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Economic Reform: Left Forum, Abandoning debt-money, Learning Geoism online, Upcoming Events

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Hello Fellow Economic Reformers!


Monopoly, the Land Bubble and the Financial Crisis. Tactics to Fight the 1%

If you were in NY March 17 at 5:00, I hope you had a chance to hear Dr. Michael Hudson, Andy Mazzone, Dave Kelley (economic adviser to Representative Dennis Kucinich) and Moderator Dr. Cay Hehner in a Left Forum panel at Pace University: 
http://www.leftforum.org/panel/monopoly-land-bubble-and-financial-crisis-tactics-fight-1
sponsored by Common Ground-NYC.  This was a great opportunity to hear the current state of the crisis, the history of it, and what to do about it, from some of the great progressive and/or Georgist thinkers in our area.
I've written an article about it here:
Conversing with the Lefties at the Left Forum: Panel With speakers Andy Mazzone, Dr. Michael Hudson, and Dave Kelley
and for an upcoming issue of GroundSwell.  The video link will be posted to the Left Forum site in a few weeks here:
http://www.leftforum.org/video_gallery
Have you joined Common Ground yet?  You should, and support outreach efforts like this:
http://commonground-usa.net/whyj.htm. ; You don't even have to pay the full $36/year:
Regular membership ($36)
GroundSwell subscription only ($15)
Sample issue of GroundSwell (free)

29,000 Members of Chicago Teacher's Union support the N.E.E.D. Act
The 29,000 member Chicago Teacher's Union (and The International Association of Machinists and Aerospace Workers (Chicago area Local 126)) just came out in favor of Congressman Dennis Kucinch's N.E.E.D. ACT (HR2990):
Be it resolved that the Chicago Teachers Union goes on record to support The National Employment Emergency Defense (NEED) Act, H.R. 2990, because: The NEED Act puts back the money creation powers under public checks and balances through their Congressional representatives; The NEED Act puts any necessary functions of the Federal Reserve under public administration to be in alignment with the U.S. Constitution; The NEED Act puts any necessary function of the Federal Reserve under public administration to be in alignment with the U.S. Constitution; The NEED Act uses the money creation powers to give millions of people at all government levels work to improve the infrastructure of the country; The NEED Act allows state and local government to determine where one-fourth of the federal monies created shall be used; The NEED Act allows full funding for teaching positions, pension obligations and the building of schools.
More and more people are starting to recognize the unsustainability of having a private central bank produce our national currency. 
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Read Michael Hudson's recent article describing how government can create its own currency:
click here

I had a chance to ask Florida Congressional Candidate and former Florida Congressman, Alan Greyson, on a conference call, about his support of the idea of Greenbacking and specifically the NEED Act, and he said he thought the idea of moving the money-making power away from the banks was worth looking into, but he had some disagreements with some specifics in the Kucinch bill.  Dennis Kucinich was unfortunately defeated in the recent Ohio primaries - a victim of Republican-led re-districting due to the loss of population in Ohio, and a contest against partial incumbent, Marci Kaptur
(click here=politics).

Bill still correctly identifies that the Federal Reserve Bank is not part of the Government...
...but is the Government part of the Federal Reserve Bank?   Well, sometimes it seems that way, but no, it is just a matter of asserting the distinction between the two.  From Libertarian Candidate Bill Still, comments and specific court citations on whether the Federal Reserve Bank is part of the Government (as the Modern Monetary Theorists incorrectly assert, to the great convenience of the FRB and their complicit government handlers): http://www.youtube.com/watch?v=oGhcngTNMoM&feature=uploademail.  Still's Libertarian opponent, Gary Johnson, gets this completely wrong, and just like the good Republican he used to be, ignores the fact that every dollar we get from the FRB has to be paid for, with interest. 

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A Proposal For Debt-Free Money AND Resource-Based Taxation
It's rare to have both Monetary Reformers and Resource-Based Tax reformers (like Georgists) in the same thinkers.  It even more rare to have those thinkers be well-respected economists like Joseph Huber and James Robertson, writing a seminal paper for the New Economics Foundation.  But that is the case in "CREATING NEW MONEY. A monetary reform for the information age." 
You can access the file at:
click here
or, if you are a member of The Yahoo Economic Reform group:
http://groups.yahoo.com/group/EconomicReform/files/Greenback%20%28U.S.%20Notes%29%20Docs/Creating_New_Money.pdf

The authors call for the establishment of a parallel system of debt-free money (like this author), modeled loosely on the Lincoln example of Greenbacks, but much more in keeping with the electronic age.
In addition, the authors say (pg. 13-14, emphasis added):
In an increasingly competitive global economy, the growing mobility of capital and highly qualified people is pressing national governments to reduce taxes on incomes, profits and capital. In an aging society, opposition is likely to grow to taxing fewer people of working age on the fruits of their efforts, in order to support a growing number of "economically inactive" people. Internet trading ("e-commerce") will make it more difficult for national governments to collect customs duties, value added tax and other taxes and levies on sales, especially on products  and services that can be downloaded from the internet. It will also make it easier for businesses and people to shift their earnings and profits to low-tax regimes.
These pressures are combining with other economic, social and environmental arguments to support a tax shift -- shifting the burden of taxes off enterprise and employment and on to the use of resources, including land, energy and the capacity of the environment to absorb pollution. There is also the demand of international bodies like the OECD and the EU for action to reduce the attractions of tax havens. A more effective way of reducing them, rather than trying to enforce internationally harmonised regulations for the collection of existing taxes, might be by a tax shift which will reduce existing levels of tax on incomes, profits and capital.
Apart from the option to use some of the new seigniorage revenue to replace existing taxes, one further point should be noted. Supporters of land value taxation, i.e. taxing the site value of land, claim similar advantages for it as are claimed for monetary reform (on which see Chapter 4): it will help to smooth out the peaks and troughs of economic cycles, make it possible to reduce distortionary taxes that now damage the economy, distribute more fairly the value of resources that should be shared in common, and open up opportunities for enterprise and work to people now excluded from them.
Unfortunately, instead of co-operating with one another to promote these complementary reforms, there has been a tendency among some supporters of land value taxation and monetary reform to dispute which of the two is the more important. Further study of possible links and interactions between the two might encourage a coalition of support for both. This could usefully be initiated by a body such as the New Economics Foundation.
Well, I certainly agree on the need to reconcile the pointless feud over which is more important to reform - land value taxation or monetary reform!  Many recipients of this newsletter have raised that very issue with me!

I do disagree with the authors' recommendation to use a private Central Bank for the issuance of debt-free money (i.e. U.S. Notes here in America, but they are British and talk about the U.K., the Eurozone, and Japan as well).  They say they do this to prevent political bodies - such as our Congress - from over-issuing money and creating inflation, but given the rightward tilt of Congress, I think the danger is their releasing too little money to help meet the productive capacity of the nation (which this author believes is how money quantity should be ultimately determined, whether money is issued privately or publicly).  The authors' claim that the U.S. Constitution, article 1 section 8, would need modification to issue debt-free money, which is simply not true (e.g. we issue, unchallenged, debt-free coins) - would therefore be moot.

This excellent 10 minute video, (http://www.youtube.com/watch?v=P8fDLyXXUxM&feature=colike), raises a similar fear about the dangers of government-led inflation.  (It is Euro-centric, with an emphasis on France at the end.  But don't worry if you don't speak French - the subtitles and simple graphics make everything very clear).  Most of all, the video makes it clear why the present system, growing out of the Treaty of Lisbon, and commercial fractional reserve banking, is unsustainable, no matter how much austerity and privatization is undertaken.
I disagree slightly with the conclusion in the end, again restoring power to each country's Central Bank, because that still leaves countries pumping money into the banking sector as reserves, and hoping it will "trickle down" into the rest of the economy, and at interest (albeit lower than commercial banks), instead of simply producing money for economic needs , but I understand the historical concern about government-led inflation too.  There has to be a balance, with monetary competition , and independent money creation, but with monetary responsiveness by central governments as well.
This balance may be tricky to achieve, but that shouldn't prevent us from recognizing the inherent right of sovereign governments to produce their own money - even in Europe - or that the economic needs of the People should come before the private greed of the all-too-fallible banking sector.

Finally, here is a heavily footnoted academic paper (http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1489439) supporting Lincoln's Greenbacking, also practiced by FDR's ($3 Billion), pre-Georgist Landbank currency before the revolution in Pennsylvania, and a nod to the State Banking model of North Dakota.  The authors supply some nuanced information on Lincoln's, and then secretary of Treasury, Salmon Chase's, decision to produce debt-free sovereign money, accounting for up to 40% of Civil War funding.  Chase would later contradict himself as Supreme Court justice in Hepburn v. Griswold (1870), essentially declaring he had acted unconstitutionally in his previous capacity as Secretary of Treasury, but this would be overturned in two subsequent Supreme Court decisions, Knox v. Lee (1871), and Julliard v. Greenman (1884), paving the way for the federal government to produce United States Notes under Article 1, Section 8's, constitutional authority to "coin Money." 

Several subsequent attempts, post-Roosevelt were made to issue new United States Notes.  One of the most recent was proposed in 1999 by Representative Ray LaHood (like Lincoln, a Republican from Illinois), who introduced legislation to create $360 billion in United States Notes to be lent interest-free to state and local governments over a five-year period to fund capital projects.

But, we live in a different age - an age where, despite the presidential candidacy of a historian, the true lessons of history are not abided.

=======================================================================
Time for a plug, folks.  Many people on this list will have already seen Prosper Australia's new video but, if you've not already done so, why not let your friends know about it too?  It's now freely available at http://realestate4ransom.com/ .
=======================================================================

State Banks are the Norm, not the Exception

It's easy to get discouraged about progress towards our goals.  For example, America still has only one State Bank - the Bank of north Dakota - in spite of the BND's wildly successful track record: no bank failures in the state for 10 years, the lowest unemployment and foreclosure rate in the nation, both under 4%.  However, as this recent article (click here) from Public Banking Institute president Ellen Brown - part of what she will present at the upcoming PBI conference in Philadelphia, April 26-28 - makes clear, it is State Banks that are the norm the world over, not private banks.  Why?  Because countries that have them are more stable, grow faster, have fewer booms and busts, less corruption, less egregious banker salaries, and higher returns to the governments of the countries they are in (the BND has returned over half a billion dollars to North Dakota since WWII).  They do the traditional job of banking , not speculation in bubble markets for short-term gain.  It's not that hard.  No wonder the BND is run by Occupy Wall Street's favorite Banker (click here).

I met with my local Assembly member, Brian Kavanagh, along with Public Banking advocate and Georgist Common Ground Treasurer, Rita Rowan, recently.  He is fully on-board with both of these ideas (indeed, he did his post-graduate thesis on Henry George and is well aware of the benefits of LVT).  However, New York's Governor Cuomo does not believe in setting up commissions, according to my source at Sandy Galef's office, sponsor of the feasibility study bill (http://www.assembly.state.ny.us/leg/?default_fld=&bn=A06737&term=2011&Summary=Y&Actions=Y&Votes=Y&Memo=Y&Text=Y).  But, as Kavanagh put it, "well, in that case, why not just skip that and set up a State Bank instead?" 
Why not indeed!  We heartily agreed with that! 
Hopefully, we can move in that direction soon, but no one in that meeting was under any illusions that the country's largest banks, nearly all headquartered in New York, will move from "studying" the Galef bill to endorsing an actual State Bank.  The people will have to demand it (click here)!  I did get a chance to plead to the audience for pressure on Galef's office to pass a real State Banking bill, at the Left Forum's Public Banking Panel (click here).  Are the Occupy people, and others, strong enough to coalesce around the idea of a State Bank?  There's some evidence from the 2nd article above that they just might be. 

From the shoot-myself-in-the-foot Department:
Here is a short example of industry-favorable misdirection, from a growing movement to abolish all property taxes in North Dakota - and feed an already booming Land speculation boom:
click here
Fortunately, people are fighting back:
click here
but the oil & gas industry is very powerful there, and they may get their way. 
This is a radical move - if ND does this, it will be the first state in the country to abolish property taxes, and then even a State Bank won't save them form the inevitable Land boom and bust.  We only need to look at California's post proposition-13 to see how that turned out.

Until then....
 
How Many Economists Does it Take to Screw up The Economy?
It's a trick question, because, as this Forbes article points out (Yes, that Forbes magazine: click here) , virtually all modern economists posit theories which have little to do with how the economy actually works.  What?!   Well, as the article goes on to say:
 
This is not completely atypical. It is a function of the fact that economists spend too much time developing complex thought experiments and clever stories and not working to understand the complexities of the real-world economy. A famous book published in 1990 showed evidence of this in the top graduate programs in our discipline (The Making of an Economist by Arjo Klamer and David Colander, Westview Press). When asked what was most important to success as an economist, students ranked these skills in this order (page 18):
"1. Being smart in the sense of being good at problem solving.
2. Excellence in mathematics.
3. Being very knowledgeable about one particular field.
4. Ability to make connections with prominent professors.
5. Being interested in, and being good at, empirical research.
6. Having a broad knowledge of the economics literature.
7. Having a thorough knowledge of the economy.
No, I did not accidentally type the list backwards! And, if anything, the relegation of "knowledge of the economy" to dead last has become worse."

Well, I think the real economic reformers of history DID get this list exactly backwards.  Was Henry George particularly good at mathematics (#2) or did he simply have a thorough knowledge of the economy (#7)?
This does not mean the study of economics is hopeless (or else this writer might as well stop learning too!), but it does mean we'd better be real careful whom we listen to and why.  One economist who did get things right, Steve Keen, was voted the most accurate by a poll of mostly other economists, here: http://rwer.wordpress.com/2010/05/13/keen-roubini-and-baker-win-revere-award-for-economics-2/, says:

Today, after pointing out the fallacy of neo-classical economics when it comes to proposing that debt doesn't matter because "one person's liabilities is another person's asset"*:

They are profoundly wrong on this point because neoclassical economists do not understand how money is created by the private banking system--despite decades of empirical research to the contrary, they continue to cling to the textbook vision of banks as mere intermediaries between savers and borrowers.
This is bizarre, since as long as 4 decades ago, the actual situation was put very simply by the then Senior Vice President, Federal Reserve Bank of New York, Alan Holmes. Holmes explained why the then faddish Monetarist policy of controlling inflation by controlling the growth of Base Money had failed, saying that it suffered from "a naive assumption" that:
        ... the banking system only expands loans after the [Federal Reserve] System (or market factors) have put reserves in the banking system. In the real world, banks  extend credit, creating deposits in the process, and look for the reserves later. The question then becomes one of whether and how the Federal Reserve will  accommodate the demand for reserves. In the very short run, the Federal Reserve has little or no choice about accommodating that demand; over time, its  influence can obviously be felt.9 (emphasis added):
"The empirical fact that "loans create deposits" means that the change in the level of private debt is matched by a change in the level of money, which boosts aggregate demand. The level of private debt therefore cannot be ignored--and the fact that neoclassical economists did ignore it (and, with the likes of Greenspan running the Fed, actively promoted its growth) is why this is no "garden variety" downturn. "

* Krugman, Paul and Gauti B. Eggertsson. 2010. "Debt, Deleveraging, and the Liquidity Trap: A Fisher-Minsky-Koo Approach [2nd Draft 2/14/2011]," New York: Federal Reserve Bank of New York & Princeton University, p. 2, http://www.princeton.edu/~pkrugman/debt_deleveraging_ge_pk.pdf

Keen also warns of the Ponzi FIRE sector that has now created one of the greatest asset bubbles in history.

Learning Georgism on an International Scale

Long-time human rights and Georgist activist, Alanna Hartzog, is building quite a following from her online course, on an international scale.  She asks that we forward this opportunity onto fellow economic reformers:

The course is not only a great educational venue, it is also a way of organizing action oriented Research for Policy Implementation Projects. Please make my New Year's wish come true of doubling the number of course participants in this first month of 2012.  Thank you!! Please copy and forward this along with your personal note to your friends, family and colleagues:
 
Land Rights and Land Value Capture
Online Course & Training Program
 
We invite you to register for our online course -- Land Rights and Land Value Capture. This is a great way to learn about Earth Rights Policies.  The enrollment form can be found at http://www.course.earthrights.net/. ; You will receive an attractive paper certificate upon completion of the course. Thereafter you are eligible to partner with us on policy research and implementation projects for your city/country.
 
There are currently nearly 700 people enrolled from more than 90 countries. Many of those enrolled are either professionals in an area of land management, are affiliated with NGOs, or are university students. They are organized into class groups by country or special interest.  The course is offered in English and Spanish.
Those with full course access, which is the majority, receive individual responses to their course assignments, recorded on the website. We keep in touch with the entire student body via occasional emails.

The course includes:

Five Modules: Land Rights and Poverty, Land Prices and the Law of Rent, Land Value Capture, Economics of War and Peace, and Policy Implementation.  Below you will find a brief description of the contents of each of these modules.
A short two-page brochure and a long brochure (content outline also below).
An overall analysis and analyses for 12 countries.

Several hundred quotes organized into several categories including Economists, Philosophers, Statesmen, Land Ethic, Ancient Wisdom.

 A Land Value Capture Calculator which can illustrate the taxable capacity of land for a particular city or locality.

 A Forum section with categories including Thematic, Classes and Geographic.

Below you will find more details about the several components of the Land Rights and Land Value Capture program. The course is offered as a public service. Scholarships are available upon request as stated on the online course enrollment form. 
The course is here: http://www.course.earthrights.net/
 
Land Rights and Land Value Capture Course Overview and Module Descriptions
Land Value Capture is a public revenue policy recommended for national action by consensus of all UN member states in both the UN Habitat II Agenda in 1996 and The Vancouver Action Plan, the 1976 founding document for UN Habitat. Land value capture can provide a substantial and practical means to raise the revenue needed to implement Local Agenda 21 sustainable community plans, meet the Millennium Development Goals, and provide needed community services.
 
Module One - Land Rights and Poverty - of this online course contains an exploration of the theme of land rights and land ownership.
 
Module Two - Land Prices and the Law of Rent - introduces the "law of land rent" - an in-depth analysis of the role of land under economic development as land values increase.

These first two modules will give course participants a heightened understanding of how many social problems are rooted in "the land problem." By the end of the second module students will know how the enormous worldwide wealth divide is due in large part to fundamental injustice in the "people/planet" relationship.
 
Module Three - Land Value Capture - introduces "land value capture" as a key public revenue policy based on justice in land rights. Sections in this module describe how this approach to public finance can "hatch many birds out of one egg" by addressing a number of issues including provisioning affordable housing for all, funding infrastructure, helping to secure women's rights, promoting land reform, and improving the environment.

Module Four - Economics of War and Peace - details the dynamics of how - absent equitable rights to land resources - a war system develops and how land value capture can be an important tool for resolution of conflicts over land and natural resources.

Module Five - Policy Implementation - first gives ideas about ways to mobilize citizen campaigns in support of this policy followed by specific details of policy implementation. Course participants will learn about components of a land value capture system, principles of land valuation, and the use of information technology to promote understanding and transparency in policy implementation.

Enroll in Land Rights and Land Value Capture here:  http://www.course.earthrights.net
 
You Have To Learn When to Hold(er) 'em, and Learn When to Fire Holder
Eric Holder must go. He is up to his eyeballs in conflicts of interest from his old employer: Covington and Burling, which represented the now-infamous and unaccountable (and perhaps legally non-existent) MERS, and 4 of the biggest banks using it. The entire Justice Department has a revolving door relationship with C&B that is akin to the banks' relationship with Goldman Sachs.
Says Reuter's:
Jan 19 (Reuters) - U.S. Attorney General Eric Holder and Lanny Breuer, head of the Justice Department's criminal division, were partners for years at a Washington law firm that represented a Who's Who of big banks and other companies at the center of alleged foreclosure fraud, a Reuters inquiry shows.

The firm, Covington & Burling, is one of Washington's biggest white shoe law firms. Law professors and other federal ethics experts said that federal conflict of interest rules required Holder and Breuer to recuse themselves from any Justice Department decisions relating to law firm clients they personally had done work for.
click here

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http://newthinking.blogspot.com/

Scott Baker is a Managing Editor & The Economics Editor at Opednews, and a blogger for Huffington Post, Daily Kos, and Global Economic Intersection.

His anthology of updated Opednews articles was published by Tayen Lane Publishing (March, 2015) and may be found here:
https://tayen-lane.squarespace.com/america-is-not-broke/

Scott is President of Common Ground-NYC (http://commongroundnyc.org/), a Geoist/Georgist activist group. He has written (more...)
 

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