George Monbiot advocates land tax in Guardian article

George Monbiot argues for land tax

It came as a bolt from the blue. Monbiot wrote an article for the Guardian in which he explains why land tax must be implemented.

But for those UK Georgists who have been trying to persuade Monbiot for years it is due reward, since high profile advocacy moves debate along.

Monbiot says the loudest silence is about property taxes, that the Sultan of Brunei pays only £32 a month more for his pleasure dome in Kensington Palace Gardens than some of the poorest people in the same borough. He also quotes from Winston Churchill  “Roads are made, streets are made, services are improved, electric light turns night into day, water is brought from reservoirs a hundred miles off in the mountains – and all the while the landlord sits still. Every one of those improvements is effected by the labor and cost of other people and the taxpayers. To not one of those improvements does the land monopolist, as a land monopolist, contribute, and yet by every one of them the value of his land is enhanced. He renders no service to the community, he contributes nothing to the general welfare, he contributes nothing to the process from which his own enrichment is derived. … the unearned increment on the land is reaped by the land monopolist in exact proportion, not to the service, but to the disservice done.”

Michael Lewis on Iceland, Ireland and Greece is worth reading

Review of Boomerang, the Biggest Bust by Michael Lewis. Penguin Books 2011

I didn’t read Michael Lewis’s The Big Short, or Liar’s Poker about the dark art of investment banking, but this one is surely immensely readable. Lewis is a ‘financial catastrophe tourist’, travelling to Iceland, Greece and Germany interviewing key people in each country’s unique version of the Global Financial Crisis. He obtains interviews with significant players – Prime Ministers, ministers of finance, officials in treasury, hedge fund managers, traders, economists. In Greece he interviewed the head monks of an ancient monastery which had played a such key role in the indebting of Greece.

If you can ignore the fact that the writer is an economist who is still believes that banks just lend depositors’ money rather than create the credit (understandable when you realise how hopelessly captured universities are these days by the banks), you will enjoy this romp through the financial stupidity outlining how Greece, Ireland and Iceland got into such trouble.

I read the chapter on Iceland twice because there is a move to bring the leader of the protestors Hordur Torfason to New Zealand. Torfason will explain how in 2011 Iceland arrested nine bankers together with the Prime Minister who allowed the madness to take place on his watch by privatising the banks, freeing up trade and lowering taxes. Lewis says “From 2003 to 2007, while the value of the U.S. Stockmarket was doubling, the value of the Icelandic stock market multiplied nine times. Reykjavik real estate prices tripled.” When the bubble burst, Iceland’s 300,000 citizens found they bore some kind of responsibility for the $100 billion in banking losses. The debt was 850% of their GDP.

Lewis has a nice way of writing mixing the factual stuff with well painted personal profiles and vivid stories. Warning: If you want to read this book in a public place, people will think you are reading porn. The sensual cover features wine glasses and a prostrate woman in a tight gold dress.