Unjust Deserts

The full book title is
Unjust Deserts: How the Rich Are Taking Our Common Inheritance and Why We Should Take It Back
by Gar Alperovitz and Lew Daly
Now, all I know about this book is what I read in this review by Mark Engler, but clearly the point being made is that, whatever one earns by one’s own efforts, some share legitimately belongs to the community in which one lives.  What share? Measured how? Collected how?

The collection of land rent by the community seems to be a pretty good way to accomplish this, as it won’t reduce the incentive to produce and it will tend in multiple ways to benefit other community members, not only in its direct revenue effects but also in its tendency top raise wages for the poorest.

Funding Amtrak from land rent

Real estate developer Jimmy Gierczyk spent $1.5 million to build a New Buffalo station for Amtrak.  It’s  adjacent to his real estate development.  The source article doesn’t give a lot of detail about the project, but notes that he can now more easily market his condos to Chicagoans. Who are accustomed to paying much higher prices than folks in New Buffalo, I’d guess.

All of which raises the question, why can’t Amtrak collect more of the location value it generates or preserves?

Chicago "leasing" "parking" "meters"

Apparently the City is getting a one-time payment of $1.16 billion (yahoo says $1.15 billion, but what’s $10 million among friends?).  Hopefully this is entirely in cash and will be paid at the start of the “lease.” But what is being given up to one of Morgan Stanley’s financial devices for 75 years?  It’s not really the parking meters, because no meter could last more than a decade or two.  Is it the street space controlled by the meters?   Can the City reduce this space in the future if needed for a driveway, bus stop, hydrant?  What about spaces that currently lack meters but where they might be appropriate in the future?

While the Tribune says rates will quadruple, or more, by 2013, but what happens later?  This deal apparently runs to 2084.  Of course we can be sure it’s fair. The Tribune says

The mayor’s nephew, William Daley Jr., works for Morgan Stanley and lobbies state and Cook County officials on the firm’s behalf.

And according to Reuters

“I think it’s a fair price” for the parking meter system, said Dana Levenson, head of North American infrastructure banking for Royal Bank of Scotland, who helped negotiate the parking lot lease in his former position with the city.

The deal covers “more than 36,000 meters,” which seems to value each space at about $32,000.  Of course that’s a citywide average, surely spaces in outlying districts aren’t worth as much as those in the loop.

One thing that I don’t doubt: Chicago street parking has been underpriced and raising the rates is a smart move for the City.  HIgh Cost of Free Parking author Donald Shoup recommends…

Charge market rates for curb parking.  He defines market rate as the parking price that will yield 85 percent occupancy

Clearly the City has been losing revenue for years, essentially subsidizing motorists while taxing retail purchasers, homeowners, renters, and the rest of us.

Korea mortgages conservatively

From “South Korea’s High Household Debt Adds Financial Woes” WSJ Nov 29-30 ’08

South Koreans are forbidden by law to engage in high levels of borrowing for real estate…loan-to-value ratio of South Korean real estate is 47%, well below the 90% and higher ratios seen in parts of Europe and the U.S.

Apparently this doesn’t prevent heavy borrowing, which is “rooted in high housing and education costs.”

One would think that, if in fact Korean real estate is less leveraged than elsewhere, they’d be less affected by economic instability.  It would be nice to know more.

"Progressive" income tax discourages paid work

That’s no news, but this seems to be a paper that confirms it. Abstract says that the proportion of “potential” income realized as actual taxable income by high income households declined when tax rates increased, while that of low income households grew when their tax rates dropped.  That is, folks work more or less hard, depending on what proportion of their income they’ll get to keep.

This seems to be what the paper says, but it’s behind an ssrn screen so I can’t actually get a copy. Abstract from taxprofblog.

Federal Reserve Banks disagree about financial crisis

Minneapolis says the crisis affects only financial firms but other companies can get along OK, but Boston says no, it really is a serious crisis for everybody tho it’s hard to see. The article is from a couple of weeks ago, one way or another recent declines in retail sales and employment seem to mean the crisis has become real. Maybe ’cause folks are worried about what the government will do next.  Thanks to Tasgall for the link.

Philadelphia needs land tax, too

Henry George Foundation’s Josh Vincent had a nice op-ed in Thursday’s Philadelphia Bulletin, noting that there is a good case for cutting taxes on work and investment, and a good case for increasing the budget to pay for needed services.  His point is that this doesn’t have to be an either/or choice.  By taxing land adequately, taxes can be cut and service maintained or improved. No great revelation to Georgists, but it’s good to see it in a major newspaper.

Free fertile farmland!

I’ve said for quite a while that if you want to build a factory, unless it’s particularly noxious, you can probably get free land, or equivalent in benefits, from any number of economic development organizations.  Turns out that the same can be true for farmland.

You, or I, couldn’t do it, but Korean conglomerate Daewoo can, 1.3 million hectares (that’s half the size of Belgium, says FT), in Madagascar.  Apparently this is an above-board legitimate deal, and Madagascar “will simply gain employment opportunities.” Daewoo doesn’t get fee title, but a 99-year lease.  The produce will for the most part be shipped to Korea.