no third solution

Blogging about liberty, anarchy, economics and politics

In a Free Market, Who Will Build the Parking Lots?

October 12th, 2010

Yesterday evening I caught a random comment from local news anchor Stephen Clark, lamenting (perhaps?) a proposal to increase parking meter fees in Royal Oak, Michigan.

A dollar an hour to park in royal oak..I bet businesses love that…not! (via Twitter)

If I had my druthers, the city would stop collecting property taxes and say to all the people and businesses: “You figure it out. The roads, the parking lots, the meters, they’re all yours now. Do with them (or not) as you wish.” So, this is not a defense per se of the proposed increase.

royal oak parking meter in front of Ed Retardy boutique

With that qualifier out of the way, I responded with a little Econ 101 knowledge: especially on a Thursday-Friday-Saturday evening, they could easily charge $3-4 per hour that much and there would be no shortage of people willing to pay. This is fundamental economics: when the price of a good or service is set lower than the market will bear, there will be a shortage of that good or service vis à vis the number of people who want to consume that good or service.

If parking were nominally “free”, it would be even more difficult to find a parking spot. Right now, parking is inexpensive, at fifty cents per hour during normal business hours and it’s still very difficult to find a parking spot. This is the number 2 reason why I don’t visit Royal Oak.

The number 1 reason is a preponderance of douchebags. I think the douchebags are attracted by low parking fees.

Stephen responded that, “As a rule, merchants resist parking price increases… they have a tendency to drive away business, but your point is well-taken.”

The notion that these customers (the same people who gladly pay $6 for a pint of beer and $190 for a pair of jeans) are going to be off-put by a 25-cent per hour increase in the meter fees is as retarded as a football bat, by the way.

Let me rephrase that: The business interests downtown oppose any change to this fee structure which would result in them bearing a greater amount (i.e., their fair share) of the burden for maintaining public parking lots in the city. The taxpayers in the City of Royal Oak are providing corporate welfare to the businesses in Royal Oak, predominately in the city’s downtown district. It is a direct transfer of wealth from the people who live and pay taxes in Royal Oak, to the people who only visit Royal Oak.

In a free market, there would be no taxpayer subsidized parking lots just like there would be no taxpayer subsidized bank bailouts, because there would be no taxpayers in the first place! How the parking situation might resolve itself, if I had my druthers (see above) is anyone’s guess. Here are a few options:

  • Parking lots could be strictly private: belonging to a person or group of people who may (or may not) choose to explicitly charge for their use.
  • An independent parking lot would probably charge daily or hourly fees to maintain the parking lot.
  • A restaurant might charge a daily or hourly fee for entry, and validate the charge (or a portion thereof) for any restaurant patrons, or a restaurant might keep the lot for patrons only, building the cost of maintenance/upkeep in to their menu prices, just like they do with the amortization costs of the establishment proper.
  • Or parking lots could be communally owned and operated — perhaps by a group of neighbors/citizens, but more likely by a group of commercial establishments with less absolute need for parking lots may pool resources together and establish shared lots, perhaps managed by the group or by a third party.

But instead, we have this pseudo-marketplace where the state or city zoning board sets (more-or-less arbitrarily) a uniform price for all places & times. The fact of the matter is that, although business interests may unanimously oppose fee increases, raising the parking fee is not necessarily “bad for business” or “bad for downtown Royal Oak”. The effects either way are probably de minimis, but I would argue that at least on principle of basic economic theory, subsidizing parking lots is a harmful distortion to market prices.

The results: parking is a clusterfuck during weekends and high-traffic events, and there are too many idiots wearing Ed Retardy jeans and fist-pumping all night long in sunglasses after dark.

The Recession is Officially Over

September 21st, 2010

Yesterday when I got home from work I flipped on the TV and heard one of the talking heads say that the recession is officially over.  And not only is it over, it’s been over, for over a year.  They said that the official end of the recession was June, 2009. Lolwut?

A catastrophic implosion of a magnitude never-before-seen, is over and nobody noticed it except the bow-ties at NBER after they had a year and a half to study, clean, analyze and massage the data?  Yeah, right (and monkeys might fly out my butt).

But look, it’s right there on the graph!

NBER-recession-overPretty sure I dropped an f-bomb or two.

What happened was that the fraudulent system persuaded or blackmailed the government in to bailing them out on the backs of the working class by theft and extortion writ large.  And guess what? The working class is still working, they’re still poor, they’re still living paycheck to paycheck, and most of them are struggling to regain whatever sense of security they might’ve held before the economy went belly-up.

If you want to pick nits and say, “Well the NBER defines a recession’s end as the low point”, I’m not going to get in to a semantic pissing match with you. The fact of the matter is that for most people, this hardly registers as an end to the recession because for most people things haven’t gotten better, they aren’t about to get better any time soon, and it will take years to get back to wherever they were prior to the implosion.

Many forecasters estimate that output needs to grow over the long run by about 2.5 percent to keep the unemployment rate, now at 9.6 percent, constant…

…The broadest measure of unemployment, including people who are reluctantly working part time when they wish to be working full time and those who have given up looking for work altogether, also was at its highest level since World War II. [NYT]

I don’t know how you interpret that, but 10-percent unemployment rate (one that is considerably higher if you account for underemployment) hardly strikes me as an end to a recession. As long as 1 in 10 people looking for work to pay their bills are unable to find work, something is terribly wrong. Until the economy has in-fact “recovered” it’s still a goddamned recession in my book.

To put this all in proper context, we need to juxtapose the fact that 1 in 10 people are unemployed and probably 1 in 5 people are underemployed, with the slave-like systematic dependence on Wall Street, NBER and their respective oracles (who throughout the years have done absolutely nothing but engineer the sort of monetary collapse we recently lived through).

This is the paradox of modern capitalism: masses of people are out of work, fighting to keep their homes if they haven’t already lost them, starving, dropping much-needed expenses like insurance policies, or prescription medications, etc., in order to stay financially afloat…

All of these people still need food, shelter, warmth, leisure, whatever. Everyone still wants goods and services; everyone still wants stuff, and those needs can only be satisfied by production, which requires people [doing work and getting paid for that work]. [link]

It is this way because they want it this way.They want it this way because this is how they maintain control: convince the masses that they can’t take care of their own, convince them that they can’t survive, convince them that they need the government or the multinational corporations of the world to “provide” them with “jobs” and paychecks, convince them that there are powers at work which are infinitely beyond their comprehension.  And every once in a while you stir up some shit, or fail to take the appropriate preventative measures, or maybe go a little (or a lot) overboard.  For a few years everything goes sideways and upside-down.

But it’s enough to remind those working idiots that they aren’t in control, there are things they don’t understand or can’t comprehend, and reinforces the illusion that they do need the parasites.

They don’t.  But until they — we — can wake up and shake the cobwebs out of our collective brains, and systematically withdraw support for such an abomination, it’s going to continue.

This concludes today’s lesson in futility.

The “Race to the Bottom” is Only a Symptom

August 30th, 2010

Last week the NYT highlighted an ongoing labor struggle between Dr. Pepper Snapple and a local labor union, which Dissent Magazine characterizes as the latest installment in an ongoing “race to the bottom“, something like Marx’s iron law of wages. Per the Times,

The strike has become so important because of the prominence of the brands and because of its unusual nature: a highly profitable company is taking the rare and bold step of demanding large-scale concessions.

Dissent notes that the productivity gains of the last several decades have simply not “trickled down” in to the pockets of the American worker, instead they’ve been pocketed by the corporate elite. If this sounds somewhat familiar, it should.

Mike LeBerth, president of the local union echoes a familiar, but mistaken refrain:

“This whole economy is driven by consumer spending, so how are we supposed to keep the economy going when they take away money from the people who are doing the spending?”

Mistaken, because economies aren’t driven by consumption, they’re driven by production. The standard GDP-economy puts the cart before the proverbial horse. Per J.B. Say, Production must precede consumption; prosperity increases where production is permitted.

In fairness, I have to admit I’d be hard-pressed to find a better example of corporate greed, than a company which showed a $555M profit on $5.5B revenue in FY2009. What LeBerth describes, is not the problem. The real problem, or problems, are much greater.

The case of Dr. Pepper Snapple illustrates nicely that the “race to the bottom” is but a symptom* of monopoly rents.

In this instance, a substantial portion (approaching 100%) of their profits are attributable to intellectual property, a considerable barrier to market-entry enforced by the government under penalty of law. Make no mistake: this is not a “right” in any sense of the word, it is a privilege granted by government, to corporations X, Y and Z, protecting them from A, B and C and anyone else who might otherwise be tempted to start their own competing business. The effects of such privilege are obvious: where a lucrative market exists, profits are concentrated among those who benefit thereby.

Insofar as this case embodies a “race to the bottom”, it is the monopoly privilege of intellectual property which drives a wedge between workers of various classes: those inside the protected industry may enjoy leverage over those outside. To a probably substantial degree, the wages taken by the union are a derivative economic rent, extracted from the rest of the economy (i.e., the non-union employees in other industries in the local market), but coming first and foremost from the privilege granted the corporation. And it is precisely this privilege which enables a corporation like Dr. Pepper Snapple to exercise such a degree of economic power over its own workers, as to demand considerable concessions even when posting record profits.

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* For brevity’s sake I will limit discussion to this one problem, although I do not doubt that you could point out several more, each of which would merit examination of its own.

no third solution

Blogging about liberty, anarchy, economics and politics