Forty years ago, my father bought a little retirement farm in Wisconsin. The farm included a wonderful old barn and a house that was started back about A.D. 1900.
The house was a standard, two-story farm house. But it was particularly interesting because it was built one room at a time. You could tell because not one of the six ground-floor rooms had a floor that matched the level of any adjacent room’s floor. Each room’s floor was a half or three-quarter’s inch higher or lower than the adjacent room’s floor.
It was apparent that the original farmer had saved his money, bought the land, and then saved more money to build his first room (now, the kitchen). I’m sure that he, his wife and kids all lived in that first 250 ft2 room. Later, as the farmer worked and saved more of his profits, he bought more lumber to build a second room (probably a bedroom). Then he even dug a basement under the third addition (no small feat in that rocky soil). After what may have been five or ten years, the farmer had built a pretty nice, two-story home.
I can imagine how hard that farmer had to work. I can imagine the strain of saving enough of his earnings each year to buy more lumber to add another room. I can also imagine the pride that the farmer, and his wife, and even their kids felt each time the farmer was able to add another room onto their house. There had to be a real sense of accomplishment.
But, most importantly, they had to be delighted that there was no debt.
When the farmer finished adding rooms to his original cabin, he owned the building free and clear. He had an asset. He was not a debtor.
Compare that farmer (who probably spent five years building his home but was never a debtor) to a modern home-owner who can have a complete, new house built in 90 days—but will remain a debtor for the next 20 to 30 years.
Which form of home construction is better? To slowly build room-by-room for 5 years—and never be in debt? Or to build quickly and completely, but remain in debt for 20 to 30 years?
• Today, it’s almost impossible to emulate the farmer’s “modular” home. Today, we don’t generally build a cabin, and then add one room, and then another. We usually build the entire house all at once. Three bedrooms, two baths, kitchen, living room, dining room, basement, garage.
There might be a certain efficiency in building the whole house, all-at-once. (Surely, every room on the ground floor can be on one level throughout the house.)
But, before today’s new owners can move in, they must first go deeply into debt. The average home buyer can’t afford to pay cash for his new home. Instead, he “buys” a new home with credit based on a mortgage that will keep him indebted for 20 to 30 years. As a result, the new home owner will typically spend the prime of his life as a “debtor”.
Why is it almost impossible to build a home “room-by-room”?
Because zoning regulations effectively prohibit the construction of do-it-yourself, one-room-at-a-time home construction in most communities. The result is homogenous neighborhoods where virtually all the homes are of a similar price range.
Understandably, most home-owners don’t want someone building a ramshackle “cabin” for $30,000 on the lot next to their $250,000 home since that cabin might cause the market value of the $250,000 home to fall to, say, $175,000.
Therefore, we establish zoning regulations that force any upstart who wants to live in our neighborhood to come up with $250,000 cash or credit to build a home that won’t impinge on the property values of the pre-existing, neighborhood homes.
I understand that the owners of every existing home want to protect the value of their homes. That’s natural.
I also understand that the kind of man or woman who would start by building a $30,000 “cabin” in a neighborhood filled with $250,000 homes might be a drunken bum. But he might also be a very hard-working, innovative, entrepreneur who’d be a valuable addition to the neighborhood.
In any case, the modern zoning laws essentially prevent the young, ambitious, hard-working entrepreneur from building his home “room-by-room” over a period of several years.
• We presume that zoning regs are required to protect the property values and equity of existing homes and existing home-owners.
But we could also look at zoning regs as a means to create more debtors.
Thanks to zoning, the American dream of owning your own home had been degraded into a de facto nightmare of becoming a life-long debtor. In most instances, if you dream of not just having, but building your own home, that dream can’t be. Instead, your “American dream” must include a bank that’ll loan you enough currency to build your house now and saddle you with a mortgage that you may later learn to hate. Instead of building your own home over a period of several years and for, say, $125,000 in materials and hundreds of hours of your own labor—today, you’ll have an instant house and a mortgage that over the next 30 years might ultimately cost you $500,000.
Think how prosperous a young man might become if, by building his own house, he could save the equivalent of $375,000 over the course of the next 30 years.
Conversely, think how unprofitable some banks might become if most people started building their own homes and avoiding mortgages.
When I contemplate how bank profits might fall if the American Dream included building your own home without debt, rather than borrowing the money to have someone else build, I begin to wonder whether the primary purpose for residential zoning laws is to protect the property value of adjacent homeowners—or to protect the banks’ profits.
• I even begin to wonder if zoning laws are primarily intended to protect the “property value” of the banks’ mortgages rather than the home-buyer’s property values.
For example, suppose I buy a home for $250,000. Suppose some eager teenager buys the adjacent lot and builds a $35,000 one-room “cabin” that he plans to expand over the course of the next 5 or 10 years. By building his $35,000 cabin next to my $250,000 McMansion, my new neighbor will almost certainly reduce the property value of my home from $250,000 to, say, $175,000. I won’t like that one bit.
If the property value of my McMansion falls by 30%, my home might be “underwater”—the market value of my home might be less than the remaining debt due on my mortgage. Therefore, I might be tempted to abandon my home and leave the bank stuck with a non-performing mortgage on a house of significantly diminished value.
If the neighbor’s cabin diminished the market value of my home, I’d suffer a loss. But if I abandoned my home, the bank that issued the mortgage might suffer an even greater loss.
So, I’m wondering if zoning laws that prevent young or poor people from building “cabins” on adjacent lots are primarily intended to protect the neighborhood “homeowners” (debtors) or the banks that issued the neighborhood mortgages.
• In fact, we could look at a lot of government regulations over businesses, corporations, etc. and wonder about their primary purpose.
For example, thanks to the FDA’s drug regulations and approval process, a hard-working and insightful American entrepreneur will never: 1) discover a drug while working in his garage/lab that will eliminate cancer or stop heart attacks; and 2) get that drug on the market. Our industrious entrepreneur may have brains enough to discover that new drug, but he’s unlikely to have brains enough to “discover” enough money to pay for the testing procedures required by FDA regulations.
Result? He’ll be forced by FDA regs to either sell his drug discovery to a major corporation (that has ready access to enough credit to pay for the testing procedure) or he’ll have to abandon the drug to die stillborn in his garage.
In the end, no one—not the hard-working entrepreneurial genius, or the major corporation is going to put any new drug on the market without first going into significant debt.
So—what’s the primary purpose for FDA drug tests? To insure that drugs are safe? To force people or corporations to go deeper into debt? Or to protect major pharmaceutical corporations from competition by entrepreneurs?
I guarantee that the primary purpose for the FDA tests is not to insure drug safety. One way or the other, the primary purpose for those regulations is to enrich banks or enrich corporations, or both. Those regs are not about safety—they’re about money.
And it’s not an accident.
• TheEconomicCollapseBlog.com published an article entitled, “They Are Murdering Small Business” in which they reported more evidence of excessive government regulation:
“The percentage of Americans that are working for themselves has never been lower in the history of the United States. Once upon a time, the United States was a paradise for entrepreneurs and small businesses, but now the control freak bureaucrats that dominate our society have created a system that absolutely eviscerates them. . . . [B]y murdering small business, the bureaucrats are destroying the primary engine of job growth in this country. One of the big reasons why there are not enough jobs in America today is because small business creation is way down. Entrepreneurs and small businesses are being absolutely devastated by rules, regulations, red tape and by oppressive levels of taxation.
The percentage of unincorporated, self-employed Americans as a share of non-farm employment has fallen from about 25% in 1950 to 7% today—a level never before seen. When we were the richest, most prosperous country in the world . . . when we had the world’s strongest middle class . . . 25% of non-farm Americans were unincorporated and self-employed. Twenty-five percent. Is the loss of the middle class and the loss of the self-employed people a coincidence? I’ll bet it’s not.
“As a share of the population, the percentage of “new entrepreneurs and business owners” dropped by a staggering 53% between 1977 and 2010.”
Is it any surprise that wealth is disproportionally concentrated in the top 2 or 3% of the nation’s people who can manage to work their way through government’s endless regulations and paperwork? Without the self-employed, our economy is stagnating, the distribution of wealth is hugely disproportional, and the middle class is disappearing.
Cause? The same kind of excessive government regulation and paperwork that prevents young people from building a home one room at a time. Today, to be a self-employed plumber, or a carpenter, or a handyman, it’s not enough that you merely know your job and be good at it. No, instead, in order to be self-employed, you must first become a lawyer able to negotiate government’s endless rules, regs and forms. If you can’t become a lawyer or afford to hire a lawyer, you can only become an employee or a welfare recipient.
• Economist Tim Kane reports that there’s,
“anecdotal evidence that the U.S. policy environment has become inadvertently hostile to entrepreneurial employment. At the federal level, high taxes and higher uncertainty about taxes are undoubtedly inhibiting entrepreneurship . . . . The dominant factor may be new regulations on labor. The passage of the Affordable Care Act is creating a sweeping alteration of the regulatory environment that directly changes how employers engage their workforces . . . .”
But has the national government’s regulatory regime become “inadvertently” or intentionally “hostile to entrepreneurial employment”? I’d bet on “intentionally”.
“Separately, there has been a federal crackdown since 2009 by the IRS on U.S. employers that hire U.S. workers as independent contractors rather than employees . . . . The dilemma for U.S. policy is that an American entrepreneur has zero tax or regulatory burden when hiring a consultant/contractor who resides abroad. But that same employer is subject to paperwork, taxation, and possible IRS harassment if employing U.S.-based contractors. . . . [similarly] the rise of occupational licensing is destroying startup opportunities for poor and middle class Americans.”
Thus, the Internal Revenue Code effectively forces entrepreneurs to “outsource” jobs to foreign countries and thus increases U.S. unemployment. Simultaneously, occupational licensing requirements (for roofers, lawn care people, service workers, etc.) are reducing the number of lower- and middle-class entrepreneurs.
Again, the big question is whether these adverse consequences (more unemployment and fewer entrepreneurs) are inadvertent or intended?
Are zoning laws, FDA regs, endless business regulations and licensing requirements primarily intended to protect our property rights and make us safer? Or is the primary intent to cause most of us to become debtors and/or government-dependents and insure that no significant economic progress is allowed unless the bankers get their cut and the gov-co is in control?
What is government really trying to accomplish with all its regulations? Are they working to improve our standard of living or degrade it? Are they working to make us safer or more subservient? Are we moving towards liberty or overt fascism? The answers are obvious. Thanks to government regulations, Americans are becoming less free and therefore less prosperous.
Your government is destroying this country.
Your government . . . yours . . . is destroying this country.
The only real question is whether government is destroying this country by accident or by intent.
We don’t want to believe our own eyes. We don’t want to believe that our congressmen, senators and presidents are engaged in treason—intentional destruction of our nation. But if you look around, open your eyes and find the courage to really “see,” what other conclusion is tenable?
This is purportedly the “land of the free”. And yet, we are seldom free to build our own homes or to build our own businesses. Our commercial freedoms are fast becoming just two: freedom to go deeply into debt and freedom to work for major corporations or gov-co.
Does that sound like the kind of freedom anyone ever fought for? Or does it sound more like the kind of despotism that our Founders fought against?
What are you going to do about?
Take out a loan? Put in a job application to a major corporation or government agency?
Or start pushing your government hard to end the regulations that are killing our freedom to build our own homes and build our own businesses?