LVTFan's Blog

Father of the ecosystem: Joseph Priestley

Father of the ecosystem.

This book review in Salon caught my eye.  Joseph Priestley's name appears in the second paragraph of one of my favorite books, Progress & Poverty, alongside that of Benjamin Franklin, who was his contemporary.  P&P was written in 1879.  It begins,

The Problem

[01] The present century has been marked by a prodigious increase in wealth-producing power. The utilization of steam and electricity, the introduction of improved processes and laborsaving machinery, the greater subdivision and grander scale of production, the wonderful facilitation of exchanges, have multiplied enormously the effectiveness of labor. 

[02] At the beginning of this marvelous era it was natural to expect, and it was expected, that laborsaving inventions would lighten the toil and improve the condition of the laborer; that the enormous increase in the power of producing wealth would make real poverty a thing of the past. Could a man of the last century -- a Franklin or a Priestley -- have seen, in a vision of the future, the steamship taking the place of the sailing vessel, the railroad train of the wagon, the reaping machine of the scythe, the threshing machine of the flail; could he have heard the throb of the engines that in obedience to human will, and for the satisfaction of human desire, exert a power greater than that of all the men and all the beasts of burden of the earth combined; could he have seen the forest tree transformed into finished lumber -- into doors, sashes, blinds, boxes or barrels, with hardly the touch of a human hand; the great workshops where boots and shoes are turned out by the case with less labor than the old-fashioned cobbler could have put on a sole; the factories where, under the eye of a girl, cotton becomes cloth faster than hundreds of stalwart weavers could have turned it out with their hand looms; could he have seen steam hammers shaping mammoth shafts and mighty anchors, and delicate machinery making tiny watches; the diamond drill cutting through the heart of the rocks, and coal oil sparing the whale; could he have realized the enormous saving of labor resulting from improved facilities of exchange and communication -- sheep killed in Australia eaten fresh in England, and the order given by the London banker in the afternoon executed in San Francisco in the morning of the same day; could he have conceived of the hundred thousand improvements which these only suggest, what would he have inferred as to the social condition of mankind?

George goes on to say that someone of Franklin's or Priestley's scientific vision, could he have imagined all the technological progress of the 100 years which would follow the founding of the US, would surely have assumed that after that 100 years, there would be no poverty or fear of poverty; that society would have advanced to a point where all could be provided for and none need be anxious about the material needs of life. 

The Foldvarium: How to Extirpate Poverty

The Foldvarium: How to Extirpate Poverty.

I'm going to take the liberty of posting Fred Foldvary's entire post.  It is relevant to a lot of things I've been thinking about a lot recently.  I've added links to some pages at wealthandwant.com which expand on some of Fred's concepts.   I'm intrigued with his definition of extirpate -- it is the one I associate with "eradicate" -- to remove by the root.  Google definitions suggests that extirpate has the sense of having been made locally extinct but still in existence elsewhere.  Here's the Latin root: [Latin exstirpare to root out] -- likely related to "stirpes" -- as in "per stirpes" -- [Latin, By roots or stocks; by representation.]

How to Extirpate Poverty

To “extirpate” means to complete eliminate, from the Latin word meaning to pull out by stem and root. To extirpate poverty means to eliminate its cause, so that it does not come back. Fundamentally, poverty comes from a low wage level, so we need to examine what makes a wage level low.

The wage level of an economy can be thought of as the wages paid to unskilled people. Those with greater skill and talent get higher wages, so some think that the solution to poverty is better education. But a stagnant economy also depresses the return to human capital, the extra wage for those who are more productive. In a thriving productive economy, even those with few skills are better off than skilled labor in a depressed economy. Indeed, in an unproductive economy, those with skills often find little market for their human capital.

The wage level of an economy is set by marginal labor, those who work at the least productive land in use. The classical “law of wages” says that when workers are mobile, the wage at the margin of production will set the wage level for the rest of the economy.

Change.gov

The new administration is seeking comments.   I'd like to believe they'll be read.  Here's what I posted at http://change.gov/ under "economy":

We need to shift taxes OFF productive effort and ONTO land value and natural resources.    Doing so will have a wide range of benefits.

hear, read, mark, learn, and inwardly digest

This phrase comes from an Anglican prayer book, but it came to my mind when I was writing to a foundation which claims to be in favor of a just society.  Examining their website, I could see no sign of any familiarity with Henry George's ideas, and this phrase, whose origins I could not bring to mind, popped into my head. 

Hear ..., read, mark, learn, and inwardly digest ...  The reference is to scripture, but I think it might apply nearly as well to Henry George's ideas, if you regard any of these as important:

• ending poverty
• improving wages
• sharing nature's bounty more evenly among us
• protecting the environment from despoilment
• reducing, even reversing, sprawl
• making housing affordable
• making cities more vibrant
• creating jobs
• making effective public transportation systems realistic 

(I'd be happy to see any one of those ... and thrilled to see all of them.  Dayenu!)

 Well, Henry George has been called "The Prophet of San Francisco" -- that's where he wrote Progress & Poverty -- and many people consider him to have answers to problems that most people think are completely intractable.

Hear, read, mark, learn and inwardly digest ... and then get to work creating a more just society, for yourself, your neighbors, and all our children and future generations.

Dying of Consumption - NYT

Dying of Consumption - NYTimes.com.

The chairman of Morgan Stanley Asia has an op-ed piece in the NYT which calls for measures which will increase savings by the American people, and promote less consumption:

The United States needs a very different set of policies to cope with its post-bubble economy. It would be a serious mistake to enact tax cuts aimed at increasing already excessive consumption. Americans need to save. They don’t need another flat-screen TV made in China.

The Obama administration needs to encourage the sort of saving that will put consumers on sounder financial footing and free up resources that could be directed at long overdue investments in transportation infrastructure, alternative energy, education, worker training and the like. This strategy would not only create jobs but would also cut America’s dependence on foreign saving and imports. That would help reduce the current account deficit and the heavy foreign borrowing such an imbalance entails.

It is difficult, though, to ask people whose income is being eaten up by fixed costs to save.  (See Warren & Tyagi's The Two Income Trap.)  Many of these fixed costs relate to housing, and, for young families, childcare -- and, I might add, this is a vicious circle: many need the childcare because of the high housing costs

Couple this with the fact that taxes weigh heavily on lower-income and middle-income people, and one might be led to seek a better way. 

As we do things now, if one buys a home, one makes a down payment of some size, and finances the rest.  For most of us in urban areas, with the possible exception of those who are buying newly built homes, over half of what we are paying is not for the house (or condo) itself, but for the location, the site.  The seller didn't create the land value, even if he and his ancestors have owned that property for generations.  The community created that land value.  But as we currently do things, the hapless buyer must pay the seller for it.  And then, to add insult to injury, he must pay property taxes on the house itself and on the land value, and taxes on many of his purchases (in Chicago, the sales tax is now over 10%, surpassed only by a few counties in Alabama), and taxes on his wages.

Leo Tolstoy -- The Last Station -- and Henry George

I'm listening to Diane Rehm interviewing Christopher Plummer on the occasion of the publication of his memoirs.  He mentions that he plays Leo Tolstoy in a film which, according to IMDB, is in post production, due for release in 2009.  (I missed part of the interview, so don't know all details.)  The film title is "The Last Station" and it is based on a novel published in 1990, and in paperback in 2007.

The novel was reviewed this way by Publishers Weekly:

Alternating narrators from Count Leo Tolstoy's household tell of his attempts to balance his philosophy of poverty and his privileged lifestyle by living humbly in his final days. "In the end, it is not the people around him who speak most eloquently for Tolstoy, but the sincerity of his own words--and those of Parini in his kaleidoscopically rich and skillful novel," said PW.

There is also a review in the NYT of 7/17/90, which ends with

As for his portrait of Tolstoy, Mr. Parini plays down the raging conflicts (religious, sexual and philosophical) that animated the latter part of his life, and instead makes him the still center of this book. While the other characters are scheming, arguing and maneuvering, while the press and sychophantic supporters vie noisily for his attention, Tolstoy himself sits alone in his study, quietly contemplating the great questions of faith and justice. We are shown letters he wrote to Gandhi and George Bernard Shaw in which he discusses God and love and evil; and we are given an excerpt from ''What Then Must We Do?'' in which he sets forth his own guilty observations about poverty in Moscow.

In the end, Tolstoy decides to leave the chaos at home, setting off, at the age of 82, to find a purer, more spiritual life. ''My position in this house has become intolerable,'' he writes his wife. ''Along with everything else, I can no longer abide these luxurious conditions. What I am now doing is what old people have commonly done - leave their worldly life behind to spend their last days in peace and solitude.''

Needless to say, he fails to find that peace. Taken ill at a local railroad station, he dies in the stationmaster's house, while family members, followers, reporters and photographers hover about, waiting to record his last words, his final moments.

Why am I bringing this up?  Leo Tolstoy was a great admirer of the ideas of Henry George. He died in 1910, about 13 years after HG.  The following year, Bolton Hall, an American Georgist, published a book called "What Tolstoy Taught," with the approval of Tolstoy, which described things as Tolstoy saw them.  Henry George's most famous book was Progress and Poverty.

For more information, you might see these pages:
http://www.cooperativeindividualism.org/lebrun_victor_on_tolstoy_and_george.html
http://www.wealthandwant.com/auth/Tolstoy.htm which includes this:

Mason Gaffney: "The Great Crash of 2008" -- and how we can dig out and head off the next one

This is one of several things I've been meaning to post here for weeks.  It was written in July, and has been making the rounds in Georgist circles -- and beyond -- ever since.  Shorter versions of it have been published in some newspapers, but I think it worth sharing here in its entirety.  You can find more of Mase's writings on his website, at http://www.masongaffney.org/, on the Schalkenbach foundation website, and at Wealth and Want.   

Relatedly, take a look at the November issue of Harper's Magazine, in particular the article by Michael Hudson, entitled "Tax the Land."

If you have contacts within the incoming administration, I hope you'll share this piece with them.  It provides a means to get ourselves out of our current economic crisis, and, equally important, prevent it from happening again.

Here beginneth:

THE GREAT CRASH OF 2008
Mason Gaffney

This crash is The Big One; it has signs of becoming a Category 5. How do we know? We’ve “been there and done that” so many times before, roughly every 18 years over the last 800 or more. Major wars and, rarely, plagues have broken the rhythm, along with the little ice age, reformation and counter-reformation, political revolutions and reactions, the rise of nation-states, the enclosure movement, the age of exploration, massive European imports of stolen American gold, the scientific and industrial revolutions, the Crusades, Mongol and Turkish invasions, and other upheavals. Yet, the endogenous cycle keeps returning, as soon as we find peace, and economic life returns to its even tenors. What President Warren Harding famously called “normalcy” soon evolved into another boom and a shocking bust, as so often before. Calm and routine prosperity has never been man’s lot for long: it somehow leads to its own downfall, cycle after cycle.

Homer Hoyt published his classic 100 Years of Land Values in Chicago, 1833-1933, in December, 1933. He covered in fine detail the 5 major cycles that crested and crashed in 1837, 1857, 1873, 1893, and 1926-29. At the end he generalized “The Chicago Real Estate Cycle”, a  regular rhythm of boom and bust with the same features in the same sequence. The boom sets us up for the bust. He could have omitted the limiting word “Chicago”, its cycles were synchronized with national waves recorded by other scholars like Arthur H. Cole, Philip Cornick, Lewis Maverick, Frederick Lewis Allen, Harry Scherman, Carter Goodrich, Ernest Fisher, Homer Vanderblue, Herbert Simpson, and others — surprisingly few others, in fact. Alexander Field has recently reviewed much of this literature, but held back from seeing cycles in the present or future.

It is uncanny how the latest boom tracks the events that Hoyt recorded and generalized. There was “an increase in rents, building ..., and subdivision ..., each of which was carried in turn to speculative excess, and each of which interacted upon the others and upon land values to generate and maintain the boom psychology”. The cycle, Hoyt continued, is “the composite effect ... of a series of forces that ... communicate impulses to each other in a time sequence, ... in a definite order” (p. 369).

How do we reduce the demand for energy?

As I listen to and read about attempts to reduce pollution, reduce reliance on foreign oil, reduce energy usage, I find myself frustrated by the lack of radicalism in the answers people propose.  Their answers aren't wrong, but they don't go to the source of the problem, and so merely nibble around the edges.  Nibbling is fine and admirable, and definitely has its place.  And nibbling will make a bigger difference if they are nibbling at a circumference of 2X instead of X, though a larger percentage difference if we can get to a circumference of X.  

The current Vice President asserted a few years ago that the American way of life was non-negotiable. 

Well, if that means that what is is good -- the ultimate conservatism -- keep things just as they are because we live in the best of all possible worlds -- or -- it works just fine for my and my kind thank you very much -- a case one might reasonably make if one were in the top 1% of the wealth and income spectra, which, as I frequently mention here, receive a very disproportionate share of the productivity in this country:

1. The top 1% of income recipients -- and I'm using income excluding capital gains for the moment -- have received 36% of the aggregate income gains from 2000 to 2006.
2. The next 4% of income recipients have received 17% of the income gains between 2000 and 2006.
3. The next 5% of income recipients have received 14% of the income gains between 2000 and 2006
4. The bottom 90% of income recipients have received 33.1% of the income gains between 2000 and 2006.     

For comparison: in 2000, the top 1% had 16.5% of the income excluding capital gains; the next 9% had 26.6%, and the bottom 90% had 57.8% of the income; by 2006, the corresponding figures are 18.2%, 27.0% and 54.7%.  [Source, my calculations from Tables A1 and A0 of Piketty and Saez's spreadsheet through 2006.]

Is this the non-negotiable American way of life to which the Vice-President was referring?  I suspect that, at bottom, it is.

So why should we change anything, if the machine is working so well for those at the top? 

• So what if this machine uses excessive amounts of the world's natural resources? 
• So what if it produces more than our legitimate use of the world's carrying capacity for dealing with pollution of air and water?
• So what if, in order for us to be rich, others must be poor -- very poor? 
• So what if, in order to us to continue to drive our cars everywhere we need or want to go, we need to import oil drilled in other parts of the world?
• So what if, in order for our powerful to maintain their privileges, we impinge on the rights of our own people, the rights of our contemporaries in other countries, and on the rights of future generations both here and abroad?

  Ah - I've not answered the initial question.  I'll come back to that in a future post, I guess -- because I think there are some very obvious answers to that question -- obvious to Georgists, anyway -- whose widespread understanding could make a big difference. 

Wealth Concentration, Income Concentration, and Ups & Downs in Consumer Spending

It occurs to me that if more of us had more money in our pockets and our portfolios, consumer spending might not be so seriously affected when the economy catches a cold.

But then again, if we shared justly among ourselves that which ought to be shared among all of us, the economy might not catch cold so much and would be pretty well inoculated against pneumonia.

Ben Franklin, technological progress and moral progress

I heard an interesting quote from Ben Franklin on Bill Moyers NOW program a few minutes ago, which sent me searching because it put the opening passage in one of my favorite books in a different light.  The first thing that turned up on Google was this, at http://www.thenewatlantis.com/publications/the-scientific-mind-of-ben-franklin:

This article appears in the WINTER 2007 issue of The New Atlantis

The Scientific Mind of Ben Franklin 

Jerry Weinberger

Had Benjamin Franklin managed to outwit the Grim Reaper, he would have turned three hundred years old in 2006, and would probably have been making plans for another three hundred. Journalist, scientist, diplomat, and vendor of the virtues, Franklin stands in our imagination as the iconic “First American,” the self-made man and proud inventor of the future. His scientific achievements were indeed interesting and impressive — especially his research on electricity and his invention of the lightning rod. But equally interesting, and far more complicated, was Franklin’s idea of science. He was, you might say, our first home-grown Baconian — seeing scientific ingenuity as the greatest delight and truest redeemer of human life.

In 1780, Franklin complained to his friend and fellow natural philosopher Joseph Priestley of the disparity between scientific and moral progress: so badly constructed were most human beings, said Franklin, that Priestley should have killed boys and girls instead of innocent mice in his experiments with mephitic air. How much better than the bratty kids were the results of these experiments. Scientific progress, Franklin commented,

occasions my regretting sometimes that I was born so soon. It is impossible to imagine the height to which may be carried in a thousand years, the power of man over matter. We may perhaps learn to deprive large masses of their gravity, and give them absolute levity, for the sake of easy transport. Agriculture may diminish its labor and double its produce; all diseases may by sure means be prevented or cured, not excepting even that of old age, and our lives lengthened at pleasure even beyond the antediluvian standard.

Later on, in letters to other friends, Franklin trimmed his timetable by a full nine hundred years, saying that a mere one hundred would see modern science produce discoveries of which he could have “no conception.” And he said again that the “art of physic” would advance so far and so fast that mankind would be able to avoid diseases and live as long as “the Patriarchs in Genesis; to which I suppose we should make little objection.”

A new film: "The End of Poverty?"

A new film entitled The End of Poverty? is making its way around the film festivals. It premiered at Cannes in May, as an Official Selection of the 2008 Cannes Film Festival Critics Week as well as an Official Selection at over a dozen international film festivals.   This week, it was shown at Leeds, in the UK.  Here's the description from the festival's program:

The End of Poverty? + Oxfam Panel Discussion

The End of Poverty? asks a simple question: ‘with so much wealth in the world, why is there still so much poverty?’ Looking beyond the popular ‘solutions’, director Philippe Diaz asks if the true causes of poverty in a modern, globalised world originated in colonial times. From the barrios of Latin America to the slums of Africa, leading economists, politicians and activists warn how the developed nations are plundering the planet at a pace that outstrips its capacity to support life. Followed by a panel discussion event organized by Oxfam.

Contrary to appearances, Oxfam was not involved in the production of the film, but I'd be very interested to hear about the discussion which followed the film's showing. 

The film was financed by the Robert Schalkenbach Foundation, based in NYC, whose mission is to share the ideas of Henry George, known to readers of this blog.   (For those who arrived here by searching on the film's title, welcome!  Have a look around!  And check out this blog's sibling site, http://www.wealthandwant.com/)

Here are comments from two bloggers who saw the film:

http://rolamcclary.blogspot.com/2008/11/end-of-poverty.html

Thursday, 6 November 2008
The End of Poverty?

Once again, reminding me of one of the first posts I ever made, Leeds International Film Festival is upon us, with a catalogue full of films I plan to go and see.

I made a start tonight, with a film from Oxfam: The End of Poverty? I went keeping in mind that perhaps the bias of the people behind the film would hinder its objectivity. However, I was pleased to say that I was presented with a greatly informed account of the events that have led up to the current, torrid global situation. I feel much less ignorant for it, and more able to speculate on the worsening future.

http://www.theendofpoverty.com/
Posted by Laura Stubbs at 14:56
Labels: environment, film, human rights

http://fancy-plants.blogspot.com/2008/11/leeds-film-festival-day-3.html

Fancyplants' Cracked Pot
My little cracked plant pot. Mind the roots.

Thursday, 6 November 2008
Leeds Film Festival - Day 3

The End of Poverty? (US) (site)

Created in partnership with Oxfam, this film deals with the question of why, when there is so much wealth in some parts of the world, there is destitute poverty in so many others. The film works from the time of the Spanish Conquistadores, who were the first western (labelled 'northern' in the film) power to start carving up the African and Asian land to invade, colonise and take over. Of course, Britan, alongside Holland, Portugal, France, Germany, Japan and many others followed and became owners of the lands that were not the property of anyone, and the indigenous peoples became part of the deal also. The capitalist engine thrived upon this influx of cheap slave labour and a culture of individualism (rather than a community sharing its resources) and forced Christianity reaped all it could from the soil and the rock of these countries, leaving the natives with barely anything they could call theirs.

As time passed and slavery was abolished, the western hunger could not stop there, and so in a number of repackaging exercises, slavery was reinvented time and time again, each one requiring a little less work by the owners and more by the slaves themselves. The slavery continues in various forms today, often because the country is mired in heavy debt it can never repay and so is at the mercy of the world bank and the multinationals who have set up industry, extracting raw materials and shipping the result back to the 'mother land'. It is this that leads to the statistic that far more money flows from poor to rich countries than the other way around.

It is a film packed with insights into how we have ended up in the situation we are in now, with some countries enjoying prosperity whilst others cannot seem to progress. It covers such a massive subject very well, almost like a super-documentary to which all others on the subject handle but a subset of the problem, and I would recommend it to anyone remotely curious as to why and how we in the west manage to live so well. 8/10

Again, Oxfam was not involved in the production of the film (though I'm sure RSF would welcome their interest), and I'd be interested in hearing about the discussion which followed the showing at Leeds.  Please post comments!

(I'll be posting more information on the film as time goes on.)

Fareed Zakaria: How to Spread Democracy

Zakaria: How to Spread Democracy -- Newsweek.com

I just came across this piece, from the September 29th issue of Newsweek, and want to applaud:

How Not to Save the World

Valiant efforts are being made every day to end hunger, reduce poverty, save lives. But if we truly want to solve the world's problems, here are five things we need to do.

Democracy: If You Want to Free Your Country, First Liberate Its Land
By Fareed Zakaria | NEWSWEEK

So you want to spread democracy. By now, it's pretty obvious that this is easier said than done. George W. Bush's stirring rhetoric about freedom has suggested a too-simple path: just rid the country of its tyrant and the people will be free. Bush often asserts that people in every country and culture yearn for democracy and are capable of it. To argue otherwise represents cultural condescension. It's not that President Bush is wrong at the abstract level — if Nazi Germany and fascist Japan could become democratic, it can happen most anywhere — but the argument holds at such an elevated plane that it becomes meaningless when applied on the ground. ...

Spreading the "wealth" -- this time, let's talk about income

The people who are offended by the concept of "spreading the wealth" are offended at the idea that income they might receive might be "redistributed" downwards, and assume that they would be the logical targets, the folks from whom income would be taken in order to provide more income to people below them on the income spectrum -- people they suspect do not work as hard as they do, or display virtues they feel they excel in.  But I suspect that most of those who boo on cue are not in the top 1%, or even the top 10%, who receive a significant share of the wage income and in fact all kinds of income. 

Let's look at income distribution.  The data come from Piketty and Saez's annual spreadsheet, at http://emlab.berkeley.edu/users/saez/TabFig2006.xls.

1. Wages (P&S, Table B2):

2006
Top 1%: 12.00% of wages    Next 9%: 23.82% of wages      Bottom 90%: 64.18% of wages

For comparison, we might look at 1968:
Top 1%: 5.24% of wages     Next 9%: 20.36%                     Bottom 90%: 74.40%

1953:

Top 1%: 5.61% of wages     Next 9%: 18.52%                     Bottom 90%: 75.87%

1928:
Top 1%: 8.87% of wages     Next 9%: 20.24%                     Bottom 90%: 70.89%

2. Income excluding Capital Gains* (P&S, Table A1):

2006:
Top 1%: 18.24% of income excl capgains   Next 9%: 27.04% of income excl capgains  Bottom 90%: 54.70% of income excl capgains

1968:
Top 1%: 8.35% of income excl capgains     Next 9%: 23.63% of income excl capgains  Bottom 90%: 68.02% of income excl capgains

1953:
Top 1%: 9.08% of income excl capgains     Next 9%: 22.30% of income excl capgains   Bottom 90%: 68.62% of income excl capgains

1928:
Top 1%: 19.60% of income excl capgains    Next 9%: 26.49% of income excl capgains  Bottom 90%: 53.91% of income excl capgains
* Note: Capital gains are excluded both from the income and from the rankings.  That is, one can't compare directly the top 1% ranked by income excluding capital gains and the top 1% ranked by income including capital gains.

3. Income including Capital Gains

2006:
Top 1%: 22.90% of income incl capgains   Next 9%: 26.79% of income incl capgains   Bottom 90%: 50.34% of income incl capgains

1968:
Top 1%: 11.21% of income incl capgains   Next 9%: 23.63% of income incl capgains   Bottom 90%: 65.15% of income incl capgains

1953:
Top 1%: 9.90% of income incl capgains    Next 9%: 22.41% of income incl capgains   Bottom 90%: 67.69% of income incl capgains

1928:
Top 1%: 23.94% of income incl capgains   Next 9%: 25.35% of income incl capgains   Bottom 90%: 50.71% of income incl capgains

4. Capital Gains income as a percentage of income excluding capital gains: (calculated from Table A0)

2006:   9.38%
2000: 10.76%
1986: 13.49%
1968:   6.61%
1953:   1.74%
1928:   8.94%

5. Capital Gains Income as a percent of total income, by income fractile, 2006 (P&S, Table A8, panel B -- including capital gains income in defining the fractiles):

• 90th to 100th percentile: 17.3% of income is from capital gains [income above $104,696] -- 10% of us, who get 49.66% of the aggregate income
• 90th to 95th percentile: 3.9% of income is from capital gains [income $104,696 to $148,423]  -- 5% of us, who get 11.27% of the aggregate income
• 95th to 99th percentile: 8.6% of income is from capital gains [income $148,423 to $382,593] -- 4% of us, who get 15.51% of the aggregate income
• 99th to 100th percentile: 29.3% of income is from capital gains [income above $382,593]   -- 1% of us, who get 22.90% of the aggregate income

Looking at that top 1% more closely, we can break it into its bottom half, next 40%, next 9% and top 1%:

• 99th to 99.5th percentile: 12.9% of income is from capital gains [income $382,593 to $597,584] -- 0.5% of us, who get 4.29% of the aggregate income
• 99.5th to 99.9th percentile: 20.9% of income is from capital gains [income $597,584 to $1,898,200] -- 0.4% of us, who get 7.05% of the aggregate income
• 99.9th to 99.99th percentile: 32.9% of income is from capital gains [income $1,898,200 to $10,659,283] -- 0.09% of us, who get 6.13% of the aggregate income
• 99.99th to 100th percentile: 49.6% of income is from capital gains [income above $10,659,283]  -- 0.01% of us, who get 5.46% of the aggregate income

[The income thresholds come from Piketty and Saez's Table A6; the percentages of aggregate income are from Table A3.  Notice that the 17.3% of income in the top decile coming from capital gains does not relate directly to the 9.38% figure for 2006 shown in Section 4, above.  The corresponding figure would be 9.38/109.38, or 8.56%]

Somewhere I read that the one party's derisive references of "spread the wealth" is intended to conjure up thoughts of "welfare queens."  They've found a way to divide working people.  But the unemployed and the working poor and our lower- and middle- middle classes are not the problem here.  Rather, the problem is a system that funnels such a large share of our production into the pockets of so few of us.  We've created a poverty machine.

How do we retool that machine?  Henry George has some good analysis and advice for us.

For more about "spreading the wealth," see also http://lvtfan.typepad.com/lvtfans_blog/2008/10/spreading-the-wealth.html   and http://lvtfan.typepad.com/lvtfans_blog/2008/10/spreading-the-wealth-some-kinds-of-wealth-ought-to-be-spread.html

Progress, and Poverty -- how do they relate?

I suspect that many people relate these two words, without quite knowing why.  A google alert on the two words brings me 4 to 6 items a day which mention the two words fairly close together.  In many the context is "We're making progress against poverty."  In others, the context is more like "we're making progress in many areas, but little progress against poverty." 

Putting those two words into the search field at Amazon yields these books:

• The Poverty of Progress: Latin America in the Nineteenth Century by E. Bradford Burns (1983)
• Progress, Poverty and Exclusion: An Economic History of Latin America in the Twentieth Century (Inter-American Development Bank) by Rosemary Thorp (1998)
• Poverty and Progress: Social Mobility in a Nineteenth Century City (Joint Center for Urban Studies) by Stephan Thernstrom (1981)
• Poverty, Progress, and Population by E. A. Wrigley (2004)
• Poverty and Economic Issues (Africa: Progress & Problems) by Tunde Obadina (2006)
• Progress and Poverty: An Economic and Social History of Britain 1700-1850 by Martin Daunton (1995)
• The Other Bostonians: Poverty and Progress in the American Metropolis, 1880-1970 by Harvard University Press (1999)
• Poverty and social progress, by Maurice Parmelee (1926)
• Poverty and Progress (Down to Earth) by Fred Martin and Aubrey Whittle (1990)
• Poverty and Progress in the Caribbean, 1800-1960 (Studies in Economic & Social History) by J.R. Ward (1985)
• Progress, Poverty and Population: Re-reading Condorcet, Godwin and Malthus by John Avery (1997)
• The Time Has Come: To Confront the Tragedy of World Poverty Through Centers of Village Progress by James Mayfield (2006)
• Poverty and Progress in the U.S. South since 1920 (European Contributions to American Studies) by Suzanne W. Jones and Mark Newman (2006)
• Profits, Progress and Poverty by Richard N. Farmer (1985)
• Poverty and progress;: An ecological perspective on economic development by Richard G Wilkinson (1973)
• Poverty Reduction and the World Bank: Progress in Operationalizing the Wdr 2000/2001 by World Bank (2002)
• The Developing Nations Poverty and Progress (Volume 41, Number 1) by Irwin (Editor) Isenberg (1969)
• Poverty and Progress in New Zealand by W. B. Sutch (1969)

All of these books together can not have come close to the sales of Henry George's 1879 book, Progress and Poverty: An inquiry into the cause of industrial depressions and of increase of want with increase of wealth; the remedy.  By the turn of the century, over 6 million copies had been sold, it had been translated into 30 or so languages, serialized in newspapers in a number of countries. [6 million copies would be a large number today ... think of it in 1885!] Today, there are at least two foundations, created by industrialists of another era (using identical language), whose missions are to share Henry George's ideas, as expressed in Progress & Poverty -- the Robert Schalkenbach Foundation (based in NYC) and the Lincoln Foundation (with offices in Cambridge, MA), founded, respectively, by a printer and an electric utility magnate.  Joseph Fels, of the Fels Naptha soap company (and brother of the endower of the Fels Planetarium at Philadelphia's Franklin Institute) also devoted much of his mature years to promoting these ideas. 

George's Progress & Poverty was the #2 best seller of its decade, second only to the Bible, and the "progress" in its title helped inspire the Progressive movement.  Anyone in English-speaking countries who read at all was likely to be familiar with its ideas, and George was an effective speaker who traveled widely.  In NYC, he ran twice for mayor; the first time, he lost to Abram Hewitt (the Tammany Hall candidate) in 1886, but beat out the 29-year-old Theodore Roosevelt (whose Bull Moose Party platform about 25 years later looked remarkably Georgist; it is said TR learned his George at San Juan Hill, from a hero who died there); the second time, he died a few days before election day in 1897.  His funeral was among the largest ever in NYC.  (Search the NYT's free archives for articles.)

So what sets Henry George's Progress & Poverty apart from the other books which mention those two words in their titles?  Why did he choose that title?  What is the relationship between these two aspects of our society?  Is it a necessary relationship, ordained by immutable natural forces or laws of economics, or is it something created by human structures, and therefore something we can alter?

George saw clearly something that others had seen through a glass darkly.  He laid it out clearly in Progress & Poverty.  Extend your education by reading this book.  It will probably change your mind and your vision forever, and if enough of us understand the workings of the poverty machine, we will be able to retool it, and leave our children a better world, and a country which genuinely lives up to its ideals.

Progress and Poverty.  You might also want to go read the first essay in George's second book, Social Problems.  It is very timely.

We've made a secular religion of homeownership

I heard this phrase from a guest on Diane Rehm's NPR program today.  And I think it is essentially a correct statement, and reflects our lack of understanding of the underlying dynamics.

We see that homeowners fare better than renters, and think that the answer to wealth distribution might be to make more renters into homeowners as a way to help them fare better.

But as a society, we could do a lot better if we all -- owners and tenants alike -- shared in the appreciation of land value, which currently accrues only to owners.  If you've never thought about it before, this will sound very odd to you.  But consider that
(1) houses, like cars and machinery, do not appreciate.  They depreciate.
(2) land appreciates, for reasons which have nothing to do with the individual landholder.  It appreciates because of public spending on infrastructure and services (schools, libraries, roads, highways, bridges, public health, emergency response at both the individual and community level, police, courts, jails, prisons, social workers, food stamps,  It appreciates because of natural amenities like great views.  It appreciates because of the presence of a healthy local and/or national economy.  It appreciates because of increases in population, whether from increased fertility, decreased mortality because of better health care or fewer accidents or disabilities, immigration or migration. It appreciates because of advances in technology -- faster trains, air conditioning, elevators, earthmoving equipment advances, subways, bridge design.

Why on earth should landholders -- residential or, far more significantly, commercial -- be the beneficiaries of this appreciation?  Why shouldn't we treat this value as our common treasure, since we're all equally responsible for it?  Shouldn't we use this as our natural revenue base, to benefit all of us -- those who consider ourselves owners, those who are residential tenants, and those whose work is on land owned by others? 

The way we do it now, tenants get nothing (and get to pay for some of that public spending, which raises next year's rent to their landlord), residential owners do pretty well, and commercial property owners, who own our best-served-by-valuable-infrastructure downtown sites (like that block in Manhattan) make out magnificently.  That "magnificent" doesn't come out of thin air. It comes from the labor of all of us, often at wages well below what they should be.

The World Distribution of Wealth, part I: how does the US compare to the rest of the world

Wow.  Here it is.  As good a quantification of the distribution of wealth around the world as one could hope for.  The study, under the title above, is online here. The authors are James B. Davies, Susanna Sandström, Anthony Shorrocks and Edward N. Wolff.

As the authors note, the concentration of wealth is, if anything, underestimated in the data they start with.  The distribution is shown in a couple of different ways.

Table 1 shows the percentages of wealth shown by various quantiles.  Let's start with the percentage of wealth held by the bottom 50% of households in selected countries:
Australia     9.0%                            Canada       6.0%
China        14.4%                            Denmark  -17.6% (a lot of debt for a lot of people!)
Finland       7.4%                            Germany    3.9%
India         8.1%                              Indonesia   5.1%
Ireland      12.2%                            Japan      13.9%
South Korea   12.3%                       Norway      10.4%
Spain      13.2%                              Sweden   -4.8%
United Kingdom   5.0%                   USA         2.8%

Other than two Scandinavian Countries, the US has the lowest percentage of its wealth held by the bottom half of its wealth spectrum.  Does this tell us anything about the success of capitalism (as we practice it, anyway) as a tool for sharing wealth justly or logically?

Here are similar figures for the bottom 90% in each country:

The World Distribution of Wealth, part II: Natural Resources and Ownership

Here's the abstract for the study, The World Distribution of Household Wealth, found here:

There has been much recent research on the world distribution of income, but also growing recognition of the importance of other contributions to well-being, including those of household wealth. Wealth is important in providing security and opportunity, particularly in poorer countries that lack full social safety nets and adequate facilities for borrowing and lending. We find, however, that it is precisely in the latter countries where household wealth is the lowest, both in absolute and relative terms. Globally, wealth is more concentrated than income both on an individual and national basis. Roughly thirty percent of world wealth is found in each of North America, Europe, and the rich Asian-Pacific countries. These areas account for virtually all of the world’s top 1 per cent of wealth holders. On an official exchange rate basis India accounts for about a quarter of the adults in the bottom three global wealth deciles while China provides about a third of those in the fourth to eighth deciles. If current growth trends continue,India, China and the transition countries will move up in the global distribution, and the lower deciles will be increasingly dominated by countries in Africa, Latin American and poor parts of the Asian-Pacific region. Thus wealth may continue to be lowest in areas where it is needed the most.

But much of the natural resource wealth in the world is in the middle east and in Africa.  The transfer of mineral wealth and oil wealth away from the people in the developing countries is stunning.  The fact that the people of these countries see little of that wealth is simply wrong.  They are as entitled to the earth's resources as we are, and if some countries are more advanced in using them, the people of those countries are being deprived by the structures we have set up.

Nibbling around the edges to ameliorate some of the effects of poverty is not going to reduce poverty or the misery it produces, if we don't recognize and eliminate the structures that create poverty.

Henry George's writings provide the answers.  You might start with the recent (contemporary language) abridgment of Progress & Poverty, available from Amazon or Schalkenbach, or online here and here (the latter with an online course available).  If you're looking for something shorter, you might take a look at two speeches: The Crime of Poverty and Thou Shalt Not Steal.  And you might explore these websites:

• http://www.wealthandwant.com/
• http://www.answersanswers.com/
• and the rest of this blog: http://lvtfan.typepad.com/

The alternatives are to bemoan the situation, to accept it as simply in the nature of things, or to educate yourself -- and others -- on the cause of poverty and the remedy for it.  Yes, singular.  The Remedy.  Without enacting this reform, none of the other things we attempt are going to succeed.  With this reform, most of them will turn out to be unnecessary.

It is something like the serenity prayer ... serenity, courage, wisdom.  It is all too easy to be serene about a system in which one perceives oneself to be coming out above the wedge, particularly if one is sure one can keep all one's own loved ones above it, too.  But courage would be needed to move us toward knowledge of alternatives, and wisdom to withstand the barbs from those who are sure they are above the wedge -- and that that is all that matters.  Or maybe I have wisdom and courage backwards. 

When I am elected President ...

That was the title of a talk I heard some months ago, by my friend Mike Curtis, and with his permission, I'm sharing it here.  [The links are my additions.]

When I am elected president I will initiate legislation that will end poverty.  It will create full employment, raise wages, and make housing affordable for all Americans.  It will increase the return on savings,  stop inflation, and end recessions.  It will rejuvenate our cities, outlaw pollution, and generate a socially-created fund to pay for national health care and social security. 

This legislation, once enacted, will deliver an abundance of opportunity, strengthen the incentives, and protect the rights of property.   Revenues will come from the value of benefits received —— exclusive privileges assigned by the government.

Those Shareholders who are being wiped out ... who are they? - or, "How's it trickling?"

Some will try to tell you that stock ownership in America is very broad, and that the middle class is going to be suffering -- as shareholders -- if we don't bail out ... whoever.  The oil companies, the banks, etc.

They are telling the truth, sort of.  Not the whole truth, of course, but the sort of truth that leads you to the conclusions they need for you to reach.  The sort of truth, too, that most of us would like to believe is true.

Much depends on how we define the "middle class."  I'm going to pick a definition that I don't think is ideal, but for which the data is readily available.  It comes out of the Survey of Consumer Finances, as reported in a Federal Reserve Board Study called Currents and Undercurrents: Changes in the Distribution of Wealth, 1989-2004.  I'm going to define the middle class here as the 40% of us whose net worth places us above the median in net worth, but below the top 10% of the wealth spectrum.   By that measure, half of us are below middle class, and 10% of us above it. Here is how aggregate net worth is divided among the three groups:

We all contribute to rent. Some of us get to live off it. How does this fit with the notion that we are created equal?

Rent is something most of us give little thought to, and most of those who think about it are not thinking about the sort of rent to which I refer.  The rent I'm talking about is not the payment which goes from tenant to landlord each month.

Rather, the rent to which I refer is the return to land, just as wages are the return to labor and interest is the return to capital.  And, just to expand it a bit further, "land" in this usage refers not just to the sites under our feet, but equally to the remainder of the natural creation and to that which our common investment in infrastructure and services has added to the natural creation: the access created by bridges, highways, railroads, subways, airports, river locks, etc, the value created by schools, parks, public health, courts, systems set up to respond to individual and widescale emergencies, etc.  Land includes natural resources, such as oil, water and air, the electromagnetic spectrum (those airwaves that belong to the American people); airport landing slots (where demand exceeds supply), etc.  

Rent happens.  It happens whenever more than one party wants to use a specific piece of land.  Who should benefit from it?  A small group of us? the first to arrive? Or all of us? 

He who sees the truth ...

He who sees the truth, let him proclaim it, without asking who is for it or who is against it. This is not radicalism in the bad sense which so many attach to the word. This is conservatism in the true sense.
-- Henry George, The Land Question

A Budget is a Moral Document

A few days ago I received a mailing from a friend, incorporating (with permission) something I wrote a while ago, and had mostly forgotten about.  I think it is worth sharing here; I'll expand on bits and pieces of it, as the spirit moves me.

It has been said that a budget is a moral document.  Usually that is construed to refer to the spending side of the budget.  But it is equally and importantly true of the revenue side.  When we tax the wrong things, we get undesirable effects.  When we fail to tax that which we should tax, we get undesirable effects as well.  [I might add that an individual's revenue which comes from stealing from others is also a very poor idea -- even when the theft is legal!  Chattel slavery certainly fit in this category, as did the industrial slavery Douglas Blackmon described in his recent book.]
    
With other Georgists, I seek a shift in how we tax ourselves which will produce a better world for all of us. Land value taxation will have important effects in many areas which concern most Americans:

• slowing, stopping and reversing urban sprawl
• urban blight
• improve wages, without raising the cost of living
• spur job creation -- here
• poverty eradication
• wealth concentration
• education funding
• reduce long commutes
• excessive energy usage
• reducing greenhouse gases
• economic development
• infrastructure finance
• boom-bust cycle

The term LAND includes not just the value of urban land, which is huge (and currently underreported and thus ignored, despite being the underlying source of huge fortunes), but also the rest of the natural creation ...

• broadcast spectrum -- those airwaves which we all say (complete the sentence)  ... belong to the American people, but which have been sold to corporations
• water rights (ditto)
• natural resources, particularly the non-renewables
• congestion in the skies and at location³ airports
• geosynchronous orbits
• and many others -- see Mason Gaffney's paper, The Hidden Taxable Capacity of Land: Enough and to Spare, here

Land Value Taxation (LVT) can solve a lot of problems and set the stage for solving many others.  Most of us believe that without this taxation reform, none of these problems are solvable; all we can do is place small bandages on them and spend a lot of money on programs which help relatively few victims.

We seek a society with NO VICTIMS.

Some thoughts about paying taxes...

I saw a comment, deep in a long thread at Daily Kos, whose topic had varied a bit from the original post:

Daily Kos: Is Palin also a tax cheat?. I don't hate taxes ... anymore than I hate paying for my food or housing. Taxes pay for services, and they are a reasonable way to provide an economy of scale we could not otherwise afford.

Continue reading "Some thoughts about paying taxes..." »

Interesting that GWB seems to think it is normal and to be expected that most people will have to tap their home equity to send their children to college.

What have we come to when people are unable to save toward a predictable expense, but some portion of the ~70% who are homeowners have rising land value which they can borrow against to finance their children's college bills?   Most parents of college students have 10 to 20 years before their own retirements.

Remember the old ad "Is this any way to run an airline?"  You bet it ISN'T!

If we are going to claim to value every life, and encourage every pregnant woman to bring every fetus to term, we need to acknowledge that every child born is the equal of every person already born.  Interestingly, Alaska has been doing something important in this regard, for more than 20 years.

Every man, woman and child who lives in Alaska receives an annual income from the Alaska Permanent Fund, which represents dividends from the invested proceeds of Alaska oil revenue, and which, if properly managed, will continue to provide an annual income for every Alaska long after the oil has all been tapped. And Alaska's governor has had the fortitude to increase the share of the public in Alaska's oil revenue due to the high price of oil. (See another post on the subject from a few days ago.)

(And much of Alaska's state government spending comes from oil revenues, too.)

Our oil is not the only resource that needs to be treated this way.  Urban land values can be hundreds of thousands of times the value of an acre of agricultural land.  There is an acre in Manhattan said to be worth $400,000,000 to $1,100,000,000 -- as a teardown.  If we were to tax that land value at, say, 5% per year, at $400,000,000 it would produce $20 million in income for we-the-people, relieving the need for $20 million in sales taxes, or $20 million in payroll taxes, or $20 million in income taxes.  Talk about fiscal stimulus!  Talk about a permanent tax holiday! Talk about getting the incentives right!  

The Self-Sufficiency Standard Studies, which have been conducted in more than 35 states so far (most recently Colorado, Pennsylvania and Ohio), show the bare-bones cost of living, county by county, for several configurations of family.

What does it cost for a single adult to get by?  How much does her cost of living rise when she has an infant? A preschooler? Both?

Link: 411710_work_pay.pdf (application/pdf Object).
The study is entitled "Making Work Pay Enough: A Decent Standard of Living for Working Families" and it comes from the Tax Policy Institute.  Like the Self Sufficiency Standard Studies, it points out that many of America's jobs simply don't pay enough to support oneself, much less to support a small family.

I found myself very disappointed by the recommendations of the study.  They lack radicalism.  They don't seek the root of the problem, so they don't find the root of the problem.   They propose programs rather than solutions.

Link: Mandela's B-Day message: Rich should help poor

"There are many people in South Africa who are rich and who can share those riches with those not so fortunate who have not been able to conquer poverty," Mandela said.

I hate to disagree with Nelson Mandela, but I'm going to.  The rich should not 'help' the poor.  The rich should seek justice for all, which would help the poor a great deal.  Charity is not a substitute for justice.  The rich should not be asked to share what they have created, themselves.  Rather, they should be "relieved" of that which they have stolen from the commons and that which they have stolen from others by owning their labor and by owning the land on which we all must rely.

Link: Tax Analysts: The Price of Civilization.

Bravo! Both to David Cay Johnston and to Tax Analysts, for making him a regular columnist there.  I hope that DCJ's work will remain available to us ordinary mortals who aren't subscribers to Tax Notes.  Yes, getting the conversations going among legislative aides and academics is important -- but so is reaching the public, and I hope TA will choose to do both, with this particular column!

The third paragraph says

Our national debate on tax, such as it is, suffers from "experts" who typically know little to nothing of the history, practical rationale, moral basis, or economic benefits of tax. Their expertise is in delivering memorized talking points, not imparting understanding.

Bill Gates has moved on to his second career, using a large share of his -- and Warren Buffett's -- accumulated funds -- $30 to $40 billion -- to make a difference in the world.  I've got some thoughts about the options he has chosen, and some alternatives. 

He seeks to cure malaria.  A worthy goal. Nothing wrong with that. Success would remove a cause of human suffering.  But we ought to be conscious of the side effects of such measures.   And if the goal is to reduce human suffering, then something more needs to be done, above and beyond the things Bill Gates proposes, the things the Millenium Development Goals propose, the things Jeffrey Sachs proposes. 

David Cay Johnston is a good journalist and a good writer, and I think he has both a good mind and a fine intellect, and a love for his fellow human beings.  He is well read, a good researcher, and shares what he finds with  his readers.  But I have come to think that he has, at minimum, a blind spot.  (I'd hate to think that it was blinders producing what I'll describe below.)

article: http://news.yahoo.com/s/nm/20080620/ts_nm/anglican_conference_dc_2 begins

PARIS (Reuters) - Conservative bishops debating the future of the worldwide Anglican Communion have issued dramatic warnings about a looming parting of the ways with liberal churches, but stopped short of outlining steps toward a schism.

A bit of websearching took me to the booklet mentioned in the final paragraph:

The 94-page guidebook entitled "The Way, The Truth and The Life" defined the issues Anglicanism faces as struggles over authority, scripture, theological pluralism, mission work and "post-colonial power relationships."

Link: gafcon_way_truth_life.pdf (application/pdf Object).

It runs to 102 pages.  A search on the word poverty finds its only two appearances on page 56.  Here's what it has to say on the subject:

A friend sent me a link to a page where one can make policy suggestions to Barack Obama's campaign.  Turns out to be a thinly veiled way to harvest emails.  But maybe somewhere in the campaign, someone might actually read the suggestions.

One of the fields was a dropdown menu so one could categorize one's proposal.  I chose "economy" but made the first line of my policy proposal a list of a number of categories into which mine falls:

Issues: Economy, Energy, Environment, Ethics, Family, Infrastructure, Justice, Labor, Poverty ... and maybe even health --  

A Washington think tank, the Center for American Progress, has published a strategy for halving US poverty in 10 years.  While I applaud their goal, I find it too timid and think their strategies wrong-headed.  Their analysis fails to consider why we have poverty in the first place, and proceeds to design bandaids.  If we are going to eradicate poverty, we must go to the root of the problem, and in my judgment, CfAP has not  pursued the problem to its root and thus cannot do more than attempt to trim its branches.  Pruning poverty's branches is not going to rid us of poverty.  It may move some people we acknowledge as "in poverty" to "out of poverty" as we officially define it, and perhaps they can achieve half their goal, declare victory, and call the rest of the problem intractible.

But living just above the poverty line is little better than or different from living somewhat below it, and we're kidding ourselves if we accept the poverty line as a meaningful statistic.    See this page and this page and the related pages linked there.

link: http://www.washingtonpost.com/wp-dyn/content/article/2008/06/18/AR2008061801173.html
These paragraphs caught my eye ...

Luke Russert said that whenever he did well on a school assignment, his father would yell, "Yahoo! You smoked 'em, buddy!"

He asked the crowd to imagine a special edition of "Meet the Press" this Sunday in heaven, perhaps with a debate between Alexander Hamilton and Aaron Burr, or John F. Kennedy and Barry Goldwater. He even suggested a talk on the need for a new political party involving Teddy Roosevelt, the former president who later ran unsuccessfully for president as a member of the Bull Moose party.

What was the platform of that party?  You might be surprised, both by its timeliness and by its similarity to the ideas of Henry George, who came in #2 in the 1886 NYC mayoral election in which TR was #3. (Tammany Hall won, and the circumstances would not surprise most people troubled by some of our recent national elections.)   

I hear this statement from time to time, and almost always, it turns out to be a reference to the spending side of the budget. 

But it is equally and -- perhaps more importantly -- true of the revenue side of the budget.  To the extent that we -- as individuals, corporations, philanthropies, endowments, pension funds, family trusts, small businesses, whatever -- are obtaining our revenue from illegitimate sources, and keeping it (legally), we are  stealing -- legally -- from what rightly belongs to everyone equally -- the commons.   And that theft has huge effects on others -- individuals and systems.

The tributes to Tim Russert are moving, and I'm sure many of us who follow news and politics will feel his loss, too young, for quite some time.  But as I listen, I am led to wonder whether he ever questioned why it should be that a man needed to work two full-time jobs  to support his family.

Link: Bangkok's Independent Newspaper.

The title is certainly promising, and Dr. Stiglitz says some important things.  He points out,

At the core of America's success is technology, symbolised by Silicon Valley. The irony is that the scientists making the advances that enable technology-based growth, and the venture capital firms that finance it were not the ones reaping the biggest rewards in the heyday of the real estate bubble. These real investments are overshadowed by the games that have been absorbing most participants in financial markets.

The world needs to rethink the sources of growth. If the foundations of economic growth lie in advances in science and technology, not in speculation in real estate or financial markets, then tax systems must be realigned. Why should those who make their income by gambling in Wall Street's casinos be taxed at a lower rate than those who earn their money in other ways. Capital gains should be taxed at least at as high a rate as ordinary income. (Such returns will, in any case, get a substantial benefit because the tax is not imposed until the gain is realised.) In addition, there should be a windfall profits tax on oil and gas companies.

So far, so good.

But then, he seems to shift gears:

Given the huge increase in inequality in most countries, higher taxes for those who have done well - to help those who have lost ground from globalisation and technological change - are in order, and could also ameliorate the strains imposed by soaring food and energy prices. Countries, like the US, with food stamp programmes clearly need to increase the value of these subsidies in order to ensure that nutrition standards do not deteriorate. Those countries without such programmes might think about instituting them.

It seems to me that it is important to differentiate between those who have done well because they have contributed to the common good -- creating jobs, meeting human needs and wants -- and those who have done well because our system has permitted them to privatize the value of natural resources -- including oil, but also including an even more important resource: urban land value.

I am in agreement with the content of his final paragraph ...

Rich countries must reduce, if not eliminate, distortional agriculture and energy policies, and help those in the poorest countries improve their capacity to produce food. But this is just a start: we have treated our most precious resources - clean water and air - as if they were free. Only new patterns of consumption and production - a new economic model - can address that most fundamental resource problem.

and I don't think Dr. Stiglitz yet sees clearly that in order to conserve those scarce resources, we must turn to Henry George's remedy -- land value taxation -- in order to create the incentives which will concentrate our population into more compact cities, making effective public transportation a real option.  Without this, no amount of research on alternative energy sources for individual cars is going to reduce our energy usage by the kinds of rates that we simply must achieve.  This is not a "command and control" approach; rather, it is making possible and affordable that which many people prefer to do, by reversing some perverse incentives.

If we continue to sprawl as we do now, we simply cannot solve the energy problem -- or the housing affordability problem,  or the poverty problem -- or our economic justice problems. 

For more on Joe Stiglitz, see http://wealthandwant.com/themes/underpop/Stiglitz.htm

This comes from a predecessor to the current Episcopal/Anglican Book of Common Prayer.

Land, water, oil, air ... none of it is of our creation, and all of us depend on access to them.  If dollars are involved, to whom should they flow, and why?  If royalties are due, who is entitled to them? If rent happens, as it does in any place where there is a scarcity, who is entitled to it?

Is it the fellow whose land is in high demand?  Is it the fellow whose land has valuable minerals in it? Is it the fellow whose property is on a great aquifer?  Is it the great-great-grandchild of the Duke of Westminster, or of the first Caucasian settlers on a particular piece of land, or of someone to whom they sold title?   LVTfan says not. 

Several articles on the topic of assessing golf courses have come to my attention in the past few days.  I've posted previously on the topic, but will start fresh here.

The first article had to do with assessments in Greenwich, Connecticut, where eight private golf clubs were seeking assessments of just $60,000 per acre.  Now that might seem like a high value to people who live in the heartland of America, but Greenwich is a place where a single-acre building lot (with or without an existing house on it) can sell for well over $1 million, and where roughly 1 in 4 residential transactions results in a teardown, often of a home which would be considered a super-luxury home nearly anywhere else.   The assessor had sought to value the land at a still-very-generous-to-the-clubbers $200,000 per acre.  (By law -- a peculiar law whose justification I don't follow, CT's assessments are to be 70% of actual value, so the $200,000 valuation would be about $285,000 -- still a very generous valuation in a town with high property values.)

My local newspaper has set up a facility to permit comments on articles and opinion pieces, and I frequently respond to what I read.  Yesterday, I posted a comment to an article entitled Office owners strive to retain tenants whose thumbnail description says "In tough times, office building owners often look for other sources of tenants besides relocations to their properties."  Today I went back and someone had posted the comment, " Your sole issue is land value tax. Am I right?"

 

A recent article on the NYT "most-emailed" list, entitled Can You Become a Creature of New Habits? had a paragraph which caught my attention.  It said,

Researchers in the late 1960s discovered that humans are born with the capacity to approach challenges in four primary ways: analytically, procedurally, relationally (or collaboratively) and innovatively. At puberty, however, the brain shuts down half of that capacity, preserving only those modes of thought that have seemed most valuable during the first decade or so of life.

This was the headline of an email that came into my inbox today.   And it dawned on me that it is a fine angle from which to view the benefits of land value taxation. 

I've heard it said that voting and paying taxes are two of the major sacraments of citizenship. Having spent a significant part of the past week working on the machinations of the latter for several different family members, I am weary of the sacramental qualities of income taxes.  It isn't that I think taxes are a bad thing.  But our current system of taxation is both fundamentally wrong and, having said that, unbelievably convoluted.

Most of the commentators I read and hear are only interested in simplifying the income tax. A few propose getting rid of the income tax and replacing it with a sales tax, which I regard as simpler, but nearly as evil as an income tax from a number of points of view.   And that puts aside the question of whether the necessary rate for the so-called "FairTax" is 23% (or 30% in the way we're used to thinking of sales taxes) or closer to 60%, as I understand is more realistically the case.

I received in an email recently a quote from Albert Einstein:

A clever person solves a problem; a wise person avoids it.

Friday night's PBS NOW and Bill Moyers Journal were a powerful combination.   My local station shows NOW first, followed immediately by BMJ.  NOW showed three families in Alabama, including a hard working couple whose income places them at roughly the poverty level.  They pay sales taxes of 10% on their purchases, even on food.  They only recently got indoor plumbing.

The footage also showed one of my heroes, Susan Pace Hamill, law professor at the University of Alabama, who has written several important papers, all available online [and highly recommended], about the inconsistency of Alabama's tax code [2002] and of the federal tax code [2006] with the ideals we say we hold dear.  I applaud her efforts and her scholarship and her good heart ---  and I don't think she sees the half of it, or the solution.

Link: Still on the mountaintop: Economically rational racism, by Gavin Putland

... So the key to the Promised Land is to reduce the natural rate of unemployment without creating a new class of working losers. To see how to do that, we must revisit some basic economic principles.

For a century and a half, capitalists and socialists argued about ownership of the means of production as if the assets that make up the "means of production" were all of the same kind. But they're not; they fall into two distinct categories.

• In one category are the assets can be produced by private, competitive effort. For convenience I'll call these house-like assets, although they include not only houses but also other buildings, as well as movable plant and equipment.
• In the other category are those assets that cannot be produced by human effort, or at least cannot be produced by private, competitive effort. For convenience I'll call them land-like assets, although they include not only land but also other natural resources, building rights attached to land, and monopolies and privileges of all kinds.

The returns on house-like assets include

• interest, which is the price of time-preference,
• insurance, which is the reward for bearing (quantifiable) risk, and
• economic profit, which is the reward for bearing (unquantifiable) uncertainty.

Those returns are an incentive to produce house-like assets. Any tax on those returns, or on the assets themselves, reduces the incentive. Conservatives repeat this argument ad nauseam but never acknowledge that it's valid only for house-like assets.

The net returns on land-like assets are usually called economic rent. Some people prefer to call them usury. But whatever you call them, they can't be an incentive to produce anything, because no private person or corporation can produce land-like assets, while the rental values of those assets are produced not by the owners, but by the demand from prospective users.

It follows that any fraction of the rental value of a land-like asset can be diverted into the public treasury without discouraging any productive activity, and therefore without raising prices. In other words, taxes on the values of land-like assets are not inflationary.

Link: Harvard Law, Hoping Students Will Consider Public Service, Offers Tuition Break - NYT

Link: Getting Poverty Wrong by Steven Malanga, City Journal 21 March 2008.

Malanga argues that the solution to poverty is getting people to marry before they have children.  He cites Census poverty statistics which show that a far larger proportion of children who live in single-parent families are in poverty, and that relatively few in two-parent families are in poverty.

Pres. Bush is worried about people being able to send their children to college

Interesting that GWB seems to think it is normal and to be expected that most people will have to tap their home equity to send their children to college.

What have we come to when people are unable to save toward a predictable expense, but some portion of the ~70% who are homeowners have rising land value which they can borrow against to finance their children's college bills?   Most parents of college students have 10 to 20 years before their own retirements.

Remember the old ad "Is this any way to run an airline?"  You bet it ISN'T!

Valuing life, and applying fiscal stimulus, and setting us all equal

If we are going to claim to value every life, and encourage every pregnant woman to bring every fetus to term, we need to acknowledge that every child born is the equal of every person already born.  Interestingly, Alaska has been doing something important in this regard, for more than 20 years.

Every man, woman and child who lives in Alaska receives an annual income from the Alaska Permanent Fund, which represents dividends from the invested proceeds of Alaska oil revenue, and which, if properly managed, will continue to provide an annual income for every Alaska long after the oil has all been tapped. And Alaska's governor has had the fortitude to increase the share of the public in Alaska's oil revenue due to the high price of oil. (See another post on the subject from a few days ago.)

(And much of Alaska's state government spending comes from oil revenues, too.)

Our oil is not the only resource that needs to be treated this way.  Urban land values can be hundreds of thousands of times the value of an acre of agricultural land.  There is an acre in Manhattan said to be worth $400,000,000 to $1,100,000,000 -- as a teardown.  If we were to tax that land value at, say, 5% per year, at $400,000,000 it would produce $20 million in income for we-the-people, relieving the need for $20 million in sales taxes, or $20 million in payroll taxes, or $20 million in income taxes.  Talk about fiscal stimulus!  Talk about a permanent tax holiday! Talk about getting the incentives right!  

What does an infant cost a young family?

The Self-Sufficiency Standard Studies, which have been conducted in more than 35 states so far (most recently Colorado, Pennsylvania and Ohio), show the bare-bones cost of living, county by county, for several configurations of family.

What does it cost for a single adult to get by?  How much does her cost of living rise when she has an infant? A preschooler? Both?

Making Work Pay Enough: A Decent Standard of Living for Working Families

Link: 411710_work_pay.pdf (application/pdf Object).
The study is entitled "Making Work Pay Enough: A Decent Standard of Living for Working Families" and it comes from the Tax Policy Institute.  Like the Self Sufficiency Standard Studies, it points out that many of America's jobs simply don't pay enough to support oneself, much less to support a small family.

I found myself very disappointed by the recommendations of the study.  They lack radicalism.  They don't seek the root of the problem, so they don't find the root of the problem.   They propose programs rather than solutions.

Mandela's B-Day message: Rich should help poor

Link: Mandela's B-Day message: Rich should help poor

"There are many people in South Africa who are rich and who can share those riches with those not so fortunate who have not been able to conquer poverty," Mandela said.

I hate to disagree with Nelson Mandela, but I'm going to.  The rich should not 'help' the poor.  The rich should seek justice for all, which would help the poor a great deal.  Charity is not a substitute for justice.  The rich should not be asked to share what they have created, themselves.  Rather, they should be "relieved" of that which they have stolen from the commons and that which they have stolen from others by owning their labor and by owning the land on which we all must rely.

Tax Analysts column: The Price of Civilization

Link: Tax Analysts: The Price of Civilization.

Bravo! Both to David Cay Johnston and to Tax Analysts, for making him a regular columnist there.  I hope that DCJ's work will remain available to us ordinary mortals who aren't subscribers to Tax Notes.  Yes, getting the conversations going among legislative aides and academics is important -- but so is reaching the public, and I hope TA will choose to do both, with this particular column!

The third paragraph says

Our national debate on tax, such as it is, suffers from "experts" who typically know little to nothing of the history, practical rationale, moral basis, or economic benefits of tax. Their expertise is in delivering memorized talking points, not imparting understanding.

Bill Gates: How Can He Best Use His Wealth and Influence to Help the World?

Bill Gates has moved on to his second career, using a large share of his -- and Warren Buffett's -- accumulated funds -- $30 to $40 billion -- to make a difference in the world.  I've got some thoughts about the options he has chosen, and some alternatives. 

He seeks to cure malaria.  A worthy goal. Nothing wrong with that. Success would remove a cause of human suffering.  But we ought to be conscious of the side effects of such measures.   And if the goal is to reduce human suffering, then something more needs to be done, above and beyond the things Bill Gates proposes, the things the Millenium Development Goals propose, the things Jeffrey Sachs proposes. 

David Cay Johnston doesn't get it -- yet

David Cay Johnston is a good journalist and a good writer, and I think he has both a good mind and a fine intellect, and a love for his fellow human beings.  He is well read, a good researcher, and shares what he finds with  his readers.  But I have come to think that he has, at minimum, a blind spot.  (I'd hate to think that it was blinders producing what I'll describe below.)

Orthodox Anglicans hint schism, stop short of split

article: http://news.yahoo.com/s/nm/20080620/ts_nm/anglican_conference_dc_2 begins

PARIS (Reuters) - Conservative bishops debating the future of the worldwide Anglican Communion have issued dramatic warnings about a looming parting of the ways with liberal churches, but stopped short of outlining steps toward a schism.

A bit of websearching took me to the booklet mentioned in the final paragraph:

The 94-page guidebook entitled "The Way, The Truth and The Life" defined the issues Anglicanism faces as struggles over authority, scripture, theological pluralism, mission work and "post-colonial power relationships."

Link: gafcon_way_truth_life.pdf (application/pdf Object).

It runs to 102 pages.  A search on the word poverty finds its only two appearances on page 56.  Here's what it has to say on the subject:

Thoughts for Barack Obama

A friend sent me a link to a page where one can make policy suggestions to Barack Obama's campaign.  Turns out to be a thinly veiled way to harvest emails.  But maybe somewhere in the campaign, someone might actually read the suggestions.

One of the fields was a dropdown menu so one could categorize one's proposal.  I chose "economy" but made the first line of my policy proposal a list of a number of categories into which mine falls:

Issues: Economy, Energy, Environment, Ethics, Family, Infrastructure, Justice, Labor, Poverty ... and maybe even health --  

Halving US Poverty in 10 Years

A Washington think tank, the Center for American Progress, has published a strategy for halving US poverty in 10 years.  While I applaud their goal, I find it too timid and think their strategies wrong-headed.  Their analysis fails to consider why we have poverty in the first place, and proceeds to design bandaids.  If we are going to eradicate poverty, we must go to the root of the problem, and in my judgment, CfAP has not  pursued the problem to its root and thus cannot do more than attempt to trim its branches.  Pruning poverty's branches is not going to rid us of poverty.  It may move some people we acknowledge as "in poverty" to "out of poverty" as we officially define it, and perhaps they can achieve half their goal, declare victory, and call the rest of the problem intractible.

But living just above the poverty line is little better than or different from living somewhat below it, and we're kidding ourselves if we accept the poverty line as a meaningful statistic.    See this page and this page and the related pages linked there.

Luke Russert's tribute to his father: a new political party?

link: http://www.washingtonpost.com/wp-dyn/content/article/2008/06/18/AR2008061801173.html
These paragraphs caught my eye ...

Luke Russert said that whenever he did well on a school assignment, his father would yell, "Yahoo! You smoked 'em, buddy!"

He asked the crowd to imagine a special edition of "Meet the Press" this Sunday in heaven, perhaps with a debate between Alexander Hamilton and Aaron Burr, or John F. Kennedy and Barry Goldwater. He even suggested a talk on the need for a new political party involving Teddy Roosevelt, the former president who later ran unsuccessfully for president as a member of the Bull Moose party.

What was the platform of that party?  You might be surprised, both by its timeliness and by its similarity to the ideas of Henry George, who came in #2 in the 1886 NYC mayoral election in which TR was #3. (Tammany Hall won, and the circumstances would not surprise most people troubled by some of our recent national elections.)   

A Budget is a Moral Document

I hear this statement from time to time, and almost always, it turns out to be a reference to the spending side of the budget. 

But it is equally and -- perhaps more importantly -- true of the revenue side of the budget.  To the extent that we -- as individuals, corporations, philanthropies, endowments, pension funds, family trusts, small businesses, whatever -- are obtaining our revenue from illegitimate sources, and keeping it (legally), we are  stealing -- legally -- from what rightly belongs to everyone equally -- the commons.   And that theft has huge effects on others -- individuals and systems.

Why did Big Russ have to work two full-time jobs?

The tributes to Tim Russert are moving, and I'm sure many of us who follow news and politics will feel his loss, too young, for quite some time.  But as I listen, I am led to wonder whether he ever questioned why it should be that a man needed to work two full-time jobs  to support his family.

Joseph Stiglitz: Revise Taxation to Combat Scarcity in an Age of Plenty

Link: Bangkok's Independent Newspaper.

The title is certainly promising, and Dr. Stiglitz says some important things.  He points out,

At the core of America's success is technology, symbolised by Silicon Valley. The irony is that the scientists making the advances that enable technology-based growth, and the venture capital firms that finance it were not the ones reaping the biggest rewards in the heyday of the real estate bubble. These real investments are overshadowed by the games that have been absorbing most participants in financial markets.

The world needs to rethink the sources of growth. If the foundations of economic growth lie in advances in science and technology, not in speculation in real estate or financial markets, then tax systems must be realigned. Why should those who make their income by gambling in Wall Street's casinos be taxed at a lower rate than those who earn their money in other ways. Capital gains should be taxed at least at as high a rate as ordinary income. (Such returns will, in any case, get a substantial benefit because the tax is not imposed until the gain is realised.) In addition, there should be a windfall profits tax on oil and gas companies.

So far, so good.

But then, he seems to shift gears:

Given the huge increase in inequality in most countries, higher taxes for those who have done well - to help those who have lost ground from globalisation and technological change - are in order, and could also ameliorate the strains imposed by soaring food and energy prices. Countries, like the US, with food stamp programmes clearly need to increase the value of these subsidies in order to ensure that nutrition standards do not deteriorate. Those countries without such programmes might think about instituting them.

It seems to me that it is important to differentiate between those who have done well because they have contributed to the common good -- creating jobs, meeting human needs and wants -- and those who have done well because our system has permitted them to privatize the value of natural resources -- including oil, but also including an even more important resource: urban land value.

I am in agreement with the content of his final paragraph ...

Rich countries must reduce, if not eliminate, distortional agriculture and energy policies, and help those in the poorest countries improve their capacity to produce food. But this is just a start: we have treated our most precious resources - clean water and air - as if they were free. Only new patterns of consumption and production - a new economic model - can address that most fundamental resource problem.

and I don't think Dr. Stiglitz yet sees clearly that in order to conserve those scarce resources, we must turn to Henry George's remedy -- land value taxation -- in order to create the incentives which will concentrate our population into more compact cities, making effective public transportation a real option.  Without this, no amount of research on alternative energy sources for individual cars is going to reduce our energy usage by the kinds of rates that we simply must achieve.  This is not a "command and control" approach; rather, it is making possible and affordable that which many people prefer to do, by reversing some perverse incentives.

If we continue to sprawl as we do now, we simply cannot solve the energy problem -- or the housing affordability problem,  or the poverty problem -- or our economic justice problems. 

For more on Joe Stiglitz, see http://wealthandwant.com/themes/underpop/Stiglitz.htm

The Landlord's Prayer

This comes from a predecessor to the current Episcopal/Anglican Book of Common Prayer.

Oil, Land, Water -- who among us is entitled to privatize their value?

Land, water, oil, air ... none of it is of our creation, and all of us depend on access to them.  If dollars are involved, to whom should they flow, and why?  If royalties are due, who is entitled to them? If rent happens, as it does in any place where there is a scarcity, who is entitled to it?

Is it the fellow whose land is in high demand?  Is it the fellow whose land has valuable minerals in it? Is it the fellow whose property is on a great aquifer?  Is it the great-great-grandchild of the Duke of Westminster, or of the first Caucasian settlers on a particular piece of land, or of someone to whom they sold title?   LVTfan says not. 

Golf Courses, Assessments, Property Taxes, and Nonmembers

Several articles on the topic of assessing golf courses have come to my attention in the past few days.  I've posted previously on the topic, but will start fresh here.

The first article had to do with assessments in Greenwich, Connecticut, where eight private golf clubs were seeking assessments of just $60,000 per acre.  Now that might seem like a high value to people who live in the heartland of America, but Greenwich is a place where a single-acre building lot (with or without an existing house on it) can sell for well over $1 million, and where roughly 1 in 4 residential transactions results in a teardown, often of a home which would be considered a super-luxury home nearly anywhere else.   The assessor had sought to value the land at a still-very-generous-to-the-clubbers $200,000 per acre.  (By law -- a peculiar law whose justification I don't follow, CT's assessments are to be 70% of actual value, so the $200,000 valuation would be about $285,000 -- still a very generous valuation in a town with high property values.)

Is LVT the answer to all our problems?

My local newspaper has set up a facility to permit comments on articles and opinion pieces, and I frequently respond to what I read.  Yesterday, I posted a comment to an article entitled Office owners strive to retain tenants whose thumbnail description says "In tough times, office building owners often look for other sources of tenants besides relocations to their properties."  Today I went back and someone had posted the comment, " Your sole issue is land value tax. Am I right?"

 

Poverty, America's Children, and Our Future

A recent article on the NYT "most-emailed" list, entitled Can You Become a Creature of New Habits? had a paragraph which caught my attention.  It said,

Researchers in the late 1960s discovered that humans are born with the capacity to approach challenges in four primary ways: analytically, procedurally, relationally (or collaboratively) and innovatively. At puberty, however, the brain shuts down half of that capacity, preserving only those modes of thought that have seemed most valuable during the first decade or so of life.

Are you going to be part of the problem, or part of the solution?

This was the headline of an email that came into my inbox today.   And it dawned on me that it is a fine angle from which to view the benefits of land value taxation. 

a tax reformer does the family 1040's

I've heard it said that voting and paying taxes are two of the major sacraments of citizenship. Having spent a significant part of the past week working on the machinations of the latter for several different family members, I am weary of the sacramental qualities of income taxes.  It isn't that I think taxes are a bad thing.  But our current system of taxation is both fundamentally wrong and, having said that, unbelievably convoluted.

Most of the commentators I read and hear are only interested in simplifying the income tax. A few propose getting rid of the income tax and replacing it with a sales tax, which I regard as simpler, but nearly as evil as an income tax from a number of points of view.   And that puts aside the question of whether the necessary rate for the so-called "FairTax" is 23% (or 30% in the way we're used to thinking of sales taxes) or closer to 60%, as I understand is more realistically the case.

The Purpose of Government

I received in an email recently a quote from Albert Einstein:

A clever person solves a problem; a wise person avoids it.

Taxes as oppression, taxes as incentives: Alabama

Friday night's PBS NOW and Bill Moyers Journal were a powerful combination.   My local station shows NOW first, followed immediately by BMJ.  NOW showed three families in Alabama, including a hard working couple whose income places them at roughly the poverty level.  They pay sales taxes of 10% on their purchases, even on food.  They only recently got indoor plumbing.

The footage also showed one of my heroes, Susan Pace Hamill, law professor at the University of Alabama, who has written several important papers, all available online [and highly recommended], about the inconsistency of Alabama's tax code [2002] and of the federal tax code [2006] with the ideals we say we hold dear.  I applaud her efforts and her scholarship and her good heart ---  and I don't think she sees the half of it, or the solution.

Still on the mountaintop: Economically rational racism

Link: Still on the mountaintop: Economically rational racism, by Gavin Putland

... So the key to the Promised Land is to reduce the natural rate of unemployment without creating a new class of working losers. To see how to do that, we must revisit some basic economic principles.

For a century and a half, capitalists and socialists argued about ownership of the means of production as if the assets that make up the "means of production" were all of the same kind. But they're not; they fall into two distinct categories.

• In one category are the assets can be produced by private, competitive effort. For convenience I'll call these house-like assets, although they include not only houses but also other buildings, as well as movable plant and equipment.
• In the other category are those assets that cannot be produced by human effort, or at least cannot be produced by private, competitive effort. For convenience I'll call them land-like assets, although they include not only land but also other natural resources, building rights attached to land, and monopolies and privileges of all kinds.

The returns on house-like assets include

• interest, which is the price of time-preference,
• insurance, which is the reward for bearing (quantifiable) risk, and
• economic profit, which is the reward for bearing (unquantifiable) uncertainty.

Those returns are an incentive to produce house-like assets. Any tax on those returns, or on the assets themselves, reduces the incentive. Conservatives repeat this argument ad nauseam but never acknowledge that it's valid only for house-like assets.

The net returns on land-like assets are usually called economic rent. Some people prefer to call them usury. But whatever you call them, they can't be an incentive to produce anything, because no private person or corporation can produce land-like assets, while the rental values of those assets are produced not by the owners, but by the demand from prospective users.

It follows that any fraction of the rental value of a land-like asset can be diverted into the public treasury without discouraging any productive activity, and therefore without raising prices. In other words, taxes on the values of land-like assets are not inflationary.

Harvard Law, Hoping Students Will Consider Public Service, Offers Tuition Break - New York Times

Link: Harvard Law, Hoping Students Will Consider Public Service, Offers Tuition Break - NYT

Getting Poverty Wrong, by Steven Malanga, City Journal 3/21/08

Link: Getting Poverty Wrong by Steven Malanga, City Journal 21 March 2008.

Malanga argues that the solution to poverty is getting people to marry before they have children.  He cites Census poverty statistics which show that a far larger proportion of children who live in single-parent families are in poverty, and that relatively few in two-parent families are in poverty.