The horizon is not so far as we can see, but as far as we can imagine

Confusion over what government does

So, what’s wrong with this thinking?  First, from the NYTimes:

The shrinking supply of these apartments, highlighted by researchers at New York University, illustrates not only the increasing strain that housing costs have had on this city of renters, but also the limits of the mayor’s success in providing the city’s poor with reasonable places to live. While the mayor’s plan has put thousands of low-income families in new or rehabilitated buildings and helped stabilize neighborhoods, it has been nearly drowned out by the twin waves of gentrification and rent deregulation.

Then, from FDL, in reference to the above:

Mayors like Bloomberg are trying to keep up, but this is clearly a bigger problem than classic development planning schemes can solve.

Deregulation is government policy.  Therefore one of the two main factors driving poor folks out of New York is fully something that could be reversed by government any time they want to.

People get awfully confused about what government does and doesn’t do, and there’s little that’s more classic development planning than rent control.  Rent control existed exactly to make sure that poorer people weren’t driven out of neighborhoods.  Removing it has had exactly the effect anyone should have expected.


The one post on Goldman Sachs you NEED to read


Pakistan Army assault on Warziristan Taliban forces begins


  1. Yep. This is the pernicious effect of Freakonomicism on public discourse. When it’s painfully obvious that removing rent control will mean that rents will rise uncontrolled (by definition), people instead seek some magical counterintuitive phenomenon to believe that rents will remain equitable. It’s nothing more than cargocultery.

    Daniel Davies has a wonderful post on the intellectual phenomenon of which I speak:

    The basic problem with the Freakonomics era was that the profession abandoned the study of production, consumption and exchange. I don’t wholly agree with Lord Skidelsky, but he is right – economics is the study of the economy, it’s not the study of “rational choice” or “behaviour” in the abstract, and the fact that econometricians have invented a huge part of the toolkit of modern statistics doesn’t mean that anything you can estimate using an econometrics package is thereby “economics”.

    I thought the rest was pretty good too.

  2. I love wired magazine and they have a brilliant article; 12 Shocking Ideas That Could Change the World. Within this is a very interesting spin on slums; here’s a link

    Hope this is okay (posting a link).

  3. And speaking of the Devil, looks like the people who brought us Freakonomics are about to bring us Superfreakonomics, denying global warming for fun and profit.

  4. Lori

    Ahhh, but don’t you know that rent control prevents further development? Grrrrrrrrrr…..

Powered by WordPress & Theme by Anders Norén