|Wealth and Want|
|... because democracy alone is not enough to produce widely shared prosperity.|
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Joseph Stiglitz: October, 2002, interview
Michael Hudson: The Lies of the Land: How and why land gets undervalued
Turning land-value gains into capital gains
Hiding the free lunch
Two appraisal methods
How land gets a negative value!
Where did all the land value go?
A curious asymmetry
Site values as the economy's "credit sink"
Immortally aging buildings
Real estate industry's priorities
THE FREE LUNCH Its cost to citizens Its cost to the economy
Hiding the free lunch
BAUDELAIRE OBSERVED that the devil wins at the point where he convinces humanity that he does not exist. The Financial, Insurance and Real Estate (FIRE) sectors seem to have adopted a kindred philosophy that what is not quantified and reported will be invisible to the tax collector, leaving more to be pledged for mortgage credit and paid out as interest. It appears to have worked. To academic theorists as well., breathlessly focused on their own particular hypothetical world, the magnitude of land rent and land-price gains has become invisible. But not to investors. They are out to pick a property whose location value increases faster rate than the interest charges, and they want to stay away from earnings on man-made capital -- like improvements. That's earned income, not the "free lunch" they get from land value increases.
economists insist that no free lunch exists. But
when one begins to look beneath the surface of national income
statistics and the national balance sheet of assets and liabilities,
one can see that modern economies are all about obtaining a free
lunch. However, to make this free ride go all the faster, it helps if
the rest of the world does not see that anyone is getting the
proverbial something for nothing - what classical economists
unearned income, most
characteristically in the form of land rent.
You start by using a method of
appraising that undervalues the real
income producer, land. Here's how it's done. Read the
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Wealth and Want
... because democracy alone hasn't yet led to a society in which all can prosper