Rising Tide at Sunset

The Credit Crunch

The Cause and the Cure

by Bob Keall



The CAUSE:

is not the Banking System, (in N.Z). It is the unearned gains from land¹; values privately monetised through the Banking System, with prime/sub-prime mortgages. This had become a sacrosanct industry promoted by Government with tax breaks.

The CURE:

  • is to socialise the same unearned, community-created gains, with comparable tax concessions; for a Rent, licence or fee, instead of taxes. A charge for what we hold or take, not on what we do or make, to distinguish public from private property.
  • is a national Land Value Rate levied by, and shared with Regional Government. Initially, there should be interim gradations of Income Tax and Land Value Rate as an accommodation to home owners, but not investors.

In the U.S, and elsewhere, recent plans to rescue the Banking System and the car industry will entrench the malady and will convert the icon of "Freedom" (to own the earth!) into the biggest Socialist state we've yet seen. A de facto Nationalised banking function will assume its proper role. “Capitalism’s” mistake of conflating land with capital; natural resources with commodities², and thus Rent with Interest, will find its just desserts.

In N.Z. the Reserve Bank is State-owned. Under Sir Roger Douglas, as Minister of Finance, the Government abdicated its responsibility in favour of the Reserve.Bank for Monetary and related Policies. As Prime Minister Lange protested, “on that basis who needs a Government?The resolution will be for the new state tenants to pay a market Land Rent (ex auction) in lieu of Income Tax, GST and other taxes. They can't pay both! (see Rates Relief)

Continued ...

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References:

  1. Rates Relief
  2. Economics In One Lesson
  3. Where To From Here For The Sharemarket?" (pdf)
  4. "The Neo-Classical Stratagem against Henry George" from "The Corruption of Economics" by Dr. Mason Gaffney (pdf).
  5. Tax Set-off/Negative Gearing
  6. Inflation
  7. A Challenge To The Church (Mosaic Law and Messianic affirmation)


1. "Land" includes natural monopolies, rights to land, water, airwaves, minerals, fisheries, hydro-power generation and supply, any public utility such as a port, airport or the monopolistic rights to reticulate wires, pipes, rails, roads, and the like; even the right to pollute Refer to "Economics In One Lesson".

2. The "Corruption of Economics" by Dr Mason Gaffney (Prof Of Economics California University) and Fred Harrison, examines the intentioned confusion of "land" as capital over the last 100 years or so. Consequently some "interest" is really rent. Under a system of Resource Rentals, in Accountancy also, "land" would not be a capital asset.

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