Rent Control in Stockholm
Here’s an interesting letter from “Stockholm” to Seattle
Dear Seattle,
I am writing to you because I heard that you are looking at rent control.
Seattle, you need to ask your citizens this: How would citizens like it if they walked into a rental agency and the agent told them to register and come back in 10 years?
I’m not joking. The image above is a scan of a booklet sent to a rental applicant by Stockholm City Council’s rental housing service. See those numbers on the map? That’s the waiting time for an apartment in years. Yes, years. Look at the inner city – people are waiting for 10-20 years to get a rental apartment, and around 7-8 years in my suburbs. (Red keys = new apartments, green keys = existing apartments).
Stockholm City Council now has an official housing queue, where 1 day waiting = 1 point. To get an apartment you need both money for the rent and enough points to be the first in line. Recently an apartment in inner Stockholm became available. In just 5 days, 2000 people had applied for the apartment. The person who got the apartment had been waiting in the official housing queue since 1989!
In addition to Soviet-level shortages, the letter writer discusses a number of other effects of rent controls in Stockholm including rental units converted to condominiums and a division of renters into original recipients who are guaranteed low rates and who thus never move and the newly arrived who have to sublet at higher rates or share crowded space. All of these, of course, are classic consequences of rent controls.
Addendum: More details on Sweden’s rent-setting system can be found here, statistics (in Swedish) on rental availability in Stockhom are here and a useful analysis of the Swedish housing crisis with more details on various policies (e.g. new construction is exempt for 15 years but there isn’t nearly enough) is here. Jenkins wrote a comprehensive review of the literature on rent controls in 2009 that echoed what Navarro said in 1985 “the economics profession has reached a rare consensus: Rent control creates many more problems than it solves.”
Hat tip to Bjorn and Niclas who confirmed to me the situation in Stockholm and to Peter for the original link.
Washington fact of the day
Jeff Bezos' net worth just went up by 29 Washington Posts https://t.co/QYX7CR1tBK
— Matt Anderson (@MattAnderson_NY) July 23, 2015
The progressive closure of San Francisco
…San Francisco does not have a massive network of regional public transit connecting hundreds of different high-density, walkable communities to the city. In fact, neighborhoods that foster urban life and convenience are tremendously scarce in the Bay Area. All of this means the pressure on San Francisco has proven to be even greater than other cities in the country.
Regardless of these realities, most San Francisco progressives chose to stick with their familiar stance of opposing new development, positioning themselves as defenders of the city’s physical character. Instead of forming a pro-growth coalition with business and labor, most of the San Francisco Left made an enduring alliance with home-owning NIMBYs. It became one of the peculiar features of San Francisco that exclusionary housing politics got labeled “progressive.” (Organized labor remained a major political force throughout this time period, and has allied with both pro-growth and anti-growth forces, depending on the issue.) Over the years, these anti-development sentiments were translated into restrictive zoning, the most cumbersome planning and building approval process in the country, and all kinds of laws and rules that make it uniquely difficult, time-consuming, and expensive to add housing in San Francisco.
That is from Jed Kolko, hat tip to Conor Sen.
The University of California raises its minimum wage
University of California President Janet Napolitano announced Wednesday the school will become the first to raise the on-campus minimum wage to $15 an hour.
“This is the right thing to do,” Napolitano said at a meeting in San Francisco. “For our workers and their families, for our mission and values, and to enhance UC’s leadership role by becoming the first public university in the United States to voluntarily establish a minimum wage of 15 dollars.”
The raise will benefit college employees who work more than 20 hours a week. It will also be applied to thousands of contractors working with the school.
Arrived in my pile
John Kay, Other People’s Money: The Real Business of Finance. This seems to be a book on what is wrong with finance and how to fix it.
The *Financial Times* as a purely digital product
The word is now in, Nikkei is the buyer, but Pearson is keeping The Economist.
I find the Financial Times works well as a purely digital product, and of the major newspapers it is the one I can most easily imagine reading digital only. From a newspaper I care not only about the amount of absolute content, but also the sense that I haven’t “missed anything.” Often I find this feeling of completeness hard to get from digital editions, even when they are fairly well done. There is too much content, with too many overlapping categories, to organize everything neatly. There is a new set of stories up before I am sure I really have culled through the old. The FT runs fewer stories, has fewer sections and content areas, and the wonderful Saturday edition has a relatively transparent structure which I can navigate on-line.
Would it be so terrible for other newspapers to concentrate their arts and leisure coverage, or their book reviews, on one or two days of the week? Digitalization might eventually bring that about, for greater ease of navigation. In the digital world, “less content” seems less miserly, because a universe of alternative content is at your fingertips in any case.
One equilibrium is that more newspapers copy the FT in their greater focus. Another equilibrium is that only the FT goes digital only. A third option is that the home page dies altogether, even for major newspapers, and this difference between the FT and other papers ceases to matter altogether.
Here is a good Nieman article on the economics of the FT.
Addendum: Here is Peter Thai Larsen: “In 1987 Pearson sold the FT’s building to a Japanese buyer and kept the paper. Now it’s selling the paper and keeping the building. Discuss.”
China fact of the day
Recent overweighting to stem A-share plunge has made China Securities Finance Corp (CSF), central bank-backed refinancing institution, among top 10 shareholders of many listed-firms, reported Securities Times on Wednesday.
Among all investments, eight firms have been confirmed of the CSF’s stake, which include property developer Dulexe Family, Hualan Biological Engineering, resource purifying developer SJ Environment Protection, Yunnan Tin Company Group, Fujian Cosunter Pharmaceutical Co, Hunan Er-Kang Pharmaceutical Co, digital map provider NavInfo Co, and retailer Friendship&Apollo.
The CSF has been listed as the second-largest holder of tradable shares at Cosunter Pharmaceutical, third largest at SJ Environment Protection, and fifth-largest shareholders at Yunnan Tin Company, according to the Times citing disclosures to Shanghai and Shenzhen stock exchanges.
There is more here, by ChinaDaily, via Patrick Chovanec. I wonder how they are planning to unwind all of those share purchases?
Thursday assorted links
3. The upside of bride prices?
4. Henry on the Very Serious People.
5. Imprisoned books.
6. “That’s why the saga of these two deworming trials should be regarded as a pivotal point in history.”
7. Is the media becoming a wire service? Also read the cited pieces at the end of the article.
Is there a great teen sex stagnation?
The share of teen girls who reported they’ve had sex at least once dropped from 51 percent in 1988 to 44 percent in 2013, they found. Abstinence was more pronounced among the guys: 60 percent of teen boys in 1988 said they’d had sex, compared to 47 percent in 2013.
That is from Paquette and Cai, the underlying CDC study is here. One major hypothesis is that teen sex has declined because smart phone usage is up. Teens are both better informed about the risks of sex and…they have something else to do.
Wednesday assorted links
1. Daniel Davies defends the 2010 bailout of Greece.
2. Indian markets in everything: Andhra Pradesh pays beggars to stay away from festival. Many are trying to claim the benefit, but verification of beggar status is required.
3. What are the most popular picks on freshman reading lists?
4. The tiny islands where Canada and America are at war (puffin photo too).
6. Singapore arts festival, September in NYC, more here. Be there or be square.
7. Uh-oh.
Taylor Swift, Straussian?
The singer is launching her own Taylor Swift-branded clothing line next month, on the platforms of local e-commerce giants JD.com and the Alibaba group, with t-shirts, dresses and sweatshirts featuring the politically charged date 1989.
The date – as well as being Swift’s year of birth – refers to her album and live tour of the same name, which she will perform in Shanghai in November.
But the date – and the initials TS – are particularly sensitive in China, as they signify the Tiananmen Square massace in 1989, when hundreds of students were killed in pro-democracy protests.
There is more here. Here is a story on the map of China accompanying Dwyane Wade.
Patent Trawls and the Total Profit Rule
Patents should be made more difficult to obtain, say by raising the obviousness standard or more speculatively by requiring patent terms to vary with investment. Aside from these types of changes, however, damages for infringement can also be made more reasonable. The issue is especially pronounced for design patents.
In the recent Apple v. Samsung case, the infringement of a handful of “look and feel” design patents resulted in Apple being awarded Samsung’s total profits on the infringing devices. A friend of the court brief from industry heavyweights, Dell, eBay, Facebook, Google, Hewlett-Packard, Limelight Networks, Newegg, and SAS Institute explains:
In this closely watched case, the panel upheld a jury’s award of the entirety of Samsung’s profits on smartphones that were found to have infringed three Apple design patents relating to a portion of the iPhone’s outer shell and one graphical-user-interface screen. Although the design patents covered only minor features of those complex electronic devices, the panel rejected Samsung’s argument that damages must be limited to the profits made from those infringing features. See slip op. 25-28. It instead concluded that the relevant statute, 35 U.S.C. § 289, “explicitly authorizes the award of total profit from the article of manufacture bearing the patented design.” Id. at 26-27. Viewing the smartphone as a single “article of manufacture,” the panel held that the statute required it to award the total profit where the “innards of Samsung’s smartphones were not sold separately from their shells as distinct articles of manufacture to ordinary purchasers.” Id. at 27-28.
A typical device might involve many design elements and what the total profit rule means is that a finding of infringement on any of these elements can get you all of the profits. The total profits rule is an invitation to rent seek. For a complex product, trawling the patent databases will almost always find some handful of patents that some court might rule were infringed. Defendants are put in the unenviable position of having to be right one hundred percent of the time while trawls need only be right once.
Do we really want to turn serifs into billion-dollar weapons of commercial war?
Hat tip: Mark Thorson.
Addendum: Keep in mind the general point: Patents are supposed to protect innovators but when weak claims of imitation are easily made and well-rewarded then patent law can harm innovators and reduce innovation, as the Tabarrok Curve illustrates.
What makes the Very Serious People so very serious?
I mean that question quite um…seriously.
Paul Krugman, who I believe originated the concept, recently defined it as follows: “…someone distinguished by his faith in received orthodoxy no matter the evidence.” I would rather have something less normative and also more specific.
I think of it this way: the People are Very Serious if they realize that common sense morality must, to a considerable extent, rule politics. At least if voters are watching.
So what is common sense morality in this context? It embodies a number of propositions, including, for instance (with cultural variants across nations):
1. Political decisions should be based on what people and institutions deserve, based on their prior conduct and also on their contributions to the general good.
2. Economic nationalism.
3. Traditional morality, based on respect for authority, repayment of debts, savings, and hard work.
4. Inflation is bad, in part because it violates #1 and #3, and in the case of the eurozone it often violates #2 as well.
5. “I don’t care what you all say, the government should be able to find some way of arranging things so that I don’t have to suffer too badly from this.”
Now here’s the thing: common sense morality very often is wrong, or when it is right that is often with qualifications.
Therefore at the margin there is almost always a way to improve on what the Very Serious People are pushing for. The Very Serious People realize this themselves, though not usually to the full extent, because they have been cognitively captured by their situations. They see themselves as “a wee bit off due to political constraints,” instead of “a fair amount off due to political constraints.” So there is usually some quite justified criticism of the Very Serious People. Common sense morality is needed at some level, but still at the margin we wish to deviate from it.
That said, it is a big mistake to try to throw the Very Serious People under the bus. The Very Serious People understand pretty well how to deal with a public which believes in some version of 1-5, and furthermore they often know that such public beliefs, whatever their limitations, are useful too. Anyone else trying to manage the situation may come up with some favorable breakthroughs, but also may make a total hash of it, as was the case with Syriza. Syriza failed to realize the import of 1-5 for both domestic and foreign politics,and so they drove the Greek economy to the point of total desperation. There is a nested game going on, where the public has a big say on the heavily publicized issues, and the politicians must in some way heed that.
If you want to try the “replace the Very Serious People” game, and assume the subsequent risks, that is a judgment which can be made. The mistake is to think that the partial wrongness of the Very Serious People is necessarily a reason to take matters out of their hands.
Addendum: Via Tim, here is the entry on Very Serious People on RationalWiki, it seems Atrios first put forward the concept. And here are the remarks of Tsipras.
Yes, there is a great Singaporean novel
Or is it a novella? The Widower, by Mohamed Latiff Mohamed, was not recommended to me by anyone, but I found it during my recent browse in Singapore Kinokuniya. It starts with the meditations of a man whose wife has passed away and who then delves into his obsessions.
Although the book was published in the 1990s, it was translated into English only this year; I hope Michael Orthofer at Literary Saloon is paying attention. But alas it is not for sale on U.S. Amazon.
Here is a recent article about the hand-wringing of Singaporeans over their failure to win major literary prizes. Not long ago, Mohamed moved to Australia, proclaiming “Singapore is still my home.”
Here is my earlier post on what are the Singaporean literary classics, there were a few good answers in the comments.