Creative Capitalism – the latest buzzword

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Creative Commons License photo credit: ArtBrom

Bill Gates Davos speech on Creative Capitalism has spurred an interesting array of online debate. Gates essentially re-branded Corporate Social Responsibility within the speech, outlining how corporations serve themselves and society best by considering the wider ramifications of their activities.

Speaking as the world economy crashes like Microsoft OS, Gates proclaimed:

I like to call this idea creative capitalism, an approach where governments, businesses, and nonprofits work together to stretch the reach of market forces so that more people can make a profit, or gain recognition, doing work that eases the world’s inequities.

Ironic that a guy who recently left one of the world’s most powerful monopolists is now calling for some of the rent seeking profit to be shared back with the community. Creative Capitalism should not require RED branded product placement by the world’s most powerful monopolists. No matter how much money well intentioned corporates donate to the poor, without deep rooted reform of the monopoly capitalism marketplace we live under, poverty and disease will continue.
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Economic Rehab :Lesson 1 – Economics

Karl FitzgeraldCommentary, True Cost Economics1 Comment

The Lone Soldier
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as according to Tohm Curtis

a new series outlining why Economic Rehab is crucial

What does ‘Economics’ mean…there’s some confusion as to whether it is a science or a philosophy? Wikipedia can provide some insight into the history of economics. I think though that maybe the simple starting point is:

Economics is the study of reality.

Okay so what do I mean when I say Economics is a study of reality? What I mean is that this is really what makes it a science. I would say the exact same thing of Physics, I would say the exact same thing of Mathematics. Bertrand Russell incidentally said ‘Pure mathematics consists entirely of assertions to the effect that, if such and such a proposition is true of anything, then such and such another proposition is true of that thing.’

In Physics this means Isaac Newton’s description of gravity as any two masses exerting a constantly attracting force on each other is true. That is what happens in reality. For Physics to work, you can’t have a law of gravity that has exceptions. A theoretical world where some people fall towards the earth and other people float up into the sky would not hold as science. The laws have to conform to reality. They must be based on observations of things that happen.

Economics supposedly represents a scientific reality. Just we seem to get surprised in Economics much more regularly than we do in Physics or Mathematics.
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BHP Record Profits and 4 Corners Money Pit

Karl FitzgeraldCommentary2 Comments

Tagebau Garzweiler
Creative Commons License photo credit: BK59

Last night saw the media highlight two essential points. On the same day that BHP announced it’s fifth consecutive record profit of $17.8 billion for the year, 4 Corners discussed how high land and housing prices in the mining town of Port Headland were strangling the community.

Both media pieces overlooked the fundamental role of the community in creating the value that naturally accrues to natural resources. Over the last 5 years of record profits for BHP, the ratio of royalty related payments to dividends has averaged 50.6%. In 2003 shareholders received 61% more in dividends than all tiers of government from resource rents. It was around this time that BHP CEO Chip Goodyear chided the business community with comments like ‘Our hard work has paid for your tax cuts’. In 2007 the community received 56% of the amount paid to shareholders. Why should shareholders get more than the rest of the community?

We ask here whether so called owners of resources are entrepreneurial geniuses or just extremely privileged to benefit from the gifts of nature? For that reason, Government should have the courage to withstand the criticism to any changes in royalty rates. Since when did mining companies and land developers become royalty? Why should mining companies have the right to demand meetings with government to ‘negotiate’ what it will pay?

Port Headland demonstrates the danger of allowing what is technically known as economic rent to accrue in land prices. Watch 4 Corner’s The Money Pit: A Boom town running on empty and put the 2 + 2 we discuss here together.
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Baby Boomers Rule Property Market

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(Banksy courtesy jordi.martorell - flickr)

Banksy courtesy jordi.martorell - flickr

…..so jumps the headline on p3 of today’s Business Age. As we prepare to head off to the Baby Boomers Expo this weekend, we are armed with even more data on generational inequity. It may be just that little bit harder to bite our tongues as we go undercover, deep into the bowels of consumerism, as we attempt to raise their understanding of the pressures other generations face.

FINSIA Reconciling wealth with leverage paper is reported as saying:

The percentage of people with home loans has increased from 30% to 33%, but loans taken out by those under 29 have decreased from 18% to 15% whilst the figure for 45 to 59-year-olds lept from 36% to 49%.

“Buoyed by strong superannuation returns and relatively higher incomes, there is strong evidence to suggest that older Australians are increasingly ‘crowding out’ younger Australians from the property market,” the report says.

Earlier in the year we heard that only 12% of new housing loans are for construction. As the property market starts to crumble and the environment melts away, we can only imagine who will clean up this mess?

Well no matter how many debates this weekend yields, we will surely be filled with even more motivation to write that blockbuster article….plus a little audio for our Renegade Economists podcast.

I wonder what our film makers over at the I Want to Live Here film comp will say?

House Hunt Put in Focus

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House hunt put in focus – Leader News: Melbourne community news

The I Want to Live Here Film competition has made the Leader Newspaper throughout Western Melbourne. Concern over affordability and the lack of deep seated analysis leaves young people no option but to tell the real story.

Laura Zeeman says:

It is not really fair the previous generations were able to afford to buy homes, so this (competition) is bringing it to the forefront.

“I also think some parents don’t appreciate how hard it is to buy a home.”

Co-ordinator Karl Fitzgerald said the film competition was started to put the bigger issues of housing affordability into the public forum.

“The reduction in council rates and land taxes are big issues they are the most efficient ways to fund government, but they are taxes people can’t avoid, so that’s why it gets shot down in the press so often,” Mr Fitzgerald said.

“Generally we just wanted any renters to be able to tell their story on what’s going on out in the rental queues and the dark bedrooms we have to dwell in.

“For us it was quite shocking to see there were, according to the 2006 Census, 119,623 empty homes in Melbourne.”