Dispatch

By Rowan Oulton

Last week, after years of research and speculation, Jacinda Ardern announced the New Zealand Government would not instate a capital gains tax on property:

After forming a government that represented the majority of New Zealanders, we have been unable to build a mandate for a capital gains tax. While I have believed in a CGT, it’s clear many New Zealanders do not. That is why I am also ruling out a capital gains tax under my leadership in the future.

In the context of a mounting affordability crisis, I can’t see this as anything but a momentous display of self-interest. Michael Cullen, a former finance minister who’s spent the last few years investigating tax reform, puts it in plain terms:

The problem we have is New Zealanders seem not to want an inheritance tax, or a wealth tax, or a land tax or a capital gains tax but they still want to complain about growing inequality of wealth.

For me this chart from Jesse Mulligan’s op-ed in 2018 says it all:

Taxation by asset class

When the system so plainly favours housing it’s no wonder so much of our nations wealth is tied up in our homes. Why invest anywhere else when you stand to gain the most from real estate? And here’s the double-whammy: most of our banks are foreign-owned. Not only are we chosing to perpetuate our system’s inequities: we’re collectively agreeing to siphon our countries wealth offshore for generations to come.

The media portrayal of this debate was generational struggle: Millenials desperate for housing verses Boomers hoping to maintain their equity. But that narrative betrays the truth of it, as Mulligan points out here:

For all that this was pitched as a generational battle, the baby boomers’ house price gains were already locked in – the new tax would apply only to gains made after 2021, disproportionately affecting (you guessed it) millennials and first home buyers.

Even an unfair deal wasn’t good enough to change the status quo.

Naval Ravikant on reading:

The genuine love for reading itself, when cultivated, is a superpower. We live in the age of Alexandria, when every book is a fingertip away. The means of learning are abundant — it’s the desire to learn that’s scarce. Cultivate that desire by reading what you want, not what you’re supposed to.

For years I would force myself to read one heaving textbook after another in the hope of self-improvement. Far from sparking a thirst for knowledge, it became a chore and I wound up reading less and less.

It wasn’t until Vic gifted me a book one year that the spell was broken and I rediscovered the joy of reading. Years later what I love most is how, when reading isn’t dictated by any particular goal, one book leads to another in an almost organic fashion. I keep a record of this journey and it’s a delight to look back at the tapestry each turn has weaved. Every book becomes a reminder of a time in my life, like an imprint or tattoo.

This:

Followed by this:

Bellísimo

Nabham again in Where Our Food Comes From:

Living through the famine of 1891 and 1892 had a profound effect on Vavilov just as the 1873 famine had on Tolstoy.

It was into this era of calamity and inequity that the worlds greatest agricultural scientist had been born and the seeds of the Russian revolution were sewn.

Nothing breeds change like hunger.

Gary Paul Nabhan describes one of Nikolay Vavilov’s early experiences in Where Our Food Comes From:

He was on assignment from the czarist government to determine why Russian troops at remote garrisons were getting sick on the wheat flour in their rations.

Soon Nikolay arrived at the first garrison near the Iranian border, where he quickly surmised that the soldiers were being fed flour that included not only the ground grains of wheat, but the ergot-infested seeds of a weedy grass named darnel, as well. Ergot is a fungus that attacks the grass seeds, producing toxic but typically sub-lethal levels of lysergic acid, the naturally occurring drug that later became famous as LSD.

Nikolay quickly completed his official assignment by making a simple suggestion to the garrison commander: The men would probably stop hallucinating soon after he bought them some better-quality flour.

This was in 1917, decades before the discovery of lysergic acid.

There’s a sense of sovereignty that comes from life on a mountain, a perception of privacy and isolation, even of dominion. In that vast space you can sail unaccompanied for hours, afloat on pine and brush and rock. It’s a tranquility born of sheer immensity; it calms with its very magnitude, which renders the merely human of no consequence.

Tara Westover in Educated

In this article from the Huffington Post, Michael Hobbes captures a lot of what it feels like to be a young person today: the profound uncertainty, desperation, and anger.

He describes in minute detail the ways our systems of economic safety are failing us, and points to fundamental changes in attitude that have caused them:

Over the last four decades, there has been a profound shift in the relationship between the government and its citizens. In The Age of Responsibility, Yascha Mounk, a political theorist, writes that before the 1980s, the idea of “responsibility” was understood as something each American owed to the people around them, a national project to keep the most vulnerable from falling below basic subsistence. Even Richard Nixon, not exactly known for lifting up the downtrodden, proposed a national welfare benefit and a version of a guaranteed income. But under Ronald Reagan and then Bill Clinton, the meaning of “responsibility” changed. It became individualized, a duty to earn the benefits your country offered you.

This is something I’ve felt acutely during my time in America, where benefits that ought to be universal are tied to employment.

Hobbes goes on to examine the housing affordability crisis:

Falling homeownership rates, on their own, aren’t necessarily a catastrophe. But our country has contrived an entire “Game of Life” sequence that hinges on being able to buy a home. You rent for a while to save up for a down payment, then you buy a starter home with your partner, then you move into a larger place and raise a family. Once you pay off the mortgage, your house is either an asset to sell or a cheap place to live in retirement. Fin.

This worked well when rents were low enough to save and homes were cheap enough to buy. In one of the most infuriating conversations I had for this article, my father breezily informed me that he bought his first house at 29. It was 1973, he had just moved to Seattle and his job as a university professor paid him (adjusted for inflation) around $76,000 a year. The house cost $124,000 — again, in today’s dollars. I am six years older now than my dad was then. I earn less than he did and the median home price in Seattle is around $730,000. My father’s first house cost him 20 months of his salary. My first house will cost more than 10 years of mine.

This part in particular resonated with me. As prices rise faster than we can save, buying that first home is increasingly impossible. My wife & I have had immense privilege and good fortune our whole lives and yet without some miracle windfall we, too, will struggle to become home owners in our hometown of Auckland. And there seems to be little will to fix the system, especially in New Zealand where home ownership is so inextricably linked to a secure retirement:

All the urgency to build comes from people who need somewhere to live. But all the political power is held by people who already own homes.

There is a deep unfairness to it all. And not one perpetuated by any one actor. It would be easy to point to our parents generation and place blame, but I expect many of them are as worried as we are.

The sooner you start to code, the longer the program will take.

— Roy Carlson

One of many gems from this 1985 article by Jim Bentley.

The release of all of the log’s stored chemical energy creates a glorious blaze of heat and light. The tree spent years quietly absorbing carbon molecules and sunshine joules, and all at once, during combustion, that carbon and sunshine explode back out into the world.

Tim Urban’s delightful description of a wood fire.