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America, the Globalist Grift
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I hate to snuff out any post-Independence Day fervor that you still might be enjoying. Oh, well. “Wet Blanket” is my middle name. All the annual Old Glory-waving rituals and public displays of patriotic affection can’t change this bitter fact:

Our once-sovereign nation has become nothing more than a morbidly obese cash cow for what the Biden administration now openly calls the “liberal world order.”

Higher gas prices are just the tip of the sacrifice iceberg. It’s our posterity paying the globalist pipers. In the new “liberal world order” (which is really just the same old Bush family “New World Order” of more than three decades ago), homegrown children’s needs are subjugated to the hopes and dreams of the children of the rest of the world.

Stick with me and follow an open-borders bouncing ball that demonstrates how multinational elites exploit America Last — with the brazen complicity of our own U.S. government, nonprofits and corporations. As always, we must follow the money to find the truth. Let’s dig deeper behind this headline:

“Former American Hebrew Academy will house unaccompanied immigrant children.”

According to WFMY-TV news in Greensboro, North Carolina, a failed international school venture called the American Hebrew Academy entered into a lucrative five-year lease agreement this week with the U.S. Department of Health and Human Services’ Office of Refugee Resettlement. The plan will turn AHA’s sprawling campus into a tax-subsidized shelter for illegal alien youth. The “unaccompanied children” will be shipped from Mexico starting this month and will be treated to a comprehensive array of benefits exclusively showered on the offspring of southern border violators.

I exposed the HHS/ORR kiddie catch-and-release racket in my 2019 book, “Open Borders Inc.” Thanks to a liberal Bill Clinton-appointed judge in Southern California and convoluted class-action litigation dating back to 1997 on behalf of illegals spearheaded by the American Civil Liberties Union, the feds created new rights and standards for illegal alien minor shelter care. Clinton immigration bureaucrats agreed to provide food, clothing, personal grooming items, medical and dental care, family planning, “at least one hour a day of large muscle activity,” “structured leisure time activities,” psychotherapy and lawyers. Lots of lawyers.

HHS now operates a network of 100 state-licensed shelters in 17 states and has provided care to a whopping total of over 340,000 illegal alien children. (For perspective: That’s a population roughly equivalent to the city of Anaheim, California, or Aurora, Colorado.) In 2017, the budget was \$1.4 billion. In 2022, the Biden administration has requested an astronomical \$3.2 billion in funding for the program.

Fun fact: The Biden administration rerouted \$2 billion in COVID-19 funds for Americans to the illegal alien youth housing boondoggle.

ORDER IT NOW

Those tax funds will subsidize a panoply of for-profit and nonprofit ventures serving foreigners’ children on American soil, which in turn provides bottomless inducements for countless hundreds of thousands of other families around the world to fork over coyote fees to send even more unaccompanied minors across our borders, who then move into the HHS/ORR facilities, which are served by nearly 50 other organizations at a cost of over \$34,000 per child, according to the Capital Research Center.

So while you’re worrying about formula, diaper and food shortages for your own kiddos, rest assured: Open Borders, Inc. is hard at work spending your money on everyone else’s babies, toddlers and teens.

Let us peer further into the defunct “American Hebrew Academy,” which is now reinventing itself as part of the Biden leasing scheme as the “Greensboro Piedmont Academy Influx Care Facility for UC (unaccompanied minors)” and the “Greensboro Global Academy.” The AHA was in a “financial death spiral” for years after its profligate founder and aviation reinsurance mogul, Maurice Sabbah, threw \$100 million down a black hole pursuing his dream of building a world-renowned boarding school in 2001 that he envisioned as “an international destination in elite Jewish education,” according to The Forward.

But that year, an arbitration panel ruled that Sabbah’s aviation reinsurance business had committed fraud and “willful and deliberate misconduct” by skimming off hundreds of millions of dollars for its founders, leaving Japanese insurance companies high and dry when 9/11 happened; the decision yielded a \$400 million settlement. The ripped-off companies then sued and settled with AHA to recoup purloined funds. The operators of the academy tried to salvage the 100-acre campus — replete with an \$18 million athletic field, 22-acre lake, 16 dorms, 34 staff resident apartments, natatorium, climbing walls and high-tech gadgetry in every classroom — by rebranding as an “international school” targeting Middle Eastern and Asian students.

The goal: bringing “globalization” to Greensboro.

The “American Hebrew Academy” turned to a “private” education company called Puxin in communist China for a \$26 million loan in 2019 for help. In May 2022, the New York Stock Exchange moved to suspend trading in Puxin and delist it amid longstanding allegations of fraud. As Judicial Watch notes, “the money HHS is paying in rent will likely be used to pay back the Chinese company.”

God bless America? God help us from the globalist grifters making bank off whatever is still left of this country, if that is what you call it.

Michelle Malkin’s email address is [email protected]

 
• Category: Foreign Policy • Tags: Immigration, Joe Biden 
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  1. Thank you Michelle.

    ((grifters))

  2. I live in a gated community of 145 homes. On national holidays, and on June 14th, about half of those homes have typically flown the American flag. That number has been decreasing the past few years and decreased sharply this year. On July 4th this year not one single American flag was displayed. Not one.

    • Thanks: ruralguy
    • Replies: @Achmed E. Newman
    @Bill H.

    Are there more Ukrainian flags than American, Bill? I have a hard-left-wing neighbor that flies the Ukraine one, but would never deign to fly an American flag ever.

    I've had no respect for the Feral Government for over 25 years, but now I believe we may be able to reclaim the flag. The Potomac Regime has their Pride flag now, so patriots can resume using the Stars & Bars.

    Replies: @Greta Handel

    , @Verymuchalive
    @Bill H.

    On July 4th this year not one single American flag was displayed. Not one.

    So that includes you. Any particular reason ? Are you even American ?

    Replies: @Mike Tre, @Brad Anbro

    , @Ertugrul's Sword
    @Bill H.

    Maybe next year fly the flag upside down, an understood sign of distress. Or better yet just get a pirate flag.

    , @Brad Anbro
    @Bill H.

    For what it's worth, I live just south of the big NASCAR race track in Bristol, Tennessee. This year's 4th of July neighborhood celebrations (fireworks set off by the locals) were MUCH smaller this year than last year. Last year, they were setting off fireworks well past midnight and this year, they were pretty much done by 10 PM...

    , @Reg Cæsar
    @Bill H.


    I live in a gated community... On July 4th this year not one single American flag was displayed. Not one.
     
    There's just something un-American about the words "gated community". Indeed, it sounds Latin American.

    Whatever happened to front porches?


    https://st.depositphotos.com/1163717/3352/i/950/depositphotos_33525821-stock-photo-american-front-porch.jpg

  3. What a sick, sick country the Potomac Regime has turned this nation into! I keep up with VDare, so I know many of these details, and likely more than most of you all on the Biden Admin. illegal alien Human Trafficking programs (see “Joe Biden is a criminal Human Trafficker!”, “This Human Trafficking is HUGE. We’re gonna need a bigger boat aircraft.”, and “The ICE men and the who-ers of the skies”) Your info. on these HSS “Influx Care Facilities” pisses me off more than usual, though.

    Imagine if half of all Americans would read just the one paragraph of yours about the \$34,000 per illegal alien kid and think about this:

    So while you’re worrying about formula, diaper and food shortages for your own kiddos, rest assured: Open Borders, Inc. is hard at work spending your money on everyone else’s babies, toddlers and teens.

    Wouldn’t heads be rolling, or are Americans just in a high-fructose-corn-syrup-induced stupor?

    BTW, about being forced to pay for other people’s kids? That’s a Welfare State thing – been going on for 1/2 a century. Reap the whirlwind!

  4. For once I share Ms. Malkin’s concerns. The actual problem is beginning with Ronald Reagan, the US has come to allow the FIRE sector to dominate the economy. Classical economics (and some old style Hamiltonian mercantilism) taught that to have an actual wealth creating free market, you needed to purge the economy of its “rentier” class. That means you want no economic rent. Rent includes things like rental housing, mortgage interest, credit card interest, car loan interest, private health care and insurance and similar items. Think of your 30 year home mortgage. You will pay the bank more in interest over 30 years than the value of the home. Think of your rental apartment, you will pay the landlord far more in rent than the value of the apartment. What is worse, your landlord will work to use zoning rules to prevent competitor landlords from driving rents down by building more housing.

    Since Reagan, the Reagan tax cuts have created more wealth disparity. The Reagan deregulation destroyed local banking. The Republican drive for more home owners, made more people slaves to their mortgage.

    What Ms Malkin identifies is more folks lining up to collect “rent.”

    The fix is to purge society of ‘rents’ and to push the US back into a world where it makes wealth by invention, mining, milling, and manufacturing.

    • Replies: @RadicalCenter
    @Harry Huntington

    How about a federal public bank that refinances Americans’ mortgage loans at ZERO percent interest? Four limitations on eligibility:

    1. Must be a US Citizen
    2. Must have filed federal income tax returns for the past five consecutive years
    3. Must not have any substantial amount of back federal taxes owed
    4. Primary residence only, no vacation homes

    This is a way to provide fast and substantial relief to tens of millions of Americans. Not to banks or airlines or any other powerful connected interests in the alleged hope that the benefit will trickle down to us. Directly to us.

    (actually, banks that have issued these mortgage loans should be glad to get all their principal back without further risk. Tough luck that the poor poor bankers won’t be able to rape the borrowers with interest just so they can keep their homes anymore.)

    How will we pay for this? Well, closing, say, 3/4 of our 700-plus military bases abroad will provide at least $150-175 billion in savings annually. (Another benefit is that the tens of thousands of troops currently spending money near their foreign bases, will come home and spend the money in US towns instead.).

    Next, phase out the federal income tax for everyone except the top 3% of household incomes, as urged by a columnist on Unz a couple years ago.

    I’d add: restrict residential property ownership to actual human beings, not corporations or banks or REITs. No more corporate/bank landlords, period. For that matter, no non-citizen landlords either.

    Then tax the Hell out of corporations and banks’ “earnings” from residential rent and any remaining unrefinanced/pre-refi residential mortgages that they hold. In short, make existing corporate/bank landlording unprofitable and further such landlording illegal. Actual US citizen human beings — you know, the people the government is supposed to serve and protect, lol — who own residential rental properties, leave them be.

    , @Kratoklastes
    @Harry Huntington


    economic rent
     
    This term has a very specific meaning in economics, and it is very specifically not

    rental housing, mortgage interest, credit card interest, car loan interest, private health care and insurance and similar items
     
    An agent accrues economic rent when they realise a rate of return on investment above some (largely-notional) 'equilibrium' rate of return. Put another way, the agent receives payments in excess of the amount required to bring the asset/good/service into existence/production.

    It's similar to - but not the same as - the economic notion of 'excess profits' (which also does not mean what the common man thinks it means).

    In Chapter 10 of "That Which is Seen and That Which Is Not Seen" Frédéric Bastiat wrote an excellent brief summary on why the market for credit exists, and why interest receipts cannot properly be considered as 'economic rent' (and therefore people who lend money at interest cannot properly be called 'rentiers').

    If you want to see where all the 'economic rent' exists in an economy, look at the industries that have IP 'protection', including licensure (doctors, dentists etc) and other government-furnished systems of preferment that deliberately constrain competition. Those who hold government-furnished monopoly/oligopoly power are the actual rentiers.

    Big Tech? Yep. Big Pharma? Double-yep. Big Ag? Surprise, surprise!

    In a modern financialised economy, the rentier class almost certainly includes major credit providers - but the process of credit generation itself is not the source of the economic rent: the economic rent derives from the fact that barriers to entry into the market keeps their returns above the 'natural' equilibrium.

    One final note: I mentioned that the 'equilibrium' rate of return is largely notional - that's because it's not really a single number... that's because different activities have different embedded risk, and so the 'equilibrium' return must compensate capital-providers for taking on that risk in that specific activity.

    Imagine if a law was passed that forbade property owners from earning more in rent than they would earn on a 1-year CD (after all, rental contracts are usually renewable annually). How many rental properties do you reckon there would be?

    What if people who sell automobiles on credit, were only permitted to charge an interest rate equal to the Federal Funds rate - irrespective of the risk characteristics of the borrower? Because after all, if nobody in the credit-creation chain is allowed to add a risk margin, the cost of borrowing can't be more than Fed Funds.

    Also, that idiot's logic implies that there is no such thing as a yield spread, a credit spread, or a junk bond: everything has to yield Fed Funds, or idiots will think that there are people 'earning economic rents'.

    By all means: pass that law - and watch how fast the industrial economy crashes, and living standards decline to pre-WWII levels (because prior to WWII there was still a credit market that included risk premia).
  5. Why shouldn’t US be one big grift?

    The founding stock, the Anglos, handed control of the US over to the Jews whose view of America is “Is it good for Jews and Israel?” rather than “Is it good for all Americans?” In other words, Jews see the US as one big grift for their self-aggrandizement.

    So, if Anglos favor such a people the most, then it only follows that all groups in the US should emulate the Jews and pursue their own ethnic interests.

    But of course, Anglos(and whites in general) have a mental caveat: “Jews are a special people, and because they are oh-so-very-great, they DESERVE to favor their own godlike interests over those of lowly goyim; and so, all of us goyim must cuck to them like the dogs that we are… but the rest of Americans, except blacks and homos(who also deserve the red carpet treatment), aren’t so special, so you guys must serve Americanism over your special group interests.”

    But then, what is this ‘Americanism’? Since America is now defined by elevating Jews(and homos and blacks) upon the pedestal, it means most groups must serve the group interests of Jews, blacks, and homos.

    What a great formula for success. But don’t expect too much from Dissident Right. While the likes of Jared Taylor may not cave to blacks and homos so easily, they also partake of the Jews-are-special and above criticism shtick. Their hope is to pray that the special high-IQ Jews will come over to their side. Just a variation of dog behavior.

  6. Oh, well. “Wet Blanket” is my middle name.

    Thanks. I hadn’t heard that expression for a while. This expression originated in the 1870s, derived from the practice of cooks to keep a wet blanket near the stove to be able to smother a fire. I love disappearing idioms and metaphors. Thanks again, great writing style, I like the cut of your jib.

  7. @Bill H.
    I live in a gated community of 145 homes. On national holidays, and on June 14th, about half of those homes have typically flown the American flag. That number has been decreasing the past few years and decreased sharply this year. On July 4th this year not one single American flag was displayed. Not one.

    Replies: @Achmed E. Newman, @Verymuchalive, @Ertugrul's Sword, @Brad Anbro, @Reg Cæsar

    Are there more Ukrainian flags than American, Bill? I have a hard-left-wing neighbor that flies the Ukraine one, but would never deign to fly an American flag ever.

    I’ve had no respect for the Feral Government for over 25 years, but now I believe we may be able to reclaim the flag. The Potomac Regime has their Pride flag now, so patriots can resume using the Stars & Bars.

    • Replies: @Greta Handel
    @Achmed E. Newman

    Shhh!

    Ukraine is a topic that Mrs. Malkin avoids, remember?

  8. @Achmed E. Newman
    @Bill H.

    Are there more Ukrainian flags than American, Bill? I have a hard-left-wing neighbor that flies the Ukraine one, but would never deign to fly an American flag ever.

    I've had no respect for the Feral Government for over 25 years, but now I believe we may be able to reclaim the flag. The Potomac Regime has their Pride flag now, so patriots can resume using the Stars & Bars.

    Replies: @Greta Handel

    Shhh!

    Ukraine is a topic that Mrs. Malkin avoids, remember?

  9. Cat says:

    Excellent article, my dear. I had read about the school, but no backstory . It was obvious something was up. Thank you for explaining how it came down that once again shady Jews are at the trough liberally helping themselves out to American tax payer money.

    Erroneous title. The headline should read “Jews in America, Globalist Grifters Everywhere They Go.”

  10. @Harry Huntington
    For once I share Ms. Malkin's concerns. The actual problem is beginning with Ronald Reagan, the US has come to allow the FIRE sector to dominate the economy. Classical economics (and some old style Hamiltonian mercantilism) taught that to have an actual wealth creating free market, you needed to purge the economy of its "rentier" class. That means you want no economic rent. Rent includes things like rental housing, mortgage interest, credit card interest, car loan interest, private health care and insurance and similar items. Think of your 30 year home mortgage. You will pay the bank more in interest over 30 years than the value of the home. Think of your rental apartment, you will pay the landlord far more in rent than the value of the apartment. What is worse, your landlord will work to use zoning rules to prevent competitor landlords from driving rents down by building more housing.

    Since Reagan, the Reagan tax cuts have created more wealth disparity. The Reagan deregulation destroyed local banking. The Republican drive for more home owners, made more people slaves to their mortgage.

    What Ms Malkin identifies is more folks lining up to collect "rent."

    The fix is to purge society of 'rents' and to push the US back into a world where it makes wealth by invention, mining, milling, and manufacturing.

    Replies: @RadicalCenter, @Kratoklastes

    How about a federal public bank that refinances Americans’ mortgage loans at ZERO percent interest? Four limitations on eligibility:

    1. Must be a US Citizen
    2. Must have filed federal income tax returns for the past five consecutive years
    3. Must not have any substantial amount of back federal taxes owed
    4. Primary residence only, no vacation homes

    This is a way to provide fast and substantial relief to tens of millions of Americans. Not to banks or airlines or any other powerful connected interests in the alleged hope that the benefit will trickle down to us. Directly to us.

    (actually, banks that have issued these mortgage loans should be glad to get all their principal back without further risk. Tough luck that the poor poor bankers won’t be able to rape the borrowers with interest just so they can keep their homes anymore.)

    How will we pay for this? Well, closing, say, 3/4 of our 700-plus military bases abroad will provide at least \$150-175 billion in savings annually. (Another benefit is that the tens of thousands of troops currently spending money near their foreign bases, will come home and spend the money in US towns instead.).

    Next, phase out the federal income tax for everyone except the top 3% of household incomes, as urged by a columnist on Unz a couple years ago.

    I’d add: restrict residential property ownership to actual human beings, not corporations or banks or REITs. No more corporate/bank landlords, period. For that matter, no non-citizen landlords either.

    Then tax the Hell out of corporations and banks’ “earnings” from residential rent and any remaining unrefinanced/pre-refi residential mortgages that they hold. In short, make existing corporate/bank landlording unprofitable and further such landlording illegal. Actual US citizen human beings — you know, the people the government is supposed to serve and protect, lol — who own residential rental properties, leave them be.

  11. @Bill H.
    I live in a gated community of 145 homes. On national holidays, and on June 14th, about half of those homes have typically flown the American flag. That number has been decreasing the past few years and decreased sharply this year. On July 4th this year not one single American flag was displayed. Not one.

    Replies: @Achmed E. Newman, @Verymuchalive, @Ertugrul's Sword, @Brad Anbro, @Reg Cæsar

    On July 4th this year not one single American flag was displayed. Not one.

    So that includes you. Any particular reason ? Are you even American ?

    • Replies: @Mike Tre
    @Verymuchalive

    Flying it upside down would be perfectly reasonable these days.

    Replies: @Verymuchalive

    , @Brad Anbro
    @Verymuchalive

    MINE was on display; it still is. But I am ashamed at what it now stands for.

    Thank you.

  12. @Bill H.
    I live in a gated community of 145 homes. On national holidays, and on June 14th, about half of those homes have typically flown the American flag. That number has been decreasing the past few years and decreased sharply this year. On July 4th this year not one single American flag was displayed. Not one.

    Replies: @Achmed E. Newman, @Verymuchalive, @Ertugrul's Sword, @Brad Anbro, @Reg Cæsar

    Maybe next year fly the flag upside down, an understood sign of distress. Or better yet just get a pirate flag.

  13. @Verymuchalive
    @Bill H.

    On July 4th this year not one single American flag was displayed. Not one.

    So that includes you. Any particular reason ? Are you even American ?

    Replies: @Mike Tre, @Brad Anbro

    Flying it upside down would be perfectly reasonable these days.

    • Agree: Verymuchalive
    • Replies: @Verymuchalive
    @Mike Tre

    Do they still fine you for doing that? Not being American and all.

    Replies: @Mike Tre

  14. Globalist Grifters.

    Isn’t that that name of the Trump Family?

  15. Randy Newman is a fine Jewish boy.

    I’m with Randy! I love LA and even the scurrilous, confused gentile whites that live here.

  16. @Mike Tre
    @Verymuchalive

    Flying it upside down would be perfectly reasonable these days.

    Replies: @Verymuchalive

    Do they still fine you for doing that? Not being American and all.

    • Replies: @Mike Tre
    @Verymuchalive

    I believe they do, but as long as you set it on fire afterword you get a full refund.

    Replies: @Verymuchalive

  17. According to WFMY-TV news in Greensboro, North Carolina, a failed international school venture called the American Hebrew Academy entered into a lucrative five-year lease agreement this week with the U.S. Department of Health and Human Services’ Office of Refugee Resettlement. The plan will turn AHA’s sprawling campus into a tax-subsidized shelter for illegal alien youth. The “unaccompanied children” will be shipped from Mexico starting this month and will be treated to a comprehensive array of benefits exclusively showered on the offspring of southern border violators.

    The ((Jew’s)) can’t accomplish anything without Big Brother/Uncle Shlomo subsidizing it. And they take the lion’s share of government funds for their own pockets. In this case they’ll temporarily house some illegal immigrant youth, and pocket 9 out 10 dollars intended for relief. Half their take will be paid into the Zionist racket, half will go into their personal bank accounts.

    Grifting goyim taxpayers is the Zionist way, and always has been.

    How many members of Congress and the Executive Branch are Zionists? 99%? We know Joe “I am a Zionist” Biden is one.

  18. @Bill H.
    I live in a gated community of 145 homes. On national holidays, and on June 14th, about half of those homes have typically flown the American flag. That number has been decreasing the past few years and decreased sharply this year. On July 4th this year not one single American flag was displayed. Not one.

    Replies: @Achmed E. Newman, @Verymuchalive, @Ertugrul's Sword, @Brad Anbro, @Reg Cæsar

    For what it’s worth, I live just south of the big NASCAR race track in Bristol, Tennessee. This year’s 4th of July neighborhood celebrations (fireworks set off by the locals) were MUCH smaller this year than last year. Last year, they were setting off fireworks well past midnight and this year, they were pretty much done by 10 PM…

  19. @Verymuchalive
    @Bill H.

    On July 4th this year not one single American flag was displayed. Not one.

    So that includes you. Any particular reason ? Are you even American ?

    Replies: @Mike Tre, @Brad Anbro

    MINE was on display; it still is. But I am ashamed at what it now stands for.

    Thank you.

  20. @Verymuchalive
    @Mike Tre

    Do they still fine you for doing that? Not being American and all.

    Replies: @Mike Tre

    I believe they do, but as long as you set it on fire afterword you get a full refund.

    • Replies: @Verymuchalive
    @Mike Tre

    Especially if you are an illegal immigrant. Then, they'll give you rent-free housing for the next 10 years.

  21. @Bill H.
    I live in a gated community of 145 homes. On national holidays, and on June 14th, about half of those homes have typically flown the American flag. That number has been decreasing the past few years and decreased sharply this year. On July 4th this year not one single American flag was displayed. Not one.

    Replies: @Achmed E. Newman, @Verymuchalive, @Ertugrul's Sword, @Brad Anbro, @Reg Cæsar

    I live in a gated community… On July 4th this year not one single American flag was displayed. Not one.

    There’s just something un-American about the words “gated community”. Indeed, it sounds Latin American.

    Whatever happened to front porches?

  22. @Mike Tre
    @Verymuchalive

    I believe they do, but as long as you set it on fire afterword you get a full refund.

    Replies: @Verymuchalive

    Especially if you are an illegal immigrant. Then, they’ll give you rent-free housing for the next 10 years.

  23. @Harry Huntington
    For once I share Ms. Malkin's concerns. The actual problem is beginning with Ronald Reagan, the US has come to allow the FIRE sector to dominate the economy. Classical economics (and some old style Hamiltonian mercantilism) taught that to have an actual wealth creating free market, you needed to purge the economy of its "rentier" class. That means you want no economic rent. Rent includes things like rental housing, mortgage interest, credit card interest, car loan interest, private health care and insurance and similar items. Think of your 30 year home mortgage. You will pay the bank more in interest over 30 years than the value of the home. Think of your rental apartment, you will pay the landlord far more in rent than the value of the apartment. What is worse, your landlord will work to use zoning rules to prevent competitor landlords from driving rents down by building more housing.

    Since Reagan, the Reagan tax cuts have created more wealth disparity. The Reagan deregulation destroyed local banking. The Republican drive for more home owners, made more people slaves to their mortgage.

    What Ms Malkin identifies is more folks lining up to collect "rent."

    The fix is to purge society of 'rents' and to push the US back into a world where it makes wealth by invention, mining, milling, and manufacturing.

    Replies: @RadicalCenter, @Kratoklastes

    economic rent

    This term has a very specific meaning in economics, and it is very specifically not

    rental housing, mortgage interest, credit card interest, car loan interest, private health care and insurance and similar items

    An agent accrues economic rent when they realise a rate of return on investment above some (largely-notional) ‘equilibrium’ rate of return. Put another way, the agent receives payments in excess of the amount required to bring the asset/good/service into existence/production.

    It’s similar to – but not the same as – the economic notion of ‘excess profits‘ (which also does not mean what the common man thinks it means).

    In Chapter 10 of “That Which is Seen and That Which Is Not Seen Frédéric Bastiat wrote an excellent brief summary on why the market for credit exists, and why interest receipts cannot properly be considered as ‘economic rent‘ (and therefore people who lend money at interest cannot properly be called ‘rentiers‘).

    If you want to see where all the ‘economic rent‘ exists in an economy, look at the industries that have IP ‘protection’, including licensure (doctors, dentists etc) and other government-furnished systems of preferment that deliberately constrain competition. Those who hold government-furnished monopoly/oligopoly power are the actual rentiers.

    Big Tech? Yep. Big Pharma? Double-yep. Big Ag? Surprise, surprise!

    In a modern financialised economy, the rentier class almost certainly includes major credit providers – but the process of credit generation itself is not the source of the economic rent: the economic rent derives from the fact that barriers to entry into the market keeps their returns above the ‘natural’ equilibrium.

    One final note: I mentioned that the ‘equilibrium’ rate of return is largely notional – that’s because it’s not really a single number… that’s because different activities have different embedded risk, and so the ‘equilibrium’ return must compensate capital-providers for taking on that risk in that specific activity.

    Imagine if a law was passed that forbade property owners from earning more in rent than they would earn on a 1-year CD (after all, rental contracts are usually renewable annually). How many rental properties do you reckon there would be?

    What if people who sell automobiles on credit, were only permitted to charge an interest rate equal to the Federal Funds rate – irrespective of the risk characteristics of the borrower? Because after all, if nobody in the credit-creation chain is allowed to add a risk margin, the cost of borrowing can’t be more than Fed Funds.

    Also, that idiot’s logic implies that there is no such thing as a yield spread, a credit spread, or a junk bond: everything has to yield Fed Funds, or idiots will think that there are people ‘earning economic rents’.

    By all means: pass that law – and watch how fast the industrial economy crashes, and living standards decline to pre-WWII levels (because prior to WWII there was still a credit market that included risk premia).

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