COUNTIES use ‘LAND BANKS’ and EMINENT DOMAIN to FIGHT FORECLOSURE FRAUD
http://www.webofdebt.com/articles/north_dakota.php
http://www.webofdebt.com/articles/occupy.php
by Ellen Brown / January 12, 2012

An electronic database called MERS has created defects in the chain of title to over half the homes in America. Counties have been cheated out of millions of dollars in recording fees, and their title records are in hopeless disarray. Meanwhile, foreclosed and abandoned homes are blighting neighborhoods. Straightening out the records and restoring the homes to occupancy is clearly in the public interest, and the burden is on local government to do it. But how? New legal developments are presenting some innovative alternatives.

John O’Brien is Register of Deeds for Southern Essex County, Massachusetts. He calls his land registry a “crime scene.” A formal forensic audit of the properties for which he is responsible found that:

• Only 16% of the mortgage assignments were valid.
• 27% of the invalid assignments were fraudulent, 35% were “robo-signed,” and 10% violated the Massachusetts Mortgage Fraud Statute.
• The identity of financial institutions that are current owners of the mortgages could be determined for only 287 out of 473 (60%).
• There were 683 missing assignments for the 287 traced mortgages, representing approximately $180,000 in lost recording fees per 1,000 mortgages whose current ownership could be traced.

At the root of the problem is that title has been recorded in the name of a private entity called Mortgage Electronic Registration Systems (MERS). MERS is a mere place holder for the true owners, a faceless, changing pool of investors owning indeterminate portions of sliced and diced, securitized properties. Their identities have been so well hidden that their claims to title are now in doubt. According to the auditor: “What this means is that . . . the institutions, including many pension funds, that purchased these mortgages don’t actually own them”.

The March of the AGs
When Massachusetts Attorney General Martha Coakley went to court in December against MERS and five major banks—Bank of America Corp., JPMorgan Chase, Wells Fargo, Citigroup, and GMAC—John O’Brien said he was thrilled. Coakley says the banks have “undermined our public land record system through the use of MERS.” Other attorneys general are also bringing lawsuits. Delaware Attorney General Beau Biden is going after MERS in a suit seeking $10,000 per violation. “Since at least the 1600s,” he says, “real property rights have been a cornerstone of our society. MERS has raised serious questions about who owns what in America.”

Biden’s lawsuit alleges that MERS violated Delaware’s Deceptive Trade Practices Act by:
·         Hiding the true mortgage owner and removing that information from the public land records.
·         Creating a systemically important, yet inherently unreliable, mortgage database that created confusion and inappropriate assignments and foreclosures of mortgages.
·         Operating MERS through its members’ employees, whom MERS confusingly appoints as its corporate officers so that they may act on MERS’ behalf.
·         Failing to ensure the proper transfer of mortgage loan documentation to the securitization trusts, which may have resulted in the failure of securitizations to own the loans upon which they claimed to foreclose.

Legally, this last defect may be even more fatal than filing in the name of MERS in establishing a break in the chain of title to securitized properties. Mortgage-backed securities are sold to investors in packages representing interests in trusts called REMICs (Real Estate Mortgage Investment Conduits). REMICs are designed as tax shelters; but to qualify for that status, they must be “static.” Mortgages can’t be transferred in and out once the closing date has occurred. The REMIC Pooling and Servicing Agreement typically states that any transfer after the closing date is invalid. Yet few, if any, properties in foreclosure seem to have been assigned to these REMICs before the closing date, in blatant disregard of legal requirements. The whole business is quite complicated, but the bottom line is that title has been clouded not only by MERS but because the trusts purporting to foreclose do not own the properties by the terms of their own documents.

Courts Are Taking Notice
The title issues are so complicated that judges themselves have been slow to catch on, but they are increasingly waking up and taking notice. In some cases, the judge is not even waiting for the borrowers to raise lack of standing as a defense. In two cases decided in New York in December, the banks lost although their motions were either unopposed or the homeowner did not show up, and in one there was actually a default. No matter, said the court; the bank simply did not have standing to foreclose. Failure to comply with the terms of the loan documents can make an even stronger case for dismissal. InHorace vs. LaSalle, Circuit Court of Russell County, Alabama, 57-CV-2008-000362.00 (March 30, 2011), the court permanently enjoined the bank (now part of Bank of America) from foreclosing on the plaintiff’s home, stating:

[T]he court is surprised to the point of astonishment that the defendant trust (LaSalle Bank National Association) did not comply with New York Law in attempting to obtain assignment of plaintiff Horace’s note and mortgage. . . .

[P]laintiff’s motion for summary judgment is granted to the extent that defendant trust . . . is permanently enjoined from foreclosing on the property . . . .

Relief for Counties: Land Banks and Eminent Domain
The legal tide is turning against MERS and the banks, giving rise to some interesting possibilities for relief at the county level. Local governments have the power of eminent domain: they can seize real or personal property if (a) they can show that doing so is in the public interest, and (b) the owner is compensated at fair market value.

The public interest part is obvious enough. In a 20-page booklet titled “Revitalizing Foreclosed Properties with Land Banks,” the U.S. Department of Housing and Urban Development (HUD) observes: “The volume of foreclosures has become a significant problem, not only to local economies, but also to the aesthetics of neighborhoods and property values therein. At the same time, middle- to low income families continue to be priced out of the housing market while suitable housing units remain vacant.” The booklet goes on to describe an alternative being pursued by some communities: “To ameliorate the negative effects of foreclosures, some communities are creating public entities — known as land banks — to return these properties to productive reuse while simultaneously addressing the need for affordable housing.”

States named as adopting land bank legislation include Michigan, Ohio, Missouri, Georgia, Indiana, Texas, Kentucky, and Maryland. HUD notes that the federal government encourages and supports these efforts. But states can still face obstacles to acquiring and restoring the properties, including a lack of funds and difficulties clearing title. Both of these obstacles might be overcome by focusing on abandoned and foreclosed properties for which the chain of title has been broken, either by MERS or by failure to transfer the promissory note according to the terms of the trust indenture. These homes could be acquired by eminent domain both free of cost and free of adverse claims to title. The county would simply need to give notice in the local newspaper of an intent to exercise its right of eminent domain. The burden of proof would then transfer to the bank or trust claiming title. If the claimant could not prove title, the county would take the property, clear title, and either work out a fair settlement with the occupants or restore the home for rent or sale.

Even if the properties are acquired without charge, however, counties might lack the funds to restore them. Additional funds could be had by establishing a public bank that serves more functions than just those of a land bank. In a series titled “A Solution to the Foreclosure Crisis,” Michael Sauvante of the National Commonwealth Group suggests that properties obtained by eminent domain can be used as part of the capital base for a chartered, publicly-owned bank, on the model of the state-owned Bank of North Dakota. The county could deposit its revenues into this bank and use its capital and deposits to generate credit, as all chartered banks are empowered to do. This credit could then be used not just to finance property redevelopment but for other county needs, again on the model of the Bank of North Dakota. For a fuller discussion of publicly-owned banks, see http://PublicBankingInstitute.org.

Sauvante adds that the use of eminent domain is often viewed negatively by homeowners. To overcome this prejudice, the county could exercise eminent domain on the mortgage contract rather than on title to the property. (The power of eminent domain applies both to real and to personal property rights.) Title would then remain with the homeowner. The county would just have a secured interest in the property, putting it in the shoes of the bank. It could then renegotiate reasonable terms with the homeowner, something banks have been either unwilling or unable to do. They have to get all the investor-owners to agree, a difficult task; and they have little incentive to negotiate when they can make more money on fees and credit default swaps on contracts that go into default.

Settling with the Investors
What about the rights of the investors who bought the securities allegedly backed by the foreclosed homes? The banks selling these collateralized debt obligations represented that they were protected with credit default swaps. The investors’ remedy is against the counterparties to those bets—or against the banks that sold them a bill of goods. Foreclosure defense attorney Neil Garfield says the investors are unlikely to recover on abandoned and foreclosed properties in any case. Banks and servicers can earn more when the homes are bulldozed—something that is happening in some counties—than from a sale or workout at a loss. Not only is more earned on credit default swaps and fees, but bulldozed homes tell no tales. Garfield maintains that fully a third of the investors’ money has gone into middleman profits rather than into real estate purchases. “With a complete loss no one asks for an accounting.”

Not only homes and neighborhoods but 400 years of property law are being destroyed by banker and investor greed. As Barry Ritholtz observes, the ability of a property owner to confidently convey his property is a bedrock of our society. Bailing out reckless financiers and refusing to hold them accountable has led to a fundamental breakdown in the role of government and the court system. This can be righted only by holding the 1% to the same set of laws as are applied to the 99%. Those laws include that a contract for the sale of real estate must be in writing signed by seller and buyer; that an assignment must bear the signatures required by local law; and that forging signatures gives rise to an actionable claim for fraud.

The neoliberal model that says banks can govern themselves has failed. It is up to county governments to restore the rule of law and repair the economic distress wrought behind the smokescreen of MERS. New tools at the county’s disposal—including eminent domain, land banks, and publicly-owned banks—can facilitate this local rebirth.

Ellen Brown is an attorney and president of the Public Banking Institute, http://PublicBankingInstitute.org. In Web of Debt, her latest of eleven books, she shows how a private cartel has usurped the power to create money from the people themselves, and how we the people can get it back. Her websites arehttp://WebofDebt.com and http://EllenBrown.com.

STATE PUBLIC BANKS
http://www.yesmagazine.org/new-economy/how-wisconsin-could-turn-austerity-into-prosperity-own-a-bank
http://www.yesmagazine.org/new-economy/a-choice-for-states-banks-not-budget-crises
http://www.yesmagazine.org/new-economy/the-growing-movement-for-publicly-owned-banks

NY STATE ENACTS ‘LAND BANK’ LAW
http://www.housingwire.com/2011/07/29/new-york-state-enacts-land-bank-law
New York state enacts land bank law
by Kerry Curry / July 29, 2011

New York became the latest state Friday to enact land bank legislation to deal with the burgeoning problem of vacant and blighted properties — one of the aftereffects from the nation’s foreclosure crisis. New York Gov. Andrew Cuomo signed the law Friday in what was described as a bipartisan effort. Land banks are entities that take control of problem properties and either rehabilitate the property or bulldoze it to redevelop the land. The strategy has met with success in some of the nation’s inner cities that have been ravaged by the foreclosure crisis, such as Detroit and Cleveland. Land banks have assembled parcels for green space, urban farming, side lots, community amenities, commercial development and affordable housing, among other uses.

New York’s law will allow cities and counties across the state the ability to develop land banks, which would be tasked with converting vacant, abandoned or tax-delinquent properties into productive use. The issue is of particular importance in Western New York, where the volume of abandoned housing stock is overwhelming. Center for Community Progress President Dan Kildee, who wrote a piece on land banks for HousingWire’s August magazine, worked closely with the lawmakers who crafted the bills, which are modeled on the example of Flint, Mich., a city ravaged by the downturn in the American auto industry. The Genesee County Land Bank, created there in 1999, has been the primary vehicle for redeveloping the city’s vacant housing.

Kildee, the creator of that land bank, says he believes land banking can yield similar results for New York. He told HousingWire that the Flint land bank has acquired nearly 10,000 vacant homes since its inception, demolishing more than 1,300 of those. Its projects have included redevelopment or repurposing of 2,500 properties. Kildee said the land bank has attracted more than $60 million in new investment to Flint. “Around the country, as communities face the fallout of a changing economy and the foreclosure crisis, land banking is giving local governments the chance to help re-set the real estate market and promote sound development plans for the future,” he said. Similar legislation is up for consideration in Pennsylvania and Tennessee, while Georgia legislators are debating an update of a land banking law already on the books there, according to the Center for Community Progress.

LOCAL SOLUTIONS
http://www.mainstreetmatters.us/publicbanking
http://www.mainstreetmatters.us/solvingforeclosures
A Solution to the Foreclosure Crisis / by Michael Sauvante

Summary
Not since the Great Depression have so many homes been seized in foreclosure proceedings. With no end in sight, our country and local communities are faced with the realization that neither Washington nor Wall Street is willing or able to solve the problem. National Commonwealth Group has developed a set of solutions that can be initiated at the local level independent of outside help. They begin with actions that just take some political will on the part of local county officials, which “political backbone” they might conveniently find with the help of local citizens action groups, the small business community and local newspapers, TV & radio.

We have defined a 6 step program that communities can put in motion. The first 4 steps represent largely mitigation efforts that can dramatically reduce the negative impact that foreclosures have on homeowners, their neighbors, the banks and the community as a whole. In some cases those steps will translate into stopping certain foreclosures outright. However, if a community wants to step them entirely, then steps 5 and 6 provide them with the means to do that. We have detailed those 6 steps in the following downloadable document entitled “Stopping Foreclosures: A Local Action Plan“. It is our understanding that not all states and counties in the country, due to local and state laws, would be able to apply these recommendations as is. Nonetheless, a sufficiently large enough segment of the states and their counties could follow these guidelines that they should start to have impact on a large number of communities impacted by the foreclosure problem. We are working with some experts in those states that have a different foundation for how foreclosures are administered to develop an alternate plan for them as well.

In the meantime, we recommend you read the “Stopping Foreclosures: A Local Action Plan” document first and then proceed to read the balance of this section, as it drills deeper into our recommendations contained in Steps 5 & 6. Steps 5 & 6 entail local governments, in particular counties and larger cities, using two sets of laws that will allow them to seize control of their local foreclosure problem and bring about a halt to the devastation they cause to the community and all participants. The first set of laws related to the eminent domain powers of government bodies and the second set of laws relate to banking. Here is a brief synopsis of those two solutions. It is followed by a more in-depth exploration of the whole topic, including a downloadable .pdf document that can be read offline.

Let us begin with the eminent domain powers of these entities. We recommend this solution be pursued primarily at the county level. Here’s why: Counties are the government entity most concerned with foreclosures in their jurisdiction, in that legal proceedings occur at the county court level and county sheriffs are the law enforcement agency tasked with carrying out evictions. The first step we recommend is that a county issues a moratorium on foreclosures within the county, along with ordering the sheriffs to discontinue any evictions (of homeowners facing foreclosure or those who move back in post foreclosure as currently promoted by Occupy Our Homes et al.). Counties can take such actions under their mandate to promote the public good.

Next, they can address the problem of MERS, the principal perpetrators of foreclosure actions against homeowners. MERS was established to bypass the normal title transfer process and costs, resulting in purported title holders unable to prove clear title. Few homeowners have the financial resources to fight foreclosures on this basis, but counties clearly have the financial muscle, ability and motivation to challenge MERS on title questions. If MERS (or any other purported title holder) cannot prove clear title, then it is in the interests of the county and the homeowner for the county to step in and seize the mortgage contract for the property under its eminent domain authority. (Note – as explained here, eminent domain can be used to not only seize real property, but personal property like contract rights and other intangible property, including mortgage contracts.) Post seizure (which costs the county virtually nothing), the county is in a position to work out new terms with the homeowner, allowing them to remain in the home and make mutually agreed upon payments. In the process, the county and all other local constituents avoid the negative impact a foreclosure has on the community and the homeowner gets to stay in the home.

The above solution could address about 50% of the pending foreclosures in the community, corresponding to the percentage of all mortgages held by MERS. If that happens in enough counties, the magnitude of the losses to MERS may well force a national solution to the title issue, but in the meantime, counties could use the process to begin to address their local foreclosure problem. That begs the question of what can be done about the mortgages held by legitimate titleholders, such as community banks, that did not resell their mortgages? A county could still exercise its eminent domain rights and seize those mortgage contracts to those properties as well. In those circumstances, eminent domain rules dictate that the county need only pay a “fair market” value for the mortgage, just as it does with any other normal eminent domain purchase. This would actually currently yield more income to the selling bank than it would see through a foreclosure auction, a plus for the bank.

{Download the full article that explores the eminent domain and county bank solution here: http://www.mainstreetmatters.us/docs/No-more-foreclosures.pdf}

Ending Foreclosures With Local Solutions
Wall Street abuses! Inaction in Washington! Regardless of where one points the finger, the foreclosure crisis continues to devastate the American economy. Community banks are particularly hard hit, through no fault of their own, and many have failed, seized by regulators or snatched up by larger banks seemingly immune to regulatory heavy handedness. Collapsing real estate markets have a domino effect on institutions that are dependent on healthy real estate values, in particular local governments that rely on property taxes. The problem is that the players who might have a solution to the crisis are pressured in ways that exacerbate it. For example, community banks would be penalized by the FDIC and other regulators if they tried to help homeowners by renegotiating their loan payment amounts, providing them payment holidays or simply writing down the value of the loans. The federal government would have to initiate a massive new program to cover the costs to the banks that would produce, or require regulators to radically alter their rules to allow banks to take such actions without a negative impact on their own status. Neither is politically feasible. And Wall Street banks have no motivation to step in and solve the crisis that they helped to create. But there is a way out. Local governments, primarily at the county level, can exercise certain of their legal rights, including the right of eminent domain. And they can go much further if they also make creative use of existing banking laws.

Counties and Foreclosure
Most of the legal procedures associated with foreclosures occur at the county level, including legal filings, court hearings and the too familiar process of sheriffs evicting homeowners after foreclosure. This allows counties to begin implementing a solution in three simple steps:

Step 1: Counties can declare a moratorium on foreclosures on the grounds that they are economically harmful to all residents of the county, not just individual homeowners and mortgage holders. The decline in overall property values following foreclosures impacts the revenue of the county and other government entities that depend on property tax revenues. Reducing or stopping foreclosures is clearly in the public interest and is the first step in solving the problem locally.

Step 2: The county can order its sheriffs not to evict any property owner as a result of already instituted foreclosure proceedings or other parties that have moved into foreclosed homes as part of the Occupy Our Homes movement and other similar activities. That would prevent homeowners being thrown out on the street and provide homes for those already evicted.

Step 3: The county can begin working with homeowners who are under threat of foreclosure to distinguish which homeowners have mortgages primarily with local institutions versus those that have been re-sold and currently held by MERS (Mortgage Electronic Registration Systems, Inc.) or other non-local institutions. MERS is a private mortgage registry that Fannie Mae and Freddie Mac formed along with major banks to bypass public registration of deeds and facilitate the creation of mortgage-backed securities. MERS holds about half of the mortgages in the country.

The Problem with MERS
MERS was created to simplify the bundling of large numbers of individual mortgages into other financial instruments, which resulted in the breakdown of the normal process of title transfer. One reason for that was a desire by the owners of MERS to avoid title transfer costs and thus increase their profits on securitizing those mortgages. The result is that many homeowners are paying on mortgages for which no clearly defined mortgage holder can be identified.

The majority of state attorneys general are in battles with Fannie and Freddie over their unresponsiveness to homeowners’ need to reduce their debt and the imposition of foreclosures even when proper title cannot be presented. (See “Kamala Harris, California Attorney General, To Fannie And Freddie Head: ‘Step Aside’ Over Mortgage Crisis” and “Beau Biden, Delaware Attorney General, Sues Big Banks’ Mortgage Registry”) Yet in order to perfect a foreclosure claim, a mortgage holder is supposed to have clear title to the property, giving them the right to seize the property for non-performance on the part of the mortgagee (homeowner). Where clear title cannot be evidenced, the law should be on the side of the homeowner. But courts, banks and law enforcement have often run roughshod over homeowners who, without the financial resources to fight foreclosure proceedings, are often powerless to stop the juggernaut. If the purported mortgage holder cannot prove clear title, then the law is clear that the homeowner should be able to retain possession and control of their property. Yet many homeowners have been foreclosed improperly and forced out of their homes. Some homeowners have successfully prevailed in court by demanding that the foreclosing entity prove title, which in many cases they could not. Of course, such a legal battle requires financial resources that are usually missing because the homeowner is already in financial difficulties, causing the foreclosure proceedings in the first place.

Counties, MERS & Eminent Domain
This is where counties can come to the rescue. If the financial institution (typically downstream from the originating bank and rarely a community bank) cannot demonstrate clear title, the county can invoke its power of eminent domain to resolve the issue. Eminent domain allows a government entity to seize not just physical property but intangible property such as contract rights, patents, trade secrets and copyrights, provided that doing so is in the public interest and the owner is compensated at fair market value. Counties simply need to provide adequate public notice that the property is subject to eminent domain seizure. If the lender cannot provide proof of title by the end of the notice period, the county can proceed with the seizure uncontested. Since there is no identifiable party to compensate, this procedure costs the county next to nothing. Regardless of the cloud over the title prior to the seizure, clear title is once again established afterward. We have a long history of counties re-establishing clear title, as in cases where property is seized (e.g., for failure to pay taxes) and sold in what are often called “sheriff’s sales.” The title industry considers such sales to wipe out all previous title history, and any future title searches only go back to that date. As the title cost the county essentially nothing, it can negotiate terms with the homeowner that will redefine what portion of the property the homeowner is allowed to retain and also allow the homeowner to remain in the home. That could include a temporary moratorium on any payments pending improvement on the homeowner’s financial condition. At a very minimum the county can then rent the home to the (former) homeowner. (See ““Right-to-Rent”: A Simple, Sensible Idea That Dysfunctional Washington Is More Than Happy to Let Die”)

The net result of this process is:

• Foreclosures and their negative ripple effect on the local economy are reduced.
• More homeowners remain in their homes, helping to preserve neighborhoods.
• The county receives new revenues.

The Moral Argument
In addition to the economic benefits of stopping foreclosures, this process addresses the fact that the MERS system was designed to skirt legal procedures in pursuit of profit. The foreclosure crisis stands at the very center of our economic woes, and since the federal government appears incapable or unwilling to address this problem, this solution lies with local communities. The nature of free market capitalism is that you risk losing your investment. If, like the owners of MERS, you do so because you played fast and loose with the rules, then taxpayers especially should not be required to bail you out, as MERS owners might demand if their system starts to significantly unravel.

What About Legitimate Mortgages?
What can the county do when the titleholder is a financial institution, like a community bank, that normally does not re-sell its mortgages? The county can still exercise eminent domain and seize the property, paying fair market price. Actually, were the bank to be paid the current appraised value for the property, it would in most cases come out financially ahead of what it could realize from a foreclosure sale. How does the county finance the eminent domain purchase of a property at fair market value? Currently, that means borrowing the funds from other institutions and repaying them out of tax revenues and/or the revenues realized from payments by the homeowners. One could argue that the revenue from all of the properties seized (both the MERS properties and those bought for full market value) should be adequate to service the debt. But the county has another tool that allows it to go far beyond financing seized properties and into facilitating the larger credit needs of the county and its residents. That solution is called Public Banking. See the section entitled Public Banking to see what it is and how we can use the concept to get credit flowing in our communities again and to free us up from the tyranny of the Wall Street banks.

Start Now
At the very least county administrators should be petitioned to place a moratorium on local foreclosures and exercise the eminent domain seizure of those foreclosure candidate properties for which no clear titleholder can be established. That will require no new systems at the county level and will go a long ways to ending the devastation of foreclosure.

LAND BANKS
http://planphilly.com/rda-farming
http://www.thelandbank.org/aboutus.asp
http://www.mslandbank.com/aboutus.html
http://www.communityprogress.net/around-the-states-pages-5.php

WHAT is a LAND BANK?
http://www.umich.edu/~econdev/landbank/
Revitalizing Blighted Communities with Land Banks / by Jessica de Wit

A land bank is a public authority created to efficiently hold, manage and develop tax-foreclosed property.(1) Land banks act as a legal and financial mechanism to transform vacant, abandoned and tax-foreclosed property back to productive use. Generally, land banks are funded by local governments’ budgets or the management and disposition of tax-foreclosed property.(2) In addition, a land bank is a powerful locational incentive, which encourages redevelopment in older communities that generally have little available land and neighborhoods that have been blighted by an out-migration of residents and businesses.(3) While a land bank provides short-term fiscal benefits, it can also act as a tool for planning long-term community development. Successful land bank programs revitalize blighted neighborhoods and direct reinvestment back into these neighborhoods to support their long-term community vision.

[youtube=https://www.youtube.com/watch?v=Elg6i3NxvdE]

Why have a land bank?
Land is one of the most important factors in local economic development today and must be managed well to improve existing land use practices, enhance livability of communities, and support local community development.(4) In recent surveys, the Brookings Institute found that on average 15% of the land in major American cities is vacant.(5) Vacant and abandoned land does not produce sufficient property tax revenue for cities, which generally is their main revenue source. This lack of funds impedes a city’s ability to sustain its operations, programs, and services. In addition, vacant and abandoned land discourages property ownership, depresses property values, attracts crime and creates health hazards.

To understand why it is important to have a land bank, it is necessary to assess the costly impact of vacant and abandoned land in communities. When there are vacant and abandoned properties in communities, neighboring property owners and the municipalities incur significant costs. The U.S. Fire Administration reports that over 12,000 vacant structure fires are reported each year in the U.S., which results in $73 million in property damage annually.(6) In addition, abandoned properties tend to attract crime. A 1993 study of 59 abandoned properties in Austin, Texas, found that 34 percent were used for illegal activities and of the 41 percent that were unsecured, 83 percent were used for illegal activities.(7) This crime drains police department resources and leaves residents feeling unsafe in their own neighborhoods.

When property owners neglect and abandon their properties, the local municipality must use its own resources to clean and maintain the properties as part of their nuisance abatement responsibilities to protect the public health, safety and welfare of its community. For example, from 1999 to 2004, St. Louis spent $15.5 million, which equates to nearly $100 per household, to demolish vacant buildings.(8) Detroit spends roughly $800,000 per year to clean vacant lots.(9) Abandoned and vacant properties drive down the surrounding property values, which lowers the property taxes that most municipalities rely on as a primary source of revenue.

Property abandonment can destabilize a neighborhood by causing an out-migration of property owners, who are worried about losing value on their properties due to surrounding vacant and abandoned land. A Temple University study suggests that, all things being equal, the presence of an abandoned house on a block reduces the value of all the other property by an average of $6,720.(10) According to Emory University Professor Frank Alexander’s research, “failure of cities to collect even 2 to 4 percent of property taxes because of delinquencies and abandonment translates into $3 billion to $6 billion in lost revenues to local governments and school districts annually.”(11) While it is difficult to quantify all of the costs associated with vacant and abandoned properties, it is clear that they place a tremendous cost burden on communities.

Land Bank Benefits
While abandoned and vacant properties depress property values, discourage property ownership, and attract criminal activities in the surrounding area, a land bank provides tools to quickly turn these tax-reverted properties back into usable parcels that reinvest in the community’s long-term vision for its neighborhoods. Land bank programs act as an economic and community development tool to revitalize blighted neighborhoods and business districts. Land banks can benefit urban schools, improve tax revenues, expand housing opportunities, remove public nuisances, assist in crime prevention and promote economic development.(12)

Source: 2004 Kirwan Institute for Study of Race & Ethnicity, Ohio State University.

By transferring vacant and abandoned properties to responsible land owners through a land bank program, local governments benefit because they avoid the significant cost burden of property maintenance, like mowing and snow removal, as part of their nuisance abatement responsibilities. In addition, local governments benefit from increased revenue because the new property owners pay taxes on the property. Also, the local schools benefit because they receive more funding when there is an increase in property owners in their school districts. Land bank programs can increase the variety of mixed-income housing offered and provide more opportunities for affordable housing. Also, land bank properties, which become owner-occupied, discourage criminal activity thereby benefiting public safety and decreasing the cost burden on the local police and fire departments. Finally, the more residents and businesses that occupy property in a neighborhood, the more services and amenities will be needed, which boosts local economic activity. Many cities, like Atlanta, GA; St. Louis, MO; Genesee County, MI; and Cleveland, OH; have established land bank programs to redevelop vacant and abandoned land as a productive use for their communities. These communities are using land banks as a tool to reuse their urban land and stimulate economic development and neighborhood revitalization.

Land Bank Challenges
While there are many benefits to establishing land banks in communities, there are also many challenges in operating and maintaining them. Several U.S. municipalities have had challenges with running their land banks. Atlanta’s land bank has a lack of sufficient acquisition funds for both Community Development Corporations (CDC) and the land bank authority (LBA).(13) In addition, they have a need for ongoing improvement coordination among community development departments of local governments, the LBA and the Tax Commissioner.(14)

Cleveland’s land bank challenges are the capitalization of projects, the CDC’s limited capacity to take and rehab land acquired from the land bank and the time consuming administrative procedures, including the legislative process and aldermanic approvals.(15) CDCs want the City to go beyond supporting primarily tax-delinquent vacant properties and take the lead on tax-delinquent properties that have existing structures and the possibility of environmental contamination.(16)

Genesee County’s land bank challenges are whether urban tax-reverted properties have enough value to be purchased, even with the latest Land Bank Fast Track legislation.(17) In addition, there are concerns whether there will be enough revenue generated by the sale of these properties to pay the costs associated with administering a Redevelopment Fast Track Authority.(18)

Case Study: Michigan’s Land Banking Enabling Legislation
To better understand how land bank programs work, it is helpful to review a case study. Following is a case study of Michigan’s Land Bank Enabling Legislation and Michigan’s Genesee County land bank program. It is important to first review a State’s particular Land Bank Enabling Legislation because these laws provide land bank programs with the legal and financial tools needed to operate and maintain a land bank. Prior to January 2004, Michigan’s tax foreclosure laws on abandoned properties were ineffective because local governments did not have the authority to effectively manage tax-reverted land and prevent blight. Now, Michigan has one of the most progressive land banking laws in the nation.(19)

In January 2004, Governor Granholm signed into law the Land Bank Fast Track Legislation, Public Act (PA) 258, to provide communities with better legal and financial tools to put vacant and abandoned properties back into productive use.(20) This law establishes a state land bank authority while also enabling the establishment of city and county land bank authorities.(21) In addition, the law permits these authorities to expedite quiet title on properties, which it possesses, and make them available at nominal prices for productive reuse in the community.(22) The quiet title process is a legal action that eliminates all liens and past claims on a property and clears the title so a new owner may purchase the property without worrying about any unresolved claims.

In conjunction with PA 258, the Governor also signed into law four other related Public Acts:

PA 259 amends the Michigan Brownfield Redevelopment Act to allow any land bank authority owned property to be defined as “blighted property”, which enables a tax increment financing board to provide assistance to a land bank authority with clearing or quieting a title, and disposing of property owned or held by a land bank authority.(23)

PA 261 creates the Property Tax Exemption Act, which exempts property, with titles held by land bank authority, from taxes and exempts property sold by a land bank authority from general property taxes for five years.(24)

PA 260 creates the Tax Reverted Clean Title Act to impose a specific tax, which would have the same rate of general property taxes for five years, on property sold by a land bank fast track authority. While one half of the revenue from this specific tax funds an authority’s title clearance and land disposition costs, the remaining half is earmarked for local and state collecting units on a pro-rata basis.(25)

PA 263 amends the General Property Tax Act to permit a foreclosing governmental unit to request a title product other than an unreliable title search to identify the owners of tax delinquent properties at the time of foreclosure and describe a reasonable process for identifying these owners and providing public notice to them.(26)

Michigan’s Genesee County Land Bank
In Michigan, Genesee County has been a leader in creating a successful land banking program. Under the Genesee County Land Bank Authority, tax foreclosed properties are held for a period of time before being returned to the market. This allows for the grouping of parcels together to provide a more attractive resale opportunity and the assessment of potential property owners to ensure that they will contribute to the long-term vision of the community.

The Genesee County Land Bank Authority has acquired title to more than 3400 land parcels, including nearly 6% in the City of Flint in the first three years of the program.(27) They have successfully transferred 130 foreclosed tenant occupied properties to non-profit housing agencies, whose goal is to stabilize neighborhoods and encourage home ownership.(28) In addition, the LBA has redeveloped a 30,000 sq. ft. mixed use building in downtown Flint, which has been empty since 1980, and they have assembled hundreds of empty lots for city development projects and local non-profit and community organization projects.(29)

Land Banks as a Smart Growth Planning Tool
While other cities’ land bank programs, like St. Louis, have been used primarily as a fiscal tool to stimulate growth in their communities, Genesee County’s land bank program has been used as a planning tool to align with their communities’ long-term redevelopment plans that provide the greatest benefit. When Michigan’s Governor Granholm signed the latest land bank legislation in 2004, she said, “Together these new laws will help local planning officials to look at an entire area or region when developing land use plans.”(30) In addition, the Governor said, “To make headway against urban sprawl, we must think regionally and use new tools.”(31) Land bank programs are one of these smart growth tools that counter sprawl and revitalize the inner core of Michigan’s cities. Based on Governor Granholm’s state-wide smart growth goals, it is imperative that Michigan communities focus on city and region-wide planning instead of just fiscal objectives when implementing land bank programs.

References and related links
1) 2005. Smart Growth Tactics. Michigan Society of Planning, January.
2) Brooks, Amy; Collins, Demetria; Eichmuller, Barbara; Tintocalis, Melissa; van Leeuwen, Simon. 2004. Harnessing Community Assets: A Detroit Land Bank Authority. Taubman College of Architecture & Urban Planning, University of Michigan, April.
3) Blakely, Edward and Bradshaw, Ted. 2002. Planning Local Economic Development. California: Sage Publications.
4) Ibid.
5) Pagano, M. & Bowman, A. 2000. Vacant Land in Cities: An Urban Resource, Survey Series. The Brookings Institute.
6) 2004. Vacant Properties and Smart Growth: Creating Opportunity from Abandonment. Funder’s Network For Smart Growth and Livable Communities, September.
7) Ibid.
8) Ibid.
9) Ibid.
10) Ibid.
11) Ibid.
12) 2004. The Multiple Benefits of Land Banking and Comprehensive Land Bank Planning for Detroit. Kirwin Institute for the Study of Race & Ethnicity, Ohio State University, April.
13) Local Initiatives Support Corporation. 2005. Atlanta Case Study: Model Practices in Tax Foreclosure and Property Disposition. Retrieved from http://www.lisc.org/resources/vacant_abandoned.shtml?Affordable+Housing.
14) Ibid.
15) Local Initiatives Support Corporation. 2005. Cleveland Case Study: Model Practices in Tax Foreclosure and Property Disposition. Retrieved from http://www.lisc.org/resources/vacant_abandoned.shtml?Affordable+Housing
16) Ibid.
17) Wyckoff, Mark. 2003. All Communities to Benefit from New Land Use Legislation. Planning & Zoning News, December.
18) Ibid.
19) 2005. Smart Growth Tactics. Michigan Society of Planning, January.
20) Brooks, Amy; Collins, Demetria; Eichmuller, Barbara; Tintocalis, Melissa; van Leeuwen, Simon. 2004. Harnessing Community Assets: A Detroit Land Bank Authority. Taubman College of Architecture & Urban Planning, University of Michigan, April.
21) Ibid.
22) Ibid.
23) 2005. Smart Growth Tactics. Michigan Society of Planning, January.
24) Brooks, Amy; Collins, Demetria; Eichmuller, Barbara; Tintocalis, Melissa; van Leeuwen, Simon. 2004. Harnessing Community Assets: A Detroit Land Bank Authority. Taubman College of Architecture & Urban Planning, University of Michigan, April.
25) Wyckoff, Mark. 2003. All Communities to Benefit from New Land Use Legislation. Planning & Zoning News, December.
26) Ibid.
27) 2005. Smart Growth Tactics. Michigan Society of Planning, January.
28) Ibid.
29) Ibid.
30) Crowell, Charlene. 2004. In Lansing, A Legislative Breakthrough. Michigan Land Use Institute. Retrieved from http://www.mlui.org/growthmanagement/fullarticle.asp?fileid=16609.
31) Ibid.

[youtube=https://www.youtube.com/watch?v=igo_QoB6OvE&]

‘LAND VALUE TAX’
http://en.wikipedia.org/wiki/Land_value_tax#References
http://www.newstatesman.com/200409200008
A revolutionary who won over Victorian liberals
by Tristram Hunt / 20 September 2004

While land reform has been alive in British radical thinking since 1066, it was an American who managed to craft the first credible programme for change. Medieval critics of the “Norman Yoke”, the Diggers and Levellers of the English civil war, and the 18th-century opponents of land enclosure had all longed without success for the return of a golden age in which land would be equitably distributed according to need. But the campaigning California journalist Henry George transformed nostalgia into public policy with a tour through 1880s Britain, energising public opinion and making land reform the foundation stone of progressive politics.

Late 19th-century Britain enjoyed a wealth of radical debate. New ideas, new movements and new leaders were systematically unpicking the intellectual hegemony of mid-Victorian laissez-faire. In the town halls of Birmingham, Glasgow and London, the coming creed of municipal socialism was displaying the practical benefits of an activist council; the works of Marx and Engels were being translated and distributed; even John Stuart Mill, the high priest of negative liberty, was turning his attention in “Chapters on Socialism” towards a future ideal of communal harmony. Mill showed that forms of property ownership, rather than being the sacrosanct foundations of modern society, simply reflected the cultural ethos of each civilisation. Private property had no unimpeachable status.

At the same time, there was a growing awareness that the wealth wrought by the industrial revolution and empire was not being evenly spread. The 1880s downturn witnessed the rediscovery of poverty as the dark continents of outcast London, Manchester and Liverpool were traversed by growing numbers of journalists and social investigators. While W T Stead exposed in the Pall Mall Gazette the immoral underbelly of the capital, Charles Booth walked the streets of the East End to discover rates of poverty far higher than even the socialists had predicted. As Beatrice Webb put it, there was “a growing uneasiness . . . that the industrial organisation, which had yielded rent, interest, and profits on a stupendous scale, had failed to provide a decent livelihood and tolerable conditions for a majority of the inhabitants of Great Britain”.

Into this fertile intellectual terrain stepped Henry George to deliver a series of lectures on his book, Progress and Poverty (1879). Initially employed in Ireland as an American correspondent for Irish World, he soon immersed himself in Irish politics and caught the nationalists’ attention with his case for land reform. He was arrested for speaking out against the British – a political coup which made his eventual entry into British public life all the more anticipated. Thousands turned up to hear his lectures; tens of thousands read his book.

After 80 years of economic growth, George considered that “the association of poverty with progress [is] the great enigma of the day”. Moreover, it was in the most highly developed capitalist economies such as the United States and Great Britain that were found “the deepest poverty, the sharpest struggle for existence, the most enforced idleness”. An Atlanticist radical in the vein of Paine and Cobbett, George identified the problem as one of monopoly. (Lizzie Magie, the future inventor of the board game Monopoly, was a keen follower of George.) Where the “natural” means of production had been privately appropriated, rent absorbed all increases in the nation’s wealth. The monopoly of land caused fundamental inequality and poverty, because whenever there was an increase in efficiency the profits would go not to the workers – or even to the capitalists – but to the landlords. Such a grotesque monopoly of wealth was clearly in opposition to natural law. No man made the land, and by ancient right and custom it should not be permanently alienated from the nation at large. As a monopoly, held in trust for the people, land must be made to bear its fair obligations to the public weal.

George’s solution was a land-value tax, a “single tax” that would both confiscate the rent from land and remove all other forms of taxation. This would enable progress to alleviate poverty, as economic growth would be distributed more widely and a land tax would also allow for the subsidy of a vast network of public services, from utilities and housing to culture. The clarity of George’s proposals and the power of his rhetoric pushed land reform to the top of political debate. J A Hobson declared that George “exercised a more directly powerful, formative and educative influence over English radicalism of the last 15 years than any other man”. Both liberals and socialists were drawn to his ideas. In the Fabian pamphlet Capital and Land, Sydney Olivier proposed that the landlords’ “unearned increment” ought to be confiscated through taxation. Reform movements such as the Land Nationalisation Society and the English Land Restoration League sprang up around George’s public meetings, while the Marxists of the Social Democratic Federation were clearly attracted to the nationalisation argument.

Yet George was ambivalent about full-blooded socialism. The management of land through market mechanisms such as taxation, rather than government control, was his favoured option for reform. This explains why so many liberals were equally drawn to Progress and Poverty. Joseph Chamberlain declared himself “electrified” by the book and the ensuing Radical Programme reflected this pressing concern with the land question. The liberal Winston Churchill argued that the land monopoly was detrimental to the public interest, while Herbert Asquith supported Lloyd George’s proposal “to free the land that from this very hour is shackled with the chains of feudalism”.

GEORGISTS
http://en.wikipedia.org/wiki/Georgism#Influence
http://econjwatch.org/articles/geo-rent-a-plea-to-public-economists
http://renegadeecologist.blogspot.com/2012/01/if-you-want-vision-of-future-imagine.html
Views from a Georgist Ecologist

Land Value Tax, which is in my opinion the Holy Grail of legislative changes to protect wildlife, is the simplest expression of the Economic theories of Henry George. This theory goes that if we abolish all harmful taxes on our hard work and trade and instead charge a rent for the use of natural resources such as Land we will not waste them or allow private interests to exploit the rest of humanities access to them.
Such a tax would not only stimulate jobs and enterprise but put a value on all of our natural resources and force us to look after them. If it was implemented for agricultural land, where the lower value of perpetually designated wilderness or natural grazing land is reflected in its land value taxation, it would be the surest way to save the wildlife of the UK and for the least cost to the taxpayer”.

This would mean hard to farm areas, steep banks, riverbanks, rocky outcrops and areas landowners want to designate a nature reserves, which must be legally binding, could be set aside for wildlife and as such attract no taxation. The result of this would be that unproductive and marginal land would become wildlife havens and receive long term protection for future generation to enjoy.

the SINGLE TAX
http://www.henrygeorgefoundation.org/links/
http://www.nytimes.com/2011/10/16/opinion/sunday/heres-the-guy-who-invented-populism.html
by Jill Lepore / October 15, 2011

Henry George, the most popular American economic thinker of the 19th century, was a populist before populism had a name. His economic plan was known as the Single Tax. George was born in Philadelphia in 1839. He left school at 14 to sail to India and Australia on board a ship called the Hindoo. At the time, a lot of people were writing about India as a place of jewels and romance; George was struck by its poverty. Returning to Philadelphia, he became a printer’s apprentice. He went to New York where he saw, for the first time, “the shocking contrast between monstrous wealth and debasing want.” In 1858, he joined the crew of a ship sailing around the Cape Horn because it was the only way he could afford to get to California. In San Francisco, he edited a newspaper; it soon failed. He spent most of his life editing newspapers, and, as with every other industry in the 19th century, many of them failed. In 1865, George was reduced to begging in the streets.

The 19th century was the Age of Progress: the steam engine, the power loom, the railroad. (Awestruck wonder at progress animated that era the way the obsession with innovation animates American politics today.) George believed that the other side of progress was poverty. The railroad crossed the continent in 1869. From the West, George wrote an essay called “What the Railroad Will Bring Us.” His answer: the rich will get richer and the poor will get poorer. In a Fourth of July oration in 1877, George declared, “no nation can be freer than its most oppressed, richer than its poorest, wiser than its most ignorant.” In 1879, George finished a draft of his most important book. “Discovery upon discovery, and invention after invention, have neither lessened the toil of those who most need respite, nor brought plenty to the poor,” George wrote. He thought the solution was to abolish all taxes on labor and instead impose a single tax, on land. He sent the manuscript to New York. When no one would publish it, he set the type himself and begged publishers simply to ink his plates. The book, “Progress and Poverty,” sold three million copies.

George was neither a socialist nor a communist; he influenced Tolstoy but he disagreed with Marx. He saw himself as defending “the Republicanism of Jefferson and the Democracy of Jackson.” He had a bit of Melville in him (the sailor) and some of Thoreau (“We do not ride on the railroad,” Thoreau wrote from Walden. “It rides upon us.”) But, really, he was a Tocquevillian. Tocqueville believed that democracy in America was made possible by economic equality: people with equal estates will eventually fight for, and win, equal political rights. George agreed. But he thought that speculative, industrial capitalism was destroying democracy by making economic equality impossible. A land tax would solve all.

In 1886, George decided to run for mayor of New York. Democrats urged him not to, telling him he had no chance and would only raise hell. “You have relieved me of embarrassment,” George answered. “I do not want the responsibility and the work of the office of the Mayor of New York, but I do want to raise hell.” The Democrat, Abram Hewitt, won, but George got more votes than the Republican, Theodore Roosevelt.

In the 1880s, George campaigned for the single tax, free trade and ballot reform. The last succeeded. George is why, on Election Day, your polling place supplies you with a ballot that you mark in secret. This is known as an Australian ballot, and George brought it back from his voyage halfway around the world. George ran for mayor of New York again in 1897 but died in his bed four days before the election. His body lay in state at Grand Central. More than 100,000 mourners came to pay their respects. The New York Times said, “Not even Lincoln had a more glorious death.” And then: he was left behind. Even Clarence Darrow, who admired him, recanted. “The error I found in the philosophy of Henry George,” Darrow wrote, “was its cocksureness, its simplicity, and the small value that it placed on the selfish motives of men.”

This image (from a Henry George Cigar box) reflects George’s fame at the time of his run for the Mayoralty of New York in 1886 (and later in 1897). George outpolled a young Theodore Roosevelt, but lost to machine Democrat Abraham Hewitt. The rooster was George’s campaign icon, and his slogan was “The democracy of Thomas Jefferson. And although the cigars were advertised “for men”, George was in fact an outspoken advocate for women’s suffrage.

HENRY GEORGE
http://renegadeecologist.blogspot.com/search?updated-max=2011-05-23T12:37:00%2B01:00&max-results=7
by Agnes George de Mille  /  January, 1979

A hundred years ago a young unknown printer in San Francisco wrote a book he calledProgress and Poverty. He wrote after his daily working hours, in the only leisure open to him for writing. He had no real training in political economy. Indeed he had stopped schooling in the seventh grade in his native Philadelphia, and shipped before the mast as a cabin boy, making a complete voyage around the world. Three years later, he was halfway through a second voyage as able seaman when he left the ship in San Francisco and went to work as a journeyman printer. After that he took whatever honest job came to hand. All he knew of economics were the basic rules of Adam Smith, David Ricardo, and other economists, and the new philosophies of Herbert Spencer and John Stuart Mill, much of which he gleaned from reading in public libraries and from his own painstakingly amassed library. Marx was yet to be translated into English.

George was endowed for his job. He was curious and he was alertly attentive to all that went on around him. He had that rarest of all attributes in the scholar and historian that gift without which all education is useless. He had mother wit. He read what he needed to read, and he understood what he read. And he was fortunate; he lived and worked in a rapidly developing society. George had the unique opportunity of studying the formation of a civilization — the change of an encampment into a thriving metropolis. He saw a city of tents and mud change into a fine town of paved streets and decent housing, with tramways and buses. And as he saw the beginning of wealth, he noted the first appearance of pauperism. He saw degradation forming as he saw the advent of leisure and affluence, and he felt compelled to discover why they arose concurrently. The result of his inquiry,Progress and Poverty, is written simply, but so beautifully that it has been compared to the very greatest works of the English language. But George was totally unknown, and so no one would print his book. He and his friends, also printers, set the type themselves and ran off an author’s edition which eventually found its way into the hands of a New York publisher, D. Appleton & Co. An English edition soon followed which aroused enormous interest. Alfred Russel Wallace, the English scientist and writer, pronounced it “the most remarkable and important book of the present century.” It was not long before George was known internationally.

During his lifetime, he became the third most famous man in the United States, only surpassed in public acclaim by Thomas Edison and Mark Twain. George was translated into almost every language that knew print, and some of the greatest, most influential thinkers of his time paid tribute. Leo Tolstoy’s appreciation stressed the logic of George’s exposition: “The chief weapon against the teaching of Henry George was that which is always used against irrefutable and self-evident truths. This method, which is still being applied in relation to George, was that of hushing up …. People do not argue with the teaching of George, they simply do not know it.” John Dewey fervently stressed the originality of George’s work, stating that, “Henry George is one of a small number of definitely original social philosophers that the world has produced,” and “It would require less than the fingers of the two hands to enumerate those who, from Plato down, rank with Henry George among the world’s social philosophers.” And Bernard Shaw, in a letter to my mother, Anna George, years later wrote, “Your father found me a literary dilettante and militant rationalist in religion, and a barren rascal at that. By turning my mind to economics he made a man of me….”Inevitably he was reviled as well as idolized. The men who believed in what he advocated called themselves disciples, and they were in fact nothing less: working to the death, proclaiming, advocating, haranguing, and proselytizing the idea. But it was not implemented by blood, as was communism, and so was not forced on people’s attention. Shortly after George’s death, it dropped out of the political field. Once a badge of honor, the title, “Single Taxer,” came into general disuse. Except in Australia and New Zealand, Taiwan and Hong Kong and scattered cities around the world, his plan of social action has been neglected while those of Marx, Keynes, Galbraith and Friedman have won great attention, and Marx’s has been given partial implementation, for a time, at least, in large areas of the globe. But nothing that has been tried satisfies. We, the people, are locked in a death grapple and nothing our leaders offer, or are willing to offer, mitigates our troubles. George said, “The people must think because the people alone can act.” We have reached the deplorable circumstance where in large measure a very powerful few are in possession of the earth’s resources, the land and its riches and all the franchises and other privileges that yield a return. These positions are maintained virtually without taxation; they are immune to the demands made on others. The very poor, who have nothing, are the object of compulsory charity. And the rest — the workers, the middle-class, the backbone of the country — are made to support the lot by their labor.

We are taxed at every point of our lives, on everything we earn, on everything we save, on much that we inherit, on much that we buy at every stage of the manufacture and on the final purchase. The taxes are punishing, crippling, demoralizing. Also they are, to a great extent, unnecessary. But our system, in which state and federal taxes are interlocked, is deeply entrenched and hard to correct. Moreover, it survives because it is based on bewilderment; it is maintained in a manner so bizarre and intricate that it is impossible for the ordinary citizen to know what he owes his government except with highly paid help. We support a large section of our government (the Internal Revenue Service) to prove that we are breaking our own laws. And we support a large profession (tax lawyers) to protect us from our own employees. College courses are given to explain the tax forms which would otherwise be quite unintelligible. All this is galling and destructive, but it is still, in a measure, superficial. The great sinister fact, the one that we must live with, is that we are yielding up sovereignty. The nation is no longer comprised of the thirteen original states, nor of the thirty-seven younger sister states, but of the real powers: the cartels, the corporations. Owning the bulk of our productive resources, they are the issue of that concentration of ownership that George saw evolving, and warned against. These multinationals are not American any more. Transcending nations, they serve not their country’s interests, but their own. They manipulate our tax policies to help themselves. They determine our statecraft. They are autonomous. They do not need to coin money or raise armies. They use ours. And in opposition rise up the great labor unions. In the meantime, the bureaucracy, both federal and local, supported by the deadly opposing factions, legislate themselves mounting power never originally intended for our government and exert a ubiquitous influence which can be, and often is, corrupt.

I do not wish to be misunderstood as falling into the trap of the socialists and communists who condemn all privately owned business, all factories, all machinery and organizations for producing wealth. There is nothing wrong with private corporations owning the means of producing wealth. Georgists believe in private enterprise, and in its virtues and incentives to produce at maximum efficiency. It is the insidious linking together of special privilege, the unjust outright private ownership of natural or public resources, monopolies, franchises, that produce unfair domination and autocracy. The means of producing wealth differ at the root: some is thieved from the people and some is honestly earned. George differentiated; Marx did not. The consequences of our failure to discern lie at the heart of our trouble. This clown civilization is ours. We chose this of our own free will, in our own free democracy, with all the means to legislate intelligently readily at hand. We chose this because it suited a few people to have us do so. They counted on our mental indolence and we freely and obediently conformed. We chose not to think.

Henry George was a lucid voice, direct and bold, that pointed out basic truths, that cut through the confusion which developed like rot. Each age has known such diseases and each age has gone down for lack of understanding. It is not valid to say that our times are more complex than ages past and therefore the solution must be more complex. The problems are, on the whole, the same. The fact that we now have electricity and computers does not in any way controvert the fact that we can succumb to the injustices that toppled Rome.To avert such a calamity, to eliminate involuntary poverty and unemployment, and to enable each individual to attain his maximum potential, George wrote his extraordinary treatise a hundred years ago. His ideas stand: he who makes should have; he who saves should enjoy; what the community produces belongs to the community for communal uses; and God’s earth, all of it, is the right of the people who inhabit the earth. In the words of Thomas Jefferson, “The earth belongs in usufruct to the living.” This is simple and this is unanswerable. The ramifications may not be simple but they do not alter the fundamental logic. There never has been a time in our history when we have needed so sorely to hear good sense, to learn to define terms exactly, to draw reasonable conclusions. As George said, “The truth that I have tried to make clear will not find easy acceptance. If that could be, it would have been accepted long ago. If that could be, it would never have been obscured.” We are on the brink. It is possible to have another Dark Ages. But in George there is a voice of hope.