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Rent Too High?

Friday, December 19th, 2014

Remember Jimmy McMillan? He’s “the rent is too damn high!” shouting, six-time New York City mayoral candidate with the, er — Rent is Too Damn High Party.

McMillan is at least partly right. It’s no mystery that rents are so high. Government policies are aimed at just that result.

In New York City, rent control discourages new supply as well as maintaining existing supplies — causing shortages leading to higher prices. In many cities, particularly in Blue political metropolises, zoning has pretty much the same effect.

Meanwhile, pumping subsidies into the demand side of the rental housing market doesn’t exactly decrease prices.

Last weekend, the Tyler Morning Telegraph offered up “Housing Choice Voucher program helps families,” reporting on 65-year-old Brinda Meier’s effort to land one of 500 “popular” Housing Choice Vouchers offered with grants of federal tax dollars distributed through Tyler’s Neighborhood Services Department. The voucher goes to help pay the rent.

That’s nice, of course, and no doubt why the program is popular. But the landlord actually cashes the voucher check. Moreover, to the extent these rent subsidies allow folks to afford higher rents, they in turn keep those rents higher — including for folks whose voucher numbers won’t come up in the “please Uncle Sam help pay my rent” lottery.

We discover that Meier, who lives on Social Security and food stamps, is preparing to move across town. She’s found a new place to rent, $200 cheaper than her current place — and in a better neighborhood. She tells the reporter that she’ll move without regard to whether she wins the rent subsidy.

So taxpayers may subsidize someone who doesn’t need it, serving only to keep rents too darn high.

This is Common Sense. I’m Paul Jacob.

Rewarding Gruber

Monday, November 24th, 2014

Revealing to all the world the contempt for the American people that Washington insiders possess might garner for Prof. Gruber a future Medal of Freedom.

Perhaps by a president elected by the Irony Party.

What Gruber is unlikely to get, however, is a Nobel Prize for Economics.

Benjamin Zycher, writing at The Hill, questions Gruber’s astuteness as an economist. The MIT professor surely has the wit to sucker those representing American taxpayers out of six million bucks for his consulting, but, otherwise, reveals some blind spots about where incentives should be figured in.

“Economists may disagree about many things,” writes Zycher, “but absent among them is the central role of incentives as determinants of behavior,” a principle that “applies fully to government.”

To reward one constituency at the expense of others, health care bureaucrats will quickly come to regard limits to spending as a kind of “savings.”

From this type of rationing, Zycher suggests, there will be “a reduction in the flow of research and development investments in new and improved medical technologies, yielding fewer new medicines, devices and equipment.”

This means that the most negative effects will be seen down the road. While the easier-to-publicize positive effects of more people covered by insurance can be pointed to right now, as a “benefit.”

However, even that upfront goody isn’t what we might pretend it is. “Gruber seems actually to believe that an expansion of insurance ‘coverage’ is the same as an expansion of actual healthcare,” Zycher notes, with apt incredulity.

By ignoring negative effects of his convoluted program, and concentrating on a few dubious upfront benefits, Gruber proves himself more con artist than economist.

This is Common Sense. I’m Paul Jacob.

We Need iPads

Thursday, October 30th, 2014

Every once in a while somebody explains that “we” don’t need this or that product, however great it may be and however great the demand for it. For example, a tech reviewer dubs Apple’s latest iPad models “largely unnecessary,” given last-year models almost as capable.

The charge of unnecessariness is surely false when we’re talking about customers who do want the most cutting-edge technology and can put it to good use. But it’s false in a broader perspective too — unless we suppose that all advances in human civilization beyond the level of the hut and the bearskin are “largely unnecessary” to human survival and well-being.

If technological progress is necessary, so are key aspects of how that progress happens, including the fact that it so often happens by “largely unnecessary” increments. Any given marginal advance in computer or PC tech may have been dispensable. But the same can’t be said of the process of cumulative improvement as a whole. Consider, for example, that some ninety percent of what we now do on our PCs would have been impossible to do with the 1980 PC. Our 2014 laptops could not have been crafted without myriad intermediate advances.

As striving human beings, our needs evolve as our means improve and enable us to pursue ends that we could not have pursued with less powerful means. Ergo, I welcome every little improvement we can get. And I can hardly wait for my 2025 iPad.

This is Common Sense. I’m Paul Jacob.

This Ain’t Laissez-Faire

Thursday, October 23rd, 2014

Things are what they are, not their opposite. Can we accept that as a starting point?

Not if we’re scoring ideological points regardless of the cost to clarity.

Newsweek calls drug-war violence in Long Island “a harrowing example of free-market, laissez-faire capitalism.” To this, Cato Institute’s David Boaz objects that “the competition between the local Crips and Bloods [is described] in terms not usually seen in articles about, say, Apple and Microsoft or Ford and Toyota.”

Under a truly free market, the rights of buyers and sellers to peaceably trade are legally protected from theft and violence, and their contracts defended from fraud. Black markets, on the other hand, are made up of illegal exchanges, actively prohibited trade.

Sure, black-market trade has something in common with legal trade. As with legal exchanges, persons willingly participate in black-market trades and expect to benefit.

But economic activity that can easily get you jailed is fundamentally different in just this respect from that conducted in a relatively laissez-faire context.

The difference has consequences.

You can’t go to court if you have a grievance with a black-market trading partner or competitor. And persons less scrupulous, more violent, more criminal than the norm tend to be disproportionately represented among sellers of illegal goods that have especially big markups precisely because they’re illegal.

So Boaz is right.

The legal capitalism at K-Mart, J. C. Penny, or a post-Prohibition-Era liquor store isn’t fertile ground for the gang warfare invited by the War on Drugs. We can’t tell the difference, though, if we ignore the difference.

This is Common Sense. I’m Paul Jacob.

The Dark Guardian of Opacity

Monday, October 6th, 2014

Sen. Harry Reid has his reasons that reason does not know.

Well, Nick Gillespie of ReasonTV (and .com) doesn’t know them. But he has his suspicions.

While the House has passed the Federal Reserve Financial Transparency Act, aiming to audit the Fed, Senate Majority Leader Reid balks at bringing the proposal up to a vote in Congress’s upper chamber. (Gillespie says it won’t happen, not while Reid has his say.)

In the House, both parties supported the audit — a majority of Democrats, and all Republicans save one lone holdout giving a Nay vote. But Reid, whose commitment to corporatism and opacity is well known, presumably fears the upwelling of good old republican values in the Old Man’s Club that is the U.S. Senate — Reid’s romper room for so many decades.

Egads, he must be thinking, even Senators Elizabeth Warren and Rand Paul agree on the need for some sunlight into the dark corridors of America’s bank cartel.

And they don’t agree about much of anything!

Gillespie spells out the whys of transparency. He also explains the basic context: “The central bank is explicitly tasked with the fundamentally incompatible duties of conducting stable monetary policy, promoting full employment, acting as a lender of last resort, and regulating the banks it works with. Good luck with all that.”

Who needs luck when you have power? Some do benefit from the current Old Boys’ system. They’re just not the general citizenry. Or republican governance.

A free society would have a very different banking and monetary system. Adding transparency might begin the process toward such a system.

Next step? Boot Harry Reid out of his cushy position of power.

This is Common Sense. I’m Paul Jacob.

Giddy, Nope

Thursday, September 25th, 2014

The National Labor Relations Board has ordered CNN to rehire 100 workers and pay off 200 others.

NLRB rebukes CNN for “failure to bargain” with a union. The dispute apparently involves no breach of contract with employees — only a breach with a union’s demand that CNN deal with it.

Blogger Daily Pundit is giddy: “I can’t imagine a happier outcome than seeing CNN, the hack propaganda mouthpiece for the ‘respectable’ American left, being forced into bankruptcy” by a “rogue bureaucracy.”

But wait. Would the tyrannical destruction of CNN be — ideological schadenfreude aside — a happy outcome?

No.

However poetic the justice, or injustice, being inflicted on its owners and officers, their right to make economic decisions — the right to control our own lives and property — does not hinge on the content of their notions. The only way we can all have rights, share the same standing  in the world, is to ground our rights in our shared humanity … and not anything more specific, narrow, or particular. Only those who forcibly violate the rights of others properly forfeit some of the protections to which peaceful persons are normally entitled.

Even if Pundit’s point is only to relish CNN’s comeuppance, not to root for governmental harassment of lefty prattlers, it’s misguided. Each new assault on our freedom — to hire, to fire, to speak, to write — serves as precedent for comparable and worse assaults. If we hope to defend our own freedom, we should defend that of all peaceful individuals. And prefer that they be left alone.

We must defend even those with some pretty noxious ideas.

This is Common Sense. I’m Paul Jacob.

The Uber Rebellion

Tuesday, September 9th, 2014

Customers in Germany and elsewhere have flouted irrational attacks on the popular ride-sharing service Uber.

As I have explained before, Uber’s software lets passengers and drivers connect in a way that bypasses regularly regulated taxicabs. Cabbies don’t necessarily oppose the innovation. Many see Uber’s app as a nifty way to get customers. And, of course, many riders see it as a nifty way to get rides.

But taxi dispatchers? Well, that’s another story.

At least it is in Germany, where an organization for dispatchers called Taxi Deutschland has kvetched that the San Francisco company lacks the Necessary Permits to do electronic dispatching in Deutschland. Thanks to TD’s loud complaints, a German court issued a temporary injunction against Uber, prohibiting it from conjoining ride-seekers and ride-givers in happy synchrony.

Uber decided to keep operating in the country anyway, despite the threat of huge fines.

They’ve gotten lots of moral support. In response to the injunction, customers quietly but firmly told regulators “Laissez nous faire!” — a.k.a. “You’re not the boss of me!” — by doubling, tripling and even quintupling demand for Uber’s app. Matthew Feeney of Cato Institute points to jumps in signups in the days following the court’s order: in Frankfurt a 228 percent jump, Munich 329 percent, Hamburg 590 percent.

Last July, in the U.K., Brits surged their signups eight times over after protests against the company.

Keep up the good work, rebels.

This is Common Sense. I’m Paul Jacob.