DOCSLIB.ORG

2010 the Inquest Other Works by Fred Harrison Include

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
2010 the Inquest Other Works by Fred Harrison Include 2010 The Inquest Other works by Fred Harrison include: THE PREDATOR CULTURE (2010) THE SILVER BULLET (2008) WHEELS OF FORTUNE (2006) RICARDO’S LAW: Housing & the Great Tax Clawback Scam (2006) BOOM BUST: House Prices, Banking & the Depression of 2010 (2005; 2nd edn 2010) THE CHAOS MAKERS (1979, with Frederic J. Jones) THE POWER IN THE LAND (1983) 2010 The Inquest Fred Harrison Copyright © Fred Harrison 2010 This first edition published in Great Britain in 2010 by DA Horizons 978-1-905108-82-4 The right of Fred Harrison to be identified as the Author of the Work has been asserted by him in accordance with the Copyright, Designs and Patent Act 1988 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means without the prior written permission of the Author Available from Discovered Authors Online – All major online retailers and available to order through all UK bookshops Or contact: Discovered Authors Suite 6 37 Great Russell Street London WC1B 3PP 0844 800 5214 [email protected] www.discoveredauthors.co.uk Typeset by Alacrity, Sandford, Somerset. Printed in the UK by BookForce Distribution BookForce Distribution policy is to use papers that are natural, renewable and recyclable products and made from wood grown in sustainable forests wherever possible www.bookforce.co.uk About the Author FRED HARRISON studied economics at Oxford – Ruskin, the college for “mature students”, and University College, where he read Politics, Philosophy and Economics. His MSc is from the University of London, and his doctorate is from the University of Hard Knocks while enjoying the golden days of Fleet Street. There followed 10 years of learning lessons in Russia, after the collapse of communism, during which he fought the advance guard of the Washington Consensus. Boris Yeltsin wouldn’t listen, and the Kremlin capitulated to the oligarchs. For Fred Harrison’s latest views on the global economy, read his blog on: fredharrison.com v Media Assessments “Frankly, when we first saw Harrison’s ‘Cycle 18’ discovery in the MoneyWeek office back in 2005, we thought it was too good to be true. Then we checked the facts. Everything added up. Then we quizzed Harrison ourselves. Again, everything added up. Then his 2008 prediction came true. And we really sat up and paid attention. It really is an extraordinary discovery – a potential landmark moment in our understanding of the property markets, and our ability to make money from them” MoneyWeek “Economist Fred Harrison proved to be the canary in the housing market… Nostradamus could scarcely have been more accurate” Ross Clark, Spectator Business vi Media Assessments “…those warnings were not of the ‘boy who cried wolf’ variety, but well thought out and calculated” Marc Coleman, Irish Independent “[Harrison] does make a case for the existence of an 18-year business cycle, which he links to speculation in the property market” Samuel Brittan, Financial Times “So far, Harrison’s predictions have been eerily accurate” Lee Jones, Money Marketing “…there are some fascinating insights into cycles, property and rents” John Calverley, Economic Affairs vii When we look back at the 1990s from the perspective of say 2010, the nature of the forces currently in train will have presumably become clearer. We may conceivably conclude from that vantage point that, at the turn of the millennium, the American economy was experiencing a once-in-a-century acceleration of innovation, which propelled forward productivity, output, corporate profits, and stock prices at a pace not seen in generations, if ever. ALAN GREENSPAN 13 January, 2000 Contents PART I IT’S THE POLITICS, STUPID 1 “I’m Your Worst Nightmare” 3 2 The Indictment 32 3 The Wealth Wipe-out 51 4 The Repetitive Syndrome 67 PART II SOCIAL PSYCHOSIS AND THE PRICING MECHANISM 5 The Economic Black Box 95 6 The Politics of Split Personalities 120 7 They Treat Us as Imbeciles 140 8 Statistics Calculated to Deceive 163 PART III BEYOND CAPITALISM 9 A Bankrupt Paradigm 179 10 From Séance to Science 199 11 The Last Chance Frontier 219 12 Blueprint for Growth 235 Epilogue 263 References 274 Index 279 ix PART I It’s the Politics, Stupid —1— “I’m Your Worst Nightmare” ILL CLINTON’ S winning election slogan made its mark on the minds B of American voters: “It’s the Economy, Stupid!” As a guilt shifter, that was a shrewd piece of political hyperbole. A gift for politicians who need to direct people’s anger at a faceless target. The truth, how- ever, is that our major social and economic problems are almost entirely the result of bad governance. It’s the Politics, Stupid! If I am correct, we need forensic exam- ination of the politicians who exercise the 3 power of the state, if we want to under- stand why and how Britain – and the rest of the world – fell into the severest econ- omic crisis since the Great Depression of the 1930s. As I write, in February 2010, Britain has suffered 18 months of negative growth. A recession is defined at six months of declining national income. The pain of that downturn was felt not just by those who lost their jobs and homes. Even the people who managed to cling onto employment suffered a reduction in wages, as the price of continuing to receive pay packets. And those who managed to get back into work, after a gut-wrenching spell in the dole queue, suffered an average pay cut of 28%.1 Britain was on a life support system as New Year fireworks flared over London at midnight on December 31, to celebrate the arrival of 2010. Banks, car dealers and retailers were receiving financial support from taxpayers, in the desperate bid to resuscitate the economy. It need not have happened. Because, as far back as 1997, I alerted Tony Blair and 1 The estimate is by the Chartered Institute of Per- sonnel and Development. Monaghan (2010). 4|2010: THE INQUEST his New Labour government to the fact that they had a full 10 years to prepare for the next catastrophe. I had lived through three recessions, beginning with the Barber boom/bust of 1972/74. That was when I embarked on my autopsy: I wanted to know why the people of Britain were forced to suffer these repeated bouts of mass unemployment. I published my findings in 1983: The Power in the Land. This explained why the capitalist economy was subject to violent swings, and what could be done about it. And I explained that it was simple arith- metic to work out that Britain would go into recession at the end of the 1980s (what would turn out to be the Lawson boom/ bust), hitting the bottom in 1992. The economic engine of Britain – the first industrialised country in the world – has suffered such cardiac arrests on a regular basis. Graph 1:I below registers the movement in national income back to 1830. The fluctuations appear to be random. And unstoppable. So how could I know, ten years in advance, that the economy would suffer one of its worst crises for a hundred “I’M YOUR WORST NIGHTMARE” |5 6| 2010: THE INQUEST THE 2010: ———————–——— Graph 1:I ————–——————— 1830 1838 UK GDP (1830-2010) 1846 1854 1862 1870 1878 1886 Source: Angus Maddison1894 (http://www.ggdc.net/maddison/). 1902 1910 1918 1926 1934 1942 1950 1958 1966 1974 1982 1990 1998 2006 years? And how could I be so sure that it could be prevented? My warnings were specific. In The Chaos Makers, published immediately after New Labour’s election victory, I described the economic trajectory that was pushing Britain towards the following crunch points. • Property prices would peak in 2007: they did. • The crisis would be triggered by break- down in the housing market: it was. • The economy would hit the bottom in 2010. Output of national income went negative in the second quarter of 2008, and flattened out in the three months running up to Christmas 2009. Anaemic growth restarted with the Christmas sales that were dragged out into February 2010. The historical evidence on which I based my forecast is overwhelming. But there was something unique about the cycle that ended in 2010. The real estate sector of every country in the world was integrated into the same timetable. That meant one – terrible – prospect: a freefall in the global “I’M YOUR WORST NIGHTMARE” |7 economy of depression proportions. And so, I predicted that prospect in 2005, in Boom Bust. Through newsletters and per- sonal communications, I kept the Treasury and Downing Street fully briefed on the terrible events that were on the horizon. Those warnings went back to November 1997. Boom Bust: The Alert TONY BLAIR reincarnated the Labour Party as New Labour, in a bid to come out of the political wilderness. Labour’s poli- ticians had been in opposition for 18 years. The suave, slick-talking barrister from the back benches took control and ditched his party’s constitutional commitment to nationalise the means of production. He won the election in May 1997 by not only reforming his party, but promising to rejuvenate Britain. I also had an agenda. I was determined that the Blair government would be held accountable, if it failed to guide the UK through the implosion of the global economy at the end of the first decade of the 21st century. 8|2010: THE INQUEST I wrote to the Prime Minister on November 4, leaving him in no doubt about the primary source of Britain’s problems. I wrote: “With every passing month, Britain loses more than £10bn in goods and ser- vices, money that could be shared between the public and private sectors to finally solve all the problems that will otherwise be with us when you seek re-election in 2002.” My letter to the Chancellor of the Exchequer, Gordon Brown, was dated November 1.
Load more

Recommended publications
  • Economics Department of the Russian Academy of Sciences, Doctor Lvov Worked Fearlessly to Offer His People the Antidote to Shock Therapy
    ������������������������������������ � ������������ � � ���� ��� ������ ������ ����� ������������� The IU is an international umbrella organisation for land and tax reformers. It has members in 35 countries around the world – activists, politicians, professionals and academics, and over 70 national and local organisations. The IU’s objective is “to stimulate in all countries a public opinion favourable to permanent peace and prosperity for all people, through the progressive removal of the basic economic causes of poverty and war”. The IU engages in international initiatives in support of its objectives and enjoys Special Consultative Status at the United Nations. www.theIU.org THEthe INTERNATIONALIU UNION FOR LAND VALUE TAXATION The traditional story of the silver bullet originates from folklore. The silver bullet is the only means effective against werewolves, vampires and monsters. The modern metaphor applies to any straightforward solution which has extreme effectiveness. The phrase typically appears in the knowledge or hope that a new way of thinking, technology or practice will solve a major prevailing problem. The Silver Bullet Fred Harrison The Silver Bullet theIU Published in the UK in 2008 by The International Union for Land Value Taxation 212 Piccadilly, London w1j 9hg www.theIU.org isbn 978-0-904658-10-1 Text copyright © 2008 theIU The International Union for Land Value Taxation No part of this book may be reproduced without prior written permission from the publishers. Cover photo © Christian Misje/iStockPhoto Typesetting and design by Heilbunth & Co Printed in Denmark by Lasertryk.dk on Munken Cream 100gsm In Memoriam This study is dedicated to the memory of Professor Dmitry Lvov. As Academician-Secretary of the Economics Department of the Russian Academy of Sciences, Doctor Lvov worked fearlessly to offer his people the antidote to shock therapy.
    [Show full text]
  • THE GREAT CRASH of 2008 Mason Gaffney August 17, 2008
    THE GREAT CRASH OF 2008 Mason Gaffney August 17, 2008 This crash is The Big One; it has signs of becoming a Category 5. How do we know? We’ve “been there and done that” so many times before, roughly every 18 years over the last 800 or more. Major wars and, rarely, plagues have broken the rhythm, along with the little ice age, reformation and counter-reformation, political revolutions and reactions, the rise of nation-states, the enclosure movement, the age of exploration, massive European imports of stolen American gold, the scientific and industrial revolutions, the Crusades, Mongol and Turkish invasions, and other upheavals. Yet, the endogenous cycle keeps returning, as soon as we find peace, and economic life returns to its even tenors. What President Warren Harding famously called “normalcy” soon evolved into another boom and a shocking bust, as so often before. Calm and routine prosperity has never been man’s lot for long: it somehow leads to its own downfall, cycle after cycle. Homer Hoyt published his classic 100 Years of Land Values in Chicago, 1833-1933, in December, 1933. He covered in fine detail the 5 major cycles that crested and crashed in 1837, 1857, 1873, 1893, and 1926-29. At the end he generalized “The Chicago Real Estate Cycle”, a regular rhythm of boom and bust with the same features in the same sequence. The boom sets us up for the bust. He could have omitted the limiting word “Chicago”, its cycles were synchronized with national waves recorded by other scholars like Arthur H.
    [Show full text]
  • Land and Liberty Economics • Politics • Philosophy
    LAND AND LIBERTY ECONOMICS • POLITICS • PHILOSOPHY UK £2 USA $3.50 Summer 1996 SPECIAL ISSUE ON RUSSIA "People with rights to exclusive, legal possession of land have a duty to pay an annually assessed Social-Rent Charge for the resources of nature, public services and the locational benefits that give value to land, as determined under market conditions and equal to the economic rent of land. " The clause that 10 Georgists proposed for Russia's Land Code at a congress in Moscow on May 21st LAND EDITORIAL AND LIBERTY Quest for a cure Established 1894 Volume 103 No. 1179 for the sick society WESTERN governments are Sick our society is, and the malaise celebrating the re-election of Boris can ultimately be traced back to the Yeltsin as President of Russia. We will unfair and inefficient way that we use ~ CONTENTS never know whether or not the return of land. Take the housing sector. In Britain, Communists to power would have poor housing kills thousands of people provided the people with a breathing every year. There are 1.5m homes EDITORIAL space to formulate a more sensible officially classified as "unfit for human Cure for Society strategy for transforming their society. habitation" which are occupied by But we now fear that Russia is destined people who consequently develop to a second-rate society based on the MOSCOW chronic chest disease, hypothermia, Fred Harrison worst of two social systems. Yeltsin digestive problems, schizophrenia and represents the worst of Western even cancer. These are the conclusions monopoly capitalism. But folded into of two recent studies.
    [Show full text]
  • Implementation of Site Value Tax in Ireland Smart Taxes Network July 2010 Table of Contents
    Implementation of Site Value Tax in Ireland Smart Taxes Network July 2010 Table of Contents Roadmap for Site Value Tax Implementation in Ireland .............................................3 Summary..........................................................................................................................................4 1. Technical Issues.......................................................................................................................6 1.1 Establishing the System........................................................................................................6 1.2 Assessing Value......................................................................................................................9 1.3 Ensuring Defendable Valuation..........................................................................................11 2. Administrative Issues...........................................................................................................14 2.1 Fundamental Administrative Components.......................................................................14 2.2 Appropriate administration levels for Site Value Tax.......................................................15 3. Political issues........................................................................................................................16 3.1 Government and Private Sector Support.........................................................................16 3.2 Taxpayer Support.................................................................................................................18
    [Show full text]
  • Linc/Landlines 1.99
    Land Lines Newsletter of the Lincoln Institute of Land Policy Smart Growth for the Bluegrass Region Jean Scott and Peter Pollock and developing innovative planning solu- • Think, plan and act as a region and tions to growth and conservation concerns. work out issues through collaboration ike many fast-growing areas across The guiding framework for Bluegrass and teamwork. the country, the Bluegrass region Tomorrow is the Bluegrass Regional Vision • Make the commitment to preserve Lof central Kentucky is dealing with that was developed in 1993 through a farmland and open space. two complementary growth management broad-based regional planning process. • Demonstrate environmental sensi- issues: In seeking to maintain a clear definition tivity, recognizing that “we borrow • How to manage growth that takes between town and country, this Vision the land from our children.” place within the 40-year-old urban reflects the region’s legacy of a large urban • Value compact, mixed-use develop- growth boundary around Lexington center (Lexington) surrounded by smaller, ment that supports alternative choices and in the smaller cities and towns distinct cities and towns. These communi- of transportation. of the surrounding counties; ties are separated and yet connected by a • Provide certainty for developers with • How to best preserve the unique rural beautiful greenbelt of agricultural land and less contention. character of the countryside beyond areas rich in environmental and historic • Reuse older areas of cities and towns urban growth areas. resources. including abandoned lands and obsolete buildings. Civic leadership for this critical Smart Growth Choices • Preserve and reinvest in traditional planning process is provided by Bluegrass Continuing a partnership established in downtowns and neighborhoods.
    [Show full text]
  • Henry George's Political Critics
    Henry George’s Political Critics By MICHAEL HUDSON* ABSTRACT. Twelve political criticisms of George were paramount after he formed his own political party in 1887: (1) his refusal to join with other reformers to link his proposals with theirs, or to absorb theirs into his own campaign; (2) his singular focus on ground rent to the exclusion of other forms of monopoly income, such as that of the railroads, oil and mining trusts; (3) his almost unconditional support of capital, even against labor; (4) his economic individualism rejecting a strong role for government; (5) his opposition to public ownership or subsidy of basic infrastructure; (6) his refusal to acknowledge interest- bearing debt as the twin form of rentier income alongside ground rent; (7) the scant emphasis he placed on urban land and owner- occupied land; (8) his endorsement of the Democratic Party’s free- trade platform; (9) his rejection of an academic platform to elaborate rent theory; (10) the narrowness of his theorizing beyond the land question; (11) the alliance of his followers with the right wing of the political spectrum; and (12) the hope that full taxation of ground rent could be achieved gradually rather than requiring a radical confron- tation involving a struggle over control of government. Economic theorizing is not like the natural sciences. To the extent that theories justify or criticize specific policies, they affect the vested interests. Economists are notorious for starting with a policy conclu- sion and then reasoning backward to create a line of analysis whose logic leads up to it—free trade or protectionism, as well as arguments over whether all forms of income are earned or some are unearned “free lunches.” The element of personality also is at work.
    [Show full text]