The above transcript and transposition of the formula offers a robust and testable economic model which might assist to demonstrate the inverse relationship between wages/profits and the privatization of economic rents. There are implications for the financial catastrophes which flow from excessively privatized rent capitalized into impossibly high land prices.

That the formula is fundamentally the same as that of Henry George published in “Progress and Poverty” back in 1879, namely;-

Produce – Rent = Wages + Interest

should add further to the model’s credibility.

Let’s take a peep at the repetitively destructive socio-economic role of bursting land price bubbles.

Another slant: –

KPI.pptx (live.com)

So, yes, there is a proper response to misbegotten cyclic busts. They are not “the natural business cycle” as we’re often advised. They can be remedied by a genuine tax reform which includes an all-in land tax, along with the abolition of some 100 other taxes as a trade-off, along the lines recommended by the Henry Tax Review.

• h/t Warren Mosler 16 Feb 2024

So why is the media always so solicitous about so-called ‘national debt’? 2008 surely pulled the rug from under that nonsense?

“The tax system is worse than it was fifteen years ago“: Ken Henry.

It’s weird that major natural disasters appear to accompany financial collapses. They’re sometimes held to have caused the financial recession. They don’t. It’s us.

I had “Unlocking the Riches of Oz: A case study of the economic costs of real estate bubbles 1972 to 2006” published in early 2007 because I believed the 2008 Australian property collapse might stand “as a proxy for economies of the world”. The Global Financial Crisis of 2008 proved to be the biggest collapse since the 1929 depression.

In the same year, the United Nations reported that cyclones, earthquakes and hurricanes around the world made 2008 one of the worst years of the decade. These included the deathly Sichuan earthquake and Cyclone Nargis in Myanmar.

In late 2018, I used the same barometer of the economy to forecast economic recession in 2020, of course without knowing that COVID-19 was about to hit the world.

As China wrestles with an initial decline in its land markets, I’m led to wonder what if any natural disaster is going to accompany the bursting of the world land price bubble some time in 2026/27.

I wish I had a dollar for all of the commentators speaking about the rising cost of living and the widening split between left and right. The political clash is palpable, and the USA is looking just about primed for another civil war.

Commentators and analysts are nothing short of marvelous at describing all the problems we’re facing, but are missing the key factor that generates them. Some even going so far as to suggest that there may be some truth in one or two conspiracy theories: banks and the level of private debt and increasingly impossible mortgages get an occasional mention.

However, you could count on the one hand those economists acknowledging most of our social problems stem from a failed economics–whether of left or right–that public capture of the national surplus product (‘economic rent’) instead of taxing earned incomes and purchases would go a long way towards bringing us back to the political centre; away from rampantly speculative rent-seeking.

Yes, the lonely idea of public capture of publicly-generated land and natural resource rents would meet powerful resistance from banking, real estate and media interests, but this is the only political adjustment that might mend the ever-widening split.