People who say it cannot be done should not interrupt those who are doing it. Welcome to From On High.

Monday, August 08, 2005

The Man Has a Point

Don't you hate it when a guy you want to hate actually makes good sense and forces you to admit that he's right?

Here's just that guy, as reported by the Associated Press:
Strip Club Owner Raises Ire With New Sign

LOS ANGELES (AP) -- For years, Howard White has advertised his strip club near Los Angeles International Airport with a not too subtle marquee reading "Live Nude Nude Nudes." But some tourists and nearby businesses say White has gone too far with his latest pitch for the Century Lounge: a freshly posted sign proclaiming "Vaginas R' Us." (link)
I and local Los Angeles officials would like to see Mr. White imprisoned.
"We don't appreciate the signage and we're working with the city to make sure this establishment is adhering to all codes," said Laurie Hughes, executive director of Gateway to L.A., an association that promotes businesses along Century Boulevard just east of the airport.
But then Mr. White makes a valid point.
"In a sort of a naive way, I felt that there was nothing terrible about it since the 'Vagina Monologues' was on Broadway forever," White said. "I didn't feel there was anything terrible about it."

Well. I suppose. But still. Vaginas R' Us? Can't you change it to Muff n' Stuff or something similarly innocuous?

He's an Economist?

Paul Krugman claims to be an economist. It was even rumored several years ago that President Clinton had him on a short-list of candidates for a cabinet post.

For the life of me, I don't know why.

Today, Krugman, who writes a column for the New York Times, makes this strange economic pronouncement:
That Hissing Sound

Housing prices move much more slowly than stock prices. There are no Black Mondays, when prices fall 23 percent in a day. In fact, prices often keep rising for a while even after a housing boom goes bust.

So the news that the U.S. housing bubble is over won't come in the form of plunging prices; it will come in the form of falling sales and rising inventory [my emphasis], as sellers try to get prices that buyers are no longer willing to pay. And the process may already have started. (link)
Economics 101, Paul. When you take a product to market, it is the market that determines the price at which it will sell. We agree on the fact that there is a disturbing housing bubble in a number of market areas around the country (signified by the fact that prices have risen precipitately in the last few years; an unsustainable rise), but economists will tell you, Paul, that when sales fall and inventories rise, prices will indeed go down (signicantly, that's why it's called a bubble; it bursts, prices decline).

A home is only worth what someone is willing to pay for it (that's why I've always found "property assessment" to be a joke). I could price my property at $74 million but if I can't find a buyer, it's not worth that. In order to determine what it is worth, I'm going to start lowering the price.

That's what will happen when inventories rise. It becomes a buyer's market.

I would have thought you'd learned that in Econ 101.

Econ 102

Michael and Deborah Privitello are steamed that their landlord has threatened to evict them from their rented East Side New York City home because they dare to fly the American flag out front. That's the storyline.
By LEELA de KRETSER, The New York Post

A patriotic family is being threatened with eviction for flying the American flag outside their East Side home.

Michael and Deborah Privitello are outraged after receiving a letter signed by landlord Francis Greenburger saying the flag displayed in front of their East 50th Street apartment breached their lease and must come down or the family will be kicked out. (link)
There is an underlying story here too; the real reason the Privitellos might get bounced. It is illuminated in this sentence.
The Privitellos — who pay just $2,000 a month for the 1,800-square-foot home — say they have taken the landlord to court alleging their heat and hot water have been cut off and that they are constantly harassed.
New York adopted government-mandated rent controls back during World War II. They exist today. Rent controls prevent a landlord from increasing the rent to an existing tenant beyond a certain percentage over the previous year's rent. That's why the Privitellos are "only" paying $2000 a month (talk about a housing bubble). The only way the landlord can get more revenue from this property is by charging fair market value to a new tenant. Thus, the landlord is looking for a way to give the Privitellos the boot.

I mentioned in the last post that the market will determine the price at which a commodity sells. That's absolutely true, but there is one exception. When the government gets involved, the rules go out the door. As the people in New York learned long ago.

I believe the Privitellos should be able to fly their flag. I also believe the landlord should be able to realize fair market value for the property he owns.

A note to Paul Krugman: The day New York City drops rent controls, watch the prices of rental properties actually go down as a swarm of new housing construction begins. Call it Econ 102.

Peter Jennings is Dead

Dead of lung cancer at 67. (link)