In the 1970s, municipalities enacted new rules that were designed to protect farmland and to preserve green space surrounding rapidly growing cities by forbidding private development in those areas. By the late 1990s, this practice evolved into a land-use strategy called “smart growth.” (Here’s a video I did about smart growth.) While some of these initiatives may have preserved green space that can be seen, what is harder to see is the resulting supply restriction and higher cost of housing.
Again, the lower the supply of housing, other things equal, the higher real-estate prices will be. Those who now can’t afford to buy will often rent smaller apartments in less-desirable areas, which typically have less influence on the political process. Locally elected officials tend to be more responsive to the interests of current residents who own property, vote, and pay taxes, and less responsive to renters, who are more likely to be transients and nonvoters. That, in turn, makes it easier to implement policies that use regulation to discriminate against people living on low incomes.
Sandy Ikeda, “Shut Out: How Land-Use Regulations Hurt the Poor”, The Freeman, 2015-02-05.
October 18, 2016
October 17, 2016
Fortunately, as Tim Worstall explains, politicians can rarely be believed — especially when it comes to economics:
Hillary Clinton Vows To Slam The Economy Into Recession Immediately Upon Election
This probably isn’t quite what Hillary Clinton intended to say but it is what she did say at a fundraiser on Friday night. That immediately upon election she would slam the US economy into a recession. For what she has said is that she’s not going to add a penny to the national debt. Which, in an economy running a $500 billion and change budget deficit means tax rises and or spending cuts of $500 billion and change immediately she takes the oath. And that’s a large enough and fierce enough change, before she does anything else, to bring back a recession.
Now, what she meant is something more like this. That she has some spending plans, which she does. And she is also proposing some tax rises. And that her tax rises will balance her spending plans and thus the mixture of plans will not increase the national debt. Which is possibly even true although I don’t believe a word of it myself. For her taxation plans are based upon static analyses when we really must use dynamic ones to measure tax changes. This is normally thought of as something that the right prefers. For if we measure the effects of tax cuts using the dynamic method then there will be some (please note, some, not enough for the cuts to pay for themselves) Laffer Effects meaning that the revenue loss is smaller than that under a static analysis. But this is also true about tax rises. Behaviour really does change when incentives change. Thus tax rises gain less revenue in real life than what a straight line or static analysis predicts.
That is, as I say, probably what she means. But that’s not actually what she said. She said she’ll not add a penny to the national debt. Which means that immediately on taking office she’s got to either raise taxes by $500 billion and change or reduce spending by that amount. Because the budget deficit is that $500 Big Ones and change at present and the deficit is the amount being added to the national debt each year. The problem with this being that that’s also some 3.5% or so of GDP and an immediate fiscal tightening of that amount would put the US economy back into recession.
September 29, 2016
Daniel Greenfield describes them very well:
The sort of people who set off class wars as a hobby have very particular classless societies in mind. The average left-wing revolutionary is not poor. He is a homicidal dilettante from the upper classes with a burning conviction of his own importance that he is unwilling to realize through disciplined labor. His revolution climaxes with a classless society in which he is at the very top.
Not near the top, not adjacent to the top, as he usually was before, but at the very top.
Utopia has a class system. At the top are the thinkers, the philosopher kings who develop plans based on how things ought to be and then turn them over to lesser men to actually implement. They are the priestly class of an ideological movement whose deity is politics and whose priests are politicians.
In a planned economy, they are the titans of industry and finance, they are the heads of banks and the men who move millions and billions around the board, and they are utterly unfit for the job. But they also make decisions in matters of war and science. And in all things. They measure political heresy in all things and all the activities of man are measured against their dogma and rewarded or punished.
This is the way it was in the Soviet Union or Communist China. But take a closer glance at the White House and see if you don’t spot the occasional similarity.
In the middle of Utopia’s class system is the middle class. This is not the middle class you are familiar with. There are no small business owners here. No one striving to make it up the ladder. Utopia’s middle class is the bureaucracy, the interlinked hive mind of government and non-profits.
At the top of Utopia’s class system are the philosopher-planners who issue the regulations. Or rather they offer objectives. The bureaucracy filters them through successive layers, transforming grandiose ideas into stultifying regulations and each successive layers expands them into further microcosms of unnecessary detail. This expansion of regulations also expands the bureaucracy. One feeds off the other.
September 20, 2016
Another land-use regulation that makes space more expensive is municipal requirements that establish a minimum number of parking spaces per housing unit.
According Donald Shoup’s analysis, parking requirements add significantly to the cost of housing, particularly in areas with high land values. For example, in Los Angeles, parking requirements can add $104,000 to the cost of each apartment. Parking requirements limit consumers’ choices and increase the cost of housing even for those who prefer not to pay for parking.
Developers typically build only the minimum amount of parking required by law, which indicates that those requirements are binding. That is, in a less-regulated environment, developers would devote less land to parking and more land to living space. A greater supply of living space will, other things equal, lower the cost of housing.
Sandy Ikeda, “Shut Out: How Land-Use Regulations Hurt the Poor”, The Freeman, 2015-02-05.
September 10, 2016
By any measure, the pre-eminent form of aggressive pack violence is violence by governments, in either its explicit form as warfare and genocide or in more or less disguised peacetime versions. Take as one indicator the most pessimistic estimate of the 20th-century death toll from private aggression and set it against the low-end figures for deaths by government-sponsored violence (that is, count only war casualties, deliberate genocides, and extra-legal violence by organs of government; do not count the deaths incurred in the enforcement of even the most dubious and oppressive laws). Even with these assumptions biasing the ratio to the low side, the ratio is clearly 1000:1 or worse.
Readers skeptical of this ratio should reflect that government-directed genocides alone (excluding warfare entirely) are estimated to have accounted for more than 250,000,000 deaths between the massacre of the Armenians in 1915 and the “ethic cleansings” of Bosnia and Rwanda-Burundi in the late 1990s. Even the 9/11 atrocity and other acts of terrorism, grim as they have been, are mere droplets besides the oceans of blood spilled by state action.
In fact, the domination of total pack violence by government aggression reaches even further than that 1000:1 ratio would indicate. Pack violence by governments serves as a model and a legitimizing excuse not merely for government violence, but for private violence as well. The one thing all tyrants have in common is their belief that in their special cause, aggression is justified; private criminals learn and profit by that example. The contagion of mass violence is spread by the very institutions which ground their legitimacy in the mission of suppressing it — even as they perpetrate most of it.
And that is ultimately why the myth of man the killer ape is most dangerous. Because when we tremble in fear before the specter of individual violence, we excuse or encourage social violence; we feed the authoritarian myths and self-justifications that built the Nazi death camps and the Soviet gulags.
There is no near-term hope that we can edit either aggression or docility out of the human genome. And the individual small-scale violence of criminals and the insane is a mere distraction from the horrific and vast reality that is government-sanctioned murder and the government-sanctioned threat of murder.
To address the real problem in an effective way, we must therefore change our cultures so that either alpha males calling themselves “government” cease giving orders to perform aggression, or our bachelor males cease following those orders. Neither Hobbes’s counsel of obedience to the state nor Rousseau’s idolization of the primitive can address the central violence of the modern era — state-sponsored mass death.
To end that scourge, we must get beyond the myth of man the killer and learn to trust and empower the individual conscience once again; to recognize and affirm the individual predisposition to make peaceful choices in the non-sociopathic 97% of the population; and to recognize what Stanley Milgram showed us; that our signpost on the path away from mass violence reads “I shall not obey!”
Eric S. Raymond, “The Myth of Man the Killer”, Armed and Dangerous, 2003-07-15.
September 6, 2016
Other things equal, the larger the lot, the more you’ll pay for it. Regulations that specify minimum lot sizes — that say you can’t build on land smaller than that minimum — increase prices. Regulations that forbid building more units on a given-size lot have the same effect: they restrict supply and make housing more expensive.
People who already live there may only want to preserve their lifestyle. But whether they intend to or not (and many certainly do so intend) the effect of these regulations is to exclude lower-income families. Where do they go? Where they aren’t excluded — usually poorer neighborhoods. But that increases the demand for housing in poorer neighborhoods, where prices will tend to be higher than they would have been.
And it’s not just middle-class families that do this. Very wealthy residents of exclusive neighborhoods and districts also have an incentive to support limits on construction in order to maintain their preferred lifestyle and to keep out the upper-middle-class hoi polloi. Again, the latter then go elsewhere, very often to lower-income neighborhoods — Williamsburg in Brooklyn is a recent example — where they buy more-affordable housing and drive up prices. Those who complain about well-off people moving into poor neighborhoods — a phenomenon known as “gentrification” — may very well have minimum-lot-size and maximum-density regulations to thank.
When government has the authority to restrict building and development, established residents of all income levels will use that power to protect their wealth.
Sandy Ikeda, “Shut Out: How Land-Use Regulations Hurt the Poor”, The Freeman, 2015-02-05.
September 2, 2016
I believe that religion, generally speaking, has been a curse to mankind — that its modest and greatly overestimated services on the ethical side have been more than overcome by the damage it has done to clear and honest thinking.
I believe that no discovery of fact, however trivial, can be wholly useless to the race, and that no trumpeting of falsehood, however virtuous in intent, can be anything but vicious.
I believe that all government is evil, in that all government must necessarily make war upon liberty and the democratic form is as bad as any of the other forms.
I believe that the evidence for immortality is no better than the evidence of witches, and deserves no more respect.
I believe in the complete freedom of thought and speech — alike for the humblest man and the mightiest, and in the utmost freedom of conduct that is consistent with living in organized society.
I believe in the capacity of man to conquer his world, and to find out what it is made of, and how it is run.
I believe in the reality of progress.
I — But the whole thing, after all, may be put very simply. I believe that it is better to tell the truth than to lie. I believe that it is better to be free than to be a slave. And I believe that it is better to know than be ignorant.
H.L. Mencken, “What I Believe”, The Forum 84, 1930-09.
September 1, 2016
Scott Alexander explains why “the market” has very little to do with the outrageous price hike for EpiPens:
EpiPens, useful medical devices which reverse potentially fatal allergic reactions, have recently quadrupled in price, putting pressure on allergy sufferers and those who care for them. Vox writes that this “tells us a lot about what’s wrong with American health care” – namely that we don’t regulate it enough:
The story of Mylan’s giant EpiPen price increase is, more fundamentally, a story about America’s unique drug pricing policies. We are the only developed nation that lets drugmakers set their own prices, maximizing profits the same way sellers of chairs, mugs, shoes, or any other manufactured goods would.
Let me ask Vox a question: when was the last time that America’s chair industry hiked the price of chairs 400% and suddenly nobody in the country could afford to sit down? When was the last time that the mug industry decided to charge $300 per cup, and everyone had to drink coffee straight from the pot or face bankruptcy? When was the last time greedy shoe executives forced most Americans to go barefoot? And why do you think that is?
The problem with the pharmaceutical industry isn’t that they’re unregulated just like chairs and mugs. The problem with the pharmaceutical industry is that they’re part of a highly-regulated cronyist system that works completely differently from chairs and mugs.
If a chair company decided to charge $300 for their chairs, somebody else would set up a woodshop, sell their chairs for $250, and make a killing – and so on until chairs cost normal-chair-prices again. When Mylan decided to sell EpiPens for $300, in any normal system somebody would have made their own EpiPens and sold them for less. It wouldn’t have been hard. Its active ingredient, epinephrine, is off-patent, was being synthesized as early as 1906, and costs about ten cents per EpiPen-load.
Why don’t they? They keep trying, and the FDA keeps refusing to approve them for human use. For example, in 2009, a group called Teva Pharmaceuticals announced a plan to sell their own EpiPens in the US. The makers of the original EpiPen sued them, saying that they had patented the idea epinephrine-injecting devices. Teva successfully fended off the challenge and brought its product to the FDA, which rejected it because of “certain major deficiencies”. As far as I know, nobody has ever publicly said what the problem was – we can only hope they at least told Teva.
Imagine that the government creates the Furniture and Desk Association, an agency which declares that only IKEA is allowed to sell chairs. IKEA responds by charging $300 per chair. Other companies try to sell stools or sofas, but get bogged down for years in litigation over whether these technically count as “chairs”. When a few of them win their court cases, the FDA shoots them down anyway for vague reasons it refuses to share, or because they haven’t done studies showing that their chairs will not break, or because the studies that showed their chairs will not break didn’t include a high enough number of morbidly obese people so we can’t be sure they won’t break. Finally, Target spends tens of millions of dollars on lawyers and gets the okay to compete with IKEA, but people can only get Target chairs if they have a note signed by a professional interior designer saying that their room needs a “comfort-producing seating implement” and which absolutely definitely does not mention “chairs” anywhere, because otherwise a child who was used to sitting on IKEA chairs might sit down on a Target chair the wrong way, get confused, fall off, and break her head.
(You’re going to say this is an unfair comparison because drugs are potentially dangerous and chairs aren’t – but 50 people die each year from falling off chairs in Britain alone and as far as I know nobody has ever died from an EpiPen malfunction.)
Imagine that this whole system is going on at the same time that IKEA spends millions of dollars lobbying senators about chair-related issues, and that these same senators vote down a bill preventing IKEA from paying off other companies to stay out of the chair industry. Also, suppose that a bunch of people are dying each year of exhaustion from having to stand up all the time because chairs are too expensive unless you’ve got really good furniture insurance, which is totally a thing and which everybody is legally required to have.
And now imagine that a news site responds with an article saying the government doesn’t regulate chairs enough.
August 29, 2016
[…] there is a second, possibly more important source of the man-as-killer myth in the philosophy of the Enlightenment — Thomas Hobbes’s depiction of the state of nature as a “warre of all against all”, and the reactionary naturism of Rousseau and the post-Enlightenment Romantics. Today these originally opposing worldviews have become fused into a view of nature and humanity that combines the worst (and least factual) of both.
Hobbes, writing a rationalization of the system of absolute monarchy under the Stuart kings of England, constructed an argument that in a state of nature without government the conflicting desires of human beings would pit every man against his neighbor in a bloodbath without end. Hobbes referred to and assumed “wild violence” as the normal state of humans in what anthropologists now call “pre-state” societies; that very term, in fact, reflects the Hobbesian myth,
The obvious flaw in Hobbes’s argument is that he mistook a sufficient condition for suppressing the “warre” (the existence of a strong central state) for a necessary one. He underestimated the innate sociability of human beings. The anthropological and historical record affords numerous examples of “pre-state” societies (even quite large multiethnic/multilingual populations) which, while violent against outsiders, successfully maintained internal peace.
If Hobbes underestimated the sociability of man, Rousseau and his followers overestimated it; or, at least, they overestimated the sociability of primitive man. By contrasting the nobility and tranquility they claimed to see in rural nature and the Noble Savage with the all-too-evident filth, poverty and crowding in the booming cities of the Industrial Revolution, they secularized the Fall of Man. As their spiritual descendants today still do, they overlooked the fact that the urban poor had unanimously voted with their feet to escape an even nastier rural poverty.
The Rousseauian myth of technological Man as an ugly scab on the face of pristine Nature has become so pervasive in Western culture as to largely drive out the older opposing image of “Nature, red in tooth and claw” from the popular mind. Perhaps this was inevitable as humans achieved more and more control over their environment; protection from famine, plague, foul weather, predators, and other inconveniences of nature encouraged the fond delusion that only human nastiness makes the world a hard place.
In reality, Nature is a violent arena of intra- and inter-species competition in which murder for gain is an everyday event and ecological fluctuations commonly lead to mass death. Human societies, outside of wartime, are almost miraculously stable and nonviolent by contrast. But the unconscious prejudice of even educated Westerners today is likely to be that the opposite is true. The Hobbesian view of the “warre of all against all” has survived only as a description of human behavior, not of the wider state of nature. Pop ecology has replaced pop theology; the new myth is of man the killer ape.
Eric S. Raymond, “The Myth of Man the Killer”, Armed and Dangerous, 2003-07-15.
August 18, 2016
Ever since the beginning of the ethanol mandate it was obvious to anybody with eyes to see that the whole thing was a boondoggle and a huge waste for everybody except ADM. What the Greens failed to understand is that if you prop up corn prices by buying, distilling and burning massive amounts of corn whisky in cars, two things are going to happen. One the price is going to go up, making things like cow feed and other uses of corn more expensive and 2. farmers are going to, without restraint, plant ever larger amounts of corn, which will 1. push out other crops like wheat and 2. require more land use to plant even more corn. Which is why you can now go from Eastern Colorado to Western NY and essentially see nothing but corn. Millions of acres of corn, across the country, grown to burn. Somehow this was supposed to be environmentally friendly?
J.C. Carlton, “The Law Of Unintended Consequences Hits Biofuels”, The Arts Mechanical, 2016-08-07.
August 16, 2016
Every expansion of the state incites more people to compete – and to compete more intensely – to possess the power over others that that expansion brings. From each individual’s perspective, it’s better to be in the group that exercises power rather than in the groups against whom the power is exercised. Unlike competition in markets, competition for power wastes material resources and human time and energy (rent-seeking wastes); such competition is never win-win but, rather, win-lose. But also unlike competition in markets, competition for power results in the worst form of inequality – indeed, the only form of inequality that warrants legitimate concern – namely, inequality of power. Those with state power, regardless of how they acquire it, can command those without state power. Those with state power use force to override the choices of those without state power. Those with state power do the choosing; those without state power do the obeying.
Unlike market-enabled differences in monetary incomes and wealth, this species of inequality – inequality of power – is inhumane and destructive, and it results from humans’ most primitive impulses.
Don Boudreaux, “Quotation of the Day…”, Café Hayek, 2016-07-25.
August 12, 2016
The bad news? It’s more expensive to consume than ever before, thanks to the way the Ontario government has manipulated the market:
You may be surprised to learn that electricity is now cheaper to generate in Ontario than it has been for decades. The wholesale price, called the Hourly Ontario Electricity Price or HOEP, used to bounce around between five and eight cents per kilowatt hour (kWh), but over the last decade, thanks in large part to the shale gas revolution, it has trended down to below three cents, and on a typical day is now as low as two cents per kWh. Good news, right?
It would be, except that this is Ontario. A hidden tax on Ontario’s electricity has pushed the actual purchase price in the opposite direction, to the highest it’s ever been. The tax, called the Global Adjustment (GA), is levied on electricity purchases to cover a massive provincial slush fund for green energy, conservation programs, nuclear plant repairs and other central planning boondoggles. As these spending commitments soar, so does the GA.
In the latter part of the last decade when the HOEP was around five cents per kWh and the government had not yet begun tinkering, the GA was negligible, so it hardly affected the price. In 2009, when the Green Energy Act kicked in with massive revenue guarantees for wind and solar generators, the GA jumped to about 3.5 cents per kWh, and has been trending up since — now it is regularly above 9.5 cents. In April it even topped 11 cents, triple the average HOEP.
The only people doing well out of this are the lucky cronies of the government who signed up for provincial subsidies on alternative energy (primarily wind and solar), who reap rents of well over 100% thanks to guaranteed minimum prices for electricity from non-traditional sources.
August 2, 2016
All taxes have something called a “deadweight cost”. This is simply economic activity that doesn’t happen because of the simple fact that we’re levying a tax. If we tax the purchase of apples then fewer apples will be purchased. This is entirely divorced, by the way, from any good that might be achieved by how we spend that revenue collected. We also know that different taxes have different deadweight costs. We even have a ranking of them. At the top, with the highest costs for the revenue collected, we’ve transactions taxes like the financial transactions tax under consideration. This is so expensive that it’s a really, really, bad idea to tax in this manner. Then come capital and corporate taxes, then with lower again deadweights incomes taxes, then consumption and then finally repeated taxes on real property, or land value taxation. If we were interested only in efficiency (we’re not, equity is important too) then we would collect as much as we could from a land value tax, then from Pigou and sin taxes (carbon emissions, cigarettes, booze) then general consumption taxes and so on. Perhaps leaving corporates and capital entirely untaxed. And there’s a whole field of study, optimal taxation theory, that suggests that we really should do that and the general prescription is the progressive consumption tax. There’s general agreement that on purely those efficiency grounds this is about the best we can do with a tax system.
Tim Worstall, “Surprisingly Perhaps, State Republicans Are Actually Correct On The Economics Of This”, Forbes, 2015-02-14.
July 25, 2016
Scott Adams considers how likely the election of Il Donalduce would be to prompt President Obama to declare martial law to save the republic:
… keep in mind that Democrats have successfully sold the “racist strongman” narrative about Trump to their own ranks. If they’re right about Trump, we need to start getting serious about planning for martial law, for the good of the country and the world. No one wants another Hitler. And if they’re wrong, we still need to plan for martial law because Democrats think they are right. That’s all it takes.
Imagine, for example, that violence against police escalates because of the rhetoric on the left. That seems likely. Then add in some more videos of police shooting unarmed African-American men and you have all the ingredients for riots, followed by martial law.
My best guess is that 30% of the country believes (incorrectly) that we are heading toward some sort of pre-Nazi situation in the United States, where President Trump calls on his legion of racist supporters to do some ethnic cleansing. That’s all completely ridiculous, but it doesn’t stop perhaps 30% of the country from believing it.
Unlike most campaign rhetoric of the past, the attacks against Trump are designed to generate action, not words. Normal campaigns ask for little more than your vote. But this time, Clinton’s side – mostly surrogates and supporters – have defined their opponent as a Nazi-like dictator who will destroy the country, if not the entire world. In that situation, action is morally justified. And that action could include riots and violence against authority.
How much violence against authority would it take for President Obama to declare martial law and stay in power?
Less than you think. Television coverage will make every act of violence seem a hundred times worse than it is.
July 19, 2016
As the situation in Turkey stabilizes, Tom Kratman says it probably wasn’t Erdoğan’s version of the Reichstag fire:
So what are the possibilities?
A. The coup attempt could have been more or less spontaneous, incited by word that Erdoğan’s government was about to start arresting soldiers that either adhered to liberal Islamic cleric, Fethullah Gülen, or on some other pretext.
B. It could have been preplanned for a later date and only moved ahead because of the fear of arrest.
C. It could have been a small scale plot, as per B., above, but one of which Erdoğan was fully apprised, and the timing of which he was able to control by issuance of arrest warrants, as per A. and B.
D. It could have been, start to finish, Erdoğan and his party’s attempt at a Reichstag Fire, a staged incident, employing ignorant dupes, started and sabotaged in order to justify massive repression, bloodshed, and tyranny. You know; getting off the train.
E. It was a subplot of a larger Armed Forces-run plot for a real coup.
We can probably dispense with D right off; conspiracies of this kind are too difficult of execution, too unlikely to come off well, that it’s not for anyone but a fool to try. Erdoğan may be many things, and is possibly all of them, but a fool he is not. Likewise, one is inclined to discount E. Again, when the Turkish Army decides to do something it tends to do it forthrightly, competently, and without any undue restraint. If the Turkish armed forces as a whole had been not just doing the planning for a coup, but had such plans and preparations for execution well in hand, or, at least, well advanced, then the coup actors’ calls for assistance and support would not have been so ignored and the streets of Turkey would have seen enough soldiers on them, quickly enough, that defiance would have been unlikely in any case, and massive in no case.
A and B are both plausible, and there is evidence for both of those and C, but I’m going to go out on a limb and suggest that what really happened was C, that there was a plot on a minor scale, that Erdoğan knew about it in considerable detail, that he let it go forward intending to dictate by his actions the time for the coup, and at the worst possible time for the coup, and that he was prepared to countercoup and to take full advantage of the opportunities that would open to him via a successful countercoup.
None of the evidence for C rises above the circumstantial, of course, but taken together, the body of evidence is persuasive. Consider: 1) Erdoğan was out of town at the precise right times, yet, 2) he was able to get back to Istanbul at the precise right times, while 3) easily avoiding capture, 4) having lists already prepared of military officers to dismiss, very nearly the entire Turkish officer corps above the rank of captain, I’ve heard, and 5) also had extensive lists of prosecutors and judges to purge.
That last one is the most persuasive to me, because we don’t have any evidence that the judges or prosecutors had anything to do with the coup. Mere opportunism? Maybe, but the speed of the thing and the thoroughness, given the lack of time…no, I’m not buying opportunism; Erdoğan was ready! Why? Because he knew! How? Because he was forewarned, possibly well in advance, even as to timing because he dictated the timing.