Texas Worker

By Greg Moses

CounterPunch / DissidentVoice / TheRagBlog

From a distance the Chinese mainland appears to be snorting through the global depression like a fire-breathing dragon. But a closer look at internet discourse reveals a giant in the throes of aftershock. When we hear tones of irritation from Chinese officials regarding “dollar problems” we could on the one hand consider their pain.

On the other hand, whether you are listening to pro-dollar or anti-dollar partisans today, there is an eerie agreement between Marxist and Friedmanite alike that return on capital is the main thing. What we need to hear more often from both sides of the global mouth is how capital will only grow through labor.

With the help of Google translate, the average monolingual yankee can cross the ocean and listen to the official pronouncements of ministers for the Communist Party of China (CPC) who have a thousand throats exhorting the masses to keep on the scientific path.

What the scientific path sounds like in China today is a lot like what you hear weekdays over the chatterbox at the Capitalism-Knows-Best Channel (CNBC). For instance, the Chinese “socialist market economy” is being redefined scientifically into a “modern market economy under rule of law,” which is exactly the way they like it at CNBC.

From both sides of the Pacific you get pretty much the same news: double-digit downturns in profits across the board, dozens of gigantic projects suddenly scrapped and unplugged, trade routes collapsing, pages snatched from memories of capitalism past, the better to remind us how to survive.

Even on the question of climate change there is a convergence of policy conviction that “the construction of ecological civilization” will help our damaged economies to “cope with the international financial crisis” through the material re-production of green technologies.

Tuning into the thoroughly capitalized culture at CNBC—coming at you “live from the financial capital of the world”–bust is generally accepted as the price of boom. Mad Money man Jim Cramer said recently that if the stock market were to take another 150 point dive on the S&P 500 Index, investors from the boo-yah land of Cramerica could consider it a gift–”A GIFT!!”

But over on the Chinese mainland, ministers seem to be talking to masses who haven’t quite learned how to appreciate the opportunities of economic collapse. This is the time, say the ministers, to vigorously seek innovations in technology, reconfigure business models, bury dead capacities, and evolve the community through decisive calculations of “M&A.”

In the chatter of Chinese ministers sounds a worry that the “socialist market economy” could come out of the economic crisis fatter than it needs to be and therefore vulnerable to all the lean dogs that global capital is breeding as we speak.

Of course every Wal-Mart shopper knows how much is owed to the enormous Chinese factories that punched out a dozen or so shopping seasons. But Chinese ministers know better how the tiny “Made in China” labels were not attached to Chinese-branded logos. And whereas the great logos of the global economy will likely recover on top of factories somewhere or anywhere (thank you Naomi Klein) there is no guarantee that the factories of China will be serving the logo powers next year.

There is enough worry to go around. In the USA we don’t know if the unemployment numbers will stop in time to provide the baby boom a respectful retirement. In China, the ministers don’t know if plants and projects will stop shutting down in time to prevent a more colossal sacrifice in capital spending.

Matching the positive image of the Chinese minister atop his nearly $2 trillion mountain of dollar reserves is the precise negative image of the average American consumer down in his valley of debt. And where the images should be joined at the middle term is across the rubbed glass surface of the Wal-Mart check-out counter, courtesy of MasterCard and Visa.

Of course, there was a time not too many months ago when the era of dollar-fed arrogance seemed to be stalking the world with unchecked power as “dollar hegemony” rolled around the globe with tsunami force. These days however the dollar gets pulled up off its knees by other currencies at the most curious times, exactly in moments when the whole flow of things seems to shudder with collapsing pipes.

What the dollar needs most right now is a national emergency declared in behalf of jobs. Enough diddling with yield curves and balance sheets already. Whatever it takes, we need folks back at work. Until we are busy creating value through labor, every dollar will stay busy shrinking.

Which brings us to the final correspondence between CNBC and the ministers of China. By and large all these voices fail to inflect the urgency of the single outcome that will count most toward economic health–getting everybody back to work. If you are holding a pile of dollars the immediate question should be how to transform that cash into tools of productivity for workers of the world. Wealth today is paralyzed from not knowing how to become productive. This is the real problem.

So whether you grew up on one side of the Pacific listening to warnings about the Midas touch or you grew up on another side of the Pacific sneaking lessons from Mencius you should know. When you mistake the real value of human economy for dollars, gold, or profit, you shall kill the order of things.

Something about the discourse of crisis is chilling to the ear. Neither side of the ocean is talking early or often enough about how to forge wealth into tools that can be put to work. There is still time perhaps to put jobs first.

I was happy to read your article in CounterPunch where you explain and recommend the Georgist tax shift to land values. I just wanted to introduce myself, as former president of Council of Georgist Organizations and as UN Representative for the International Union for LVT. With funding from the UN Global Land Tool Network, the IU and the Schalkenbach Foundation I completed production of an online course on Land Rights and Land Value Capture that now has registrants from 43 countries. It is here: www.course.earthrights.net.

–Alanna Hartzok, author of The Earth Belongs to Everyone, and co-director of Earth Rights Institute, which also works for ecological village development worldwide.

By Greg Moses

DissidentVoice / CounterPunch / TheRagBlog

It’s a wistful headline, I admit. But it covers a considerable hope.

The Austin-Round Rock metropolitan area was nearly alone among USA cities for its ability to report year-over-year job growth in April, 2009 (up by 3,400 jobs). And it was the only major metro area (out of 38) to report an increase in the employment rate (+0.4 percent). To believe that this slim green shoot is the first sign of economic Springtime in America requires a bit of the Oat Willie determination to go “Onward thru the Fog.” Which, actually, is what I intend to do.

But first a note: more notice should have been given to Odessa-Midland which, unlike Austin-Round Rock, gets split into two separate metro areas. Odessa employment was up by 1,800 over the year, while Midland was up by 1,500. Why these sister cities don’t get hyphenated into a single metro is curious….

Still, these Texas numbers look like boutique novelties in a warehouse of national economic crisis. The volumes are crushingly large. Los Angeles has lost 240,000 jobs, the New York metro area is down by 234,000. Chicago down 190,400, Detroit down 143,400, Phoenix and Atlanta down by 129,700 and 123,600.

How all these jobs will get re-started is not easy to see. Where are the new paradigms of labor to come from?

Stock watchers are reading reports about large dollar supplies stored up by investment managers and standing ready to flow back into a wary market of stocks and bonds as soon as things get more steady. But the dynamic reminds me of Truman’s exhortations on fear. Don’t things continue to fall harder the longer the investment managers wait?

In some circles one hears a constant drumbeat for buying gold, which may be a way to own something that won’t crash in value this year. But what use is gold, really?

In the great classic of American political economy, Progress and Poverty, Henry George defines capital as that part of wealth which is put back into productive use. He encourages a view of capital as something which enables labor to be more productive and he therefore discourages taxation on capital.

Taking a Georgist view, I would think that gold is wealth that serves very little productive purpose. To the extent that gold is a way of holding some savings for retirement or rainy days, I don’t see how it should be valued much differently than any other form of savings.

But to the extent that gold is hoarded up as a pile of fear, doesn’t it become its own effect, pulling wealth out of productive equity investments, drying up more jobs, etc.?

From my armchair view of internet chatter, it seems to me a wise thing for policy makers to devalue the dollar in the near-term as a means of coaxing cash into markets. But if devalued dollars simply get transmuted into gold shares, then the alchemy gets dark.

A Georgist approach to systemic reform begins with tax policy. Capital and labor should be taxed last. Then property values should be clearly divided between improvements and the land they rest upon. Let the improvements also move to the back of the tax line. This leaves land value at the head of the line for taxation.

George’s reasons for land tax could be summed up in a Kudlow motto: “tax it and you get less of it.” But with land, there is no danger of taxation reducing the supply, there is only the promise of land monopolists unloading every acre that they are not already putting to productive purpose.

Thus, under the Georgist model, the land tax — as the only tax — could never result in an absolute decrease in land supply. The land tax would only tend to decrease the amount of land that is held, like piles of gold, for unproductive use. As for gold and other means of piling up unproductive wealth, I can’t see right away why a tax on such things wouldn’t hasten the development of a more productive economy for all.

George says that supply and demand are misleading terms to use when trying to understand the causes of the unemployment cycle. Workers are not quitting their jobs because they have earned all they need. They are not refusing to produce or to consume. We never have all we want, and the example of Austin in April proves that we are ever willing to earn the next leg up. So why do so many workers find themselves at massive rates closed out of productive opportunity?

The problem lies at the door of unproductive wealth, because there is still plenty of it. Yet for some reason unproductive wealth is encouraged and allowed to pile up, even sometimes as an excuse for “real value.” If we taxed land, unproductive wealth, and gold supplies, I wonder, wouldn’t we quickly motivate and incentivize tons of wealth into capital that would eagerly call for full employment now?