Couple of things
- As expected with a child, plus a couple of days off to relax, my projections for posting my year-end pieces got delayed. I'll put up two today, and the final one tomorrow. Seriously.
- Always a fan favorite, the crazy letters that didn't get printed. I think the guy who claimed he has the copyright on the Book of Matthew is my favorite.
- Not only does J.T. put together a very strong piece on journalism and bloggers that should get tips of the hat from all interested ... and he gave me a shout-out.
- I think this story reveals two fundamental problems ... the first being unbridled and unrestrained growth (i.e. randomly building in the absence of master plans) with the other being that the reductions in water mandated by the governor should have been adjusted to the projected water use and not the use from the previous year. Arguably a community which has grown by 50 percent is going to have a difficult time in cutting back on its usage by 10 percent when it's got more customers.
- As an aside ... I don't get New Year's Eve. I never understand why we celebrate a random midnight. Don't get me wrong - I really enjoy the cold beer/lots of football aspect of the holiday - but it definitely ranks toward the bottom of the holiday list for me.
- Always a fan favorite, the crazy letters that didn't get printed. I think the guy who claimed he has the copyright on the Book of Matthew is my favorite.
- Not only does J.T. put together a very strong piece on journalism and bloggers that should get tips of the hat from all interested ... and he gave me a shout-out.
- I think this story reveals two fundamental problems ... the first being unbridled and unrestrained growth (i.e. randomly building in the absence of master plans) with the other being that the reductions in water mandated by the governor should have been adjusted to the projected water use and not the use from the previous year. Arguably a community which has grown by 50 percent is going to have a difficult time in cutting back on its usage by 10 percent when it's got more customers.
- As an aside ... I don't get New Year's Eve. I never understand why we celebrate a random midnight. Don't get me wrong - I really enjoy the cold beer/lots of football aspect of the holiday - but it definitely ranks toward the bottom of the holiday list for me.
posted by Jmac at 9:03 AM
12 Comments:
People do not build 'randomly.' They build by investing their own resources in projects that they THINK are demanded by the market (i.e., projects that they THINK people want badly enough that they will be able to make a decent profit off of their investment to deliver those projects). Sometimes investors are wrong about what the market really demands, though, and we end up with neighborhoods half-built or other eyesores. But this sort of problem is much easier to solve by simply reducing government regulation in the market--it is government regulation in the form of price controls, subsidies, entitlements, mandates (like Bush's awful 2003 American Dream Act), etc., which cause 'distortions' in the market. I.e., these regulations and manipulations cause the market to send false 'signals' to investors about what projects are profitable and which ones aren't. The result is we get a 'boom' in a certain industry that is not actually warranted by true demand, and 'booms' have to be followed by 'busts.' (Although what we are currently trying to do in this country is to keep the fake 'boom' going by printing more money, i.e. getting the Fed to lower interest rates, and stimulating boom after boom through inflation. This will work--for a while. Eventually we'll be like Mugabe's Zimbabwe, though.)
'Master plans' are no guarantee that things will be built in an efficient way. Master plans are political animals, and as such they have their own problems. Plenty of city governments have created eyesores and sprawl of their own when their semingly-intelligent 'master plan' turned out to be unable to account for everything.
Sorry for all the 'i.e.'s.
You're reading too much into my use of the word 'random' aren't you? Surely, people build projects in places where they think they can make a profit, but I would argue a good many of them are awful and ill-researched business ventures that are doomed to fail from the outset (i.e. the glut of townhomes in Athens-Clarke County which sit vacant).
Deregulation won't do anything to deter this type of poor behavior - a behavior that leads to permanent land changes, poor management of resources and a strain on existing infrastructure - or, let me be more accurate, I fail to see how deregulation will deter this behavior.
A community coming together to prepare a master plan to help guide development, however, can help inform future developers where growth is most viable.
My use of 'random' was done in the vein of 'hey, that's a random neighborhood here in this rural area with no gas station or grocery store within 20 miles' ...
Perhaps the problem is bigger than planning. While I disagree with some planning activities made by ACC such as ad hoc moratoria, I have seen smart planning preserve valuable areas when the trends of style and commerce sway against sensibility.
The bigger problem is the metro Atlanta economy. Most big towns have prevailing economic forces. New York has financial markets. Minneapolis is the nexus between the farm and the table. L.A is entertainment. Houston is oil and gas. So what is ATL?
We can say technology which will draw a chuckle from most who actually work with the tech industry. We can say banking while we wave to the banks moving the headquarters out of ATL. Are we a manufacturing town? Is our economy based in healthcare? Nope.
The economy of Atlanta and it’s surrounding areas is growth.
Our economy is rooted in the locating, financing, administering, facilitating, servicing and regulation of growth. Grey lots are such a great little cocktail party subject but such is always approached as if it is a whimsical choice. It is not. Land speculators have purchased and sold and purchased land all around metro Atlanta and they (or, more menacingly, their investors) must develop the property into income bearing development lest they be washed over by the tide of development flowing from the city.
We lambaste our state officials and say they are engaged in some sort of Tomfoolery by not regulating growth. But the fools are us. The State knows what we continue to ignore. Atlanta cannot stop growing. Too many jobs and smaller economies depend on the acquisition, banking, administering and appreciation of real estate.
Unless Atlanta develops a significant economy other than growth, we are going to be up shit creek with a turd for a paddle in a very short while.
Athens is not immune. Growth has become a larger part of our economy as we build sports condo towers and retireescrapers and cute little villages of villas for the flood of citizens that are supposedly coming here. We are building student housing faster than we can add students to the university. When I addressed a group a while back and said that my suggestion to affordable housing is make incentives to get students back on campus, a few student condo czars completely shit their pants. They don’t want affordable housing. They want $500 a bedroom with free tanning and they want to keep building.
If you would like a model of what we could be headed for, look at New Orleans in the mid eighties. A mass exodus of the oil and gas economy took nearly 10,000 high paying jobs to Houston. In the ashes, New Orleans leaned on it’s tourism and convention business to barely keep it afloat.
It took a hurricane for people to wake up and realized how crippled New Orleans economy had become after a major economic force dried up.
Atlanta is just too far from the coast.
The Thompson piece is pure gold. I'll comment on it later.
I grant that you were using 'random' in a less literal way, and I concede your right to do so. But I was not just being pedantic in my response, either. I understand why a word like 'random' gets thrown out there, but in truth it does color our perception of what is actually going on when 'the market' causes something to be built.
"Deregulation won't do anything to deter this type of poor behavior - a behavior that leads to permanent land changes, poor management of resources and a strain on existing infrastructure - or, let me be more accurate, I fail to see how deregulation will deter this behavior."
Won't do anything to deter? That's overstatement, clearly.
If there is no regulation manipulating demand curves for houses/townhomes in an upward direction beyond what is truly viable (i.e., lower interest rates and mandates to lenders and mandatory refinancing and loan forgiveness from the government and government programs that provide loans to 'subprime' people and the general increase in the money supply via inflation and credit expansion which leads to more people in the economy being able to borrow large sums of money to spend on expensive things like homes, etc.), then investors will not build as many houses. Perhaps there would still be more than building that what is optimal--nobody said the market is perfect. But the idea that regulation by government plays no role (a clear implication of your claim that reducing regulation will have no effect) in bringing about the problem of 'bubbles' is absurd.
Deregulation--and really I am talking about government getting out of the economy altogether, not just regarding 'regulations' which depending on how we are using the word might refer only to a particular kind of government meddling--allows supply (of houses, toothpaste, backrubs) to match demand, more or less. Regulation causes suppliers to misread what demand 'actually' is, b/c it caused demanders to demand more or less than they normally would for 'artificial' reasons. If you force corn's price up by law, for example, then less people will demand corn. But suppliers will try to produce MORE corn, b/c the 'message' they are getting from the higher prices is "people want more of this." The result is a massive shortage and massive waste, as all these resources are invested in producing corn that will not sell b/c the price is too high.
It's the same thing with houses or anything else (or are houses now another one of these so-called 'public goods', like water and health care, which we need the government to regulate? Funny how we free marketers keep getting patted on the head and told that the market may do its thing in most cases, but see there are exceptions. And then every time there is a political 'hot' issue that comes up we are told that this is yet another thing to add to the list of exceptions. So you won't trust the market with water, food, health care, houses, or energy. But it can still have toothpaste...).
If you cause the demand for houses to go up b/c you make them easier to get than they should be, then the supply is going to go up to match this new perceived demand. But then investors might 'overdo' it, b/c they're human and they overreact to the 'easy' money that looks like it can be made in real estate. Then when it turns out that in fact lots of these folks cannot afford their home loans after all, you end up with a contraction. Less people demand houses, yet suppliers have alrady geared up and started building more houses.
To clarfiy, I should say that the supply goes up to match the new demand, if the suppliers think they can get higher prices to go along with the increased demand. Which, in the housing market, is exactly what everyone has thought for the last several years, as real estate has been seen as a 'can't miss' way to increase wealth b/c all houses were going up in value farily rapidly. So this means that people were demanding more newer homes to live in, and the price of those homes was going up, and so buildere were providing more and more homes.
Until it became obvious that we have over-inflated our credit and money supply, and that many of the borrowers over-extended themselves, many of the loans were not good investments, and so there are in fact far less people in this country 'demanding' to buy a new house right now. The housing market has already contracted a bit; when the rest of the economy will follow depends on several factors. It's possible the economy as a whole won't follow in this contraction, but I wouldn't hold my breath. Hold on for a wild ride.
government will never be able to stop morons with money from doing moronic things. regulation, deregulation, or anything in the middle still doesn't change that fact that there lots of idiots with money. money does not equal intelligence (see Paris Hilton) and lots of them are just greedy enough to try to make a lot more of it in the industry that has historically proven to be the most lucrative for the dumbest people on the planet. real estate and development has the greatest number of millionaires who are just dumber than dirt.
"moron" "moronic" "idiots" "dumbest" "dumber than dirt" - The preceding comment was brought to you by the "Honourable" Elton Dodson.
Anyway Jmac - for Catholics, we celebrate January 1 as the feast of Mary Mother of God. New Years for us is the first day of Advent.
Just a random tidbit.
I thought Advent was the four Sundays before Christmas.
It is, Hillary. My guess is that Chuck accidentally mixed up 'Advent' and 'Epiphany'. Although Epiphany isn't a series of weeks, but just a single Sunday (this coming Sunday, 1/6). The calendar is now in 'ordinary time' until Lent begins on Feb. 3.
Wait, my apologies to Chuck. Hillary, you and I misunderstood what he was saying. He was saying that the 'Christian New Year' (i.e., not January 1) is the first Sunday of Advent. And that's absolutely correct. The Christian church year begins with Advent (late Nov/early Dec).
Yep that's right. Sorry for the confusion.
Actually the calendar is now in the season of Christmas, which lasts until Epiphany, which will then start Ordinary Time. The seasons go as follows:
Advent season
Christmas season
Ordinary Time
Lent season
Easter season
Ordinary Time
Post a Comment
<< Home