Archive for September, 2008

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Hunters vs. “landowners” in Virginia

September 27, 2008

If your hunting dog wanders onto private property, can you go there to retrieve her? That would seem to be the simplest solution, but some Virginia landowners disagree.  Just what they want hunters to do is unclear.  Maybe to stop hunting.  Of course landownership cannot be absolute, all landlords have obligations to the community, and letting owners retrieve their dogs seems to be one of them.

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700-bank solution isn’t better than nothing

September 25, 2008

Bob Matter’s thoughtful comments need a response, and I can’t figure out how to properly format one without doing a new post, so here it is.

1. Not enough to time to implement a plan of such scope.

There’s enough time to price and purchase opaque derivative securities but not to open 700 straightforward banks?  There are so many out-of-work bank staff– and more to come.  I agree that this is a considerable task, but there are lots of people who know how to do it, and would have started their own banks already if they could raise the capital.

2. Too much added expense. 700 more buildings to rent, heat, light, and maintain, 700 sets of phone lines to pay for, computers, personnel, etc. etc.

We have a banking infrastructure in place now. There is plenty of vacant commercial space pretty much throughout the country. Of course there will be a cost, but each bank is a billion-dollar institution before they even take a deposit; they could spend 1/10th of 1% for physical facilities and startup staff.

3. Even this plan would ultimately lead to failure. The core problem of allowing private ownership of real property needs to be addressed. Until that time we will just keep repeating the boom-bust cycle. Interested parties can read the solution to today’s financial “crisis” in _Progress and Poverty_ by Henry George.

Henry George explains the root cause of economic meltdowns, and they will not be avoided until something like his proposal is put into effect. If he were here today, what would he propose as a way out of this depression?
I claim only that my proposal is far better than what the authorities propose.  I don’t claim that it is better than doing nothing, which would result in considerable inconvenience but probably a quicker recovery than what we’ll get.

What’s really encouraging now is how much opposition is appearing to the whole idea of any bailout.  I wish that meant it was unlikely to happen.

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The 700-bank solution

September 24, 2008

Georgists know why the economic meltdown was unavoidable.  It could be postponed and, to some extent, redirected, but it was inevitable as long as big profits could be anticipated from speculation in privilege including landownership.

And furthermore, we know what needs to be done to avoid the next meltdown.

But what do Georgists say should be done to facilitate the recovery from the present economic distress?  I will offer my suggestion, a pragmatic approach to what’s already underway. Read the rest of this entry ?

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Great Chicago history resource– and a new blog

September 21, 2008

Anyone interested in the history of Chicago land values (and that should be everyone around here) will enjoy getting lost in the 1916  Valuations of central business property which I just found at the Internet Archive. As a period piece it’s fascinating, but it also provides interesting comparisons to real estate prices and practices of today.

And this brings to mind that I have set up a second blog, priceofprivilege, to focus on just that– the prices being paid and asked for land ownership and other privileges.  This item doesn’t go there, because it’s nowhere near current.  But other items, such as taxi medallion prices and land prices around the world are going to go there rather than here.  The purpose is to possibly attract an audience more interested in speculation and profit than ending poverty and economic meltdowns, but the information can still be of interest to those of us with the latter objectives.

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Privatizing Federal patents

September 16, 2008

NASA has engaged a Chicago company, Ocean Tomo, to auction off “a suite of 25 patents.” This is considered to be transferring technology to the private sector.   I guess an auction is better than sleazy private deals.  The main point to remember is that a patent is not the right to use an invention, it is only the right to prevent others from doing so.  (via slashdot)

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Unbroken record on overtaxing those who use land…

September 14, 2008

…and undertaxing those who just sit on land, waiting for its value to rise.

The 2006 data are now published, and once again the Cook County Assessor has overassessed houses (and the lots they occupy) in Chicago relative to vacant land.  As in the previous year, data from actual sales show that, as a percentage of  sales price, assessments on houses (including land) average 50% higher than assessments on vacant land. This is the reverse of the legal requirement, under which real estate which includes houses is supposed to be assessed at a 1/3 lower percentage of value than vacant land.

This amounts to is a further penalty on homeowners (and owners of condo’s, and 2-4 flats, too), as owners of vacant land aren’t carrying their legal (let alone fair) share of the tax burden.

Is Cook County uniquely corrupt or incompetent in this regard? Other Illinois counties do not even pretend to assess residential parcels at a lower percentage of value than vacant parcels.  Rather, they are obligated to assess everything at the same percentage of value.   In most cases where data are reported, however,  the assessment as a percentage of sales price is considerably lower for vacant parcels than for improved real estate.

Source: Data compiled by the Illinois Department of Revenue, which can be seen here (look at the “ratio” links under “property tax.”

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Nobody understands the income tax

September 11, 2008

That’s what Albert Einstein is reputed to have said, tho I’ve never found it documented.  He might have meant that nobody understands the logic of a tax system that penalizes productivity and “put[s] a premium upon unscrupulousness and a tax upon conscience.” More likely he meant that no one understands how to calculate it.  A recent prominent example could be Charles Rangel, who maybe really didn’t understand that he had to pay taxes on the income from renting his Dominican villa.

But today’s a twofer, because we also have a report that “[s]ome of the country’s biggest investment banks and brokerage firms…marketed allegedly abusive transactions that helped foreign hedge-fund investors avoid billions of dollars in U. S. taxes…”  The big news isn’t that they cheated, but that they got caught. I bet they’ll be a lot more careful in the future.

The income tax is inherently difficult to administer.  Many very smart people spend their working hours figuring out ways to avoid taxes.  Other smart people spend their working hours figuring out how to eliminate the ways discovered by the first group of smart people. (Later those in the second group join the first group, whose work is more lucrative.)

Meanwhile, we ordinary taxpayers have to deal with more and more complexities, most inserted by the second group in a futile attempt to stop the first group.