I would be the first to argue that if an economist claims to know of a cure-all policy — a reliable way to relieve a long list of social ills in one fell swoop — common sense tells you to stop listening.
So it is awkward for me to declare that I know of something close to a panacea policy: one big reform that would raise living standards, reduce wealth inequality, increase productivity, raise social mobility, help struggling men without college degrees, clean the planet and raise birth rates. It’s a sweeping reform that Democrats and Republicans, progressives and conservatives could all proudly support.
The panacea policy I have in mind is housing deregulation. Research confirms that there are large benefits in saying yes to tall buildings, yes to multifamily structures, yes to dense single-family development and yes to speedy permitting. The growing YIMBY (Yes In My Backyard) movement already has high-profile wins in Minnesota, Oregon, California and beyond, but even YIMBY devotees rarely appreciate the scope of the merits of loosening rules on housing.
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What would happen if homebuilders could once again freely build until housing prices were driven back down to cost? According to a conservative estimate, prices would ultimately fall about 50 percent on average nationally — with significant, wide-ranging implications. The most direct would be a sharp jump in the average American’s economic well-being. Since shelter is now roughly 20 percent of the average American’s budget, halving its price makes the cost of living 10 percent lower — and the standard of living 11 percent higher. This would be welcome news for those struggling to make rent or buy a first home. And while current homeowners would see their house values drop, those who sold to developers could still make a killing.
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Housing deregulation would be especially advantageous for one of America’s most downwardly mobile demographics: men without college degrees. Anne Case and Nobel Prize recipient Angus Deaton famously called attention to non-college males’ poorer job prospects and “deaths of despair.” But over 80 percent of construction workers have not graduated from college, and almost 90 percent are male. Construction is already a large sector, employing about 10 million workers at an average wage over $37 per hour, well above the average for full-time non-college males. Allowing even mild deregulation would therefore create millions of promising career paths — and well-paid ones at that — with full-throated deregulation adding millions more, all without requiring disaffected young men to learn to code.
Keith Richburg reports on the CCP authoritarianism now swallowing the once-great city of Hong Kong. Here’s his conclusion:
Hong Kong officials’ words belie their internal contradictions. They dismiss the expat exodus as wholly insignificant. But when outsiders say Hong Kong is becoming just another mainland city, they fire back indignantly — still keenly sensitive to any foreign criticism and eager to defend the city’s status as distinct from China.
They are finding out how difficult it is to tell both stories at once.
Brian Riedl warns of America’s worsening fiscal incontinence. A slice:
When President Joe Biden delivered his 2023 State of the Union address, Washington was drowning in a sea of red ink. The annual budget deficit was in the process of doubling from $1 trillion to $2 trillion in a single year due to some student-debt cancellation shenanigans. That year’s budget deficit would become the largest share of gross domestic product (GDP) in American history outside of wars and recessions. Economists at the Congressional Budget Office (CBO) and across the political spectrum warned that continuing to ignore the escalating Social Security and Medicare shortfalls while also opposing new broad-based taxes was unsustainable and could bring a painful debt crisis.
How did the nation’s highest elected officials respond to this economic challenge? Biden promised that “if anyone tries to cut Social Security [or] Medicare, I’ll stop them. I’ll veto it.” He also accused congressional Republicans of plotting to reform these programs—prompting outraged shouts from Republicans who resented the accusation of caring about the looming insolvency of the Social Security and Medicare trust funds. When the president triumphantly taunted that such boos reveal a new bipartisan consensus to do nothing about Social Security and Medicare shortfalls, both Republicans and Democrats leaped to their feet with thunderous cheers. For good measure, both parties endorsed Biden’s prohibition on any new taxes for 95 percent of families. Washington’s dangerous borrowing spree would continue with enthusiastic bipartisan support.
Sarah Montalbano details some of the contradictions of Biden’s climate policy. A slice:
The Bureau of Land Management on June 28 quietly shut down the last hope of the proposed Ambler Road project in northwest Alaska. Simultaneously, the bureau also recommended that no mining, oil or gas development be allowed across 28 million acres of Alaska’s federal land under the Alaska Native Claims Settlement Act.
The decisions limit economic opportunities for Alaskans, but East Coast denizens should care too. Denying the construction of the Ambler Road blocks access to a wealth of minerals needed for the Biden administration’s clean-energy agenda. The government’s right hand would be wise to consult what its left is doing.
The Ambler Road was a proposed 211-mile private-access road in Alaska’s Northwest Arctic Borough. The Ambler Mining District holds significant quantities of zinc, lead, silver, cobalt and copper—the last two of which are critical to electric vehicles, solar panels and battery storage.
