It is remarkable how many political “solutions” today are dealing with problems created by previous political “solutions.” Three examples that come to mind immediately are the housing -market crisis, the wildfires in southern California, and the water shortages in the west.
In the San Francisco Bay Area, where housing prices are the highest in the nation, risky interest-only loans went from being 11 percent of all new mortgages in 2002 to being 66 percent of all new mortgages in 2005.
Study after study has shown that housing prices are highest where government restrictions on building are the most severe. That is the ugly result of pretty words like “open space.”
Maybe Sowell has a point. See, I lived in the Bay Area for a while. Part of the reason people find it to be desirable place to live, part of the reason pay a lot of money to live there, is because it has the open spaces and the facilities. I would think the magic of the free market – the prices people are willing to pay to live in San Francisco – would tell Sowell something about the value people place on these open spaces.
Why would people risk building million-dollar homes in the known paths of wildfires? For the same reason that people choose to live in the known paths of hurricanes. Because the government — that is, the taxpayers — will get stuck with a lot of the costs of dealing with those dangers and the costs of rebuilding.
Yes, and why do consider building in areas with tornadoes, or prone to floods, or where blizzards might shut the place down for a week, or where there are droughts, or where you might end up in contact with animals that have rabies, or where there are gang members? All of these situations end up having “government solutions”. But guess what… that’s everywhere in the US. There is no idyllic place we’d all move to if only the government didn’t encourage us to make stupid decisions.
That’s not to say the government doesn’t make a lot of problems. It certainly does. The Housing bubble was spurred on by Greenspan’s massive rate cuts, which were intended to do something about getting the economy moving again that GW tax cutting policy wasn’t doing in 2001 and 2002 and 2003. And of course, Sowell would never mention the National Debt, caused by cutting taxes and simultaneously spending massive amounts of money – a combination known as a Reagan.