Monthly Archives: October 2015

This Gentle Town

According to Wikipedia, gentrification is “the buying and renovating of houses and stores in deteriorated urban neighborhoods by wealthier individuals, which in effect increases property values and displaces low-income families and small businesses.” At face value this would seem to be a positive turn of events: transforming something of low value into something of high value, just as one might transform sand and carbon into a computer or granite into a statue. But leave it to the SJW’s (Social Justice Warriors) to find the cloud in every silver lining. Instead of welcoming improvements (both aesthetically and commercially) they instead decry these changes as destroying the “character” of a neighborhood or town. As though “character” were a tangible, ownable thing that residents had a right to enjoy ad infinitum. This sentiment is best captured in the following quote from a recent article in The Flagpole (an Athens, Georgia local paper):

“There is still a powerlessness that black residents feel against affluent, mostly white 20-somethings overtaking what’s theirs. ‘There’s a certain community ownership that the long-term residents have,” says Ellison. “… They’re feeling squeezed out of the their communities.’ ”

The attitude expressed in this quote demonstrates a fundamentally flawed view of the world that all too often infects political action. Notice the use of the possessive pronouns and homage to notions of communal property. When people take up residence or frequent certain areas they invariably tend to identify that territory as “theirs”: “my” town, “our” city, “our” park, etc. Although usage is colloquial and people understand they do not hold title to the city in which they reside – they often act as though they do own it. For example, zoning laws are the political manifestation of this view of the world: “we don’t want that in OUR town.” Zoning laws are a way for nearby non-owners to behave as though they were owners. It allows them to exert control over something that is not theirs merely because they happen to live in an ill defined geographical boundary around said property.

Fortunately there are few substantive anti-gentrification measures that can be legally attempted. The only effective measure would be a grossly egregious violation of private property rights. It would entail simply prohibiting the sale of any private property in certain areas arbitrarily identified as worth “saving” – unless of course it is to someone the SJW’s approve of. In other words, it would be a direct transfer of ownership en masse from the individual to the collective. That is straight up communism, and fortunately, for now, America isn’t quite ready for that.

The irony is that the SJW’s think they need the state to “fix” gentrification when in fact it is the state that is the proximate cause of the biggest objection they have to gentrification: the pressure to leave. They typically blame “unbridled capitalism,” for these forced expulsions, but, they are taking aim at the wrong entity. This compulsion to exit is predominantly a function of state influence (i.e. the government). Between eminent domain and property taxes the state has done more harm in the way of pushing people out of their homes then any supposedly free market in real estate. It’s certainly not part of a free market for government cronies to condemn properties, give financial aid to private developers, or to extract a tribute (tax) from the serfs who happen to live on the master’s land.

As property values increase during the gentrification process, so do property taxes. This more than anything accelerates the process of gentrification as residents who would not otherwise sell have no alterative but to leave if they can’t afford the higher taxes. Without property tax there would be no coerced impetus to sell. Likewise property taxes compel landlords to raise rents – those taxes have to be passed onto someone (yes, renters pay property tax, all expenses, including taxes, are accounted for in the cost of every good sold). Although it is true that rents may rise due to higher demand for housing, unless you want slums, rent control is not the answer. Ownership is the answer. Unless one owns the property, then no one has a positive right to live in some particular place. To suggest that someone who has rented a home for many years has a right to live there as long as they wish for whatever price they deem is fair is as goofy a concept as it is to suggest that because I enjoy Fruity Pebbles, Post Cereal has a positive obligation to me to never discontinue it or raise its price – gosh darn it, that is “my” cereal after all!

Backdoors

Computer programmers use the term “backdoor” to describe covert methods the programmer can use to bypass the normal user interface in order to more expeditiously accomplish certain tasks. Normally the motivation behind installing such devices are not sinister; their purpose is to assist in debugging or to clean up other messes. The apparatus of the state has similar backdoors, although the motivation there is usually not so pure. These backdoors are set by legislators but only become apparent to those who possesses a perspicacious view of the state. For example, the way government is supposed to work (at least according to Schoolhouse Rock) is that bills are introduced in Congress, voted on, and then sent to the President to sign into law. If the people don’t like the laws they can vote for new Congressmen or appeal to the Supreme Court to overturn the law on constitutional grounds.

That system does still exists, but government power rarely originates that way. The vast majority of power comes from the backdoor: administrative “law”. Regulations promulgated by the EPA, DOE, IRS, etc. do not come from Congress. They are written, proposed, and approved by career bureaucrats who are as much a part of Washington as the marble buildings. The politicians enter, ride the coaster and then exit, but the bureaucrats, like the coaster operator, remain. Although bureaucrats can’t introduce extensive reforms, they can implement piecemeal changes that ultimately have the same effect. Can’t ban fossil fuels? That’s ok, just require (via regulation) anything that directly or indirectly uses such energy must use less of it. The amount is ratcheted down ever so “reasonably” every few years until fewer and fewer can clear the regulatory hurdle. If the outrageous costs for compliant goods don’t decrease usage, then the constrained supply from manufacturers exiting the market will.

It is the same tactic the left uses to chip away at the 2nd amendment and the right at abortion ‘rights’. If you aren’t allowed to close the gate the only alternative is to erect a series of hurdles and obstacles that make the journey more burdensome. Any performance (not safety) based regulations are a fascistic interference of the state in the functioning of private markets: “sure you own your business, but we’ll tell you when, where, and how to operate it.” I don’t know whether to laugh or cry: educated adults actually come together in the belief that their personal views on how much water it takes to flush a turd down the drain or how many gallons of water are sufficient to de-soil underwear is a compelling interest of the state. But if the state does not appease Mother Gaia, then who will? Faux environmentalism has become the state religion in the 21st century. One is not worthy to pass into the Temple of Political Piety unless they have shown the proper level of obsequiousness before the altar of “sustainability.”

And what has this wrought us? Gas cans that don’t pour, toilets that don’t flush, showers that dribble water, light bulbs that either cost a days pay or require a hazmat unit if they break, and hot water that isn’t – we are moving backwards as a society.  Like the frog in the slowly boiling water the process occurs incrementally enough that the “way it used to be” is lost down the generational memory hole. Younger people today simply assume the way thing are today are the way they have always been. They assume appliances don’t work well because of poor design rather than the imposition of strangling regulations by the state.

Now it is true that many of the products I cited have seen improvements. Some are almost as good as the original product. However that was not without a cost. Consumers played the role of unwitting beta-testers for subpar equipment. Once the bugs were finally worked out there is then an ongoing cost to all who purchase this more “efficient” equipment either upfront or in time loss. But hey as long as the planet will be 0.00001 °C cooler in a hundred years it’s all worth it right?

Since government’s role in society is apparently to “fix” things, then in order for it to justify its continuing existence it must seek out new problems and new victims, to boldly re-fix those things it just fixed last week. Those in government seem to believe we live in an artificial Matrix-esque reality where passing laws is the equivalent of writing computer code than can magically make cars go from 25 mpg to 45 mpg overnight or dishwashers switch from using 6.5 gallons to 5 gallons and soon to a mere 3.1 gallons.  To see how awful that will be, fill your sink with 3 gallons of water and now wash all your dishes by hand with just that water. Yeah, yuck.

So perhaps someday we’ll regale our grandchildren with wild tales of machines that used to wash dishes for us. And as they stare at us in wonderment, we will begin the tedious task of washing the dinnerware by hand – just as our great-grandparents did – except we’ll only be permitted the use of cold water. Hot water is way too damaging to the environment, what with all the energy it uses. Ah, yes, progress.

Free Market Gun Control?

In the wake of the horrific Oregon shooting a few weeks ago each side in the pro-gun/anti-gun debate engaged in a kind of holiday-esque ritual: unbox one’s standard talking points, adorn social media and the press with said arguments for a week or two, and then when the furor has died down quietly pack them back up for the next gun-related incident. The problem with the standard talking points is that although they may resonate with the owner, they do little to sway the opinion of the opposing side. They have become stale and useless.

Government prohibitions of market transactions do nothing to eliminate those transactions. Prohibition raises their costs and consequently the profit potential. This induces more, not fewer, people to ply that trade. Decentralized markets are the most efficient means of delivering to people the goods and services they want. People do not want themselves or anyone else to die a violent death. Let’s see if the market can provide this good. Since it is the left’s position that our government has been ineffective at stopping gun violence and it is the right’s position that the government has no business stopping gun violence, then let’s just pretend for a moment there is no government at all. How could this problem be solved absent any sort of bully running around threatening and intimidating people? Insurance. Yes, that’s right, insurance. Insurance companies are in the business of providing financial protection for unforeseen events. Consequently insurance companies are in the business of mitigating risk. If someone owns (or rents) a home they will, if they are smart, carry a liability policy. This protects the policy owner from financial ruin if they are found guilty of causing some sort of harm to another. In order to minimize such claims involving guns each insurance agency could impose their own (varying) set of regulations on gun ownership for their policyholders. Depending on the level of policy owner regulation some insurers would see more losses related to gun incidents and some fewer. Those that had fewer would find their policies and regulations being copied. The market would soon converge on the most efficient and set of regulations that allow people to own guns while still preventing gun related incidents.

A decentralized system is superior to any one-size-fits-all top down approach because it is self-regulating through an alignment of incentives. In other words it is a “carrot” and not a “stick” approach. Gun owners don’t want to be sued into poverty if despite their best efforts something unexpected happens. Insurers prefer fewer claims over more, so they will make sure their policy owners do indeed make good on those best efforts.

Would this system have prevented Sandy Hook or the Oregon shooting? Maybe, maybe not. Since both shooters got their guns from relatives perhaps those relatives would not have be able to afford the higher premiums (due to other risk factors), or perhaps they would have been compelled to have kept the guns better secured, or perhaps other policy rules would have given them second thoughts about allowing others to access to their guns. We can’t know for certain what might have happened, but the point is that there are at least several possible barriers under this system. Not a single “sensible” new law would have imposed the tiniest of impediment had they been in place prior to those incidents.

So at this point the obvious question might be, “We have insurance today, why don’t insurance companies enact these sort of regulations today?” That is actually such a good question that rather than speculate I called my insurance agent at State Farm and asked him. The reason is simple: gun related incidents not involving an actual criminal (i.e. criminals shooting other criminals) are so few in number they can’t actuarially determine the risk level for them. It’s like trying to calculate the risk of blindness caused by a snowflake injury.

Despite media hype to the contrary, these events, as horrific as they are, are so few and far between that we each have a better chance of being struck by lightning than becoming a shooting victim. Other inanimate objects controlled or used by humans cause far more harm than guns each year (cars, pools, trampolines, etc.)  and yet there is no call to ban those things. Quite odd. Insurance acts as a guide to mitigating risk. Risky things are expensive to insure (be that poor drivers or unguarded pools) and so that tends to minimize those things.

Rather than lamenting violence in this country we should be astounded that in a country with over 300 million guns the murder rate is a mere 4.7 per 100,000 per year.  That is lower than 110 other countries with more stringent gun control or outright bans. We should always strive to do better but since there seems to be no correlation between murder rates and gun control then perhaps the answer is not more gun control but rather to follow the market’s lead and see what works and copy that. Laws shackle us from trying alternative approaches and limit choice. Only the free choice of millions in the market can guide us to the best solution.

* Answers to some obvious objections:

Question: “Well what if someone just chooses to get a policy that doesn’t cover guns or they just don’t get insurance, i.e. they simply take the risk that all will be fine?”

Answer: They are of course free to do so, however, the complete lack of any protection means those they have harmed (or their agents) as a result of their negligence are without any limitation whatsoever permitted to take all that they possess in the world, up to and including their life. In other words there is no limitation of liability if you don’t have insurance or have insufficient coverage. That is a pretty big motivator for 99.9999% of all people to have the peace of mind of being protected by insurance coverage.

Question: “Well what if it is just some homicidal loner who buys a gun and is planning on dying, so they don’t care about insurance or liability?

Answer: Liability laws would need to be eliminated so that one could sue the person that sold them the gun and likewise the person that sold that person the gun, all the way up to the manufacturer of the gun. This would ensure that each person in the chain has an incentive to exercise some level of due diligence to ensure whoever they are selling the gun to represents little risk and is qualified to operate it.

Question: “But wouldn’t that just put gun manufacturers out of business if they got sued every time someone got shot?”

Answer: No, because gun manufacturers would perform whatever actions their insurer said they must do in order to remain protected under their own insurance. As long as they do what the insurer says (i.e. voluntary regulation), they are protected from any such claims. Likewise each person down the chain of sale then has an incentive to be protected by insurance and thus to have their actions regulated by their own insurer. The end result is the final seller then has the greatest incentive to ask for certification of the buyer from some other independent certifying body that has “okayed” the buyer for the seller. That certifying agency takes on the risk and you can be certain they will investigate the heck of the background of each person applying for certification. The certifying agency has their own insurance and their insurer will drive the level of due diligence they must engage in order to approve or deny gun buying permits.

Question: “So gun buyers would be in some sort of database and if they did not possess the purchasing permit they would not be able to buy a gun?”

Answer: Yes and no. Those that want to prove to the world they are low risk and not crazy would voluntarily do so. Once they have their seal of approval they could purchase whatever firearms they wanted and remain protected by insurance. But, being a free system, if someone does not want insurance they can buy guns from others who also don’t want to be part of the system – and this would all be legal. There would be no “black market” per se of people without permits buying guns. There would simply be a small market of some people doing this but the inherent risk of selling to someone like that would be so great it would make the cost of the guns so high this alone would act as a natural barrier to most. Most crazed loners are not financially well off. But given the enormous downsides very few would engage in this sort of activity. Basically the same people that are criminals today and can’t legally buy guns would remain similarly verboten under this system. But the point of gun control has never been to stop criminals from getting guns – everyone knows mere laws won’t stop that. The point has always been to minimize accidental shootings or the mentally unbalanced from obtaining weapons and this approach would accomplish this in an entirely voluntary approach. It would also foster an environment of fewer accidents since today anyone can buy a gun without any training at all. Under this approach one would have to demonstrate competency. We demonstrate competency to drive a car with a license, so why not demonstrate competency to handle a gun with a license? I’d rather have a private system doing this rather than a one size fits all government approach that is immune to improvements from new information.

VW: Cookie Thief

So, Volkswagen has been evading the EPA’s rules and regulations regarding emissions from diesel engine? Well good for them. Yes I realize that is not a very PC thing to say amongst all the cacophonous lamentations of those holding Proper Opinion on the “damage” to the environment that this little ploy has wrought. Regrettably VW swiftly engaged self-flagellation mode, seeking forgiveness from those that run the many worldwide plantations we today refer to as states. In other words, they quickly went to mommy and daddy and begged to not be spanked too hard if they would just quickly clean up their mess. If only they had stood up to the EPA and told them “Yes, we skirted your stupid rules, we do not recognize your authority, we only recognize the authority of our customers who will buy our products if they meet their standards and won’t if they don’t”. Of course that is not what happened. Instead VW bent over and obsequiously bleated, “Thank you sir, may I have another.” VW’s crime is about as morally significant as a slave stealing cookies from the master’s kitchen. It is but a technical violation of an arbitrary rule with no real victim.

I can hear the objections now, “But, but, the environment! They were damaging the environment!” Really? How do you know that? Because the EPA said so? Because this single agency run by a handful of bureaucrats established a committee whose job it was to climb Mt. Sinai and return with stone tablets upon which was inscribed the exact amount of safe emissions? Please. I do not know if the level of emissions emitted by VW diesels, or any diesel or gasoline engine is “safe”, and neither do you or anyone else. Maybe the level set by EPA now is itself “too high” but everyone seems ok with it. The level of emissions VW’s cars were actually producing complied with the EPA standards in existence as recently as 2004. So in 2004 the level was perfectly fine and not “harmful” at all, but two years later the target changed and suddenly VW is the anti-Christ for continuing to meet the old target? The new “clean diesel” standards were not a trivial change. VW and other manufacturers left the US diesel market and worked on the problem for 4 years! In the end VW balanced the demands of cost, power, and emissions and felt their customers would be better served by lower cost and higher power at the expense of higher emissions as opposed to higher cost and lower power in order to achieve lower emissions. Luxury brands like BMW and Mercedes could produce diesel engines conforming to the new rules more easily because their customers are less sensitive to cost considerations. When regulations force product costs upward it is the luxury brands that benefit at the expense of the value brands. If all diesels cost $50k because of the new rules, then why buy a VW when you can have a BMW?

Now some might object that when it comes to the environment cost should not be a consideration. However that assertion flies in the face of economic reality; everything has a cost and everything has tradeoffs relative to those costs. Those espousing the “ignore costs” mantra engage in a performative contradiction. Their actions in their own lives contradict their philosophy. If the environment should reign supreme to all other considerations they should return to the wilderness as hunter-gatherers. And yet they do not.

Cost is always a consideration, even in our daily lives. For example, we all obviously value our personal safety, but to what degree? Even with our safety we are willing to make cost tradeoffs. If we truly valued it above all other things we would either drive tanks or never exceed 5 mph. The sheer cost of driving a tank or the time-opportunity cost of traveling so slowly is far beyond what any of us deem reasonable. Nobody does this; we collectively have shifted that balance between time, safety, and money to the one we see today. Technology will likely change that balance in the future, but for now it is the best compromise available given current costs and benefits. Absent the EPA we would be afforded the opportunity to balance environmental concerns relative to cost in a market where different manufacturers would offer a variety of products that they hope will suit the demands of consumers. It would be the most successful model (the one people buy the most of) that would be emulated. This purely market based approach is thus the most democratic means of the people deciding where that tradeoff should be. To believe that the EPA knows best and we should all bow to their will is no different than believing the King or Queen is much wiser than us all and we should do whatever they say. Although we lack royalty in this country today, that is in name only. We have unwittingly elected the same sort of top down one size fits all approach to governance (tyranny) that so many pay lip service to opposing while blithely waving flags and swearing oaths in support of it (the state). E Pluribus Pluribus.