Review of

Boom Bust: House Prices, Banking
and the Depression of 2010

Marvin Morris

[A review of the book by Fred Harrison, published by Shepheard Walwyn,
London, UK. The publisher's email is: books@shepheard-walwyn.co.uk.
Also available from Barnes & Noble, US $46]

Fred Harrison's book "BOOM BUST - House Prices, Banking and the DEPRESSION OF 2010" is a superb work with touches of genius in clarifying how the speculative land problem plays a major role in cyclical depressions. I have read this book with great admiration for his crystal clear insights and marvelous ability to express himself -- and his spirited forthright ability to attack problems head on. I have been in contact with the author by mail and phone.

His background includes a career in investigative journalism ending as Chief Reporter of a Fleet Street newspaper. He then left to work as an economic consultant. This included ten years during the 1990's advising the Economics Department of the Russian Academy of Sciences and the Russian Parliament on the importance of tax reform in the transition from a command economy to a more equitable market economy. He now turns a strong focus on the failure of the past and current economic analysis and public policies. This book includes a clear and positive resolution based on his very extensive experience and knowledge pertaining to this global problem.

Fred Harrison was alerted to an 18-year property cycle by a very successful, Washington-based property speculator. His early research into this phenomenon in the UK, USA, Japan and Australia was published in his first book, The Power in the Land. Twenty years later, having witnessed his prediction of a recession in 1991/1992 come true, he now exposes the internal mechanics that periodically causes the capitalist economy to crash.

This book contains interesting charts that show the ongoing increase in land value in relationship to the cost of a residence done in Harrison's colorful way. It is hoped that this awareness will motivate people to consider the solution that is being offered. The book delves into the history of ground rent discourses. It deals with rent as site value, which is determined by the value of the infrastructure services and its benefits (services not provided by the titleholder). The book refers to several of the major world protagonists over a considerable time in history and their quotations which support land rent or site value legislation. These include Winston Churchill, Leon Tolstoi, Sun Yat Sen and Andrew Jackson. It includes legislators and political parties in England and other countries now giving this serious consideration.

The emphasis in government today is to maximize the acceleration and growth of the nation's income as the guideline for the country's economic welfare and stability. This releases politicians from the responsibility for the persistent failure to confront the power that is in the hands of those who control the land and rental income. There is a need for the population to understand the need to recognize rent as a reflection of the value of infrastructure services and should be collected at point received -- the benefit, in part, being lowered income taxes, reduced taxes on home and business structures and very possibly the elimination of sales taxes

HOW DOES OUR TAX SYSTEM WORK TO MANIPULATE THE BOOM AND BUST CYCLE?

Governments stealthily intervene in our lives through the medium of rent. The size and the distribution of rent (net rent after taxes) are manipulated through the tax system. The partial retention of ground rents rewards those who choose to speculate -- resulting in capitalization of the untaxed portion of the rent. This is the equivalent of selling the rights to claim the net rent. This capitalization is the value of the rights to claim the value of what the government is losing. The author's conclusion is that by collecting proper and adequate land rent to cover infrastructure services there will be a vast reduction on income taxes, reduction or possible elimination of sales taxes, much lower prices for the combination purchase of house and land, a definite reduction in sprawl and its pollution caused from extra car mileage, less corruption in government, a giant step toward balancing the budget, and much more funding available to meet the social needs that the government is now providing with much more private and corporate funds, new construction and more jobs. Fundamentally, with the above and lesser taxes paid from wages and interest will be an uplift in purchasing power to aid our economy -- with stability and growth.

THE EDITOR'S EDITORIAL

Many of our cities, states and possibly the federal government are now face to face with bankruptcy. Some are already in bankruptcy. There is growing debt along with job loss, income loss, eroded savings, uncertainty, mental and emotional strain and much more. The future looks ever more bleak unless we get down to fundamental causes, and learn to right the direction of the Ship of State, study it, act on it and "just do it". The National Chamber urged its members to seriously consider this specific plan and devote all possible resources using educational materials for the Two Tiered Tax. We are like a jar with a hole in the bottom - trying to fill it leading only to frustration, dealing with the complexities in patchwork fashion (trial and error), fighting waves fruitlessly, and they just keep relentlessly coming...This reminds me of the autoimmune system fighting itself.

The Two-Tiered tax contains the very base element of a fair and practical plan. This can be installed promptly - no studies need to be done (they have been done already), the fundamental cause already clarified. The current existing tax needs only to be modified and is similar to a car motor being shifted to higher gear. This is solid rock on which to build. This simple procedure reduces the complexity, planning time and cost for both the tax payer and the IRS tax collection service when adequately applied. It has been strongly supported by Winston Churchill (who 4 times proposed it to the parliament), Leon Tolstoy, Howard Samuels, who ran for governor - and was head of the Small Business Administration, Carl Madden, Executive with the U.S. Chamber of Commerce, and Perry Prentice, Vice President of Time, Inc., who was the rapporteur of the National Consensus in this presentation, and many other prominent people. For those who are favorably impressed with the truth and impact it is suggested that you forward this website to friends, business and professional people, and legislators and others who are sharply aware of the precarious positions in which we are living daily. (This is an example of "just do it".)