Category Archives: markets

Rent Control vs Market Competition

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Here’s an example of the failure of no competition in affordable housing, this one in St Paul, MN. The residents of St Paul last November voted to cap rent increases at 3% per year, forever, with no exceptions.

Mercatus Center [Senior Research Fellow and Director of the Urbanity project] Salim Furth compared St Paul building permits in the five months after passage of rent control with the average of the same months in the three years prior [i.e., immediately preceding the Wuhan Virus situation onset]. By that metric, St Paul’s multifamily permitting is…down 55%.

And

City data shows St Paul’s building permit revenue from January to May 2022 was $3.699 million, down from an average of $4.176 million from 2018 to 2021.

The claimed purpose was to protect affordable housing availability.

However.

St Paul’s rent control creates an incentive for developers to build luxury apartments to recoup their construction costs. But builders are also opting to leave St Paul. Citing rent control, investors recently paused development on the 3,800-unit Highland Bridge project. Its builders would have set aside 20% of units for affordable housing, with 10% going to those earning 30% or less of area median income.

The only ones who wouldn’t have predicted this outcome, who don’t understand its inevitability, are those who can’t stand the thought of individuals or private businesses making their own decisions, or free markets making their own aggregated decisions, independently of the limits and requirements set by Know Betters.

Relations with the People’s Republic of China

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Maurice Greenberg, Chairman and CEO of CV Starr & Co, an insurance and investment company with subsidiaries domiciled in the PRC and Hong Kong, said in his Wall Street Journal Wednesday op-ed that he wants the US to “rebuild relations” with the People’s Republic of China.

It is in our national interest, now more than ever, to do all we can to improve U.S.-China relations.

And

The US and China have a long history of collaboration dating to before World War II. When the People’s Republic of China reopened to the world, the US extended favorable trade terms to foster China’s economic growth….

What Greenberg ignored is that the People’s Republic of China has no relation to the pre-World War II China beyond sitting in the same geography. What he also ignored is that since the PRC “opened” and we extended favorable trade terms, the PRC has been running a campaign of stealing our intellectual property through outright theft, hacking, and coerced transfers as a condition of doing business within the PRC. That nation also has been running a parallel campaign, using the same techniques, to steal our national defense and foreign policy secrets.

Frank talks can build trust relationships with the PRC? No, the only thing we can trust of what the PRC’s government men say is their commitment to replace us on the world stage and to subordinate us to them.

We don’t to rebuild relations with the PRC. Let the PRC want to build, from the beginning, relations with us.

Energy Crisis—It’s What We Deserve

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Ignorant peasants that we are, we’re too dependent on fossil fuels. High prices and energy shortages are our due. The words of folks like the Sierra Club’s personage are just—to coin a phrase—code words for “stop arguing, and do it our way.”

Here’s Kelly Sheehan, Sierra Club’s Senior Director of Energy Campaigns:

Concerns about energy shortages in Europe and the spiking fossil fuel costs Americans are experiencing are both symptoms of our continued reliance on fossil fuels[.]

Shape up, guys. She added this:

As long as we rely on volatile global commodities like oil and gas, we’ll always be vulnerable to geopolitics and the whims of greedy fossil fuel executives.

Yeah, because making profits is so evil. Never mind that profit is what starts and grows companies, starts and grows supporting companies, starts and grows employment, starts and grows companies that cater to the needs and wishes of those employees—creates and increases prosperity all around.

Oh, and that volatility? Much, if not most, of that comes from the uncertain, varied, and varying regulations applied, adjusted, withdrawn by virtue-signaling government personnel and from the uncertainty of granting (and later withdrawing) exploration and production leases and permits for a host of fossil fuel-related projects also effected by virtue-signaling government personnel.

Geopolitics? The instability here is amply illustrated by the Netherlands government’s attack on farming(!).

Inflation and the high cost of energy, from gasoline and diesel to fuel our transportation and shipping vehicles to electricity and natural gas to heat and cool our homes and work places, are most assuredly on the ballot this fall and will be there still in the fall of 2024.

Oil Price Caps

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The G-7 is floating a new sanction against Russia in response to Russian President Vladimir Putin’s invasion of Ukraine. That sanction centers on capping the price nations would pay for Russian oil.

The Group of Seven leaders are expected to agree to start work on a mechanism to cap the purchase price of Russian oil….
Leaders will direct relevant ministers in their countries to work on the details of Russian oil caps, which would create a buyers’ cartel of Western nations and their allies, the official said.

To the extent such a cap would have a material effect on Putin’s economy, or more importantly on Putin’s war (how many battalions have the current sanctions forced Putin to withdraw from Ukraine?), and I’m not convinced a cap would have any material effect, I suggest a cap with which to begin would be the deeply discounted price at which Putin already is selling his oil to India and the People’s Republic of China.

On the other hand, though, there’s likely not much urgency to this virtue-signaling move:

There is no timeline yet on when the details will be worked out.

Airbus Thinks It’s Special

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Or at least, more important than the existence of a nation.

Airbus is pushing against sanctions on Russian titanium sales, amid a flurry of restrictions on the export of other Russian goods ranging from vodka to steel.

After all,

About 65% of Airbus’s titanium supply comes from Russia, according to consulting firm AlixPartners.

Of course, Russia should be let off the hook regarding its naked and barbaric invasion of Ukraine, and Ukraine should be made to pay with its existence for Airbus’ consciously developed business decisions. Airbus Chief Executive Guillaume Faury:

We think sanctioning titanium from Russia would be sanctioning ourselves[.]

And

Russian titanium sales are “one of the few areas of business where it is in the interest of no party to disrupt the current situation,” he told reporters at an aviation gathering in Doha, Qatar.

Because Ukraine and Ukrainians are just bits of trivia and flotsam, not worth the notice. This is in stark contrast with Boeing:

…before the war purchased about one third of its titanium from Russia, said at the onset of the invasion of Ukraine that it would suspend its titanium joint venture in Russia and halt purchases of the metal from there.

It’s true enough that Russia is the second largest producer of titanium in the world (behind the People’s Republic of China). On the other hand, Ukraine is—or was before the barbarian’s invasion—the fifth largest producer of titanium.

However, Russia doesn’t even make the list of the top fourteen nations with titanium reserves.