the land market plays in the economy.

I dislike the way that economists have changed the meaning of rent so that it further conflates the

returns to land and capital. Can’t the source of current financial crisis be summarised as uncontrolled money piling into an uncontrolled land

market? Haven’t the banks in fuelling the house price boom/bust been collecting pure land rent?

The dotcom crash did not affect the real

economy. Land is different. Not only does it have no cost of production but it can be continually used without wearing out. There are vast

landholdings which are totally idle, which could be producing wealth for all. It’s value is created by whole communities, never by owners. It is

the source of most inherited wealth. Rent, as you say, is totally unearned income, yet it is not taxed in any meaningful way.

There is no

simple (politically acceptable) solution to the banking crisis but there is a very simple solution to the dysfunctional land market – an annual

80%+ tax on land rent.

Respectfully yours. Carol

Thanks for this…and you’re on the money…and the scary thing is that it takes another Great Depression to

subordinate the finance sector to the interests of society….Let us hope this is the last one….

thanks for joining in….Ann

the Advocacy Int’l. site. I shall read them often.

In the US (and I suspect similarly in the UK) ceding control over the monetary system by

the govt. to the financial sector over the last several decades has allowed the financial sector (in search of profitable activities) to create a

massively complicated and convoluted financial system. To the extent that in the current “crisis” our Govt. can only state that the proposed bail-

out MIGHT avert a melt-down.
This lack of clarity is the fundamental reason why the package didn’t pass our Congress.

Last May or June,

Robert Samuelson, an economic (orthodox to the nth degree) columnist with the Washington Post, in defending the Financial sector, extolled the

virtues of modern finance and in particular the massive prosperity it had helped engender. Based on?? Well he mentioned that in the 1950′s the

sector accounted for 10% of US GDP. But by 2006 that had grown to over 21%. Hmmm, I must be from another planet, but given the massive level of

computerization over the past 4 decades, it seems to me that procutivity would have resulted in a decrease of the GDP share. That the opposite

happened goes a long way to explain our anemic GDP growth over the last three decades as well as the growth of income inequality, to levels last

seen in 1929, as the Great Depression started.

I hope we don’t require another Great depression to rectify the situation, but we seem to be

on our way.

for liquidity to BoE and ECB — does not seem the best idea. That’s precisely what American and European and Japanese deregulated investments

banks and FOREX have been doing for the last 20 years or so. Prices — like housing — went up to sky levels. Borrowing from Yen carry-trade became

a world orgy. On the other hand production in general went to China, India, etc. We (Europa-America) all got loaded with funny money (gold went to

China, India, Russia, OPEC parners and so on.) Deloading this entire mess is going to be hard for everyone. America is presently going down with

very low interest-rates policy. Should we copy the recipe?!

a system.

Another question is what to do now. Bailouts seem unethical to me but are happening already even in the UK under the auspices of

the SLS as far as I can tell.

How did we get here. After the bailout in the S&L crisis in the ’80s, why have we got to that point again

(in a much bigger way). How come we failed to improve the system? Perhaps we did in the wrong way .

For me, the Austrian Economists are

making some sense but I’m no economist. Unfortunately economics seems like a branch of politics (or philosophy). i.e. lots of competing schools of

thought because the system is too complex to understand.