Saturday, November 12, 2016

The Real Anti-Immigration Party

Just a friendly reminder that those voters marching against the anti-immigration President-elect live in states that have forced, on net, more than 3 million of their own residents out over the past decade - generally the poorest and least educated.

These are, across the board, our richest, most aspirational, cities, and they have already built magic walls around themselves that only allow in the educated and most well-off residents from the rest of the country.  Everyone else is locked out of their economic fortresses while soaking up those 3 million housing refugees.

Oh, look, now the folks in the Capitol are upset about the lousy attitudes of the proles out in the districts.  How precious.


  1. It's a clever analogy: restricting housing construction keeps newcomers out just as surely as restricting immigration does.

    Whether the analogy is politically helpful is another matter. I suspect a good number of the marchers are skeptical of the very notion of a housing market.

    Of course there are the true lefties who would freeze their favorite "ethnic" neighborhoods in amber; for them, restricting the rights of property owners is a feature, not a bug.

    But here in the Bay Area at least, there are lots of liberal folks who own houses and hold real jobs and are nonetheless skeptical that approving that new apartment building or this new block of townhouses will do anything at all to lower prices, much less house new immigrants. "I'll be damned if I'm going to sit in even worse traffic and compete for on-street parking and send my kid to an overcrowded school so 10,000 more Googlers can move in and fork over $7500 a month to Prometheus." Or something like that. And I find it hard to argue they're wrong, without any clear notion of the costs and benefits.

    What we see as the hypocrisy of city dwellers marching behind their big, beautiful, invisible walls, I suspect they are more likely to view as rationally favoring their clear short-term interests over an uncertain long-term good.

    What can we do to change that? Are there historical examples of closed-access cities successfully opening up?

    1. Great points.

      That's the problem. North, Wallis, and Weingast, whose ideas I'm building on here, admit that few places have ever made the shift, and we don't really have a prescription for how to do it.

      You're right about how they would tend to see it. On the other hand, I'm surprised by how progressives outside of those cities that I know seem to get it when I tell them my version of the story. These are people who generally would have an intuition for solving problems with things like rent control, etc. I think the stark reality of millions of displaced low SES households does move them past the cognitive dissonance they may have about the policy implications. But, you're right. This probably isn't my best tone.

  2. That's an interesting way of looking at it. Is the problem that the growing urban areas are not providing enough housing locally or is it that the refugees are not bringing employment with them?

    NYC, for example, had and still has a lot of government subsidized housing for the middle class - think Mitchell-Lama, the NYHA and other such programs, not rent control or rental vouchers. Those programs, in their better days, relied on high federal taxes and spending. The free market never really balanced well in NYC, at least not since the 1930s. I can imagine, however, that this problem could be solved by a combination of such subsidies as can be afforded and increasing infill, largely replacing two and three story zoning with six story or higher zoning.

    This might ameliorate the refugee problem, but it isn't going to make areas now receiving refugees more economically vital. A big part of the problem is automation. Agricultural automation wiped out the farm towns. Ford and Disney built museums to preserve their memory, but they aren't coming back. Now manufacturing automation has been wiping out the manufacturing towns. Even if we banned manufactured imports, we'd still have a massive dearth of factory jobs.

    Ideally, we could improve the quality of housing cost refugees by driving out people who would relocate their businesses to dying industrial, mining and farming areas, but their businesses have only a limited demand for unskilled labor and greatly benefit from central place dynamics unavailable away from central places. I'm sure we'll be seeing some of this, but there is a lot of resistance to encouraging the kinds of jobs these refugees would bring.

    We are seeing the ugly reaction to a dying way of life. Perhaps some new Ford or Disney will build a museum or theme park. I've often considered the approach in The Hunger Games where we bring back hard rock coal mining because it builds character and provides authentic jobs for real men, though I'd provide better wages and fly injured workers to proper hospitals in those atomic powered hovercraft described in the book. We could bring back harvesting wheat with scythes and, as in the book, issue night vision glasses to workers so they can meet their quotas properly. I'm not too keen on death matches for the children, but I'm just a lily livered liberal and never got into high school football.

    1. The problem is that the transition from manufacturing is into non-tradable sectors. These sectors, by definition, need to exist where their customer base is. That customer base is in the dense cities - the high income information economy workers. So, the workers in the stagnant areas can't get to where the jobs are. This is the technological state of the world right now, and we have political roadblocks set up that prevent this transition from happening. So, the existing real estate owners in the constrained cities are pocketing the portion of the national income that should be going to those struggling workers. Then, to add salt to the wound, those cities suck a bunch of talent from the rest of the country, creating a brain drain, and dump a bunch more semi-skilled and low skilled workers on the rest of the country.

      The income inequality that comes from this obstruction will not be solved until those cities figure out how to add some residential density. Like you say, this is a century long trend in New York City, so it may not be solvable. But, at least we can stop blaming the outcomes on a bunch of other things, like Chinese imports, loose money, or excessive homebuilding, all of which either not causally important or are flat out errant observations.

    2. @Kevin E, these 4 sentences are really right on:
      The problem is that the transition from manufacturing is into non-tradable sectors. These sectors, by definition, need to exist where their customer base is. That customer base is in the dense cities - the high income information economy workers. So, the workers in the stagnant areas can't get to where the jobs are.

    3. Thanks, bill. What's fascinating is that the experts get this. The best papers about the problem of stagnation and labor market stress all talk about the high cost of housing and the lack of migration. They have all the pieces to the puzzle. But, they can't reach the obvious conclusion, because they have this virus in their brain that says there was an unsustainable housing bubble.

      It's a fascinating example of the limits our presumptions impose on our ability to think. They end up concluding that the housing "bubble" only masked the problem of declining manufacturing employment, and once it inevitably collapsed, the stagnation in our labor market was laid bare. The conclusion is refuted by their own set of accepted facts, but they can't get to the right conclusion because of the virus.
      This is why the story of what has happened to us has to be so sweeping. Getting rid of that virus causes the scales to fall from our eyes, and suddenly, all of these obvious conclusions that we couldn't see are right in front of us.

  3. Great post.

    The right-wing and the left-wing do not want to hear about property zoning. That is the reception I get on websites.

    This comment will just about get you banned on a right-wing website:

    "You are against rent control. But you are for property zoning (which can include restricting the supply of housing). How do those two ideas play out? Who benefits when there is no rent control but there are property controls?"

    Egads, the presidential election just played out, and monetary policy and property zoning were debated...maybe on the backside of the moon.

  4. Perhaps a political migration in play. Conservatives leave liberal cities for whatever reasons and those cities become more and more liberal. The areas the conservatives move to become more and more conservative.

    1. I know one or two of those. :-)

      The relationship is surprisingly strong. It was even slightly stronger 4 years ago. If you switch your vote from Republican to Democrat, sometime in the next 8 to 10 years, someone is moving out of your state as a result. (Assuming causality, of course.) :-)