We are Madoff-free

A few prominent foundations have lost most or all of their assets in the Madoff mess, and many of their donors have also suffered.  So I’m pleased to note that the Henry George School of Chicago, and (as far as I know), all the Georgist organizations, are untouched by this fraudster.   We have suffered somewhat from the economic meltdown, but as Georgists we didn’t lose  nearly as badly as  Harvard University.

This doesn’t mean that we don’t need your donations, of course we do.  If you agree that what the School does is important, and can afford to help out, we hope you’ll do what you can.  And even if you can’t afford to send money, you can sign up with igive to provide the School with cost-free donations. Thanks.

Strange pricing in the book business

This post isn’t about how the field of economics was corrupted, but rather about the strange pricing of the eponymous book by Mason Gaffney and Fred Harrison. I’ll use it in a course next term, so I wanted to get some copies because Henry George School policy is to include the book in the registration fee.

Schalkenbach, the U S distributor,  is charging $16 plus shipping. They’ll probably give us only a small discount, so since the book is 14 years old I decided to check other sources including used copies.

According to bookfinder4u, abebooks,  froogle and amazon, nobody is selling this for less than $21.88 plus shipping.  Amazon says that a used copy costs $35.64 while a new one can be had for $22.95. No sign of it on ebay at all. Of course this can all change very quickly, but it’s curious to see it at all.

I suspect that no one at Schalkenbach reads this blog, at least not right away, so I shall hasten to order a few copies from them.

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.