How PRICE CONTROLS Leads to Big Government

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Күн бұрын

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@Omer1996E.C 2 ай бұрын

This is one of the best, if not THE BEST content about price controls. Easy to understand, short, simple and has strong arguments

@YashArya01 2 ай бұрын

Extremely important topic and great presentation, but touches on too many topics to establish this point. People who are just starting out to understand prices, price controls, and rent controls, may not necessarily also understand deficit spending and inflation.

@christiangrosjean2980 2 ай бұрын

True limit the scope to prices as signals and the most elegant communication system humans have developed. Price controls are not just ineffective but morally evil.

@Sound557 2 ай бұрын

Another kind of rent control is limits on RATE of increase, instead of creating an absolute price ceiling. California’s Prop 13 is an example of this and it’s worked out how you’d expect.

@partydean17 2 ай бұрын

I've been waiting for a video about exactly this. It's such a critical part of what worries me about progressives is how I already know what their solution is to the unintended, more government distortions. Then more and more problems until we are in a crippled and unfree state. And then they would wonder what went wrong

@Slugma-kx7pv 2 ай бұрын

The Importance of prices is to signal to producers where to supply. Higher profit margins means there is a shortage and lower profit margins means the supply is being met with demand. If you have profit loss, then there is a surplus. People who don't realize the law of scarcity and its signal, prices, are doomed to frolic fantasy and starve in reality.

@turboredcart 2 ай бұрын

Folks who want rent controls, need to realize carry costs. IE property tax, ins ect

@benjaminlehman3221 2 ай бұрын

These problems wouldn’t exist if the government didn’t increase the money supply. Inflation not only increases prices because the dollar value decreases but attempts so solve high prices with giving money it has the same undersupply issue as a price ceiling.

@robloxmaverick77 2 ай бұрын

By your idea of a quantifiable money supply an increase in population growth would lead to less currency per person. This may just lead to more people saving their money which becomes scarce (not as good for businesses who need consumers); if they spend it, the money supply will be concentrated in the hands of a few owners, creating large income inequality. An economy requires government injection to prop up demand so firms can continue to invest and consumers can continue to purchase

@tinyleopard6741 2 ай бұрын

@robloxmaverick77 Credits can handle that too, and in some places, several currencies can be used. Actually these two phenomena seem to happen whenever the government messes up.

@andrewkerr5296 2 ай бұрын

what? The Money supply has ALWAYS increased regardless of what entity has the Monopoly The problem has always been, sheep voting for more Centralization which then limits the ability for the Private Sector to produce

@Libertaro-i2u 2 ай бұрын

And if nimbyist local zoning wasn't a thing. Zoning creates artificial scarcity in the housing market by curtailing new builds.

@andrewkerr5296 2 ай бұрын

@@Libertaro-i2u Living in Australia I know all too well

@thisiscompletelyreta 2 ай бұрын

Theres alot of bad conclusions in this. But the easiest one is rent price controls dont create housing shortages. Rent controls are put in place BECAUSE of housing shortages. If you have adequate or a surplus of housing availability rent prices will control themselves. Basic supply and demand. If you have a shortage of housing. A basic human need. Then prices can and do skyrocket. When theres 500 units available for rent and 5000 people looking for a place to live landlords can set the price to whatever they want. People pay or live on the street. Then all the other landlords see the prices rising and do the same. And you get into the situation here where an average 1 bedroom apartment costs $2000/month. Rent controls won't stop people from renting. Theyll still have houses just to make a second income. At most theyll sell it and cash out on the investment, and that would be even better for the housing market.

@marcusmoonstein242 2 ай бұрын

You misunderstood his argument. Step 1 is rent goes up because of a housing shortage. Step 2 is instead of fixing the housing shortage the government imposes rent controls. Step 3 is the artificially low rents attracts more people into the rental market which makes the shortage even worse. Step 4 is because there is not enough profit to be made from building new housing developers don't build enough new housing to meet the increased demand, which makes the shortage even worse. TLDR: the rent controls were initially imposed because of the high prices caused by the housing shortage, BUT the long-term effects of rent control is that less new housing gets built which aggravates the existing housing shortage. Rent controls do create housing shortages.

@Libertaro-i2u 2 ай бұрын

Actually, housing is not a need, it's shelter that's necessary for survival. A fully functional apartment or house is not a necessity for survival.

@goldieswitzerlox 2 ай бұрын

🎉 everything is a lie.

@lucasworktv Ай бұрын

Thank you ❤🙏

@Anti-CornLawLeague 2 ай бұрын

I recognize that flag of St. Louis on your shirt.

@Sandwichking-hikes Ай бұрын

The ever increasing money supply leads to the inflation that price controls try to counter, and they never blame the excess money creation.

@daviddelgado6090 Ай бұрын

Interesting that the thesis begins with rent control and not with low wages.

@steven7936 2 ай бұрын

America has a lot of spare land, why not build more low income housing? That would drive prices down.

@jonathanjones3126 2 ай бұрын

Who is going to pay for it, manage it etc. Housing tends to get built in cities where jobs are. If you built massive welfare housing in the middle of nowhere then you have to provide food and other services because their won't be enough jobs for people to be self sufficient. I would be build welfare housing in the middle of nowhere but never trust the government to run it.

@siggyincr7447 2 ай бұрын

Depends on what you mean by low income housing. Do you mean privately built low cost homes that will sell on the market for prices that the builder can still run a profit on? Municipalities across the country have made that nearly impossible with permits, zoning and code requirements. It's almost impossible to find a place that will let you build a home that will sell for less than $300k that you could still make money on as a builder. Or are you talking about government run housing projects? In which case you need only look to historical examples to see they have a horrible track record. Not to mention that no one wants them in their city because they inevitably attract the type of people you don't want as neighbors.

@DangRenBo 2 ай бұрын

Location, location, location

@Libertaro-i2u 2 ай бұрын

And maybe make the development a co-op rather than government run housing project. Giving low income people skin in the game encourages them to take care of their dwellings and neighborhoods and makes it less likely that the development becomes rundown and crime infested.

@jonathanjones3126 2 ай бұрын

@Libertaro-i2u you still require all of the services including food, schools, hospitals and on and on

@christiangrosjean2980 2 ай бұрын

Generally great video. Except up-zoning an area wouldn’t force shit. Thats not at all what zoning laws do. ALL zoning laws do is restrict property rights of owners to use their property as they see fit. They restrict what can be built not force what must be built. Zoning laws should have been ruled unconstitutional in Ecluid v Amber. So all up-zoning does is peel back a bit of an arcane law, making it less restrictive. It would be like me saying you may only use this land for farming and you ask to build a barn and i refuse. But later I change my mind and allow for barns. Thats whats actually happening. Changing a single family house zoning to multifamily or anything more dense is simply allowing for more flexibility and a freer market. It’s the same concept as removing a price control which we all agree price controls are bad.

@matthewash7651 Ай бұрын

Libertarian mayor. Your better than porn. Subscribed

@lucagattoni-celli1377 2 ай бұрын

The road to communism is terrible framing that normal people will not relate to. A better framing would be that rent control does not leave people better off. Especially not poor people.

@robloxmaverick77 2 ай бұрын

I think looking at housing as a perfectly competitive market is a faulty assumption here. If rents were reduced by a price control, more people could afford the asking rent, yes. But I don’t buy the idea that some houses will reject to offer rents at that price and thus not rent out their property. They will rent anyway. The two issues are that (1) the same rent control across the board doesn’t account for the heterogenous nature of houses/apartments; and (2) is that rent controls should be met by a shift in supply according to population growth so there is a greater quantity of affordable rentals on the market.

@DangRenBo 2 ай бұрын

Everything is an opportunity cost. Is the investment into real estate a better return than that same investment into something else? Sure, current owners will likely continue to rent out units they already own, but they may not do the work to build more. Or if controls don't allow the owners to service debt, then banks will repossess and those units will likely stay empty.

@amargasaurus5337 2 ай бұрын

Yes, under certain circumstances government regulation can most certainly lead some people to keep their property empty. I know that to be true as I've seen it with my own eyes for years. I used to live on a town heavily dependant on tourism, meaning that aside from summer and winter season there wasn't much demand, but ON those seasons demand would spike to the heavens and hotels would make a good chunk of income. Because of that sudden spike in demand, it made no sense to rent property year-round to a single tenant, as you'd earn the same amount from the property with a much, MUCH higher amount of wear and risk of significant damage to it, compared to 3 months of intensive tourist use. Where does rent control come in? Well, the government in my country has a truckload of rent legislation meant to defend tenants, some of which included a minimum contract time of 2 years (later increased to 3). Due to this, it was literally ILLEGAL to rent property on 6-8 month long contracts to accomodate people during the winter season. Legislation meant to protect tenants ended up forcing them to compete directly with tourists, driving monthly rent prices way beyond most people's means and resulting in lots, LOTS of property spending 8 months empty and 4 in use (if one's not so optimistic more like 9 and 3). While I understand that it's a special case and not applicable to most places, my point is that excessive legislation, even when meant to protect the consumer, can often have unforseen side effects and make the situation worse, ESPECIALLY if said legislation is made in a capital hundreds of kilometres away and signed off by people who can't even know about (nevermind actually consider) your local economy. Had this legislation not been in effect, I'm confident in my old town you'd have had a secondary rent season during winter where hotels would have rented monthly at comparatively low prices to people that mostly worked from home and wanted to take an extended (and affordable) vacation or worked from home and didn't mind moving out in summer. I know the demand was there cause I met people that wanted that kind of deal, but alas the government made it illegal so screw both tenant and landlord I guess.

@mwatercress Ай бұрын

"But I don’t buy the idea that some houses will reject to offer rents at that price and thus not rent out their property." You don't need to accept the idea but it has been happening for years. Thousands of units are being warehoused in NYC alone. I witnessed it firsthand with rent control in Santa Monica. There were two apartment towers a block from the beach and as the owner regained procession of the units they kept them vacant. Ten or fifteen years later the towers were razed, and condos were built. One of the challenges of your proposal is the very poor track record of central planners to optimize inventory levels. Another challenge is that government sponsored housing tends to come at a much higher cost than comparable market rate housing. Another example from Santa Monica is that they are building a large apartment complex on city owned land and it is costing almost $1,000,000 per unit not counting the value of the land. Adding this modest entry level inventory was more costly than the median home price including the value of the land. California is about 3 million units short of current need due to government infringement on private property rights (punitive impact fees, CEQA, restrictive zoning, and rent control). California (the fifth largest economy in the world) also has a $75 billion deficit that must be balanced so building 3 million $1,000,000 units doesn't seem realistic. In California the median home sells for about 10 times the median income. California has a long history with rent control in many communities and statewide rent control since 2019, on some types of building. Californian have been moving out of the state to find more affordable housing and they find it in states without rent control that also have stronger property rights protections. Many moved to Texas where the median home sells for about 5 times median income. Texas was able to maintain relative affordability with significant population growth due to private developers adding inventory. If rent control in combination with public housing were an effective means of maintaining affordability, NYC with many decades of rent control and one of the largest public housing portfolios in the world, would be an affordable market for the working class. It is not at all.

@patrickvernon4766 2 ай бұрын

Liberal democracy gov is big government. A monarchy is far smaller. A dictatorship is far smaller. Who cares about the size it’s about the quality why do you people keep talking about the same non issues year after year

@davianoinglesias5030 2 ай бұрын

Price controls are necessary in a world where 85% of the wealth is held by 10% wealthiest people. The free market has resulted in a few winners who control entire supply chains, it's therefore necessary to ensure that these few wealthy people do not hold humanity hostage like big pharma is doing in the US

@wastingmylifeaway4898 2 ай бұрын

The reason why big pharma is so powerful isn't because of the free market, it's because of FDA regulations that price competitors out of the market. For example, there's only one supplier of copper IUDs in the US despite there being many such IUDs available in Europe. Those smaller European companies simply cannot afford the testing required by the FDA to get approved. Additionally, patent ever greening allows for pharmaceutical companies to hold a monopoly over a product indefinitely. This is also a product of government, not the market. Of course some patent protection is likely desired to increase confidence that research will be rewarded; but once a patent expires, that should be it. No new patents for a product that is only different on a surface level. The reason why so much wealth is held by the few is because government regulations raise the barrier of entry so high that people simply cannot afford to create new wealth in most cases.

@coachtaewherbalife8817 2 ай бұрын

What you're describing is not what we're seeing, though. Housing prices have skyrocketed beyond what people can afford, but this wasn't the result of a shortage or scarcity. It is the result of monopolistic/oligopolistic behavior on the part of investors. They have purchased the houses, not for personal use, but rather to artificially inflate the prices for higher returns. In effect, they have created a minimum price, not by the govt, but by private investors owning the product and refusing to sell at regular prices based on market forces. The regular consumer of these products has been priced out of the market. This is the type of situation where govt intervention is helpful in preventing capitalist greed from exploiting a less powerful entity. The solution is not rent control. This is a clear case of price gouging taking advantage of a less powerful entity. The solution is taking away the right of investors from cornering the market for corporate profits, perhaps by restricting the purchase of so many homes not for personal use.

@EveryDooDarnDiddlyDay 2 ай бұрын

Which is why the government and banks shouldn't be allowed to own property. Thats not a free market.

@coachtaewherbalife8817 2 ай бұрын

@EveryDooDarnDiddlyDay I thought the housing had been purchased by private investors.

@EveryDooDarnDiddlyDay 2 ай бұрын

@@coachtaewherbalife8817 Eventually, but the government and the bank can and does seize property