Letter to the editor: The destabilizing effects of leisure capital - by Steve Kirchoff

Found here. Our comments in bold.

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This letter to the editor is typical leftist agitprop. The letter writer does what all leftists do: foment envy. It's always about the rich oppressor and the exploited worker.

In this case, the letter writer invents a bogeyman, "leisure capital," and blames it for all the economic issues we face. He has his narrative, and seems to think he doesn't have to explain anything. It sufficient for him to simply make statements as if they're unvarnished truth.

Again, typical for a leftist.

Further, the letter writer wanders from Gallatin County to the Montana Governor and legislature to "Yellowstone clubbers" in Big Sky. Does he even know who his enemy is?

Lastly, it concerns us to note that the letter writer is a political science instructor. Hopefully he's not indicative of the state of political science.

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Housing in Gallatin County has transitioned from being a marketplace where regular folks buy and sell dwelling places, to one where wealthy investors purchase housing specifically to increase prices. Our “hot” housing market kicks out regular people because it is dominated by “leisure” (nonproductive) capital, (There is no such thing as "leisure capital." The letter writer is just making up terms. 

All "capital" [i.e., financial assets] is always at work. Capital is on deposit, which banks loan out to others to make purchases; capital is invested, which allows companies to expand, innovate, and hire; capital is held in real estate or housing, which allows people to live in shelter with all the conveniences of life; and capital is in the form of businesses, which generate the necessary products people want to buy. 

All capital is productive. All capital is always at work.

The letter writer is attempting to create a category of wealth that based on a caricature of wealthy people, that they have oodles of cash laying around doing nothing. But this doesn't happen. 

Period.)

whose sole function is to increase housing’s rent and price points. (Leisure capital has a sole function? Did the letter writer mean it has a sole "effect?" Notice the preposterousness of this. A person with money buys a house. This purchase is bad because its "sole function" is to drive up rent and housing costs. How does this happen? Unknown, because the letter writer doesn't explain.

Someone is going to buy that house, whether with "leisure capital" or a loan from a bank. Someone is going to need housing somewhere and use capital to buy or rent it. Capital is always going to go somewhere, if not to purchase the house. Capital is always working.

Housing is expensive for one reason: Demand exceeds supply. The result of this equation will be that fewer people will move to Bozeman, or people will continue to buy expensive housing, or housing will be more affordable if more of it is built. It's a simple equation having nothing to do with rich people spending their money.)

Profound socio-economic changes are being wrought in Montana’s high rent areas — like Gallatin County — and policy makers must rightly understand them. If leaders continue to misunderstand the social deterioration caused by leisure capital’s domination of markets, (What? The letter writer tosses out a casual undocumented accusation, and it is a multi-element claim as well. He thinks

1. leaders have something to do with this
2. they misunderstand something
3. there is social deterioration as a result
4. it is caused by leisure capital, and
5. leisure capital is dominating the markets.

None of this gets demonstrated, explained, or proved by the letter writer. He assumes these massive false premises as self-evident and simply moves on.)

they will keep making bad policy choices — choices that stoke already unsustainable levels of economic inequality and deny labor the chance to put down roots. (A few rich people buying houses causes this. And "leaders" are making it worse by allowing rich people to buy houses here. 

Any of this making sense?

And by the way, these "leaders," at least the ones on the Bozeman city commission, are far Left. The condition of the housing market in Bozeman is a direct result of Leftist governance.)

Housing markets can no longer be understood by relying on the bromides ("A bromide is a common saying or proverb that is obvious and not that helpful.")

of Econ 101, (A summary denial.)

which claim markets are best comprehended by focusing on supply and demand. (The letter writer will never refute this "bromide." In fact, supply and demand is an obvious principle by which wealth changes hands. Further, supply and demand is simply an observation about the way people interact financially. It is not a "law" or a "cause," it is simply an acknowledgment of reality.)

Montana’s governor and Legislature followed this logic in the recent session by adopting new laws gutting local regulations and subsidizing the building industry. They claimed these laws would boost housing production and thereby solve housing unaffordability, which they believe is caused by low supply. (An observation left dangling.)

Meanwhile, Yellowstone Clubbers have invested some of their leisure capital to purchase or construct labor housing in various locations in Gallatin County. (That is, these eeevil rich people built housing for people to live in affordably. This of course is bad, for some unstated reason.)

This investment is an admission by leisure capital ("Leisure capital" is not a person. It cannot make an "admission" about anything.)

that it puts undue pressure on a community to provide labor with life’s necessities. (The letter writer just goes on and on, constructing an elaborate edifice upon false premises. We might say that he is building his case with "leisure logic."

The investment in worker housing is simply a necessity. People in Big Sky recognize that demand for housing [yes, even expensive housing] means workers are needed. And by and large workers don't want to drive in with 45 minute commutes. So it only makes economic sense to provide beneficial local housing for workers.

And by the way, Big Sky has always been an upscale community with large, expensive houses. It is therefore logical that rich people wanting to live there would need workers to build their houses for them. And these workers need a place to live, which the community decided to build for them.

There was a demand for housing for workers, which was addressed by supplying housing.)

After all, leisure capital’s goal, ("Leisure capital" is not a person. It does not have "goals.")

with its unrelenting demands for higher rent, ("Leisure capital" is not a person and cannot make demands.)

is to push up prices. (Which would not happen if there was adequate supply.)

And yet, labor doesn’t need just housing, but also schools, clinics, fire departments, libraries, and essential services. (Big sky has all of this.)

Leaders must understand that leisure capital should be held responsible ("Leisure capital" is not a person that can be held responsible for anything.)

for providing these services. (Um, what? "Leisure capital" built that worker housing. In addtiona, the exorbitant property taxes paid by these homeowners fund schools and fire departments. We no longer think that the letter writer is thinking clearly.)

Our housing problem cannot be fixed without making leisure capital answer for the destabilizing effects it has on cities and towns. (Ah, we finally get to the issue. It took the letter writer to the last sentence to spill the beans.

This is not about housing, "leisure capital," workers, or anything of the sort. It's about making the wealthy less wealthy. Increase their taxes. Seize their wealth. Drive away rich people by making it more difficult to live here. 

Because that what "leaders" really need, is more tax revenue. More taxes. More for government. 

And of course, the letter writer, having explained nothing up to this point, likewise does not explain how giving government even more money will solve this problem.

Lastly, increasing taxes on the rich will not dissuade them from buying expensive houses. Rich people have lots of money, which they will spend. Additional tax barely raises a blip on their finances. 

Thus the leisure capital "problem" will not get solved.)