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The seen and the unseen

Summary:
Here is someone arguing against loosening regulations to allow more home building, unless supported by the neighborhood in question: I would only support upzoning in order to create affordable housing if the zoning changes were supported by the community that they would affect. Currently, our land use process provides inadequate opportunity for substantive community input. I oppose upzoning our City’s historic districts. We can address our city’s affordable housing needs without changing the character of our City’s neighborhoods. Here’s another example: Did you know that an advisory panel in San José has recommended the elimination of single-family home zoning on neighborhood streets away from major boulevards and transit? This betrayal of the families in those

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Here is someone arguing against loosening regulations to allow more home building, unless supported by the neighborhood in question:

I would only support upzoning in order to create affordable housing if the zoning changes were supported by the community that they would affect. Currently, our land use process provides inadequate opportunity for substantive community input. I oppose upzoning our City’s historic districts. We can address our city’s affordable housing needs without changing the character of our City’s neighborhoods.

Here’s another example:

Did you know that an advisory panel in San José has recommended the elimination of single-family home zoning on neighborhood streets away from major boulevards and transit? This betrayal of the families in those neighborhoods contravenes the Envision San José 2040 General Plan that was adopted after much civic input. This so-called “Opportunity Housing” concept also contravenes common sense. . . .

[It] is a recipe for neighborhood strife around parking, noise, and privacy. It also goes against the city’s pledge to protect the character of often-historic blocks not on major boulevards or adjacent to transit. Such a move would nuke the neighborhoods that give San José charm, character, and breathing room.

The first statement was made by Maya Wiley, a progressive running for mayor of New York.  The second comes from the Santa Clara California Republican Party.

We are frequently told that America is polarized between liberals and conservatives, and there is clearly some truth in that claim.  But perhaps we are missing an even bigger polarization, between those who focus on the seen and those who focus on the unseen.  (BTW, the title of this post comes from Frederic Bastiat’s brilliant essay on opportunity cost.)

Proponents of NIMBYism on both the left and the right are opposed by those who focus on the unseen effects of zoning restrictions, that is, all the anonymous people who will never be able to live in areas with lots of great jobs because the local residents refuse to allow new construction.

There are many proponents of protectionism in both political parties.  They focus on the easily seen impact of imported goods, which is a loss of jobs in import competing industries.  They are opposed by people on both sides of the ideological spectrum who  focus on the unseen effects of protectionism, such as a loss of jobs in export industries.

A few years ago, a bipartisan group of Congressmen successfully repealed the “Cadillac tax” on health insurance, which aimed to gradually phase out the heavy subsidy that the federal government currently provides to health expenditures made through company insurance plans.  They focused on the easily seen consequences on worker paychecks and health care jobs.  They were opposed by people on both sides of the ideological spectrum, who worried that the subsidy to health insurance causes costs to explode, thus reducing real wages for future generations.

People on both sides of the ideological spectrum often favor fiscal stimulus.  Other people on both sides of the ideological spectrum worry about its unseen effects, such as crowding out.

People on both sides of the political spectrum worry that immigration will reduce wages.  Others on both sides of the political spectrum think about future generations of people who are not now but will become American, and who will be better off because they were allowed to immigrate to America in the 2020s.

People on both sides of the political spectrum favor government deposit insurance to protect savers when a bank fails.  Other people (including FDR) worried about the less visible moral hazard thereby created, the tendency of insured banks to make riskier loans than uninsured banks.

People on both sides of the political spectrum have advocated that universities fire people who make offensive statements about Israel, or about minority groups.  Others worry about the chilling effects of moving away from a tradition of free speech.

Yes, in America we have the Democrats and the Republicans.  But perhaps at a deeper level the actual split is between the party of the seen and the party of the unseen.

Scott Sumner
Scott B. Sumner is Research Fellow at the Independent Institute, the Director of the Program on Monetary Policy at the Mercatus Center at George Mason University and an economist who teaches at Bentley University in Waltham, Massachusetts. His economics blog, The Money Illusion, popularized the idea of nominal GDP targeting, which says that the Fed should target nominal GDP—i.e., real GDP growth plus the rate of inflation—to better "induce the correct level of business investment". In May 2012, Chicago Fed President Charles L. Evans became the first sitting member of the Federal Open Market Committee (FOMC) to endorse the idea.

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