I recommend doing what Karl Fitzgerald, presenter of 3CR’s The Renegade Economists, suggests at the outset of the program on 20 February 2012: “Put your listening ears on” to hear Dr Adrian Wrigley background how Germany’s land-based currency, the Rentenmark, fixed Germany’s 1920s hyperinflation overnight.
Could the principle be employed to repair Europe’s current financial collapse?
It’s a fact-filled interview.
There’s more information on Adrian Wrigley’s Systemic Fiscal Reform Group here.
Hard economic times aren’t caused by governments, Danny; they’re caused by us. We permit land price bubbles to generate, and then they burst – and it’s happened again. Then, we will kick the government of the day out on its arse – but WE are responsible.
The Land Values Research Group (LVRG) was able to forecast both the 1991 recession and this current economic depression. This predictability shows the LVRG has a scientific explanation for hard times.
We still need to cut taxes on doers, Danny, and to capture more of the economic rent of our land, as recommended by the Henry Review.
The Chinese authorities may be at odds with The Epoch Times, but any reading of the following article underlines China’s need to capture back her land values from billionaire ‘entrepreneurs’.
Instead of the benefits of China’s incredible construction boom flowing to all her people, a coterie of private rent-seekers has had its way with her.
Is this communist China, or the rent-seeker’s paradise?
From Jian Tianlun in The Epoch Times
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LATEST NEWS ON THE LOCAL CHALLENGE:
The narrative of The Depression blog is that the growth (or decline) in real estate price turnover actually leads and directs the economy.
I argued the case in a report “Unlocking the Riches of Oz: A case study of the social and economic costs of real estate bubbles 1972 to 2006” which was released in 2007, just before the US residential real estate bubble burst.
Although the facts are quite clear, economists sidestep this analysis, claiming that real estate bubbles are a factor of the undersupply of land. Inadequate suitably zoned land explains these bubbles, they say, but they have no explanation for what caused land price bubbles before town planning and zoning came into existence, not all that long ago.
Could it be that economists are ignorant of the Theory of Real Estate Valuation? i.e. that the phenomenon of land price is simply the capitalisation of its net annual rent? And, therefore, greater public capture of land rent via municipal rates and state land tax would keep the lid on recurrent land price bubbles?
These two charts complement the Kavanagh-Putland Index. In the first it can be seen growth or decline in GDP does respond to the direction of real estate turnover. So, although GDP growth was up in 2011 in accordance with the growth in 2010 real estate turnover, we may expect GDP to fall sharply in response to the 2011 dive in real estate turnover. Watch this space.
The second chart states the obvious: if real estate is doing better than the economy, guess in which direction the economy is headed?
The utter economic stupidity, hidden not only by neo-classical economists but also by the crass diversions in Australian political life, could of course be rectified by putting into place the recommendations of Ken Henry’s inquiry into the Australian tax system.
Fat chance when economists don’t understand the Theory of Real Estate Valuation, and when politicians have become as useless as tits on a bull.
DON’T FALL FOR THE LIES OF THOSE WHO BUILT THIS BUBBLE!
THIS FROM THE HEARTLAND OF MIDDLE AUSTRALIA:
STEPS IN THE RIGHT DIRECTION <–
Of course the Gonski Review of the Australian education system found “school performance has slipped over the past decade”. It undoubtedly has gone backwards.
It’s clearly also slipped off the educational radar that previous hardworking generations of (far fewer) Australians managed to build dams, highways, bridges and ports from the uplift in values capital works gave to their land values.
In this brave new “post industrial” era, however, our education system and think tanks (the likes of the Institute of Public Affairs) believe it’s quite OK for Australia’s publicly-generated land rents to be delivered to corporate ‘entrepreneurs’.
Curiously, now that we’ve wound back knowledge and use of our natural resource rents, we find we’re short of funding for such infrastructure, for education, health and public housing. Where are the funds to come from? Indeed, from whence shall come the extra $5 billion per annum David Gonski says we need to rectify Australia’s educational problems?
Oh, they’ll have to come from more taxes which will impede labour, capital, thrift and exchange – isn’t that obvious? Our education system tells us municipal rates and land taxes have had their day: they’re passé – even if, unlike other taxes, they don’t add to costs.
Once it was considered the public duty of landholders to pay for public works in proportion to the increase in the value of their landholdings, but we’ve been ‘educated’ to believe that “user pays” is superior to “beneficiary pays” and been dudded accordingly by this gaping hole in our educational system.
So, the corporates may now control our natural monopolies such as gas, electricity, airports and highways and, in so doing, may capture our economic rents. Our infrastructure must now be funded, not from government bonds nor from rates and land taxes, but from unholy public/private partnership (PPP) alliances which deliver our publicly-generated land rents to these parasites.
Education. This was Julia Gillard’s area of expertise, her specialty. But do you think she understands natural resource rents, or the great public dividend they might still deliver? I doubt it. So, can any doubt exist that in the study of economics Australia’s education has retrogressed sadly?
Our forebears worked hard for public works and amenities which have increasingly been allowed to be plundered and privatised. You could bet when they’d finished with Julia Gillard and Tony Abbott, these brave souls would have taught them a thing or two!
Yep, David Gonski, we most certainly do need to improve education.
