Business Week channels the Daily Mail

Spotted by Sarton Bander in Business Week:

Acapulco, once a teeming beach resort city, is now one of the most blood-soaked precincts in Mexico. A spike last year in gangland killings by drug cartels has terrorized residents and curbed tourism...

Oh dear, you think, those poor Mexicans, paying in blood for America's stupid Prohibitionism, scared to go out at night, losing their jobs in tourism etc...

Nope:

... It’s also made it even harder to sell real estate in a city already falling behind rival resort enclaves along the Caribbean.

Few real estate developers feel the pinch as keenly as Sare Holding (SAREB), Mexico’s fifth-biggest publicly traded builder that got 36 percent of its sales from Acapulco in 2010. The company is selling $1.4 million luxury condominiums in Acapulco and has seen its sales and stock price collapse in recent months.

Sare’s revenue in Acapulco dried up completely in the fourth quarter, dragging the city’s full-year 2011 home sales down 54 percent, to 330.2 million pesos ($26 million), according to the company. Sare’s home sales nationwide plunged 90 percent, in part a result of the violence in Acapulco, it says. As of March 13, Sare’s stock was down 14 percent since the company reported earnings on Feb. 27.

Can we stop bashing the developers, please? (2)

Robin Smith again, on Can we stop bashing the developers, please?:

I'm not sure if you have seen the point I made... Enough housing already gets built and is already built. (a) NIMBY's just get it moved as far from them as possible. (b)

1) On "demand" how can there be a real demand when the developer is calling the larger number of shots? The only demand is for the housing the developer wants to build at the cheapest price and then walk away with all the planning gain. This is called a monopoly position. We get shit and have to live in it. No one else is building non-shit. That is not demand. That is monopoly power. (c)

2) Cars are consumed wealth. Land is not wealth. It is neither consumed nor made. Surprised at you here! A classic mistake in the false battle between labour and capital. Do me a comparison with say another natural opportunity such as fossil fuels and I'll think about it. (d)

5) Yes lets have a free market for housing. Single Tax would do that. (e)

6) But do we actually need more homes as you state above? We need to free up the existing ones being kept out of use (about a million at the last count) Single tax would do it. (f)

a) That may or may not be true. But as a matter of fact, we're building half as many now as we did in the 1950s or 1960s when we were poorer, had a smaller population and much larger (and hence fewer) households.

b) True.

c) The construction industry is simultaneously victim and beneficiary of restrictive planning laws (depending on whether you look at construction workers or home-builders with large land-banks).

But demand is demand. Under the Prohibition, there was no doubt 'demand' for a few reasonably priced, cool beers of an evening. But instead, people had to pay for inferior quality at higher prices and watch their politicians disappear into bootleggers' pockets. Exactly the same logic applies here. The 'shit' quality of which you speak is because the supply curve has been shifted, not the demand curve.

d) Land is very much 'consumed'. The fact that it is not physically depleted by being so consumed is a separate topic. And buildings and improvements are very much 'wealth' and are also 'consumed', albeit at a very, very slow rate so that to all intents and purposes they last for ever. Or can a tenant argue that he owes no rent as he has not 'consumed' anything?

e) Agreed, of course.

f) I alluded to that in the original post.

Reader's letter of the day

From today's Metro (letters unfortunately not available on line):

Graham Bates' criticism of downgrading ecstasy to a class B drug and his simplistic solution to tackling illegal drugs will solve about as much as the current policy has: absolutely nothing. Research has shown that ecstasy is less dangerous than unclassified substances such as tobacco, alcohol and solvents...

The only people who benefit from any kind of prohibition are criminals. I think all drugs should be decriminalised - the government could then generate billions in extra tax revenues, ensure a degree of quality control exists, create thousands of [legal] jobs, allow the police to concentrate on more pressing matters and, most importantly, take power and profits out of the hands of criminal gangs.

A Morris, Cardiff

Hooray!

Julian Critchley* rocks!

* Via Tim W.

Update, glad to see that the BBC have picked this up.

Would this have made you quit drinking...?

Finish your beer ...

Via The Remittance Man.