OK, and since we’re all barrelling towards the Budget and beyond … how useful a thing really is National’s programme of building 34,000 houses, as a solution to the crisis of housing affordability? Answer: not very. The details are here.
Evidently, only 13,500 of this new build will be state houses/social housing and much of that will be catch-up, since the government will reportedly be demolishing 8,300 state homes over the same period. The other 20,600? About 80% will be sold privately, at the going market rate. So there’s precious little joy for aspiring first homeowners, or the homeless. Not at the stratospheric level of market prices in Auckland, or – increasingly – in Wellington as well, where house prices have risen by 21.2% over the past year.
Oh, and of that “sold privately” portion – some 20% or just over 4,000 homes, are being classified as “affordable”. Under a prior government definition, this means about $650,000 in Auckland. Is this really an “affordable” price? For trust fund kids, maybe. Not for many other people. Earlier this year, the international housing affordability think tank Demographia – using prices from the third quarter of 2016 – ranked Auckland as the fourth most unaffordable city in the world, among 94 major cities and 406 areas overall. That survey can be accessed here.
Routinely, Demographia calculates average home prices against median income, and defines houses costing three times the median income or less, as being “affordable.” A house costing five times (or more) of the median income is deemed to be “ severely unaffordable.” In the Demographia survey, house prices in Auckland last year were running at ten times the median income.
Admittedly, this is not an exact science. Is median income the best measure, given that – as David Farrar has recently argued, it includes the too young, the retired old etc – within its net. Still, it is the international standard. More to the point, if we want to look only at the income of wage and salary earners…in an income survey by Statistics NZ the median (or midpoint) the median income in June 2014 from wages and salaries across all jobs was about $45,800 a year (or $882 a week) before tax. By 2016, Careers NZ calculated this pre-tax median figure to be $48,800 a year, minus any overtime and bonuses.
OK then, so to be generous… lets call the median income $50,000. On an allegedly “ affordable” $650,000 house that would still mean house prices are running at a ratio 13 times the median income. Even if we’re really, really generous and assume that every prospective home buyer is actually a couple with both of them earning $50,000 that would still mean that house prices in Auckland are running a 6.5 times the household income of even these fortunate few. By Demographia’s standard measure this would still a considerable way beyond the “ severely unaffordable” threshold of five times the median income.
But hey…we knew already the government’s “solution ” to the housing crisis in Auckland was a sham, right? First came the denials of a crisis. Then we’ve had the slash and burn regulatory response, as if Auckland’s housing problems were only a zoning problem readily solvable by a rampant increase in ribbon development out at the city’s edges. Now, we get the token gestures.
Footnote: National’s programme will reportedly cost $2.23 billion over four years, with only about half of that being new money (obtained from borrowing) and the other half being taken out of Housing NZ’s existing budget. Smoke and mirrors, as Labour leader Andrew Little says.
Fear of Laptops
The secret information that Donald Trump blabbed to the Russians had to do with how (and where) Islamic State were planning to weaponise laptops carried by passengers on commercial airlines. Assuming the threat is real and that the US response will be to extend the limited current rules on laptops for in-cabin carriage and use….the potential for airline disruption is immense.
In March, the US instituted an in-cabin laptop carriage ban on flights from a limited number of origin points in the Middle East. Last week, the Department of Homeland Security floated the idea of extending that ban to all flights emanating from the European Union.
If so, what would be the consequences… beyond increasing the rigour of airport screening, the length of airport delays and the level of irritation among passengers just as the airline industry heads into the lucrative peak period of summer travel in the northern hemisphere? As this article relates, the immediate losers would be the 24/7 workaholics in business class, whose pricey tax-deductible seats generate the profits that enable airlines to keep economy class seats at a relatively cheap level. Many corporate captains would be unwilling to risk their devices – and the business secrets they contain – to the perils of check-in and storage, where they could be sent in error to Kansas, or stolen, or damaged. So those computers would have to be sent on beforehand by Fedex or the like. Bummer. Or to the dismay of airlines, more business conferences will be done via Skype.
Ordinary folks may be more willing to risk check-in, handling and storage – and they soon may have no other choice. Which means that unless the airport detection technology is really, really, good… all of us may soon be flying anxiously at 38,000 feet with the potential for several weaponised laptops being clustered together in the hold. Obviously, this could be an even bigger bummer, and not merely for those flying economy.
To hark back to where this started, with Trump’s big mouth… it seems that back in March, CNN had the story about the ISIS explosive laptops and the city in which they were being developed, and yet when they checked with the White House – as the mainstream US media routinely does, when national security issues are at stake – the Trump administration strongly advised CNN not to run the story, because people (ie crucial informants) would die if they did.
So CNN didn’t run the story. Only to see Trump subsequently blab the same precise details to the Russians. Keep in mind that the Russians have every reason to enable ISIS to create terrorism panics and anti-immigration blowback in Europe, and elsewhere. Remember how Trump and Putin both supported Marine Le Pen in the recent elections in France? CNN’s anger is palpable in this damning clip.
This next bit is blackly comic… here’s House Speaker Paul Ryan in an op-ed published just before voting day last year, warning us about what a Hillary Clinton presidency would entail. Among the best lines:
This is what life is like with the Clintons. It is one scandal after another, and you never know what’s coming next. They use the system to enrich themselves. Can we handle four years of this?
Phew. Glad we dodged that bullet.
Jonathan Taplin, in Wellington
From time to time, local universities host some interesting visitors on their lecture circuit, and especially – of late – on copyright issues. A few weeks ago, it was the renowned Canadian academic/copyright law activist Michael Geist. At 12.30 this Friday at the lecture theatre situated behind the law faculty on Lambton Quay, Jonathan Taplin will be giving a lecture on the stranglehold that Facebook, Google and Amazon are exerting on online culture, and the consequences for creative artists of this concentration of power. Details are here.
Those with long memories will recall Taplin being a one-time manager of Bob Dylan and the Hawks, and he also produced a string of great movies –including Martin Scorsese’s breakthrough film Mean Streets, the Band music doco The Last Waltz, the David Cronenberg media satire To Die For, and Under Fire, an under-rated Nick Nolte/Ed Harris/Gene Hackman film based (a) on the Sandinista revolution in Nicaragua, and (b) on the on-air killing in 1979 (by the US backed Somoza regime) of ABC news reporter Bill Stewart. Taplin must have a suitcase full of terrific on-the-road stories.
After that heady period, Taplin moved on to a career in media mergers and acquisitions at Merrill Lynch, and more recently to a major professorship position at the University of Southern California, with a focus upon digital media issues. So what’s he likely to be talking about tomorrow? Taplin has long opposed the ‘for free’ treatment of creative works by the likes of Youtube, given the impact this has had on the ability of artists to sustain a royalties-based income stream from their creations. Since he’s also the son of an anti-trust lawyer, it was also hardly surprising that in his 2017 book Move Fast and Break Things, Taplin mounted a fierce attack on the near-monopoly power being accumulated and wielded by Facebook/Google/Amazon… It is a power concentration that deliberately violates the gospel of free market competition to which the dinosaurs of the centre-right still cling.
On that point, Taplin has cited the notorious claim by Peter Thiel, (the Silicon Valley guru, Trump adviser and NZ citizen) that “competition is for losers.” According to Thiel and his libertarian acolytes, achieving monopoly power – not fostering competition – should be the end goal of business. As a consequence, there’s now far more evidence in online commerce of a drive for total market control than of any sentimental quest for a level playing field. In film and other areas of digital commerce, the bright new digital entrepreneurs appear to want to take us back to the late 19th century, before the Standard Oil anti-trust case in 1910 (taken against the Rockefellers, no less) first established the principle that markets need to be constantly regulated in order to keep them competitive, and thereby saved from their own worst tendencies.
That lesson is still keenly relevant here. A fortnight ago, the Commerce Commission rightly rejected the mooted Fairfax/NZME merger on the grounds that this would deliver a 90 % ownership of NZ media to one entity, with all the downstream consequences this would have for the quality of journalism, and for the level of democratic debate.
Right. But as Taplin will no doubt point out, Facebook, Google and Amazon either already have – or are headed for – similar levels of market dominance. (eg Google reportedly enjoys an 88% market share of search advertising.)
Meaning : anti-trust powers urgently need to be beefed up and used by governments, and not abandoned by the wayside. Like most of us, Taplin is short on solutions when it comes to how we can (a) adequately reward creative artists and (b) promote diversity within the digital marketplace. At times in the past, he has romanticised the pre-digital situation in the music industry in ways reminiscent of a hankering for the good old days back on the plantation. Many people will also disagree with Taplin’s hostility to the ‘safe harbour’ provisions – and fair use protections? – contained in modern copyright law. Even so, his Friday lunchtime lecture should be worth your time.
Mean Streets + Music
One of Taplin’s tasks on Mean Streets involved talking the Rolling Stones down from the unaffordable fees they were initially asking for the rights to use a couple of their tracks… In this most Catholic of films, Scorsese’s alter ego was played by Harvey Keitel, to the point where the name of Keitel’s character (Charlie Cappa) was a composite of the name of Scorsese’s father and his mother’s maiden name. And if we want to go all out Freudian on this, the clip from The Searchers that Charlie and his pals watch at one point of the film involved a fight between two characters named Martin and Charlie.
Below, we have one of those key Rolling Stones moments, as Keitel looks down the bar at Robert De Niro’s Johnny Boy entering the frame. Mr Trouble is in the house. Basically, the entire film was about the penance that the Keitel character pays for trying to protect Johnny Boy from a self-destruction that eventually swallows up everything that Charlie Cappa had aspired to be. BTW, the two women in this scene are sisters in real life, with the taller woman on Keitel’s left being Scorsese’s then-girlfriend, Sandy Weintraub, later an Emmy award-winning scriptwriter for her work on The Young and The Restless.
And here’s a brilliant, entirely improvised exchange between DeNiro and Keitel – the scene is a small miracle of actorly communication – which should have warned Charlie Cappa about where all of this was headed: