photo credit: unusualimage

Sometime soon someone will write an article on how lobbyocracy has subverted the public’s interest at the expense of the community’s in a staggering number of projects. One just has to have read John Perkin’s Economic Hitman to understand that the major projects announced in Victoria (Channel deepening, North- South pipeline, De-Sal plant plus roads and new rail) all tie back to one or two lobbying firms representing major firms like Veolia (water). Interestingly Veolia seems to be influencing up on NSW as well, where Kellie Tranter writes this key article:

Premier Nathan Rees was quick off the mark to announce that Sydney’s water supply is secure for the next 50 years with Veolia Water – a private company – being granted a licence to draw from the Fairfield Sewage Treatment Plant, recycle the waste and sell it. On top of the desalination plant – which coincidentally is also being built by Veolia Water and John Holland Group Pty Ltd – this will, we’re told, have a positive effect on dam levels.

The article that got me going was Lobbyists Win Labor’s Ear

LOBBYING firms with close links to the State Government have been involved in at least a quarter of the major development projects fast-tracked by the Government since February.

Projects such as a massive apartment development on St Kilda Road, the Pentridge Prison redevelopment and plans for the development of the Chirnside Park golf course site have been supported by lobbyist firms Hawker Britton and CPR, both with strong links to the Labor Party.

photo credit: Aidan.Morgan

We read here how Norway’s oil rents have been more wisely invested than the UK’s. Fair point, but it still implies that we have failed to learn from the GFC:

Still, even Ibsen might concede that it is easier to stand alone when your nation has benefited from oil reserves that make it the third-largest exporter in the world. The money flowing from that black gold since the early 1970s has prompted even the flintiest of Norwegians to relax and enjoy their good fortune. The country’s G.D.P. per person is $52,000, behind only Luxembourg among industrial democracies.

As in much of the rest of the world home prices have soared here, tripling this decade. But there has been no real estate crash in Norway because there were few mortgage lending excesses. After a 15 percent correction, prices are again on the rise.

Why are rising property prices seen as a good thing? They are only good for speculators and bankers.

Everything is relative.

As we have commented on here, if oil rents are shared as citizen’s dividends, this is ok in the short term. In the long run, economic laws dictate that greater purchasing powers will only cascade into higher land prices if land rents are not collected. It is not rocket science, but one would think that a rational society would be going to any length to avoid similar GFC tragedies. Norway’s smug leaders must believe that land booms are fine for their generation. Little East Timor has outperformed them via their oil wealth investment strategy.

With corporate tax revenue plummeting and corporate suicides building by the day, we must avoid similar boom-bust economic cycles. Instead we see government’s globally engaging in massive infrastructure projects that will only make land in prime locations…more valuable.

This mentality is a neo-colonial hangover (MP3) where the economic profession outrightly supports those who own 80% of the planet to receive implicit subsidies through any improvement society makes.

We can only truly benefit from oil rents when land rents are also collected for the public good. The genuine resource curse is that we look at this problem with blinkers on. We must ensure all scarcity rents from natural resources and natural monopolies are recycled so that young drug takers realise there are creative, well paid jobs on offer. Who needs a gun when you have the best job you could imagine? Current policy making is selling future generations short and doing little to provide the vision that we are indeed rational.

DETROIT—As community leaders and members of the press looked on, Detroit mayor David Bing proudly hurled the first brick this week in a window-shattering ceremony for the city’s newest dilapidated slum.

The result of three years of construction work and more than $24,000 in public funds, the rat-infested and crime-ridden development was unveiled to the public on Tuesday.

“It is my great honor to introduce to you the brand new Baneberry Heights,” announced Bing, gesturing to the ramshackle subdivision behind him. “Filthy, dangerous, filled with violence and blight: It’s all here, and it’s all completely falling apart.”

Read more at The Onion – at it again in their sarcastic manner!…all we can do is laugh in this age of lobbyocracy.