Archive for the ‘history’ Category

Tribune exposes one scandal and misses a bigger one

Property tax needs attention

credit: From Sovereign to Serf (CC BY-ND 2.0)

The Chicago Tribune, or what’s left of it, has issued a pretty good report on inequities and corruption at the Cook County Assessor’s office. Of particular note, they’ve included a lot of detailed statistics looking at assessment/sales price ratios, as well as a lot of details of recent history.  I think it’s fair to describe their main points as:

  1. Less expensive homes typically are assessed at a higher percentage of market value than more expensive homes, and therefore pay more taxes than they would if assessments more accurately reflected market prices.
  2. Sophisticated homeowners are more likely than unsophisticated ones to appeal their assessments, and a large percentage of appeals are successful.  This is one cause of the problem in (1).
  3. The quality of assessments in Cook County doesn’t meet professional standards of accuracy.  The MacArthur Foundation funded development of new mass appraisal methods which may provide more accurate results, but the Assessor has made little or no use of them.
  4. The Cook County Assessor’s office suffers from some combination of corruption and incompetence.

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End of the Statistical Abstract

Statistical abstract spines on a shelf

image credit: DIY Librarian via Flickr (cc)

Back in the old days, pre-Internet, the Statistical Abstract of the United States was usually the first place I’d look for any US data that the feds were likely to collect or review.  I could cite it with confidence that most readers would also have access to it, and it included source citations if more detail was needed. In the Internet age, it continued as a convenient resource, posted annually on the Census Bureau’s web site.

I had missed the news (was it even reported in the dominant media?) that the 2012 Abstract will be the last.   If the federal budget must be cut, then I suppose this is one way to do it, but it seems that our rulers could have found a better way.

Apparently a guide to sources will remain, at least for the time being.

Putting God on the side of the geoists

Chapel atop Mt. Sinai

Sinai Summit (credit: Wikimedia)

Peoria Georgist John L. Kelly has produced a three-titled book making the theological case for economic justice:

The Other Law of Moses:
God’s Remarkable Plan for Prosperity:
What 21st-Century Nations Can Learn from Ancient Israel’s Economics

I am the second-least-qualified person to review this book.  That’s because it takes for granted that the reader is a believing Christian, and that the reader has an Amazon Kindle or other proprietary software (or hardware) with which to read it. I claim neither qualification; what I review here is a text which I was told is the text of this book.

An earlier version of this book is the basis for the course Economics as if God Cared, offered by John Kuchta once or twice each year at the Henry George School of Chicago.

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Sun Yat-sen “deeply inspired” by George

Georgists claim Sun Yat-sen, founder of the Chinese republic, as one of us.  But I could never find anything in English-language books to support this assertion. So it’s good to see this article from Focus Taiwan News Channel, about an exhibition on “Sun Yat-sen and the United States.”

[Taiwan President Ma Ying-jeou] noted that Sun, when he drafted his political philosophy, was deeply inspired by Henry George, a renowned American political writer of the 19th Century, as well as Abraham Lincoln’s Gettysburg address of 1863.

 

The limits of Econned

Over the years, Naked Capitalism has provided a fine, if discouraging, play-by-play of the worsening corruption of our financial and governmental powers.  Dense daily posts, plus links to relevant news stories, supported by thoughtful and knowledgable commenters, makes it one of the few sites I really ought to read daily. (Cute animal pictures are a bonus.)

When chief blogger Yves Smith published Econned: How Unenlightened Self Interest Undermined Democracy and Corrupted Capitalism, I was anxious to read it. Which I finally did over the last couple of weeks. (more…)

Inside Job gets outside

Prize-winning documentary Inside Job was posted for free download at archive.org a few days ago.  It was withdrawn late yesterday or this morning, but in the interim I had a chance to watch it. It was pretty much as I expected: A very well-documented expose of the forces which brought down the world economy, emphasizing that they have been rewarded, not punished, for doing so, and essentially escaped prosecution (some paid fines amounting to a small part of their takings.)  It’s well put together, director Charles Ferguson seems to be a skilled and persistent interviewer, getting on-camera answers even from some of the guilty parties.  Ominous music reflects our ominous economic future, lots of shots showing the Manhattan skyline, other centers of wealth, as well as foreclosed houses and abandoned developments.

As a documentary with a point of view, this film says “The guys who drove us off this cliff and unpunished and still in charge,” which might lead one to suppose that, if only they could be caught and punished, perhaps our long-term future would become brighter.  These guys own the government, of course, so exactly how a prosecution would work isn’t clear.  Elliott Spitzer’s experience, reported in the movie, does not make one optimistic.

The problem, as I see it, is that Inside Job doesn’t tell the story from the beginning.  I would represent the principal causes of the global financial crisis as the five connected items below

5  Regulatory capture and control of the government

4  Concentration of financial power

3  Securitization

2 Loans against capitalized rent

1  Private collection of economic rent

 

IJ describes 5 quite well, addresses 3 and 4, but doesn’t get into the fundamentals.  As long as, and to the extent that, we have private collection of economic rent, we will continue to suffer from economic crashes.  Inside Job needs a prequel explaining the root cause of the problem.

Does poverty cause conservatism?

A University of Tennessee study, reported at phys.org among other places, finds that, when incomes are more concentrated, people are more likely to say they oppose governmental redistribution of income.  This decidedly includes low-income people.  Why would low-income people oppose redistribution of income?

It might be because they’re too busy with survival to pay much attention to the question.  Or, having been screwed by the powers-that-be, they assume any redistribution will be away from them, toward those already in control.  Might even be that they are “free-market” types who expect to make a better living in the absence of government interference. I really have no idea.

I’ve only seen the news report, the actual paper seems to be behind a paywall, so there’s a lot of detail left unspecified. Such as whether “redistribution” is defined to include the current pattern of redistribution from those who work to  those who manipulate, what specific surveys were analyzed, and how the matter of sequence (Does public support for redistribution cause redistributive programs to be expanded?) was handled.

Why Why the German Republic Fell is Hard to Find

Bruno Heilig’s 1938 essay Why the German Republic Fell is posted and freely available on the Internet. Unfortunately, the Scholars at the School of Cooperative Individualism are not the world’s greatest proofreaders, so google has some trouble finding it, but it is here.  There is also a nice abridgement here.  Hardcopy, of course, is for sale cheap at Schalkenbach.

I read this booklet about 25 years ago, didn’t remember a thing about it, but hoped it would give me some insight into how the Weimar inflation was dealt with. No such luck, it really begins after inflation had been tamed and prosperity commenced, but it’s all the more worthwhile for that.   Heilig asserts that the rise of Hitler was caused by land speculation. I am no expert in German history, but he does seem to make a good case.

Not by land speculation exclusively, of course, but land speculation as an ingredient along with:

  • public aid to large landlords, encouraging them to withhold land from use
  • privatization, on especially favorable terms to connected individuals and groups
  • failure to fully utilize farmland, resulting in unemployment as well as high food prices
  • tariffs, raising prices of consumer and industrial goods
  • public subsidies to favored enterprises
  • control of the major news media by the landed class

Land prices soared, wages fell, eventually the economy slowed, and:

Although it was obvious that the, “invariable costs” — i.e. the tribute land monopoly exacts from the working people — were eating into all production, the responsible men and the leading exponents of what was taught as economics kept their eyes, as if under some hypnotic influence, fixed upon the worker’s pay-packet.

Reformers advocated unworkable or ineffective solutions: If progress brings poverty, they urged that we retard progress.

The newspapers, of course, served the interests of their owners:

I need not explain what that propaganda organization meant in operation. Its effect was to sway public opinion into believing that the interests of the landowners were the interests of the nation. Subsidizing the landlords was the accepted policy for preserving and even saving the sources of subsistence of the people: the higher tariff walls were for the benefit of the wage-earning population: increase in land values meant increase in the national wealth: and so on…

[A]s unemployment grew, and with it poverty and the fear of poverty, so grew the influence of the Nazi Party, which was making its lavish promises to the frustrated and its violent appeal to the revenges of a populace aware of its wrongs but condemned to hear only a malignant and distorted explanation of them.

Much in this essay is similar to today, tho Heilig never uses words like “TIF” or “terrorism.”  Some things are decidely different, for example I don’t think Germany at the time had anything like a well-paid public employee class, nor a large class of small-scale investors, such as workers with 401k’s.  But it’s easy to see how today’s conditions could lead to similar results.

Theories are easy; facts are hard

Georgists say that we understand the cause of the global financial crisis, and we saw it coming.  So if we’re so smart, why ain’t we rich? Well, some of us are, but for most of us it’s a matter of data and calibration. If we had detailed data on land prices and land rents, and a few other robust variables, properly and consistently defined, for a couple hundred years, we might make some real and pretty quick money from the theory that we do understand quite well.Or maybe not.

The above is suggested by a somewhat related post at Falkenblog.

Most people think facts are easy, and theory is hard, but actually I think it is the reverse. Theory, once you understand it, is trivial, yet important facts are very elusive, often at the bottom of most major disagreements.

And, from one of the comments:

Economics is not Physics. Economists do not collect data then develop theories like physicists. Economics is closer to Ethics in form and methodology…

Georgist History

Thanks to Bob Jene of the Better Cities Committee of Illinois for discovering the Henry George Historical Society of San Francisco. And thanks to Mary Lois Timbes for blogging at Finding Fairhope, and particularly for notice of a new book about one of Fairhope’s most distinguished. Browsing around her blog, it turns out that Timbes has written her own book about Fairhope, too.