–Whom do you know, at the AFL-CIO?

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Mitchell’s laws:
●The more federal budgets are cut and taxes increased, the weaker an economy becomes.
●Austerity is the government’s method for widening the gap between rich and poor, which leads to civil disorder.
●Until the 99% understand the need for federal deficits, the upper 1% will rule.
●To survive long term, a monetarily non-sovereign government must have a positive balance of payments.
●Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
●The penalty for ignorance is slavery.
●Everything in economics devolves to motive.
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BACKGROUND

Why is the National Rifle Association (NRA) so resoundingly successful, while the Occupy (OWS) groups have been so predictably impotent? The answer: The three M’s — Membership, Money and Message.

The NRA not only has a large and broad membership — they claim 5 million — but can count on millions of non-member sympathizers. OWS has a sparse membership and few sympathizers.

The NRA has tons of money. OWS has little.

The NRA has a simple, seductive message: “Guns protect you.” OWS has no coherent message. They simply seem angry at everything money. Their pride in having no leadership structure and no organization has made them a confused messenger with a confused message.

Embarrassingly, Modern Monetary Theory and Monetary Sovereignty are more like OWS than like the NRA. We have sparse Membership, little Money, and though we have a Message (“Deficit spending protects you”), it is counter-intuitive and not heard for lack of volume.

One might think we’d have an easier job. After all, we promise better health, education, infrastructure and housing — better lives overall — for the vast majority of Americans.

Our cut-the-deficit opponents promise worse of everything, and have the statistics to prove it. Everywhere austerity has been tried, it has resulted in abject misery. So why do we struggle?

The opposition has Membership (bought-and-paid-for, old line economists, the media, Congress) Money (the Peterson/Koch brothers crowd) and a simple, intuitive Message (“Deficits are bad”).

NOW, ABOUT THE AFL-CIO

Their site says:

“We are the umbrella federation for U.S. unions, with 57 unions representing more than 12 million working men and women.”

That’s 12 million members, plus millions of sympathizers — way more than the NRA has. And what does the AFL-CIO do? They say:

Our priorities include:
1. creating good family-supporting jobs
2. by investing tax dollars in schools, roads, bridges, ports and airports ;
3. improving the lives of workers through education, job training
4. and a livable minimum wage;
5. strengthening Social Security and private pensions;
6. ensuring fair tax policies;
7. making high-quality, affordable health care available to everyone;
8. and holding corporations more accountable for their actions.

NRA results: In the face of massive evidence that gun ownership begets gun murder, Congress resists gun control. Even the most innocuous gun control bills struggle. NRA Membership and Money are growing. Gun sales keep climbing. The NRA succeeds.

AFL-CIO results:
1. Unemployment remains high
2. Spending for schools, roads, bridges, ports and airports is cut
3. Spending for education is cut
4. The minimum wage is not “livable.”
5. Social Security is cut; private pensions are underfunded
6. FICA is increased. The middle class is overtaxed.
7. Medicare and Medicaid are cut. Still millions uninsured
8. No banksters yet convicted, and TBTF banks more powerful than ever.

In short, despite massive Membership and lots of Money, the AFL-CIO fails to accomplish its goals. In fact, they are backsliding.

They don’t have a strong, coherent Message. Why? Partly, because they accept the false belief the federal government spends tax dollars, which evolves to the false belief the deficit must be reduced.

But, an AFL-CIO and MMT-MS team could be a marriage made in heaven. We want mostly the same things for the 99% of Americans. With our Message, plus the AFL-CIO’s Membership and Money, we could change the world.

Suddenly, Congress would “realize” that deficit spending, far from being “unsustainable,” is vitally necessary. Suddenly, workers would receive better health care, income and retirement. Suddenly, the recession would disappear, forever.

Some cynics might say, “That is not what the AFL-CIO leaders want. All they want is union membership.” Whether or not that is true, the union leaders want credibility, an asset they have been losing. Were the unions to finance and spread the “Deficit spending protects you” message, their credibility would come from the credit they could take for saving the American worker.

AFL-CIO + MMT-MS would be a powerful, unstoppable force for the middle class. But, the marriage requires first a proposal. AFL-CIO already understands that the sequester is foolish, as witness their blog article, The Consequences of Austerity Are Dire. But this paragraph in the article indicates they do not understand that deficit reduction itself is foolish:

Working families are calling on Congress to protect Social Security, Medicare and Medicaid from benefit cuts (i.e., raising the retirement age and the “chained” CPI), repeal the sequester and close tax loopholes for corporations and the wealthiest 2%

My reading of this is they wrongly believe the deficit must be reduced, and so long as one believes that, arguments against deficit cuts merely turn into weak, seemingly self-serving bleatings, “Cut them, not us.”

If the leadership of AFL-CIO were educated to understand why the federal deficits actually should be increased, and increased significantly, they could use their Money to deliver the Message to their Membership and to Congress.

I can visualize, just for instance, the University of Missouri, Kansas City, setting up one-week seminars for AFL-CIO officers, leaders, lobbyists and marketing people, to provide the economics basics and arguing points countering the cut-the-defict lies.

The top three AFL-CIO officers are: Richard L. Trumka, President; Elizabeth Shuler, Secretary-Treasurer and Arlene Holt Baker, Executive Vice President.

Probably Mr. Trumka would be the one to reach, directly or via an intermediary. Which brings me to the title of this post: Whom do you know at AFL-CIO? If you know an official, I’ll contact him/her. Meanwhile, I’m going to write to Mr. Trumka. You might write him, too. His address is:

Richard L. Trumka, President
AFL-CIO
815 16th St., N.W.
Washington, D.C. 20006

Rodger Malcolm Mitchell
Monetary Sovereignty

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Nine Steps to Prosperity:
1. Eliminate FICA (Click here)
2. Medicare — parts A, B & D — for everyone
3. Send every American citizen an annual check for $5,000 or give every state $5,000 per capita (Click here)
4. Long-term nursing care for everyone
5. Free education (including post-grad) for everyone
6. Salary for attending school (Click here)
7. Eliminate corporate taxes
8. Increase the standard income tax deduction annually
9. Increase federal spending on the myriad initiatives that benefit America’s 99%

No nation can tax itself into prosperity, nor grow without money growth. Monetary Sovereignty: Cutting federal deficits to grow the economy is like applying leeches to cure anemia. Two key equations in economics:
Federal Deficits – Net Imports = Net Private Savings
Gross Domestic Product = Federal Spending + Private Investment and Consumption – Net Imports

#MONETARY SOVEREIGNTY

Published by Rodger Malcolm Mitchell

MBA Northwestern, business turnaround expert, economist

Published

22 thoughts on “–Whom do you know, at the AFL-CIO?”

  3. My union is affiliated with AFL-CIO. The members I know, myself included, are not intellectuals, recognize we have as much corruption in top union management as work management and many many union members own a gun.
    Hitching the MMT wagon to the union horse will alienate more people than you enlist. Union leadership is perceived politically as extreme left wing.The Democrat will ALWAYS be supported. Many people see unions as an arm of the Democratc Party.
    MMT needs a politician or new political party to carry the banner, forget the AFL-CIO.

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    1. Understood and thanks.

      Lacking that politician and that new political party, we need to do something now. The country is in crisis, because people have been brainwashed into believing austerity is a viable and necessary solution.

      When your house is afire, you don’t worry about the politics of the guy with the hose. And trust me, our house is afire.

      Today, America needs AFL-CIO’s loud voice. I’ve considered contact with AARP, an organization that also can be criticized (can’t all big organizations?), but also has a loud voice.

      The real enemy is austerity and the rich who promote it. The enemy of my enemy is my friend. We need loud voices to speak factually against austerity.

      If you have a contact at AFL-CIO who has a line to the top echelon, it could be helpful.

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  4. I agree with Golferjohn that union bosses are corrupt. They pretend to champion workers, but they really work for management.

    However I also agree with Rodger that we should try to reach them anyway.

    It is the nature of society and large organizations to have leaders who are always politicians. We must understand this reality if we are to get the message out.

    Richard Trumka is a politician, which means he wants to cut the deficit. He says the “deficit problem” is caused by skyrocketing health care costs. He says that SS and Medicare have “long-range financing problems” — although he opposes any cuts to SS and Medicare. He says that if we want to reduce the deficit, then we should not cut social programs, but instead “finance them more efficiently,” which means closing “tax loopholes.”

    In short, he is a Democrat.

    That’s politics. We can’t avoid it. We must work with it. More on this below.

    Almost all politicians want austerity. Right-wing politicians say we must cut the deficit because there is not enough tax revenue. Left-wing politicians say we must cut the deficit because tax dollars are being wasted, and being stolen from the (mythical) SS and Medicare “trust fund.” Trumka believes there is a “trust fund.” He says that “Social Security has not contributed one cent to the deficit or debt of the United States” (true) and that SS “is entirely supported by its own funding” (false). As a politician, Trumka claims to defend the “trust fund” for “the people.” But in doing so, he sustains the illusion that dollars are limited, and that tax revenue pays for the federal government and social programs. He is a deficit dove: (“I don’t for a moment think that America’s deficit is not a long-term problem. It is, but it’s not our short term crisis.”) Thus, he contributes to austerity mania.

    Again, this is politics. And politics is not always about bribery. True, most politicians push for austerity because they are bribed, but they would likely do it even without bribes, since politicians always need a boogeyman to “protect” us from. Moreover society wants bogeymen, because most people play the blame game. During the colonial days, the bogeyman was Native Americans. Later the North and South regarded each other as a “threat.” Then came the “Yellow Peril.” Then Germany was the bogeyman. Then the 1930s bogeymen was the “red menace,” plus the international IWW union. Then Germany was the bogeyman again. After WWII, communists were the bogeymen. Then Muslims were the bogeyman. Now the deficit and the national debt are the bogeyman.

    Plus, there have been additional bogeymen along the way, sometimes at the national level, and sometimes at the regional level. Ronald Reagan, as governor of California, ended free university education, and introduced crony capitalism under the rubric of a “war on crime.” President Nixon launched his “war on drugs.” President Reagan fought the “evil empire (the USSR, plus populist movements in Central America). Bush launched his “war on terror,” followed by Obama’s war on the deficit.”

    All these wars and bogeymen still exist, and they run concurrently, thereby camouflaging the ever-widening wealth gap.

    THE POINT is that austerity mania is a product not only of bribery and stupidity, but politics at all levels, on all sides. Right-wing types want to cut social programs. Left-wing types want to cut the military, and increase federal taxes.

    Society >ISIS< politics. Society is bullshit, bogeymen, and the blame game. Trumka knows this. He knows how to play politics. For example, he says that to cut SS is to “disproportionately hurt women.” Whether that’s true is irrelevant. It’s politics. Trumka could not get away with candidly admitting the facts of MS, so instead he says, “Our nation stands at a crossroads. We’re either going to get on the path to shared prosperity, or we’ll let ourselves be fooled by deficit fears into heading back down the road to economic ruin and inequality.”

    Therefore I agree with Rodger that we must reach out to politicians like Trumka. We must let them play politics (since society demands it), but in ways that do not promote the false belief the federal government spends tax dollars, and the deficit must be reduced.

    We can do that through slogans like “DEFICITS PROTECT YOU,” as suggested by Rodger. The public would accept such slogans if people like Trumka repeated them often enough. Union leaders need such slogans to regain union credibility. They need a fresh approach.

    Politicians and the public will always want bogeymen. Therefore we must change their bogeyman. Slogans like “Deficits protect you” change the bogeyman from the deficit to bankers and rich people.

    Austerity is genocide.
    Deficits are hope.

    Taxes kill you.
    Deficits sustain you.

    The rich want to enslave you.
    Deficits protect you.

    The truth is, people respond to slogans, not logic or facts. We can accept this fact and exploit it, or else we can give up and resign ourselves to despair.

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  5. OFF-TOPIC

    Here’s something from the right-wing blogosphere that shows the idiocy of Tea Party types. It’s titled, “Corporations Profit From $75 Billion Tax Payer Funded Food Stamps Program!”

    (No! You mean government spending helps U.S. businesses and employees? Outrageous!)

    >>“Government Accountability Institute President Peter Schweizer and Breitbart News Executive Chairman Stephen K. Bannon exposed how politicians and corporations have used the country’s food stamps program to profit on the backs of taxpayers.”

    There it is: the all-purpose “paid for by taxpayers” lie. Some people use it to defend austerity. (“The federal government is short of revenue!”) Some people use it to oppose austerity. (“Social Security is financed by taxes!”). The latter wind up defending austerity, since they defend the illusion that dollars are limited, and that the US government needs revenue.

    Anyway, because of austerity, there are now 46.37 million food stamp recipients. That’s one in seven Americans,an all-time high, and it keeps growing. Forty percent of food stamp recipients have jobs, but they cannot afford the cost of living. So, even if unemployment were to stop exploding (which it won’t) the food stamp program would have to continue because of expanding poverty and the extreme wealth gap.

    Incidentally, the “cost” of the food stamp program (that is, the amount of money created out of nothing on the government’s keyboard) is $6 billion per month. That’s only 13% of what the Fed creates on its keyboard each month for QE, and less than 10% of what Congress gives each month to U.S. weapons makers.

    Besides, what are right-wing retards complaining about? J. P. Morgan handles food stamp debit cards for 26 states, plus the District of Columbia, and gets a cut from each food stamp transaction. This brought an added profit of $5.47 billion to J.P. Morgan in 2010.

    (Other sources say J.P. Morgan collected only $500 million since 2004. JP Morgan also provides child support debit cards in 15 U.S. states, plus unemployment insurance benefit debit cards in 7 states.)

    Oh…and this should delight you right-wing morons… if you have a problem with your food stamp debit card, you must call a JP Morgan service center located in India, where call center workers are paid $3.15 per hour. Hence, with off-shoring, and with JP Morgan’s monopoly, we have “less government.” Hooray! (However, with increasing austerity, we have an increasing need for food stamps. Boo! That’s “big government!”).

    The article continues…

    >> “Though the food stamps program was always meant to be a ‘safety net’ to provide temporary assistance, Schweizer says it has ‘become an insider game of power and profit’ for corporations who are attempting to get a slice of the $75 billion provided by the taxpayers.”

    There it is again. The ubiquitous “provided by taxpayers” nonsense.

    Food stamps give jobs to food producers, plus food transporters and food sellers. They also keep Americans alive. Hence, food stamps must be CUT! They must be sacrificed to the god of austerity! (But if we do that, we will deprive J.P. Morgan of that revenue. Oh the dilemma!)

    The article continues…

    >> “Schweizer says, ‘A nutrition program has become a stimulus and jobs program that politicians have tried to expand with no resistance. In fact, it was House Minority Whip Steny Hoyer (D-MD) who brazenly suggested that welfare stimulates the economy.”

    Stimulus and jobs program? Horrible! Unacceptable! Unthinkable! Government spending helps the economy? How brazen! (By the way, food stamps are not a “nutrition program.” They are an anti-famine program.)

    Continuing…

    >> “Schwiezer rightly points out that this kind of thinking is nothing more than ‘traditional Keynesian argument, that you spend government money and somehow it multiplies.’ He says there is not economic evidence to support that claim.”

    Yes, all the “evidence” proves that austerity boosts productivity. Austerity = prosperity. (For the rich, anyway.) Therefore we must eliminate social programs!

    (Wait. Scratch that. We don’t want to hurt J.P. Morgan’s profits, or cause a popular revolt against the bankers. Starving people form mobs. So we’re back to the dilemma. Who causes this dilemma? Mexicans? Jews? Muslims? North Korea? Fidel Castro? Certainly WE don’t cause it. Right?)

    http://freedomoutpost.com/2013/04/corporations-profit-from-75-billion-tax-payer-funded-food-stamps-program/#ixzz2PtY4sHlU

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  6. “YES WE MUST MOVE FORWARD ON DEFICIT REDUCTION, but it must not be done on the backs of some of the most vulnerable people in this country.”

    ~ Sen Bernie Sanders on Obama’s cuts to Social Security through the “Chained CPI” scheme, plus $305 billion in cuts to Medicare.

    Tell us Mr. Sanders, how will you reduce the deficit? Will you cut subsidies to oil companies? Will you cut the military budget? Will you end bailouts of Wall Street? Will you end QE? End food stamps? End the sale of T-securities? Stop paying interest on T-securities? End the wars, plus the war on drugs, plus the war on terror? Or will you triple our taxes, which the government does not need or use?

    No, you will do none of these. Therefore Mr. Sanders, when you call for a reduced deficit, you call for cuts to social programs. You call for austerity, and ever-increasing poverty. You call for an end of support for three million disabled children, one of which is my daughter who depends on SS for her medical bills. (Don’t worry, she’s 23 now, and with her condition, she probably won’t live past 30.)

    Mr. Sanders, YOU ARE A LIAR AND A TWO-BIT HUSTLER!

    Today (9 Apr 2013) Sanders rallied with several dozen protesters outside the White House. Organizers from 15 groups stacked nine file boxes containing two million petition signatures near him. All 15 groups supported Obama in both elections. Every one of those signatures demands more austerity – i.e. cuts to SS and Medicare. They all want deficit reduction.

    Indeed, the only thing that all Americans agree on is their desire for collective suicide. And there’s Bernie Sanders cheering for death.

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    1. Thanks Tyler,

      Before that happens, I want to see whether UMKC is amenable to setting up a short course. My experiences with my own friends indicates one person talking to one person for a half hour, isn’t going to help overcome the years of brainwashing.

      If we could get a class — even a two- or three-day seminar — then we would make progress.

      I’ll keep your offer in mind, however.

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  8. I doubt you’ll get very far in promoting an economic philosophy – MMT – that supports an idle rent-seeking class collecting interest on money we could just make ourselves IF we were monetarily sovereign, which, by choice or ignorance, we aren’t.
    I think I’ll write Trumka too, but about Truly Sovereign Money – the U.S. Note (aka Greenback) and Public Banks (you’ve probably already heard about the joint Bank of England-FDIC plan to forcibly confiscate deposits in a deposit-for-equity swap the next time a TBTF bank actually fails. It’s called a bail-in. More info here: http://www.huffingtonpost.com/ellen-brown/banks-confiscation_b_2957937.html )
    Government spending: Yes
    Government Debt: No
    Sovereign Money for Government: Yes
    Private Money for Government: No

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    1. “. . . make ourselves. . . ”
      Not sure who “ourselves” is. The U.S. government being Monetarily Sovereign, never can run short of dollars. You and I, being monetarily non-sovereign can run short of dollars.

      People earning interest on loans doesn’t take one penny out of your pocket (in fact, you are one of those people if you own any bonds or have a bank savings account), so I’m not sure what your objection is.

      The federal government issuing T-securities (aka “debt”) has nothing to do with the worrisome situation in which banks steal depositors funds. That could happen whether or not the government issues T-securities.

      The federal government can and should stop issuing T-securities as they are an obsolete remnant of the pre 1971 days when the government was monetarily non-sovereign, and could run short of dollars.

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      1. Ourselves = Sovereign America, which in this case, refers to the national currency, which OUGHT to include U.S. Notes, but hasn’t since 1996.
        Yes, you are right the government “can and should stop issuing T-securities as they are an obsolete remnant…” etc. but they aren’t, so clearly someone is benefiting. The people that are benefiting are the rent-seekers who loan us our money under the current, corrupt, and unnecessary, system.
        It’s strange that the MMT folks, unless really pressed (mainly by me, it seems), never talk about ending the T-market and the payment of debt upon that. Not to get all ad homineny, but it is interesting that MMT co-founder makes a living trading gov’t securities.
        Yes, it DOES cost me, because gov’t, stupidly, or corruptly, chooses to spend about 20% less on society because it is spending 20% to pay interest on the debt, for every tax dollar collected.
        We have to distinguish between what OUGHT to be, from what IS. MMT fails to do that, which means they are basically lying. Lying is for politicians, not purported monetary reformers interested in social justice. It’s no wonder MMT has not taken off better in that case.
        The only sovereign money CURRENTLY in circulation is coins.
        The only sovereign paper money that was EVER in circulaiton was U.S. Notes, and even that was only so in practice, not in theory (because SCOTUS under Julliard v. Greenman said U.S. Notes could only be issued under the constitution’s borrowing clause; in practice, U.S> Notes were excluded form the national debt, and never repaid).

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  9. The dollar is the sovereign currency of the United States. The fact that you and I and banks individually are able to create dollars by lending, doesn’t change this fact.

    This is in contrast to Greece, France, Illinois, Cook County and Chicago, none of which have a sovereign currency.

    Though many left-wing college professors brainwash their students into believing that rent-seeking somehow is immoral, almost everyone benefits from receiving interest, and when federal interest payments enter the economy, they benefit everyone in the economy, and cost nothing.

    The only reason T-securities should be eliminated is they wrongly are called “debt” (they should be called “deposits” as that is what they are), so they fool the public into thinking the government is spending too much. In fact, Congress makes the government spend too little.

    The benefit of T-securities is their interest adds dollars to the economy.

    Federal spending “on society” is not limited by federal spending on interest. The only thing that limits federal spending is Congress and the American public’s ignorance of federal financing.

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    1. Left-leaning Joseph Stiglitz today came out against rent-seeking too here: http://opinionator.blogs.nytimes.com/2013/04/14/a-tax-system-stacked-against-the-99-percent/
      And he is right, and you are wrong.
      “One of the reasons for our poor economic performance is the large distortion in our economy caused by the tax system. The one thing economists agree on is that incentives matter — if you lower taxes on speculation, say, you will get more speculation. We’ve drawn our most talented young people into financial shenanigans, rather than into creating real businesses, making real discoveries, providing real services to others. More efforts go into “rent-seeking” — getting a larger slice of the country’s economic pie — than into enlarging the size of the pie.”
      Stiglitz says it better than I can, but the basic point is money goes to where it can get the greatest return. And further, which Stiglitz didn’t say, but Henry George did “Man seeks to gratify his needs with the least amount of effort” which means that if I can somehow acquire Land or some other resource everyone wants, I can sit back and collect the rent on that without doing anything but holding it. John Stewart Mill called this how the “Landlord makes money while he sleeps.”
      I’ve just named 3 respected economists, present and past. You could add Michael Hudson to that list too, though he is currently touring with the MMT folks, he has fundamental disagreements with them, and has recently endorsed Greenback (Lincoln) dollars, directly issued from Treasury, saying, correctly, that money could be issued without debt.
      We don’t need T-bills to spend. We need money.
      We agree on the need to have government spend, but not on the need to do that through debt, and I believe that is what will kill MMT as a philosophy and, eventually, allow Greenbacking, to triumph.

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      2. ““Man seeks to gratify his needs with the least amount of effort” which means that if I can somehow acquire Land or some other resource everyone wants, I can sit back and collect the rent on that without doing anything but holding it.”

        I guess I did it wrong. My land had a building on it, which is what the people wanted to rent. I suppose the income came in while I slept, but I busted my ass while I was awake, taking care of it.

        And that part about “somehow acquire” also involved years of work.

        “Euthanize the rentier class”? If someone needs to be “euthanized”, I could nominate a few of my tenants who trashed the place.

        Oh, and lest anyone jump to conclusions, this was not low-income housing or anything like that, it was a nice vacation home in a popular resort area.

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        1. Right, golfer,

          For some reason, immature people of the kind who followed Marx down the rate hole, are ready to believe that rent-seeking and speculation and financial businesses aren’t productive, but rather are leeches on the public body.

          In fact, those who earn money by conducting businesses not requireing hand labor are just as important as those who farm, construct or invent — often more so.

          I thoroughly disagree with those who disparage the so-called “rent-seekers.” Profiting from a patent or a risk taken are of great benefit to society.

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        2. You completely misunderstand me, though I suppose that’s my fault for not distinguishing better between productive activities and rent-seeking. Under a Georgist paradigm, unlike Marxism, which George completely disagreed with, and vice-versa, all fruits of labor would be 100% yours to keep. There would be zero taxes on buildings, and 100% tax on the full rental value of land. This is more incentive to build, and incentive not to hoard land either. It’s actually more capitalistic than the subsidized socialism for the rich we have now.
          Same for oil, which would be taxed at its below the wellhead price (or as close as practical), but all aspects of production would be untaxed (except pollution and the rent of land that refineries and gas stations sit on).

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        3. Seems to me the tax would be very small, and not much of an impact on anything. Consider two parcels in the center of Manhattan, one is a parking lot bringing in $10,000 a day, the other is vacant and cannot be used for any productive activity. One sells for $1M an acre, the other has been on the market for 2 years with no offers. What will be the tax on each? How would that be determined? Nobody would have rented my lot if it were vacant. They only wanted the house. The land was irrelevant.

          Likewise for oil. If it can be gotten out, the value “below the wellhead” is the market price of oil minus the cost of extracting it. If you tax all of that away, there is no profit to be made in production, and it will not be produced. How do you tax equal reserves, when one is easily gotten out for $10 a barrel, and the other requires expensive technology costing $60 a barrel?

          And if you secretly redefine words like “rent”, nobody else will understand you either.

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          1. Actually, most people who study land value taxation for a living say that if properly applied, it would amount to 1/3 of the GDP. That’s how much is being privately collected form the commons right now, that rightfully belongs to the people. This includes location in the case of buildings, airport slots, radio spectrum, etc.
            See our website for some specific examples of egregious mispricing that literally leaves money “under our feet”: http://commongroundnyc.org/ Interesting you should bring up a parking lot, as that has been our classic real-world example for years. The parking lot at 28th and Park Avenue was there for decades, paying 1/10th the property tax of the 15 story building right next door. This “taxpayer” then, was essentially being subsidized for holding unproductive land, and the minimal fees brought in by parked cars were enough to pay the attendant (1) and the meager property taxes. Only recently was the lot sold – undoubtedly at a “killing price” and new construction begun. No doubt the property tax will NOW be adjusted upward, effectively punishing the new owner for building something useful, like a high-capacity building. This is a disincentive to build anything but the most expensive, luxury buildings, and is a key reason there is so little affordable housing in NYC. BTW, there is also 22 square miles of vacant land in NYC’s 5 boroughs – more on our website about this.
            As for oil, former Interior Secretary under Reagan, James Watt, initiated a Fire Sale of public lands in order to get the oil companies to drill, in the 1980s, when OPEC was already ratcheting back some of the worst increases of the 1970s, or rather, our money supply had been inflated enough to meet the new price. Instead of drilling, however, the oil companies picked up millions of acres on the cheap, held them while paying a nominal “rent” for years, and then only drilled when the price was high enough to entice them. Again, there was no incentive to produce, and every incentive to hold and wait.
            There IS a difference in the raw price of oil, and its delivered refined final product version. That is what producers would keep (minus pollution taxes along the way, refinery land value costs, etc.). This would also end speculation in oil, as the tax would suck the profit out of it before it could start. In the summer of 2008, oil was $147/barrel. In February of 2009, it was $35/barrel. The demand did not drop by 3/4. Rather, the oil traders got shaken out of highly leveraged margin positions and had to cash in their futures contracts, driving oil to unnaturally low prices. The high price the previous summer was also unnatural, driven by parked oil tankers and hoarding, all untaxed to any significant degree. A resource value tax on oil would end this by making it unprofitable. Use it (oil) or pay for it would be the paradigm.
            In all cases, the market would determine the price, or if that information is unavailable, honest assessments on Land (Land is capitalized here to mean all products of nature, including location, as Land is defined in classical economics) would take over. If the price went up, the tax would go up. Cheaper locations and resources would generate less taxes too.

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