Day: December 30, 2008

There Is Another Cause Of The Economic Crisis

All is quiet on the economic front, at least until 2 Jan 09…..Kuwait craps on Dow, GM/Chrysler get their minimum amount of cash, Wall Street biggies are rolling in dough and foreclosures continue to rise.  By now everyone is tired of bad news, especially economic bad news and stick their heads into the wide screen TV and prey all will get better.  The spoiled, pampered nation ignores the obvious hoping it will go away.  No one wants to admit that the situation will get worse.

Few will admit to the causes of the problems and the biggest has been ignored for long enough.  Credit is the culprit, at least that is what they want us to believe.  Personally, I see another way.

THERE IS ANOTHER CAUSE, not yet mentioned, that must be considered before we can fully explain the impact of progress on the distribution of wealth. It is the confident expectation that land values will increase in the future. The steady increase of rent in all growing countries leads to speculation — holding onto land for a higher price than it would otherwise bring at that time.

The result of land being withheld is that the margin of the city is pushed away so much farther from the center. The actual margin of building is at the limits of the city. This corresponds to the margin of production in agriculture. But we will not find land available at its value for agricultural purposes, as we would if rent were determined simply by present requirements. Instead, we find — for a long distance beyond the city — that land bears a speculative value. This is based upon the belief that it will be required for urban purposes in the future. To reach the point at which land can be purchased at a price not based upon urban rent, we must go very far beyond the actual margin of urban use.

We may conceive of speculation as extending the margin of production. Or, we can look at it as carrying the rent line past the margin of production. However we view it, the influence of speculation on increasing rent is an important fact. It cannot be ignored in any complete theory of the distribution of wealth in progressive countries. Speculation is the force, arising from material progress, that constantly tends to increase rent in a greater ratio than progress increases production. As material progress goes on and productive power increases, speculation thus constantly tends to reduce wages — not merely relatively, but absolutely.

Speculation–It leads to land being withheld from use, as higher prices are expected. Thus, the margin of production is forced out farther than required by the necessities of production. As landowners confidently expect rents to increase further, they demand more rent than the land would provide under current conditions.

The price of land has been a major contributor to just about all our recessions and such.  When one acquires land to hold for higher prices–then that is speculation.  There is a way to control speculation, but the question is, does anyone really want to stop the cycle of boom or bust?  Thanks to American economist Henry George that answer is Land Value Taxation.

War Comes To Gaza–Day 4

Palestinian militants sent a deadly barrage of missiles flying deep into Israel on Monday, demonstrating that Hamas still had firepower three days into Israel’s punishing air offensive in Gaza. Three Israelis were killed and two seriously wounded. Palestinian health officials put the three-day death toll in Gaza at 364; the U.N. said the total included at least 62 civilians.

In Monday’s attacks, Israel focused its bombing on the houses of Hamas field operatives in a campaign meant to tear at the roots of the extremist group ruling Gaza. Israel’s defense minister promised a “war to the bitter end against Hamas” and allied militants.

Intensified rocket strikes by Gaza militants, which triggered the Israeli offensive, have revealed the expanding range of missiles that are making larger cities farther inside Israel vulnerable.

In a barrage Monday night, a missile crashed into a bus stop in Ashdod, 23 miles from the Gaza Strip. A woman died and two others were wounded, one seriously — the first casualties in the city of 190,000 residents.

Israel’s offensive has rattled the Middle East and capitals around the world, triggering street protests and fiery speeches by adversaries of Israel like the militant group Hezbollah in Lebanon. In the day’s biggest outpouring of anger, tens of thousands of Hezbollah’s supporters stood in a pouring rain in a Beirut square to condemn Israel.

Stone-throwing clashes broke out in about a half-dozen spots in the Palestinians’ West Bank territory as well as in several Arab-populated areas inside Israel. Israeli police and soldiers fired rubber bullets and tear gas at rioting youths, but it did not appear anyone was injured.

U.N. Secretary-General Ban Ki-moon condemned Israel’s offensive as excessive and demanded an immediate cease-fire. He said key international and regional players — including foreign ministers of the Arab League nations holding an emergency meeting Wednesday — must “act swiftly and decisively to bring an early end to this impasse.”

He Will Be Tested

That was the prediction of Biden in one of his speeches, so far looks like a fairly accurate prediction, at least from where I sit.  India, Economics, Israel and then there is Iraq, Afghanistan and finally Iran…..now if I had to guess I would say that is a full plate on day one.

Israel’s continuing attacks on Gaza serve as a reminder that President-elect Barack Obama and his nominee to be secretary of state, Hillary Rodham Clinton, will not get to choose the world they inherit Jan. 20.

The incoming administration had planned to focus on the economic crisis and recalibrating U.S. policy in Iraq and Afghanistan in its early months — but the Israeli assault on Hamas may have instantly changed that calculus.

Obama’s views on the Israeli action remain opaque. Even as the attack continued into its third day Monday, with a Palestinian death toll topping 300 and Israel threatening a ground invasion, Obama had yet to say a word about the crisis, on the grounds that President George W. Bush (who has also been silent) must take the lead.

There were growing signs Monday that the air strikes — which came in response to increased rocket fire from Gaza, which is governed by Hamas — could be accompanied by a ground incursion. Israel’s leaders signaled that this could be an extended conflict, while emphatically denying any intention of reoccupying the independently governed territory.

Though both sides in the Middle East are intensely aware that this battle will establish facts on the ground in the region for the new administration, Obama’s advisers have sent only vague signals, with David Axelrod on “Face the Nation” Sunday calling Israel a “great ally” and citing America’s “special relationship” with the Jewish state.

A well-worn geopolitical cliché holds that every crisis contains an opportunity. But for Obama — a president-in-waiting who faces daunting dilemmas across the domestic and foreign policy spectrum — the Israeli crackdown on Hamas seems unlikely to do anything but complicate his approach to a region that he had clearly hoped to keep low on his to-do list for awhile.

Israeli leaders see the faint possibility that, on one hand, the attack could weaken and further isolate Hamas and its sponsor Iran, paving the way for a return of its more moderate rivals. But that was also one of the goals in the 2006 invasion of Lebanon — an action many believe only served to strengthen Hezbollah.

Some observers who are more sympathetic to the Palestinian cause think the conflict could clarify the depth of Hamas’ support and lead Obama or his allies to bring them to the negotiating table. But the early consequence of the attack has been the collapse of peace negotiations between Israel and both the Palestinian Authority and Syria, and analysts on both sides say the likeliest consequence is an increasingly bitter and intractable conflict.

The new President had better hit the ground running or events will pass him by and allow plenty of openings for the opposition to attack.

Barack, The Magic Negro

Controversy is stirring among some of the nation’s highest ranking Republican officials over a Christmas gift given out by one of its own.

Some say it is a funny gift, while others say it is offensive. Former Tennessee GOP Chairman and candidate for RNC Chairman, Chip Saltsman, sent members of the Republican National Committee a holiday CD featuring a racially charged song about president-elect Barack Obama.

“Barack the magic negro lives in D.C.,” the song starts out singing.

Saltsman says the song entitled “Barack the Magic Negro” from the “We Hate the USA” CD is meant to be funny, not offensive.

“He make guilty whites feel good,” the song continues to sing.

Republican National Committee Chairman Mike Duncan, from Inez, says he doesn’t find the humor in the song. Duncan released this statement saying he is “shocked and appalled that anyone would think this is appropriate as it clearly does not move us in the right direction.”

Some people we spoke to agree with Duncan, saying the lyrics are inappropriate.

“I don’t think it’s funny at all. I think it’s sad,” Jeremiah Ford of Leslie County said.

“For him to do this, it’s not amusing. It’s just not amusing,” Penny Ford of Leslie County said.

“I think for a representative of Tennessee to send something like that out is just asking for trouble,” Jeremiah Ford said.

Others say they enjoy the political satire.

“Lighten up. Have a sense of humor,” Bobby Morgan of Leslie County said.

Saltsman declined an interview, but wrote a blog on his website saying the negative reaction by party members is just quote “a desire for scandal.” Saltsman managed the presidential campaign for former Arkansas Governor Mike Huckabee and held several positions under former Tennessee Senator Bill First.

Is not Tennessee the place that Rep. Harold Ford was beaten by a Repub with a racially charged attack?  Repub are doing a fine job of finishing the party off.  They have no leadership, no direction and they want new members–fat chance, but if they are gonna find members, the South is the perfect place to look for racists.

Taleban Continues Activity In Pakistan

Taliban militants are beheading and burning their way through Pakistan‘s picturesque Swat Valley, and residents say the insurgents now control most of the mountainous region far from the lawless tribal areas where jihadists thrive.

The deteriorating situation in the former tourist haven comes despite an army offensive that began in 2007 and an attempted peace deal. It is especially worrisome to Pakistani officials because the valley lies outside the areas where al-Qaida and Taliban militants have traditionally operated and where the military is staging a separate offensive.

The Taliban activity in northwest Pakistan also comes as the country shifts forces east to the Indian border because of tensions over last month’s terrorist attacks in Mumbai, potentially giving insurgents more space to maneuver along the Afghan frontier.

Militants began preying on Swat’s lush mountain ranges about two years ago, and it is now too dangerous for foreign and Pakistani journalists to visit. Interviews with residents, lawmakers and officials who have fled the region paint a dire picture.

A suicide blast killed 40 people Sunday at a polling station in Buner, an area bordering Swat that had been relatively peaceful. The attack underscored fears that even so-called “settled” regions presumptively under government control are increasingly unsafe.

Tensions are rising, no presidential leadership and a very Happy New Year(sarcasm).