photo credit: derekkeats

Mark Braund
Guardian UK

The South African government’s recent decision to abandon its Expropriation Bill, aimed at addressing the painfully slow pace of …

photo credit: laurenatclemson

Michael Hudson

July 14, 2008

I am writing this article about Fannie Mae and Freddie Mac while sitting in the Queens Botanical Garden. This was not my plan today. The central air conditioning in my apartment broke down six weeks ago, and still has not been fixed. (It’s a nice condominium building, but accidents happen.) It is over 90 degrees outside, and nearly 100 as a result of the greenhouse effect in my apartment. Yesterday I took refuge in the Forest Hills Public Library, but it is closed on Sunday. One of the few libraries near public transport that normally is open on Sunday is in Flushing. So I went there to write the final draft describing the past week’s financial turmoil.

Unfortunately, when I got to the Flushing Public Library, a lady explained that because of the city’s budget cuts, the library no longer would be open on Sundays. Already before noon, when it was supposed to open, a large number of Chinese were waiting to get in, expecting to use the books and computer terminals. There was no sign explaining the situation in Chinese, and they continued to wait as I went down Main Street to the Botanical Garden.

At first glance this might not seem to have much to do with the turmoil of the last few days over the fate of Fannie Mae and Freddie Mac or the real estate markets they have helped inflate over the past decade. But actually, my experience today has everything to do with this topic. These two semi-public mortgage-packaging companies dominate the nation’s mortgage market and have supported real estate prices by steering over $5 trillion to enable homebuyers to bid higher and higher prices for homes, earning billions of dollars of bonuses, profits and interest for the bankers, mortgage brokers and Wall Street debt packagers who are the financial beneficiaries of the real estate bubble.

Frank de Jong, Green Part of Ontario Leader

Frank toured Australia this time last year for the True Cost Economics Forum. He wrote this piece in lieu of exciting developments in Canada.

For the first time to my knowledge, Toronto will be collecting economic rent to pay for infrastructure — in this case to redevelop a section of a busy shopping street. (The wealth that accrues to locations is known as economic rent).

It was reported in the Globe and Mail as follows: “The city will borrow the money up front, to be paid off gradually by the businesses along the ritzy strip.”

Significantly, although the city has refused to pay for the street redevelopment out of property taxes, the adjacent businesses know the benefits to them will outweigh the costs, and are therefore willing to pay for it themselves. These Toronto businesses know that if infrastructure is warranted and beneficial it will raise the value of their land by more than the cost of that infrastructure. When redevelopment makes locations more desirable, more economic rent is attracted, over time, than the cost of the initial redevelopment.

INSITE: Bulletin of the Land Policy Council
Editor: Fred Harrison, April 1996, Vol 2 (3)

Kill the Tax Scams and Create Jobs

IT’ S ENOUGH to make Marx turn in his grave! His arch champion, the Soviet Union, capitulated to the capitalists in 1991 just as the market economies crashed into their …

TAYLOR CALDWELL

THE MIDDLE CLASS

With the rise of the Industrial Civilization in the world about two hundred years ago, there also arose a social body which we know as the middle class. Before that, most of the world suffered under a feudal system in which the people were truly slaves of …