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Kahlon The Fake Has A Genius Idea for Bringing Down Real Estate Prices: Rent Control!

rafifarber Economics, The Jewish Libertarian Blog , ,

“In many cases rent control appears to be the most efficient technique presently known to destroy a city—except for bombing.”

Assar Lindbeck, The Political Economy of the New Left (New York: Harper and Row, 1972)

It’s all the same. There is never any change. It’s all the same total bullshit. The only reason people ever though Kahlon was different from all the other disgusting slime was that the media, licensed and directed by the State, decided it would be a good idea to paint a picture as if someone were slightly different in order to get people interested in granting the State more legitimacy.

Kahlon is a genius! He’ll stand up for the middle class! He’ll bring down housing prices! He’ll save everything! This is just Netanyahu’s way of getting 10 more seats in his stupid game. Kahlon is Likud, and he left it to get some more votes from the left for Bibi. That’s all this ever was. There is NO DIFFERENCE between Kahlon and Dov Henin or Bennett or Ahmed Tibi.

So his idea, just like I said it was going to be, is rent control. That’s the greatest idea that comes to any politician’s mind. Don’t let people build houses. Don’t give up your thieving control of the unhomesteaded land supply. Don’t help increase supply by getting out of the freaking way.

Just pass a law saying that higher prices are illegal. Why not pass a law that says everyone needs to have a yacht. Then they can sell it for a house. Why not pass a law that nobody is allowed to die.

We can see how well rent control is doing in Venezuela, where people there can’t even get basic goods while the government prints money to death and forbids prices from rising.

I already wrote a post about Tzipi Livni and Pretty Boy Lapid’s idea for bringing down housing prices. Guess what it was. Rent control. But if Kahlon says the same exact thing, he’s a freaking genius!

You know, when I first got into the whole libertarian crowd, and started seeing claims all over the place discrediting the media and claiming it was all rigged and worthless, I kind of poo-poohed it. These are just tinfoil hat types.

I already wrote about rent control here. What it does is destroy property, as landlords cannot charge enough to maintain the property, so they abandon it, and it becomes unliveable, which exacerbates the housing crisis.

It really is a simple issue. If there’s not enough of something, you MAKE MORE OF IT SO PRICE GOES DOWN.

But the government’s solution is tojust  FORBID THE PRICE FROM GOING UP

What a vicious little nothing creature Moshe Kahlon is.

Kahlon’s First Move To Lower the Cost of Living: Raise Taxes

rafifarber Economics, The Jewish Libertarian Blog , ,

I saw this one coming. If you thought Moshe Kahlon and his Kulanu Party are a group of economic geniuses, it turns out they’re a group of politicians looking for more excuses to take more money away from you. Really, only a politician could think up an idea like raising taxes to make your cost of living go down. Bluntly, it’s saying this: You want to be wealthier? I’ll just take more money away from you and then voila! You’ll suddenly be wealthier. Amazing.

An article out in Calcalist, a hack magazine if there ever was one where they throw jargon at you but nothing makes any sense, says that even before Kahlon goes into the Finance Ministry, the bureaucrats there are busy cooking up a plan to take away tax exemptions on property gains for those who own apartments as investments, and to tax rental apartments.

It’s amazing really. That this is what they think of. Not building more, not freeing up more land, not giving away land to build, not even selling land. Raising taxes.

What will this cause? A lot of people want to say that the tax raise will just be passed down to the renter. It won’t. That’s impossible. Rental prices are what they are not because of taxes, but because of supply and demand of houses.

What will happen, though, logically, is something like this:

The people that buy apartments to rent them out have the capital to do so. They have the savings to make a down payment on the house in order to rent it out. The ones that rent, usually do not have the capital or income to qualify for a mortgage. So they don’t buy houses. And now, even if they could, they’d have to pay taxes on property gains.

So what’s going to happen is that the moderately rich people who can afford a house or two as an investment, will sell them in order to escape the new taxes. But who will buy? The people who can’t afford a mortgage now? Certainly not. The ones who will buy will be the super rich who can afford so many houses that the economies of scale will keep real estate investment profitable only at a higher theshold that only the superrich can afford.

So the landlords scraping a living at modest investments, all that income will now go to the superrich. I have nothing against the superrich unless those riches came from government. I’m just saying that they end up benefiting the most from government intervention like this.

The other alternative would be to make it much much easier for a person who cannot afford a mortgage now, to afford one in order to buy a house. That would mean forcing banks to accept people who make no down payment, and then we’re back where we started at the housing bubble.

So super wealthy real estate owners rejoice. You’re about to get a lot more real estate at a discount. But rental prices ain’t goin down until you INCREASE SUPPLY.

 

 

Why Moshe Kahlon is a Total Fake

rafifarber Economics, Israeli Politics, Likud, The Jewish Libertarian Blog , , , ,

Sometimes dirty politicians are caught at the right place at the right time, and everybody thinks they’re a hero. This is the case with Moshe Kahlon, another Likud politician who left the party to form his own Kulanu party. Others who left have been Lieberman, Bennett, Livni, and Sharon. Kahlon is a two-bit loser lacking any guts or backbone, that was shoved in the right office at exactly the right time to make one move and now people worship him.

What people think he did was introduce competition into the cellular market, thereby lowering prices. If he had done this, it would have been a good thing. Unfortunately, this is only partly true. He did allow other phone companies to exist (amazing) thereby increasing competition. But there was one caveat that nobody seems to care about that will bite everyone in the ass very soon.

They never tell you this detail in the media, because the media is stupid. But Kahlon’s “reform” goes like this. Companies have a finite amount of time to start up and get as many customer as possible. In order to enter the market they have to pay a huge deposit to the Misrad HaTikshoret or whatever department is the overlord of the phone market. And then the 4 or 5 (forget how many) companies with the most customers gets their deposit back from the overlord government department.

This, of course, encourages rock bottom prices at a loss for the phone companies because they are trying to stay alive in the race to be allowed to continue operating. My phone bill, for example, is 10 shekels a month with Golan Telecom. They are charging ridiculously low rates because the owner, Something Golan, wants to be in the running to survive and get his deposit (bribe) back from the government.

After the time limit is up, which I believe is at the end of 2015, the remaining companies will then jack up prices to higher than market rates in order to make up for their losses in trying to bag as many customers as possible within the time limit. There will STILL be a lack of supply because other companies will STILL be banned from the space and forbidden from competing with the survivors.

So much for Moshe Kahlon, who, if he had any guts, would have simply closed his department and allowed anyone to start a phone company at any time anywhere.

All a government minister has to do in order to really succeed is close his office, lock the doors, and never show up.

Unfortunately, that is not what Kahlon did.