A Disaster in Waiting

The 1985 Genplan Moskvy (General Plan of Moscow), often referred to as the Moscow Master Plan, was the former Soviet Union’s comprehensive urban plan for Moscow encompassing every public service from childcare to food outlets, to transportation to housing.  I’m not going to detail the specifics of this plan because Zohran Mamdani, the anti-semitic New York State Assemblyman and recent winner of New York City’s Democrat mayoral primary did it for us in his policy platform.

Mamdani claims he wants to address the city’s affordability crisis, but his policy positions go far beyond unaffordability and are abjectly indefensible.  Only an apathetic or ignorant electorate could have put him in the position to become the mayor of America’s largest city and the world’s financial center.

I’m not going to touch his policies on defunding the police, ending cash bail, decriminalize drugs, establishing safe injection sites, repealing mandatory minimums for violent crimes, or how after the George Floyd riots cities around the country tried soft on crime policies with predictable results.  If someone doesn’t see the idiocy of Mamdan’s positions the individual is an idiot and reading this post isn’t going to change that.

Instead, I want to focus on Mamdani’s economic platform and rent control in particular because the economic forces inherent in rent control, apply to all his economic policies.  And let’s begin with the fact that there is no such thing as a free lunch in economics and “no cost childcare” is the poster child.  No one is going to volunteer to care for other people’s children for free.  Nor is there such a thing as “free public transportation,” the last time I checked, bus drivers like all city workers receive paychecks, and somehow, I don’t see city-run-grocery story supplanting Whole Foods.

And here’s the irony in New York City’s “affordability crisis” – the city is unaffordable because of failed democratic governance, to wit:   Rent control and eviction limits have caused landlords to take tens of thousands of apartments off the market.  A higher minimum wage raised the cost of food and other basics, while rich union contracts have kept transportation inefficient and costly, and climate bans with their ridiculous mandates have raised the cost of energy.

~ Basic Economics ~

The first thing the voting public needs to understand is that whether an economic system is capitalist, socialist or feudal, economic policies and economic systems need to be examined in terms of the incentives they create, rather than the goals they proclaim.   Why?  Because people act upon what they perceive as being their best interests – I think the scientific term is “human nature.”  And regardless of what ‘school of economics’ one subscribes to, there are two basic economic realities that are as persistent as is the law of gravity.

• Economics is the study of the use of scarce resources that have alternative uses, and…
• What everybody wants adds up to more than what is.

And no economic system ever devised has escaped this economic reality – you cannot make a square circle!

~ A Sterling Example ~

The law of supply and demand is a fundamental economic principle that explains how prices and the availability of goods & services are determined in a market economy.  As the price of goods fall, people buy more, and as the price of goods rises, suppliers will supply more of it.  But when rent controls are introduced, that equilibrium is disturbed and artificial market adjustments always result in unintended consequences.  History reveals that housing shortages follows rent control because landlords have less incentive to maintain existing buildings and investors have less incentive to build new rental properties when they can’t earn a fair profit – it too is called human nature.

When landlords get caught in a cash squeeze because of frozen rents the first thing to go is usually the building’s maintenance resulting in the deteriorating housing conditions we see in big cities like New York, Chicago and San Francisco.  Additionally, when rents are kept artificially low, people tend to stay in living units they no longer need or even want because their living situations have changed but stay because they are cheap.  This is how black markets are created and how under-the-table payments and political connections soon determine who gets to live where.

Is it any wonder we have so much homelessness in our big democrat run cities?  Ask yourself, would you invest in an apartment complex if you could not earn a fair profit?  This is why wherever rent controls exist; we find new construction either lacking or non-existent and an abundance of abandoned or deteriorating housing units.

Rent control, similar to all far-left economic policies are throwbacks to the former Soviet Union –  policies that inevitably cause more harm than good, especially for the people far-left loons tell us they’re intended to help.

Quote of the day: “There is no shortage of housing under rent control; only a shortage of housing that is both affordable and available.” – Forbes Magazine