Send a Tweet
Most Popular Choices
Share on Facebook 52 Share on Twitter 1 Printer Friendly Page More Sharing
Life Arts    H4'ed 9/18/13

Reverberations between immoderate land-price cycles and banking cycles

By       (Page 1 of 7 pages)   3 comments
Message Mason Gaffney
Become a Fan
  (9 fans)

(Image by Unknown Owner)   Details   DMCA

Paper delivered at Annual Meetings, Association for Evolutionary Economics (AFEE), Chicago, January 8, 2012


A.   Major Outline

1.   The Pecora Hearings, 1933.   Another 10 days that shook the world.

2.   Hearings sponsored by a dying Republican Congress.   Role of Hoover, seeking scapegoat.   Role of Senator Norbeck of S.D., an echo of earlier progressive Republicans of the Bull Moose Party.

3.   Pecora was a surprise, brilliant, effective, and lethal. He forced leading bankers under oath to admit not just to forecasting errors, but self-dealing and breach of trust.   His 10 days set the stage for FDR's 100 days.  

4.   A major flaw, though, was to narrow his subject to banking and securities -- the paper economy. This has narrowed policy reformers and macro analysts ever since.

5.   The academic clerisy has purged much of the real economy from macro studies by compartmentalizing its work.   It has sanitized macro from at least the following:

a.   Real estate and its endogenous cycle of about 18 years, established and documented by Hoyt and others

b.   Austrian analysis of the structure of production

c.   Institutional economics

6.   Quality of Credit is the obvious link between banking and real estate, and at the core of current banking troubles.   Yet the leading Chicago economist Friedman early on ruled out Quality of Credit as a public concern, that would be improper   "intervention" in free markets.   Only Quantitative controls are permissable.

7.   1945-50 or so, postwar gloom capped land prices.   Affordability was high, e.g. in housing and farming.   Loans were mostly for production and use: price/earnings ratios were low, payoffs fast.   All kinds of taxes remained high, stifling any "Reverberations" Ã la 1920s.

8.   What are these "Reverberations"? Effects echoing back and forth between land prices and expansion of bank deposits, forming and exaggerating an up-down cycle.

a.   A peace dividend, plus "magnetic" institutions, attract immigration of labor and capital, as in booming California

b.   Banks begin shifting from strictly commercial loans to taking real estate as collateral, and lending for longer terms

Next Page  1  |  2  |  3  |  4  |  5  |  6  |  7

(Note: You can view every article as one long page if you sign up as an Advocate Member, or higher).

Valuable 4   Well Said 3   Must Read 2  
Rate It | View Ratings

Mason Gaffney Social Media Pages: Facebook page url on login Profile not filled in       Twitter page url on login Profile not filled in       Linkedin page url on login Profile not filled in       Instagram page url on login Profile not filled in

Mason Gaffney first read Henry George when a high school junior , and became notorious among his classmates for preaching LVT to them . H e served in the S.W. Pacific during W.W. II, where he observed the results of land monopoly in The (more...)
Go To Commenting
The views expressed herein are the sole responsibility of the author and do not necessarily reflect those of this website or its editors.
Writers Guidelines

Contact AuthorContact Author Contact EditorContact Editor Author PageView Authors' Articles
Support OpEdNews

OpEdNews depends upon can't survive without your help.

If you value this article and the work of OpEdNews, please either Donate or Purchase a premium membership.

If you've enjoyed this, sign up for our daily or weekly newsletter to get lots of great progressive content.
Daily Weekly     OpEd News Newsletter
   (Opens new browser window)

Most Popular Articles by this Author:     (View All Most Popular Articles by this Author)

Land as a Distinctive Factor of Production

Land Booms, Capital Stretch-Out, And Banking Collapse

A Georgist Perspective on Thomas Piketty's book: "Capital in the 21st Century."

What's The Matter With Michigan? The Rise And Collapse Of An Economic Wonder.

Europe's Fatal Affair with VAT

Sales-tax bias against turnover and jobs

To View Comments or Join the Conversation:

Tell A Friend