The Guardian has a story on European housing which matches Prosper Australia’s findings on speculative vacancies at home. Does this not demonstrate the urgent need to downtax labour and capital, and to uptax land values around the world if economies are to be resurrected and people housed?

‘Mike Norman Economics‘ carries the Rumplestatskin/Mason Gaffney case that all taxes ultimately come out of economic rent.  [So, why not put them there in the first instance, thereby cutting out the vast amount of price hikes, bureaucracy, and other deadweight generated by the taxation of labour and capital?]

Who’s taxing who, and who pays the rent?, Ross Gittens’ definition of rent-seeking

ASIC “reactive, not proactive”, Michael West  (How true! They’re meant to be outing the crooks before they go under.)

Everest-like boom in city apartments

Canadian rebuff to Chinese to inflate Australian real estate prices even further? (Or, why young Australians can no longer afford a home.)

Pearls before swine.  – Bryan Kavanagh

All taxes come out of rents.  – Cameron Murray

We ain’t got nothing but a carload of tax, and the doggone load is is just a breakin’ our backs.  (Breadline Blues)

Bubbletopia: Australia’s Land of the Never Never

By Paul Egan

Has a cruel delusion befallen this grand antipodean paradise? Girt by sea, but apparently without boundless plains to share. Eye-watering housing prices require debt contracts written in blood or the sacrifice of one’s first born. Perhaps it is my wicked imagining, for the usurers chime in unison that we are in a bubble-less sanctuary, with minor debt overhangs (hang overs?), frothy sub-pockets and minor bouts of exuberance that is treatable with minor antibiotics. For instance, CBA’s head usurer, Ian Narev, boldly proclaimed in recent times: “…we don’t think we have a housing bubble.”[1] Ian is not alone in his assessment: ANZ CEO Mike Smith: “We’re a long way from a bubble. There has been an adjustment back, in terms of the market.”[2] Westpac CEO Ms Kelly: “… said she believed that Australia was ‘nowhere near’ a housing bubble.”[3] NAB CEO Cameron Clyne: “We don’t see, certainly in the housing market, we don’t see a bubble emerging.”[4]

The Big Four must be doing ‘God’s Work.’ Clearly, a heavenly state of profit growth and ROE is divine providence, unrelated to a credit flood in the residential market. Being nowhere near, a long way from, adjusting back, and far from the emergence of bubble, there is only one possible explanation remaining: “We’re different here.” How do we know? Why, FIRE sector mouthpieces guarantee “It’s a structural upwards permanent plateau reflecting a chronic housing shortage and idiotic government policy, Chinese investors, Siberian investors, the mining boom, the dollar, RBA jaw-boning, RBA buzz-cuts, interest rate levering, consumer pop psychology, and Chinese princelings with suitcases full of freshly laundered cash,” allowing every residential property investor to win a prize. Please forgive those deluded classical and post-Keynesian economists for thinking this is simply a Ponzi-financed credit bubble, driven by rabid investors seeking a quick buck in financialized dwellings, spurred on by mere 100s of billions of tax breaks over the decades and the obscene privatization of geo-rent.

Yup, the banks and other credit providers are still kicking ass in good ol’ benighted Oz.  That should put a few hundred thousand more people out of work.  We may hope that one day Australians will come to see the connection between a bubble real estate market and economic collapse. That’s what this blog is all about.

However, most journalists and economists still seem to believe a “strong” real estate market and excessive household debt–a burgeoning FIRE sector you may say–is something to which Australia should aspire. [!]

Only if we wish to crucify ourselves further.

There is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success than to take the lead in the introduction of a new order of things.

– Machiavelli, The Prince, 1513

The approximately $20 trillion tucked away in tax havens won’t matter much once an ad valorem tax on land values becomes the revenue base. Of course, the 0.1% will vehemently oppose land value ownership being a fair and equitable revenue base. They push to the fore the inability of “the poor widow” to afford a levy on the value of her land any time a land ‘tax’ has been mooted, in order they may continue to steal the greater part of the land rents owed equally to each and every citizen of the nation. The poor widow can easily be accommodated.

The poor widow? Is it not passing strange, then, that the 0.1% never cite the poor widow when they argue in favour of indirect taxation?

Selective maudlinism perchance?

Cameron Murray sees Henry George’s ‘old’ ideas as being quite applicable today.  [Note the sub-title of Progress and Poverty.]