Will Obama Make Housing Affordable?

Property-rights and housing-affordability advocates were surprised and elated that the chair of President Obama’s Council of Economic Advisors, Jason Furman, gave a speech blaming housing affordability problems on zoning and land-use regulation. They shouldn’t be: while Furman is correct in general, he is wrong about the details and the prescriptions he offers could make the problems worse than ever.

There is no doubt, as Furman documents in his speech, that land-use regulation is the cause of growing housing affordability problems. Yet Furman fails to note the fact that these problems are only found in some parts of the country. This is a crucial observation, and those who fail to understand it are almost certain to misdiagnose the cause and propose the wrong remedies.

Citing Jane Jacobs (who was wrong at least as often as she was right), Forman blames affordability problems on zoning that “limits density and mixed-use development.” Such zoning is found in almost every city in the country except Houston, yet most cities don’t have housing affordability problems. Thus, such zoning alone cannot be the cause of rising rents and home prices.

Based on this erroneous assumption, Furman endorses what he calls the administration’s agenda, which is its Affirmatively Furthering Fair Housing program. Rather than making housing more affordable, this program is aimed at ending racial segregation of middle-class suburbs by requiring the construction of multifamily housing in suburbs that are not racially balanced relative to their urban areas. It assumes that multifamily housing is less costly (and thus more affordable to low-income minorities) than single family, but that is only true because units are smaller: on a dollar-per-square-foot basis, multifamily costs more than single family, especially for mid-rise and high-rise apartments. Multifamily also uses more energy per square foot than single family, which means heating bills will be higher.

CBO: Tangled Web of Welfare Programs Creates High Tax Rates on Participants

The dozens of different programs that form our tangled welfare system often impose high effective marginal tax rates that make it harder for low-income people to transition out of these programs and lift of those programs and into the middle class. As the people in these programs enter the workforce, get a promotion, or work more hours, they can lose a significant portion of those earnings through reduced benefits and increased taxes. A new report from the Congressional Budget Office (CBO) illustrates this predicament: many households hovering around the poverty level face steeper effective marginal tax rates than even the highest earners. These prohibitively high tax rates can discourage work and limit their prospects, ultimately making them less likely to escape poverty.

Debating Police Practices

If you are an advocate for school choice, you must risk being called “anti-teacher” by the political left.  But did you know there is a similar phenomenon on right side of the political spectrum?  If you are an advocate for reforming police practices, you must risk being called “anti-police.”  I experienced this last week when I spoke at the National Convention of the Federalist Society.  In this post, I will briefly describe what happened.

I was invited to speak on a panel titled, “Ferguson, Baltimore, and Criminal Justice Reform.”  By way of background, I have spoken at Federalist Society events many times and the Fed Soc folks have always been professional and courteous.  The panels typically consist of speakers with a variety of viewpoints.  Last week, when it was my turn to speak, my goal was to highlight many reforms that I thought were worthwhile and to explain why.  Among the topics were civil asset forfeiture reform, municipal court reform, getting an accurate annual tally of persons who die in police custody, and a tally of persons shot by the police. 

Robert Woodson, President of the Center for Neighborhood Enterprise, was the final speaker on our panel.  He was mad.  He immediately complained about what we had “heard so far.”  That was a weird complaint.  Four panelists had just delivered their presentations.  Two defended the police against what they said were unfair criticisms.  And two offered ideas for police and criminal justice reform.  Woodson seemed upset that all of the of the preceding talks were not to his liking.

Time to Overhaul the Criminal Justice System?

This week I hosted a debate between two federal appellate judges on the question, “Does the American Criminal Justice System Need an Overhaul?”  Judge Alex Kozinski says it does; Judge Jay Harvey Wilkinson says it does not.  Watch it here and decide for yourself.

By way of background, Kozinski authored a much discussed article titled, “Criminal Law 2.0.”  One problem he identifies (among many others), is that federal prosecutors too often shirk their legal and ethical obligations.  The Department of Justice tried ignoring his criticism, but is now responding.  Here is a snippet from an article in the National Law Journal (November 16 – sorry, pay wall for this one).

Justice Department Rebuts Judge Kozinski’s Criticism of Prosecutors

In a rare public war of words, top officials at the U.S. Department of Justice are pushing back against recent criticism about prosecutors’ ethics from Judge Alex Kozinski of the U.S. Court of Appeals for the Ninth Circuit.

The thrust of the DOJ argument is the familiar, “Trust us – we’ll do the right thing.”  Kozinski rightly insists upon a “trust, but verify” posture as it relates to government promises.

Related items here & here.


Rethinking Monetary Policy – Cato’s 33rd Annual Monetary Conference

monetary policy, federal reserve, plosser, miron, selgin, sumner, john b. taylorMore than two hundred people gathered at the Cato Institute last Thursday for our 33rd Annual Monetary Conference.  Over the course of three addresses and four panel discussions, a distinguished cast of speakers — including St. Louis Fed president James Bullard, Richmond Fed president Jeffrey Lacker, and Stanford economist John Taylor — covered topics ranging from the rights and wrongs of monetary rules, to the ins and outs of the Fed’s long-awaited “exit strategy” from quantitative easing and near-zero interest rates.  If you didn’t make the event, here’s a synopsis.

The WellCare Case Provides an Example of Overcriminalization in Action

Overcriminalization is not a myth. Labyrinthine regulations often produce absurd outcomes, including prison sentences for individuals who do everything in their power, including consulting multiple attorneys, to comply with the law before acting.

A recent op-ed in The Washington Times illustrates the point, using a recent Medicaid fraud case that is currently in front of a federal appeals court:

Here’s a quiz: Which of the following is a federal crime: (a) A hamster dealer needlessly tilting a hamster’s cage while in transit; (b) subliminally advertising wine; or (c) selling a fresh steak with paprika on it?

Give up? The answer: all of the above.

Right now, there are approximately 4,500 federal criminal statutes and 300,000 administrative regulations that can be punished with imprisonment — and the list keeps growing. This is an invitation for our government to over-prosecute. Too often, federal prosecutors are accepting that invitation and rejecting more measured and effective administrative and civil remedies.


In a case that was recently argued before a federal appeals court, executives at WellCare, a managed health care company in Florida, were prosecuted based on their reasonable interpretation of a Florida statute. Federal prosecutors, however, disagreed with the company’s interpretation, even though Florida never issued any regulations contradicting the executives’ reading of the law.

Let’s Talk Turkey

Thanksgiving is almost upon us and time has come for that most sacred of American traditions: bemoaning the rising cost of living. Per this Bloomberg headline on Thursday, “Thanksgiving Meal Costs Most Ever as Bird Flu Hits Turkeys.”

Well, that’s complete and utter nonsense. 

The headline grabbing data comes from the American Farm Bureau Federation, which faithfully records the cost of 12 items (e.g., turkey, pumpkin pie mix, sweet potatoes, etc.) that go into a preparation of a Thanksgiving meal for 10 people.

On the face of it, the nominal cost has risen by $0.70 from $49.41 in 2014 to $50.11 in 2015. Using a BLS calculator, I have inflated $49.41 in 2014 dollars to $49.64 in 2015 dollars. So, the real increase amounts to mere $0.47.

Now let us see what happens when we adjust the nominal cost of Thanksgiving dinners by the rise in nominal wages.