Tony Reardon replied to  Ronald Johnson’s letter in the AFR on 8 January which suggested a single tax solution for industrial relations:-

Beware tax utopians

Ronald Johnson and the Association for Good Government (‘‘Reform taxes for jobs boost’’, Letters January 8) want our tax system to be replaced by a single tax based on ‘‘unimproved land values’’ as per the 19th century ideas of Henry George. The theory is that we ought to rent our land off the government to maximise the usage value. If you don’t want to pay the notional rent, well, just move off that bit of land to one more suited to your pocket.

I freely admit that the current system is ridiculous. However, we have learned to live with it and many of us look forward to the end-of-year tax refund. I say beware utopians bearing gifts – no income tax, no consumption tax sounds great. Thank goodness there is literally no chance.

Tony Reardon, Terrey Hills, NSW     ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

If you were to reflect further, Tony, you may come to see the practical merit of publicly capturing land rent instead of the current system you yourself label as “ridiculous”. As elsewhere, it can only end badly for policy makers to have allowed Australia’s land rent to be privately capitalised into the biggest household debt bubble in the world.

In more thoughtful days, we did institute a federal land tax in 1910 and founded Canberra on a land rent system, both in the lingering wake of the 1890s depression which had ensued as a result of the 1880s bubble in land prices. Meanwhile in the UK, the British aristocracy believed the Liberal Party’s ‘Peoples’ Budget’ of 1909–which had people dancing in the streets about the proposed land tax–was so confronting the 0.1% began to concoct reasons to go to war – and the killing of Archduke Ferdinand proved their godsend.

In the Progressive Era (1890-1920), great US city mayors the likes of Al Smith, Tom L Johnson, Brand Whitlock, Daniel Hoan, Edward Robeson Taylor, “Sunny Jim” Rolph and Hazen Pingree instituted capital works and land taxes to resurrect their failing economies.

Seeking to switch from taxes on productivity to land rents were timely worldwide responses to impossible debt such as Australia now faces. You may also note that land and spectrum, being unable to flee to overseas jurisdictions, represent the only unavoidable revenue base. Oh! Maybe that’s why you believe there’s “no chance” for such a system now, Tony?

We’ve made top spot! –> Philip Soos in The Guardian.

Or, at the ABC.

Wow!  Yesterday I saw ‘The Big Short’.  It’s based on Michael Lewis’ eponymous book, and the screenplay was ably co-written by director, Adam McKay.

It’s a most entertaining encapsulation of the US 2007 – 2008 financial collapse—for which some of my scribbling on the Australian real estate market stands as a proxy—and I’ll want to see it again, to enjoy the workmanship and pick up more of the nitty-gritty.

Quirky drama, action, characterisation and comedy manage to skirt around preaching, to display McKay’s abhorrence at the crookedness coming out of Wall Street.

Yes, finance, insurance and real estate—the FIRE sector—did bundle up a housing bubble into contaminated “AAA securities”, but it would be great to see a director with similar ability tackle the incredible puzzle of why we continue to allow the FIRE sector to rent-seek in land prices! Because this is the fundament of impossible mortgages on which the dregs of Wall Street rely for obscene super profits which crash the US economy every 18 years!  Can’t this truth be told?

Unlike McKays’ brilliant tirade, mine amounts to a rant, but it’s cathartic.

THAT was the one of the best speeches I’ve ever heard.  Some will say it amounted to a castigation of the Republicans, but it was more than that.

Nevertheless, Barack Obama can’t talk away the parlous state of the US economy. Like leaders everywhere, he either doesn’t understand that taxation destroys, and the public capture of natural resource rent builds prosperity – or he is complicit with those who steal it.

I think it’s probably the former: economic ignorance.  Pity.  Without a foundation in economics, words are made cheap – and mock us.

From where will emerge the first leader with the gumption to tell people how economies really work?

http://www.telegraph.co.uk/finance/economics/12093807/RBS-cries-sell-everything-as-deflationary-crisis-nears.html

…. it’s hard not to believe it.

– Like taxes are good for us but natural resource rents are not?

‘What do students really think of universities?‘ on Radio National this morning was worth the listen – even though it’s just one more symptom of failing economies.

Western education may have been expected to become dull–and life increasingly brutish–once rent-seeking (per medium of banks, privatised tollways, investment properties, etc.) came to rule over us as the goal to which we must all aspire.

Private capture of publicly-generated land rent is now our greatest political corruption – and education has averted its gaze.

It continues.

The Daily Telegraph’s Ambrose Evans-Pritchard, whose analyses I generally appreciate, as reported in China ‘spiralling out of control’ in THE AGE today, fails to note the incredible irony in his final paragraph:

“The authorities have clearly shown that they have no intention of addressing leverage problems,” Jonathan Anderson from Emerging Advisors Group in Shanghai said. “Our new base case is that the Chinese government will simply let the debt party go on until it collapses under its own weight.”

Yeah, I guess we’re allowed to say that about China.  Now, how about the USA, the UK, Japan, Australia …..?  Hypocrisy, perhaps?