Friday, October 31, 2008

An Open Letter to Our Next President

Dear Next President, whoever may win this election:
Prepare ye this day for the monumental challenge of the century, our economy.  For this, I have two suggestions.
First, converse with a few real estate salespeople.  Take note of the many times they recite the ever-popular real estate mantra, "The three most important things about a location are location, location, and location."
Next, read the nineteenth-century book Progress and Poverty by Henry George, which explains what all this location business is all about.
You see, all human activities, without exception, have one thing in common, that is they require a location.  At a minimum, in order to do anything you have to be someplace while you are doing it.  Some locations are better than others for certain activities.
It should come as no surprise, therefore, that all meaningful investments contain a major component consisting of the market value of their location.  The influence of land speculation artificially jacks up this location value component, making the entire investment appear more valuable than it really is, thus we end up with investment "bubbles" of various sorts.
When the location value component reaches a certain point, land usage patterns become less dynamic because of the greater amount of money that needs to be borrowed for a land sale, thus decreasing the efficiency of industry and leading to economic stagnation.
Mr. McCain, your party has traditionally believed that the Invisible Hand envisioned by Adam Smith will, if government simply butts out, magically cause more wealth to be created.  How do you expect this to happen if the Invisible Hand is chained to the dungeon wall of land speculation?
Mr. Obama, your party has traditionally believed that there's plenty of wealth and all that's needed is equitable distribution.  If you redistribute wealth from the rich to the poor, how do you propose to prevent the forces of land speculation from re-redistributing it back to the rich?

Mr. Next President, whichever of you should win, you've got your work cut out for you!

Tuesday, October 14, 2008

Same-sex Marriage

It's time for me to present my opinion of same-sex marriage, a topic of which I know nothing, so I'll freely admit that my own opinion is total hogwash.
I know nothing about gay people, so I have no idea whether the institution of marriage is right for them.  That's for them to decide.  I'm not qualified to deny them something that might or might not work for them.
All arguments I've ever seen against same-sex marriage appear to fall into three categories: first, it's not the way we imagine marriage was done a thousand years ago therefore we can't do it now; second, somebody's religion says homosexuality is an Abomination Unto The Lord (or some such theological jibberish); and third, extending marriage to a new category of people will destroy it in some vaporously unfathomable way.  I consider all these arguments utterly spurious.
Now I'll admit that same-sex marriage is quite a jolt to my concept of what's usual, but I see no material harm in it.  Now I realize that the institution of marriage has been custome-fine-tuned for the benefit of opposite-sex couples, but whether or not it would be workable for same-sex couples is something only gay people can decide.  If we let them try it, and if they try it, and if they find it doesn't work for them, then fine, they'll at least have the opportunity to find out for themselves whether they can make it work.
I suspect it'll be quite a few years before Maryland considers legalizing same-sex marriage, but if it ever does come up for a vote during my lifetime I'll vote for it.  I'm not qualified to vote against it.
Now, whether same-sex couples should have children either by adoption or by donor insemination depends on how the children will be raised.  That's a topic for sociologists to examine scientifically, and that's outside of my field of expertise.  I'll abstain from presenting any opinion.

Monday, October 13, 2008

Terrorism or Religion?

Suppose a headline reads, "Hoodlums smear bloody gang symbol on government property!"
Wouldn't we be outraged?
Well, what if the "hoodlums" are nuns and the "gang symbol" is a cross?  Here's the story.
It appears that religion is receiving a special privilege here.  Tax exemption is another special privilege.  The right to ring those out-of-tune gongs in church steeples on Sunday morning without getting arrested for excessive noise is another special privilege.
And in my community, every year at noon on Good Friday, a group of Episcopal and Catholic priests and parishioners block traffic for a cross-carrying parade without bothering to get a parade permit.  They've never been arrested.
The first of the rights promised in the First Amendment is freedom of religion.  To me, that means freedom to practice your religion, not freedom to annoy other people with your religion.
Now, what do you make of our religious politicians?  It doesn't bother me a bit for politicians to be religious.  What bothers me is that they fall all over each other trying to prove how religious they are in order to get votes.  That's not a reflection on the politicians' integrities, it's a reflection on the moronic mentality of the American public.
If an atheist, or a Hindu, or a Muslim, or a believer in Zorb the Sacred Crocodile were to run for public office, he'd barely get a vote, no matter what the superiority of his qualifications may be.
Now, I'm all for freedom of religion.  But I'm not for special privileges for religion.

Monday, October 6, 2008


When sane and rational people try to bail out a sinking boat, they bail the water out.  When our fine government economists get in on the act, they bail more water into the boat.
Here's what appears to be happening.  Banks loan money to homeowners to buy houses and the land the houses are sitting on, and to businesses to buy business equipment and the land to locate it on.
When the forces of land speculation raise the prices of land, more of the money loaned goes to buy the land instead of the houses and business equipment.  It becomes more expensive to become a homeowner or home renter, and more expensive for a business to start up, expand, or relocate.
So land speculation becomes a sort of Ponzi scheme which can only go so far.  There comes a point at which home ownership becomes impossible for most people, and at which businesses can no longer be profitable, and whoever has bought a piece of land at the latest price, expecting to make a profit when the price goes even higher, is left holding the bag.  If the landowner defaults on the payments, the bank is left holding the bag.
Now, business stock prices are based, in part, on the business's total assets, including land.  If land prices get to the point where further rise is impossible, stock prices tumble, leaving the current investors holding the bag.
So, along comes Big Daddy Government with seven hundred billion dollars to buoy up the banks so they can stay in business to loan even more money and enable land speculation pressures to jack the price of land up even higher, thus imposing even greater burdens on homeowners, home renters, and businesses.
Nobody seems to be noticing that the only people profiting are the financial institutions loaning money to land speculators, and to those few land speculators lucky enough to sell before the Ponzi scheme crashes.
You'd think we ought to bail water out of the sinking boat by taxing the location component of land values, not pouring more water in by funding increased land speculation.  Such a tax, gradually imposed, could eventually replace portions of our current taxes on income, sales, imports, and property imporovements.
I'm not sure any of our current leading presidential candidates ever heard of such a thing.  Well, maybe Dennis Kucinich and Ralph Nader, but they seem to be out of the running at the moment.