photo credit: James Willamor

Michael Hudson explores the analogous nature of Ponzi schemes and the property bubble. How is wealth created in …

Still in shock at the ALP’s audacious handout to the nation’s biggest polluters, we thought it time to broach a few of the details hidden within the 824 page Carbon Pollution Reduction Scheme (CPRS) White Paper.

Billions of dollars of the commons is proposed to be given away by the climate scheme. Permanent and inalienable carbon permits will be handed over to the biggest polluters if it passes both houses of parliament. These do not expire. Five year windows have been announced where ‘4 year vintages’ of the proceeding trading period permits are sold, presumably in tranches.

If the rapidly melting permafrost demands a drastic reduction in carbon permits, the taxpayer will have to compensate the polluters in buying those permits back. However, even then a case could be mounted in the courts to delay this.

Pricing Undermined

The CPRS relies on the pricing system to reduce outputs. However, the pricing system will be undermined by the ability to import carbon permits from international markets.

The international market will be flooded with permits, as world wide the development of carbon sinks has been growing but the purchasers are yet to come online. Australia will be one of the first carbon markets with a viable demand for carbon permits.

This will ensure that the carbon price will be low, threatening the viability of the system and risking the need for buybacks from polluters.

photo credit: kimberlyfaye

Karl Fitzgerald

Around the world, pubs and bars are full of insightful conversations, democracy at work grass roots style, as we try to make sense of the global financial meltdown. 19/10/08

“From neo-liberalism to neo-handouts, the pyramid purveyors know how to baffle the masses” scowled Maxxy. With the financial meltdown moving at a rate of knots, policy makers and armchair critics alike are scrambling to keep up with the plans of the vested interests.

Some estimate that $45 trillion has already been wiped from the global economy.

“The world of monopoly capitalism has quickly reverted back to ‘privatise the profits, socialise the losses” said Maxxy to his ole sparring partner Ruth.

Their Sunday arvo beer garden sessions looked into the eyes of the philosophical times we live in. “How can governments worldwide fall for it?” said Ruth. “To think that the banks deserve cheap money spoon fed from central banks is just unworldly. The handouts for AIG palatial parties are just the beginning. The old hands from Goldman Sachs have been given the reigns to handout the money”

“What? Are Goldman Sachs working for the government now?” exclaimed Maxxy.

“No – but the revolving door between Goldman and Treasury didn’t stop with ‘Paulson the panicker’. He bought over three of his minions. They are the ones on the sub committee deciding who gets what from the $800bn bailout.” professed Ruth.

“Och that bankers bailout - bailing out the wealth gap! Shock Doctrine in effect. How many trillion have been pumped on those printing presses Ruth? I hope they’re using recycled paper on all these new dollar notes!” joked Maxxy.

“Well you know my story on that one. ‘If you owned all the money in the world and I owned all the land, how much do you think I’d charge you for your first night’s rent?’” asked Ruth.

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 …

Last night’s Insight focused on the tragedy unfolding in the housing market and it’s effects on the rest of the economy. It was good to see that Housing Supply side issues got some time on air, but again the property lobby had large numbers in the crowd, no NGO’s got a guernsey, the omnipresent Ross Gittins took the softly softly line and outside of Steve Keen, there was not the sort of hard hitting critique needed.

The Real Estate lobby again pushed for more land supply. Result - cheap land for speculators to extort the market. Someone mentioned building high speed rail to Penrith and surrounding areas. Result - the added benefits are capitalised into higher land prices - benefiting whom? Those speculators with inside contacts. Debt was mentioned at 7 times the average wage - yes, but why? The high cost of land due to land speculation, inefficient government developer charges and the failure to capture the economic rent. Supply side was mentioned by 1 young academic and a few others, but no one dared to mention how.

Supply side? 119,623 vacant homes in Melbourne. Supply would be increased if the most efficient tax of all is implemented, the one students are taught in economics as the most effective way for government to raise revenue with the least distortions. It’s called Land Tax.

Let’s rename it as a Site Rental. No one likes a tax. We don’t like how it is presently administered, but we agree with the property lobby that it should be set at a flat rate. However, we differ in seeing that it should be set at a higher rate, funding the abolition of income and sales taxes.

Holding charges on land are barely 2%, whilst land values have increased at over 10% p.a for over a decade. The two are inter-related. Increase holding charges and speculation is diminished. Land banking becomes no longer profitable. Read more here and on our sister website

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