French president says Peugeot layoffs are unacceptable

[Philippus Flavius Homovallumus]

The problem with that plan is that you effectively make it impossible for city dwellers to live in the city. As you'd make apartment living hugely expensive, which is far more prevalent in say France than Canada or Norway.

You mean people who have an apartment they share with their mistress and a house they share with their wife and children?

Don't look at me like that - that's exactly where the practice came from, and everybody should remember that.

If house ownership (property speculation) is more profitable than actually engaging in business then you have a problem. Contrary to popular belief there are enough houses in most Western countries - in a lot of places in the UK whole streets are effectively deserted and turned over to squats. The problem is that these arears are not profitable for business. There are a couple of things you can do about that - in some instances you just need to accept that the area is too far away from the economic centre or other trade links (mill towns in the North of England have this problem) if you aren't going to keep them on life support you might be better served actually allowing the town to wind down, breaking up the deserted sections and turning them back to greenfield. That's a kind of infastructure project nobody bother with - despite the fact that a lot can be recovered from such sites.

Of course, we'd just rather leave all that to rot and build more shoddy cardboard houses on green field and let people winge about how they have no jobs, because that's their "right".

[HoreTore]

If house ownership (property speculation) is more profitable than actually engaging in business then you have a problem.

DING DING DING! Spot on.

It's obvious that property needs to be less profitable, while production needs to be more profitable. I do not claim to have a miracle recipe on how to accomplish that, of course. I do know I'm very skeptical of solutions which smells of ideological blindness though, like solutions that focus entirely on tax raises or entirely on tax cuts.

[Philippus Flavius Homovallumus]

DING DING DING! Spot on.

It's obvious that property needs to be less profitable, while production needs to be more profitable. I do not claim to have a miracle recipe on how to accomplish that, of course. I do know I'm very skeptical of solutions which smells of ideological blindness though, like solutions that focus entirely on tax raises or entirely on tax cuts.

Actually, business just needs to be more profitable for the same effort. The second is an important point.

Property taxes in the UK are basically out of date, they don't scale up so that for your really huge mansions you're still just paying the same as a Georgian townhouse - that's not a question "increasing" taxes, just removing the cliff drop at the extreme end.

Beyond that, you could tax people for leaving arable land fallow for more than two years, punatively, that would at least encourage either use or development rather than fields being bought up and then sold when they become valuable as real estate for a housing estate.

Proper town planning is a part of this too, by which I mean not just tacking bits on willy nilly and hollowing out the centre of a town while all the wealthy people move to the suburbs.

[HoreTore]

Repackaging the debt was not of itself the problem, it was the credit rating it was given that was the problem. Was it the banks or the credit agencies that awarded them the AAA ratings?

The credit agencies...

Norway has a sort of banking service called "Exportfinans"(export finance), which is a semi-government controlled agency/company which gives credit to exporting companies. A year or two ago, it had some problems with its funding, causing its credit to dry up, The government solved it by basically putting the oil fund up as safety for the company.

How did the credit agencies react to that move? They downgraded it. Apparently, the trillion dollar oil fund isn't very credit-worthy. It was at that time the last bit of confidence I had for credit agencies evaporated. They are completely clueless.

Actually, business just needs to be more profitable for the same effort. The second is an important point.

Property taxes in the UK are basically out of date, they don't scale up so that for your really huge mansions you're still just paying the same as a Georgian townhouse - that's not a question "increasing" taxes, just removing the cliff drop at the extreme end.

Beyond that, you could tax people for leaving arable land fallow for more than two years, punatively, that would at least encourage either use or development rather than fields being bought up and then sold when they become valuable as real estate for a housing estate.

Proper town planning is a part of this too, by which I mean not just tacking bits on willy nilly and hollowing out the centre of a town while all the wealthy people move to the suburbs.

All good ideas.

[Fragony]

Rating agency's are private company's with their own clients, the effects of the nervousness on the markets they can create is a little bit too big for our own good. As it is now they can make or break what is perfectly fine or absolutely rotten. Friend of mine called it the lemming-constance which I thought was pretty accurate.

Problem with the modern world is that we no longer plan ahead, nownownow.

[HoreTore]

Problem with the modern world is that we no longer plan ahead, nownownow.

This is as accurate as one can get it.

[Fragony]

Edit

[lars573]

No, it's the other way around.

Home(every kindm, including cabins and the like) ownership is barely taxed at all here. This was one of a dozen measures taken by the government to turn us into a nation of tenants to a nation of home owners - and it did work. The only ones who don't own their homes today are those withiut stable employment, students and those who need a place to live for a short period of time. Heck, I'm still a student working 50% in the public sector, and I own my apartment.

However, I live in the suburbs, not in the city centre. Why? Because the prices there have shot through the roof, and it's completely impossible for young people to buy homes there unless they have parents with money. And getting my apartment would be impossible without my uncle as safety.

The current situation is one where young people are finding it extremely hard to buy homes, and is slowly turning us back into a nation of tenants again. The reason for that is because people who have a little extra money use that money to buy a second home, which they then sublet. This in turn creates a false demand for houses, which causes house prices to skyrocket. The high prices makes it impossible to buy homes, etc etc.

Sure, a higher taxation on homes means an extra expense for home owners. But extra taxation means that the amount of money people can spend on a home is lower, which lowers the price, and that means you have a lower loan. It also reduces the demand for houses as people no longer see home ownership as an investment, thus further lowering the price.

So, as well as being beneficial to the home owner, it is also beneficial for society as a whole, as it keeps the money in the production sector, providing clothes, food, jobs, cars, etc. A win-win for all.

In North America owning an apartment (AKA condos) is a rich mans pass time. And yes it's true many young people of modest mean own their first home in the sub-urbs. My brother-in-law owns a house (well a right side of a duplex) on a couple scholarships and a TA job. And he and my sister have 2 toddlers. Had they wanted a house closer to the Uni in the city centre it would have cost them double or triple the $100K they spent. The problem I'm speaking of is exemplified by my brother and his wife (plus their infant and toddler), they pay ~$650 in rent for 2 bedrooms in a crappy neighbourhood. And he and I both now it's crappy, as it's the one we grew up in before moving to the suburbs. Higher property taxes means they'd have to move to the really bad part of the city. When you consider that the property taxes on his building would be $2.65 per $100 of assessed value (2009 rates). Where as in the area that the property my grand father bought (and I live in the slummy apartment) is $1.65 per $100 of assessed value.

You mean people who have an apartment they share with their mistress and a house they share with their wife and children?

Don't look at me like that - that's exactly where the practice came from, and everybody should remember that.

If house ownership (property speculation) is more profitable than actually engaging in business then you have a problem. Contrary to popular belief there are enough houses in most Western countries - in a lot of places in the UK whole streets are effectively deserted and turned over to squats. The problem is that these arears are not profitable for business. There are a couple of things you can do about that - in some instances you just need to accept that the area is too far away from the economic centre or other trade links (mill towns in the North of England have this problem) if you aren't going to keep them on life support you might be better served actually allowing the town to wind down, breaking up the deserted sections and turning them back to greenfield. That's a kind of infastructure project nobody bother with - despite the fact that a lot can be recovered from such sites.

Of course, we'd just rather leave all that to rot and build more shoddy cardboard houses on green field and let people winge about how they have no jobs, because that's their "right".

The problem isn't that there is a lack of houses. The problem is the lack of them where people are. Rural communities being gutted is nothing new. The problem is that these areas are too far from where people work. Unless your like my uncle and willing to drive 2 hours to and from work. Halifax has an issue with affordable housing, a buzz word the hippies love. That is many people can't afford to live close to their job due to property taxes and values, and really can't afford to own a car. Don't bother mentioning mass transit. This is North America, mass transit is for pinkos, commies, and euroweenies.

[HoreTore]

100k for an apartment?

You can probably get a run-down hut somewhere in the backyards of northern Norway for that amount... I just checked the listings, and the cheapest apartment in Drammen(populatiln around 50k) costs 115k usd. For a massive 14m2... And that apartment has a nasty joint-debt thingy, making it risky...

[lars573]

Unfortunately inflation made that mind set obsolete.

100k for an apartment?

You can probably get a run-down hut somewhere in the backyards of northern Norway for that amount... I just checked the listings, and the cheapest apartment in Drammen(populatiln around 50k) costs 115k usd. For a massive 14m2... And that apartment has a nasty joint-debt thingy, making it risky...

Well my sister and family has more of an attached house* than an apartment. But yes as I said owning an apartment is a rich man's (or at least a white collar professional or retirees) undertaking here. Condos are just large apartments and they run 100k on the low end. To over 200k for the really fancy ones is desirable locations. And here you rent an apartment and buy a house or condo. I should also add that real estate values in Nova Scotia aren't that high.







* If someone from North America says a duplex think of something like this:

[HoreTore]

Unfortunately inflation made that mind set obsolete.

Inflation was just as much of a factor in Henry Ford's day as it is today.

It was also a factor during roosevelt and the post-war years, yet it always went just fine.

And it's funny how only wage increases for workers cause inflation according to the right - the extreme increases seen in upper management, the finance sector, etc is apparently no problem at all...

[Philippus Flavius Homovallumus]

The problem isn't that there is a lack of houses. The problem is the lack of them where people are. Rural communities being gutted is nothing new. The problem is that these areas are too far from where people work. Unless your like my uncle and willing to drive 2 hours to and from work. Halifax has an issue with affordable housing, a buzz word the hippies love. That is many people can't afford to live close to their job due to property taxes and values, and really can't afford to own a car. Don't bother mentioning mass transit. This is North America, mass transit is for pinkos, commies, and euroweenies.

So there aren't a lack of houses - most Western Nations have economies which are a mix of high tech and high-quality services. You can just as easily run a tech company from Durham as London - people just don't want to.

So far as I'm concerned, government shouldn't be authorising new housing builds unless it has an actually house shortage - which means doing something with all the brown field sites first.