HoltesThoughts

Thursday, September 10, 2015

The only thing we need to fear is fear itself

FDR Said it, not so long ago:

The only thing we need to fear is fear itself!

Fear isn't good for anyone's health.

Fear is like a cancer,

it can be acute, or spread with stealth.

Scientists have shown that fear and anger

Are evil twins that shut down the brain.

The fearful respond with anger

They circle wagons,

or march the door to war.

But there is one enemy the dark twins can't handle

One enemy that releases their victims

That enemy is the power of laughter

To join with former enemies, and let go of fear.

The Fearful and Angry can't deal with laughter

They don't know how to take a good old Joke.

They may know all about stoking hate and fear

But they can't deal with a sympathetic joke.

So to defeat the fearful

All we need to do is to see the joke

to see through the oppressing illusion

And throw off the miserable yoke!

Then we need not even fear, fear

For seeing the absurdity of it all

When our bellies are full of laughter

We don't even notice it if we fall

So all we can do is laugh at them

Or even find a way to get them join in the fun

Because if they are too busy laughing

They won't have time to push anyone around.

So share a sympathetic joke

And a belly laugh for all of us who have survived.

And permit yourself a sympathetic tear

At all of the victims of fear

who have suffered on down through the years.

If you do, then fear and anger,

no longer have hold of you.

Christopher H. Holte 9/10/2015

Wednesday, September 9, 2015

Tories and Whigs

Two of the most misused words in English come from English speaking history. These words are "Tory" and "Whig". I refer to them a lot, and so I've spent a long time learning what they mean. Both of them are names for groups of people, to the behaviors and attributes of that group, and are labels for the people engaging in those behaviors. They also historically have been labels adopted to disguise efforts and misdirect people. As George Orwell noted in reviewing his own book, "Newspeak" wasn't a term he invented to cover a fictional future, but is a feature of the english language.

Our Revolution was against Toryism

There are specific attributes that are "tory" and "whig" and although they overlap the traditions associated with each other, the spirit of toryism and whiggery is alive and well. Once you know the attributes you can identify Tory behavior even when the person calls themselves a "Whig" member of the "labor party", a Democrat or a Republican. Our forefathers understood these terms. The people we were fighting during our revolution were Tories.

The Target of progressive taxation and LVT is unearned land rents/income

This blog is a follow on to the Posts; Common Property and the Commons and Locke Talked of the Importance of the Collective. It also is one of a series looking at what Henry George actually had to say about taxation, what modern Georgists say about the subject and what non Georgists have taken from the unsound arguments they've picked up from the Georgists!

I run into libertarians who claim to be followers of Henry George. Some talk about the "single tax" as a special property tax that exempts capital investments and helps developers efficiently use property by kicking "speculators" out and preventing farmers from squatting on land that properly should be redeveloped. But Henry George is one of my heroes. He would never be for taking property from old people or the poor. Yet that is what our current property taxes do. So why would anyone want to merely reform property taxes?

How this leads to distortions of what LVT is all about

Worse this apparent confusion about the meaning and purpose of Land value taxes leads to misappropriation and misunderstandings of what the tax is about in Left and Right circles alike:

For example the writer Peter Orzag writing at Bloomberg shares a garbled version of Land Value Taxation ideas in his article: "To Fight inequality Tax Land" [http://www.bloombergview.com/articles/2015-03-03/to-fight-inequality-tax-land]. In that article he notes that the largest increment of wealth increases [he calls them capital increases] takes the form of Land value increases and then referring to Joseph Stiglitz notes that:

"Stiglitz also argues for imposing a land value tax, to directly address this source of increasing wealth inequality. Economists have long favored such a tax, because it does little or nothing to distort incentives: Since land is roughly fixed in supply, there's little one can do to escape a land tax. Indeed, from the perspective of economic efficiency, a land value tax scores higher than even a value-added tax, which is typically seen as the most efficient form of taxation." "Tax Land Article" [fight-inequality-tax-land]]

Stiglitz is either directly or indirectly echoing Henry George here. And knowing how brilliant he is I suspect he's read Henry George at some time and understood him.

Economic Efficiency versus the Efficiency with which wealth can be looted

But in the hands of Peter Orzag LVT becomes about "Economic efficiency," which is "A broad term that implies an economic state in which every resource is optimally allocated to serve each person in the best way while minimizing waste and inefficiency. When an economy is economically efficient, any changes made to assist one person would harm another." I'm not sure what measures Orzag is using for "economic efficiency" but I have to assume he's fine with the kind of economic efficiency where one person's gain is another's loss. He like some other LVT enthusiasts have seem to have no trouble with this, or it's intended consequences such as illustrated in this Washington Post Article from 2013 about the vicissitudes of ordinary Property Taxes:

Src: http://www.washingtonpost.com/sf/investigative/2013/09/08/left-with-nothing/

LVT as a Direct Tax

If that is economic efficiency we are all in trouble. But the notion of LVT as an "efficient Tax on land" isn't just the interpretation of Peter Orzag or hucksters for whom LVT is both a social panacea and a "Single Tax" yet somehow is primarily a tool for efficient land development. I guess if everyone is a renter then the economy is optimized for the rentiers. Many people translate Henry George's "Single Tax" proposal into something like the way Milton Friedman represents it:

“In my opinion, the least bad tax is the property tax on the unimproved value of land, the Henry George argument of many, many years ago” (Mark Blaug. Economica, New Series, 47, no. 188 [1980] p. 472). Econ Library Bio:[http://www.econlib.org/library/Enc/bios/George.html]

Because of understandings and statements like these, LVT is actually pretty popular in the developer community and they advertize the benefits. For example this page here explicitly touts the benefits of "Land Value Taxation as follows:

Source: Benefits of Land Value Taxation, taken 3/4/2015 [http://www.taxjustice.net/cms/upload/pdf/gen_ben_f_land_tax.pdf]: "LVT would encourage new capital investment rather than sterile land speculation as it would encourage a shift of private investment from land speculation (which creates no extra land but only higher land prices) to productive enterprises. "; "LVT would encourage the use of empty sites zoned for development, creating more job opportunities and wealth. "; "LVT would help avoid urban sprawl. As brown field sites would be developed within towns and cities it would be unnecessary to permit urban sprawl. Compact towns are also more efficient in their use of resources for transport and other services."; "LVT [cannot] be avoided. (Unlike income tax and business taxes where tax avoidance experts are in great demand and the ‘shadow economy’ flourishes to evade taxes.) Every landowner would be required to register their land and to pay LVT on all their land holdings. With LVT any site with no registered owner would be sold by auction for the benefit of the Government."

But that is not Henry George's Tax!

This sounds good until you realize the ads are targeting the poor, the widow, the laborer, the retiree, all potentially to be dispossessed by LVT when it's used as a tool for development. If they can't avoid the tax, they'll be evicted. Thus too many LVT enthusiasts are offering a bait and switch proposition. They think of LVT as a direct tax. But as my friend;

"All direct taxes on property ownership are abusive and prone to tax tyranny"

And Land Value Taxes are not supposed to be tax tyranny! Indeed all these other BS reasons for LVT are things that Henry George warned about:

"Nothing is to be gained by having the Single Tax advocated for wrong reasons. Men brought over by erroneous arguments can never be relied on in a cause that rests on truth."

Indeed Henry George feared folks advocating LVT for the wrong reasons more than he feared outside enemies:

"The unsound supporter is, in fact, more dangerous than an opponent."

And George was right to fear the consequences of misunderstanding as demonstrated a few short years (1893) after his stroke rendered him weakened:

"Unless he sees that taxes on Land Values or economic rent which is what we mean by the Single Tax must be borne by the owners of the valuable land from which it is collected, and that it cannot fall on users of land as users, and cannot add to the cost of production or increase prices, no one can appreciate the moral side of our argument or the full weight of the fiscal side."

My friend includes wages in the definition of "property", which only makes sense because what makes our 'income tax' so unjust is that it is figured on and taken from Net Incomes that are often far less than the expenses and survival needs of workers -- and is thus equally unfair to what the authorities are doing to property owners in DC, Md & Virginia (and around the country).

Which is why the constitution forbids the Federal Government to levy direct taxes! Moreover, if you are going to levy direct taxes there is no reason to be punishing people for being elderly, poor, or not privileged. As my Friend notes:

"The government could easily have waited till these elderly people passed away, or voluntarily sold their property, before collecting any unearned income gains generated by the parcel, but apparently some vultures wanted the land right away."

Property taxes may be "efficient" but without humanity they are efficiently abusive. The rights we need to enshrine in our law are the rights to "home" and "livelihood" because "efficient taxation" is often a euphemism for ruthless taxation.

Land Value Tax is after unearned rents and gains from speculation

But fortunately for my estimation of Henry George, he didn't actually teach Land Value Taxes as a Direct tax, nor as a property tax. He wanted it to be on "unearned rent." He wanted it to be a tool to protect workers, and producers, the elderly and ordinary families:

As this biography notes that his LVT proposal was found on the reality that:

"rent tends to increase not only with increase of population but with all improvements that increase productive power, Mr. George finds the cause of the well-known tendency to the increase of land values and to the decrease of the proportion of the produce of wealth that goes to labor and capital, while in the speculative holding of land thus engendered he traces the tendency to force wages to a minimum and the primary cause of paroxysms of industrial depression." H. george Bio: [http://www.sfmuseum.net/hist9/hgeorge2.html]

His tax was NOT intended to evict small farmers or householders from farm and livelihood.

"The remedy for these he declares to be the appropriation of rent by the community, thus making land virtually common property, while giving the user secure possession and leaving to the producer the full advantage of his exertion and investment." H. george Bio: [http://www.sfmuseum.net/hist9/hgeorge2.html]

Henry George was after "unearned rents" and was talking about progressive taxation:

"the single tax is NOT a tax on land. It is a tax on what in the terminology of political economy is styled rent---that value, which . . . attaches to SOME land with the growth of population and social development; that premium which the user must pay to the owner as owner in one payment (purchase money) or in annual payments (rent), for permission to use land of superior excellence."

Thus the people that think of LVT as a tool for real estate development or have no regard for labor, or are confused about what Capital is are what Henry George Called "Unsound Followers."

Originally published 3/3/2015

Monday, September 7, 2015

Pandora's Dream

A dream can't be killed

Only turned into a nightmare

She dreamed of a world of gifts and love

Anesidora bringing to fruit seeds grown from the ground.

And she was given an urn as a gift.

She opened that urn in all innocence

And furies flew out and all around.

The spirits of hates and thefts and war

Flew into the world once more.

Denying even the hopes she'd longed to give.

She saw them fly away and closed the lid.

But stubborn hope resurrects

And lurks patient and kind beneath the lid

For when the furies have passed.

Don't fear to open that box again!

When it grows quiet at last.

That dream we mortals have

Of a world that is fair and just.

Call it hope, the "American Dream" or just common sense.

They put it in a funeral urn,

But it won't stay there.

Sunday, September 6, 2015

The Quixotic campaign of Lawrence Lessig

Those of us who are looking at the wreck of the corrupt Con known as Reaganomics and it's half sister parasite that tried to take over the Keynesian movement (Neo or New Keynesianism) know that for 40+ year a multiplicty cons have nearly wrecked the world as well as the economics field. Part of this election's task is to dump the con economic arguments out of our party and restore some sanity to the political debate. The other part is to dump the overt corruption that has taken over much of our political process; the return of yellow journalism, monopolies owning whole networks and corrupt politics as a result of the influence of the monopolists. Lawrence Lessig is a middle tier wealthy lawyer who threw his hat in the race for what he says:

"I'm a ‪#‎winteriscoming‬ sort. I believe, in the words of Tom Mann and Norm Ornstein, that "the country is squandering its economic future and putting itself at risk because of an inability to govern effectively." I believe, moreover, that our "inability to govern" is tied fundamentally to the way we've permitted our representative democracy to be corrupted. It is, in my view, the vast political inequality that we have allowed to creep within our system that produces the systemic failure of our government to be responsive to Americans. (And for the data about that gap, begin with the extraordinary work of Martin Gilens and Ben Page. We will only have a government that works if we address that fundamental political inequality." [HuffPost]

Some History of our Corrupt Supreme Court of the United States (SCOTUS)

I suppose some Lawyers in training, have to memorize the names of all the SCOTUS Chief Justices who have ever served. If a Professor were to require people to do that I'm sure even the most brilliant lawyer would fail the test unless he had a facility for arcania. On the other hand it is important, to understanding the court, to know that these Justices have never been Saints. Some have been memorable for awful decisions, some for execreable decisions and a few for brilliant ones. In some cases, partisans of arbitrary reasoning have celebrated those decisions for a period of time, only for society to realize years later they were dreck.

Establishing a Timeline Helps sort the dreck from the jewels

I was trying to figure out how SCOTUS could be all over the place, and so in a systematic matter I started fashioning a timeline. Sometimes the court changes when the majority of judges changes, but the SCOTUS always reflects the life and times of it's chief Justice no matter how it's constitution changes who is on it.

Georgist Definitions of Labor, Capital and Land

Introduction

In trying to figure out what Henry George was talking versus what his many followers say he was saying. I have to look at his definitions, because that is where he starts. He wasn't really using new definitions. But in some cases he was unspinning what most folks were pedalling. In this little exercise I'm going to focus on his three major terms; Land, Labor & Capital In that order.

Land

He defines Land:

"The term land does not simply mean the surface of the earth as distinguished from air and water—it includes all natural materials, forces, and opportunities. It is the whole material universe outside of humans themselves. Only by access to land, from which their very bodies are drawn, can people use or come in contact with nature." [Page 20]

Labor

George pretty much dispenses with most of the Bull and defines Labor as such:

"Wages are the portion of production that goes to labor. Therefore, the term wages includes all rewards for such exertion." [Page 18 paragraph 3]

Then he defines wages:

"Wages, in the economic sense, simply means the return for the exertion of labor."

"Whatever is received as the result or reward of exertion is 'wages.'" Henry also had to explain what Labor and wages are not:

"Wages are not drawn from capital. On the contrary, wages are drawn from the product of the labor for which they are paid." [page 18 Wages and Capital]

Wages are drawn from production.

Wealth and Capital

And part of the argument for why wages are drawn from labor, hinges on what Capital is not:

"they claim, without reservation, that capital limits labor. Then they state that capital is stored up or accumulated labor. If we substitute this definition for the word capital, the proposition refutes itself."

If Capital were a store of labor then labor can't come from Capital. The fact that these folks argue this way just shows they were fascists then. The fact they still argue this nonsense in some circles is evidence they are just conning us. But as Henry George notes, the economists and folks advertising for Capitalism aren't precise. He notes:

"The idea of capital, on the other hand, is so beset with ambiguities that it is difficult to determine a precise use of the term." [page 19]

Wealth And Capital

Therefore he starts by saying what Capital is not, drawing on the writings of Adam Smith and other economists.

"nothing properly included as either land or labor can be called capital."

In order to define Capital he has to define "wealth":

"Wealth, then, may be defined as natural products that have been secured, moved, combined, separated, or in other ways modified by human exertion to fit them for the gratification of human desires." [P & P Ch2]

Capital

This leads to an economic definition of capital:

"Capital is ... [that] part of wealth—that [is] devoted to aid production." [P & P Ch2]

He further refines that definition to be:

Capital is "wealth in the course of exchange."

That is, it is wealth derived from some sort of production, transformation, etc... that is being used to help produce more wealth.

Discussion

The reason for these definitions is to help when differentiating between the rules for his Land Value Taxation. If Wages and Capital are to be excluded from taxation -- then we have to be clear what is meant by those terms.