Economics

"What's the Matter With San Francisco?"

The article's subhead is "The city’s devastating affordability crisis has an unlikely villain—its famed progressive politics."

That needs an adaptation of an old joke: "What's unlikely, Kimo Sabe?"

Related: "How Burrowing Owls Lead To Vomiting Anarchists (Or SF’s Housing Crisis Explained)". It's long and complicated, but part of the explanation is this: ". . . parts of the progressive community do not believe in supply and demand." (Another big part, as usual in articles of this type, is allegedly Howard Jarvis.)

Even worse news for California: it is "so hard to get a great bagel" there.


"It takes a Marxist to know how to show one up"

Video of a debate about possible rent control in Seattle. Co-starring for the pro-control side is a holder of an economics Ph.D. from N.C. State (don't blame me, I had nothing to do with it).

After listening to her and remembering how futilely I fought against the economic dopiness of some of my students, retirement is seeming even a bit better.

Link courtesy of Pat Sullivan.


"Government brings out the worst in us"

Scott Sumner:

Here's the obvious solution. Privatize the DMV by letting competing companies provide this service, and compensate them per customer at the current spending level of the government service. Since the private sector is far more efficient than the public sector, they can do this at far lower cost, and will compete for customers with better service, by getting rid of the long lines. The same idea has been shown to work with school vouchers, where private voucher schools can consistently produce the same crappy low achievement scores as the public schools, at a far lower cost per pupil. . . .

At the University of Chicago we were taught all sorts of mathematical proofs for the efficiency of the free market equilibrium. For me, the strongest argument for markets (which of course goes back to Adam Smith, and even earlier) is simple human decency. Government brings out the worst in us, and competition brings out the best in us.


"In Honor of His 103rd Birthday, Here Are The 20 Best Quotes From The Late, Great Milton Friedman"

Magnificent beyond the telling.

The great danger to the consumer is the monopoly - whether private or governmental. His most effective protection is free competition at home and free trade throughout the world. The consumer is protected from being exploited by one seller by the existence of another seller from whom he can buy and who is eager to sell to him. Alternative sources of supply protect the consumer far more effectively than all the Ralph Naders of the world.


"Heart over Mind: The Death of JFK, Jr."

In this piece Eric Nolte, an "airline captain for a major carrier,"  makes two fine points. Here's one:

When the waves closed over the watery graves of Kennedy, his wife, and sister-in-law, calls began to arise for greater regulation of private pilots. But there were already plenty of regulations on the books to cover every facet of Kennedy's last flight. As I asked my friends, how would the government restrain anybody from getting in their cars and driving off a cliff? How does one regulate common sense? And more to the point, what are the hazards of granting government the power to attempt such regulation of horse sense?

We live in an era when most people assume that every new problem is properly open to solution by government regulators. Implicit is the belief that the regulators have enough power, information, and wisdom to meet any new challenge.

Young Kennedy's pitiful death illustrates some of the issues that arise from the question of government regulation and the hugely vexing and misunderstood question of the major political tension of our age: the questions of the political primacy of the individual versus the state, and the very purpose of government.


"Pension Funds Burn Cities as $1 Trillion Shortfall Set to Grow"

To quote what the psychiatrist, Dr. Krakower, chillingly tells Carmela Soprano: "One thing you can never say: You haven't been told."

(Transcript of part of the scene here; video clip here. One of the absolutely best scenes of the show.)

Related: You might think they'd know better by now. But noooooooo! "The Dangers of Pension Obligation Bonds". (With extra nice touch: this unanticipated problem is due to a fix to an earlier problem.)

Also related: "Chicago's Financial Fire: The city faces trouble from every direction."

Also related: the private sector, no surprise, is smarter.

The stunning improvement in business and family balance sheets is arguably the most impressive and under-reported characteristics of this U.S. recovery (see chart). The latest government statistics indicate that the private sector has massively deleveraged following the debt binge from 2000 to 2008.