California leftists are now promising voters lower rent if they will pass Proposition 10 on Tuesday. They intend to do it by using the same crack economic analysis, reverence for truth and total unconcern for results that worked so well when they sold the country on Obamacare’s promise to reduce healthcare costs.
The National Review — which can be trusted only if the topic doesn’t concern President Trump or defend Bush foreign policy — published a comprehensive analysis of Prop 10 that demonstrates to us the only way the initiative will pass is if a majority of voters are idiots or suffer from untreated early-onset Alzheimer’s, a distinct possibility if they couldn’t afford Obamacare.
California suffers from high housing and rent cost due to the functioning of the market. There is growing demand for housing and a very limited supply. Even a first-year economics major knows that when that condition exists prices go up. The solution to reducing the cost of housing is to increase the supply of housing.
Instead the California left offers a solution that “would open the way toward expanding government-imposed price controls on residential rentals, a policy based in economic ignorance and pure superstition.” Passage of Prop 10 would remove any impediment to government interference in the private housing market, “leaving the sober minds of the Berkeley Rent Stabilization Board and their counterparts throughout California to interfere in the rental market with essentially no limitation.”
To show you what a terrible idea rent control is as a means to reduce rent, even New York Times columnist Paul Krugman thinks it is a terrible, counter-productive idea.
The favorite quotes from the National Review are from socialists who hate the idea: “Gunnar Myrdal, the father of the Swedish welfare state, concurred, calling the policy 'the worst example of poor planning by governments lacking courage and vision.' Economist Assar Lindbeck, another Swedish socialist, called rent control the most effective way to destroy a city short of bombing.”
None of that matters to the left who see rent control as a means to extend their power over the private market they loathe, mostly because they are too stupid to take time to study and understand it.
Here is a list of just a few of the organizations that ought to know better, but support passage of Prop. 10: The Los Angeles Times, Sacramento Bee, California Federation of Teachers and the California Teachers Association (evidently few economics teachers are members), SEIU California State Council, the National Urban League, and the ACLU of California.
Reality doesn’t support any of the promises made by supporters. In New York City rent control was a ‘temporary measure’ passed during World War II that may prove to be the only 1,000-year regime to survive the conflict. Rent control laws are still in effect and still strangling new housing construction.
In New York City after the war an average of 35,000 new units were built each year. In 1969 politicians tightened rent control in the city and new construction plunged to 20,000. That worked so well that in 1974 rent control was expanded again and construction was cut in half, to 10,000 units.
Adding rent control to the already impossible zoning, eco-meddling, and other bureaucratic roadblocks to new construction will make California’s housing problem geometrically worse. Smart voters will vote ‘no’ because, “housing shortage is not a problem that is going to be fixed by men with gavels. It’s going to be fixed by men with hammers.”
Michael Reagan, the eldest son of President Reagan, is a Newsmax TV analyst. A syndicated columnist and author, he chairs The Reagan Legacy Foundation. Michael is an in-demand speaker with Premiere speaker’s bureau. Read more reports from Michael Reagan — Go Here Now.
Michael R. Shannon is a commentator, researcher for the League of American Voters, and an award-winning political and advertising consultant with nationwide and international experience. He is author of "Conservative Christian’s Guidebook for Living in Secular Times (Now with added humor!)." Read more of Michael Shannon's reports — Go Here Now.