On Thu, 8 Jun 2000, Brad De Long wrote:
> >To return to the original question, Seth, the conventional rent control
> >argument that Krugman parrots assumes that new construction will be
> >controlled. But in actually existing schemes like SF and NY, it isn't.
>
> It isn't *now*. But at some point in the future what was to us new
> construction will be old construction, and at some point in the
> future there is some chance that it will be brought under the
> rent-control umbrella...
>
<snip>
>
> Of course, this means that you *can't* solve the problem by removing
> rent control--because there remains a chance that some future
> election will bring in a city council that will reimpose it...
>
Follow this argument out, and the spectre of rent control will always be a problem even where it never existed because it someday might. But this is a ghost of the original argument. Now it's not the rent control that exists that's the problem, but the rent control that someday might, and which, by definition, can never be abolished. And thus totally abolishing rent control can't fix it! That's seems more like an argument for keeping it. It's certainly no longer a ringing argument for deregulation.
Brad, you don't think the limit on supply has something to do with the finite supply of land, the finite tolerance for density and the finite tolerance for length of commute? I.e, something inherent to this particular market that makes it a natural monopoly? (Or natural oligopoly?) And thus a good that naturally asks to be regulated to maximize the public good?
It's a separate question where or not a particular scheme is a good one. But in general, economic reasoning seems to argue for regulation, not against it.
Michael __________________________________________________________________________ Michael Pollak................New York City..............mpollak at panix.com