Whose side is Supervisor Frost on? Plutocrats!

© by Mark Dempsey
Supervisor Frost’s latest newsletter discounts rent control as a solution to California’s housing affordability problem. She repeats the standard capitalist, market-based nostrums about why this is so:
- We must let the market handle all such problems.
- Limiting landlords’ profits discourages new home construction,
- Etc.
Pretty standard stuff, and practically speaking, an article of religious faith in right-wing America. God has an invisible hand, and no planning or regulation is necessary to have the optimum outcome. All we need is patience...and a substantial savings account.

But this is manifestly untrue. The Great Recession emerged from the unrestricted, deregulated market on Wall Street basically pushing a Ponzi scheme to its logical conclusion. And if you think Wall Street has no stake in the housing market, you’re ignoring the number of rental homes purchased by Private Equity investors like Blackstone...from 0 in 2010 to more than 200,000 now, or the increase in debt service as a percentage of disposable income...creeping up! (Source: Washington Post)

In fact housing is highly regulated, from its finance (FNMA, FHLMC, FHA, etc.) to the actual buildings themselves (building and planning codes). The “free market” doesn’t exist in this area. Rather than "freedom," subsidies pervade this market since interest paid on mortgages is a tax write-off. Unfortunately, renters get no such subsidy.

Sacramento County used to have the best kind of program to encourage building affordable housing. Called “inclusionary zoning,” it required builders to integrate those affordable homes among their existing subdivision proposals. This prevents ghettos and has market acceptance--the most valuable propery in the region, McKinley Park, integrates multifamily homes among the mansions.

Unfortunately, the Supervisors caved when the builders protested, saying they would rather pay a per-square-foot fee than build affordable homes that would integrate poorer people in their subdivisions. The fee they settled on was less than a third of the equivalent inclusionary zoning requirements, so now it's no surprise we have a shortage of affordable housing.

You might wonder why we need to integrate poor people into rich folks’ neighborhoods. Answer: So the rich can appreciate that there’s more to life than money. It’s healthier for all concerned.

So Ms. Frost wants to deregulate a tiny corner of a highly regulated market in a way that favors the wealthy and crushes renters. Of course no one gamed the system to get extraordinary wealth, and predatory rent increases are really just things we must bear without protest...for our own good!

This is consistent with her other positions, and just as clueless and heartless.

Big American Money, Not Russia Put Trump in the White House

Worth a look: https://www.counterpunch.org/2018/03/30/big-american-money-not-russia-put-trump-in-the-white-house-reflections-on-a-recent-report/

...a Chomsky quote from the link:

“Americans may be encouraged to vote, but not to participate more meaningfully in the political arena. Essentially the election is a method of marginalizing the population. A huge propaganda campaign is mounted to get people to focus on these personalized quadrennial extravaganzas and to think, ‘That’s politics.’ But it isn’t. It’s only a small part of politics…The urgency is for popular progressive groups to grow and become strong enough so that centers of power can’t ignore them. Forces for change that have come up from the grass roots and shaken the society to its core include the labor movement, the civil rights movement, the peace movement, the women’s movement and others, cultivated by steady, dedicated work at all levels, every day, not just once every four years…sensible [electoral] choices have to be made. But they are secondary to serious political action.”

Warren Mosler explains Modern Money Theory, and the macro problem behind unemployment.

See 7:38 for unemployment info

The farm bill makes us sick, and climate worse

It's not an accident that a calorie of carrot is more expensive than a calorie of high-fructose corn syrup. Michael Pollan quotes one farmer as saying Federal ag subsidies are "just like laundering money for Cargill and ADM..." (two big agribusinesses).

Read the whoe article here. (bonus action opportunity, includes a letter requesting a better farm bill)

Uber not a panacea

This NY Times editorial is worth a look.

The Noamster Comments about Russian Meddling

Interviewer: Which brings us to the narrative of Russian influence in the 2016 presidential election. I understand you’re not very impressed with this line.

Chomsky: Well it’s very hard to take seriously for a number of reasons. One reason is the work of Thomas Ferguson and his colleagues [“How Money Won Trump the White House”]. There really is manipulation of elections, but it’s not coming from the Russians. It’s coming from the people who buy the elections. Take his study of the 2016 election [“Industrial Structure and Party Competition in an Age of Hunger Games: Donald Trump and the 2016 Presidential Election”]. That’s how you interfere with elections. Or the pretty spectacular study that he and his colleagues did about a year ago on Congress “How Money Drives US Congressional Elections,” where you just get a straight line [correlation between money and major party votes in Congress]. You rarely see results like that in the social sciences. That’s massive manipulation. Compared with that, what the Russians might be doing is minuscule. Quite aside from the fact that the U.S. does it all the time in other countries.

Pete Peterson: The alternative obituary

Billionaire National Debt panic promoter Pete Peterson just died. His vocations included being CEO of Bell & Howell, Nixon’s Commerce Secretary, CEO of Lehman Brothers, and one of the founders of Blackstone, a vulture hedge fund.

His hobby was spreading panic about national debt. To that end he funded several think tanks and campaigns, including “Fix the Debt” speaking tours, budget workshops from his Concord Coalition (bipartisan!) think tank, and the ubiquitous Peterson Institute which supplied economists even to “lefty” radio NPR.

But national “debt” is nothing like he portrays it in his propaganda. It’s the money. The money is the debt.

How is money debt? Any bank account is the depositor’s asset, but the banks liability--that is the bank’s debt. When you write a check, you’re assigning a portion of the bank’s debt to the payee.

Currency works like that too. It’s like checks made out to “cash” in fixed amounts. The Federal Reserve, our country’s central bank, carries currency on its books as a liability too. In fact, all that “debt” is really the dollar financial assets circulating in the economy.

What happens when policy makers heed the Peterson’s prescription? It diminishes the population’s savings! And mortgage holders all say “OK, there’s less money in the economy now, so we’ll skip this month’s house payment!”

...NOT!

Mortgage holders universally say “Pay your mortgage payment or we’ll foreclose on your house!”

And sure enough, in the periods following major reductions in national “debt” the economy suffers waves of foreclosures and asset forfeitures as the population struggles to come up with the cash to pay their payments.

...And that’s just what a vulture fund wants: Lots of foreclosed assets to pick up on the cheap.

So...Pete Peterson is self-serving even in his “Fiscally Responsible™” concern. He even worried about whether the country would go bankrupt...but if the government makes fiat money, and owes its debts in that money it can never be involuntarily insolvent. NEVER! Bad on us for believing otherwise.

So let’s sum up: 

1. Money is debt is money. 
2. Money creators who owe their debt in the money they create are completely unlike households, and that fundamental difference means they can never be involuntarily insolvent. 
3. Government does not need to implement austerity to “conserve” money...it makes as much as it needs whenever it needs it. 
4. Peterson’s advocacy for austerity injected fragility into the economy, subjecting large numbers of people to debt peonage and suffering. 

The austerity continues today. I’m not the only one who thinks so, too. See Pete Peterson’s Fix the Debt CEOs Promote Austerity for the Masses, Expanding Wealth for the 1 Percent.