upper west snide
(rants from a New Yorky economist)
1. It really ticks me off when...
People conflate the clarity of a problem with the simplicity of its solution
2025-04-25

I'm writing this blog for my friends with whom I often discuss social ills and policy fixes. I find myself caught in a strange liminal space: far left of most of society, convinced of the injustices my lefty compatriots proclaim, but pessimistic towards the quick fixes they espouse.

"Big companies drive out small businesses that serve and support their local communities and families." They do. But they also provide economies of scale that benefit those same communities, and every big business started out small. "Luxury housing developments ruin the character of historic neighborhoods, and displace local residents through gentrification." They do the former; the evidence on the latter is mixed. Some incumbents benefit from neighborhood price appreciation. There's a shortage of housing supply, and introducing new luxury units may reduce competition for existing stock. "Society should ensure all children equal opportunity for a successful future." I'd think so too, but does that mean some parents should be forbidden from spending extra time reading to their young children (or that others should be forced to spend more)?

We on the left identify genuine social ills, but we engage in wishful thinking when we propose solutions. We do not contend enough with trade-offs, with unintended consequences, or with the successes of free-market capitalism.

The political, academic, and economic right are worse. Academic economists--a group among which I gingerly count myself--fetishize contrived mathematical reductions of the real world, and jubilantly proclaim overconfident policy prescriptions while sweeping the inaccuracies of our assumptions under the rug. (Many, either out of ignorance or dishonesty, also proclaim as unconditional results that derive from mathematics that applies only in narrow special cases.) We apply lazy syllogisms--reasoning that if A implies B then almost-A implies almost-B (and without the decency even physicists, those most duplicitous of scientists, evince in their error analyses).

In some cases, we lefties are imprecise about terms. We say a new policy will exacerbate the affordable housing crisis, and we prove it: the average rent in ZIP Code X is higher ex post. But what if richer people live in that ZIP ex post? Okay, we find a ZIP with constant composition and show rents are still higher: housing really is less affordable. But what if incomes grew at twice the pace of rents? Fine: we find an example of no income growth and no composition change, with higher average rent. Touché.... Unless a developer built new units, everyone in the neighborhood moved into units with more bedrooms, and they're just paying a few dollars more for far better apartments. (While food, energy, and other expenses are lower too.)

It's hard to say what we really mean. We may know it when we feel it, but we may not know it when we see it.

My goal in writing this blog is to flesh out the subtleties in such considerations. I aim to show why simple-seeming lefty solutions to genuine lefty-identified problems aren't so simple. I aim to show equally why traditional economic arguments fail to provide useful guidance. And while I have a healthy dose of skepticism toward my own prescriptions, I do aim to suggest paths that I think stand better chances of achieving our goals.

Two of my most important mentors are Peter Vorkink and Paul J. Sally, Jr. The former counseled me to practice "tolerance, patience, and humility." The latter, "never to confuse activity with achievement." Heavy lifts for me both, but I hope I disappoint neither.

Copyright 2025 Philip Kalikman