Monday, August 17, 2015

Low Hanging Fruit Guarded By Dragons

A nice essay by Brink Lindsey at Cato, analyzing some regulations that are strangling economic growth, with an explicitly bipartisan (multipartisan) appeal.

It's nice because of the unusual focus, not just health, banking, environment, and labor regulation but regulation we don't hear about often enough,
(a) excessive monopoly privileges granted under copyright and patent law; (b) protection of incumbent service providers under occupational licensing; (c) restrictions on high-skilled immigration; and (d) artificial scarcity created by land-use regulation
It takes a while to get going, so skip to p. 7 where the real analysis starts.

I liked especially the analysis of zoning laws, which are the central force behind rising housing prices. They are also curiously damaging to the environment, by forcing people to live far from where they work, and regressive. I say curiously, because tight zoning is so beloved by supposedly green and liberal places, such as Palo Alto.

11 comments:

  1. DDerp (2Ds for a double dose of derpin')August 17, 2015 at 1:07 PM

    Maybe the growth induced by president Trump's popular agenda of getting tough with foreigners, building an impenetrable wall, and deporting ALL suspicious foreign types will completely overwhelm these theoretical 2nd order effects you pointy headed elitists are always whining about. What do you figure a patriotic, soul purifying witch hunt will produce (on it's own) in growth? 5% 10% Sky's the limit?

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    1. You left out the minus signs on the growth estimates, a typo I'm sure :)

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    2. It seems to me that the collapse of the housing market basically coincided with moves against illegal immigrants. Coincidence? I think not.

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    3. I don't follow your logic. The best thing for housing values and construction activity would be 10 million or so previously illegal immigrants, and a million more newly legal ones, wanting to buy houses.

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    4. His logic, if you want to call it that, is that the original housing collapse, back in 2007-08, was in some way caused by moves against illegal imigrants.

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    5. Maybe you should cut back to a single dose of "Derpin'".

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  2. Professor Cochrane - If I recall correctly a number of states (Arizona springs to mind) were moving aggressively against illegal immigrants in 2006. What I was trying to suggest is that the anti-immigrant moves in 2006 drove some illegal immigrants out the United States, reducing the demand for housing and contributing to the collapse of housing prices.

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    1. that goes the right way. I wonder if the location and quantities add up. I would guess that few illegal immigrants buy houses, and of those few were kicked out. Also the crashes were not obviously biggest in immigrant neighborhoods.

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    2. I know. On the one hand illegals have to live somewhere. Even if the illegals were renting houses that were owned by other people they would have created a demand by investors.

      On the other, a lot of illegals were probably involved in house building. I recall reading that the number of illegals dropped in 2006/2007. If that is correct then it might well be linked (correlated) to the housing crash but which way the causation runs is open to analysis.

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  3. Try to build 40-story condo sky-rises in the City of Newport Beach or the City of San Clemente in arch right wing GOP Orange County, California.

    There is no wealthy single-family detached neighborhood in America that wants high-rise housing. These neighborhoods may be liberal, but usually they are conservative---after all rich people usually are!

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    1. Yes, though "conservative" usually means "respectful of property rights," and not so here.

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