Re: how does economics explain stagflation?
- From: "anon" <me@xxxxxxxxxxx>
- Date: Sun, 8 May 2005 17:24:45 -0400
<royls@xxxxxxxxx> wrote in message news:4271d1c3.4921791@xxxxxxxxxxxxxxxxx
> On Thu, 28 Apr 2005 21:25:14 -0400, "anon" <me@xxxxxxxxxxx> wrote:
>>>>land rent can be seen of as a private tax.
>>>
>>> But it's not a tax like other taxes, because it's voluntary.
>>>
>>it is voluntary to a particular landlord.
>
> ?? What is? LVT or paying rent to a private landlord?
>
rent to a private landlord.
LVT remains a theoretical curiosity for now.
>>>
>>firms which can relocate "production" (work) to reduce costs, whether
>>labour, or land will do so. that is what all the outsourcing is about.
>
> No, that is of course false. Any firm could relocate out in the
> desert to reduce land costs. But they don't, because they understand,
> as you do not, that the land rent they pay for their current location
> is for the benefits they receive from government and the community by
> conducting their business _at_that_location_.
>
apart from keeping CEOs and other executives in the localities they like,
a firm has to produce, and sell. it can sell only where people have
money to buy. so the main office will likely not be offshored.
but _if_ it can produce at another place at a lesser cost, it will
move the production. if it does not someone else will.
unfortuately in an "information economy", the location of
labour does not matter much.
labour is one cost of production that is easily reduced by
outsourcing etc. the reason labour is so expensive in the
west is high cost of housing, healthcare and payroll taxes.
>>these are all making the worker uncompetitive.
>
> ?? Nope. The only reason people are willing to pay that much land
> rent is that the location gives them that much of an advantage. You
> don't seem to be very clear on the concept of what land rent is.
>
a piece of land can only be used exclusively by one person
(or entity). the price of that use is the rent. you stuff twice the
number of people in a unit area and don't increase the
housing. rent as a fraction of income goes up. the services
around the land have not changed.
how much is the advantage given by that piece of land?
that can only be decided by the market auction.
which as we know are fixed by pliant politicians in the
city council.
>>even though his
>>discretionary income is not much, the workers in India or
>>wherever can easily work for much less while getting almost the
>>same discretionary income. because the rents there are much less
>>than $1600.
>
> And the location advantages likewise just as much less.
>
i'd say the other bidders who work for the local economy can
afford less so the struck price is lower.
with just the health insurance premium cost of some employees
a firm could hire a woker in china/india.
>
> ?? And why isn't housing being built to accommodate them? Think,
> man!
>
apart from political connections of landlords, the financial system
needs collateral to continuously increase in price to allow new
debt to be created. collateral is usually land.
IMO this is why when real estate goes bust, money supply
growth can move in to the danger zone and collapse
financial confidence ( a la japan).
.
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