economics

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.

By Divemedic, ago

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.

By Divemedic, ago

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.

By Divemedic, ago

Spin tobacco

The CEO of Phillip Morris surprised many this week by saying the company wants to get out of the cigarette market. This doesn’t surprise me in the least. As a (former) teacher, I can tell you that cigarette smoking is almost unheard of among teens.

What is popular with teens is vaping. Vapes come in different flavors: bubble gum, Tutti Fruity, Watermelon, Cotton Candy, and other candy flavors are enticing a new generation of customers into smoking at a time when cigarette smoking just isn’t cool anymore, and that doesn’t even address the vapes that contain cannabis. Most of the kids in high school are vaping.

Two years ago, Jim Cramer did a story on how vapes were killing the cigarette industry. If you were surprised by this, you haven’t been paying attention.

By Divemedic, ago

On the Dole

So this woman didn’t work enough during her lifetime to get enough credits to receive the full Social Security benefit and now wants all of us to pay her more, because reasons.

Susan Aubrey Wilde, 74, of Sacramento, California, lives alone in an apartment for seniors on fixed incomes, but her social security benefits of $1,122 a month barely covers little more than her rent of $794. After paying for utilities, internet, phone and the costs to upkeep and insure her car, there is little left to survive.

Here is a suggestion: Shut off the Internet and sell the car, both of which are luxuries. You can rely on public transportation and use the free WiFi that is provided in many places. There is no reason to demand that you receive more public dollars. You have two children. Perhaps one of them can help take care of you? And if they won’t, then why and how does that create an obligation on the rest of us?

By Divemedic, ago

Rents and inflation

For months I have been posting about how the eviction moratorium is killing landlords. Many landlords are leaving the business, on top of that, there is inflation to deal with. The increased costs, increased risk, increased demand, and falling supply has combined with record inflation to put a lot of pressure on rental prices.

So now Orlando area residential rents are seeing the highest rate increases in history. In the last year, rent in the Orlando market has increased nearly 14%. I know that we have seen increases in our costs: insurance, taxes, lawn maintenance, and other expenses have increased. This means that we will be increasing rent on our properties, I just don’t know by how much yet. The increase will be at least four percent, maybe as much as ten. I will know more in the fall. Our next lease renews right before Thanksgiving, so I will know by mid October.

By Divemedic, ago

Dealership car thieves

One of the Youtube shows that I enjoy watching is Lehto’s Law, a show where a Michigan lawyer answers legal questions from his subscribers. A video from last week referred back to a situation from years ago where a dealer was running a financing scam. It is apparently a widespread practice.

Looking back on it, the story is a familiar one. I myself have had a dealer call me the next day to tell me that they couldn’t reach a deal and wanted me to either return the car or bring in more cash. This video is worth a few minutes of your time.

Many businesses are shady, taking actions that they KNOW they are not legally permitted to take. They also know that few customers will call them on it, and even fewer will sue. For that reason, breaking the law becomes quite lucrative. Don’t be a sucker. Know your rights, fight for them.

By Divemedic, ago

Sue them

I have been talking about evictions and how landlords are being blamed for the problems caused through government malfeasance.

Landlords all over are saying that they are being put out of business because they are not being permitted to remove non paying tenants from their property. The government claims to offer rental assistance, but it is a sham. A year of rent free living often means that tenants owe tens of thousands of dollars in back rent. These rental assistance plans often require that landlords sign an agreement which states that they agree to accept whatever the government sends as full and final payment for all past due rent. So the landlord is expected to accept pennies on the dollar.

Instead, some landlords in New Jersey have found a better way. After fourteen months of watching their money go out without a dime in rent being paid, they have had enough. They can’t evict- but they can sue. They go to court, sue the tenant, and get a judgement for the past due rent.

Such lawsuits do not violate the governor’s eviction moratorium. That has the communists going apoplectic.

“I don’t think it’s in the spirit of the moratorium,” Albert added.

The claimed “Spirit” and legal basis for the moratorium was that people who have been evicted pose a risk for spreading COVID. It is supposedly an infection control measure. Of course, we all know the truth: the eviction moratorium is just another giveaway program- one paid for by property owners.

Communism, isn’t it great?

By Divemedic, ago

Selection Bias

This story says that people with college degrees whose parents also have a college degree make more money than those whose parents don’t have a college degree. It also found that for children without a college degree, it made no difference if their parents had a college degree or not.

Why? My opinion (you knew I would have one)

If a parent has a degree in a field that pays good money, say medicine, law, or STEM, also tends to have children who follow in their footsteps. Examples: I have a degree in the medical field. My son is a nurse practitioner. My uncle has a degree in computer engineering. My cousin got a degree in marine engineering and is on the design team for the Navy’s LCS.

What if a parent doesn’t have a degree? They assume that all college degrees have equal value. They convince the kids that they need to go to college and get a waste of a degree in Leisure studies, music, or Gender Studies. A degree is a degree, right? Example: My wife’s cousin has a degree in outdoor recreation. She is largely jobless and spends all of her time smoking weed and banging Colorado ski instructors. Or you can simply look at every Asian and Jewish family in America and observe that Asian and Jewish mothers consider an education to be a gift from God.

A parent who goes to college and gets a degree in Gender Studies or some other useless major winds up working at a McJob and decides that a degree is worthless. He tells the kid the same thing. Kid doesn’t go to college and winds up in the same company with the same McJob at the same pay as dad.

By Divemedic, ago

Evictions in Orlando

The Orlando Sentinel did a recent three part story in evictions. The story that I am posting about today was published on May 13. The woman at the heart of the first part of the story is Jocelyn Bennett, a nursing assistant who lost her job at a senior living facility. Dexter, her husband, had been between jobs, finding work through a temp agency. They were already on food stamps. In April, they couldn’t cover the rent. Their landlord told them they needed to be out in 30 days. And the family became homeless in a matter of weeks.

She claims that they cannot find a job. Bullshit. My hospital has more than a dozen openings for nursing assistants. We are supposed to have eight nursing assistants on each floor on each shift. Lately, we have had as few as three. We are also short on biomedical technicians (they repair medical devices like ECG machines, ventilators, medication pumps, etc.), we need telemetry monitors, nurses, and even people to work in the kitchens.

The article blames minimum wage, claiming that the minimum wage has only gone up by $2.50 since 2005. In 2005, Florida’s minimum wage was $6.15 an hour. They estimate that an Orlando resident would have to make $23 an hour, or a $47,840 yearly salary, to afford a two-bedroom rental that costs $1,248 per month. What? Where do they get these numbers from? Since $47K a year is far above the average wage for Orlando, how is everyone else affording all of these apartments?

Here is Bennet’s problem: She has 5 fucking kids. She couldn’t afford them before COVID. That isn’t her landlord’s fault. It isn’t because of minimum wage. It isn’t because she can’t find a job, nor is it because rent is too expensive. It is because our government pays people to have more kids, so she is literally breeding for a living.

The second woman was Alexiss Green, who quit her $50k a year job, then bought two houses while she rented another. Her intention was to flip the two houses, probably because she watches too much HGTV. Her investment failed, and she lost both houses, can no longer pay rent, and now we are all supposed to feel sorry for her and screw over her landlord by letting her live in her apartment for free.

“I’m not a deadbeat person who doesn’t pay her bills, I’m just a person in a hard situation,” Green said. She said she understands her landlord has bills, too, “but I don’t have control over what’s going on in the world right now.”

Regardless, I don’t see how any of this is her landlord’s problem. See, he made a wise business decision and is successful in his business. For that, he should be required to let her live in his home for free?

Her landlord, who’s in his 70s, says he’s on a fixed income and is using Social Security payments to pay his mortgage. He doesn’t have a lawyer, either.

A week later, the judge’s ruling arrives in the mail. Green prays over the envelope before ripping it open. It’s bad news. The judge ruled she hadn’t made any “timely partial payments,” even $5 or $10 a month. She has 10 days to move out.

Note: It has been over a year since she paid a single dime in rent. Not even a dollar. Yet we are supposed to feel sorry for her and throw the landlord out into the street.

A few days later, Green gets an email from Lake County saying she’s been approved for $9,000 in rent relief. According to county staff, it will go to the landlord who evicted her.

That is only fair, since she lived in the house for over a year- owing $22,000 in unpaid rent, with the landlord only receiving a single $4,000 government rent assistance payment. This $9,000 doesn’t even cover half of what the landlord is owed, once court costs for the eviction are factored in.

This isn’t an eviction crisis. It is a stupid people who don’t know how to run their lives, but expect everyone else to pay their freight crisis.

By Divemedic, ago