Freedom Studies - Housing, Scarcity, and Incentives

Freedom Studies - Housing, Scarcity, and Incentives

Jon Reisman

Fifty-two years ago, in the fall of 1974, I started my sophomore year as a Colby environmental studies major. Richard Nixon had just resigned over Watergate. The American economy was still reeling from the OPEC reality/nightmare that had doubled the price of oil and gas. I had a 1966 Delta 88 Oldsmobile I had purchased for $500 from my years of paper route earnings delivering the Philadelphia Inquirer, which I guess was my first journalism job. The Delta 88 got eight miles per gallon on premium gas, which was about $0.75/gallon. The first concerns about global warming were emerging (it wouldn’t become climate change for some time). My biggest concern was affordability, not sustainability, despite my ongoing green indoctrination.

In addition to science classes in biology, ecology, chemistry and physics, the environmental studies major required Principles of Economics. I stepped into Professor Hank Gemery’s class and found my calling. More than half a century later, two of Hank’s lessons still guide my thinking: Scarcity (unlimited wants and desires versus finite resources and technology) and incentives matter in resource allocation choices and human welfare consequences; ignoring and/or denying that is a recipe for economic, social, and political disaster. Applying that thinking to environmental policy issues is dangerous, Orwellian wrong-think as far as the left is concerned.

There are few things more threatening and aggravating to a granola-crunching Maine Conservation Voters/Natural Resources Council of Maine true believer than a freedom-loving economist, especially one working at a public university where leftist shibboleths are constructed and worshipped. It’s a wonder I got tenure, and it would never happen today in a higher education environment characterized by a stunning lack of honesty, transparency, and intellectual and political diversity. Hypocrisy rules higher education, and there is little prospect for improvement or change. Saying things like that invites leftist opprobrium and cancellation calls. The problem is, this retired widowed economist is relatively unconstrained by scarcity and has a powerful incentive to see the leftist liars discarded in the dustbin of history. I’m pretty sure the contempt and contrariness are mutual.

Which brings us to the current housing conundrum. Housing in Maine is scarce, expensive, and increasingly problematic. The American dream of home ownership and all the societal stability and benefits that confers (despite leftist contempt of bourgeois values) is in jeopardy. Homeless encampments, drug addiction, and used needle detritus (handed out by “harm reduction” needle exchange programs championed by leftist NGOs who have made the problem worse) are shamefully maintained and encouraged by government policies that incentivize the very behaviors (homelessness and drug use) they allegedly seek to address. Incentives matter. That’s why we have more homelessness, more drug addiction, and more societal chaos. That’s exactly what the left wants.

I don’t know the exact solution to our housing problems, but I know that pretending that government policies driving housing prices up (starting with our disastrous energy/climate policies, which drive costs up for everything and avert no climate change whatsoever) is the base cause of the problem. Since our climate/energy/housing policy was created by Janet Mills, Hannah Pingree, and the Democrats, the only solution I can see must necessarily involve decapitation of the Democratic political machine.

Efforts like the proposed Yellen Pines Homeless Housing “low barrier” drug dens in Bangor are expensive (over $400 K per modular shed-like housing unit) and only incentivize more homelessness and drug use.

I have two policy recommendations. First, we should encourage our tuition-free community colleges to assemble housing rehab teams across rural Maine to fix up the old, deteriorating housing stock that time and generational flight have created. Every town in rural Maine has abandoned housing stock falling into the ground. Addressing that while Mainers struggle to find affordable housing should be a top priority.

Second, instead of building homeless housing pods in Bangor and Portland, we should transport the homeless to the island of North Haven and build the homeless drug dens there, where Chellie and Hannah can see the consequences of their policies.

Jon Reisman is an economist and policy analyst who retired from the University of Maine at Machias after 38 years. He resides on Cathance Lake in Cooper, where he is a Statler and Waldorf intern. Mr. Reisman’s views are his own, and he welcomes comments as letters to the editor here or to him directly via email at jreisman@maine.edu.

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