Thursday, August 27, 2009

Fat fools call for new taxes on rent and mortgages [update 2]

House_300x20030215 Everyone’s got a favourite tax they want to slap on someone to stop the exchange rate exploding and the housing bubble happening again.

Brian Fallow is the latest alleged economist to weigh in with a new tax burden to fix things.”Time to add GST to rents and mortgages,”says the Fat Man.  No Brian, it’s time you and your tax-hungry buddies stuck your head down a toilet and pressed flush. 

It’s not an answer to say that this would be “revenue-neutral.”  What rot. What serious student of politics would seriously expect any commensurate drop in income and company taxes to match the new ones. And what serious economist would want the serious dislocations that would happen when a tax on rents and mortgages was slapped on – not to mention the serious injustice of raising taxes on one group, even if you did drop them elsewhere.

Apparently it’s too much like rocket science to figure out what’s really wrong and to fix it.  Better instead to flap about strangling the residents while their house is burning down. 

Because it’s not rocket science to fix things. Here you go, let’s fix them:

  1. Fix the building regulations and the land controls that are still ramping up supply-side costs (even when demand has dropped), and
  2. stop the Reserve Bank inflating the economy with counterfeit capital

Do those two things and the problem disappears – and you don’t need to hand Bill English all the arguments he needs to put his hand even further into everyone’s pocket. Look at those two points in turn:

You see, the Reserve Bankers and their shallow, fallow supporters still maintain that the Reserve bank’s primary job is to set interest rates, print money, and allow banks to issue credit. They think this is a good thing (and some of then even labour under the illusion that an economic dictator setting interest rates and printing money is somehow a free market!)

And they think that the Reserve Bank is fighting inflation, when if they weren’t so blinded it would be obvious the Reserve Bank is actually creating it.*

Essentially you see, what happens when the Reserve Bank sets interest rates is that banks issue enough debt to balance out the supply-and-demand at that interest rate level. And under our fractional-reserve banking system that debt is then monetised (what Charles Holt Carroll called the Organization of Debt into Currency).  Under this arrangement for easy credit expansion, NZ’s M2 money supply had been increasing at a year-on-year rate of around 20% at the height of the boom, and was still increasing at a year-on-year rate at May this year of 10.7%. 

This is literally new money, created out of thin air.  And guess what happens when more money is chasing the same number of goods? (That’s right Virginia, you get what the mainstreamers call inflation. And the poor fools think the Reserve Bank is fighting it!) 

And guess where the lion’s share of that all that new money goes?  That’s right again, – although the mainstreamers are too blinded by their theories to see it, (mostly because they’re still thinking in the Keynesian aggregates that conceal most of the real economic facts), the lion’s share of that new money goes to people who borrow it.

You know.  People like home-buyers. Remember them?  Folk who get first use that new money and, when things start taking off, want to use it quick as they can before prices do the same.

DollarTrash This is what feeds the bubble. As Thorstein Polleit points out,

It is an inflationary regime. The relentless rise in the money stock necessarily reduces the purchasing power of money to below the level that would prevail had the money supply not been increased. Early receivers of the new money benefit at the expense of those receiving it later.

And that’s why it’s so easy to stop another housing bubble being inflated.  if you seriously want to stop it, then just stop inflating the money supply. 

Stop diluting it with new paper. 

Stop printing more of it. 

Stop creating credit out of thin air, and stop it with the nonsensical idea that a new tax will solve the problems that government itself has created.

Just stop it with the Reserve Bank Act’s inflation-mongering altogether, and leave us taxpayers alone.

We’re already over-burdened.

* * * *

* Inflation is what mainstreamers call it when prices rises across the board, right? But what they don’t even realise is that it’s the Reserve Bank who promotes general price rises across the board.

Ironic, huh?

Price rises, say the blind fools, are caused by wage-push, or cost-push, or demand-pull or some other failed excuse for not looking at the whole picture.  Because if you do look at the whole picture you understand that the only way you can get price rises across the board is if the money supply increases.  If some costs go up and the money supply doesn’t, then there must be a corresponding drop in prices elsewhere. If some wages go up and the money supply doesn’t, then there must be a corresponding drop in prices elsewhere. If demand goes up in one area and the money supply doesn’t, then there must be a corresponding drop in prices elsewhere to match the price rises due to demand.

The only way you can get price rises across the board is if the money supply increases.  And look who’s in charge of that.

Ironically, to squelch the price inflation that they themselves set off, the Reserve Bank then tries to squelch it all. And to do that, they do everything necessary to ramp up the exchange rate. 

But this Scylla and Charybdis of high finance isn’t inevitable – that is, is is not inevitable unless you refuse to take off your mainstream blinders and see things as they really are.  And in this context, that’s to realise that inflation is not essentially a measure of rising prices but of the rising money supply that causes them.

UPDATE 1The Visible Hand confirms that it’s never seen a tax it doesn’t like.  “Excellent” it calls Fallow’s disgraceful call for the IRD to put their hand in renters’ pockets.

    Well, I’ve not read the article, don’t have time to do so [don’t worry, you’re missing nothing], but from this I would say it’s not going to affect domestic rental investment, because I would assume that type of investment will no longer be a GST exempt activity, thus, landlords will be able to claim the GST on the interest back, plus will add GST to existing rentals to be returned. No difference to them.
    So who loses?
    Tenants, because they will have a 12.5% rent rise.
    Every house owner, especially low income house holders who will incur dramatically higher interest rates via the GST component, which they won’t be able to claim back, some of whom will thus be forced into rented ghettos, paying rents they can’t afford for the same reason.
    Another brain dead idea by a NZ mainstream economist who only seems to find ’solutions’ that include increasing the cost of living for kiwis by the likes of this, or further taxes. Why not advocate reducing the size of the State so the people that would be so badly affected by this ludicrous proposal could be given tax cuts - that aren’t simply to compensate for higher taxation elsewhere - and get on with their lives with the least amount of government, and economist, interference.
    PS: Matt, do you see a government implementing any new tax, and then cutting another tax.
    It doesn’t happen.

Exactly right.

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53 Comments:

Blogger Bryan Spondre said...

"says the Fat Man. No Brian" - on the behalf of fat Bryan's everywhere: STFU :-)

8/27/2009 11:56:00 am  
Blogger Matt Nolan said...

If the government is going to spend it has to fund it. I would rather have a broad based tax that limits the impact on peoples decision making than a bunch of random taxes.

And the revenue neutral point is important. Sure you might not believe that politicians will improve the tax system in a way that doesn't change revenue - but that doesn't make the suggestion of such a change wrong.

The tax system distorts incentives in the same way as poor regulation and inflation - Brian's criticism of policy is along the same lines as yours, it just appears to me that you are unhappy he used the word tax.

8/27/2009 01:24:00 pm  
Blogger Cactus Kate said...

Yep. All comes back to the renter if you tax the landlord.

Dumb dumb.

Are renters the problem? Ergh NO

8/27/2009 01:35:00 pm  
Anonymous Curious said...

Is Brian Fallow hot or what ?

8/27/2009 02:08:00 pm  
Anonymous Elijah Lineberry said...

Pleased you mentioned the exchange rate.

What is not widely understood in NZ is that for an import dependent trading nation a high exchange rate is a GOOD THING; it means imports are cheaper, which means living standards are higher!

Gosh!

It frustrates me enormously when there are endless calls for a lower dollar; perhaps it has escaped the notice of NZers the reason Britain and America are rich nations...(or they were until Brown and Obama starte wrecking their economies)... is because of their high value currency.

If it were up to me the NZ dollar would be worth around $1.25 USD

8/27/2009 02:12:00 pm  
Blogger Bryan Spondre said...

@curious - NOT

8/27/2009 02:13:00 pm  
Blogger PC said...

MATT, your comment is laced with so many prior assumptions one would need Alexander's sword to properly untangle them.

"If the government is going to spend it has to fund it."

Well, yes. But if productivity is our goal, then more money invested in capital accumulation and less going to government consumption is urgently necessary - and all govt spending is consumption, let's agree on that right here.

So given we're supposed to be reducing consumption spending, where are the calls for govt to spend less?

Why do we see only proposals to move around the deck chairs?

" I would rather have a broad based tax that limits the impact on people's decision making than a bunch of random taxes."

Whatever the inequities of the present tax system, you only introduce new injustice when you impose new taxes on a new set of people -- in this case, renters and mortgage holders. I don't see anything in what either the fat fool or yourselves has said that even recognises the injustice of what is proposed -- your "aggregates" apparently blind you to the new theft that's proposed.

"And the revenue neutral point is important."

It's a fantasy. How naive can you be not to know that when there's pressure being created for new taxes (pressure created by all the shallow mainstream fools who are falling over themselves dreaming up new ways to do us over) that govt is going to use that pressure to put its hand in our pockets even further.

A new tax, say the pundits? Don't mind if I do, say the grey ones.

That's how it happens, isn't it.

It's not like there's abundant pressure around the other way, is there.

Outside those who believe govts should keep their promises, there's frankly no pressure even for the derisory tax cuts this government promised to get elected, is there.

"Sure you might not believe that politicians will improve the tax system in a way that doesn't change revenue . . . "

No, I don't. And unless you're insufferably naive neither do you.

"Brian's criticism of policy is along the same lines as yours..."

You surely have to be joking. My prescription calls for govt to get out of the way. Brian wants it to stay across all of us, and to suffocate a chosen few even further -- in other words, just to shuffle around the deck chairs while the ship continues to go down, with some going down even faster.

"...it just appears to me that you are unhappy he used the word tax."

You think I should throw up my hands in joy when an alleged economist wants a new govt tax to fix a problem created by a govt bank and govt regulations?

Picking new pockets is picking new pockets. It's unjust, it's inept, and it simply avoids doing what's necessary to resolve the two basic problems it purports to address.

8/27/2009 02:27:00 pm  
Blogger PC said...

No Elijah. You've got cause and effect backwards.

Generally (avoiding arguments about the Efficient Markets Hypothesis), nations are not rich because they have a high value currency; rather, have a high value currency because they are a rich nation.

It was precisely the error you make here that caused Britain to set their conversion rate too darn high after WWI, which arguably was one of the leading causes of the eventual economic collapse.

8/27/2009 02:31:00 pm  
Anonymous Elijah Lineberry said...

Britain and America are also in the position of having the main reserve currencies...

I was meaning that if we doubled the value of the NZD tomorrow...(considering we are hardly going to become a reserve currency/banker to the World)...we would become richer fairly quickly as prices in the shops fell considerably.

Obviously this would require the RBNZ to stop printing new money every 5 minutes.

8/27/2009 02:37:00 pm  
Blogger Mark Hubbard said...

for new taxes (pressure created by all the shallow mainstream fools who are falling over themselves dreaming up new ways to do us over)

Well said.

Hickey's blog is starting to anger me. All the MS economists posting there, including Infometrics - I used to have respect for Morgan - are advocating the CGT, and I can't remember a single posting where one of them mentioned the real solution is slashing the size our our obese State, and her excessive expenditures, all founded on theft.

Not one.

There is a complete dearth of philosophy in all of NZ's published economists, and they are, to a last one, Statists of one hue or another.

8/27/2009 02:50:00 pm  
Blogger PC said...

MARK,you said: ". . . all of NZ's published economists . . . are, to a last one, Statists of one hue or another."

Sadly, that's all too true.

What's needed, I'd suggest, is something that doesn't yet exist in this country: an articulate, reason-based organisation to promote laissez-faire capitalism, to educate more people as to what that means, and to encourage and support those few economists already in the field who are consistent in their support for laissez-faire capitalism to become consistently published.

And I understand such an organisation is in the wings. Email me if you'd like to know more.

8/27/2009 03:47:00 pm  
Blogger Paul Walker said...

"Brian Fallow is the latest alleged economist to weigh in with a new tax burden to fix things."

Very alleged. I didn't know that Brian Fallow had any training in economics. I thought he had an BA (Hons) in Philosophy.

8/27/2009 04:58:00 pm  
Blogger PC said...

! Well that should explain a lot -- iff there weren't so many "trained economists" promoting the same thing.

PS: Just did a quick search and came up with this:

"Brian Fallow is the Economics Editor for the New Zealand Herald. One of his career highlights was an interview with Al Gore in 2006. . . "

Says it all.

8/27/2009 05:05:00 pm  
Anonymous Anonymous said...

This comment has been removed by a blog administrator.

8/27/2009 11:12:00 pm  
Anonymous Terence B said...

Yes , I want to know more about an organisation that supports a world view that reduces government interfernce. Gets a government laundry man out of the money printing business.Get government out of the monopoly control of values. We do not need a reserve bank , we have one because it suits politicians who want to put a chicken in every pot because it temporaily makes them look good.The money supply needs to go backwards, give these bastards nothing to hand out. Working to live might just become fashionable when not working and starving kicks in.
Sign me PC.

8/28/2009 09:18:00 am  
Blogger PC said...

Email me Terence: organon at ihug.co.nz

8/28/2009 09:30:00 am  
Anonymous Curious said...

Bryan Spondre, I am just trying to use a Cactus Kate's Hotness Index (CKHI). I come to think that Brian Fallow is hot, because according CKHI, Sean Plunket is hot, which both of them look similar (double chin). If one is hot under CKHI, then I am sure that all lookalike of that person must be automatically hot?

8/28/2009 10:38:00 am  
Blogger Bryan Spondre said...

@curious - not necessarily. Not appropriate to get into detail on this thread but if you want to discuss further come to my blog and we can chat to our hearts content :-)I find economics DULL with a capital D and would rather theorise about human sexual dynamics any day: http://www.linkwhore.co.nz/2009/08/27/the-key-to-happiness/

8/28/2009 10:41:00 am  
Blogger Owen McCaffrey said...

if there were no building regulations then does that mean you would have to check that a building had a valid inspection certificate before you entered. Man, that would make shopping and and a whole host of other everyday activities pretty complicated.

Imagine having to ask any person whether their house was certified before entering it. nightmare. complete logistical nightmare.

I also wonder about the children who would live in un-certified houses because their parents thought they got a deal. I am sure that they would have something to say from their coffin after the house crumbled down on them. It wasn't their fault.

8/29/2009 04:12:00 am  
Anonymous LGM said...

Owen

A lot of people purchased "certified" houses only to discover they had purchased "leaky homes". They discovered, to their horror, that govt regulation and its "certification" were without any value whatsoever. I also wonder about the children who live in such "certified" houses because their parents thought they got a good deal from a government that protects them. I am sure that they would have something to say from their coffin after the house crumbled down on them. It wasn't their fault.

LGM

8/29/2009 07:46:00 am  
Blogger Owen McCaffrey said...

despite the fact that certifying houses does not always work. That doesn't alleviate the problem that not certifying them causes.

It is not a binary problem. There are more than two choices of all or none. It is possible to suggest for example compulsory cirtification much the same way as WOF's are but not done by government.

Doesn't that solve both problems?

8/29/2009 02:25:00 pm  
Blogger Owen McCaffrey said...

Cactus Kate:

Actually if you say that cost increases for landlords such as GST as proposed "All comes back to the renter" you are assuming that demand for rented properties is perfectly elastic. Unfortunately, those people who have studied economics will know that this is not in fact the case and the amount passed on to tentants will be less than 100% - in fact it could be anything in the range 0% to 100% of the increase costs.

8/29/2009 02:27:00 pm  
Blogger PC said...

"if there were no building regulations then does that mean you would have to check that a building had a valid inspection certificate before you entered."

No. It doesn't. That would be called a red herring. Or a straw man.

Common law rules of negligence would always apply, and would be among those things motivating any home-owner to acquire and maintain his home insurance.

8/29/2009 03:49:00 pm  
Blogger Owen McCaffrey said...

PC:

Common law rules of negligence would require you to check the building cirtification of every single building and structure before you entered it.

What a nightmare world to have to live in. Constantly in fear of your life every time you enter a room knowing it may not be certified at all by anyone.

At least under the current regime you know that buildings are certified before they are built and/or also at regular intervals.

8/29/2009 03:53:00 pm  
Blogger PC said...

"Common law rules of negligence would require you to check the building cirtification of every single building and structure before you entered it."

Well, no they wouldn't.

"At least under the current regime you know that buildings are certified. . . "

Certification is not a guarantee, as several hundred owners of rotting homes could tell you.

A guarantee however is a guarantee, which is what I'm suggesting with the insurance model.

8/29/2009 04:09:00 pm  
Blogger Owen McCaffrey said...

PC: Your insurance regime still does not require the house to have been certified.

There will be uninsured buildings and buildings with low-cost insurance that are not certified.

So you're system will still require someone to check that every building they enter has been insured or certified before they enter - otherwise they are taking their life in their hands.

Compulsory certification is not perfect. But that does not mean an insurance model is. It could be just as dangerous with as many buildings poorly built and with the added hassle of having to check a buildings insurance/WOF everytime you want to enter. Which is completely stupid for a 21st country if we had to check such a thing before entering.

8/29/2009 04:50:00 pm  
Blogger KG said...

"So you're system will still require someone to check that every building they enter has been insured or certified before they enter - otherwise they are taking their life in their hands."
Riight....just as they take their life in their hands when they walk under un-certified trees and climb un-certified boulders at the beach and swim in un-certified water?
Shit, life's more dangerous than I realized!

8/29/2009 06:01:00 pm  
Blogger PC said...

Owen, you're just repeating yourself.

I say again, compulsory certification is not only far from perfect, it's compulsive and demonstrably imperfect, as abundant recent cases have shown. The system of compulsory certification is broken. And no wonder: The motivation under the existing compulsory-certification-by-council is primarily to beat the certifier, rather than to provide a safe domicile. And in the end all it offers everyone is an entirely false sense of security.

The idea that a "compulsory certificate" guarantees your safety is a fool's paradise.

By contrast, the motivation under a common law-insurance model is entirely different, is free of compulsion, and clearly sheets home in whom ultimate responsibility lies.

Now I suggest you find something new to say.

8/29/2009 06:21:00 pm  
Blogger Owen McCaffrey said...

KG: What you fail to understand is that people need to go into buildings as a necessary part of everyday life. Very very few people need to go anywhere near water or uncertified trees (most trees in public places are regularly checked by councils) as part of their necessary duties. That is the reason why buildings need to be certified whereas non-necessary nature doesn't.

PC: There is nothing more imperfect than a building which was intentionally not certified to save on building costs collapsing on innocent people such as children. That is what you are suggesting should be allowed to happen.

Take away the need for certification and many DIY'ers who have no idea how to build will make ramshackle buildings that are basically deathtraps. But it is usually impossible for someone to know because structural deficiencies are not always visible.

I think you misunderstand PC that blame and responsibility matter little to dead people killed because you said there was no need for buildings to be certified.

When you come up with a way that people can enter multiple buildings in a week without having to check their certification; and 100% prevent innocent children and customers dying because you think the people who made the building that collapsed on them should be allowed to build deathtraps if they want. THen you can keep quiet.

8/29/2009 09:32:00 pm  
Blogger PC said...

Owen, you've asked and been answered. You may not like the answers, but since you're not actually responding to them it's hard to tell.

So either stop trolling and actually join the discussion, or run along.

8/30/2009 01:34:00 pm  
Anonymous twr said...

You might note that there are buildings still standing that were built hundreds of years ago without any help from city councils. One conclusion you could draw from this is that you don't need a certificate from a council to build something that will last.

8/30/2009 02:33:00 pm  
Blogger Owen McCaffrey said...

Sorry PC but while your points are valid you have still failed to assure anyone that a private model with no compulsory building codes would be any more effective than the current system.

This is because while the current system has flaws and many houses are built substandardly, this situation is still likely to occur in a private model where there is no need to comply eith anything.

Is your argument based solely on cost? If so then private is obviously better.

But if your model is based on greater safety from a private model you have failed to assure anyone that it would be safer, merely preferring to ignore the question and divert the topic each time.

What you fail to grasp TWR is that the issue is not with those who choose to build things properly but with those who cut corners. A private system will encourage more of this not less because there is no need to get anything checked as long as you are willing to go with low-cost insurance or no insurance.

So there is still no reasoned argument for anyone for why a free-market building compliance model would be safer. It will be cheaper there is no doubt, but not safer.

8/31/2009 12:32:00 pm  
Anonymous twr said...

I think what PC is trying to say is that it should be up to the individual to decide whether they wish to put up with the consequences of shoddy work. If they do, that's their choice, and they might get a cheaper house out of it. If it collapses on them, they have nobody to blame but themselves. Incidentally, the chances of things actually collapsing is pretty remote. A bit of water is more a financial problem than a safety one.

8/31/2009 02:25:00 pm  
Blogger Owen McCaffrey said...

TWR: I understand and agree that people should reap what they sow. But how about innocent kids and people who go into shops and other public buildings? They had nothing to do with the construction - are you proposing they should have to inspect each building they enter themselves? Or that they should look for a building certificate before they enter every building? That seems far less practical and more constly than the current system to me.

8/31/2009 03:10:00 pm  
Blogger Owen McCaffrey said...

People don't have to look for building WOF's or inspect them themselves because the local council undertakes this on everyone's behalf.

You keep looking at things from the point of view of the person building the building when that was never why the regulations for BUilding were made. They were made to keep innocent people safe when they are in buildings they didn't create and have no knowledge of how they were constructed.

8/31/2009 03:12:00 pm  
Blogger Owen McCaffrey said...

ANd it has nothing to do with tenants either because they have the ability to check their building's WOF. It is all about people who visit houses and customers in shops. It would be a nightmare for everyone if they had to chack a buildings WOF before entering each time.

Can you imagine the hell that this would inflict on unsuspecting tourists?

8/31/2009 03:14:00 pm  
Blogger PC said...

Owen, you do realise don't you that your trolling is on the wrong thread -- if not the wrong planet.

8/31/2009 04:41:00 pm  
Blogger Owen McCaffrey said...

PC: so that means you cannot answer simple questions then? What was that you were saying about planets?

Just wanted to know what would be done about the safety of innocent children and visitors/customers under a voluntary building code as you suggest? Do they have to spend their whole lives checking the safety of every building they enter for the rest of their lives...it is obviously something you have never considered. How about considering it?

Because you and I both know there will be priovate and commercial buildings under your system that choose not to check their structural designs or builds in order to save costs. Are we all to live in fear of them? How do you solve this very real issue with your otherwise good plan?

I am leaning more towards a compulsory building code but that people can engage with a private inspector. Much the same as a company audit is run these days. i think it would encourage most of the efficiency gains you are aiming for without risking innocent lives.

8/31/2009 04:48:00 pm  
Blogger KG said...

aaah...the innocent children argument..
Nowadays when I hear that it make we want to reach for a gun. People who argue in favour of restricting the liberties of adults in order to protest the 'innocent children' appear to be too thick to realize that--carried to it's logical conclusion--it would reduce all of us to the status of children.
I don't care about the safety arguments, I don't give a damn if some bureaucrats are saints on wheels. Like most people who know what comparative liberty once felt like I just want the grey leeching bastards to butt out of our lives.

8/31/2009 04:56:00 pm  
Blogger Owen McCaffrey said...

KG: ANd you are happy to need to check the structural integrity of every building for the rest of your life?

I will remember you when a chinese takeaway falls on your head because you wanted to save the owner a bit of dosh when he did some work upstairs. That kind of situation kind of reminds me of third world countries in Asia...

I suppose that is what you want, eh.

8/31/2009 04:59:00 pm  
Blogger KG said...

"KG: ANd you are happy to need to check the structural integrity of every building for the rest of your life?"
The difference is, Owen that I wouldn't bother to because I'm not some mimsy little hand-wringing pantywaist who needs Nanny to hold me hand for me.
In years of travel all over the world I've never had a building collapse on me. The odds say it will never happen and I'm perfectly happy with that.
It's called being a grown-up.

8/31/2009 05:07:00 pm  
Blogger Owen McCaffrey said...

I am not trying to convince you to change you mind. I am just showing you why your efforts to change other people's minds is futile...becaus they are thinking rationally.

You said..."In years of travel all over the world I've never had a building collapse on me."

How much of that travelling was done in countries WITH compulsory building codes.

It is a different story when anyone is allowed to build anything they like.

I rest my case.

8/31/2009 05:44:00 pm  
Blogger KG said...

"How much of that travelling was done in countries WITH compulsory building codes."

Some. Mostly,not. The bottom line is still (or should be) my property, my choice.

8/31/2009 06:01:00 pm  
Blogger PC said...

Owen, you've established nothing because you've read no explanations -- and you're not even on the right thread, ie., where the insurance model is laid out.

There is no case to rest because you haven't made an argument.

"An argument is a definite series of statements intended to establish a proposition . . . it's not just the automatic nay-saying of everything the other person says . . ."

As someone once said. :-)

8/31/2009 06:02:00 pm  
Blogger Owen McCaffrey said...

KG: You are still looking at the idea from your own perspective. But the problem is that your perspective is not rational because you have not even tried to consider the potential ramifications to your own entering of other peopl's buildings when there is no compulsory building code.

The thing is that MOST other people ARE rational and after they take this issue into account they prefer compulsory to voluntary building compliance.

Just because you are a cowboy means nothing. Hardly anyboy out there makes decisions like you - not even considering all possible/likely consequences of their actions.

Well actually there are some...thy are called children. They do not have the capacity to reason rationally which is why other people make decisions for them.

PC: So what you are saying is (that since it was you who proposed the insurance model) that the insurance model has a solution for the safety concern of structures that are unsafe due to intentional non-compliance? Because at the moment, people have to check the compliance of each and every building they enter for the rest of the their days in order to not be buried in rubble...

But can you answer that or not? Let me guess...you will evade it once again.



PC:

8/31/2009 08:31:00 pm  
Anonymous LGM said...

Owen

Not certifying a building does not cause any problems whatsoever. A certification does not provide structural integrity. Materials such as steel, concrete and timber erected in the appropriate fashion attain that. It is the task of the designers and builders to make certain that they provide a workable structure which is safe. What PC is trying to point out to you is that if they fail to so do, then they are (or should be) personally responsible for the consequences. Regulations and certifications are only as good as the word of the person who writes them and who signs them. Think on it.

BTW are you prepared to check the nature of regulatory applicability and compliance of every building YOU walk into presently? What about the reputation and ability of those who wrote the regulations? What about the reputation and ability of those who signed off on the certifications?

LGM

9/01/2009 09:45:00 am  
Blogger Owen McCaffrey said...

LGW: I don't need to check the integrity of buildings i enter now because they are checked by the government on my behalf. Providing a high level of safety as experienced in NZ over the last 100 years.

You are making the completely fanciful assertion that every builder is going to build structurally sound buildings in the absence of any compulsory checks whatsoever. It is a dream, but in actual fact it is a nightmare because you are opening millions of innocent customers up to the potential of buildings collapsing on them because you decided to save the builder a few thousand bucks.

Yeah, I can imagine the boon to NZ tourism that would be. HEADLINE: "American Tourists buried in building collapse in Auckland NZ". But don't worry the reparations from the irresponsible builder will be enough to maintain our reputation as a safe country and win back tourists. Not to mention all the customers who enter shops daily...

They do not die today BECAUSE of building codes. You just are happy for some of them to die, that's all. Your position is not rational as evidenced by the 99% majority of NZ who disagree with you and would like to be able to enter buildings without every time checking the building safety certificate.

Without any compulsory codes then one would be forced to do so. It is the reason the codes exist.

9/01/2009 10:30:00 am  
Blogger PC said...

Owen, as I've pointed out to you before, the present system itself provides no guarantees, which is one reason why this has become a problem

Even the system I suggest offers no absolute guarantees.

Because in point of fact, reality itself provides no absolute guarantees. Men are not omniscient.

I'm not suggesting a Utopia, I'm suggesting that properly sheeting home responsibility offers a better guarantee against building failure than the present bureaucratically-managed system. I'm suggesting that reputation is a better guarantee of success than the false sense of security provided by bureaucracy. I'm suggesting that a perusal of history and of other regulatory regimes would demonstrate that your bureaucratic system is a relatively recent phenomenon, but that buildings have nonetheless stood up well for centuries.

And finally, and at this point most importantly, I'm suggesting all that on another thread that I know you haven't even bothered to read --- which tells me that it's not this subject that really interests you so much as simple nay-saying.

Which is to say, you're a troll, and this threadjack here has gone on long enough. Take it to the thread where this is actually presented, or go away.

9/01/2009 10:54:00 am  
Blogger Owen McCaffrey said...

This comment has been removed by a blog administrator.

9/01/2009 12:23:00 pm  
Blogger PC said...

You've been asked politely many time, Owen. Take it to the other thread.

9/01/2009 12:26:00 pm  
Blogger Owen McCaffrey said...

This comment has been removed by a blog administrator.

9/01/2009 12:27:00 pm  
Blogger Owen McCaffrey said...

because you cannot answer.

9/01/2009 12:28:00 pm  
Blogger PC said...

No, because you're threadjacking.

Take it to the other thread as you've been asked many times, or go away.

9/01/2009 12:48:00 pm  

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