>>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...
>This has happened how many times in New York City? Twice so far?
>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...
Hmmmmm ... this would seem to postulate a much longer planning horizon for real estate developers than casual empiricism would suggest. Since the one thing we definitely *do* know about real estate developers is that they don't look ahead as far as the next recession, I think that this effect is going to be pretty small.
The thing that interested me most about the Krugman article was this bit of economical chest-beating:
Economists who have ventured into the alleged real world [dickhead - dd] often quote Princeton's Alan Blinder, who has formulated what he calls "Murphy's Law of economic policy": "Economists have the least influence on policy where they know the most and are most agreed; they have the most influence on policy where they know the least and disagree most vehemently." It's flip and cynical, but it's true
Since Krugman isn't a real estate economist, and since there is another old economists' proverb which goes "Krugman doesn't read the literature", how on earth did he find out whether real estate economists were in disagreement or not on the subject of rent controls? I know a couple of economists who work for property companies, and although they are indeed opposed to rent controls, the story is much more complicated than the opne Krugman tells. There's another proverb which tells us that "Whenever someone says that 'simple economics tell us' that something or other, we should always remember that less simple economics might tell us something else".
dd
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