Here in Manhattan it is well known to everybody (with the exception of myself) that perfect fairness and justice between and among all people can easily be achieved by the simple device of the government ordering that it be so. Housing is scarce and expensive? Order that it be made "affordable"! Wages aren't high enough? Order that they be increased! Food is too expensive? Order that it be free or subsidized!
Most of the time the conventional press in New York won't provide any information at all on how these kinds of solutions work out in the real world. Which makes this past week highly unusual -- on Thursday, the New York Times ran not one but two front page articles that provided some details on two different coercive redistribution schemes in two very different contexts.
First, from Caracas, William Neuman reported on the ongoing disaster in Venezuela. His article actually provides some real information, mixed in with some of the usual Times spin. There is a picture of lots of empty shelves in a store, and another one of a huge line of people who have come to get their weekly ration of government-subsidized staples:
The basic take of the article, set out in the headline ("Oil Cash Waning, Venezuelan Shelves Lie Bare"), is that the problems mostly stem from the recent decline in oil prices. Current strongman Maduro is quoted as attributing the situation to Venezuela's "right wing enemies":
[Maduro] reiterated his position that the country’s economic ills are the fault of an economic war being waged against his government by right-wing enemies.
But Neuman also devotes space to some basic economic sense:
Many economists argue that government policies are a big part of the problem, including a highly overvalued currency, price controls that dissuade manufacturers and farmers, and government restrictions on access to dollars that have led to a steep drop in imports.
There's even a hint that Venezuela's economic problems pre-dated the decline in oil prices:
Even before oil prices tumbled, Venezuela was in the throes of a deep recession, with one of the world’s highest inflation rates and chronic shortages of basic items.
You won't find details in the article of when Venezuela's recession started or how bad it was well before the price of oil started its tumble in July 2014. For some information on that, try the Manhattan Contrarian from August 2013 here. Venezuela's official GDP numbers are thoroughly dishonest, but from the combination of falling industrial production, massive inflation, and empty store shelves, it's been obvious that Venezuela's economy has been in serious decline since at least 2012, and probably long before that -- even as the price of oil held between about $90 and $110 per barrel for multiple years from 2011 to 2014.
And finally this on the end game of the perfect-fairness state:
On a recent morning, hundreds of people stood in line outside a big-box store, similar to Costco. Inside, many shelves were stripped clean. The large appliance and electronics section was empty. . . . Most people came to buy only three items sold at government-mandated prices: laundry detergent, vegetable oil and corn flour. Every purchase was entered into a database, ensuring that shoppers did not try to buy the same regulated staples at the chain for at least seven days. Soldiers patrolled the line outside, police officers were stationed inside and government officials checked identification cards, looking for fake ones that could be used to cheat the rationing system.
Well, thank God we have soldiers with guns to be sure that no one gets more than their fair share of vegetable oil! And how much do you want to bet that those "government officials [who] check identification cards" are the highest paid people in this system?
And then, on the same day, another article about lines: "Long Lines, and Odds, for New York's Subsidized Housing Lotteries," reported by Mireye Navarro. Navarro lets us in on how it's going with Mayor de Blasio's efforts to create perfect housing fairness by coercing production of some "affordable" units and then allocating those units by lotteries. Here's the report on two recent high-profile lotteries:
Last year, a new building in Greenpoint, Brooklyn drew 58,832 lottery applications for 105 affordable units. Not far behind was the Sugar Hill development in Upper Manhattan, which drew more than 48,000 applicants for 98 apartments.
So there were well more than 100,000 applicants for about 200 apartments -- that's a success rate of around 0.2%. And what happens to the other 99.8%? They get to spend endless hours filling out forms and standing around in lines. Here's a picture of people signing up to attend a "workshop" on how to get in on the lotteries:
And even aside from the hopeless shortage of these apartments, somehow perfect fairness keeps eluding us. Navarro reports that some are complaining because they were excluded from the lotteries for being just above the income cutoffs; others are complaining because their income was below the cutoffs; yet others are complaining because they work multiple and temporary jobs and can't document their income to the penny:
[A]bout three-fourths of the applicants who had been screened were rejected, mostly because their earnings were too low (income requirements ranged from $13,866 to $79,700, depending on the apartment size) or they failed to provide the necessary paperwork. Some missed out by as little as $25 a year, the developer said. Other applicants had trouble producing tax records or proving their creditworthiness because their employment histories included numerous or short-lived low-paying jobs that are harder to document. And in the months that it took to sort through the candidates, some applicants lost their eligibility because their earnings or family size had changed. (Tenants already moved in are not forced to leave if their circumstances change.) “Hundreds of people were excluded for reasons that were not rational,” Ellen Baxter, the executive director of the Broadway Housing Communities, said of the city’s lottery rules.
But I thought there were all-knowing, perfectly fair, perfectly neutral bureaucrats who could swoop in and allocate everything with exquisitely perfect fairness. What am I missing?
Check out some of the many comments to this article. Lots of them point out the folly of rent regulation, and that we have inflicted expensive housing upon ourselves by one crazy policy after another. Could it be that New Yorkers are starting to catch on? It's a small minority, but it seems that some of them read the New York Times.