More important than affordable houses for the young, is for them to afford houses.

A letter sent to The Globe and Mail (not published)

The Inter-American Commission of Human Rights (IACHR) has joined UN Rapporteur in recognizing Canadian Human Rights-Based Approach to Housing. When it refers to the creation of safe and affordable housing during the next 10 years for the Canadian population most in need, such as women and children fleeing family violence, seniors, persons with disabilities, those dealing with mental health and addiction issues and veterans, I cannot but concur.

But, it also makes reference to “young adults” and, in this, as a grandfather of two Canadian girls, I must raise my hand to argue that much more important than allowing the young adults affordable housing, is allowing them to afford houses.

Currently, because banks are allowed to leverage more with “safe” residential mortgages than with loans to the “risky” entrepreneurs who stand a better chance to create the future jobs our young need; and banks therefore earn higher risk adjusted returns on equity with mortgages than with loans to entrepreneurs, Canada, like all countries using the Basel Committee’s risk weighted capital requirements for banks, has put the horse before the cart.

PS. Not sent to The Globe and Mail: What would the price of a house be if there was no financing available to purchase these? Of their current price how much is represented by the intrinsic value of the house, and how much is a reflection of all one-way-or-another subsidized financing allocated to that sector? The sad truth is that our society has ended up financing the financing of houses. When all that low risk weighted mortgaging comes home to roost in a subprime unproductive economy, it will be hellish

PS. Chinese money: What’s the problem with Chinese freezing some of their wealth in Canadian real estate? What’s important is what those selling that real estate do with the money. Or not?

Research project: How much in the current house prices can be attributed to the market having priced in all preferential treatments the society has awarded the financing of houses… like the low risk weights in the risk weighted capital requirements for banks?

@PerKurowski

OAS-IACHR, dare opine on a violation of human rights in the economy (and the environment)

The Charter of the Organization of American States establishes among its principles that "the elimination of poverty ... is the common and shared responsibility of the American States (Art: 3f)… And also to “devote their utmost efforts ... to achieve equitable distribution of national income”; (Art. 34.b)

The American Convention on Human Rights (1969) states (Art: 26) that "States parties undertake to ... achieving progressively the full realization of the rights implicit in the economic, social and educational, scientific and cultural standards set forth in the Charter of the OAS ... to the extent of available resources, through legislation or other appropriate means ".

And in the case of "Discharged and Retired Employees of the Comptroller vs. Peru" (2009) case law has been established, when in the judgment we read that the Commission on Human Rights "is competent to decide whether the State has committed a violation or breach ach of any of the rights recognized in the Convention, including with regard to Article 26 of the same ".

OAS has yet to define though what it means with a violation or breach of economic, social and educational, scientific and cultural standards. That is sad. Had it done so, much unnecessary human suffering could have been avoided.

For instance there are some economic policies or economic crimes that causes such harm to so many humans, so as these should classify as punishable violations against human rights.

I can think of corruption; of loony foreign exchange systems; of runaway monetary policies causing hyperinflation… and of course, of Venezuela’s domestic gas prices.

In the international market gas is sold at about $1.60 per gallon, in Norway, another oil country, it is sold domestically at US$ 8.40 per gallon, and in Venezuela, where people are dying because of lack of food and medicines, it is given away, at US$ 1 cent per gallon.

In Venezuela this horror is not discussed. The political price for proposing to correct it is perceived way too high by both those in government as by those in the opposition.

If gas were sold there at the price it could fetch in international markets, the reduction in the demand would allow much more gas to be exported, and much more food and medicines to be imported.

Would the prices be even higher, and all new revenues shared out directly among Venezuelans, then the incentives in the fights against inequality and against climate change would even be aligned.

So, can you imagine how much more sanity could prevail if the Inter American Commission of Human Rights declared gas giveaways to be a violation of human rights; something which could cause anyone directly responsible for such criminal policy to be hauled in front of an International Court of Human Rights… or even just in front of a local judge?

And, can anyone doubt the fact that the regressive fuel subsidies are de facto also a crime against the environment?

I tried to do something about this in 2009. No chance! I denounced this to OAS’ IACHR or OEA’s CIDH in July 2015. I am still waiting for a response.

Can somebody lend me a hand?

PS. December 2017: If gasoline was sold in Venezuela at current world market prices (0% tax) then between eliminating its smuggling and reducing its local demand, one could easily obtain US 10 million a day. At US$2 per day, that would help feed five million people, one sixth of Venezuela’s population.

@PerKurowski

http://petropolitan.blogspot.com

http://theoilcurse.blogspot.com