BBC Worldwide Poll: Capitalism Losing Favor

[charter.rights]

When a new law defines a higher minimum salary, it makes lots of small business unable to hire, the result is more people will have no job.

If people who have different level skills and different life condition are allowed to have different choice either have their own small business or work in relative worse work condition, much less people will rely on social benefit such as EI, less people will have time to crime. When hard time passed or they have better skills though their own effort (such as learning), they can move to better job. the salary can be adjusted by market when they found short of labour, that means free. instead of define a labour hour price artificially by government. and encourage laziness by government. (big business will have more competitors, maybe this is the real reason they want this new law)

This is just one of the examples.

Now politicians are experts in spent, so that they always find money shortage, they always try to raise more tax, they don't think about how to solve social problems, they just busy in finding more ways to take money. Actually, I don't think they can solve any problem, what they can do is they tell people, they have already spent money on the problems and please pay bills.

Bullroney.

I am a small business owner, and have never used minimum wage as a jumping off point for my business model. Anyone who does needs will need to file bankruptcy shortly after they start because that kind of business model will never last.

Minimum wage is a guarantee that employers will not take advantage of the working poor. It ensures that there is a level playing field competitively in the same industry, without having to resort to having poorly paid employees becoming the company profit.

Any business that wants to make money should be considering that fair cost of having employees contribute to their business profits and costs. If they don't they deserve to fail. Minimum wage would have nothing to do with that, or their ability to hire and train new employees as needed.

[Shady]

Global recession taints unrestricted markets

What's with the myth of unrestricted markets? Markets are restricted up the ass. Part of what led to the worldwide recession was the regulated mortgage markets in the United States, skirting proper regulations in order for people to recieve home loans that wouldn't otherwise qualify, all under the guise of affordable housing. This whole thread premise is a joke.

[BubberMiley]

Part of what led to the worldwide recession was the regulated mortgage markets in the United States, skirting proper regulations in order for people to recieve home loans that wouldn't otherwise qualify, all under the guise of affordable housing.

So the recession was caused by too many regulations because they allow people to skirt "proper" regulations?

Who do you get your information from?

[bjre]

What's with the myth of unrestricted markets? Markets are restricted up the ass. Part of what led to the worldwide recession was the regulated mortgage markets in the United States, skirting proper regulations in order for people to recieve home loans that wouldn't otherwise qualify, all under the guise of affordable housing. This whole thread premise is a joke.

The question is why decades ago, people in Toronto can afford a house with a simple labor work but now, but their children can not with the same kind of job now.

[Shady]

So the recession was caused by too many regulations because they allow people to skirt "proper" regulations?

No, the regulations were in place. Government fostered the skirting of them, for liberal feel-good ideas involving so-called affordable housing. Millions of homes were purchased by people who wouldn't otherwise qualifty.

Don't blame capitalism, blame the government's infringment into it.

[M.Dancer]

The question is why decades ago, people in Toronto can afford a house with a simple labor work but now, but their children can not with the same kind of job now.

1)Demand. Dirt is a finite commodity. Look at where Canadians lived in 1940...Toronto was not the number 1 city...now it outstrips #2 by a country mile.

2)What the market wants. Look again at the average new home built between 1935 and 1955. It had almost no insulation and large was anything over 1200 sq ft. Today's average new house sits around 2500 sq ft. They come with central heating, central air, washer, dryers and 3 bathrooms. That would have been considered luxary in the extreme in 1950.

[M.Dancer]

Weren't you the one ready to give up your and everyone else Charter rights like an hour ago in another thread? It seems to me it was max and eye fighting for them. Weird you love freedom in theory and not practice?

No i wasn't but glad to see you are still living in the state of perpetual confusion.

[Michael Hardner]

MD

1)Demand. Dirt is a finite commodity. Look at where Canadians lived in 1940...Toronto was not the number 1 city...now it outstrips #2 by a country mile.

2)What the market wants. Look again at the average new home built between 1935 and 1955. It had almost no insulation and large was anything over 1200 sq ft. Today's average new house sits around 2500 sq ft. They come with central heating, central air, washer, dryers and 3 bathrooms. That would have been considered luxary in the extreme in 1950.

You're entering into a tricky arena when you try to explain the market, and although your explanations here are plausible, I would add a caveat to your post as there's an element of guesswork there.

With that caveat in place, I would add the following:

Although salaries are level, most families have a 2nd income. Also families have fewer children, and other costs have fallen over time, such as grocery costs. As such, families have money to spend on things that are important to them, such as housing.

For example, in downtown Toronto how many homes are owned by families with more than 1 income and less than 3 children ? I would say quite a bit more than in 1960.

[M.Dancer]

For example, in downtown Toronto how many homes are owned by families with more than 1 income and less than 3 children ? I would say quite a bit more than in 1960.

Sure....but it is an uncontestable fact that if the asking price of a home was more than the perceived value of the buyer, it wouldn't sell.

The 3rd and final reason why homes cost as much as they do is because that is what people are willing and able to pay for them.

[bjre]

The 3rd and final reason why homes cost as much as they do is because that is what people are willing and able to pay for them.

I don't think people are willing to pay higher, if you let them choose same quality, most people would choose cheaper one for sure.

Why house becomes expensive?

The most large problem is morgage.

If someone pay $50k for his house and use $50k morgage, he will pay bank 100k in 25 years. So after 25 years, the value of the house will become 150k if ignore any other factors. That is the Number 1 reason. There are many other reasons, include various house related taxes.

Higher management cost and insurances cost makes people pay even more.

Now new law allow people possible to pay morgage for 30 years, it will add more value to house. So where is the money, it goes to bank, goes to insurance companies, goes to brokers. Who will have to pay it? your children.

Edited November 13, 2009 by bjre

[Oleg Bach]

It's fine if 98% of all humanity approve of socialism. There will always be the ones that are the 2 percenters that will run the show - socialism has always been supported by this so-called capitalist elite.. They love it.. If the world was one huge factory - the socialist would be the ones on the factory floor and the capitalist would be management.

[Michael Hardner]

MD,

Sure....but it is an uncontestable fact that if the asking price of a home was more than the perceived value of the buyer, it wouldn't sell.

The 3rd and final reason why homes cost as much as they do is because that is what people are willing and able to pay for them.

Yes, that's the basic law of economics. The reason you give is the only reason.

My father paid about $14K for a house in the lower beaches in the early 1960s, which was about 3.5 years' pay. Doing the math makes you really wonder what is going on.

[M.Dancer]

MD,

My father paid about $14K for a house in the lower beaches in the early 1960s, which was about 3.5 years' pay. Doing the math makes you really wonder what is going on.

The lower beach wasn't as disirable as it is now. Even so, doing the math and no other market force was being applied other than inflation a lower beach house should sell for around $350K

Edited November 13, 2009 by M.Dancer

[Michael Hardner]

MD

The lower beach wasn't as disreable as it is now. Even so, doing the math and no other market force was being applied other than inflation a lower beach house should sell for around $350K

What math ? Did you apply CPI inflation increases to the house price ? How about to my father's [starting] salary. Economics doesn't seem to work properly over 50 years.

[M.Dancer]

MD

What math ?

Salary x 42 months

[Oleg Bach]

Less buying power less freedom. A man could pay a mortgage and have a car, plus support a family..now the woman and man run them selves ragged and in the end will have no equity..it's the distruction of middle class freedom. Where if you worked you were guarenteed a level of freedom..for instance if you get sick state side..and you own a home - You can lose your house without the guarentee of being cured..and the money from that house that was to be an inheritance to your children so they could by a house - is not available - hence no more middle class - real simple math.

[Michael Hardner]

Morris,

Here's a better method:

http://www.bankofcanada.ca/en/rates/inflation_calc.html

My father made $32,000 per year in 2009 dollars and our house was $101,000 approximately.

[Riverwind]

My father made $32,000 per year in 2009 dollars and our house was $101,000 approximately.

I am really not sure what your point is. Property price rises were entirely driven by the rise of two income households which bid up the prices to the point where two incomes are more or less required to purchase property. This trend is now aggravated by the fact that all developable land near most cities has been developed which means rising population is competing for a fixed supply of houses.

Stopping population increases is the only way to stablize the housing prices at this time.

[M.Dancer]

Morris,

Here's a better method:

http://www.bankofcanada.ca/en/rates/inflation_calc.html

My father made $32,000 per year in 2009 dollars and our house was $101,000 approximately.

That doesn't work.

The average annual income in ontario in 1965 was $4,192

http://www.statcan.gc.ca/pub/11-516-x/sectione/E30_40-eng.csv

Today the average is $41,8496

http://www40.statcan.gc.ca/l01/cst01/labr80-eng.htm

You can't only factor inflation into the rising cost of a house. Demand and desirability are also factors.

You would need to look at neighbourhoods today that reflect the socio-economic demographic that the beash had in the 60....perhaps....Ajax.

[Michael Hardner]

Riverwind

I am really not sure what your point is. Property price rises were entirely driven by the rise of two income households which bid up the prices to the point where two incomes are more or less required to purchase property. This trend is now aggravated by the fact that all developable land near most cities has been developed which means rising population is competing for a fixed supply of houses.

Stopping population increases is the only way to stablize the housing prices at this time.

I think that was my point. The two income household part at least, but the additional point of yours is well taken.

[Michael Hardner]

Morris,

That doesn't work.

The average annual income in ontario in 1965 was $4,192

http://www.statcan.g.../E30_40-eng.csv

Today the average is $41,8496

http://www40.statcan.../labr80-eng.htm

You can't only factor inflation into the rising cost of a house. Demand and desirability are also factors.

You would need to look at neighbourhoods today that reflect the socio-economic demographic that the beash had in the 60....perhaps....Ajax.

I'm not trying to predict the cost of a house in 2009, I'm giving the cost of a 1962 house in today's dollars so we're saying the same thing. It seems to be that people made less on the whole, but housing prices were way less on the whole.

And there you go.

[Vancouver King]

What's with the myth of unrestricted markets? Markets are restricted up the ass. Part of what led to the worldwide recession was the regulated mortgage markets in the United States, skirting proper regulations in order for people to recieve home loans that wouldn't otherwise qualify, all under the guise of affordable housing. This whole thread premise is a joke.

Obviously not restricted up the ass sufficiently to prevent the marketing of houses to those unable to meet the payments or, more important, the packaging of these subprime mortgages into investment grade derivatives. The motive? - colossal profits to realtors, investment banks, rating agencies and politicians (via campaign contributions) who gladly looked the other way.

That litany of greed is being underwritten by taxpayers, the same working families interviewed for this global poll.