Landlord Who Supports Rent Control

[Background - the city council of my town, Richmond CA, has had a very heated political debate for a couple years now over whether or not to institute rent control.
Richmond is currently one of the more affordable pockets in the San Francisco Bay Area, especially for being close enough to the center to have its own BART stop, but like rents everywhere in this popular and rapidly growing area, they are climbing fast.
With rent control measures, landlords would only be able to raise rents they charge by a certain percentage (generally close to inflation levels) each year, and could only evict tenants if those tenants actually did something wrong (or if the landlord wants to move in), not just as a way to get new tenants to pay higher rent (rents can be increased between tenants, assuming they move out voluntarily or are evicted for a legitimate reason).

In the public discourse around the issue, those against it are constantly making the claim that it would "hurt small-time landlords".
I posted the following to a couple neighborhood discussion groups on the topic:

Not that any one cares about one random individual's opinion, nor that they should... 
...but since so many who talk about the subject feel entitled to speak on my behalf, I just wanted to set the record straight. 
I grew up in Richmond, and I live here now. I worked for the downpayment money for our triplex home from scratch, on an ordinary working class salary (averaging around 20k a year). I was able to save money by living in trailer parks most of my adult life.

Today I am a "small time" landlord. I own just a couple of units, which share the same land as my own home is on. I put a lot of money and time and work into upgrading it and making it a nice place for my tenants to live, and I still have a giant mortgage on it.

And there is absolutely no way I could honestly claim that rent control would "hurt" me.

Reading list to assist in understanding everything about everything

While I'm sure there are plenty of people out there who think I'm an idiot, I think (hope?) its fair to say there are at least a few who find me to have an above average grasp of how the world works.

I don't really think I'm all that much "smarter" than average.
I may have a slightly better than average ability to spot patterns in complex systems.  Side effect of being a touch closer to the Spectrum than your typical NT, I guess.

But part of it, I think, is just that its much more my goal to understand things than for most.

It seems for a lot of people a lot of the reason for adopting particular beliefs is to fit in and be popular.
That, and having those beliefs justify what people would like to be true, which is comforting or justifies something that would otherwise conflict with ethical values.

Since I've never had much interest in large groups of people, I've never had any real use for conformity - including conforming to any non-mainstream sub-cultures.
Beliefs that feed rationalizations to avoid cognitive dissonance?  Well, who knows, maybe I'm as susceptible to that as anyone, I suppose if I were doing it, I wouldn't know, would I?

Anyway, another advantage I've had is just that I've been exposed to some good sources of information that tie it all together.

Gentrification is a myth

A friend sent me a report he had read on gentrification in Oakland, and asked for feedback, after a conversation in which I claimed gentrification was largely a myth.

This was the report:
 http://www.cjjc.org/en/news/51-housing-justice/584-gentrification-report-launch

This is a report in which they are specifically looking for signs of it, trying to play it up, and focusing specifically on neighborhoods and time spans with the most dramatic rent increases.
And even by their own numbers, even at its worst rent increased more slowly than inflation.

The thing about housing prices and inflation - if a loaf of bread goes up from $1 to $1.50, its not really a big deal, its 50 cents more.
If a house goes from 200,000 to 300,000, that seems like a dramatic increase, $100k is a lot of money. 
But they are both the exact same 50% increase.

Below is my more in-depth analysis of the specific report, including hard numbers instead of thought experiment numbers:
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Walk the talk

One person asked me, upon reading my anti-capitalism pro-free market essay series, for ideas on how individuals might help contribute in daily life.

Walking the walk on two of the big points is easy: shop at independant stores instead of chains, don't buy IPOs, and if you create something (art, music, software, inventions), make it creative commons / open source / patent it but then licence it for free.

As to walking the walk on real estate: I don't really think it's applicable. There is some political momentum behind changing the corporate system after Citizen's United, and there is piracy/file sharing undermining copyright, but there is exactly zero movement behind one person one parcel.
Thats not even a phrase that exists. I just made it up, just now, as I was typing!
But there really is no inbetween. Nothing any one person does (short of the solution proposed in Manna) is going to have more than zero effect on the rest of the world.
The closest I imagine one could possibly come would be buying rental properties, and renting them at below market rent, even at cost (though with hidden irregular costs, like vacancies and major maintenance, factored in). One could opt out, but that would do as little to change the system or benefit anyone as opting out of voting does (i.e. exactly none, and possibly counter-productive, since then you are diluting your own potential influence)

For one person one parcel, I think the best anyone could do right now, even a billionaire, would be to publicize and promote the idea, because the first step would be getting the idea into the minds of millions of people. Its not quite communism, not quite libertarianism, not quite anarchy, not quite free market. As far as I know, its something no one has ever thought of before.

There is one other thing - probably the single biggest change to our system, (short of one person one parcel) would be for working hours to be adjusted downward to match increases in efficiency.
That is something we could easily do, if we were so inclined, just like we reduced working hours from 60-80 per week at the turn of the last century down to 40-50 hours today, as the industrial revolution vastly increased output per worker.

Today, computers and the internet and robots, plus outsourcing and corporate consolidation, not to mention quickly advancing 3D printing, has increased productivity far more than steam power and assembly lines ever did, yet we have never adjusted the 40 hour work week to match.  Our insanely massive income inequality, inflation adjusted income stagnation, and steadily high unemployment are all direct results of that.
I have started a petition to that end: http://petitions.moveon.org/sign/a-35-hour-work-week-will
Of course, given the actual increase in output per worker since the 1940s when the 40 hour week was officially established, we should be at 4 hour work weeks by now,

 but 35 seems a bit more politically realistic as a starting point.

Unfortunately, I'm just a manual laborer with some ideas and a free blog account, not an activist or promoter, but if you happen to have a network of people who'd support the idea, by all means help me get some signatures
http://petitions.moveon.org/sign/a-35-hour-work-week-will

Free Market VS Capitalism: So How Do We Fix It?

[Part 10 of 10, Free Market VS Capitalism essay series.  Part 1 here]

At its root, the solution is a change in mindset.

The whole point of having an economy is to support and improve the lives of the citizens, the people, who make up society.  The economy isn't a goal in itself.  Benefiting "the economy" has no value if it doesn't benefit actual people.  There is no principal involved - any principle which does not actually make life better for real life people is necessarily an invalid principle.

There is a widespread misunderstanding of the Amish approach to technology.  The Amish are not luddites.  They simply question the value of each and every use of technology on an individual case by case.  So while they may not find that the use of tractors in general improves life for their society, if a particular farmer is disabled, he might be granted an exception.
If the entire point of the economy is to benefit society as a whole, it makes sense to question whether or not that end goal is being accomplished.  As the graphs in part 3 show, it is not.  Maximizing growth had value when the nation was young and growing, but today we are grown, and conditions have changed.

Our current system gives the biggest reward to people who do no actual productive work, thereby decreasing the pool of wealth and resources available to everyone else. It keeps employment up only by constantly growing, ensuring rapid environmental destruction and unnecessarily stressful lives for everyone but the upper 0.01%, with some people working 40-50 hours a week and others working none at all.

This would all be easy to fix - and far from socialistic idealism, doing so would require less government intervention, and more free markets.

The trick is to remove all those government creations whose sole purpose is supporting capitalism.

Free Market VS Capitalism (Market Corrupting Capitalism, Part 3: Intellectual "Property")

[Part 8 of 10, Free Market VS Capitalism essay series.  Part 1 here]

The Colbert Report
Get More: Daily Show Full Episodes,Indecision Political Humor,The Colbert Report on Facebook

I don't know if that video will come through on blogger properly.
Here's a link, in case it doesn't: http://www.colbertnation.com/the-colbert-report-videos/433578/march-06-2014/warner-music-s--happy-birthday--copyright?xrs=share_copy

How to get to the Top (without actually having to work for it)

[Part 5 of 10, Free Market VS Capitalism essay series.  Part 1 here]

Pro-capitalists generally take it as a given that anything someone has they must have earned, and therefor must deserve.

Of the 20 wealthiest people in the world, 1/2 of them inherited their snowballs.  At best, they get credit for keeping it rolling, for not finding a way to stop it, but they got it already large, already moving.

More to the point, nobody actually creates a truly massive snowball of wealth by their own productivity.

Nobody has ever gotten to the top 0.01% via hourly wages.  One would have to average $25,000 per hour for an entire full-time working lifetime in order to actually earn a billion dollars.

Nobody gets 0.01% rich on salary either - not even CEO or sports legend level salary. 

For the most part CEOs of successful companies are still just in the relatively lowly 1%, maybe the top half a percent.

Free Market VS Capitalism (Current State of Affairs; or: Why Should We Care?)

[Part 4 of 10, Free Market VS Capitalism essay series.  Part 1 here]

 A Historically Unprecedented Concentration of Wealth

There are a number of independent ways our system tilts the field and gives an unfair advantage to those who already have capital. This makes things much easier for those who need the least help.  At the same time, by encouraging resources (remember, financial wealth, like paper curranecy, is just a convenient placeholder for actual tangible resources) to be concentrated in a few hands, the system makes it substantially harder for those without capital to make a living. 

Pro-capitalists will often point out that wealth is not finite - value can be created, both by extracting primary resources from the Earth (farming, mining, logging), but notably via technology - an iphone has more value than the plastic glass and metal it is made of. 

However, at any given moment there is a finite amount of wealth currently in existence.   If one person were to have 220 trillion dollars, that is another way of saying that one person controls 98% of all the (currently available) resources on the planet.  This means that the other 7 billion humans would have to divide the remaining 2% among them. 

Gross world product (GDP of all countries combined) grows by approximately 3-5% per year.  But our one insanely rich individual is getting 98% of that 3-5%.  So the growth that goes to everyone else would be .08%  Less than a 1/10th.

This is just a thought experiment - reality is not quite that bad - but it demonstrates why the "wealth can be created" argument is meaningless.  For one, it is impossible to live on hypothetical future growth.  For two, under capitalism, those who already have enough are the ones who get the vast majority of that new growth anyway.

My analogy of one person owning everything is extreme... but it is not as far off as most people would assume.

Free Market VS Capitalism (What is Capitalism?)

[Part 3 of 10, Free Market VS Capitalism essay series.  Part 1 here]

When people point out the extreme income inequality, the corruption of politics, the dissolution of labor protections, environmental degradation, and all the other similar and related injustices we see occurring, they are not referring to free market economics.  These things are almost all due directly to capitalism.

The best analogy for capitalism I've come up with was during a spirited debate about the ethics of capitalism on the Mr Money Mustache forums:

A person makes a snowball.  In order to make a snowball, you have to physically go outside, scoop up some snow, and mush it together.  You produce it by your own physical labor.  Once you have it, you can put it down in the fresh snow and start rolling it around, and more snow will stick to it.  That makes it a lot easier to get more snow on your ball more quickly.  And the bigger it gets, the more it collects with each revolution.

The assumption I always made - the one that most make - is that capitalism arises naturally from the free market.  One person produces more income than they spend, they save the difference, they invest it, it earns them more income, which they reinvest. 

This really does happen, and could happen in even the most primitive and simple society.

So the extremes we see today must be the natural extension of that process... right?

Free Market VS Capitalism (What is a Free Market?)

[part 2 of 10, Free Market VS Capitalism essay series.  Part 1 here]

So, what do I mean by the assertion that capitalism and the free market are different things?

The key feature of a free market is that all individuals are free to participate and make their own decisions.

We treat the term "capitalism" as if it's key feature were the same, but the real key feature of capitalism is that some people accumulate wealth - capital - and use that wealth in ways that allow them to leverage additional wealth out of existing wealth, without having to personally contribute any additional productivity. 

The easiest way to think of a free market is imagining a literal market: a flea market or farmer's market.

You have a big empty lot partitioned into more or less equally sized parcels.  A bunch of different independent vendors rent one, and sell whatever they want, for whatever price they want.  Customers wander around and buy whatever they want.  Seller and buyer can negotiate prices, and sellers with better product will sell more and/or can raise prices, but as long as each seller does better than break even, they will likely show up again next week, keeping competitive pressure on every one else and keeping variety available for the consumer.

Free Market VS Capitalism

7 years ago I wrote about how, contrary to almost universal belief, democracy and the free market not only don't necessarily go hand-in-hand, but they are actively opposed to each other.

That they are two parts of a single whole comes from a extremely successful deliberate public relations campaign by US government and corporations, going all the way back to inventor of manipulative public relations and advertising, Edward Bernays.

The next year I pointed out parallels between capitalism and anarchy - but I got it wrong.  I should have compared the free market to anarchy.

I was making a similar mistake myself.  American propaganda has basically everyone assuming that the terms "free market" and "capitalism" are interchangeable.  I realized quite some time ago, in arguing with anarchists, libertarians, conservatives, and capitalists that the two meant distinct things.

But what I've realized only recently is that, just like democracy and capitalism, the two are actively opposed to each other.

You can not have a free market under capitalism.  And you can not have our current degree of capitalism without a significant amount of State power actively manipulating the market, which inherently means it is no longer "free".

Of course, even though modern America treats them as interchangeable, this idea is not new.

The person who basically invented the entire discipline of economics, the person who's words capitalists use more often than any other, Adam Smith, recognized that the two were actively opposed, and even that it was the role of the State to intervene to prevent capitalism from corrupting a truly free market.  Unfortunately, few of the people who claim to follow his model actually read his book...

In my next couple posts I'll get into explanations, examples, problems and (hypothetical) solutions.

Something is wrong here

Is it just me, or is this circular reasoning?

-Corporations should be allowed to outsource jobs so that they can stay competitive.

-It is important that American corporations stay competitive in order to support the economy.

-It is important to support the economy because it provides American jobs.

Why OWS and the 99% is THE fundamental issue, which lies behind all others:

[This is another of those things I wrote years ago, and has been lost in draft form.  I think I originally planned to add more list items, and elaborate further on all of them, but of course I don't remember what exactly I had in mind]


-War: Some of the largest corporations, (Boeing, Lockheed Martin), profit enormously from war

-Civil Rights: Corporations are not citizens, and therefor should have no civil rights - they are granted right anyway.  They violate the rights of individuals without consequence.  Income and wealth inequality are the single largest factor for the different life experiences of American whites and blacks, and wealth inequality is a direct result of our economic policies.

-Gay rights, abortion, etc etc: Directly mutual relationship between corporate political power and the religious right, as they are both "conservative".  The only reason the religious right is taken seriously is because they support the politicians who are funded by corporate money.

-Environment: EPA doesn't work on shutting down your backyard BBQ.  It is corporations which cause massive pollution.  Corporations decide which power sources to tap into and what type of cars are manufactured.  It was corporations which deliberately destroyed public transit across America.

WTO / NAFTA / etc: this should go without saying

35 hour work week petititon

I tried this once before, but wasn't able to build enough momentum in time.

Different platform this time.

Click, sign it, make the world a better place:

http://petitions.moveon.org/sign/a-35-hour-work-week-will

Read more about why this is a fantastic idea on my post about the first attempt:
http://biodieselhauling.blogspot.com/2011/10/dramatically-reduce-unemployment-by.html

If I Were Elected King of the Country

My new friend asked me a few weeks ago, "what would you change about the world, if you had the power to?"

She said she tried to ask all new people she met that question.

She said it was surprising how many people didn't have an answer because they had never thought about it.

I couldn't answer, but for a very different reason.

I just couldn't sum up, couldn't choose from the list what to say first.

I've been thinking about it ever since then, and I still can't find any way to tie all the various things together, so, instead of going into the detail about how and why for each one, I think I'll just list as many as I can think of.

(and if anyone wants elaboration on any in particular, ask me as a comment, and maybe I'll make that one its own post)

These are in no particular order:

Comments from the MMM Forums Part 5: OWS / 99%

The 5th of the 5 part series of blog posts taken from the Mr Money Mustache discussion boards, on the politics, economics, ethics and philosophy, of building wealth through frugality.
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By COguy:

Your thoughts on the we are the 99% blog?

« on: November 13, 2012, 01:51:08 PM »

At the risk of seeming insensitive, I wanted to see what all of you folks thought of this.  Is it just complaining? 

http://wearethe99percent.tumblr.com/

It seems to me that if one followed mustachian principles they should get out of sticky financial situations much easier.  Ride a bike, in source everything, etc...Yet, I know I was lucky to be born to good parents and some of these people were not and I feel that that stacks the deck against them. 

Obviously, the medical expenses make sense as being very hard to overcome, but what about the rest?

…

[lots of posts, mostly agreeing that it is in fact mostly whiny pants complainers who dug their own hole and now want bailouts]

…

Comments from the MMM Forums Part 4: Invesment Income Taxes

Part 4 (part 1 was here)...This thread was not intended to be political at all.  But of course someone had to turn it that way.
Someone, meaning me…

…

By Guitarguy:

Did anyone's eyes pop out of their head when...

Romney said he'd completely get rid of all capital gains taxes for people earning less than $200,000 a year off of dividends ect... in the debate tonight? Is that really possible? And how does that affect a mustachian's situation of retirement?

…

By Bakari:

Re: Did anyone's eyes pop out of their head when...

« Reply #9 on: October 17, 2012, 05:49:14 PM »

Does anyone else see something morally wrong with taxing earned income at a higher rate than unearned income?

Set aside the personal benefit we are all looking forward to, once we can afford to live off passive income.

From a strictly objective viewpoint:
person A spends 40 hours or more (plus commute time) a week going to a job and working hard.  On top of the direct value their labor provides to society as a whole, they also contribute a percentage of the income they earn towards the general good in the form of taxes.

meanwhile, person B simply sits around at home (or travels, or has a hobby, or whatever, doesn't matter) and has positive income flow for no other reason than they had money to begin with.  Maybe they worked hard in the past and saved up, or maybe they inherited it, or maybe they laundered it after a crime, doesn't matter, point is they are not working hard now, and for that they are rewarded with not having to contribute to society.

Comments from MMM Forums Part 3: Lets Talk Charities

Part 3 of the ongoing series of posts taken from the MMM discussion board

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By I.P. Daley :

Let's talk charities - (Afghani brick kilns and us)

Was reading the evening news tonight, and came across the following article in the world news feed:

Afghan family works to pay off crushing debt

Nutshell on the article? Guy gets married, wife gets sick, guy borrows $900 from his employer to get medical attention for his wife. Nine years later, he's still in debt and he and four of his six children (youngest working is 4 years old) are working in the kilns along with him to try and just eat and pay off the debt. And they aren't the only ones:

http://www.un.org/apps/news/story.asp?NewsID=41177
http://www.essex.ac.uk/armedcon/story_id/000786.html
http://www.afghanistan-today.org/article/?id=215

This isn't some new story in the history of man... it's happened before, it's happening right now, and it'll keep happening. This sort of thing even occurs in today's United States, just look at the immigrant tomato field workers in Florida as an example right off the top of my head.

A lot of us give a lot of lip service to frugal living, staying out of debt, being socially responsible, and extol the virtues of the bounty of goods that allow us to pursue financial independence. We also frequently want to punch people in this country in the face for their decadent living beyond their means and wasteful consumerism, and honestly, this article just re-stirs some of that anger because some of these never-to-be-forgiven family life debt balances on loans taken out for basic necessities in the third world are for less money than many people waste on frivolous crap in a month here. A lot of times, we also forget where a lot of these goods that give us the quality of life we have come from and who made them as well as how little (by our standards) it can take to dramatically change their lives.

Comments from MMM forum part 2: Pursuing a Responcible Early Retirement

A continuation of the last post, this is taken from another thread on the MMM forums.
Again, for the sake of brevity, I have included just what I’ve written, along with quotes of what I am responding to, after the initial post, but if you are curios, feel free to click the link in the first post for everybody’s discussion.

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By: darkelenchus

Pursuing and Maintaining A Responsible Early Retirement

« on: August 01, 2012, 12:07:04 PM »

Purpose & Rationale For This Thread

Since nobody seems to have any real objections to the central argument in sol's thread on how your early retirement might be evil, and since the thread has morphed into a discussion about somewhat tangentially related matters (e.g. justifying charity, differing moral systems, the purpose/value of taxation, sustainable population levels, et alia), I figured it'd probably be be best to start a new thread to begin discussing practical ways of reducing or eliminating the evil in pursuing & maintaining early retirement.

Summarizing the Problem

Okay, so let's identify the areas (in italics) where evil can creep in to MMM/ERE-style early retirement:

MMM/ERE Early Retirement =^df A lifestyle attained and maintained through frugal practices and investment strategies, whereby one keeps a high savings rate during one's working years, eventually reaching the point where return on investment from savings covers all living expenses at the very least, which enables one to forego working a conventional job and thereby free more of one's time in comparison to more conventional working careers.

The thesis is that in pursuing early retirement, each of the three italicized areas above could perpetuate an unjust inequality: viz., the manner in which one executes one's early retirement could support (or at least be dependent upon) a system that denies that same opportunity to others.

• Frugal Practices: If one seeks to maximize one's savings rate by purchasing the lowest priced goods at the best value, one might be supporting businesses that utilize exploitative business practices.
• Investment Strategies: Investing in stocks provides capital to companies that seek to maximize return on shareholder investment. Just as with keeping prices low for the consumer, many companies employ exploitative business practices to maximize that return. Investing in bonds provides capital to many of those same companies.
• Allocating Free Time/Resources: If we will early retirement as a value, it would be contradictory for us to maintain that other's shouldn't have that same opportunity. Merely refraining from perpetuating the system is not enough. We should do what we reasonably can to provide people that opportunity.

If we're concerned with reducing or eliminating this unjust inequality, then we'll have to a) choose frugal practices and investment strategies that at the very least don't exasperate the unjust inequality, and b) actively do what we can to help alleviate it. Below are some of the ideas I've come up with for going about doing this.

comments from MMM economics / philosophy / politics threads

comments from MMM economics / philosophy / politics threads

I am a regular reader and contributor to the Mr Money Mustache discussion board forums.

Its mostly talk and advice regarding money management, DIY projects, bicycling as transportation, energy use, investment strategy, and various other ways to have more wealth by living more efficiently.
Every once in a while, though, a philosophical / political / social topic comes up, and the discussions especially interesting.

Here I have consolidated a number of my input and responses to some of the more intense conversations that have come up in recent months (with quotes of what I am responding to, for context); things which I feel are important and interesting, which respond to very common ideas, but which I never had quite the right formatting to turn it into its own blog entry.
Sometimes you need a good antagonist - preferably someone intelligent and knowledgeable (but wrong) - to play off of, to respond to, in order to make a point coherently.
The indented, highlighted text are quotes that are being responded to.  The further indented, different color highlighted parts are quotes within quotes.

The first 3 were all closely related, and, randomly enough, was spawned originally by a thread on how much the average American spends at Starbucks: