Fast Forward News #5

Karl FitzgeraldCommentaryLeave a Comment

David Pecotic

our resident newshound returns
Just ignore it and maybe it will go away …

“There are few institutional structures to achieve co-operation globally on the sort of scales now essential to avoid very serious consequences, warns lead author Dr Brian Walker of Australia’s CSIRO.”

The solution? Don’t Leave Anything To The ‘Experts’

But hope springs eternal: Michael Hudson will be in Australia shortly and is scheduled to address parliamentarians in Canberra on the 21st October. Maybe one of them will be listening …

Speaking of hope – a belated happy birthday to Henry George.

This is the ‘counter-cultural saint’ and all-round snappy dresser who got the modern Geonomic ball rolling: “Wealth, in itself, is a good, not an evil; but wealth concentrated in the hands of a few corrupts on one side and degrades on the other.”

Finally, yesterday was One Web Day, and in that same spirit, let’s recommit ourselves to the online commonwealth and protecting this rare commons from enclosure. Go to the One Web Day site and find out how to get involved. Read the manifesto, “A Call to Defense and Celebration of the Online Commonwealth — Common Values and Shared Duties on the Internet.” Go sign it!

Because (and I’m quoting from it here) “the people of the Internet are, collectively, the killer app.”

So – to share the long-overdue wealth:

Web 2.0:

Google Domestic Trends: tracking economic sectors
[Tracks 23 Google search traffic indexes specific sectors of the US economy, such as retail, auto and unemployment.]

What’s New –
[Australian Government’s online portal has been revamped: the default search now doe so across all collections for all tiers of government; and the ‘Have Your Say’ section now includes links to: Public Consultations, Blogs, and Bright Ideas.]

ABS Toolbox
[The ‘Your ABS’ toolbox is an interactive widget that will allow the ABS Homepage to make it fast and easy for their customers (!?) to find key information and ABS products.]

Median house prices in Melbourne – June Quarter 2009 – Google Maps

Monthly airport traffic data for top ten airports: January 2008 to current
[Australian Policy Online points to a report which provides monthly updates of revenue passengers and aircraft movement data for scheduled operations at top ten airports in Australia and including the totals for all Australian airports. A resource rental resource? Airspace is also a valuable public asset …]

AFTS Public Submission Search
[A rough and ready searchable database of Australia’s Future Tax System (a.k.a Henry Tax Review) submissions as created by a member of the public as detailed over at the Government 2.0 Taskforce blog.]


My tax rules: the Ken Henry wayRich tax pickings in homes & The Australian home: a sacred site for tax policy?
[Now that we’re on the subject, Fairfax economic correspondent Peter Martin appears to have the inside scoop on the draft chapters of the final Henry Review report due in December and which looks set to surprise just about everyone: cheaper insurance, pay-as-you-drive road taxes policed by geosynchronous satellites, death duties, wealth taxes, and the withholding of superannuation until the age of 67 are touted as top contenders. There’s something for everyone, even supporters of Geonomics get a look-in: higher capital gains, resource rent taxes, and land tax are all on the table – though their all a bit on the tepid side. And much of it is also antithetical: retaining state stamp duties on conveyancing and land transactions as well as payroll tax, and pushing up Australia’s reliance on consumption tax.

What can be certain, however, is that it will argue to lower company tax rate to between 25 and 30 per cent. Henry is aiming for the stature of the 1975 Asprey tax review but at the moment looks like just more of the same. Yet there is clearly a need for it: especially as people in the top 20 per cent income bracket enjoy a tax break of about $8000 a year from the exemption of the family home from capital gains tax, about seven times more than the poorest 20 per cent, according to a Henry Review submission by the University of Sydney economist Judith Yates. Renters get about $1000.

Professor Yates’s paper also canvasses reintroducing death duties, and removing land tax exemptions from owner-occupied housing. The latest eBulletin from The Australia Institute notes further that the most expensive 15 per cent of houses actually account for half of the total value of all houses in Australia, which are worth in excess of $1 trillion.]
Gorgon gas project clears final hurdle
[Talking about resource rent taxes, here’s a news item the details of which were deemed so unimportant that if you blinked you’d have missed it … the WA and Federal Governments have offered five production licences for the site, and offered to renew retention leases over nearby gas fields. The spokesperson for the Federal Government said that the licences will give the developers the “necessary property rights” – but are they? Could not the project just as easily progressed (not withstanding the environmental considerations that admittedly had no bearing on the decision) on the basis of resource rental?]

Gas project has Dampier, Karratha at boiling point
[And then there is Terry Ryder, The Australian’s property spruiker, reporting that investors around Australia want to know where to “tap the property benefits” from the Gorgon gas project in Western Australia. He calls it an “an investor’s dream: housing shortages, high rents and huge upcoming demand”: and the various settlements involved already have median house prices ranging from $600,000 to $850,000! Rents in Karratha remain extraordinarily high and it is hard to find a house for less than $1000 per week. Executive-standard houses fetch more than $2000. And that’s with the recent decline in values factored in! It is government’s, communities and businesses that should be doing the “tapping” and then putting it back into the same settlements.]

Families living in tents as housing crisis bites
[And on the other hand: welfare groups in the Northern Territory say the housing shortage there is now so bad they are giving out tents to homeless families. Darwin house prices have gone up by 20 per cent and units by 17 per cent in the past 12 months, and the city is the most expensive capital in Australia to buy a home. The median price of a house in Darwin is now $450,000.]

Uranium royalty changes ‘will exploit Aboriginals’
[A bill passed in the federal Senate last week extends the royalty system so miners pay a fixed rate only if they are making profits!]

Qld Govt under fire over Indigenous home ownership
[World Vision’s chief executive, Tim Costello, announcing the launch of its Mapoon Private Home Ownership Scheme in the Cape York community in Queensland’s far north, says the Queensland Government needs to do more to encourage home ownership in remote Indigenous communities. The three-year scheme – developed in coordination with Mapoon Aboriginal Shire Council, Indigenous Business Australia and government agencies – will help more than 60 families buy their own homes by helping them with the legal and financial challenges. Is this really enough? Or is this a job for Community Land Trusts …?]

Property is no walk in the park
[More fodder for the Henry Review? Negative gearing costs us $5.6 billion a year. Running a loss-making investment is not a noted formula for success.]

Huge population boom a massive challenge: Swan & Where to put the extra millions at the end of the 21st century?
[How will the Henry Review take this into account? The Government says its third intergenerational report to be released in full before the next Federal Budget will show that increasing migration and fertility rates will push Australia’s population to 35 million (or by 65 per cent) by 2049 – around 7 million more than previous estimates released just two years ago. The Treasury Department has made a dramatic upward revision: 62 million at the end of the century!  How will failed infrastructure and housing markets – let alone our fragile environment – cope with a massive population influx? This anxiety is reflected in Labor backbencher ferment calling for immigration levels to be cut. In response, social researchers like Bernard Salt half-heartedly suggest that in order to continue to build our population sustainably new large cities might be developed rather than allow the current mega-regions (Sydney, Melbourne, south-east Queensland) to bear the weight, as if nothing could really be done about it. Yet Geonomics can and does encourage decentralisation as well as efficient urban land use …]

End of home owners’ grant to hurt prices, Housing finance dips as first time buyers exit & First-home buyers pass baton on rises
[Back in the present: the scaling back of the first-home owners’ grant will significantly impact prices at the lower end of the market, a survey predicts. Home loan approvals fell 2 per cent in July, with first home buyers leading the decline.Investors and people upgrading their homes are being relied upon to bolster the property market]

No first home grant boost, no worries, says Aussie John
[An own goal? – Aussie Home Loans boss John Symond told Radio National Breakfast people will not necessarily be worse off when the First Home Buyers Grant is cut later this year, which had in most cases over-inflated property prices.]

Farewell and good riddance to the first home owners boost
[More proof that the negative consequences of the FHOG: Fairfax economics writer Jessica Irvine weighs in from her blog: “It’s clear that the political imperative to stop house prices from falling is now deeply ingrained in our political economy. First home buyers are being used as unwitting instruments, doing the bidding of their baby boomer political leaders, on behalf of their parents.” Strong, incisive stuff.]

Low and medium-high income earners priced out of property market, Home ownership levels stagnate & House prices ‘need US-style collapse’
[A STUDY of national home ownership rates has painted a grim picture of the difficulties both low and medium-high income earners face getting into the housing market. Strong economic ‘growth’ and relatively low interest rates between 1996 and 2006 have meant that average house prices have trebled since 1996, yet overall home ownership only grew by 0.8 per cent. The study concluded that if “rises in national income continue to disappear into higher house prices” is in “a very dangerous and unstable situation” which will only be rectified either “through a US-style price collapse or a complete re-evaluation of the situation and a coordinated effort by governments, planning and financial institutions to restore the balance between housing supply and demand – or tax away the imbalance – so that all Australians may benefit.]

Vendors wary as $1m home sales slump & Sydney prestige property suffers from Global downturn
[The number of sales of homes for more than a $1 million has dropped dramatically (about 10 per cent) across Sydney and drops begin at the top of the market.]

Luxury firesales slash prices
[The number of luxury properties selling at mortgagee auctions (mostly in Queensland and most of those of the Gold Coast) has soared as receivers and banks cut prices by up to 50 per cent to meet the market.]

Chinese buyers fuel top-end property boom
[The solution? REAs and government legislation conspire to sell unaffordable property to foreigners who can? They are also courting controversy, with some local house hunters complaining they are being priced out by foreigners who have no intention of living in their new properties. A few critics go further, arguing Chinese money is now putting upwards pressure on interest rates. The floodgates opened on foreign investment in March when the Federal Government relaxed its rules on property ownership. It also abolished mandatory reporting of such acquisitions in a bid to ”enhance flexibility in the market”. So long as we keep propping up those big four pillars – they really tie the room together, unlike housing affordability (so 2008) …]

Revealed: Australia’s downturn-defying hotspots
[A report has identified 20 regions in Australia which have defied the global financial crisis with employment growth of 5 per cent or more. Bankwest research shows east metropolitan Perth and lower-northern Sydney have led the way with employment growth of 13 per cent since November 2007. However, north, west and central Western Australia have been the worst performing regions, with employment falling by 12 per cent.]

East v west: renting in Sydney’s a tale of two cities
[More than 24,300 properties were available for rent across Sydney in July, the highest number of vacant homes on record since 2005, according to SQM Research, which uses online rental listings that are advertised for at least two weeks and are still available when the monthly count is done. The list of the top 10 hardest places to find rental accommodation is dominated by outer suburbs in Sydney’s west, south-west and north-west. In contrast, suburbs on the north shore, in the east and in the inner city are the easiest places to rent, provided people are willing to pay: almost 300 houses and units sat empty in Milsons Point in July, while on the other side of the harbour 152 went untenanted at Bellevue Hill. That’s despite a year-long freeze on rent increases, which, last year, halted a 20-year run of price hikes.]

Currency surge hurts exporters
[ICAP economist Adam Carr predicted the Aussie would come near to pulling even with the US dollar in the next four months. ANZ chief executive Mike Smith has warned that the rising Aussie dollar was his greatest concern and cautioned that the flight-to-safety may be artificially inflating commodity prices. Australia’s trade deficit blew out to more than $1.5 billion in July, a direct outcome of the cash splash …]

Australia not out of the woods, figures show
[Recent data has thrown doubt on the strength of Australia’s rebound from the global financial crisis. Corporate profits and stockpiles slumped sharply in the June quarter, while business lending was still going backwards in July.]

Read the data: it was a recession
[Steven Kates argues that the ‘fact’ Australia has managed to avoid a “technical” recession by not having had two consecutive quarters of negative gross domestic product growth is very much an artefact of the data sets we use. Kates teaches economics at RMIT University in Melbourne.

Loan rates to hold as firms lay off workers
[Mortgage rates are likely to remain on hold at least until November as companies continue to shed full-time employees.]

Delinquent mortgages continue declining
[The latest report from a major credit ratings agency shows that less Australian households are behind in their mortgage payments. An unprecedented reduction of official interest rates from a peak of 7.25 per cent that prevailed between March and September last year to 3 per cent by early April this year has probably played the biggest part in reducing the number of people falling behind in their mortgage repayments. The real tests for the ability of households to continue paying their loans, however, will rest with the RBA’s future moves on interest rates, and the trends in unemployment.]

27,000 jobs lost, but unemployment steady
[Speaking of the devil: Australian unemployment has remained at 5.8 per cent in August despite the loss of 27,100 jobs. This far exceeded the average market forecast of about 15,000 jobs lost, and was above most of the more pessimistic predictions. The seasonally adjusted unemployment rate only stayed steady because some people gave up looking for work, with the participation rate falling from 65.3 per cent in July to 65.1 per cent in August. If the participation rate had remained unchanged (as was widely expected), it would have surged to 6.2 per cent. Economists expect the jobless rate to peak at 6.8 per cent. But the executive chairman of Roy Morgan Research, which has been measuring unemployment for several years, says Australia’s real unemployment rate stands at more than 14 per cent, as the ABS doesn’t count the people in the work force who are underemployed.]

Stimulus saved 200,000 Australian jobs: OECD
[The OECD says the Federal Government’s economic stimulus package has worked strongly to reduce the impact of the global recession on employment. The Opposition, of course, disagrees. The problem is that both are right: given the conditions, it was both necessary in itself but also an necessary burden that we the average tax payer will be paying for. But for the rent-seekers, the land-bankers and other monopolists its been a bonanza – and if we were applying Geonomics in teh first place it wouldn’t have been needed!]

The SME obstacle to recovery
[Recovery? Then why are small and medium-sized enterprises (SMEs) finding it next to impossible to get the bank funding they need? Here’s the rub: any new customer asking for a loan is usually shown the door unless that newcomer has a huge amount of equity in their house. Mortgage funds, with their large sums now frozen, obtained high returns by lending on the security of the real estate of smaller enterprises. If too many of the businesses can’t find replacement finance they may have to sell their properties. This will also have long-term implications for the value of real estate used by smaller enterprises. Unless we can find a way to finance smaller enterprises the recovery will not boost employment to the level we expect because SMEs are the major employers of labour.]

Recovery ‘tougher than crisis’ for retailers
[Access Economics states the obvious: retailers will see much slower growth once the Federal Government’s stimulus payments wear off and interest rates start to rise. Will it lead to unemployment and the predicted vicious de-leveraging cycle?]

Business confidence surge is “unrealistic”, says NAB
[Companies’ confidence may have outstripped reality on the back of government stimuli and recent rallies in the share market, NAB’s chief economist Alan Oster said. The news comes amid continued warnings that the global economy may suffer a ‘double dip’ as the pronounced rebound gives way to another slide.]

ACCC hails victory for supermarket competition
[The Australian Competition and Consumer Commission (ACCC) is hailing a deal with the big supermarkets as a major breakthrough in grocery competition. Woolworths and Coles have agreed to stop using restrictive lease agreements with shopping centre landlords to prevent rivals from opening stores (although they can take up to 5 years to implement it). Samuel says the move will make it easier for smaller and new grocery companies to take out leases. There’s only one problem:]

Woolies centres and servos for sale
[Woolworths, Australia’s leading retailer has placed about $100 million worth of shopping centres and service stations on the market, as it divests assets ahead of its planned hardware sector partnership with the US-based Lowes group. Woolworths owns more than 1000 properties throughout the country; a spokeswoman said: “When the time is right, we sell the sites and lease them back.” Land-banking with the best of ’em: an insight into the connection between commercial monopoly and land monopoly.]

Slump wipes 11 per cent off home investment
[Nope, no recession here … residential property investment plunged by nearly 11 per cent during the 2009 financial year, as the global financial crisis caused listed companies to shelve projects and residential developers had the chutzpah to blame “government red tape” (read: the reasonable demand to contribute some of their land value gain to the community) for a lack of new homes built. The Australian Bureau of Statistics’ figures on the country’s national GDP expenditure for fiscal 2009 revealed dwelling investment slumped a seasonally adjusted 10.9 per cent. In the June quarter it dived 5.5 per cent.]

One-third of nation at risk of loan default
[33 per cent of postcodes – including battlers’ suburbs and some of the wealthiest urban areas – had fallen into the “high-risk” category of financial distress, with Victorian suburbs facing the highest risk of defaulting on debts. This is up 30per cent on the same time last year, despite signs that economic conditions are improving.]

Banks Dominate Australia’s Housing Debt Overhang
[And here’s why this might be a problem: a report from the Reserve Bank confirms that Australians are in a lot of debt – $1.9 trillion in the June quarter, which is more than one and a half times Australia’s annual economic output; most of it is for real estate and belongs to the big four banks.]

Prod banks to lend, APRA urged
[If he squeals let him go: ASPEN Group managing director Angelo Del Borrello has called on the Australian Prudential Regulation Authority to persuade the banks to start lending to the property sector again. The banks have not only cut their exposure to property but have also tightened lending criteria. The cost of refinancing debt has also increased and substantially, due to the global liquidity squeeze. “The fate of this country, as far as property is concerned, is in the hands of the banks,” said Luke Saraceni, founder and chief executive of Saracen Properties. Large property players such as his good self were disappointed with the stance on Ruddbank, a failed initiative proposed by the federal government to fill a potential funding gap in the commercial property sector, adopted by Malcolm Turnbull. Ruddbank was knocked back in the Senate after the Liberal Party and the Greens voted against the bill.]

Buy or wait: the tough question
[A piece by Frank Gelber, chief economist for BIS Shrapnel, is revealing. It admits that the office (leasing) investment market is still in freefall, and that it will as a consequence be a tough 18 months. Rents and property values are already below replacement cost levels and it will get worse.]

Devine signals $1bn retreat
[Devine is retreating from more than $1 billion worth of Queensland residential projects, as some banks shy away from lending to the Queensland-based developer because of its relationship with the the global construction giant Leighton Holdings. Leighton’s total debt as at June 30 was $613m. It is widely spread across various institutions and banks, with exposure to all of the top four Australian banks. “We have got some large tracts of land in Queensland and we want to sell off parts of those so we can buy more land in Victoria,” managing director David Devine said. Why? Because it pays to land bank where the population growth is …]

Investors caught in big freeze
[Up to $14 billion has been trapped in unlisted retail property trusts as their managers, mostly linked to investment banks such as Macquarie Group and Westpac, are expected to keep redemptions frozen and distributions cancelled until at least next year.]

Richardson property row not his first & McGurk land under microscope
[Of course, as the McGurk affair has shown, you don’t need to worry about all this if you have the right connections … Sydney property developer Ron Medich is not the first client of ALP powerbroker and lobbyist Graham Richardson to have been embroiled in controversy over property deals. In 2006 another of Richo’s clients, property developer and a major donor to the ALP Duncan Hardie, secured approval to build 7200 houses in the NSW Hunter Valley – despite the area coming last on a state government list of possible housing sites. Meanwhile, the Badgerys Creek Consortium site, a controversial parcel of land in Sydney’s outer west owned by an associate of slain businessman Michael McGurk is likely to be “substantially redeveloped” in the near future, according to NSW government documents.  It is south of the Western Sydney Development Hub, an 800ha site rezoned for development by the NSW government last month. If the land is rezoned, BCC members stand to make substantial profits … why do I feel the need for a shower all of a sudden?]

Coastal home owners face huge losses from rising sea & Byron council to vote on demolishing seafront homes
[Meanwhile, while Sydney elites fiddle, Reuters reports that there are approximately 711,000 coastal properties and billions of dollars worth of assets and infrastructure in Australia alone are at risk from rising sea levels and storm surges. Sydney Coastal Councils, which represents 15 local governments, says the multi-million dollar price tags of beachfront homes are now unrealistic given climate change! Around the world, owners of prized seaside properties face the prospect of not just losing their homes but receiving no compensation as insurance policies may not cover climate change losses in the future. SMH reports that Byron Shire Council is pushing ahead with plans to demolish a number of seafront houses it says are most affected by coastal erosion. Such is the urgency of the matter that it has even been showcased(PDF) in About the House, a free colour feature magazine produced quarterly by the Liaison & Projects Office of the House of Representatives. It covers the varied work of Members of the House, especially Committee investigations – in this case, the House of Representatives Climate Change Committee, which is investigating the impact of climate change on coastal communities. A great example of the convergence of Geonomics and climate change.]

Catherine Hill Bay activists score victory
[Local activists scored a resounding victory against over-development on August 31, when the NSW Land and Environment Court ruled against a proposal to build 600 houses in the small coastal village of Catherine Hill Bay, near Newcastle. Justice David Lloyd didn’t mention the $143,500 donation made by the developer Rosecorp to the ALP before the last state election, but in his ruling he described the consent process as “biased”, and a “land bribe in exchange for rezoning and associated development”.]

Planning objectors may be forced to pay fees
[Meanwhile, Victorians shouldn’t feel left out: they could be forced to pay for the right to object to proposed building developments in their neighbourhoods as part of a new “market-type” approach to planning canvassed by Planning Minister Justin Madden.]

Green groups to benefit through company fines
[And then they have to go and do something that makes sense! The Victorian Government is seeking new and creative solutions to environmental issues that will be paid for by fines levied on companies or individuals found guilty in court of environmental pollution. Funding for community environmental groups could be made available through fines handed down to companies guilty of polluting.]

United Water sued for overcharging & Rann wants Lib cabinet document
[Having gotten this dirty, what’s a little more dirt? The taxpayer-owned SA Water is suing private company United Water (owned by French company Veolia which has operations in 64 countries) for tens of millions of dollars for alleged water overcharging. Premier Mike Rann will apply immediately for a release of secret cabinet documents relating to the Liberals’ privatisations in South Australia during the 1990s. The Water Security Minister, Karlene Maywald, states that if damages are awarded, it would offset future residential water price increases.]

End of the road for greatest fee grab in Australian infrastructure history
[It has become increasingly clear that the traffic projections for most toll roads have been built around the financial model, not vice versa as it should be. And that financial model was structured in such a way as to ”upfront” or bring forward the project cashflows so the bankers and all their hangers-on could pocket billions of dollars in fees before even a cent was earned in tolls. To this day, the project operators and the Queensland, NSW and Victorian state governments continue to hide financial information.]

Smart meters: pay now, pay later
[VICTORIANS will pay at least double – and in some cases triple – the price for new electricity meters from next year, even before many customers have them installed. Until now, Victorians have paid about $35 to $45 a year for meters and the costs of servicing them. But from next year, as the new smart meters come into effect, customers will pay more to distributors who provide the power lines and poles. The charges will increase again the following year.]

ABC seeks law ensuring free content on broadband
[As the federal government would contribute a large share of the cost of building the network and keep a major stake in it for at least five years, the NBN company should be legislatively obliged to carry the ABC’s online media content and other public services for free, ABC managing director Mark Scott said in a recent submission on regulating the new network. Australia’s two big internet providers, Telstra and Optus, oppose lifting download charges for publicly funded internet content, which they see as threatening their own walled-garden content offerings.]

Theatre of the absurd
[Alan Kohler lampoons the stimulus ‘exit strategy’ commitments of G20 governments. The crisis allowed a Niagara of fiscal pork to be unleashed effectively wedging oppositions out of the lime light. What no political leader has managed to do is reform the financial sector in a way that might prevent a similar crisis happening again, despite stern promises that they would. In Australia the power of the two largest banks has been entrenched and banking competition has been utterly destroyed. The big investment banks are back ruling the local capital markets as if nothing happened and, what’s more, absolutely rolling in fees again. The political media class is focused on an absurdly irrelevant debate about ‘exit’ while politicians and bureaucrats are not being held to account for their failure to make sure it doesn’t happen again.]

Costello weighs in to legacy wars
[Speaking on Radio National, Costello enters the ongoing argument over which side of politics has the best economic credentials, which was kicked off by Rudd in speeches attacking the former government’s legacy. Rudd described the Howard government as neo-liberals whose time in power was marked by indolence and wasted opportunities. “Neo-liberalism was quite good when Hawke and Keating were practicing it but bad when Howard and Costello practiced it. I think that’s the latest incarnation of the argument.” Much as I hate to admit it, the man makes a good point and reveals the bipartisan assumptions for the major parties today. But if you still aren’t clearer on what neo-liberalism is this brief definition might help …]

PM Kevin Rudd backed on public sector revamp
[Here’s another thing that there is bipartisan agreement on. Australian National University professor John Wanna, a senior public administration expert, has backed Kevin Rudd’s plan to shake up the Australian public service, warning that it has become too technocratic and process-driven. “A large part of the public sector has become technocratic — very focused on contract management and administrative process,” said Professor Wanna. “I think he (Mr Rudd) wants to instil a new agility – creative thinking at the top and also moving through to the middle levels.” And what could be more creative than Geonomics? Let’s hope that the Government’s inter-departmental Advancing Public Sector Innovation project grows legs as well as wings … See also:]

Cultural change and cuts to mark new bureaucracy, Rudd wants ‘sweeping reform’ of public service & Rudd to revamp public service

More power to people
[An article in the Courier Mail reporting on a breakfast address at Brisbane-based research think tank Eidos Institute given by Alan Milburn, British Labour MP and who as former Health Minister ran the National Health Service, who pioneered individual health budgets to spend on treatment. He calls for more of this kind of voucher system “empowerment” not just in health but in education, housing, special needs and training. A transcript of his speech can be found here, and video here. A voucher system coupled with the status quo would probably have a regressive effect; but it could also serve as a ‘citizens dividend,’ revenue surplus to the collection of resource rents and the capture of land value uplift predicted by Geonomics.]

Busting political cartels and limited visions
[Corin McCarthy, on the OnlineOpinion website, writes about the growing for a third position in Britain from both the centre-right and centre-left of politics that transcends these divisions, based on the values of empowering people through participation. McCarthy was advisor to Craig Emerson during 2007, small business advisor to Labor’s 2007 Election Campaign, and served as an advisor to Minister Emerson until September 2008. He further argues that this same participatory movement could bust the political cartel that is now limiting Australian policy options. If this does not happen in one or both of the two parties, it’s likely a third force, supported by efficient businesses and a broad church of swinging voters, will emerge to challenge the current hegemony.]

Great Barrier Reef under serious threat
[The report – entitled “The Economics of Ecosystems and Biodiversity” – unveiled in Berlin, Germany, said coral reef systems are worth up to US$172 billion (A$205 billion) per year in terms of economic activity. A UN-backed report, “The Economics of Ecosystems and Biodiversity,” unveiled in Berlin, Germany, said coral reef systems are worth up to US$172 billion (A$205 billion) per year in terms of economic activity.]

Bundanoon $20,000 grant funds ‘shop local’ campaign
[THE Bundy on Tap Committee will use a $20,000 grant from Industry & Investment NSW to promote Bundanoon and its businesses, following the village’s move to become Australia’s first bottled still water-free town. From this month, Bundanoon will replace commercially bottled water with free filtered water from public water stations.

Bundy on Tap coordinator Sandra Menteith said, “It is important, indeed essential, for the people of Bundanoon to work together to build the local economy so that the town becomes more resilient in the face of rising energy and fuel prices. In the not-so-distant future, food and other consumer items that have to be transported from afar will not only become very expensive, they may be totally available.

Ms Mentieth said if businesses and residents bought goods and services locally whenever possible, the local economy would grow through the multiplier effect of circulating money more times around the community and more jobs could be created. Bundy On Tap will be officially launched outside Bundanoon Memorial Hall at 10am on Saturday, September 26.]

Water price hike ‘too much for low-income families’
[ACTEW Corporation wants to charge ratepayers an extra $100 a year from 2013 to pay for the Cotter Dam enlargement and other water projects. The ACT Council of Social Service (ATCOSS) says it is worried people on low incomes will struggle to pay for big regressive hikes in water prices. Much more progressive would be to charge a percentage of the land values.]

Murray-Darling infrastructure works ‘urgent’
[The Murray-Darling Association is requesting the Federal Government to fast-track water-saving projects in the Murray-Darling Basin. Water buy-back has been accelerated at a far greater rate than water-saving measures that resolve evaporation and seepage losses on distribution systems. The less water there is, the more its worth – makes you wonder if there is a method to this neglect … but funding should not be the barrier: as like all infrastructure projects it, can become self-funding if the administering body has the authority to capture the subsequent uplift in land values.]

The basics of biochar & Nature’s Way. An answer to climate change could be right under our feet(PDF)
[The first is a Parliamentary Library paper introduces the concept and origins of biochar, discuss its production process, potential uses, and the benefits and costs of biochar in its key roles in agriculture and climate change mitigation. Soils have the ability to absorb carbon dioxide and influence its concentration in the atmosphere. Biochar can be used to increase the ability of soils to sequester carbon and simultaneously improve soil health.  The second is a feature article from About the House (see earlier) detailing the visit by the House of Representatives Primary Industries Committee to the Liverpool Plains to meet farmers at the leading edge of adaptations that could play a vital role for agriculture as it deals with the impacts of climate change: increasing soil carbon levels.]

It’s Hard Being a Bear (Part Three): Good Economic History
[No. 3 of Steve Keen’s no-bull series – them shoots look positively emerald until you start making comparisons with the 1930s: 15 months into our modern-day crisis, and with no protectionist legislation even being contemplated, world trade had fallen 20% below its peak, and we’re not even taking (the increasingly restrictive definition of) unemployment into the equation.]

It’s Hard Being a Bear (Part Four): Good Economic Theory
[Keen continues his series to coincide with the anniversary of the Lehman Brothers’ collapse. Slightly edited down versions of this piece have just been published in the Sydney Morning Herald and WAToday. It provides a nice summary of his position, as you would expect for broadsheet copy.]

It’s Hard Being a Bear (Part Five): Rescued?
[In his next instalment of his seemingly never ending series on the ‘green shoots’ phenomena, Keen admits he underestimated how strongly governments would respond to this financial crisis which have all had a positive impact on the economy and asset markets (both shares and houses). He points to Eichengreen and O’Rourke’s comparison of today to the Great Depression to give the most balanced assessment of how effective these policies have been at the global level. While economic outsiders from across the political spectrum like Keen, Michael Hudson, Niall Ferguson and Nassim Taleb argue that the only way to restart the economic engine is to clear it of debt, the government response, has been to attempt to replace the now defunct private debt economic turbocharger with a public one. So, while a stimulus will work for a while, the drag from debt-deleveraging is still present. The economy will therefore lapse back into recession soon after the stimulus is removed.]

Housing crisis leaves families destitute
[If there is a point to these linkrolls, its Samantha Sosaice, 25, has been teetering on the edge of homelessness for two years, shifting between family and friends and unable to find a private rental of her own. The number of homeless families nationwide spiked 17 per cent at the last Census count in 2006, and charity workers say the problem has intensified since then. Charities were shocked when the Government recently took back $750 million to help fund a blowout in the school-building element of the stimulus package. Clearly it is not a sustainable approach to the problem, being far too capricious: the missing element is Geonomics. The Last Chance Motel, last night’s related Four Corners report is also accessible from the webpage: not only does it put vulnerable human flesh on these dry bones, but it provides an invaluable resource of key reports, news items related to Australia’s homeless and a comprehensive list of NSW emergency accommodation services.]


The Face of Foreclosure

Rosemary Beside Her House

Rosemary Beside Her House

[At GFC ground-zero, Rosemary Williams is up against the same institutional evil, reflected in a series of powerful photos found on Flickr taken outside the her foreclosed home. Williams is a Minneapolis woman who for months has refused to leave her property. Seven protesters were arrested outside the home over the weekend for breaking through plastic police tape roping it off. NPR’s Money Planet blog gives further details.]

Financial 9/11, one year on
[September 15 marked one year since the collapse of Lehman Brothers – a day described by some as the September 11 of finance. Although conditions at least on the stock exchanges of the world have improved, the fundamental problem of toxic debt remains.]

Recovery prompts fear of bubble
[The FT reports that the record low interest rates and vast amounts of money pumped into economies by central banks has translated into surging asset values across financial markets, raising the prospect of a new speculative bubble. Here we go again!]

Global economic crisis to continue: IMF chief
[The global economic crisis will continue and countries must do more to adopt financial market regulations, International Monetary Fund Managing Director Dominique Strauss-Kahn has said.]

Obama wants G20 to rethink global economy
[In the lead up to G20 summit this Thursday, and with U.S. consumers now holding back on spending after house prices plunged and as unemployment climbs, Washington wants other countries to become engines of growth. Obama will be proposing a broad new economic framework where the U.S. should save more and cut its budget deficit, China should rely less on exports and Europe should make ‘structural changes’ – possibly in areas such as labor law – to make itself more attractive to investment. European officials, for their part, have renewed calls on the summit to curb bonuses paid to bankers; the kind of idea that U.S. officials, mindful of Wall Street’s concerns, oppose. And the band played on. Even our so-called leaders are not able to identify land and land speculation as the true cause of this global recession, how can we trust that their solution is sound? Worse still, it may be less to do with ignorance and more about wilful avoidance: politicians especially have an instinct for which side of their bread is buttered …]

The Two Timors
[A tale of ‘two’ countries – the Timor of the past and the Timor of the future. According to the East Timorese Government, the country is making great progress. East Timor’s economy is growing at almost 13 per cent – the second fastest rate in the world. East Timor’s main revenue is from oil and gas. Its petroleum fund has grown to $5 billion and is being managed so it can provide for future generations. There are also billions of dollars flowing to East Timor in the way of international aid yet poverty is still widespread. Yet many of the East Timorese question why more isn’t being done to provide clean water to people and to fix up infrastructure such as roads, and why so many young men, a sizable number of whom were previously rebel soldiers, don’t have work. What can explain and solve the progress and the poverty that so often go hand in hand? Geonomics.]’s submission to the Opposition’s banking inquiry
[ shows banks are not boosting profits by charging high mortgage rates, but they are cutting business lending and helping to unbalance the NZ economy. Continued inaction may result in a sovereign credit rating downgrade and a loss of foreign investor confidence. This could force Australia to step in to formalise its existing informal underwriting of New Zealand’s economy and to demand control of our banking regulation. This would lead to an eventual capitulation to an Australian-led Trans-Tasman monetary and banking system with the associated loss of sovereignty. It argues that this trend can only be arrested by a structural reform that encourages business investment in the tradeable sectors and discourages unproductive property investment: capturing uplift in land values.]

U.S. Economy May See Its Slowest Recovery Since 1945
[Bloomberg reports that the U.S. recovery may be the slowest since World War II to regain all the ground lost during the recession, even if economists’ more optimistic forecasts for expansion turn out to be right]

Option mortgages to explode, officials warn
[One the other hand – U.S. federal and state governments are girding themselves for the next foreclosure crisis in the country’s housing downturn: payment option adjustable rate mortgages that are beginning to reset. Although some (ambiguous) signs of stabilisation have recently emerged, many economists say there is still a huge supply of unsold homes lingering on the market and that, coupled with a frenzy of more foreclosures ahead, should depress home prices for the rest of 2009.]

Wall Street risks red October as rebound looks frothy
[“Today, we are in the midst of one of the strongest bull market rallies since the 1930s” – famous last words? Unusual simultaneous rallies in equities, U.S. government bonds and commodities are linked to one factor: super-cheap monetary policies adopted around the world. The U.S. stock market  rebound has been largely predicated on a rally in shares in financial firms, many of which are still believed to rest on shaky ground. An ongoing deterioration in consumer debt repayments and a worsening picture in commercial real estate are all putting additional strain on already-heavy balance sheets.]

Loan Losses Spark Concern Over FHA
[The next domino? U.S. Federal Housing Administration, which has been guaranteeing loans in an attempt to stabilize the housing market, has been hit by increasing mortgage-related losses and is in danger of seeing its reserves fall below the level demanded by Congress, according to government officials, in a development that could raise concerns about whether the agency needs a taxpayer bailout.]

Banks ‘Too Big to Fail’ Have Grown Even Bigger
[The crisis may be turning out very well for many of the behemoths that dominate U.S. finance. A series of federally arranged mergers safely landed troubled banks on the decks of more stable firms. And it allowed the survivors to emerge from the turmoil with strengthened market positions, giving them even greater control over consumer lending and more potential to profit.]

Five banks closed by U.S. regulators
[Bank regulators closed four Midwestern banks and one in Arizona on last Friday, bringing to 89 the number of U.S. banks to fail this year as deteriorating loans continue to take their toll on financial institutions.]

More Bogus Bailout Reporting: “As Big Banks Repay Bailout Money, U.S. Sees a Profit”
[Even if a pecuniary benefit eventually accrues to the U.S. government’s balance sheet, huge losses still loom, and the system remains dependent on us bailing out those responsible for the crisis, in effect enabling them to screw us again.]

America, China and protectionism: Wearing thin
[The Economist looks at the White House decision to impose punitive tariffs (35% for the first year, falling by five percentage points a year, to 25% in the third year) on Chinese-made pneumatic tyres. Do we have the makings of a new trade war? If so, the parallels to the 1930s are ominous.]

Unemployment Rate Hits 9.7 Percent As Economy Sheds 216,000 Jobs In August
[Huffington Post reports the latest U.S. figures]

Unemployment Rate Reaches 10 Percent In Over A Dozen States
[NPR’s Planet Money blog breaks it down further:  unemployment levels in 14 states are significantly higher than the national average of 9.7 percent. Michigan tops the list with a rate of 15.2 percent, followed by Nevada with 13.2 percent and Rhode Island with 12.8 percent.Twenty-seven states reported month over month increases in unemployment in August while 16 states experienced decreases. In states like Ohioand Georgia, where the unemployment rate fell, officials say people giving up on the job search contributed to the drop …]

The Slow Motion Train Wreck of State Finances
[HS Dent rounds up news items about perfect storm of multiple U.S. state government budget deficits and even bankruptcies: fewer than 10 states ended the last fiscal year with significant reserves, and three-fourths have deficits exceeding 10% of their budgets …]

Governments Shed More Workers
[18,000 government jobs lost in August — the U.S. Postal Service cut about 8,500 jobs as well — and analysts expect the reductions to continue through much of the year. Government employment at the federal level is holding up better because the U.S. can borrow more easily while states and municipalities are often required to balance their budgets. This hit, in part due to lower property-tax revenues, is a final blow from the housing decline.]

Recession hits US cities’ finances
[The FT reports that officials for 9 out of 10 cities in the US believe that their financial situation will be worse in 2010. Despite an improvement in the overall economy, municipal woes “may be just beginning, since city finances tend to lag behind changing economic conditions by 18 months to several years. Because of assessment cycles, for example, it often takes several years for city property taxes to reflect changes in property values. For this reason, cities will feel the deeper effects of the recession beyond 2009, with the worst years being 2010 and 2011.”]

Halting Recovery Dives America in Two
[WSJ reports, at one extreme of Corporate America, a cadre of companies and banks, mostly big, united by an enviable access to credit. At the other end are firms, chiefly small, with slumping sales that can’t borrow or are facing stiff terms to do so. And on Main Street, there are consumers with rock-solid jobs — but also legions of debt-strapped individuals struggling to keep their noses above water. More here:]

The widening gap in America’s two tiered society

Housing derivatives: Spark of invention
[A new way for homeowners to hedge themselves against property crashes, or more of the what ails ya? Robert Shiller and Karl Case, two economists responsible for a widely used gauge of American house-price movements, have launched of a product called MacroShares, securities that reflect the value of the S&P/Case-Shiller home-price index in ten large urban centres and hedge against falls in value.]

California’s Real Death Panels: Insurers Deny 21% of Claims
[The United States remains the only country in the industrialised world where human lives are sacrificed for private profit – and could easily be paid for through the capture of resource rentals, carbon cap-and-dividend, and the uplift of land values.]

New Exotic Investments Emerging on Wall Street
[In its never ending quest to surpass its own previous attempts at hubris, Wall Street is looking to profit from life insurance by doing to them what they did to mortgages! The bankers plan to buy “life settlements,” life insurance policies that ill and elderly people sell for cash – $400,000 for a $1 million policy, say, depending on the life expectancy of the insured person. Then they plan to “securitize” these policies, packaging hundreds or thousands together into bonds. They will then resell those bonds to investors, like big pension funds, who will receive the payouts when people with the insurance die. The earlier the policyholder dies, the bigger the return; though if people live longer than expected, investors could get poor returns or even lose money. Of course, lack of public health insurance will help here – and coincidentally, the very same people stand to benefit from both …]

Restaurants in July: 23rd Consecutive Month of Declining Traffic
[The restaurant business in the US is still contracting, although not contracting as fast as late last year. The cook must have put the green shoots in the soup …]

Can ‘Slow Investing’ Remake America’s Food Industry?
[Perhaps now is a good time to invest in an alternative. Time Magazine showcases The Slow Money Alliance, a nonprofit that brings the tenets of the Slow Food movement (buying local) to finance — exploring investment vehicles that re-circulate within the local economy, minimize environmental impact, stress diversity over monoculture, and earn decent returns.]

Nomura wins 6-year rent holiday by moving headquarters to City
[According to the FT, Nomura, the Japanese investment bank, signed a 20-year lease and agreed to rent of 40 pounds sterling per square foot, considerably lower than the 70 pounds per square foot that was the going rate a few short years ago. And the first 6 years of the lease are free!]

FSA backs global tax on transactions
[In an interview published in FT, Adair Turner, the head of Britain’s Financial Services Authority expressed support for an international financial transactions tax, or Tobin tax (named after the economist James Tobin, who proposed to reduce volatility and short-term currency speculation with a small charge – for instance 0.1 per cent – levied on every amount exchanged from one currency into another.). The proposed tax, which has previously been championed by development economists and the French government as a means of funding the developing world, has been fiercely opposed by the finance industry. Lord Turner appears worried about a return to “business as usual” in the banking sector, suggesting that new taxes may be necessary to curb excessive profits and pay in the financial sector. While not a bad idea in principle, collecting land value uplift and resource rentals would achieve the same thing and with less distortion.]

Treasury frowns on ‘Tobin’ proposal & Turner Wades Into Political Debate With Tobin Tax
[Sadly, in a disappointing display of mediocrity, the remarks have grabbed the attention of lawmakers and bankers who say the regulator might have a short political future.]

Europe’s contraction over: central bank
[The European Central Bank has declared that the economic contraction in Europe has come to an end. However, the ECB’s president, Jean-Claude Trichet, has warned the recovery will be bumpy, especially in the face of high unemployment in Europe which is now 9.5 per cent, or 21.5 million people out of work.]

France unveils carbon tax & Green policies: Sacre vert!
[The journal Nature talks to climatologist Jean Jouzel, the French representative on the executive of the International Panel on Climate Change and member of the Rocard panel, about the plans: It will be fiscally neutral, so that all the tax collected would be repaid to taxpayers via reductions in income tax, or in the form of a ‘green cheque’. Electricity will be left out, on the grounds that most of France’s electricity comes from nuclear power and hydroelectric sources, although the Rocard called for the inclusion of the 10% that still comes from fossil-fuel, used to alleviate peak loads, arguing that this would encourage a culture of lower consumption of energy, to spur greater energy efficiency and renewable energy technologies. While Sarkozy has suggested that a carbon tax could also be levied on imports, this would not be easy because of World Trade Organization rules. The EU as a whole could put forward a carbon tax, but Germany and the United Kingdom are completely opposed. The Economist piece points out that France would join Sweden, Denmark, Finland and Norway as a country with a carbon tax. Australia should join the leading edge.]

Not so sunny: trade war looms in solar space
[From a more ironic angle:  China and the EU also risk being sucked into a row over protectionism in (wait for it) renewable energy equipment such as solar panels! German solar firms Conergy and Solarworld have voiced strong concern about the pricing practices of Chinese panel makers, who undercut their German peers’ products by around 20 percent. They are calling on the EU to examine Chinese pricing tactics. China is a frequent target for complaints that it blocks access to its markets or unfairly helps its exporters with huge subsidies.]

Russia’s great leap forward into a world that few can afford
[Moscow is the world’s most expensive city, like Tokyo before the Nikkei bubble burst. A taxi from Domodedovo airport to the Kremlin costs $US170 ($A190). Property in Ostozhenka trumps Chelsea. Space fetches $30,000 a square metre. Nice Tsarist flats fetch $3 million to $4 million. Even Bolshevik boxes are booming. Moscow boasts 150,000 home millionaires in dollars, says Mirax Group tycoon Sergei Polonsky. In a good year, prices double. With Russian oil selling at $90 a barrel, this is the curse of commodity wealth, the “Dutch Disease” that eats at the competitive foundations of an economy and incubates a parasite culture. Sound familiar …?]

What Can the DPJ’s Overwhelming Victory Mean for Japan?
[And you though that Australian bureaucracy was inflexible …]

China alarmed by US money printing
[The US Federal Reserve’s policy of printing money to buy Treasury debt threatens to set off a serious decline of the dollar and compel China to redesign its foreign reserve policy, according to a top member of the Communist hierarchy. Loose credit, and associated asset bubbles ensue.]

China’s high price for emission cuts
[The cost of reducing China’s total greenhouse gas emissions is likely to reach $438bn a year within 20 years, and developed economies will have to bear much of that cost, according to a group of Beijing’s leading climate economists. The figure, equivalent to about 7.5 per cent of China’s estimated gross domestic product in 2030, is likely to be deployed to support Beijing’s argument at December’s climate change summit in Copenhagen that industrialised nations must share the cost of cutting emissions in developing countries.]

Revealed: The ghost fleet of the recession anchored just east of Singapore

The ghost fleet near Singapore.

The 'ghost fleet' near Singapore.

[The biggest and most secretive gathering of ships in maritime history lies at anchor east of Singapore. Never before photographed, it is bigger than the U.S. and British navies combined but has no crew, no cargo and no destination – and is why your Christmas stocking may be on the light side this year. The world’s ship owners and government economists would prefer you not to see this symbol of the depths of the plague still crippling the world’s economies and now detailed in a fine expose by The Daily Mail.]

India Sees Tripled CO2 Emissions by 2031
[… although well below the global average on a per-capita basis. The report is part of India’s attempt to stake out a bargaining stance before the Copenhagen climate summit in December.]

Privatisation is the Enemy of Sustainable Agriculture
[Vandana Shiva, author and international campaigner for women and the environment, writes that privatisation of the earth’s resources is a recipe for famine and desertification, violence against women, hunger, and, as happens in India, the suicide of farmers.]

NGO: Unfair distribution of oil revenue threatens 2005 peace deal
[Global Witness, released a new report which argued that revenue from Sudan’s oil industry is not being shared out fairly between north and south Sudan, threatening the 2005 peace deal. The deal, signed between the warring factions in 2005, and which brought an end to one of Africa’s longest running conflicts, was based on an agreement to share oil revenues between north and south.]

UGANDA: Carbon Trading Scheme Pushing People off Their Land
[With the world’s attention focused on climate change, the Inter Press Service News Agency reports that one of the methods suggested to reduce global carbon emissions is causing the displacement of indigenous persons as western companies rush to invest in tree-planting projects in developing countries.]

The virtues of biochar: A new growth industry?
[Even The Economist is now taking biochar seriously as a new tool to attack the problem of global warming, by providing a convenient way of extracting CO2 from the atmosphere, burying it and improving the quality of the soil on the way. Moreover, soil containing biochar releases less methane and less nitrous oxide than its untreated counterparts, and the process of making biochar also creates beneficial by-products. These include heat from the partial combustion, a gaseous mixture called syngas that can be burned as fuel, and a heavy oil.]

Better world: Tax carbon and give the money to the people
[New Scientists’s vote of confidence in the tax/cap-and-dividend idea.]

Hard times ahead for big pharma
[The major pharmaceutical companies are bracing for the patents on a number of big selling drugs to expire, opening them up to generic competition – a drug loses 60% of its market share in the first year of generic competition!]

Finance Gone Wild
[Over at the NY Times Economix Blog, Simon Johnson, a professor of entrepreneurship at M.I.T.’s Sloan School of Management and the former chief economist at the International Monetary Fund, writes that while financial flows of some kind are essential to any modern economy, 200 years of experience with real-world finance reveal that it also has at least three serious pathologies: the financial sector often acquires or aspires to political power; 200 years of experience with real-world finance reveal that it also has at least three serious pathologies: the financial sector often acquires or aspires to political power; the financial sector can obtain disproportionate power over industry; and, finance can also go crazy, running up speculative frenzies. Check, check and check – and in previous showdowns with finance, the sector was much smaller …]

A Poor Measure of Poverty
[Not only is data on low-income families spotty, but there are also many conflicting ideas about what it means to be poor. There is an official US definition of poverty, based on federal guidelines first established in 1965. At that time, typical families spent about a third of their money on food. Since then, though, the poverty line has simply been adjusted upwards for inflation every year – ignoring the fact that food prices have gradually fallen in real terms, while housing, health care, and child care costs skyrocketed. Fast forward 46 years, and the federal poverty line has become almost meaningless—it’s no longer grounded in the real-world cost of living. An alternative “self-sufficiency” standard has been proposed which measures “how much income a family of a certain composition in a given place needs to adequately meet their basic needs—without public or private assistance.” And – no surprises here – ‘housing’ (i.e., land) costs weigh heavily in self-sufficiency calculations.]

How Did Economists Get It So Wrong?
[Few economists saw our current crisis coming, but this predictive failure was the least of the field’s problems. More important was the profession’s blindness to the very possibility of catastrophic failures in a market economy. And in the wake of the crisis, the fault lines in the economics profession have yawned wider than ever (“saltwater” economists, mainly in coastal U.S. universities, who have a more or less Keynesian vision of what recessions are all about versus “freshwater” economists, mainly at inland schools who consider that vision nonsense.). An article by Paul Krugman in the NYT Magazine – complete with Jason Lutes comic strips!]

Krugman: How Did Economists Get It So Wrong?
[The Geonomic answer to Professor Krugman’s question: be they freshwater or salt, both kinds of fish took the medium in which they existed for granted! neither took the pains the study the medium in which they existed Worse still, many may have suspected but knew which side their own bread was buttered (the distinction between land and capital not to their taste) and which ideas they ought not to embrace while seeking tenure – even Paul Krugman: like most contemporary economists, he is barely even aware that there are competing schools of economic thought outside the neoclassical and Keynesian camps …]

Green Economy – Band-aids for Capitalism? Or Something Completely Different?
[The Worldwatch Institute blog looks at a possible solution to the financial crisis: the economic democracy of the Mondragon Cooperative Corporation (MCC): Spain’s seventh largest, with over 100,000 workers, annual sales of US$20 billion, and 65 plants overseas. And its not ‘capitalist’ – it began as a worker-owned firm, grew as a worker-owned firm, and remains a worker-owned firm.]

We Are All Madoffs
[Our relationship to the natural world is a Ponzi scheme …]

The great GDP swindle & Stiglitz: GDP Is Not Enough
[Over at the Guardian, Joseph Stiglitz argues that chasing GDP growth results in lower living standards, and that better indicators are needed to capture well-being and sustainability. NPR’s Money Planet goes into more detail.]

Why capitalism fails
[Sign o’ the times: an article in a mainstream US paper on Steve Keen’s direct intellectual ancestor Hyman Minsky and his Financial Instability Hypothesis – a useful adjunct to Ricardo’s Law of Rent, more fundamental but equally and tragically ignored.]


The Devil’s Dictionary – Financial Edition
[BAILOUT, n. First known use: Noah. Novel regressive taxation scheme whereby vast sums of capital are transferred from those citizens who didn’t participate in the illusory Bacchanalia of the housing bubble to those who did and weren’t clever enough to get out in time.

U-SHAPED RECOVERY, n . An opportunity for economists to incorrectly predict the timing and nature of the recession’s end just as successfully as they incorrectly predicted its inception, depth and duration. Variants include V-shaped recovery, L-shaped recovery and 🙁 shaped recovery.

– from Matthew Rose over at the Wall Street Journal, an updated financial edition of the “Devil’s Dictionary.” WSJ is behind a paywall, but due its greed makes itself freely available in a Google Search, which is where the link takes you. A crowdsourced version is in the making over at NPR’s Money Planet blog.]

Blue Chip, White Cotton: What Underwear Says About the Economy
[The Washington Post reports that the men’s underwear index, or MUI, has been falling but lately at a much slower rate. The idea is that since underwear don’t show, men who are worried about money will wear a pair until they’re in tatters. A spokeswoman for Target says sales have picked up recently, especially sales of multi-pair packs.]

French savers seek to milk cows for cash
[With interest rates at record lows and banks still tarnished by the financial crisis, some French savers are returning to grass roots and pumping money into cows. While France’s most popular savings account, the Livret A, offers returns of little more than 1 percent, cow owners can expect yields of 4-5 percent a year for an initial investment of around 1,200 euros per animal, promoters say.]

Coin of Praise
[Over at Happy Days, a NYT blog, Simon Critchley argues that in the seemingly godless world of global capitalism, money is the only thing in which we really must have faith: money is our metaphysics …]

Gates Co-op Houseboat Community | Sausalito, United States
[This cluster of eccentric houseboats – a pirate ship, a floating traitor, homes built on the remnants of WWII shipbuilding tugs and homes atop concrete barges – are the last vestige of what the old-timers call “The Last Free Ride”. The end of Sausalito’s WWII warship building days coupled with the 1950’s bohemian movement and the 1960’s hippie migration west brought a booming community to the shallow tidal waters. In the late 1960’s tensions between the waterfront community and the local authorities reached a breaking point. The 1970s found the owner facing mounting health and building code violation charges which forced its sale. The resulting construction left 38 boats without slips in the new docks. Many of the original bohemian artists and hippies still live in these boats and their children have bought the boats of those who have moved on or passed away. Sadly, plans to build a new dock and disperse the 38 boats among the million dollar boats are set to be put in motion April 2010. Could a Community Land Trust model have saved the Co-op?]

Nepalese Teen Invents Cheap Solar Panel Using Human Hair
[If this story doesn’t inspire and amaze you then you must be dead from the neck up! He certainly didn’t leave it to the ‘experts’ …]

gentrifican puppy | married to the sea

gentrification puppy | married to the sea

First-home buyers pass baton on rises

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