This blog will stay up for a while, I guess, but please update your bookmark to the new site: http://menaceofprivilege.com/

This information comes from farmlandgrab.org (“Governments and corporations are buying up farmland in other countries to grow their own food – or simply to make money”), via Alanna Hartzok.

To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries

Cong. Rick Boucher introduced a bill a couple of years ago to limit the benefits patent holders could obtain for such patents (summarized here(doc) with full text here(pdf)).   A message today from Vaughn Henry implies that this has been reintroduced.

Not only are we not seeing this, but prices in Chicago have lagged most other areas over the 1998-2008 period.  I’ve put together data from the U S Bureau of Labor Statistics here. Comparing the annual averages, we see that Chicago prices gained less than 29% while the national average increased more than 32%.  Our costs for natural gas and gasoline increase more than the average, but most other costs grew about the same or less.   Apparel actually dropped nearly 25%, compared to about 11% nationally.  Groceries and electricity also grew much less than most other places.

The last three columns of the table show the weights, which are essentially the percentage of consumer expenditures for each item.  Housing costs account for more than 42%, both nationally and locally.  You might already know that the cost of purchasing a home is not directly reflected in the CPI.  Rather, the concept of “owner equivalent rent,” how much it might cost you to rent a house like the one you own and occupy, is used instead.

I have shown pretty nearly the most detailed breakout available for the Chicago region; however much more detail is available at the national level. The components of each category, with the detailed (national) weights, are here.

I have limited this analysis to annual averages in order to avoid worrying about seasonal adjustment.  However, one could compare the latest (April ’09) report to year-ago data, at the national and regional level, and see that prices are falling more quickly here (down 2.2% in a year)  than  nationally (down 0.7%).

Why would this be?  Of course Chicago isn’t the only place to have raised sales taxes, and other kinds of taxes on productive activity will also find their way to consumer prices.  But the specifics remain to be analyzed.

Nationally, however, more than half of farmland is operator-owned.  And these owners paid more than $7 billion in interest on loans secured by real estate.

We know that the major cause of the business cycle is the capitalization and trading of government-protected privilege.  This privilege can be any kind of income obtained without producing, and may flow from spectrum licenses, drilling rights, patents, copyrights, or a hundred other sources.  But the main one is land ownership, since land is not a product of human labour.

When demand increases for a product or service, production can increase, but that isn’t true of privilege. The only limit on the price of privilege is what the market will bear without breaking.   So can’t we measure that price, use the information to forecast economic meltdowns, and thus become wealthy?

Our massive government statistics operations, which know how much more Asian-American households spend on rice than the rest of us do (4 times as much, as of 2003), and that people spend an average of 2.43 hours each weekday watching television, know just about nothing about the price of land.  Only a few countries maintain any such information (Korea, Japan, Denmark, and Australia come to mind).  Many local authorities compile land assessments, but the relationship to actual market prices is, at best, elastic, and the information is not systematically reported.  So indirect and ephemeral indicators must be relied upon.

Moreover, they land price cycle tends to run about 18 years, and may be disrupted by war (not by much else, it appears). This means that taking advantage of it requires a great deal of patience and, one can only say, a certain amount of faith.  And starting at a young enough age, by the way. Of course the cycle might be entirely abolished, but that would require the elites, and some of the non-elites, to surrender significant privilege.

The book is well-written, well-edited, and well-documented. (A subject index would be nice.) Economist Mason Gaffney’s  review is far more informed than anything I could have produced.  He points out a number of imperfections, but on the whole this is a very useful book for anybody who wants to know why many of us aren’t rich, or who would like to be.

But Mr. Assessor, how about the assessment and extension of real estate taxes.  You know, the stuff you do?  Can’t you improve that?  Maybe you could start by assessing vacant land properly?  And making sure that land value is fully included in all assessments?  That’s not going to discourage any economic activity.

Then maybe we could ask the solons of the Cook County Board to change the property classification system, assessing improvements at only 40% of the ratio applied to land value? They could do this under existing law. Maybe they could even exempt improvements entirely?  And, while we’re asking the Illinois General Assembly to reform things, why not eliminate the sales and income taxes, by resurrecting the state sales tax?

Regular readers of this blog, and Henry George School students, know why this is a good idea.  Evidently Assessor Houlihan doesn’t want us to even think about it.

a congressional provision that directs approved funds to be spent on specific projects or that directs specific exemptions from taxes or mandated fees.

On the face of it, I don’t see that as such a bad thing.  If my Congressbeing has determined that the national interest requires a particular expenditure, it seems reasonable that she might want to make sure that a budget or appropriation item really will be used for that purpose.

The problem, of course, has been that earmarks are obscure, and invariably are for local projects in which the Federal government has no legitimate role.  Now, the earmarks are being disclosed, at least by House members, and our friends at Taxpayers for Common Sense have compiled a list. Not of earmarks, but of URL’s where earmarks can be found.

I figured they might be bad, and they are.  “My” Congressbeing, for instance, has a list of mainly municipal and nonprofit projects, at least some of which are economically justified and therefore should be funded out of the savings or other benefits which they produce. There  are also a few government contractors being taken care of, and a couple of CTA projects.  Because the latter is something I know a little bit about, I can say that the descriptions are quite deceptive, greatly exaggerating the result (e.g. “extension of the Yellow Line”) which will be obtained by a relatively modest ($1 million) expenditure.

And that list is hardly the worst.