It is a major concern that all the finger-pointing at crooked banksters who failed the test of proper risk management, along with their complicit lawyers and accountants, still does not get to the root cause of the financial collapse.

This fact also lies at the heart of the “Occupy” movement’s conundrum.  Yes, change is certainly necessary at the top: but what change exactly?  Fix the monetary system? Apply a Tobin Tax?  Maybe we should all flee to intentional communities in order to live with like-minded people?

May I suggest, even with all the crooks put away, there remain far too many issues to be addressed, too many more complex regulations to be brought to bear, too many laws to change.

Long-term, it is impossible to make an honorable profit from the current system because it carries a fatal flaw. It has become corrupted because it is now based upon boom and bust.

Companies and individuals have come to recognise under such a system that you can only get ahead either by monopoly, by rent-seeking, or scams – or combinations of all three.

Despite claims to the contrary, this is no longer a capitalist system. Especially over the last forty years, societies have been quietly directed by a tiny but all-powerful rentier class. Big claim? Not if one reads these pages.

This class remorselessly scares and lobbies both sides of politics. The media is beholden to it–or at least sees itself to be–because of a perception that has become pervasive: we must slavishly serve finance, insurance and the real estate industry, sometimes rolled into an entity that has become known as the FIRE sector.  The FIRE sector is no longer the service sector, it is deified and has become an end in itself. It is now the sector WE must serve.

Understand that change. This sector, once the handmaiden of productivity and new ideas, has been put on a pedestal and permitted to become all-powerful. (Yes, the Rothchilds do belong to it!)

The media must carry its ads and support the pathologies that have come to hang off it: a corrupt tax system; a welfare industry that necessarily springs into being to obviate revolution between the haves and have-nots; taxation accountants poring over reams of concocted nonsense; lawyers who fall into line with all this sham, all this perversity.

The real estate industry has been shown again and again to be at the heart of cycles of boom, bubble and burst. It can’t (or won’t) appreciate that a public charge on all land values and the concomitant removal of taxes would assist it to experience a permanently vibrant and genuine market, just as the rest of us might begin to experience a constantly healthy economy.

The lie that the boom-crash cycle is an essential part of the economy is the narrative of the rentier class. It is now generally accepted: “This just part of the normal business cycle. We’ll be through it and into the next cycle soon.”

Those of us who have our house, office, factory, or an investment property (maybe two) consider we have common interest with rent-seekers, so why should we resist them?

The devastating unwinding of each economic depression upon our families and communities should make it clear that boom boom-bust is man-made – certainly not an essential part of society’s fabric.

Rentiers are indeed the cause of boom-bust, but we constantly overlook them. [“Aren’t they us?”  Not at all.] Though they wheel and deal in our billions, they remain cloaked in invisibility, whilst increasingly the poor, middle and even upper classes have the more modest aim of keeping body and soul together.

It has become clear that privatised land rent has first claim on both labour and capital. Rentiers understand the critical point, and work it to their advantage parasitically at the expense of all others. Privilege has thus come to rule. As their greed initiates stock and real estate market collapses, jailing corporate crims nevertheless leaves this cockeyed system, and its invisible free-riding cockroaches, entirely unaffected.

What has changed?  What has always brought down empires? Gibbons faithfully reports Pliny the Elder on the collapse of Ancient Rome: “Latifundia perdidere Italiam.” (The great landed estates destroyed Italy.) “Oh, but real estate scammers will always be with us”. OK, then let them pay the land rent, along with us all, and let’s see how their incursions into our natural resources will be greatly lessened.

Such has become the all-encompassing hegemony of this tiny but controlling rentier class, it is very easy to dismiss public capture of land rent as “impractical day dreaming” [because] “It just won’t happen: they won’t allow it”, and to settle for myriad diversions.

“Impractical” is merely a word. Such labels can be no replacement for logical argument nor effective political action.

Meanwhile, public abuse, even jailing, of a passing parade of fraudulent banksters, insurance salesmen and real estate supremos–together, of course, with an even greater blossoming of regulatory bodies–will continue to pass for systemic reform.

But, sans public capture of publicly-generated land rent, the curse of the rentier remains with us.

ODE TO A WRAITH

(A mortgagor’s lament)

Banksters lending into a bubble

was a recipe for trouble,

but their lending bravado

sent prudence out the window

as they led Australians astray

with mortgages they couldn’t repay.

Now bank CEOs have government’s ear

in promoting the fear

that they are too big to fail.

And “We’re not overpaid!” they wail

as the frauds they’ve perpetrated

leave mortgagors devastated.

It has always seemed to me

this happens too regularly,

so maybe the Henry Tax Review

should be listened to

in saying we need an all-in land tax.

That would keep bubble mortgages off our kids’ backs!

Land prices have proved to be a phantom,

that come and go with abandon;

and for such a wraith,

it is a misplaced faith

on which we securitise bank loans

but can’t foresee mortgagors’ despairing groans.

THE END!

_______________________

NEWS ITEM

OK, President Obama. Forget the crap, forget the glitz: get down to work.

If as you say “The best is yet to come”, it’s time you got serious. You’re facing the fiscal cliff and your economic advisers have failed you – badly.

You need more than rhetoric. Discover land rent.

It’s one-third of the economy, most of it stolen by rentier plutocrats.

You need to study and heed what these economists have had to say:-

Joseph Stiglitz: “Rent is the secret tax the wealthy charge the poor.”

Michael Hudson: “The way to prevent real estate bubbles is to tax the land rent. The basic principle at work is that whatever rent the tax collector leaves ‘free’ is available to be pledged to the mortgage banker as interest – to carry a yet larger loan.”

And listen to these guys from the past, because they knew their economics, too:

John Locke:  “The things of nature are given in common.”

Henry George:  “Make land common property, but let individuals who now hold it retain …. possession.”

OK?

Now get to it, or else your Presidency is going to get much worse before it gets any better.

We knew we could rely on America’s foremost philosopher, Bill O’Reilly, for the line of the evening.

BY STATE AND PROPERTY CATEGORY

The Land Values Research Group’s Director, Dr Gavin Putland, has just compiled these telling new comparative land value charts based upon Australian Bureau of Statistics’ Catalogue 5204.0, Table 61.

Our regulatory bodies, including the Reserve Bank of Australia, quite obviously did nothing to keep the greatest real estate bubble in Australia’s history from developing.

One may very well ask what purpose all our regulatory bodies and the Productivity Commission really serve.

Despite a long history of recessions and depressions having followed the bursting of land price bubbles, Australian Treasury officials and politicians also continue to ignore that these bubbles come at the expense of productivity and social cohesion.

Why?  Is the parasitic rentier class that bullet-proof?

Dr Gavin Putland shows real wages and salaries to GDP have been kept down in Australia, as elsewhere, because land prices to GDP have been up enormously.

You can’t have them both up together.

When Australians appreciate this simple fact, they may begin to see the warm inner glow they feel when their property values escalate upwards rapidly is sorely misguided.

But as our love affair with real estate is often irrational, I’m betting most of us will be unable to accept the point.

This is the crux of failing economies.

“As long as there is a child in any place in Milwaukee, any place in Wisconsin, any place in this country, who is languishing in poverty and barred from opportunity, our fight goes on”, President Barack Obama told an estimated crowd of 20,000.

“Our fight goes on because America has always done best when everybody has got a fair shot”, he added with a populist flourish.

How about some action against the rent privatizers then, Mr President?  That will win the fight for opportunity and freedom from poverty. Anything at all in that regard because, surely, that’s what the banksters have been up to? No? Nothing at all? Why not? Oh, it was Wall Street helped bankroll you again?

Obama also hit out at what he says is Romney’s effort to roll back the clock to the days when Wall Street had “free rein to do whatever” it liked, contributing to “an economic crisis that we’re still cleaning our way out of.”

Oh, really? Cleaning up Wall Street?  How exactly, pray tell, Mr Prez? A charge against land rents, maybe?

“And governor Romney now is a very talented salesman,” Obama added. “So in this campaign, he is trying as hard as he can to repackage the same old ideas that didn’t work and offer them up as change.”

And, despite the rhetoric, you’re not doing a bad job in that regard yourself, boyo!

By failing to euthanize the rentier parasite, the candidates of both parties are ensuring the US depression will linger.

Dr Gavin Putland’s 2012 update of the Kavanagh-Putland Index continues to show there’s a BIG crunch ahead, but the timing remains indeterminate.

The bust’s timing, of course, depends on how long governments can continue kicking the can down along the road; that is, artificially supporting the Australian bubble in land prices instead of adopting programs to address the damaging outcomes that must accompany its inevitable bursting.

Will we support the banks – or the people?

Despite all the evidence now showing austerity in favour of the banks overseas neither assists people nor economies–surely people and economies are the same thing anyway?–I’m betting an ALP or Liberal government will nevertheless consider people are less important than banks.

That’s in the DNA of crooked governments.

9/11 (2001) was a despicable terrorist attack that changed America forever. Then, Hurricane Katrina struck to destroy New Orleans and surrounds in 2005. This was followed by the 2007 to 2009 stock market crash, and now Super Storm Sandy hits the east coast on 29 October with horrific results across Atlantic City, New Jersey and New York.

And that’s not to mention a number of wildfires and other hurricanes to which the nation has been subjected in recent years.

So what’s next for Americans? They’re surely overdue for a run of good luck.

In my visit to the US, I took the opportunity to take a peep at The Wall Street Journal and the New York Times. I thought the appearance of the Times, particularly, came up short in comparison with The Age at home in Melbourne, where the pictures are eminently sharper and more visible on a superior quality paper. I reckon our layout is better, too. But newspapers are struggling pretty well everywhere.

Interestingly, I believe I obtained my best information, not from newspapers nor television, but from speaking with a number of seemingly ever-friendly Americans, despite being beset by mounting natural and social disasters. Not journalists, not ‘experts’: people with everyday cares. People in Central Park, bus drivers, waiters, people in hotels and airports, “Occupy New York” demonstrators who know something at the top is also politically amiss and want it fixed.

I was particularly interested, of course, in how people had adapted to the financial collapse, because that’s a man-made occurrence that the nation has in its power to turn around.

Not once was I let down in talking with Americans; their analyses were always considered and thoughtful. Especially Tony, who took us on a tour of the Hollywood, Beverly Hills area. I’d vote for him if he stood as my political representative in Australia.

Natalie, the young New York waitress, had first disabused us that America didn’t appear to be suffering. “You don’t see that we’re holding onto our jobs – if we have one”, she said, “and not contemplating changing it. You don’t see that we are desperately paying down debt and amending our spending to go without in many areas. This has a compounding affect and it certainly impacts on our lives.”

“You’re Australians?” young singer-songwriter/waiter Scott asked us at Universal City in Los Angeles. “You haven’t had a financial collapse yet, have you?” he asked.  “We’re on our way to a national debt of $17 trillion”, he volunteered. “Well, you’ve actually just gone past $16 trillion”, I said, surprised, because I’d not revealed my particular interests. (Perhaps it must show, I thought.)  For a minute or two an exchange on economic matters ensued before Scott had to attend to another customer.  He returned later during our meal with what I think must have been a couple of Midoris “Compliments of the manager for our Australian visitors.”

The pleasantness and professionalism of Americans we met was more than impressive. Unfortunately, our service doesn’t always come up quite so well back home.

The most common thread in speaking with people was that they believed they were being dudded by the big guys at the top politically–whether Democrat or Republican–that, and the banks.

Something basic needs changing came through again and again.  Although people want change, there’s not much sign they’re getting any.

It was only when I had a good chat with Justin at “Occupy Wall Street” that I let my proclivities slip by mentioning that I know Michael Hudson.  “Oh, Michael’s spoken here”, he said, handing me a copy of The Debt Resistors’ Operations Manual:  “It’s free.” He mentioned he’d been attending “Occupy” at Trinity Church Wall Street (on Broadway) for 158 days.  I made a donation.

Natural catastrophes and 9/11 aside, most Americans are clearly doing it hard during the country’s financial demise. Add the natural disasters back in, and daily life amounts to a quiet heroism for many.

It’s a shame they allow the tax and political system to divide them and to create such pettifogging hatreds.

That’s what’s been really laying waste to America.

A report to the Senate Legislation Committee by Dr Gavin Putland.