Eight nights of mailbag

YIMBYfornia, white collar crime, and the future of the post office

Merry Christmas and Happy Hanukkah! I hope everyone has had a festive holiday season and is looking forward to the New Year. There’s no school, of course, so Kate and I are primarily focused on family time this week, but the takes continue to flow!

Aaron: If California went 100% full statewide YIMBY tomorrow (e.g. banned all local zoning and parking minimums, reformed CEQA, allowed single stair, the whole nine yards); how long would it take for San Francisco or Los Angeles housing costs to drop to what we see in Sunbelt cities? 2 years? 5 years? 10?

Or if they would never drop that low, what do you think is reasonable level they could reach in a few years? I’m curious what the floor would be on rent in YIMBY-topia.

I don’t think the prices would ever equalize because of the fundamental underlying question of land scarcity. The relevant comparison is probably between coastal California and Florida. Florida has above-average housing costs because people are willing to pay a premium to be close to the ocean, and there’s only so much ocean-proximate land.

In Miami, they build tall condos right on the beach in a way they don’t allow in Santa Monica. This prevents prices from spiraling totally out of control, but you’re still talking about a relatively expensive form of construction on relatively expensive land. This means Miami doesn’t get Atlanta sprawl levels of cheapness, just cheaper than California levels of cheapness.

But note the main virtue of California YIMBY-topia isn’t that average housing costs would fall, it’s that the quantity of people living there would be much larger. The Bay Area is home to three of the top five (and five of the top ten) companies in the world, and in principle should be a Tokyo-scale megalopolis that’s creating upward economic mobility for millions and millions of people who don’t work directly in the high tech sector. The high price of housing is the visible cost of NIMBYism, but the invisible cost of tons of people moving away from such an incredible hub of innovation and prosperity is much larger.

Steve Engel: It seems like most commentators interpret the election results as support for their prior beliefs: If they thought beforehand, e.g., that the Democratic party was too coastal elitist, or not populist enough, or too left-of-center, or bad at social media, they tend to see the election results as confirmation that they were right all along. Not at all to lump you with them, but I wonder, is there anything about which the election caused you to strongly revise your views?

I don’t really think the election result should change anyone’s views much, because the result itself just wasn’t particularly surprising. We didn’t see a huge polling error, and the tipping point state was exactly the expected one. So while I think a lot of people have the wrong take on the election because they entered it with inaccurate priors (whereas I have the right take on the election because I entered it with correct priors), I don’t think much happened that would particularly cause anyone to re-evaluate anything.

One thing that hasn’t gotten a lot of attention but that did surprise me at least a little was the extent of the rightward swing in places like Tennessee, South Carolina, and Arkansas that were already very conservative. There’s been a lot of post-election discussion about voters in New York and California revolting against some blue state governance issues. But the non-backlash against right-wing policy entrepreneurism (including very strict abortion bans, K-12 school vouchers, and so forth) in these states is equally notable in my view. I don’t know exactly what follows from this, but I do think it’s a noteworthy contrast. It’s easy to find Republican governors leading GOP trifectas in red states who are both popular with their voters and well-regarded by conservative activists and intellectuals. There’s actually nobody like that on the Democratic side. It’s easy for guys like Andy Beshear and Roy Cooper to be broadly liked by all factions of Democrats, because they wield such limited power. Jared Polis seems popular and successful to me, but he’s not well-liked by progressives.

Wandering Lama: A couple of weeks ago you mentioned that if people wanted more CEOs to go to jail in the fallout of things like a financial crisis then congress should take action to help that happen.

1. Do you think it would be socially valuable for more C-level executives to go to jail over corporate related actions?

2. What reforms in particular would you like to see?

What I was saying is that there’s this myth that Obama “went soft” on bankers during his presidency, and the evidence supporting it is that nobody went to prison. But the reason nobody went to prison was they hadn’t committed crimes. That’s why so much time and energy was spent on passing Dodd-Frank and then on the subsequent agency-level rule making.

Now, a related point to that is that in general, the evolution of American legal doctrine has been to make it very difficult to secure convictions for white collar crimes. The Supreme Court has dramatically narrowed the permissible scope of “honest services theft” as a prosecutable offense, and white collar prosecutions generally require you to demonstrate that the defendant acted with criminal intent rather than making a mistake. This is hard to prove and means people can get away (criminally, at least) with all kinds of scammy conduct, as long as they don’t leave a paper trail explicitly demonstrating awareness that their conduct was scammy.

I don’t know that I have particularly good remedies for any of this. I’m really just saying that I think “he should have thrown bankers in jail” is a lazy and shallow critique of Obama.

Freddie de Boer: You’ve idly endorsed the “privatize the post office” take before, which typically suggests that companies like UPS or FedEx can take over. There’s a dozen good rebuttals of this attitude out there, published in various places — those companies do nothing like the volume that USPS does for many or most types of mail, their lack of profitability shouldn't be a problem because it’s not a for-profit entity, their fiscal problems are a result of a lot of dumb rules mandated by Congress, mail delivery to remote rural places will never be profitable unless the rates are exorbitant, huge swaths of the American economy are dependent on the subsidized rates of USPS and couldn't survive under a profit-generating delivery system.... I think it would be worthwhile for you to unpack those critiques/one of those critiques to better explain your take on the future of the post office.