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an example right here in nyc is rent stabilization-a miserable failure of trying to control the natural markets balance.
You are comparing two very different kinds of "regulation", the goal of rent controllers and the goal regulation trading is dramatically different. In the former case you are trying to promote some sort of social goal, namely, affordability for low-income families. In the latter case you're trying to reduce corruption and provide accurate information to investors.
You think the former is a "miserable failure" because why? It didn't reduce real estate prices? That isn't the goal....
You are comparing two very different kinds of "regulation", the goal of rent controllers and the goal regulation trading is dramatically different. In the former case you are trying to promote some sort of social goal, namely, affordability for low-income families. In the latter case you're trying to reduce corruption and provide accurate information to investors.
You think the former is a "miserable failure" because why? It didn't reduce real estate prices? That isn't the goal....
you have no clue what rent stabilization criteria is in nyc if you think its about housing for low income families. its nothing of the sort. income plays no part at all unless your income is over 250,000 bucks two years in a row and your rent is over 2500 bucks a month.
i wont go into the details of what it is unless you really want to know but its obvious its not what you think..
Last edited by mathjak107; 07-15-2011 at 02:49 PM..
you have no clue what rent stabilization criteria is in nyc if you think its about housing for low income families. its nothing of the sort.
Naturally you are ignoring the point, namely, that different "regulations" have different types of goals and you can't compare them. I don't know the details of NY rent controls, typically its about aiding lower-income families, but perhaps NY has different ideas about it. But whatever the goal, its dramatically different then say financial regulation.
and naturally you will skip over examples you make just shooting from the hip about things you dont know about .
regulating profits on what a company does to earn its money,or what an individual does for a living and not allowing the markets to determine the level is the same in all cases.
but other than manipulating the market for that item regulation and laws are somemes times good and sometimes bad. there is no rule ,no theory that holds true all the time.
just to bring you up to speed so you know, rent stabilization was only the landlords agreeing to have rents determined by a committe to prevent rent gouging. it has nothing to do with the tenants income at all.
as politics have it those rents decades ago became a political pawn to win votes so they played landlords dirty and held rates artificially low for years.
long time tenants benefited but they were the only ones. after the origonal tenants move out the apartment gets a jump closer to actual market value. eventually the apartments are at market and the rent increases the last decade have all been real world so there is no value in these rent stabilized apartments unless you were there for decades when the rents were held low.
anyone today moving IN is pretty much at market. NO PLACE IS INCOME A FACTOR.
why does such tight regulation suck?
we ended up buying out the leases of our origonal tenants in a bunch of co-op apartments we own over looking central park. we paid 100k to every tenant willing to move so we can sell the apartments.
imagine for a second renting someone an apartment who makes more money than you do and they become a life long member of your family until they die. imagine the only way you can get this person out of your property is to pay them 100,000.00 dollars. imagine for a second too they are paying you below market rent to boot.
welcome to rent stabilization...... its what happens when laws and regulation meet and bring out the worst qualites in each.
well back to our regular scheduled arguments.
Last edited by mathjak107; 07-15-2011 at 06:37 PM..
regulating profits on what a company does to earn its money,or what an individual does for a living and not allowing the markets to determine the level is the same in all cases.
Except that its not all the same in all cases, allowing the "markets to determine" the price level is not always desirable. It depends on the characteristics of the market, for example a market monopolized by one or a few players is likely to behave poorly.
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Originally Posted by mathjak107
rent stabilization was only the landlords agreeing to have rents determined by a committe to prevent rent gouging.
Right, its a social goal, rapid shifts in rents can be destructive for neighborhoods.
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Originally Posted by mathjak107
imagine for a second renting someone an apartment who makes more money than you do and they become a life long member of your family until they die. imagine the only way you can get this person out of your property is to pay them 100,000.00 dollars. imagine for a second too they are paying you below market rent to boot.
Shows great, its preventing transfers of wealth via the ownership of a monopolized asset.
The renter in this case gets the same sort of benefits as the owner, all this is doing is preventing the owner from transferring wealth from his tenants pockets to his pockets just because his/her property increased in value (due to no effort on his/her part...).
But where exactly is the disaster? Its a disaster because you "lost" money that you never really earned in the first place? Sounds like the policy is doing what its suppose to be doing....
I believe the government's role is to provide rules in which the free markets can operate. But wouldn't you think that interfering and regulating the free markets runs the risk of politicizing the free markets? Regulators may have political and financial reasons to regulate industries in favor of big corporations because they are the ones lobbying with their huge sum of money. Without government regulation, who would the corporations lobby for? How can they rig the markets in their favor without lobbying? In my opinion, regulation has good intentions, but the results can be terrible and monopolies can form with wealth concentrated in fewer hands.
And monopolies will form without regulation, they are a naturally occurring aspect of free markets.
And what's wrong with that? If a corporation deemed a "monopoly" within an industry happens to be the most efficient out of all of its competitors, then that's all right with me. It serves the interests of the consumers. But monopolies cannot sustain themselves in a free market without being the more competitive than its smaller counterparts, or else it will decline and other businesses will take over.
However, if a monopoly uses the advantages of a regulatory environment to sustain itself, by lobbying regulators to enforce burdensome tax laws that favor big corporations over smaller entities, then monopolies are a "bad thing" that act against the interests of the market and the consumers.
Friedman's views are correct. Free-markets with limited government. Only need government to protect private property rights and enforce contracts.
However generally what happens when friedman's views are implemented is some tyrannical government rises up and pushes a completely different agenda that is not in sync with friedman's views. Often times friedman gets blamed for these issues when in reality, they were not caused by friendman's views. Rather they were caused by power hungry tyrants.
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And monopolies will form without regulation, they are a naturally occurring aspect of free markets.
True but in a free market it is much easier to break a monopoly compared to a regulated monopoly where you simply can't compete because its against the law.
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If you don't think so, why not have a free market on radioactive elements?
Aww but you see there is a trick there. You have to make sure private property rights are enforced. So lets say that I own a nuclear power plant and it produces some high level radioactive waste. Under a free market, no regulation I could technically dump that waste into the water BUT if private property rights are enforced then all the affected parties down stream can sue me for damages. Could be in the millions or billions. In a private property free market economy that is my incentive to not dump the radioactive waste in the stream - I'll get sued. Plus there will be organizations that rise up, funded by the nuclear plant operators, that will help store the waste in safe manner. Why? Because it doesn't make economic sense to dump the waste in the stream.
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Your "free market" with "less government regulation" would allow drug companies to put any drug that meets their profit expectations onto the market, no prescription required, with the freedom to make any claim about the drug's miraculous efficacy, and charge whatever price the public is willing to pay. Be careful what you wish for.
Well, if that were the case, then what do you think the overall general public's opinion of drugs would be? Probably pretty negative. People would avoid them because they are too dangerous. Doesn't sound like that would be a good business model. For the drug companies would what happen is independent review agencies would spring up to test and rate these drugs. Likewise, the important factor in a free market is enforcement of private property rights. If I make a drug and people are getting heart attacks as a result, the damaged parties have a right to sue me. As a drug company, it is in my best interest to make sure my drugs work as intended with minimal side effects.
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Naturally you are ignoring the point, namely, that different "regulations" have different types of goals and you can't compare them. I don't know the details of NY rent controls, typically its about aiding lower-income families, but perhaps NY has different ideas about it. But whatever the goal, its dramatically different then say financial regulation.
The primary problem with rent controlled units is the fact that landlords have no incentive to maintain the units and builders don't have much incentive to actually build more housing. So if you live in a rent controlled unit it is all great that you get a, "cheap" apartment but probably broken down slum quality. Likewise, if you are a home builder do you really want to build housing in an area where the government says you can only charge a certain amount in rent? I'll personally take my money elsewhere.
Last edited by killer2021; 07-16-2011 at 12:59 AM..
do you know that nyc hasnt had not 1 new rental building put up since the 1970's... yep ,how about that one. except for section 8 subsidized housing,low income housing and luxury no landlords put up rentals.
thats what control beyond a certain level breeds. it leaves shortages and poor choices.
so you have the few lucky folks who caught a break and made out because the moved into the apartment a long time ago and the rest of the public suffers. the supply of nice clean new rentals is pathetic in nyc and they all pay market rates .
we have lots of co-ops and condos that were built but no rentals.
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