Supply and Demand

Basic Bean Counting. Or that is School of Chicago Economic Assumptions.

The new thing now is cheering on the newest Global Nation. That is the nation of the nationless, the richest top 1% who can go wherever they want in person or with the click of a mouse move their assets across borders. With 7 billion people on the planet one could make the assumption that Globally now there are about 70 Million people who are in the category "Ultra Rich". The Ultra rich are not like you and me, they have a whole lot more money. Enough that if they looses 90% of everything they become merely sort of rich, dropping from 30 million in assetts to only 3 Million. Where if you or I loose 90% of our assets and loose our job we are living in the street and eating at the soup kitchen.

Why should I care?

If those 70 million folks take their wealth and decide to build a very nice and large house, for instance a 5000 square foot home, which they frequently do, and then decide they can get several of these nice homes, maybe one in a nice spot in Colorado and one one in Hawaii and one in New England and one maybe in the Bahamas or something. Well so what???

Well traditional supply and demand kicks in here. If 70 million are buying up 4 and 5 big 5000 square foot homes then those 70 million are buying up housing building materials at the rate as compared to the average person is 10 times as much stuff. So the 70 million actually consume as much building materials as 700 million people creating a 9% excess demand on the markets. And the bean counters tell us if demand goes up then the price of the items under demand must go up.

So now you should care because this is a demand on building materials equal to the entire normal income demand of Europe and the United States Combined and a demand that skews the market even more because in addition the very wealthy do not have to pinch pennies and squeeze costs on materials or an hiring contractors and can thus cause even more price inflation. This also causes the markets to shift away from providing modest and low cost solutions to building and towards luxery and superflous things. So you get piece of crap junk house for $250,000. The new nation of ultra rich nomads get multiple mansions appointed in high luxery and superior quality.

How is this a green issue?

Simply in that the ultra wealthy consume a huge percentage of the natural resources put in to their homes. This denies resources to the other 6.93 Billion people on earth and causes misuse and over use of resources by those left out.

A solution for the problem:

A real consumption tax that would tax those who over consume.

An Initial build green consumption tax:
For example: Any home under 1500 sq ft gets no consumption tax.
Any second home gets a consumption tax.
From 1500-3000 sq ft the tax goes up lets say from 0-10% of the value

Form 3000-10,000 feet the tax goes up from 10% to 50%

If over 10,000 feet it rises to 100%

Then annually such large homes would get an additional percent of value consumption tax as such homes consume more energy, take more materials to repair and maintain, take up more space and are really unnecessary in any real way for anyone to have other than for egocentric and selfish narcisstic reasons. It could easily be demonstrated that just renting a nice place for ski or summer vacations is more economical than owning, and for business renting a banquet hall or other is more economical than having to have a huge house in order to do whatever it is that rich folk claim they must do in such huge empty halls of luxery.

Zoning laws would need to be changed such that the existing huge monstrosities all over the place could be converted to multifamily housing.

In the US at least we actually have a surplus of housing, not a shortage, what we have is a total absurd mis-allocation of housing resources with millions of units of unoccupied luxery homes and millions of over sized homes while millions languish in homeless destitution and the cost of housing is inflated by super over consumption of the resource.

$@