Inflation and rent

For months, I have been telling you that the eviction moratorium is killing the rental market. The US dollar is taking a beating. These two factors are coming together to increase rents more than they ever have before.

The central Florida area has seen rental prices increase by more than 20 percent in the past 8 months. This is a housing inflation rate of 30 percent. At this rate, rents will double every 2.5 years. To put this in perspective, the average rent increase seen before COVID was 7%, but this year is seeing rents increase at three times that rate.

This means that our inflation is far, far higher than what we are being told. I am guessing that overall inflation is somewhere near 25% or so. The wheels are coming off.

Quote of the day

Goes to John at Wilder, Wealthy, and Wise.

The (metaphorical) printing presses have been shoveling money into the economy under the mistaken assumption that all we need is additional debt to keep the engine going. It’s like a demented congressman who doesn’t understand engines deciding to open up the hood of an F-150® to just pour gasoline on it using the dim understanding of a toddler that, “gasoline makes engines go, so if I pour enough gasoline on the engine, it will be as fast as a spaceship.”

The US is falling apart. We are looking at a complete economic collapse. Right after the dollar goes, the government will follow. Go, read the whole thing.

Why is it my responsibility?

Amanda Rinehart is a mother in Pennsylvania who left her job to care for her 8 year old child. She complains that her child is too young to receive a vaccine, so she has to keep her child out of school until there is a vaccine for children. For that reason, the US taxpayer should continue to pay for her to not go to work, according to her. In all, she has received more than $37,000 from the government since she quit working, if you only count unemployment, the free money for having a kid, and the COVID stimulus money.

On the other hand, only 39 percent of the US public paid Federal taxes last year. I was one of them. While a large part of the US population was sitting at home for the past year, not doing anything, I was working, investing, and providing the money for her to sit on her ass and complain that she isn’t getting enough of MY money.

I would argue that Ms. Reinhart isn’t losing HER unemployment. She is merely losing her ability to suck even more of my money out of my wallet, and the wallets of my fellow taxpayers.

You will note that there is absolutely no mention of a Mr. Rinehart. Where is the father of this child? How am I responsible to provide for his child, yet he is not?

The people on the left will say that I am greedy because I don’t want to help her. I have no problem helping the poor, as long as they are attempting to help themselves. I don’t see how it is greedy for me to want to keep my money for my own use, yet not greedy for this woman to demand access to my money with the only claim to it being that she couldn’t keep her legs closed.

No credit scores

Something that missed my eye when it came out back in May was this story. It says that banks are going to be issuing credit cards to those in the US without credit scores. The claim here is that there are as many as 50 million people in America who do not have a credit score. Who in America has no credit score? That would mainly be people with no Social Security number, or those who deal only in cash.

Illegal immigrants? Criminals? This strikes me as a two fold policy:

  1. Allow illegals to get access to credit cards.
  2. Bring those who deal in cash, and are thus largely untraceable, into the full view of the government.

This will also give a large amount of short term spending cash to those who don’t otherwise have credit. Where did this idea come from? The Biden administration. They call it “Project REACh.”

REACh stands for Roundtable for Economic Access and Change and brings together leaders from the banking industry, national civil rights organizations, business, and technology to identify and reduce barriers that prevent full, equal, and fair participation in the nation’s economy.

Office of the Comptroller of the Currency

Who were the people that the administration brought together to come up with this idea? Representatives from the National Black Farmers’ Association, US Hispanic Chamber of Commerce, the NAACP, Credit Karma, and the National Diversity Coalition, among others.

Fundamental transformation, great reset, and all of that. Minorities will think this is a great idea. It isn’t- not for them, not for investors, and not for the economy. This is another way for banks to get more people owing them more money. It will also increase consumer spending, which will increase inflationary pressure by injecting more money into the economy.

Market Forces

In a comment to my post on subscription products, an Anonymous user had this to say:

The marketplace is a feedback mechanism to discover what buyers want. The feedback vendors are getting is that products with remote controls leased on a subscription are acceptable, because buyers keep accepting them. This is not a “market failure”, and we don’t need communism to force other people to give us what we want.

No policeman would stop you if you made and sold an aftermarket engine computer for a tractor. Farmers can buy a $300,000 350 HP 8-wheel-drive tractor, but all farmers nationwide can’t chip in $500 each to hire a techie to car-customize it? Why do you trust farmers to vote?

To tackle the first paragraph: The problem is that this isn’t a free market. In a free market, companies that are poorly run go out of business. This means that businesses in a free market have a disincentive to make poor decisions. In this market, they get a bailout, pay huge bonuses to the executives that made the poor decision, and continue business as usual.

Businesses getting bailed out has become a huge part of what the government does. Just in the last 20 years, the following bailouts have happened:
GM and Fiat Chrysler received multiple bailouts for a total of $85.6 Billion, Amtrak: $1 billion, Adidas $3.3 Billion, US air carriers have received $26.6 Billion, Bear Stearns $25 Billion, Citigroup $45 Billion, Bank of America $45 Billion, AIG received $180 Billion, Fannie Mae $116 Billion, Freddie Mac $71 Billion, the list goes on. Over the past 20 years, bailouts have totaled over $1 trillion.

Addressing your second paragraph: The reason that farmers can’t just modify a truck or tractor to circumvent that software is simple: Federal Law prohibits it. It is a felony under the Digital Millennium Copyright Act (DMCA) to modify the software of a product that has some of its capabilities controlled or restricted by software. So those subscription based devices, vehicles, and tools? They have the full protection of the might of the US government.

That isn’t a free market.

Inflation and shortages

All sorts of excuses are being made, but inflation seems to be hovering around 20 percent. There seem to be all sorts of shortages.

When I was on my lobster trip to South Florida, we ate at Frigates in West Palm Beach. They were out of hogfish and lobster. Seafood restaurants all over the country are reporting shortages and higher prices.

My wife and I went to Longhorn steakhouse on Friday. They were out of strip steaks and lava cake.

Welcome to socialism.

Finally

Today is finally the day that most American landlords can begin getting rid of the people who have been stealing their property. That’s right, the eviction moratorium is finally going to be allowed to expire. The Biden administration refused to extend it and even the Communist wing of the Democrat party couldn’t muster the votes in Congress to make it a law.

For some landlords, it has been YEARS since they were paid a cent in compensation for the use of the property that they purchased and were still required to maintain, insure, and pay taxes on, while the government refused to intervene as people were living there for free, even while destroying the place.

In the beginning, it was the government who created the problem- they forced everyone to stay home, which caused businesses to shut down, some permanently. What began as “two weeks to flatten the curve” became “until there is a vaccine.” Then the government mailed out billions in free money, paid billions more in enhanced unemployment benefits, all the while telling people that they didn’t have to pay rent because evictions were prohibited.

Instead of paying their bills, many Americans went on a shopping spree. Amazon, Netflix, and other companies saw record profits. Many businesses, including landlords, were bearing the costs of this orgy of spending. A year and a half later, and people are now upset that the evictions are coming, as if landlords are the villains.

Yes, landlords are being made into the villain here. Read this piece from Politico. They claim that 12 million people are behind on rent, including 50 percent of all black families. The article blames landlords for that, pointing out that  Forty-eight percent of voucher holders are Black and 18 percent are Hispanic, so the refusal to accept vouchers is a coded form of racial discrimination, in other words, calling landlords racist. Why?

The reasons that many landlords, myself included, don’t accept government Section 8 vouchers is purely financial.

  • People who are poor have poor rental payment histories and are likely to default
  • People who are paying for things with someone else’s money don’t value the things that the money bought, because they didn’t have to work for it
  • the government puts too many restrictions on the landlord, including more paperwork, more bureaucratic administrative burden, and more headaches. All in exchange for taking less money

All of the above increases my financial risk, my workload, and decreases my income. The only way to make money with Section 8 is to buy cheap, shitty, substandard housing. In other words, be a slum lord. I don’t want to do that, so I avoid Section 8.

The fact that most people who are receiving Section 8 housing vouchers are black has nothing to do with it. I am not in business to do people favors, I am in business to make the most money that I can by doing the least amount of work and taking the smallest risk that I possibly can. If I could make money selling goods to black people by taking little risk and expending minimum effort, I would do so. The money just isn’t there.

That isn’t enough. Some governments have made it illegal to discriminate against those who are receiving Section 8 vouchers. The latest effort is a push to get banks behind an effort to refuse loans to landlords unless they agree to rent to low income, Section 8 recipients. This will drive more landlords out of the market, especially smaller ones, leaving nothing but larger, self funded landlords in the market.

This is a push for the removal of the entrepreneur from the American experience.