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There was an article in Reason this week criticizing legislation against letting investors buy multiple houses, typically to rent out, and I agree with the article as far as it goes. Investors are not creating a housing shortage this way, nor making it much more difficult for people who want to buy homes, typically with mortgages, to do so. To the extent that they may possibly drive up house prices, that creates an incentive to build more houses, preventing the price increase from becoming very severe.

However, as a Georgist, I also believe that Senator Elizabeth Warren is onto something, although, not being a Georgist, she doesn’t really understand what. There is an issue with investors buying up land, specifically the land under houses. Doing this does not lead to the construction of more land, and therefore makes homes (land and buildings) more expensive for those who want to buy them.

There’s an article in Reason about California’s proposed tax on the wealth of billionaires, which would tax assets, not current income. The whole article is worth reading, but something which particularly struck me was the statement that covered assets “exclude real property and some pensions and retirement accounts.” Almost fifty years ago, California voters enacted Proposition Thirteen, which cut the property tax, and in particular slowed the rise of assessments on property which remained held by the same owner; the assessed value could still rise when a new owner bought the house and ground.

And now this. Suppose that billionaire Brendan is a descendant of a nineteenth century robber baron who acquired vast landholdings in California by means best not examined too closely; Brendan still owns land worth a fortune, and collects the rents. His landed estates would not be hit by the billionaire tax.

Billionaire Bernard started with much lesser advantages, but had a good idea, helped start a firm in Silicon Valley, worked hard, and is now quite rich, owning a major share of a productive business. His shares would be taxed, and if he controls part of the company by owning preferred stock, his preferred shares would be taxed at more than their actual market price. Productive Bernard would be mulcted, and may even now be moving to another state to avoid the threatened tax.

If California were to learn from the Prophet of San Francisco, it would instead tax land values; Brendan would not be able to respond to such a tax by carrying his acreage to Texas or Florida or Idaho.

And now, I hope to get back to sleep.

Slate magazine has a book review of The Land Trap, a book by Mike Bird. Mr. Bird may not be a Georgist, strictly speaking, but what he writes about how land speculation contributes to economic instability seems to resemble what the late (Georgist) Professor Mason Gaffney and others have tried to tell the world for many years, and, according to the review, the book does include an account of the thought of Henry George.

Judging by the review, Mr. Bird favors taking land by eminent domain for housing projects, as has been done in Singapore. I believe on several grounds that this would be less good than simply taxing all land on its rental value, but if nothing else, this book may help get Georgist and and Georgist-adjacent ideas into mainstream circulation.

Reason magazine’s Liz Wolfe writes, inter alia, about families having fewer children, quoting the New York Times as saying “The number of New York households with three or more children has dropped by nearly 17 percent over the past decade, according to an analysis of census data by the Center for an Urban Future, a think tank.”

Ms. Wolfe then writes (I have added emphasis): “Reading the piece, there appears to be two almost entirely separate issues: New Yorkers’ unreasonable expectations (one mom bemoans how she hosts birthday parties with homemade cakes at the local playground, contrasting that with lavish vacations taken by other parents in the neighborhood) and the fact that there are real cost-of-living issues, primarily of the real estate variety (‘43 percent of units with three or more bedrooms have been occupied by the same tenants for more than ten years’ with median asking price of $1.8 million for three-bedroom and three-bedroom-plus homes). These are two totally separate problems that too frequently get bundled together.”

Those three bedroom homes probably do not involve over a million and a half dollars worth of bricks, plumbing fixtures, and labor; the high prices are chiefly for the land. Naturally, occupying much space in NYC will cost more than having the same space in a small town in Tennessee, but prices are higher than they need to be. Taxing the value of the land would keep the selling price from being so high, and enable other taxes to be cut. Then, among other things, at least some families could afford an additional child.

On Tuesday, September 2, Henry George’s 186th birthday, I put on my Henry George Sesquicentennial tie, and went around wishing the people I saw on my perambulations a happy Henry George Day. I managed to talk a bit with a few of them about the man and his ideas.

I also scratched off some numbers from a Virginia lottery ticket which I had bought a few days before the big day; then I scratched off more on Wednesday and Thursday. I didn’t win any money to donate to Georgist organizations, though, so I am making an appeal: if you think that we should tax the idle rich more and the producers lest, if you think that people should be taxed on the basis of the special privileges which they receive, in particular the privilege of owning land, rather than on what they achieve by their own efforts, then consider making a donation.

In particular, you can donate to the Center for the Study of Economics, https://urbantoolsconsult.org. Checks can be mailed to P.O. Box 400, Collingswood NJ 08108. If you have business before the Patent Office, if you are a fellow federal employee, or if it would be otherwise improper for me suggest that you make a donation, this does not apply to you.

Among other things, the CSE is involved in Baltimore, where Baltimore Thrive is trying to reform the city’s property tax, to tax land more and buildings less. They have also exposed problems with current assessments. A small, not very valuable house is assessed at tens of thousands of dollars for the house. Additionally, there can be an assessment of nine thousand dollars or so for the land under the house, while vacant lots in the immediate vicinity of the house are assessed at around three thousand dollars in land value. This is a disgraceful screwup, benefitting out of town land speculators at the expense of working class homeowners. (The assessments are done by an agency of the State of Maryland; also, the Maryland Legislature would have to pass enabling legislation for the city of Baltimore to go two-rate, although I believe that other jurisdictions in Maryland already have that option.)

One of my friends, Alanna Hartzok, has been trying to organize a Georgist Speakers’ Bureau, and we held a Zoom meeting on Saturday to discuss it. There are people who are willing to go speak to groups that have any interest in hearing us; I mentioned that I may retire in a few years, and then have more time to devote to Georgist activism, although less money to donate to Georgist organizations. The discussion was interesting; for example, there is a Georgist subreddit, and there are Georgists out there who are not plugged into the movement, what there is of it; they’re not members of Georgist organizations, and they’re mostly not lobbying their mayors, city councilmen, and state legislators to enact Georgist tax reform.

Also, when Alanna asked who said that all that is necessary for the triumph of evil is for good men to do nothing, I chimed in, “Edmund Burke.”

“They were belted barons led by a mitered archbishop who curbed the Plantagenet with Magna Charta; it was the middle classes who broke the pride of the Stuarts; but a mere aristocracy of money will never struggle while it can hope to bribe a tyrant.” — Henry George, Progress and Poverty, Book X, Chapter 4, “How Modern Civilization May Decline”

It is to some extent all too understandable that billionaires like Bezos, Zuckerberg, and the Muskbrat are now being respectful to Donald Trump. A big businessman who openly opposes a corrupt and vengeful president would risk various federal agencies waging lawfare against him and his businesses, perhaps not only trimming his own fortune, but even putting him out of business, and harming many people for whom he may feel responsibility.

I think that Henry George is well worth reading and rereading, yet someone who refers to Progress and Poverty, especially the chapter from which I quoted, may object that we are not in the straights that George feared; we have a substantial middle class, and our society is not divided between plutocrats and the wretchedly poor. That is surely true to some extent, and yet an article in Slate discusses housing as our biggest economic problem, and reports that the shelter index has been rising for 56 straight months. Unfortunately, the authors do not associate the housing problem with land prices, and do not advocate George’s remedy. Upper middle class families who own their homes, and can leave their children an inheritance from these homes or other investments, to a large extent derived directly or indirectly from land, can give their children a good start in life, and wealth to help their own children and grandchildren; people who don’t own valuable real estate largely cannot.

People don’t have to be starving, and don’t have to have studied Georgist economics, to feel that something has gone wrong, and to feel that things need to be set right somehow, which I believe has contributed to the politics of the last decade. Unfortunately, neither the leftists nor the Trump fascists have a good understanding of the land question, and how it contributes to growing inequality and economic instability.

I attended the Common Ground USA membership meeting Sunday evening via Zoom. Georgists have been trying to get Baltimore to switch to a two-rate or, ideally, land-only property tax, which would require authorization from the Maryland Legislature, although other jurisdictions in Maryland could enact such a property tax reform if they so chose. Perhaps we could get Cumberland interested. Also, assessments are sadly imperfect in Baltimore, with vacant lots typically assessed at much less than lots which have buildings on them. Even with poor assessments, land value taxation can spur redevelopment, but it is much better to have accurate and up-to-date real estate assessments.

The mayor of Detroit tried to get land value taxation there, but the Michigan legislature, whose approval was required, voted it down. Al of the Republicans and a few Democrats opposed it. The mayor will now run as an independent candidate for Governor of Michigan; we’ll see what comes of that.

We also discussed upcoming conferences, at which we hope to meet people and get our ideas into circulation.

Today is Henry George Day, the great economist and reformer’s one hundred and eighty-fifth birthday, so I wore my Henry George Sesquicentennial tie, and, when outside my apartment to get some exercise or run an errand, I wished people a Happy Henry George Day, and if they were receptive, talked with them further. One man said that as a free trader, he was familiar with Henry George, although he hadn’t known the man’s birthday. Several other people showed some level of interest, or at least politeness, and let me tell them that they could read George’s books, or at least look up his name, and “land value taxation.” One man whom I approached announced, sua sponte, that he would Google Henry George.

This is a vacation day, but I did spend some time working, considering prior art references listed in an Information Disclosure Statement for the patent application I’m currently working on. As I once said to an attorney who telephoned my office, and was surprised to find me actually at work rather late (I think it was either on a Friday or the day before a federal holiday), “You know how famously dedicated and hardworking we federal bureaucrats are.”

I bought a couple of scratch-off lottery tickets the other day (I had intended to buy one, but failed to pay attention to the notice, “This machine does not make change”). I would scratch off a number when I finished considering a prior art patent or other document. So far, I haven’t found any prizes, so I’ll make an appeal: If you think that we should spare people from paying income and payroll taxes on the work they put in, if you think we should not make rental housing more expensive with a property tax on buildings, if you think that we should charge people according to the value of the land they occupy, the pollution they release into the atmosphere, and other uses of resources not created by human effort (the electromagnetic spectrum, for example, if you favor a tax reform to charge the poor less and the rich more, without punishing the productive rich for their accomplishments, then please consider donating to the Center for the Study of Economics, urbantoolsconsult.org.

There is a donation button on the website, if you want to pay by card, PayPal, Venmo, or Google Pay; you can also mail a check to Center for the Study of Economics, P.O. Box 400, Collingswood, NJ 08108. This does not apply to you if you have business before the Patent Office, if you are a fellow federal employee, or if it would otherwise be improper for me solicit you to make a donation.

Many, many years ago, I first heard of the Bohemian Grove, a private club where a bunch of rich and powerful men (I think I remember the late William F. Buckley, Jr. being a member) socialized with each other, and did whatever else they did. I did not know of its origins, or that there was any historical connection to my favorite political economist, but an article by Kevin Taylor in The Sacremento News Review has taught me some things I never knew before.. The original Bohemian Club was founded in nineteenth century San Francisco by a bunch of writers and other creative people, originally excluding rich fudds who lacked sparkling wit or other skills for entertaining their fellow club members. Facing a shortage of funds, the Bohemian Club did start admitting wealthy businessmen, and one thing led to another. The Club acquired some forested land a distance from the actual city, and so became the Bohemian Grove.

The story is of interest as part of the tapestry of human affairs and culture, but also of interest to me, because who was one of San Francisco’s leading newspapermen, writers, public intellectuals, and original members of the Bohemian Club? That’s right, the political economist Henry George.