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We have seen demonstrable evidence throughout history that "regulation" alone does not constitute the competitiveness of the market or the cost of housing. It i

by zanny 8y ago

We have seen demonstrable evidence throughout history that "regulation" alone does not constitute the competitiveness of the market or the cost of housing. It is in large part a straw man formulated by the GoP to deregulate megacorps for increased quarterlies wearing the shawl of improving the market for the everman. It is why, in large part, almost all regulation that would be decried as noncompetitive is propped up by special interest lobbies because it enables regulatory capture by monopolists. Not to say there is no bad regulation, or that we are in a good state of regulation today, but thinking sliding this "regulation" bar up or down does anything but make the rich richer is naive as all hell. The first people to capitalize on new markets opened up by deregulation will be those with the most resources to exploit it, and there are infinite scenarios and influencers that impact business or housing that can drive prices up or down way more dramatically than contemporary regulation: * The availability of credit to start business * The demand for whatever your new business would provide * The variables burdened upon employers to provide for their workers in the US that aren't levied upon them elsewhere (mostly healthcare) * The culture and climate of the area in regards to new business. Some parts of the country are so startup / business hostile local NIMBYs would protest a non-accredited business startup. * For real estate, its not just the draconian zoning and NIMBYism that drives prices, its the rampant use of it as an investment by the rich. * That is in large part caused by gross wealth inequality giving the rich so much money they cannot reasonably invest it in productive business so they hoard it in housing. * Developers will cater to the largest market of capital for housing, and right now - and for the better part of a decade, and to lesser degrees more further back than that - that has been the ultrarich who want properties that accrue value. And infinite numbers more than that. Nothing, especially the equilibrium of necessities and the general labor market, is as one dimensional as "we need less regulation and everything would be better!"

rectang 8y ago
Agreed. Two things can be true: 1. Regulation generally causes inefficiencies. 2. Markets tend towards market failure in the absence of regulation.
AnthonyMouse 8y ago
> For real estate, its not just the draconian zoning and NIMBYism that drives prices, its the rampant use of it as an investment by the rich. These go together though. The reason we have draconian zoning is to keep real estate prices high, because the rich want them that way when their money is invested in real estate. And the reason the rich speculate on real estate is that we have restrictive zoning that keeps the price going up. If we fixed the zoning so that it was easier to build smaller units with more density and less parking etc. then construction companies would build those. Then the rich would have to buy twice as many units. But they don't suddenly have twice as much money, so the cost per housing unit comes down. The units would be smaller, but at least people could afford them. And then the fact that people don't have to buy more than they need would reduce the demand for larger units and generally make housing less of a worthwhile investment vehicle, deterring continued speculation. > That is in large part caused by gross wealth inequality giving the rich so much money they cannot reasonably invest it in productive business so they hoard it in housing. This is caused by the combination of low interest rates and low inflation. Money is cheap, so borrowing it to speculate with is profitable. But we can't raise interest rates because that's deflationary and there is already less than the optimal amount of inflation. In principle we could fix this rather quickly by just printing a giant pile of money and giving it out to everybody at the same time as we raise interest rates. People would use the new money to pay back their loans and avoid the new higher interest rates, so you get neither inflation nor deflation (since the two forces cancel), just a return to sane interest rates and a major reduction in total outstanding debt. > Nothing, especially the equilibrium of necessities and the general labor market, is as one dimensional as "we need less regulation and everything would be better!" No, but there is a hierarchy. Good regulation > no regulation > bad regulation. And good regulation is really hard, and bad regulation is a lot of what we have right now. It would be great to have some real geniuses at the helm who can make everything better, but given that we don't, we're still better off to at least stop having the things that are actively making it worse.

by zanny 8y ago

rectang 8y ago

Agreed. Two things can be true: 1. Regulation generally causes inefficiencies. 2. Markets tend towards market failure in the absence of regulation.

AnthonyMouse 8y ago

> For real estate, its not just the draconian zoning and NIMBYism that drives prices, its the rampant use of it as an investment by the rich. These go together though. The reason we have draconian zoning is to keep real estate prices high, because the rich want them that way when their money is invested in real estate. And the reason the rich speculate on real estate is that we have restrictive zoning that keeps the price going up. If we fixed the zoning so that it was easier to build smaller units with more density and less parking etc. then construction companies would build those. Then the rich would have to buy twice as many units. But they don't suddenly have twice as much money, so the cost per housing unit comes down. The units would be smaller, but at least people could afford them. And then the fact that people don't have to buy more than they need would reduce the demand for larger units and generally make housing less of a worthwhile investment vehicle, deterring continued speculation. > That is in large part caused by gross wealth inequality giving the rich so much money they cannot reasonably invest it in productive business so they hoard it in housing. This is caused by the combination of low interest rates and low inflation. Money is cheap, so borrowing it to speculate with is profitable. But we can't raise interest rates because that's deflationary and there is already less than the optimal amount of inflation. In principle we could fix this rather quickly by just printing a giant pile of money and giving it out to everybody at the same time as we raise interest rates. People would use the new money to pay back their loans and avoid the new higher interest rates, so you get neither inflation nor deflation (since the two forces cancel), just a return to sane interest rates and a major reduction in total outstanding debt. > Nothing, especially the equilibrium of necessities and the general labor market, is as one dimensional as "we need less regulation and everything would be better!" No, but there is a hierarchy. Good regulation > no regulation > bad regulation. And good regulation is really hard, and bad regulation is a lot of what we have right now. It would be great to have some real geniuses at the helm who can make everything better, but given that we don't, we're still better off to at least stop having the things that are actively making it worse.