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Immigration: I don't think you really disagree with Cato. Arguing that immigration restrictions should be eliminated does not necessarily entail that one beli

by mmmurf 18y ago

Immigration: I don't think you really disagree with Cato. Arguing that immigration restrictions should be eliminated does not necessarily entail that one believes the restrictions should be lifted all at once. Rent Control: Rent control causes higher prices for everyone except those who happen to have a rent-controlled apartment, because it discourages improvement of existing properties and discourages building new properties. It also encourages over-buying. Someone may pay $2000/month for a 3 bedroom apartment that has been rent controlled since the 1970s, but only use 1 of the bedrooms. That person could find a 1BR apartment within budget w/o rent control, and someone (maybe 3 room-mates paying $1500 each) could share the 3BR place. Overall this is a more efficient distribution of resources, the benefit of which occurs immediately. I don't really feel sorry for someone getting a huge apartment for way below market price. Interest Rates: I'm not sure I understand what you mean, since interest rates vary based on unpredictable Fed action and unpredictable market forces all the time. Banks (lenders) hedge against this by buying/selling instruments to even out their Fed risk and by buying insurance to hedge against many of the other risks. American Auto Industry: What makes you think there would be a chaotic "all at once" situation? That is part of the fearmongering on the part of the firms seeking rents (and the politicians they have bought). Recall how Dubya told everyone that if the US didn't invade Iraq there was an "imminent threat to US national security"? The automakers used that exact strategy to obtain a bailout. Stability is an interesting concept. It's the essence of "conservatism", wanting to preserve the status quo. Marx warned about this in his manifesto. Anyone who has managed to get a leg up will fight to preserve it at the expense of productive change. In today's world, this includes the people who thought they were investment geniuses because the value of their home increased 40% the year after they bought it, it includes the overpaid workers who convince themselves that a hard working person immigrating to the US is somehow unamerican, it also includes the politicians who enjoy the huge donations they have been getting from the financial services industry and don't want to see endangered. So if you put aside the "I want to keep my small advantage at all cost" conservatism, and you do away with the Bush-style fearmongering about imminent threats to "stability", what you find is that the world really isn't all that scary, and often times the meddling that is done to try to prevent "instability" actually does far more harm than good. The Iraq war is a case in point. Note that "stability in the middle east" is the motto of those who want to go and turn it upside down with bombs and nation building! The same applies to domestic policy.

calambrac 18y ago
Just addressing the on-topic portion of your comment (not that the rest wouldn't be worth commenting on, just not enough time or energy) - I really don't understand your criticism of rent control. "It causes higher prices for everyone not under rent-control." Yes, but that's almost the whole point of rent control - people aren't being displaced by the folks bidding up the price of all the other apartments to absurd levels. The article makes it sound like without rent control everything stabilizes into this beautiful bell curve with housing for everyone, but it doesn't actually provide any evidence for this (other than showing less populated and geographically confined cities without rent control). "Discourages improvement of existing properties" Because the properties are certainly more important than the people living in them, right? I mean, our goal as a society should be as many improved properties as possible. "Discourages building new properties" This one baffles me: new properties aren't subject to rent-control in the vast majority of cases. It seems like rent-control is almost a direct stimulus to build new properties. "I don't really feel sorry for someone getting a huge apartment for way below market price." What about feeling sorry for someone who has made their home somewhere for 20+ years and is now getting shoved out because they made a tv show that was set in the neighborhood and a bunch of young overpaid professionals want to play cool for a couple of years?
- mmmurf 18y ago
  The point is that rent control (over time) drives up the price of rental dwellings, a phenomenon which greatly harms the poor. Here's why: In many cities, new buildings are exempt from rent control if they are "luxury" buildings. So the supply of luxury housing increases. Meanwhile, the incentive to build non-luxury buildings is greatly diminished b/c those buildings fall under mandatory rent control. Also, there is a bigger incentive to turn buildings into condos, etc., to avoid having to deal with rent control. Not sure where you heard that new properties are exempt in most cases. This may be due to the fact that most are luxury buildings. So there is a finite amount of rent-controlled housing, and since it's such a great deal, the landlords have little incentive to improve the fixtures, furnishings, etc. They will rent the place without improvements, so there is no reason to spend the money on them. Thus the places deteriorate over time and begin to become more and more slumlike. Rent control also encourages over-consumption of housing space. My 3br apt example above explains one example. Without rent control, supply and demand can function properly. Maybe this means that cheaper housing is located a bit further from the highest rent area of a city. More likely, if there is demand for cheaper housing, someone will figure out a way to build it. The huge number of condemned buildings in major cities is evidence of the resources that have been completely wasted b/c nobody had the incentive to improve the places enough to make them liveable! If you rent, it's not a permanent home. This has many advantages -- if you get laid off you can easily move with a month's notice. You don't have to worry about long term upkeep, you don't have to worry about hiring a realtor or trying to recoup your investment if the market dips. The other side of the coin is that sometimes prices change to reflect other realities. An increasing price probably means that the area is thriving and (surprise) the space is actually worth more. Once you get into declaring that things should be priced by public officials rather than based on the market price (what they are actually worth to someone else who's willing to pay for them) you are stepping onto a very slippery slope.

by mmmurf 18y ago

calambrac 18y ago

Just addressing the on-topic portion of your comment (not that the rest wouldn't be worth commenting on, just not enough time or energy) - I really don't understand your criticism of rent control. "It causes higher prices for everyone not under rent-control." Yes, but that's almost the whole point of rent control - people aren't being displaced by the folks bidding up the price of all the other apartments to absurd levels. The article makes it sound like without rent control everything stabilizes into this beautiful bell curve with housing for everyone, but it doesn't actually provide any evidence for this (other than showing less populated and geographically confined cities without rent control). "Discourages improvement of existing properties" Because the properties are certainly more important than the people living in them, right? I mean, our goal as a society should be as many improved properties as possible. "Discourages building new properties" This one baffles me: new properties aren't subject to rent-control in the vast majority of cases. It seems like rent-control is almost a direct stimulus to build new properties. "I don't really feel sorry for someone getting a huge apartment for way below market price." What about feeling sorry for someone who has made their home somewhere for 20+ years and is now getting shoved out because they made a tv show that was set in the neighborhood and a bunch of young overpaid professionals want to play cool for a couple of years?

mmmurf 18y ago
The point is that rent control (over time) drives up the price of rental dwellings, a phenomenon which greatly harms the poor. Here's why: In many cities, new buildings are exempt from rent control if they are "luxury" buildings. So the supply of luxury housing increases. Meanwhile, the incentive to build non-luxury buildings is greatly diminished b/c those buildings fall under mandatory rent control. Also, there is a bigger incentive to turn buildings into condos, etc., to avoid having to deal with rent control. Not sure where you heard that new properties are exempt in most cases. This may be due to the fact that most are luxury buildings. So there is a finite amount of rent-controlled housing, and since it's such a great deal, the landlords have little incentive to improve the fixtures, furnishings, etc. They will rent the place without improvements, so there is no reason to spend the money on them. Thus the places deteriorate over time and begin to become more and more slumlike. Rent control also encourages over-consumption of housing space. My 3br apt example above explains one example. Without rent control, supply and demand can function properly. Maybe this means that cheaper housing is located a bit further from the highest rent area of a city. More likely, if there is demand for cheaper housing, someone will figure out a way to build it. The huge number of condemned buildings in major cities is evidence of the resources that have been completely wasted b/c nobody had the incentive to improve the places enough to make them liveable! If you rent, it's not a permanent home. This has many advantages -- if you get laid off you can easily move with a month's notice. You don't have to worry about long term upkeep, you don't have to worry about hiring a realtor or trying to recoup your investment if the market dips. The other side of the coin is that sometimes prices change to reflect other realities. An increasing price probably means that the area is thriving and (surprise) the space is actually worth more. Once you get into declaring that things should be priced by public officials rather than based on the market price (what they are actually worth to someone else who's willing to pay for them) you are stepping onto a very slippery slope.