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Thursday, June 27, 2024

Links - 27th June 2024 (1 - Left Wing Economics)

Matthew Lau: Race and ethnicity are lousy predictors of poverty in Canada - "Milton Friedman’s first rule for government programs to alleviate poverty was: “If the objective is to alleviate poverty, we should have a program directed at helping the poor … There is every reason to help the poor man who happens to be a farmer, not because he is a farmer, but because he is poor.” It seems obvious, does it not? And yet many government programs today, supposedly aimed at alleviating poverty, do not follow this rule. It is common today for government anti-poverty programs to be directed at people on the basis of something other than their financial status — including their race. Thus the federal government’s poverty reduction strategy includes programs that target funds toward visible minority groups: for example, community supports targeted at Black Canadians and employment and skills training exclusively for Indigenous populations... if an anti-poverty program provides funding to people because they are Indigenous (rather than because they are poor), only 17.1 per cent of eligible recipients will be low-income while 82.9 per cent will not be. And anti-poverty programs that provide funding to Black Canadians on the basis of their race would have an even lower expected success rate for targeting the poor... an anti-poverty program available only to Indigenous Canadians or only to Black Canadians will exclude around 95 per cent of the low-income population. Meanwhile, although on average the white population is less likely to be poor, whites are the majority of the population and account for over 2.5 million of the nearly four million low-income Canadians. That’s 64.4 per cent of the total, with minority groups other than Indigenous and Black Canadians making up the balance... In a 1990 discussion of welfare programs ostensibly designed to reduce inequality, Thomas Sowell explained , “I’ve been doing studies now for 20 years of programs designed to increase equality. They increase inequality. Because even when the programs are designed for disadvantaged groups, they help the affluent members of disadvantaged groups while the lower members of those groups fall further behind than ever before.” To use a modern Canadian example: the federal government requires its departments and agencies to have at least five per cent of the total value of their contracts, if not currently then by 2025, held by “Indigenous businesses.” But as was uncovered during the ArriveCan scandal, a single two-person firm received more than $200 million in federal contracts from 2015 on by bidding on tenders set aside for Indigenous businesses and then subcontracting that work out to other businesses. The procurement policy may have been designed for a group that is relatively disadvantaged. But the benefits of the program went to affluent, politically-savvy members of that group and did little if anything to help poor Canadians, Indigenous or otherwise. In fact, the program only made things worse by burdening all taxpayers."
The left are racist, so their strategy makes sense

'Introduce double-locked rent caps in England', says Labour report - "Rents should be capped for tenants who cannot afford rising costs, according to a report commissioned by Labour.  The policy was recommended by Stephen Cowan, the Labour leader of Hammersmith and Fulham council, in a landmark report on the housing crisis.  It said a “double lock” should be introduced, linking rent increases to the lowest of local wage growth and inflation and that rents should only be allowed to increase once a year, with tenants receiving at least four months’ notice. But landlord lobby groups warned a cap could have an adverse effect on the rental market, driving out landlords and pushing rents even higher.  Almost half – 45pc – of evictions are now linked to landlords selling up, according to the National Residential Landlords Association. The property body said tax crackdowns and rent reforms are driving landlords out of the market, leading to fewer homes for tenants. The report, which is due to be published on Wednesday, also recommends that a “National Landlords Register”, updated annually, should be created... Rent controls have remained popular with Labour grandees despite evidence suggesting that they tighten supply and push up prices... One in 10 landlords are expected to sell up this year as a result of tighter regulation, according to a survey by the National Residential Landlords Association Trade body. Accountancy firm PwC warned that an exodus of private landlords could be damaging for Britain’s economy.  Research conducted by the company found that a 10pc exodus of small and medium landlords from the private rental sector would wipe out £4.5bn and 39,000 jobs.  Michael Gove, the secretary of state for housing, last year warned the House of Commons that controls “are proven to reduce supply overall, and a reduction of supply on the scale that an intervention of the kind that he puts forward would only increase rents and reduce the capacity of people to be able to live in the private rented sector”."
Clearly, rent control and more regulation of landlords can only increase supply
Weird. The left tell us that forcing landlords to sell will make housing affordable

The human consequences of rent control in Scotland - "For Scotland, the answers when we look at the data is no. Average rents on new tenancies have soared by nearly 14 per cent in the last year as rents on existing tenancies have been frozen and then capped. The average time to let a new tenancy is now down to around 15 days in both Edinburgh and Glasgow, when 25-30 days used to be the norm. Evidence from the rental portals also shows a gradual reduction in the availability of private rented properties in Scotland, down by around 20 per cent over the last year."

The Catastrophe of Rent Controls - "rent controls have discouraged landlords from investing in the upkeep of their rental properties. According to the same survey, 44% of landlords have reduced or stopped spending money on maintenance and improvements since rent controls were introduced.   Thirdly, rent controls have made it more difficult for new renters to find housing. According to the Scottish government, since the introduction, the average time it takes for a new tenant to find a property has increased from 12 weeks to 16 weeks."

Why rent control isn’t working in Sweden - "A shortage of accommodation in Stockholm and other cities, is causing a major headache for young Swedes - in a country which has been championing rent controls since World War Two.  Rents are supposed to be kept low due to nationwide rules, and collective bargaining between state-approved tenant and landlord associations.  In theory, anyone can join a city's state-run queue for what Swedes call a "first-hand" accommodation contract.  Once you have one of these highly-prized contracts it's yours for life. But in Stockholm, the average waiting time for a rent-controlled property is now nine years, says the city's housing agency Bostadsförmedlingen, up from around five years a decade ago.  This wait-time doubles in Stockholm's most attractive inner-city neighbourhoods. The traffic-jam has fuelled a thriving sub-letting or "second-hand" market, with "first-hand" renters and owners alike offering apartments to tenants for very high prices, despite regulations designed to stop people being ripped-off.  "I really feel like Sweden actually has failed [on housing]," says Mr Stark, who believes he pays double the price his apartment should be leased for.  Other rent-controlled apartments are passed between relatives and friends, which benefits those with existing networks, and challenges newcomers to the city... Regulations designed to prevent owners from making long-term profits are also fuelling market instability.  Since even legal sub-lets can rarely be extended beyond a year or two, it means those renting "second hand" have to jump between short-term contracts... even with major investments, it could take a decade to cut tenants' waiting time to less than a year or two."
Clearly, capitalism has failed

Stockholm's Rent-Controlled Housing Guarantee Has a Catch - Bloomberg - "When Ida Jonsson woke up on her 18th birthday, her first act as an adult — before voting or getting a drink — was to participate in a ritual for many Stockholm natives: signing up on the city’s lengthy waiting list for public housing.  Now 25, Jonsson only moved into her apartment a year ago. And she counts herself as fortunate: Not everyone is as well informed as her on the urgency of signing up for a rent-controlled apartment as soon as legally possible. “A lot hangs on the people around you and for them to tell you to put yourself in the queue,” Jonsson says. “It’s a shame because a lot of people put themselves in the queue only a few days too late and it can make a huge difference.” For thousands of young Swedes working in Stockholm, the struggle for housing involves either scrambling for an expensive sublet or commuting into the city from more-affordable suburbs. The average wait time for rent-controlled apartments is now 9.2 years; in some desirable areas, prospective tenants might hold out for 20 years.  Cities from New York to Dublin are seeing young people struggle to find affordable housing amid low supply, high demand and soaring inflation. But Sweden, where citizens pay among the highest tax rates in the world to offset better social services, was supposed to be the exception... there are not nearly enough units to meet the high demand, forcing those who cannot go through official channels into a subletting market, where reports of bribes for access and sexual harassment are not uncommon... Jonsson, after years of subletting, finally secured what some consider a unicorn in Stockholm — a 27 square-meter (290 square-foot) rent-controlled apartment in the middle of Stockholm’s historic Old Town, where picturesque 17th century buildings are placed around cobblestoned squares... While the government’s restrictions on rents create the possibility of affordable housing in the city center, the astounding shortage — 736,560 were registered in the queue in December of 2021 — results in a divide between those who know how to navigate the system and the rest. Tenants who end up with rent-controlled apartments are often wealthy, or have the right social connections to know to put themselves in the queue in time, says Ola Palmgren, a board member of the Hyresgastforeningen, a national tenants association with over 500,000 members. “Sometimes it can also just be blind luck and we obviously don’t want the real estate market to function that way.”... One prospective tenant, who wishes to not be identified because of her vulnerable situation, moved to Stockholm as a masters student and is now facing homelessness. She says she has routinely experienced sexual harassment from potential landlords during her hunt for an apartment. For many students in the city, she says, such housing precarity is an accepted fact.  Other newcomers to Stockholm are resigned to the situation. Leo Hanalp Sahin, 26, recently moved to the city from Linkoping, a two-hour train ride away, to work with the Stockholm police department. Having missed the window to sign up in the queue at 18, he is looking for a sublet while staying at a friend’s house and worries that he will need to commute from his hometown if nothing turns up.  “I’ve seen the way it looks in the queues,” says Sahin, “so I have pretty much given up on that idea.”"

Rent Control Has Failed In Sweden - "The average queue for a rental apartment in the capital is 11.3 years, reaching 30 years for heavily subsidized apartments... High demand for rental apartments, especially in urban areas, has given rise to rampant black markets in the rental housing sector. The black market mainly consists of activities like illegal trading and subletting of rental apartments. According to a survey, almost a fifth of young tenants in greater Stockholm admit to having illegally paid for a tenancy contract. The rental black market is supposedly fed by criminal gangs who use this market to channel gains from various criminal activities. These black markets are detrimental to the economy as the tenants end up paying more in order to gain access to housing and knowingly or unknowingly support illegal activities. Rent controls have caused an inefficient use of the existing stock of apartments. This can be attributed to an allocation-related economic inefficiency, i.e. apartments not being distributed according to the renters’ ability and willingness to pay. There is a low residential mobility and lock-in effects within the existing apartment stock, whereby renters (often older and single inhabitants) are effectively subsidized by below-market rents to remain in large apartments in attractive locations. The tenants normally never leave such apartments and the people who are willing to pay more rent are unable to get these apartments. This indeed is an epitome of ineffective utilization of housing leading to major economic losses...  In a survey of companies operating in Sweden conducted by the Confederation of Swedish Enterprises, one fifth of respondents claimed that housing shortages had made recruitment more difficult during the previous year. Housing being one of the main factors for any worker, a housing shortage not only prevents the recruitment of highly skilled foreign workers but also proves as an obstacle for companies to set up their businesses in the country. All in all, it is a hindrance to Sweden’s growth prospects. Rent controls create a divide between the market insiders who are more likely to be highly educated individuals with good connections, and outsiders, often immigrants or young people. As a result, the latter tend to live in unattractive suburbs – areas with extraordinarily high levels of concentrated welfare dependency and unemployment... the people who are willing and able to queue for, or through other informal means get access to the aforementioned subsidies, tend to have relatively high incomes. This undermines the basic principle of rent control, i.e. to uplift the low earners group in the country and leads to social segregation. Under the rent control system, the landlords can raise rents only if the apartment standard is improved which does not include regular maintenance work. Thus, the landlords have an incentive to undertake only expensive renovations"

100 Years of Rent Control in Sweden - "Sweden has had rent control regulations since 1917 with less than two decades of pause between the First and Second World War... the data tells us two stories. One is a warning lesson. Even after 70 years of continuous rent control in various forms, the rental housing market in Sweden seems to be a big mess.  The other story is more one of success. There was a housing shortage after the First World War but it took the market less than a decade to recover. The housing census of 1933 shows that the vacancy numbers had returned to normal levels (2-3%) for a balanced housing market. Perhaps it’s time for Sweden and the rest of the world to try it again?"

Steve Lafleur: What we can learn from Sweden’s rent control disaster - "Strong Towns’ Daniel Herriges has a useful way to frame the issue. Rent control is useful as an anti-displacement measure, but not as an affordability issue. Relatively flexible rent controls can balance the needs of existing tenants with the need for growth... the best way to balance the needs of tenants and developers is to have a rational housing market that allows for the supply of housing to keep up with the demand for housing. Fast-growing cities like Dallas, Houston, and even Edmonton have managed to keep rents in check by encouraging development. Of course, Toronto and Vancouver aren’t and shouldn’t sprawl out like Houston. But there’s plenty of room to build upwards within the geographic boundaries of Vancouver and Toronto—if we allow it. Tokyo has proven that it’s possible to build upwards to affordability. We can do it too."

CFMEU workers in Brisbane strike for $240k salary - "Tradies on a $6.3 billion construction project are walking off the job as their union calls for pay rises which would see an entry-level worker earn an eye-watering $240,000 per year. Members of the Construction, Forestry, Maritime Employees Union (CFMEU) are striking at seven sites across Brisbane... It comes after former Transport Minister Mark Bailey revealed a blowout of $960 million last year, bringing the cost of the Cross River Rail to $6.3 billion."
Left wingers scold those who disapprove of way-above-market salaries (for low level jobs), claiming that instead of pulling others down people should strive to get everyone higher pay, because they think money is free

TTC strike looms this week. Here’s what’s at stake - "Torontonians could face a total shutdown of the TTC as early as Friday, unless transit and union officials can agree on a new contract and avoid a strike... Major sticking points have included wages, job security and benefits as the clock ticks down to the possible start of the first transit strike in 16 years.  Sources told the Star late last week that the union had rebuffed a four-year TTC offer that would have given workers annual raises of 3.75 per cent, 3.5 per cent, 3.5 per cent, and three per cent. The sources, who were not authorized to disclose the figures, said the union — which had for years been legally prohibited from striking — was seeking a three-year deal with hikes of seven, six and five per cent... A walkout by the TTC’s roughly 12,000 front-line employees could mean a full shutdown of Toronto’s bus, streetcar and subway network that normally carries passengers on almost 2.5 million trips each weekday. While many more people have work-from-home options now than during the previous strike in April 2008, the sheer volume of commuters in 2024 would worsen already terrible gridlock and fill the city’s bike lanes and sidewalks... On the first day of the 2008 strike, a college student told the Star about missing a job interview, a tired nurse almost cried at the prospect of having to walk home after a 12-hour hospital shift and a disabled Mississauga woman was trying to figure out how to visit her mother who had suffered a stroke in Toronto. That strike lasted only a weekend before the Ontario government passed legislation ordering TTC staff back to work."
Left wingers want to force people to use public transport, but they also support universal strikes. Clearly the solution is to make private transport (including ride sharing) even more expensive so most people are forced to use public transport, and to raise taxes to give in to 100% of union demands, no matter how unreasonable they might be
Even in France, during strikes they need to provide a minimum level of service

Transit bus driver salaries can be $160,000 per year - - "Transit bus driver salaries can be $160,000 per year.  Some people calling the posted salaries for transit bus drivers false.  The transit bus driver salaries posted are real salaries paid out posted by the Government of Ontario.  The salaries below are for operators, not managers.  These are the higher end of the salary range with the Toronto Transit Commission.  These rates are higher than many Captains at WestJet."
Naturally, there were multiple people defending the salaries

Government policies ignore impoverished white Canadians: report - "A federal document outlining Canada’s anti-racism strategy notes: “Anti-Black racism is manifested in the legacy of the current social, economic and political marginalization of African Canadians in society such as the lack of opportunities, lower socio-economic status, higher unemployment, significant poverty rates and over-representation in the criminal justice system.”  Ontario’s anti-racism strategic plan includes the same statement almost word for word.  What’s more, the report says, government anti-poverty programs with racial qualifiers can end up misdirecting resources to those who are not even poor.  It cites Ontario’s Racialized and Indigenous Supports for Entrepreneurs (RAISE) grant program. Using the low-income-after-tax measure, eligibility for this race-based funding would apply not only to 1.4 million low-income earners in Canada (the total low-income visible minority and Indigenous population) but also to nearly 10.5 million minorities or Indigenous who are not low income, while excluding non-minority, non-Indigenous low-income earners... The study also found that some minority groups in Canada are as likely or in some cases less likely to be poor compared to white Canadians. These included Canadians of Japanese, Korean, South Asian and Chinese ancestry, all of whom have higher average weekly earnings that their white counterparts.  The study suggests delinking poverty from race, and says governments should strive to address the “root issues” of poverty by strengthening, or minimizing interference with, what it calls the “success sequence”: finish high school, work full time, and marry before having children. These markers, it says, predicate a non-poverty life for the vast majority of people in the U.S. and Canada."
Left wingers hate white people, marriage and work, so the gravy train will continue to be increased

Meme - Melanie @lmagecaptured: "Will we be getting a picture of the kid who's loan we're paying?"
Aldous Huxley's Ghost: " "Little Billy lives in New York City. Like most liberal arts majors, he struggles to earn enough money working in Starbucks to pay the loan payments on his Wymxns Studies degree from CUNY. For just about a dollar a day, you can sponsor his loans!""

wanye on X - "Something that I guess should seem obvious, but actually appears to be pretty subtle to me, is that progressives don’t just believe that systems can and should be improved, but rather that if they can think of a better way that a system should be run, then they are morally justified in acting as though that progress has already been achieved.  So if they feel like they’re underpaid at work, then they don’t have to do any of the things they are obligated to do at work. If they feel that medical bills are too high, then they think they shouldn’t have to pay them. If they think we should have a system of universal higher education, then they feel like it’s correct not to pay back the money they voluntarily borrowed in the current system. And so on and so on.  Arguments like, “well these are the rules we all agreed to for now“ or, “well, you signed that contract saying you would do X” carry shockingly little weight.
I think this is an outgrowth of their rich versus poor, oppressed versus oppressor mindset. Society is not the product of cooperation between equals, but rather a constant battle between antagonists.   So they can’t see just how much is riding on cooperation, on the rule of law, on trust, on contracts."
Electric Bass Enjoyer on X - "And when things do fall apart, they accept no accountability. The system that was working reasonably well until they stuck the wheel in the spokes is to blame for failing, even though they caused it to fail."
will the real victim please stand up on X - "Best example is social progress, when leftists decide what is normal now and literally expect everyone else to comply without even talking the time of informing them what "normal" is now. They literally react like the norm they made up 5 minutes ago has been a load-bearing societal norm for centuries, no difference."
Ben Hayes 🎿⛵️ on X - "Also, if they think of (what is realistically an incrementally) better way, the solution is to tear down the entire system and rebuild it with the new way with no concern of second order consequences. I think the main appeal of conservatism is just.. man, it’s way easier to break things than make them."

Doing homework on public school funding and teacher union rhetoric - "According to a common refrain from teacher unions, government-run public schools in Canada are forced to do more with less year after year. But in reality, per-student spending in public schools increased in eight provinces between 2012-13 and 2020-21 (the latest year of available comparable data). In fact, spending in public schools across Canada increased by $7.8 billion more than was necessary to account for changes in enrolment and inflation. And per-student spending (inflation-adjusted) on public schools increased by 8.3%... It’s critical for Canadian parents and taxpayers to understand how much of their money is being spent on government-run public schools, but it also matters how that money is spent. So, where does most of the money go? Textbooks? Smart boards? Hot lunches for kids? Not quite. While capital spending on infrastructure such as buildings or facility upgrades has increased over the years and grown as a share of overall spending, by far the largest and costliest aspect of education spending across Canada is compensation for employees including teachers, which grew from $45.6 billion in 2012-13 to $57.3 billion in 2020-21, an increase of $11.7 billion or 25.6%... The cost of sending one child to a government-run public school varies from province to province, but is highest in Nova Scotia where schools spend $16,873 per student. Contrast that with Alberta where the per-student spending tab ($13,464) is the lowest in Canada. Which raises the most important question — in light of all this spending, how are the kids doing in school? Unfortunately, according to the Programme for International Student Assessment (PISA), the world’s leading standardized test, Canada’s average scores have been declining, and the share of high-performing students in Canada, who do exceptionally well on the PISA tests, is declining as well. In science and math in particular, the academic achievement of Canadian students is tumbling."
Clearly, even more money is needed. And teachers will never be paid "enough"

Uber says new B.C. rules will increase costs, Eby says companies can 'suck it up' - "Uber says regulation changes for ride-share and delivery workers in British Columbia will drive up costs and reduce demands for local restaurants, but Premier David Eby says complaining companies can "suck it up."  Uber issued a statement Thursday saying it supports some of the new rules coming in September, such as an increased minimum wage and health and safety coverage, but the amount it is being forced to pay workers for using a personal vehicle is "unreasonable."... Uber's statement said the changes would make the ride-share expense rate in B.C. 50 per cent higher than the comparable rate in California."
When fees paid by end customers rise, it will be the fault of "greedy companies", because as left wingers tell us, Uber and similar companies are very profitable because their executives make a lot of money

Opinion | From Rags to Riches to Rags - The New York Times - "It turns out that 12 percent of the population will find themselves in the top 1 percent of the income distribution for at least one year. What’s more, 39 percent of Americans will spend a year in the top 5 percent of the income distribution, 56 percent will find themselves in the top 10 percent, and a whopping 73 percent will spend a year in the top 20 percent of the income distribution... A further example of such fluidity can be found in an analysis by the tax-policy expert Robert Carroll. Using data from the Internal Revenue Service, Mr. Carroll showed that between 1999 and 2007, half of those who earned over $1 million a year did so just once during this period, while only 6 percent reported millionaire status across all nine years.  Likewise, data analyzed by the I.R.S. showed similar findings with respect to the top 400 taxpayers between 1992 and 2009. While 73 percent of people who made the list did so once during this period, only 2 percent of them were on the list for 10 or more years. These analyses further demonstrate the sizable amount of turnover and movement within the top levels of the income distribution. Editors’ Picks I Think My Husband Has Dementia. Can I Leave Him Before It Worsens? What My Father Taught Me About Texas Barbecue, and Being a Dad Living Out Loud, Headphones Nowhere to Be Found  One of the reasons for such fluidity at the top is that, over sufficiently long periods of time, most American households go through a wide range of economic experiences, both positive and negative. Individuals we interviewed spoke about hitting a particularly prosperous period where they received a bonus, or a spouse entered the labor market, or there was a change of jobs. These are the types of events that can throw households above particular income thresholds. Ultimately, this information casts serious doubt on the notion of a rigid class structure in the United States based upon income. It suggests that the United States is indeed a land of opportunity, that the American dream is still possible — but that it is also a land of widespread poverty. And rather than being a place of static, income-based social tiers, America is a place where a large majority of people will experience either wealth or poverty — or both — during their lifetimes.  Rather than talking about the 1 percent and the 99 percent as if they were forever fixed, it would make much more sense to talk about the fact that Americans are likely to be exposed to both prosperity and poverty during their lives, and to shape our policies accordingly. As such, we have much more in common with one another than we dare to realize."

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