Written by guest poster Phil Berg
It's the money, stupid
There are two things involved in any transaction, the stuff and the money. It used to be that gas was five cents a gallon. Now it's three bucks. It's still the same old gas. So what has changed? The bucks have changed. The same goes for housing--more bucks chasing a fixed housing stock.
Let’s follow the money. But before I continue, I should say that almost everybody thinks that money is too complicated. It is much easier to make an emotional decision to just throw up your hands and blame greed. Blaming a broken market on greed is like blaming an airplane crash on gravity. Of course gravity is to blame, but the other reasons need to be investigated.
Following the money
One source of more money chasing housing is mortgages. The cash for mortgages largely comes from banks. Now, most people think that banks just recycle money from depositors. OK, this is right where most people stop listening and change the topic. But right here is the crux of the problem.
It is a little complicated. This is largely because we like to think that things work in a logical way. Honesty works in a logical. Fraud is more complicated. The machinery for creating more money for mortgages, or any other credit, is a fraud. That is a strong statement, but please just entertain the idea. Think about it for a while after you read this.
You will not be alone in being dazed by what I am about to write. No less a famous liberal economist, John Kenneth Galbraith, said that, “The mind is repelled by the notion of how money creation works.”
So here goes
We will start with a car loan, so as not to be distracted by the complications of real estate.
In the old days people used to call it “Using OPM.” Today the same phenomenon is called a “Voter Revolt.” Or at least that is what Jon Golinger calls it in his Opinion piece in the S.F. Examiner of March 15. Golinger was the driving force behind the wildly successful “No Wall on the Waterfront” campaign, which resulted in the canning of the Washington 8 luxury complex in San Francisco’s waterfront. Equally successful was Golinger’s Proposition B, which requires voter approval of any structure over existing high limits to be built on Port of San Francisco property (the waterfront).
In his Opinion piece, Golinger quotes the findings of a citywide poll of 602 likely voters conducted in February 2015 for the housing group TODCO, Tenants and Owners Development Corporation, focusing on South of Market. The findings state that the voters polled would overwhelmingly support ballot measures that would accomplish the following:
* Dedicate City-owned land to be used only for subsidized housing.
* Zone City-owned land only for subsidized housing.
* Enact a temporary moratorium on new projects in the Mission District, until the City adopts a policy to protect against the displacement of small businesses and arts groups.
Golinger excoriates the City for approving “a glut of luxury condos to occupy our increasingly limited land instead of prioritizing the affordable [subsidized] housing we badly need.” No mention in the article that Proposition C approved in 2012 would require that developers fork over the equivalent of 12% of those luxury condos in affordable housing. And Proposition K approved in 2014 would make the pressure to bump up the 12% to 33% unavoidable.
We Libertarians are 100% in favor of voter revolts. However, this revolt is starting to shape up as tons of expensive bonds (City IOU’s) and tax increment financing (future gains in taxes to subsidize current improvements). The City does not “earn” any money, so any money it may have to pay principal and interest on bonds needs to come from the pockets of those who do.
Good job by Starchild, our Outreach Director, explaining the basic principles of libertarianism on Brian Donovan’s “Post News Hour” (KPR1.com). Thank you to Brian for his interest!
Starchild’s crucial message: The current political system is rigged in favor of insiders, leaving the majority of us victims of that system. It does not have to be this way.
He touched upon the main challenges of our current system, and how libertarianism could remedy them. The challenges affect our personal lives and our economic lives. Therefore, solutions need to address both, which libertarianism does.
On the personal side, we live under policies that undermine individual liberties. Challenges include invasive searches and seizures, detention policies skewed against minorities, rules on how people choose to live their lives, prohibition on what people choose to consume, application of resources on pursuing victimless crimes.
On the economic side, we deal with policies that prevent us from easily starting a business without jumping through interminable hoops, establishing private transportation systems that help people get to where they are going, have control of our monetary system via elected representatives not unelected Federal Reserve bureaucrats.
Libertarianism pushes the balance of power towards the people and away from the insiders. There are many groups, local and national, that promote power to the people, including the Libertarian Party. However, we can exercise libertarianism every day on our own by insisting on making personal and economic informed choices without government coercion, and by believing in our hearts that we have unalienable rights that are ours to exercise while making sure nothing we do harms others.
One of the topics to be discussed at our business meeting of March 14th relates to the complex issue of surviving as the small local chapter of a “third” political party, while being forced by government regulations to abide by hundreds of rules, filing requirements, and obscure mandates that would better apply to organizations awash in resources.
More distressing than requirements that force our unpaid volunteers to spend much time learning rules and filling out forms, are requirements that force donors to reveal their names, addresses, and employers. And we are not even remotely talking about donors like the Koch Brothers or George Soros. We are talking about $100 bucks!
“Campaign finance” regulations keep changing to become more complex and encompassing. For the LPSF to remain a visible and proud local chapter of the Libertarian Party, it must stomach the rules and the paperwork. We don’t like it but we are doing it. If the LPSF closes shop, if it tries to operate underground, if it runs away, then it will cease to provide a loud constant opposing voice to San Francisco’s Nanny politics and tax & spend attitudes. No other political party or any faction of any other political party calls for reducing government to its very basic Constitutional functions to the extent that we Libertarians (BIG “L”) do. No other political party or any faction of any other political party believes in personal liberty and personal responsibility to the extent that we Libertarians (BIG “L”) do.
We ask that our members and donors continue to help us in our efforts. May we count on you, as always?
THE YAL DEBATE TEAM AND THEIR GUEST DEBATERS
Heaps of praise to the great debates Young Americans for Liberty presented on March 10th at the Cesar Chavez Student Center of San Francisco State University. Three sets of student members of YAL and their guest debaters ably sparred on three subjects: The U.S. National Debt – Stimulus or Austerity? What Constitutes Free Speech? Income Inequality – Causes and Remedies. It must not go unnoticed that YAL is braving the super progressive environment of SFSU to reframe challenges and offer solutions that work.