Sowell: Has Economics Failed?

Creators Syndicate ^ | November 1, 2016 | Thomas Sowell

[jazusamo]

It is especially painful for me, as an economist, to see that two small cities in northern California — San Mateo and Burlingame — have rent control proposals on the ballot this election year.

There are various other campaigns, in other places around the country, for and against minimum wage laws, which likewise make me wonder if the economics profession has failed to educate the public in the most elementary economic lessons.

Neither rent control nor minimum wage laws — nor price control laws in general — are new. Price control laws go back as far as ancient Egypt and Babylon, and they have been imposed at one time or other on every inhabited continent.

History alone should be able to tell us what the actual consequences of such laws have been, since they have been around for thousands of years. Anyone who has taken a course in Economics 1 should understand why those consequences have been so different from what their advocates expected. It is not rocket science.

Nevertheless, advocates of a rent control law are saying things like "this will prevent some landlords from gouging tenants and making a ton of money off the housing crisis."

The reason there is a housing crisis in the first place is that existing laws in much of California prevent enough housing from being built to supply the apartments and homes that people want. If landlords were all sweethearts, and never raised rents, that would still not get one new building built.

[Laser_Ray]

It’s already on two broken legs with the Wal-Mart business model (trade full-time American jobs for cheap Chinese junk goods and pray there are still enough Americans who can afford them) and now automation that threatens to cut the bottom rung off the job ladder

You can’t damn have a functional economy when young people have no reliable way to get job experience and their parents are in danger of losing their own jobs to some near-slave labor overseas.