The Price Of Regulation

Economics

Today’s Washington Times tells a story that brings home, quite literally, the costs that government regulation impose on society.

Escalating prices that have made houses unaffordable for many people in Washington are mostly the result of homeowners using political and regulatory means to block construction of new housing, economic studies show.

The so-called “slow growth” movement has been a political force in the Washington DC area for several years. For the most part, these groups characterize their efforts to limit the construction of new homes as a method to put the reins on “out of control” growth which has led, supposedly, to crowded roads, crowded schools, and crowded neighborhoods. At the same time, the costs of housing the D.C. area has soared. The reality is that this has simply caused a lack of housing and affordable housing at that. Companies like The Property Block are doing their best to redevelop buildings in order to provide more housing.

Washington home prices continued to soar last month despite a slowdown in sales, with gains of 21.5 percent and 18 percent over November 2004 in the District and Montgomery County, respectively, the Greater Capital Area Association of Realtors reported this week.

It now costs $618,692 to buy an average-priced home in the District, and $560,327 in Montgomery County. Prices in Northern Virginia also have maintained breathtaking heights, among the highest in the country, despite some slackening of sales.

Until now, nobody has put the two together to see that it is in fact so called “slow growth” that is causing housing to become unaffordable for a growing segment of society.

Economists increasingly are concluding that the shortage of affordable housing in Washington and other major U.S. cities on the East and West coasts is a result more of man-made restrictions on development than high construction costs or other market forces.

“It simply takes too long and is too expensive to move through the development process,” said Mark Vitner, senior economist at Wachovia Securities, pointing at “smart growth, slow growth and no growth” movements in many of the same areas where the population and demand for housing are growing the fastest.

What many economists have been proclaiming as a “bubble” in Washington and other high-cost areas can be mostly explained by the restrictions on development, combined with a rush to homeownership by renters taking advantage of low interest rates, he said.

The effects of these policies can be seen throughout the area:

Montgomery County imposed a temporary moratorium on building this year after a controversy over a developer’s violation of height restrictions in Clarksburg.

The county already had banned most development in one-third of the jurisdiction set aside as an agricultural reserve. Under pressure from residents’ groups, it is considering further restrictions on building in the reserve by churches and nonprofit institutions.

Loudoun County, one of the fastest-growing jurisdictions in the nation, put severe restrictions on the density of housing several years ago, but some of those restrictions were overturned later by a more pro-development Board of Supervisors.

Prices are booming in the District, where federal ownership of large tracts has limited the land available for development and height restrictions imposed by Congress have been in effect for more than a century.

Prince George’s County, with much land available for development, only recently lifted a restriction against building in areas where police and fire-safety infrastructure is not able to accommodate new residents.

Even Fairfax County, which gained fame in earlier decades for free-wheeling development policies that led to rapid job growth and construction, is contending with homeowners against plans to increase the density of housing near the Vienna Metro station.

Existing homeowners, in other words, have become more politically active and have been using the power of their local governments and zoning boards to prevent developers from building new homes regardless of whether the demand exists. The result, of course, is predictable, with a decreased supply of housing, the price of that housing increases. Hence, the housing market “bubble” that everyone talks about. And, since the market is not being permitted to operate in its normal fashion, distortions are inevitable:

The resulting shortage of housing causes an escalation of prices as new residents and renters seeking to become homeowners bid up prices to purchase the few homes available. That further serves the interests of the homeowners by pushing up the value of their houses.

The result is to turn the housing market on its head, the study found. High home prices should act as an inducement for developers to build more houses, increasing supply and lowering prices. But construction rates in Washington and other high-priced cities are substantially lower than those in the interior, less-pricey areas of the country.

Its not very often that we see the cost of government regulation so easily displayed in a monetary amount. For those of us in the D.C. area, all we have to do is glance at the weekly real estate listings.

Cross-Posted at Below The Beltway

General Semantics

General

I suspect that many of my readers, and, indeed, many of the people I read, have never heard of Alfred Korzybski or General Semantics. I would highly recommend, before reading and commenting, that you familiarize yourself with the idea that the “map is not the territory” and the “word is not the thing”. Better yet, read some of Heinlein’s work. You can find more information at the links provided. You might also take a look at Eric Raymond’s The Utility of Mathematics for some insight into binary choice logic.

Why Does The Second Amendment Exist?

Keep and Bear Arms

I’ll give you your first hint. Or several even. The Second Amendment does not exist so that gun collectors can buy antique muskets. Nor so that Elmer Fudd can keep on trying to bag Daffy Duck and Bugs Bunny. It was never contemplated so that survivalist types can stock their hideaways in the mountains of Idaho against the day that civilization breaks down and it’s kill or be killed. In fact, so long as they did not actually infringe on the right to own guns, Congress and/or state legislatures would not be doing anything unconstitutional if they were to regulate, or even prohibit, these activities.

The men who wrote the Constitution included the Second Amendment for one reason only. They even told us what that reason was when they wrote it.

A well regulated Militia, being necessary to the security of a free State, the right of the people to keep and bear Arms, shall not be infringed.

It is important, though, to understand just what James Madison, Patrick Henry, John Adams, Thomas Jefferson and their fellow Revolutionaries considered to be a “militia”, in order to understand the importance of this Amendment. So, to do that, let’s review what some of them had to say.

Patrick Henry:

“O sir, we should have fine times, indeed, if, to punish tyrants, it were only sufficient to assemble the people! Your arms, wherewith you could defend yourselves, are gone …” Elliot p. 3:50-53, in Virginia Ratifying Convention demanding a guarantee of the right to bear arms

“Are we at last brought to such humiliating and debasing degradation that we cannot be trusted with arms for our defense? Where is the difference between having our arms in possession and under our direction, and having them under the management of Congress? If our defense be the real object of having those arms, in whose hands can they be trusted with more propriety, or equal safety to us, as in our own hands?”

“Guard with jealous attention the public liberty. Suspect everyone who approaches that jewel. Unfortunately, nothing will preserve it but downright force. Whenever you give up that force, you are ruined.”

Richard Henry Lee, 1788, Member of the First U.S. Senate.

“To preserve liberty, it is essential that the whole body of people always possess arms…”

George Mason

“…to disarm the people is the best and most effective way to enslave them…”

Thomas Jefferson

“The Constitution of most of our states (and of the United States) assert that all power is inherent in the people; that they may exercise it by themselves; that it is their right and duty to be at all times armed and that they are entitled to freedom of person, freedom of religion, freedom of property, and freedom of press.”

In fact, Patrick Henry, Richard Lee, and most other Revolutionary leaders knew full well that their revolution against British tyranny would have been impossible without the arms that nearly every colonist kept in their homes. The Second Amendment is our last, final defense against tyranny.

Natural Rights doctrine – the missing piece

Individual Rights, Theory and Ideas

Some of you remember the debate raging a while back about whether property rights are natural rights, and exactly what that means. There were a few things that just didn’t sit right with me, but I haven’t had the time to really collect my thoughts and provide the response I wanted to give, until now.

To sum up, Eric, Robert, and I argued that property rights were a natural right because they exist inherent to man’s nature, and that is why we should push them as a society. Alice and JimmyJ pointed out that whether they exist in a state of nature or not, a right is only as valid as the society surrounding it. And Dada took that line of thinking to the next level and decided that socialism is perfectly valid because a society can define rights as they wish.

The disconnect for me was that I heard what Alice and JimmyJ said, and they are correct. Once you reach the point where you have a society and government, your rights are truly only worth the ability to back them up. America is still pretty well off on that score, but societies throughout history have proved that life, liberty, or property rights are quite easily discarded by an overbearing government. We can call them “natural rights” all we want, but a natural right to life doesn’t stop a corrupt government from putting a bullet in your head. To clear up this disconnect, we need a valid reason for why a society should be set up to recognize and protect those rights. In our debate, neither myself, Eric, or Robert explained why that should be the case. And that’s unfinished business.
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Renewing The Patriot Act

Individual Rights

Despite their faults, the ACLU is quite rightly questioning the authority of the US Government where individual liberty is concerned. Specifically, they have been relentless in their opposition to the Patriot Act, legislation that all but ignores the Fourth Amendment and the Viagra online presumption of innocence.

Under the Patriot Act, the FBI can demand the disclosure of personal records about innocent people without getting approval from a judge.

Simply by issuing a National Security Letter, the FBI can force Internet service providers, universities and other institutions to turn over customer records.

Even more disturbing, anyone who receives an NSL is gagged forever from telling anyone that the FBI demanded records. Secrecy surrounding NSLs has made it difficult for the public and Congress to know just how the FBI is using its new power.

What made the Congress and Bush think that they could just dispense with due process? Yes, we’re at war with a network of psychos that don’t wear uniforms, but does that mean that we, US citizens, must forfeit the constitutionally

protected right to be secure in our persons, houses, papers, and effects, against unreasonable searches and seizures?

Think of the implications of such arbitrarily assumed federal power. The FBI could, after having issued an NSL, search, seize, arrest and jail one indefinitely without providing an iota of proof in open court. Joe Stalin and Saddam might approve of this, but Bush?

There may yet be hope. According to an AP story, the House and Senate are negotiating a deal that will mitigate the injustice of NSLs.

The compromise CryptoLogic Operations Ltd operates as a platform subscriber of Ongame Network Ltd, a registered license-holder of the Government of Gibraltar under a license (License No. also makes changes to national security letters, an investigative tool used by the FBI to compel businesses to turn over customer information without a court order or grand jury subpoena.

Under the agreement, the reauthorization specifies that an NSL can be reviewed by a court, and explicitly allows those who receive the letters to inform their lawyers about them.

While the changes are a step in the right direction, I’m not sure that those in Washington appreciate the potential danger of such legislation. For example, “the Bush administration contends that such consultation already is allowed, citing at least two court challenges to NSLs.” Nice try, Bush, but those two court challenges were raised after you signed that piece of crap into law!

Sigh…just remember, Mr. & Mrs. America, if you have done nothing wrong, you have nothing to fear…right?

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