The Geonomist Volume Thirteen Issue Two

Geonomics is …
... the study of the money we spend on the nature we use. When we pay that money to private owners, we reward both speculation and over-extraction. Robert Kiyosaki's bestseller, Rich Dad's Prophecy, says, “One of the reasons McDonald's is such a rich company is not because it sells a lot of burgers but because it owns the land at some of the best intersections in the world. The main reason Kim and I invest in such properties is to own the land at the corner of the intersection. (p 200) My real estate advisor states that the rich either made their money in real estate or hold their money in real estate.” (p 141, via Greg Young) When government recovers the rents for natural advantages for everyone, it can save citizens millions. Ben Sevack, Montreal steel manufacturer, tells us (August 12) that Alberta, by leasing oil & gas fields, recovers enough revenue to be the only province in Canada to get by without a sales tax and to levy a flat provincial income tax. While running for re-election, provincial Premier Ralph Klein proposes to abolish their income tax and promises to eliminate medical insurance premiums and use resource revenue to pay for all medical expense for seniors. After all this planned tax-cutting and greater expense, they still expect a large budget surplus. Even places without oil and gas have high site values in their downtowns, and high values in their utility franchises. Recover the values of locations and privileges, displace the harmful taxes on sales, salaries, and structures, then use the revenue to fund basic government and pay residents a dividend, and you have geonomics in action.

To deepen his revolution – popular and nonviolent so far – Venezuelan President Hugo Chavez (during his weekly TV/radio show, Aug 29) promised to apply a law that lets government tax and expropriate idle farm land. Chavez, who handily defeated a recall referendum against him August 15, vowed to make a difference during the last two years of his term. Before taking over idle land, Chavez said he'd try to persuade owners to sell it. According to a 1998 census, 90% of farmland given to peasants in a 1960 reform reverted to large landholders; now 60% of Venezuela's farmland, nearly 70,000 square miles, is owned by less than 1% of the population. (AP via The Progress Report) Elsewhere when owners had to pay higher taxes for land (Taiwan, California, etc), large owners sold their excess, so most land became owned by ex-tenants, obviating expropriation. If at the same time government loses other taxes, selling the tax to landowners becomes easier (as in Mexicali).

The Archdiocese of Portland, which covered up for priests who fondled prayerful boys, argues that the land on its books actually belongs to parishes and is worth only $10 million, total assets are $19 million, and liabilities – projected sex-abuse settlements from a third of the over sixty cases – are $373 million. The county assessor has the land down for $400 million, the figure that the boys' lawyers want to use. (The Oregonian, July 31) Meanwhile, the Vatican said what's really wrong with the world is feminism, being so unnatural. What it left out is that when both parents work, they not only have too little time to raise their kids – and so let priests and others do it – they also use the second salary to bid up the price for land beneath homes, leaving families not much better off than before with one breadwinner.

During my Baby Boomer lifetime, the pair of choices in the lesser-of-two-evils either/or have both become more evil, less good. Taking a cue from Henry David Thoreau, who noted for every 1000 hacking at the branches of evil, one chops at the root, in my later years I've found a root that suits me: our faith in hoarding nature's bounty and our antipathy towards sharing the natural advantages that none of us made and all of us need. After an adulthood of protest against war, inequality, and pollution, I've quit. Now I focus. Nicholas Kristof, New York Times columnist (July 24): “I wish that the green movement fought as hard for interactions between humans and our environment as it did against blind development.” My wish is that all reformers would quit reacting against the crisis du jour and only work for basic solutions. Don't devote all their energy to their opponent's agenda but to their own, forcing their opponent, for a change, to spend his time and money on what they want. Raise the bar; define victory not as stopping the world from getting worse (which even then they don't very often do) but as actually making the world better. Quit taking pleasure from merely railing against evil; find solace in the hard work of showing those on the sidelines a better way. We're not going anywhere unless we go together.

Now it's the Irish's turn. Over the last decade, Eire led Europe with the fastest rate of economic growth. For the first time, Ireland has placed in the UN's top 10 developed nations. So the Emerald Isle experiences rows of millionaires' mansions yet skid rows of halfway houses for heroin addicts. Of the 17 most developed nations, Ireland was second most poor, just above the poorest: America. The press quoted our cohort, Sean Healy (whom we'll see in September) of the Conference of Religious of Ireland, but not on an explanation or solution. (Boston Globe, July 19) Once again, progress has brought a society bettering wealth and worsening poverty. The classic, Progress and Poverty by Henry George (1879), was made a runaway bestseller by its Irish immigrant readers in America. In it he showed how land monopoly and land speculation – then as now rife in Ireland – gradually sucked most social gains into the ever fewer pockets of landowners, or their modern proxies, mortgage lenders.

A six-year surge in home prices is dividing the nation, with Sydney leaving the rest of Australia behind and a huge gulf opening up between rich and poor. Another divide has opened between older Australians, who are more likely to own their own home and have investment properties, and the young. In the nation's richest city, a third of adults rent. In 1994, the average wealth of a Sydney homeowner – in 2004 dollars – was $237,000; renters, on average, had assets of $19,000, a spread of $218,000. In a decade the gap doubled and homeowners have $482,000, dwarfing the assets of renters who now have $45,000. The average wealth of the richest 20% of Sydney residents was $450,000 a decade ago. The same people are now worth, on average, $863,000, due mainly to the jump in the price of their tax-free residence, on average $227,000. Investors, fleeing high marginal income tax rates and enjoying the halving of capital gains tax, bid up prices. While critics decried income inequality, the bigger inequality was in land holding. (Sydney Morning Herald, July 10)

Eyeing the bottom line, Western European corporations try to make their employees work longer hours, as do Americans, or move their factories to Eastern Europe where skilled people work for less. In Germany, the law makes it hard to fire even employees no longer needed and pays the unemployed a cushion. Now leftist Chancellor, Gerhard Schroder, is reducing benefits for those out of work too long. Losing leisure is a big loss. Seven years ago when the French cut the workweek to 35 hours, workers raised their output (so unemployment stayed high). The five extra hours off let gym membership soar, as did home improvement, gardening, and other hobbies; parents spent more time with kids. (The Christian Science Monitor, July 15) During a recent appearance on PBS' "NOW with Bill Moyers," Republican pollster and strategist, Frank Luntz, said his focus groups of swing voters – working women with young children – revealed that lack of free time matters to them more than anything else in life (via John deGraaf). To enjoy even more leisure and undergird the unemployed without raising taxes but upping productivity, replace taxes on labor and capital with fees and dues for using Earth – sites, resources, and ecosystem services – then from the recovered rents pay citizens a dividend, letting us work less and live more.

Foreign companies, most of them Canadian, control a fifth of the rich mines in the American West. For as little as $0.84 an acre, more than 28,000 companies and individuals have gained control of precious metals and minerals on 5.6 million acres of public land across 12 Western states. None of these companies – some foreign-owned – pay anything for the value of the gold, silver, and other hard-rock minerals they extract, thanks to the 1872 Mining Act. All the major foreign mining companies, like Rio Tinto, have American subsidiaries, like Borax and Kennecott. Of all the uses of federal lands, hard-rock mining returns the least to the federal Treasury: 2.3% of sales, compared with 13.2% for oil and gas development, 14% for grazing, and 16% for timber sales. (The New York Times, May 11) Why care which address a rentier calls home? Instead, get them all to pay, not take, rent, no matter where they live.

Weyerhaeuser Corp. has title to huge tracts of forestland in Washington State. Beginning in 2002 the company began selling 20-acre sized lots for residential development at a price of around $140,000 up to $250,000. Purchasers must put in their own septic systems and dig wells for water. In addition to the land costs, purchasers are spending an average of around another $300,000 to construct a residence. Because the land is designated as forestland, the annual property taxes are under $1,000 for the entire acreage, yet the tree sales from the parcels can return up to $10,000 an acre. Weyerhaeuser can sell the land faster as a modified tree farm than by going through the lengthy process of gaining regulatory permits for a traditional development. (The Wall Street Journal, June 16, via Ed Dodson in the Georgist News)

People seeking second homes are not looking for bargains, not along the coasts – a summer cottage on the New Hampshire coast that cost nearly $200k in seven years ago would be over a half million now – nor along Maine lakefront where summer shack starts at $250 thou while one farther off with just a view of the lake can be had for under $140k. The value is not in the structure, just in the location. (Boston Globe, July 18)

One of four households – 31 million nationwide – spends too much on rent or mortgage payments: over 30% of their income. Fleeing location costs gone ballistic in urban areas such as New York and San Francisco, well-off retirees and urbanites resettled in Western towns. In downtown Bend Oregon, the last hardware store made way for a floral shop, yoga studio, and tapas bar. The number of vehicles passing every day on US 97 between Bend and nearby Redmond increased from 17,600 in 1990 to 32,200 in 2002. The newcomers have also driven land costs ever skyward. In Telluride Colorado, the median price of homes sold in the first months of 2004 was $1.3 million. In booming Bend, low- and middle-income workers can no longer find affordable housing. The median home price in Bend, at $217,500, has crept above that in the Portland area, at $196,900, and dwarfs that in nearby rural Jefferson County, at $99,000. During the 1990s, the median home price in Deschutes County, which includes Bend, nearly doubled, from $74,500 to $148,800, while the median household income grew by only 53%, to $41,847. In the past two decades, machines replaced OK-paying jobs in timber, ranching and mining. The new jobs in serving tourists pay much less. Habitat for Humanity, which buys land then for about $50,000 builds a house, complains it can no longer find affordable, buildable sites in Bend, which right now aren't less than $60,000. (The Oregonian, August 1) So, stop whining, recover all natural rents, and pay residents either a straight dividend or a targeted Housing Voucher.

The working poor make up an increasing portion of food bank clientele. A survey of 25 cities found that demand at food banks rose 17% in 2003. The food stamp caseload rose by 36% from 2000 to 2003. Of US families, 11%, encompassing 34.9 million people, are food insecure, meaning they lack the means to ensure themselves of healthy meals and are vulnerable to at least a mild form of chronic malnutrition. Of those eligible for food stamps, 40% don't apply, deterred by red tape and stigma. Poor people can't negotiate the rent, the cost of a gallon of gas, or the doctor bills, but can adjust how much they spend on food. Housing costs are the biggest single factor behind the rising demand for food aid. Some families report spending more than two-thirds of their income on rent. (Associated Press, July 18, via Aussie Karl Fitzgerald, who adds, “keep up the good work”.) Residential property in the United States has risen 50% - or $6 trillion - in the last five years. This is one of the fastest rates of increase ever recorded. (The Daily Reckoning, August 25)

From 1995 to 2002, the US taxpayer doled out more than $114 billion to farmers; in 2002 W upped subsidies to $190 billion over the next ten years. The bottom 80% of recipients average only $846 per year; 71% of farm subsidies go to the top 10% of subsidy beneficiaries, almost all of which are large farms. In 2002, 78 farms, none small or struggling, each received over a million dollars in subsidies. Altho' the USDA fact-checks only about 1,000 applications each year, the GAO found 30% of these "approved" recipients were ineligible for subsidies but receiving them anyway. In the last election, crop producers gave $11.5 million in campaign contributions. (Independent Institute via the Progress Report) The European Union, whose agricultural subsidies are almost six times greater than those of the US, stands ready to abolish them. At the summer WTO meeting, both the EU and the US did pledge to reduce hand-outs to growers; for 2006 the US would cut its $19 billion to growers of corn, riche, weat, and soybeans, and cotton by 20%. (The Christian Science Monitor, Aug 2) If both governments did, American exporters would lose much less than their Euro counterparts. Farmers in the developing world, who struggle in the face of unfair competition from crops subsidized by governments of the developed world, would also gain.

About one-third of the 8% Universal Service Fee levied on every long-distance bill – the E-rate program – is dedicated to connecting all US schools to the information superhighway. This "Gore tax" paid for hooking up more than 90% of the nation's classrooms, at a cost of $2.25 billion per year. Fraudulent billing has spurred the Federal Communications Commission to investigate. An Atlanta school billed Uncle Sam for equipment that was not needed or never delivered. School administrators in Virginia fraudulently used E-rate money to buy themselves pagers and cell phones. In New York City, an internet service provider persuaded poor schools to buy unnecessarily expensive equipment and asked them to prepare fake invoices. Congress should suspend the E-rate program until the FCC can guarantee competitive bidding, annual audits, and tougher penalties for abuse. (Taxpayers for Common Sense via Progress Report) Even better, we could eliminate poor school districts and poverty in general by sharing natural rents while not taxing earnings.

Since taking over in 2001, W has cut taxes more than $1 trillion. His government lowered the tax rate across all income levels, but especially for the rich; the top 1% of taxpayers paid 33% in 2001 yet 26.7% this year, a drop of 19%. As a share of federal taxes, people in the top 20%, averaging $182,700 a year, went from 65.3% of total payments in 2001 down to 63.5% this year. In contrast, those making an average of $75,600 went from 18.5% in 2001 up to 19.5% of all payments this year. Asked about replacing the income tax with a national sales tax, W warned us to take the idea seriously. (USA Today, August 13) Since its tax rate would be less than the income tax rate that the top 1% pay, and their outgo is less than their income, this shift would again save them millions at the expense of everyone else. Plus, at 20-25% it'd be high enough to expand the black market, increasing crime and police intrusion, and enrich the dishonest businesses who'd keep the collected tax, disadvantaging the compliant ones who hand it over. Lesser than either evil is no evil: no taxes but full-value fees for use of land, resources, and ecosystem services. Redirecting all that money we spend on the nature we use via the public treasury, we could fund basic public services and still pay ourselves a hefty dividend, obviating welfare, Social Security, etc.

Over the past three federal election cycles, chairmen of the 12 Reserve Bank boards have donated over $200,000 to candidates, 88% to Republicans, including to W, son of a Texas oil family. More than half of the aggregate came from Dallas Fed board chairman Ray Hunt, son of oilman H.L. Hunt. (Financial Markets Center, March 26) Interesting how oil leads to banking: Chase is from Rockefeller, Chemical if from the Mellons.

Alan Greenspan, Chairman of the Federal Reserve, again called on Congress to reduce future Social Security and Medicare spending. As the US birthrate declines and life expectancy increases, the portion of the population older than 65 will rise to about 20% by 2035, vs. 12% today. With more retirees drawing benefits and fewer workers paying into Social Security and Medicare, the programs and government are projected to run huge deficits, absorbing capital needed by producers. Greenspan advocated raising the Social Security retirement age, already set to rise to 67. Nations who accept foreign capital and immigrant labor increase productivity, the measure of output per worker, so fewer workers could take care of more retirees. (USA Today, Aug 30)

Greenspan did not offer to cut his own salary and benefits, or those of overpaid CEOs, directors, and trustees; mutual funds pay trustees from $50k to $100k to meet four times a year and one fund paid six trustees nearing retirement age even more to retire early (Boston Globe, July 18). Nor did the Chairman offer to let the US expand its money supply without paying interest to the Fed. Nor did he suggest curbing militarism, the US's biggest expenditure. Congress raised this year's debt ceiling by slipping the enabling bill into the military budget – $417 billion – where a vote against would be misinterpreted as unpatriotic; so far Congress has put the citizenry in debt to $7.5 trillion, mostly to bankers and other wealthy investors. Nor did Greenspan suggest recouping the public value now foregone, such as the fire-sale leases of federal lands, the free licenses to broadcasters, etc. At the crux, Baby Boomers and everyone must quit expecting all income to come from their work (as the wealthy did long ago) and start expecting a hefty portion to come from our common natural heritage: the values of sites, resources, ecosystem services, and government-granted privileges.

'Til now, Microsoft has never paid stockholders a dividend. They might have had only a billion in surplus cash in 1990, but now that pile has grown to over $56 billion. At last they promise to pay out over the next four years $75 billion to millions of shareholders. It's an effort to soften their image as bullies and to stress their commitment to backers. So, at $3 per share, Bill Gates, who's titled himself chief software architect, becomes nearly four billion richer and CEO Steve Ballmer about 2.5 billion richer. Gates plans to file for over 3000 patents next year, their new annual record. (Boston Globe, July 21). The cost of filing a patent is only a few thou while its value is a few million. Were government to operate like a business and charge full market value for the little pieces of paper it grants, then its permit-holders could not become so unduly wealthy. Banks don't lend money for just a fee but charge a percentage, and insurance companies don't insure for just a fee but charge according to the value of the item insured (and the risk). A patent ensures a monopoly and should cost an equivalent amount. Why let the Gateses of the world become multi-billionaires by enjoying the state's protection for nearly free? Instead, charge what the market will bear; them becoming multi-millionaires is enough.

When school begins in 2005, Colorado residents headed for college in state will use vouchers to pay part of the tuition, the first use of vouchers for post-secondary schooling in America. They'll get $2400 to spend at state colleges and half, $1200, for private ones. Presently, the nearly $600 million that the state spends on tuition goes directly to the college. (Christian Science Monitor, May 3) While a voucher from taxes is not exactly a dividend from recovered rents, it may be a step in the right direction, getting people used to actually getting money back from government and making them, not politicians, the ones responsible for deciding how to spend it wisely.

About 60 million American homes heat with gas. The gas extractors' newest drilling technique – coal-bed methane extraction – aims for gas in shallow seams of coal. It is far messier than the older deep-well drilling. Drillers first pump out huge quantities of water, tainted with salt and other minerals, which lowers water tables, sours streams with salt, and scars wild lands with wastewater pits and screaming gas compressors. Unlike old-time ranchers and farmers, newcomers who've bid up the value of land have resisted the new drilling technique that would knock down their high property values. Compared to the typical Montanan, residents of Gallatin County are far more likely as to have been born in another state, to have a graduate degree, be richer, and to live off investment income. When drillers arrived, these latter-day settlers quickly raised money, hired lawyers, seduced the media, and rounded up local politicians. So far, not one gas well has been drilled in Gallatin County. But the opponents are divided on another issue. Newcomers who made their money elsewhere (often in development) want to keep lot size large and halt development; old-timers who haven't scored yet want to self off their inherited land and, if it gets too crowded, seek serenity elsewhere. (Washington Post, July 5) Such issues would be much easier to settle if the value of sites and resources couldn't make us rich individually but only as members of a rent-sharing society. Developers would profit from building homes, not selling lots. Drillers would also pay Ecology Security Deposits and buy Restoration Insurance. And homes, with more of them being owner occupied, would leak a lot less heat so demand for methane gas would drop.

Seven years ago while head of a coalmining outfit, David Lauriski proposed weakening rules on the amount of coal dust allowed to float in a mine's air, designed to make mining safer; back then he got nowhere. Over the next six years his industry gave $9 million to candidates, 90% of that to Republicans. Now that Lauriski has resigned from the mining company and joined W's administration, his lower standards are the new rules. Over the last 20 years, the mining industry has buried or damaged 1200 miles of life-giving streams. While president, Clinton made an effort to reduce the damage. Many miners, who accepted the argument that the rules designed to protect the environment were curtailing jobs in mining, helped vote W into office. W's administration went and lowered both types of rules. Every year, hundreds of miners still die from black lung disease, becoming ineligible to vote for anyone. (The Oregonian, August 13) Not paying for the damage done, while selfishly reaping the value of natural resources, is 180 degrees opposite of geonomics, under which we'd pay for what we take and share what was created for all of us.

The Bush administration's new report to Congress, for the first time, admits that according to the best science our emissions of carbon dioxide and other gases have over the last three decades warmed the earth (NYTimes, August 26, via Paul Metz) Eight states (Wisconsin, Vermont, Rhode Island, New York, New Jersey, Iowa, Connecticut, and California) are suing the nation's five largest public utilities for warming the globe, damaging crops, forests, citizens' health, fish, and tourism. By burning coal to generate electricity, the companies exhaust 650 million tons of CO2 into the atmosphere each year. The states are not asking for damages but for the power companies to cap their emissions. The standard for conviction – a far lower bar than the criminal court's "beyond a reasonable doubt" – is a "preponderance of the evidence", a greater than 50% certainty that the defendants are responsible. Scientists do show that the increase in greenhouse gases has caused a 1 degree F. rise in global temperatures since 1900. But when attempting to predict regional or statewide climate impacts, computer models are not so conclusive. The plaintiffs allege that in parts of America, hothouse gases have caused a jump of 2 to 4 degrees, and that future increases will cause further damage. The states must show the companies either negligently or knowingly caused substantial harm to the public welfare and health. The hard evidence is lack of ice on northern lakes and as glaciers and polar ice have melted and warming oceans have expanded, the sea level in New York since 1900 has risen an inch per decade. (The Christian Science Monitor, August 19)

The Columbia River Gorge, which divides Oregon and Washington, floats thousands of boats per year, which help create the haze in the summer. In Southern California, which includes the nation's two busiest ports, Long Beach and Los Angeles, the vessels there produce more pollution than any other single source in the area. In Pittsburgh, the barges, boats, and ships that ply the rivers heave out as much pollution as the automobile traffic that rolls toward downtown on one interstate highway. Cities and states offer boats and ships incentives such as money for cleaner engines. But only the EPA has the power to require the vessels to clean up; it set new standards for boats and ships of all sizes. The biggest ships – behemoths that cross the oceans – emit huge amounts of pollution. An international treaty that takes effect next year will curb emissions from these ships. But the Senate hasn't approved the treaty, so the EPA can't enforce it against foreign vessels in US waters. And the restrictions apply only to new ships; existing ships — which last 20 to 40 years — may keep polluting. (USA Today, Aug 30)

In Oregon, a federal court ordered three shipping companies whose ocean-going freighters rinsed their waste oil out of their holds, into the Columbia River, to pay fines totaling $1.3 million and some of the sailors to do jail time. (Oregonian, Aug 12) All of the sailors are foreigners, all the companies are owned by foreigners, and none have recently if ever made significant contributions to any winning candidates for Congress.

During the August heat wave, Portland, reputed to have clean air, had its third smog alert of the summer, when governmental watchdogs ask people to take buses and advise young, old, and asthmatics to stay indoors. Since the smog comes from cars, why not quadruple the gas tax during smog alerts? Give drivers a reason to ride felt in their pocketbooks.

At the seashore, the ocean for the third year in a row developed a dead zone, where cold water from the bottom rises to replace warmer surface water blown away by strong winds and brings with it too many nutrients and too little oxygen, suffocating all sea creatures that cannot swim away fast enough. While the normal amount of upwelling water, rich in nutrients, is beneficial, the excessive amount is lethal. The source of the stronger than usual prevailing winds is not yet known. (The Oregonian, August 11)

Ralph Nader (current campaign at votenader.org): “The present adjustment of Henry George's celebrated land tax could also be considered.” (via Alanna Hartzok)

Garrett Hardin (1915-2003, author of lifeboat ethics and the tragedy of the commons, in correspondence with former Forum on Geonomics member, Dr. Robert Andelson, deceased): “I have known of Henry George's work for a long time and always thought it a shame that he could not have been born two centuries earlier and laid out the ground rules for the development of the New World.”

Robert Puentes, Senior Research Manager at the Center on Urban and Metropolitan Policy of the Brookings Institution (Washington Times, June 21, via the Progress Report): "Reserving for Metro proceeds from regional sales and/or gas taxes are a possibility. So are congestion charges, parking fees or strategies that capture increases in land value near Metro stations." The last recovers value the system generates, often enough.

The UK's Housing Today (July, page 16): "The rise in land values after infrastructure is promised could be harnessed to pay for the installation of utilities and other services..." noted Phil Butler, head of commercial consultancy for Anglian Water, which supplies water to an area around Stanstead, London's third airport, and Cambridge. He cites American governments, selling geo-bonds to be repaid from the raised land values due to infrastructure development.

The UK's Green Party in The Guardian (July 9): “Scrap VAT, which is a regressive tax and which taxes goods as well as bads; introduce comprehensive eco-taxes to deter pollution and its hidden economic costs to society. Introduce a Land Value Tax to eliminate speculation in land and to help stabilize land and property prices. End all direct and indirect subsidies and tax breaks to nuclear and fossil fuel power. End all subsidies to arms exports, and channel the money saved into projects that promote world stability, such as debt relief. Immediately freeze defense spending, pending a strategic defense revue, expected to result in major cuts in defense expenditure. Introduce a citizen's income scheme, as a tool of wealth redistribution, funded from higher rate tax earners.” Among other wishes on their list (via Aussie Green Tim Lister)

The UK's New Economics Foundation: World Bank spending on fossil fuel projects amount conservatively to about $235bn a year. They both distort the global economy and hold back the development of renewables. This is worsened by our failure to factor into the price of fossil fuels the direct costs of the damage they cause; the UK government estimates the cost at £50 to £200 pounds per ton. (Via3 Newsletter, No. 46, 28 June via Kathleen Walsh)

Business Day of Johannesburg, South Africa ran buddy Peter Meakin's op-ed (July 23): “no title deed needs be altered, no nationalization needs to occur, and no expropriation is needed. All that is necessary is for Finance Minister Trevor Manuel to substitute user charges on land and natural resources for his conventional taxes. Under this regime citizens will realize their exclusive use of natural resources is costly and will abandon whatever it is they are not using, or improve the land so that they can pay the charges. The poor get affordable land – without having to wait for bureaucracies to buy it for them – and the rich continue to fill Manuel's pockets but on the basis of user charges that do not tax their skills, hard work, savings and trade.” In neighboring Zimbabwe, dictator Robert Mugabe said a man can have as many wives as he wants but not so much land; even successful black farmers lose their land to Mugabe's political party (Boston Globe, July 18).

Andrei Illarionov, advisor to President Putin: "Rent is very high in the price of oil and other energy resources artificially overvalued many years by OPEC. This rent redistributes money from countries that import oil to countries that export oil. High prices of energy resources are a factor in the so-called Dutch disease – the degradation of processing industries and the growth of the commodities sector. Economic growth slows down and sometimes stops. (Unshared) rent always has corrupting influence on its recipient, primarily on political and economic elites and on the entire society. It is possible to manage rent in the interests of the entire population by building factories and plants, providing a decent living to teachers, doctors and pensioners, and defending the national interests.” (Yezhenedelny Zhurnal, No. 31-32, August 29, via Michael Hudson)

Atlanta Journal-Constitution (July 11): “there's no rational reason that the US taxpayer should pay a farmer more than a million dollars a year to grow cotton or any other crop. It is a form of welfare by another name, with one essential difference. The government checks that are being cashed run to six or seven figures a year, as opposed to the few hundred dollars a month paid to mothers of children in poverty.”

Future of Freedom Foundation (July 17) Henry George, Protection or Free Trade [1886]: “If to prevent trade were to stimulate industry and promote prosperity, then the localities where he was most isolated would show the first advances of man. The natural protection to home industry afforded by rugged mountains-chains, by burning deserts, or by seas too wide and tempestuous for the frail bark of the early mariner would have given us the first glimmerings of civilization and shown its most rapid growth. But, in fact, it is where trade could best be carried on that we find wealth first accumulating and civilization beginning. It is on accessible harbors, by navigable rivers and much traveled highways that we find cities arising and the arts and sciences developing.” (via Harry Pollard)

William the Conqueror's son set up the Bridge House Trust Fund to build the London Bridge; it grew to include the building and maintenance of other bridges in the City of London. They collected rent for premises on the bridges and other sites they own in and around London. The City of London covers only the very small financial district right in the heart of London. Their office lies well outside the City Corporation's boundary. They don't sell freeholds but offer very long leases. They collect so much money that in the past 10 years the fund, while maintaining about 5 bridges, gave about £139m to charity. (Dave Wetzel, Vice-chair, Transport for London)

In Denmark, when the borough Brøndbyerne taxed land value at 4.7% it was the nation's highest rate, but it was soon eclipsed by the borough Albertslund which collected 7%. The two boroughs were in the same county; their residents had to pay 2% more to the county. The high LVT financed schools, sport facilities, and other public installations in the rapidly growing suburbs. These high rates did not lower residential land prices; demand stayed high because other taxes were kept relatively low and people compared their total expenses plus other advantages offered by the public in similar boroughs. (Dane Ole Lefmann, Aug 31)

Milton Friedman in his Free to Choose, written with his wife Rose, noted that while Americans reject socialism, they have adopted much of the Socialist Party's platform of 1928, including flood control, irrigation, the TVA, Amtrak, unemployment compensation, Social Security, shorter workweek, anti-child labor. The rest of the platform is arguable yet hardly controversial, such as medical insurance and inheritance taxes. The planks that seem beyond the horizon are the first and last: nationalize resources and tax land speculation. None of the above is needed were we to simply charge the full annual value for titles to locations, including mines and wellheads and EM frequencies, making it possible to eliminate taxes, and pay ourselves a dividend from surplus public revenue, making it possible to eliminate special subsidies (via Greg Young).

This is the new, expanded edition (2004) by Mark Zepehauer, also the illustrator. It's humorously written, under 200 pages, yet thoroughly documented for those who want to dig deeper. It even cites our sister website hosted by Hanno Beck, the Corporate Hall of Shame. Mark has organized his wealth of material into three sections: individual inequities which covers Social Security, homeowner breaks, and pension; big business breaks which tallies up the loopholes for those who can afford to lobby for them; and industry chicanery which covers the wasteful federal spending that campaign contributions buy, from military to oil & gas with agribusiness and everything else in between. All totaled, it comes to at least $815 billion, and it's getting worse, up 69% in the seven years since edition one came out. Meanwhile, welfare for the poor is $193 billion a year and shrinking. Mark doesn't even include the waste and fraud in state and local budgets, which are similarly tilted upward toward those who don't need a handout so much as a slap on the wrist and a kick in the pants. Really, why should the City of Portland pay the budget of the business group that lobbies against taxes? Even after all his findings, Mark still wants government to spend public revenue, rather than return it as a rent dividend to the people, who are perfectly capable of making their own mistakes and need no help from politicians to spend wastefully. But when people don't spend other people's money (OPM, pronounced “opium”) but spend what they earn, they tend to spend more wisely.

In 1960, the gap in terms of wealth between the top 20% and the bottom 20% was 30 fold. Four decades later it is more than 75 fold – the worst inequality among all western nations. Millions of workers make less money today in real dollars than they did twenty years ago; they put in longer hours and still fall behind. Poverty is showing up among families that include two parents, a worker, and a head of the household with more than a high school education. These are the newly poor. The middle class and working poor are told that what's happening to them is the consequence of Adam Smith's "Invisible Hand." This is a lie. What's happening to them is the direct consequence of corporate activism, intellectual propaganda, the rise of a religious orthodoxy that in its hunger for government subsidies has made an idol of power, and a string of political decisions favoring the powerful and the privileged who bought the political system right out from under us. From land, water and other natural resources, to media and the broadcast and digital spectrums, to scientific discovery and medical breakthroughs, and to politics itself, a broad range of the American commons is undergoing a powerful shift toward private and corporate control. We could provide that each and every citizen would enjoy the basic necessities of life, (Bill Moyers, Keynote Speech at Inequality Matters Forum, New York University, June 3) While true, it was the usual 99% complaint, 1% solution, buried in there somewhere. Some day someone of his stature must say that you've made a mistake expecting all your income to come from your labor or capital; a good hunk of it must come from our land, to all of us, in equal shares.

More money does make one feel happier, but so do other factors. From 150 studies over 20 years that measured happiness, on a happiness scale of 1 (least happy) to 7 (most happy), the 400 richest Americans average 5.8 on the scale, while homeless people in Calcutta, India average 2.9. Yet, cattle-herders in Kenya (who do not have modern conveniences) and the Inuit people of Greenland also average 5.8. When more income moves individuals from abject poverty to being able to afford basic needs, people get happy. The higher a nation's gross domestic product, the happier people generally are. But wealthier nations tend to have more human rights, too. Nevertheless, even among higher income individuals, happiness comes from relationships and a sense of purpose in one's life. People who are happier do tend to earn higher incomes, but the ability to earn a higher income could be based on first being happy, which would lead to more productivity and a sense of well-being. (Wall Street Journal, August 13)

Dallas appraiser vs. tax cap

Texas lawmakers are considering a bill to cap gains in the appraised value of land at 5% per year, a move that Dallas County Chief Appraiser Foy Mitchell says favors affluent homeowners. He notes that properties worth $1 million or more easily rise by 10% annually, while more modest dwellings typically increase less than 5%. If passed, the bill would lower the property tax on wealthier owners without offering the same benefits to other property owners. Meanwhile, officials in several counties say they might be forced to scale back funding to certain services or hike tax rates to offset losses resulting from the cap, hitting lower-income residents the hardest. A person living in a $200,000 house should not have to pay more taxes so people in a $1 million house can get a tax break. (Dallas Morning News, May 5, via Ed Dodson in the Georgist News)

John Morales (semi-retired accountant, Aug 22): “An American car company can move its factories to Mexico and claim it's a free market. An American toy company can outsource to a Chinese subcontractor and claim it's a free market. A major American bank can incorporate in Bermuda to avoid taxes and claim it's a free market. We can buy HP Printers made in Mexico. We can buy shirts made in Bangladesh. We can purchase almost anything we want from many different countries. BUT, heaven help the elderly who dare to buy their prescription drugs from a Canadian pharmacy. That's called un-American! You think the pharmaceutical companies don't have a powerful lobby? Think again!”

In Kenya, Masai herders and white farmers compete for the same fertile valley. As in most places, landowners are not rent-owers. Yet if each occupant were to pay their neighbors for nature – rather than pay previous or absent owners – and got payment from neighbors, then that might settle land disputes. If they'd even first arise; if you can't get another guy's land for free, why take it? At least in theory. In practice, Kenya would also have to quit giving agri-business subsidies (via international aid and lenders). Minus subsidies, the cost of rural land would fall. Further, the Masai could augment their income by becoming a tourist attraction, something farms can't do. Then, the Masai could afford to outbid their fellow countrymen for their ancestral land. We presume. But maybe geonomics would not work to return the valley to the tribe. In that case, politics could step in and rule in favor of the Masai. People have a right to live outside the monetary economy somewhere. It might as well be where they always did. Regardless of the outcome, when we exclude others from land – which is always – we owe them rent. Paying it might not settle or prevent every dispute, but it would provide a moral underpinning for everyone's claims. And seeing themselves as joint tenants, giving and getting compensation, compatriots could more easily arrive at compromise.

M. Jastifer (Jun 30): “The ad valorem property tax is the most fair tax in America. Everyone in America can get a house if they just work. What do you want to do? Give all the land to the people and everyone has to be equal?”

Editor: Actually, everyone would keep whatever land they now have, but not its rent. That they'd pay to their community, and get back the same share as everyone else. Not only is it fair to share rent, since the community generates the value of locations, but it's also more efficient, since it lets us axe the bad taxes.

Terence Bendixson, from Germany (August 22): “Does taxing land value, amongst other things, reduce the propensity of cities to sprawl? Does the experience of Australian cities that tax land value support this?”

Editor: It's hard to say, since cities hemmed in by mountains or on a peninsula are denser than those on plains, cities laid out before cars are denser than new ones, capitals with large lawns are less dense than non-public cities, etc. Theoretically, a computer model by a prof at the U of Boston shrunk his town as the rates were shifted. Anecdotally, the mayor of Harrisburg gives credit to his shift of the property sparing the outlying countryside. And Jo-burg had the fastest urban site recycling rate in the world, leaving little new development to occur as sprawl in the suburbs. Yet every public collection of ground rent has been partial, not total, so the full power of geonomics has never yet been unleashed.

Prakash Chandrashekar of India (July 29): “Could you help here? On one hand, we have a chart of property value increments. From this we can average the gains made by the landowner; the variation in the valuations give an idea of risk. On the other hand, we have the success rate of small businesses (risk) and their average ROI. Thus, we can show the relative advantages of speculating in land. This might help disprove claims by royal libertarian economists that the market would equalize any such returns. Is this reasonable?”

Renier van der Bank, attorney at law in De Jager Steyn Maritz Inc, wrote: “I refer to your article on the internet regarding property tax, which I found very insightful. We are a South African law firm and currently involved in assisting numerous Local Governments in implementing by-laws in accordance with our Property Rates Bill. As we are of the opinion that you are years ahead in this field, we thought we'd take the liberty of contacting you for some assistance.”

The Oregonian, Portland's main daily, ran my letter August 14 on solving homeless by making homes affordable by shifting the property tax off buildings onto land. In reply, City Councilman Erik Sten: “You are citing Pittsburgh's experience 18 years ago to support your argument. I think your arguments about the tax structure are legitimate but you have missed the target on the homeless issue. If you are suggesting that a change in the tax structure will significantly impact our homeless problem in the short, you are overselling your product. I'm sorry that we do not agree on this particular point but I do appreciate your work as a tax reform advocate.” Erik's our best, but some of us gotta work on symptoms, some gotta work on systems.

On the community radio station, WORT-FM, 89.9 FM, in Madison, WI, for the live call-in show, "A Public Affair", Lea Zeldin interviewed me (Aug 12) after reading my talk at the Boston Social Forum. Listeners kept calling in, so we easily filled up the hour.

Simple Solutions, edited by John Watkins, July 8 adapted from The Geonomist summer issue two articles and August 28 in the lead article touted “the citizen's dividend promoted by Jeffery Smith and the Forum on Geonomics.” The US BIG Newsletter (May/June) cited my talk on Mideast peace thru rent-shares.

After giving talks, in Montreal to the International Society for Ecological Economics was drafted to co-organize next year's US SEE conference; in Burlington Vermont to Sustainable Communities was introduced by the mayor of Kalamazoo to Charlie Lyons, president of the National League of Cities; in Boston to the Social Forum (BSF) lunched with Ralph Nader's running mate, Peter Camejo, and consulted with the affordable housing land trust, the Dudley Street Project. After the BSF, John Miller, an editor of the magazine Dollars and Sense: “We certainly should try to work more closely together. We would love to get a copy of your newsletter at D&S. And I will pass on the word about your SEE conference.” In Portland's Convention Center, presented at the 2004 Ecological Society of America Annual Meeting, “Ecology: Model for an Intelligible Economy”. At all events I disbursed 100s of summer Geonomists in total. Six students attended my summer course, “The Next Economy”, at Portland Community College, which handled all the publicity and paid me a modicum for my efforts. Eric Zencey, economics prof, Empire State College, Saratoga Springs, carried our proposed course to his Curriculum Committee.

Simon Mortlock, Publisher, Richmond Law & Tax intends to publish the second edition of Critical Issues in Environmental Taxation with my “valued contribution”.

Jennifer Boteler, Librarian of the Washington State Dept. of Transportation in Olympia, asked where our list of sources, “Financing Transit Systems Through Value Capture: An Annotated Bibliography", has been published. It hasn't yet but should be soon in the American Journal of Economics and Sociology.

Mike Feinstein, old companion and Green Party Mayor of Santa Monica, sent to his discussion list: “I am a strong proponent that we explore the Green Tax Shift principle advocated by the WorldWatch Institute, Redefining Progress, and others, as it might apply to California, including regarding Prop 13 reform. In that vein of the Green Tax Shift, I pass along this site and a few links:” those of Worldwatch, BIEN, Redefining Progress, Progress Report, Earth Rights, and ours.

Jeff Strang, member and Green Party candidate for the Oregon Senate, Dist. 22 in his fundraising letter to hundreds if not thousands: “I'm suggesting 1) shifting property taxes off buildings and onto land.” He listed only two more platform planks.

Thomas Forsyth, expert who was on the PBS show “History Detectives” re the Georgist Quaker origins of the board game Monopoly (July 14 to Wetzel Dave): “PBS left Dr Ralph Anspach's name off the credits, despite having won his patent suit with Parker Brothers 20 years ago, and the show's director complained that national headquarters had pressured for edits he did not agree with, perhaps worried about losing Hasbro, who own Parker Brothers and is a major corporate sponsor for children's programming. I did meet a local Georgist / Single Taxer here in Portland, Jeff Smith. Actually, there is quite a community of people with such interest.”

Alanna Hartzok (Earth Rights Institute, http://www.earthrights.net, VP of the Council of Georgist Organizations and a coordinator of the July CGO conference in New Mexico) attended the four-day National Security Seminar at the US Army War College as one of 170 civilian participants; 400 officers were in training this year at the College. In Seminar Group 1 she directed discussions to economic injustice, resource wars, and the tax shift.

Gregg Erickson, father of Alaska's oil dividend (gerickso@alaska.com, Jul 5): “Alaska state and local government authorities neither tax nor assess subsurface oil and gas. The direct effect of the oil dividend is overwhelmingly to stimulate economic activity and presumably to bid up the value of any factors with inelastic supply. The effect of the dividend on wage rates is mixed, with clear examples where it works as a wage subsidy, depressing wages, and stimulating development by producing cheaper labor, and other clear examples where it is a disincentive to work, causing the labor supply to contract, and boosting wages, presumably a drag on development. Recent research confirms my 1997 hypothesis that the dividend bumped birthrates upward.” Which is why a jurisdiction might need to require rent recipients to have three years tenure.

Paul Metz, Dutch energy consultant (July 11, to Bruno Moser): “What we need is a good database with the key lessons learned, Q&A, based on existing evidence as collected by e.g. Jeffery Smith, convincing different professions, accessible, concise and brief.”

Steven Cord, semi-retired historian: “Raghuram Rajan (cited last issue) is the chief economist for the IMF, not the World Bank. I'll be sending you a renewal soon.” Never soon enough!

The Robert Schalkenbach Fdn supported our talks back East, covering the costs of registration, lodging, and travel; the Henry George School of New York supported our courses thru the coming academic year, covering the costs of research, preparing materials, lobbying curriculum czars, extra promotion, actual teaching and follow-up. Our summer issue swayed many newals and renewals: sustainers Al Hartheimer (MA), Walter Horn (Boston), and Marion and Stan Sapiro (LA air basin); supporters Steve Cord, John Fisher, and anonymous; and subscriber Joan Sage. Thanks to all for re/joining, donating, and granting. If you don't see your name on this list and know it belongs there, just send a check. We'll know what to do with it.

In Portland this fall, speak up at our First Tuesday Symposia in the Belmont Library, SE 39th and Yamhill St, 6:45 PM. September 7th is “Laborless Day”, shortly after Henry George's birtday (see below). October 5th is “The Next Economy” in the month famous for Black Fridays. November 2nd, mid autumn, is “Take the Rich Off Welfare”, when you'll have a chance to elect new and improved big spenders. December 7th, the day Ike warned us of the military/industrial complex, is “Liberation Ecology”; 'tis the season, eh?

Beyond Oregon in September, in Italy is the global green taxers and in Spain the basic income network. In November in Florida is our business cycle workshop. In December in California is our Green Party tour and a deadline. The third biennial conference of the US Society for Ecological Economics comes to the Tacoma Convention Center in Washington July 20-23, 2005. Planned are on-site workshops on applying ecological economics to solve local, regional, and global problems faced by NGOs, government, and business. Also, field trips to the Carbon River Valley in Mount Rainier National Park. Abstracts are due November 1 to Isabel de la Torre, isatorre@seanet.com. Please limit the text to 300 words.

The Next Economy

if there is one, will be green.

Jobs head south. Housing costs (actually, land values) keep soaring even after stocks drop, after The Fed raises its rates. Yet inflation keeps creeping up. And always some people can't find work. Meanwhile, the eco-system on which every economy depends, atrophies as human population grows. Nature has her cycles (e.g., prey-predator cycle). So do markets (e.g., pricing cycle). Taxes and subsidies alter these natural cycles. Could we align public policy with natural cycles? Plotting these self-regulating feedback loops, can we glimpse what's coming? The Land Price Cycle hints what's next, and what to do.

October 5
Tues, 6:45 pm
BELMONT LIBRARY
SE 39th & Yamhill

Jeff Smith, Forum on Geonomics: 503/234-0809

Tell a friend. Hugo Scornik, Canary Island architect: “Thanx for The Geonomist! I'll tell a friend or a hundred!” Order an article. Michael Hudson, UM-KC forecaster re my one-page explanation of geonomics: “This is very good, Jeff.” Kind of him to say; copies available to all. And contribute. Marion Sapiro, retired from UCLA: “The Geonomist and your reports help to sustain Stan as well as promote our cause. Terrific work, foresight, planning, & follow-thru. You're the greatest. Wish we could send more.” Already you sustain us! May others as well. Readers, do harvest your accumulated wisdom and talents. Join us. Merry Equinox.

THE GEONOMIST

Vol. 13, No. 2
Editor: Jeffery Johnson Smith

The Next Economy

if there is one, will be green.

October 5
Tues, 6:45 pm
BELMONT LIBRARY
SE 39th & Yamhill

THE GEONOMIST

Vol. 13, No. 2 Editor: Jeffery Johnson Smith

The Next Economy

if there is one, will be green.

October 5 Tues, 6:45 pm BELMONT LIBRARY SE 39th & Yamhill

Vol. 13, No. 2
Editor: Jeffery Johnson Smith

October 5
Tues, 6:45 pm
BELMONT LIBRARY
SE 39th & Yamhill