Monday, February 11, 2013

Gresham's Law of Coinage

Gresham's law is an economic principle that states: "When a government compulsorily overvalues one type of money and undervalues another, the undervalued money will leave the country or disappear from circulation into hoards, while the overvalued money will flood into circulation." It is commonly stated as: "Bad money drives out good", but is more accurately stated: "Bad money drives out good if their exchange rate is set by law."
It can also be applied to the consequences of government price controls for example a possible outcome of setting a maximum price for tomatoes might be that only poor quality tomatoes are offered for sale at that maximum price while good quality tomatoes are sold on the black market at whatever price the market will bear.

Sunday, February 10, 2013

Eminent Domain

Eminent domain (United States, the Philippines), compulsory purchase (United Kingdom, New Zealand, Ireland), resumption/compulsory acquisition (Australia), or expropriation (South Africa and Canada) is "the power to take private property for public use by a state, municipality, or private person or corporation authorized to exercise functions of public character, following the payment of just compensation to the owner of that property."

New York 1940s 
  Built in the 1940s to house returning WWII veterans, with the help of eminent domain and public subsidies, Stuyvesant Town and Peter Cooper Village are remarkable for remaining an affordable, middle-class community amid Manhattan's spiraling luxury housing market. The residents who live there perceived that the sale put their community at risk and that the stakes were even higher for them than for the bidders. "The future for the lives of 25,000 people is at stake," Nanette Ross, a 20-year resident, told the New York Times.  


Luo had just completed his house at a cost of about 600,000 yuan ($95,000) when the government first approached him with their standard offer of 220,000 ($35,000) to move out — which he refused, Chen said. The offer has since gone up to 260,000 yuan ($41,000).

What is unusual in Luo's case is that his house has been allowed to stand for so long. It is common for local authorities in China to take extreme measures, such as cutting off utilities or moving in to demolish when residents are out for the day.

Luo told local reporters his electricity and water are still flowing, and that he and his wife sleep in separate parts of the home to deter any partial demolition.


THE state government's plan to set up a development authority with powers to compulsorily acquire private property for resale to developers is anathema to elected representatives of local government, but not necessarily to the professional planners who work for councils.
The elected councillors view another planning authority as a further dilution of their powers and responsibilities. But many council planners see it as the ultimate outcome of the failure of current development processes.

Potential sites to house Sydney's burgeoning population are disappearing fast and the government's plan is to increase density in established suburbs. This is cheaper than greenfield development on the city fringe which requires huge expenditure on new infrastructure.

A prime target for compulsory purchase would be small apartment blocks in strategic locations that could accommodate larger developments. At present a single apartment owner can frustrate efforts to amalgamate such sites.

Cronulla is one location that developers would target because existing buildings do not make the most of available potential.

The director of environmental services at Sutherland council, John Brunton, agrees that development in the beachside suburb has been frustrated by current planning processes and says worse could be around the corner.

Throughout North Cronulla there are numerous sites that are developed with small apartment buildings which have a floor space well below the potential that could be achieved.

Sunday, February 3, 2013

Imperial overreach / Imperial overstrech

Imperial overreach or overstretch is a hypothesis which suggests that an empire can extend itself beyond its ability to maintain or expand its military and economic commitments. The idea was popularised by Yale University historian Paul Kennedy in his 1987 book The Rise and Fall of the Great Powers.