Last Saturday Radio NZ interviewed an English guy called Ross Ashcroft, who calls himself the Renegade Economist. Like all good campaigners he interviews people and puts the interview up on vimeo.com. Kim Hill’s interview with him is at http://www.radionz.co.nz/national/programmes/saturday/audio/2517815/ross-ashcroft-renegade-economics. Ross has produced a film called The Four Horsemen, which is part of The Documentary Edge Festival. Welington shows are at the Reading as follows:

Monday 21 May 8.45pm, Sunday 27 May 4.45pm and Thursday 312 May at 8.45pm. I gather it is also on in Auckland.

Tonight I have just watched Ross Ashcroft interview Ann Pettifor, whose name had been cropping up recently in various tweets. Half an hour interview with this bright woman economist, who has been a Fellow of the New Economics Foundation of UK for three years. She led a huge campaign, successfully winning the relief of $$350 billion worth of debt for Third World Countries in Jubilee 2000. There were 60 countries involved. Back in UK she noticed her friends getting huge mortgages when they were not exactly in secure jobs and she wrote a book called The Coming First World Debt Crisis in 2003. She said people thought she was a loony and she sold only a few copies.

The growing debt really began to blow out in 1971 after Nixon delinked from the gold standard and the UK deregulated credit. She talks of an article she is reading by Ben Broadbent, who is on the Board of the Bank of England but came out of Goldmann Sachs. She said the paper is deceptive yet packed with data. But she was convinced it was written in Goldmann Sachs office because it argues the Global financial crisis was due to low interest rates. Broadbent is defending the right of banks to be deregulated. He has huge political and economic power.   Why should banks get a return on an effortless activity, by entering numbers into ledgers or by engaging in speculative activities?

Ann Pettifor has just returned from an INET conference in Berlin financed by George Soros, where Steve Keen and Michael Hudson participated. (Initiative for New Economic Thinking). She concludes by saying she thinks people should be politically involved.

Roosevelt stood up to the banks in the 1930s and it takes leadership to do it. We need the leaders. We need capital controls to control borrowing across borders. Banks go looking to find they can borrow at 3% from China but 4% at home. Roosevelt brought in capital controls. Secondly we need to stop banks lending for speculation.  She says politicians have been taken in by bribes from banks. We must hold our politicians to account. Once the public understands, there is no stopping them. If people understand that banks create money out of thin air and charge exorbitant rent on it, then it snowballs. One in five voted for Fascist party in the French elections, very worrying, similar to Germany in the1930s. People are desperate and can’t articulate it.

Recently the locally owned businesses in our local shopping village met to air their troubles. The Council is spending heaps to upgrade the footpaths and underground services because, they understand, they are expecting “better heeled people” to move into the district. A real estate manager told one attendee that he has never had so many properties on his books. The poorer home owners can’t afford the rates and the rising insurance costs. And when the homes sell it is to Wellington folk who have the money.

The other gripe was that the shops aren’t making much profit. Transit NZ won’t allow the old time department store to advertise on the main road and traffic isn’t coming into the town, which is off the main state highway.

The department store, owned by an octogenarian, is struggling to survive. And there is yet another fast food outlet coming to our poor town, a junk food outlet again. That would make 15 cafes and takeaway shops in the village centre, and they are all suffering. So I guess we continue with our race to the bottom in sickness and poverty.

When I watched a cartoon video online somewhere recently, it showed very clearly that forcing poorer people to move further and further out is a result of having no price on the “ownership” of land.

And here is something else that has happened. A Wellington businessman bought 40 acres on the outskirts of our town 13 years ago for $400,000. He has now managed to subdivide it into three blocks and has recouped $1.2 million for two of those blocks, with another $480,000 to go. So that will be a tidy profit of $1,289,000 in 13 years. This is a privately captured windfall when it should be publicly captured. Work that out at an annual rate and he has reaped just over $99,000 a year. This should have gone to the public purse.

Multiply this event up for all the land that has been bought and resold again and you won’t be surprised at the Reserve Bank’s graphs on land affordability. There is a good video embedded here explaining how Australian land values have risen and proposing the solution shared by Adam Smith, Winston Churchill and many others.

Oh, you say, we need a capital gains tax. No, a capital gains tax will only just tie up the land sales. People will sit on their land, curse the government and work to kick them out at the next election. Labour and the Greens are on road to nowhere with this idea. But last night I reread the Values Party 1978 manifesto which clearly outlined that land should never be owned outright and that land prices should be stabilized with a land tax. This policy soon disappeared into oblivion. I don’t recall how it went.

What we need is for each landowner to pay a sum of money regularly to the public purse so that other taxes can be reduced. Since landowners already pay mortgages and rates, they are certainly going to resist a third charge. And most people believe that once they are “on the property ladder” they have a right to all the capital gain at the end of it. So how we can recapture those windfalls for public revenue?  It may be best done at local authority level, a possibility I am investigating.  It could be connected with a local authority issued currency. I am also convinced now that it needs to immediately result in a Citizens Dividend issued in a local currency by a local authority, facilitated through the Inland Revenue Department.

A local authority issued currency would do wonders for our struggling little businesses and homeowners.

This week we have had the embarrassment of our third ranked government minister Gerry Brownlee making derogatory and inaccurate statements about Finland and then laughing it off, claiming it was meant in a humorous or satirical way.

As Radio NZ reported:

“In the general debate last Wednesday, the Cabinet minister began by attacking the Labour Party’s admiration for Finland, but his monologue ended with him attacking Finland itself.

Mr Brownlee, who holds several posts including Leader of the House, said Finland had higher unemployment, lower growth and worse crime than New Zealand. He added that Finland can hardly feed its people and has little respect for women.

The comments have been reported heavily in the Finnish media and a page on the social networking site Facebook has been set up calling for him to travel to Finland to learn some facts.” It also reached the Egyptian media.

After the issue reaching media in Finland as outrage grew, a Finnish university lecturer started a Facebook group and the Finnish embassy called for a “please explain” from our Ministry of Foreign Affairs and Trade.

John Key has apologised Brownlee’s comments when meeting Finnish President Sauli Niinisto in South-Korea!

However let’s look at the context. I caught the last of this interchange in Parliament last week when the Government and Opposition were in full attack mode over the issue of the Finland economy. On Facebook one man pointed out that this was one of those inevitable results of an outdated and archaic parliamentary system of opposition.

On Facebook one man pointed out that this was one of those inevitable results of an outdated and archaic parliamentary system of opposition.  Yes, our adversarial parliamentary system sets the scene for this to take place.  I hope someone in Parliament will now take the initiative on Parliamentary reform. Joking and jibing across the chamber increases and leads to this gaffe. No amount of talking will pass it off as satire or a joke now I am afraid. When the two major parties face each other and yell abuse at each other it is embarrassing to be in the gallery.

I have just watched a bit of a debate on a social welfare bill. Grant Robertson of Labour responded to the Minister’s speech, then a government MP read his prepared speech, making absolutely no mention of the critical issues Grant Robertson had raised. This is like kindergarten children talking to each other in parallel conversations, hardly good enough for our prestigious parliamentary representatives to dignify with the term ‘debate’.

So much of our taxpayers money is wasted. Electoral reform changed parliament, with the exception that Government and the chief Opposition still sit opposite each other and throw insults to those “on the other side”. Not good enough for the 21st century.

Set up a committee on poverty and say that is a way to stop it? Daft as. Hone is right. Koretake! Useless!

The way to stop poverty is to legislate and tax so that it stops the profiting from the passive ownership of land, resources or money. This is the New Economics Party policy and gets to the root of poverty issues. Tax what you use not what you earn, tax what you take not what you make.

Today I found that after the Global Financial Crisis in UK, there was a conference on Economic Justice and a Council of Economic Justice was set up. To the conference were invited many organisations which advocated monetary reform and many who advocated Land Taxation Tax and other resource taxes. This Council will have a great deal in common with our party. Meanwhile the Libdems have a group called ALTER which advocates land value taxes and the Scottish Greens now has a policy on this at local level. We are in touch with Earthsharing Canada and it is very gratifying to know that Frank De Jong is starting to read on the topic of monetary reform.

So oh dear Pita and Tariana. You are more naive than I thought. All you will do is watch the gap between rich and poor widen and widen, but you will at least know that statistics. To have a committee chaired by the very person who introduced a rise in the regressive GST tax regime shows how utterly ineffective it is going to be.

Monetary reform and land value taxes have been around for centuries, but in my lifetime they have never been implemented except for a brief period when we had unimproved value as a basis for  most of our local body rates.