You’ll remember the world’s having this economic depression we’ve chosen to call the GFC, right?
Oh! All except Australia, that is. Australia’s OK because, as Christopher Joye of RP Data Rismark and Macquarie Bank’s Rory Robertson say, we not only don’t have the most massive real estate bubble of any country in the world, but we don’t even have a land price bubble at all. [This is undoubtedly more in hope than reality, of course. Yes, it’s a bit of a fib.] Our high prices, they say, are simply the result of high immigration and insufficient land. [!] Then we have China helping us stave off a recession, so we’re pretty right; no worries! Hey! And we’ve got the best fall-back position of all when the bubble does burst. “Well, we couldn’t really say that, could we? Someone’s got to keep up Australia’s confidence!” Yep – they’re simply cheerleaders for a doomed economy and unprepared to draw attention to the role that property played in its collapse.
Now, TIME magazine has front-covered ‘helicopter’ Ben, the man famous for his essays on the Great Depression, and for saying that it’s easy to cure economic depressions simply by printing enough money. OK? And aren’t we so lucky to have Ben Bernanke? Yes, I suppose we are. Who else could have told us the way to get out of this depression was the way we got into it? Spend up big, print money and get into debt. It sounds a bit like a door: you got in that way, so that’s also the exit. Gee, who would have thought it? I wish I had Ben’s nous and imagination!
Meanwhile, happy that their economies are in such great shape, the world’s leaders tripped off to Copenhagen towards the end of the week to front the cast of thousands fixing up climate change while we’re all on Bernanke’s winning streak. That’ll go well, too!
Whereas I had thought the only remedy for the GFC would be to un-tax people for working, and taxing land prices (therefore, removing recessions and depressions caused by bursting land price bubbles), we’re told this just won’t be allowed to happen. But we don’t have a good track record for being able to get out of depressions without an eventual war. BTW, just try to engage your elected representatives on land rent instead of taxation! It doesn’t matter which party (or philosophy), which religion (or non-religion), which sex, they’ve all got their stuff rehearsed on this one:-
“Sorry, but we must treat you and your kind as pariahs, because EVERYONE knows there is NO such easy solution!”
“You’re trying to blow the whistle on boom and bust? But that’s how the capitalist system has always worked: boom, bust, boom, bust – and we slowly progress that way!”
No place, apparently, for independent reasoning such as in my “Unlocking the Riches of Oz: A case study of the social and economic costs of real estate bubbles 1972 to 2006” showing how we might vastly improve our lot by capturing publicly-generated annual land values: that it would quickly and sustainably double our wealth and GDP; that we’d close the rich-poor gap and everyone would be much better off, and; that we’d eliminate real estate bubbles and recessions altogether.
“No, that’s madness! What would you know? We’ve got trained experts dealing with the economy! Who are you?”
“Oh! So your experts saw it coming then?”
“No, that’s beside the point. The point is they are our paid and appointed experts. Others, like you, may offer your way out opinions, of course.”
“But why not investigate the solution proposed by the handful of people who DID forecast the financial collapse – a sort of economic Copenhagen, if you like – which would exclude all the economic deadwood, the so-called experts?”
“Pshaw! Get out of here!”
Well, that just about brings you up to speed.
By the end of the year, we’ll learn to what extent Treasury Secretary Ken Henry and his panel of experts appointed to inquire into “Australia’s Future Tax System” decided to recommend dismantling the tax office and ratcheting up rates and land taxes.
Hey! That’s not a smile I see turning up at the corners of your mouth, is it? 🙂