Well done!

You’ve just made the big league – along with the US, Ireland, the UK, Spain, Greece …

http://www.theage.com.au/victoria/booming-housing-market-leaves-firsthome-buyers-behind-says-chris-bowen-20131115-2xmhh.html

http://www.theage.com.au/business/property/young-buyers-find-homeowning-dream-a-nightmare-to-fund-20131115-2xmf5.html

Advance Australia Fair – our national anthem – sing it out!

Australians all let us rejoice,

For we are young and free;

We’ve golden soil and wealth from taking advantage of insane tax laws that favour land speculation;

Our home is girt by sea;

Our land abounds in nature’s gifts

Of beauty rich and rare;

In history’s page, let every stage

Advance Australia Fair.

In joyful strains then let us sing,

Advance Australia Fair.

________________

Hat-tip to Ozquoll for the correction.

Find out to what extent are you in the grip of the BIG rent-seekers – the 0.1%.

Does the tax system penalise doers and reward rent-seeking drones?  YES/NO
Do you see that rapidly escalating land prices come at the expense of productive activity? YES/NO
Are you concerned that the super-rich are getting richer and everyone else is becoming poorer? YES/NO
Do you see that rent-seeking in land and other natural resources is the means by which the super-rich get rich at everyone else’s expense? YES/NO
Do you see that banking and real estate actually encourage bubble-inflated prices, and this is not in the nation’s best interests? YES/NO
Do you see governments don’t want to remedy this situation because it might curb escalating real estate prices and bank profits? YES/NO
Do you see revenues from land and other natural resources would capture economic rents owed equally to ALL citizens and help keep a lid on escalating land prices? YES/NO
Do you see that governments are quite happy to continue allowing economic rents owed equally to ALL citizens to be taken by the 0.1%? YES/NO
Do you see it follows that governments represent the 0.1%? YES/NO
Are we living in a false “democracy”? YES/NO
Is this why the world is in serious trouble? YES/NO
Are you prepared to do anything about it? YES/NO
________________________________

If all of your answers were “yes”–well done–you’re not one of society’s parasites, nor one of their many friends.

The forgotten idea that shaped great US cities

Ross Gittens in THE AGE today.

By exposing how the big rent-seekers have ripped Australians off, Gittens is rapidly moving himself upscale, away from the neoclassical dross, towards economists of the ilk of Mason Gaffney, Michael Hudson and Joseph Stiglitz.

Cartoon from THE AGE letters today.

So, which party is promoting The Henry Tax Review recommendations about an all-in land tax and getting a proper return for Australians–not just Gina–on our mining licences?

The Reserve Bank of Australia is worried about (a) exacerbating the property bubble by lowering interest rates any further, and (b) the Aussie dollar being too high. So it seems there’s no room to move – except maybe the RBA selling down the AUD, aided by Joe Hockey’s $8 billion injection? This would help Australian exporters.

Meanwhile, some commentators are astounded at the big four banks’ record profits given such ‘low’ interest rates and the sorry state of business in general. To which I’d pose two just questions:

1. Are Australian real interest rates all that low after inflation? Not yet. Inflation’s low because we’re in the deflationary half of a Kondratieff cycle – towards the end stage. When we had 18% interest rates, inflation wasn’t too far behind. I think we make far too much of low nominal interest rates; and these ‘low’ interest rates entrap people into buying grossly overpriced housing at times like these.

1. Could it be that banks are making record profits on the back of bubble-inflated residential land prices? I mean, it’s not only via interest that banks make their super-profits. Their greatest rip offs are made from capital repayments.

Just a couple of things to ponder.

Misallocation of capital

Obscene wealth

Sport

Increasing poverty

Atrocities

Reality TV

Scams

Celebrity chefs

Crime

Apathy

Entropy

Is there nothing we can do about it?

There is. Self actualization is incomplete without a genuine interest in where society is headed.

Note: Press X to REMOVE the “download now” and “play now buttons’!

Amongst other things, today’s “Inside Business” mentioned Australia’s banking conundrum – that few businesses apart from the banks are doing well.

The four discussants, including host Alan Kohler, all acknowledged the existence of a stock market bubble, but only one, Gerald Minack, was prepared to say Australia has a real estate bubble.

Minack has for some time now said that Australians will eventually have to pay for our grossly overheated residential property market.

I’ve enjoyed the taste of realism, the increasing unease, that has crept into the once too self-assured tone of Inside Business; the uneasy shifting in seats about what’s going on in the world of business and finance that accompanies barely discernible nods and self-aware grins that all’s far from OK these days.

I’ll watch the show with interest–as a sort of belated barometer–if things worsen before the ABC axes it next year.

____________

And Paul Krugman’s getting closer, too. This blog in the NYT last week.