"Fixing" the problem.

Policy failures bring on policy "fixes" that usually make things even worse. Various clear elaborations of the problem are in Burton Abrams' The Terrible 10: A Century of Economic Folly. See, especially, his chapter on "Government Failure and the Great Recession."  The various "fixes" that have been served up since then are not promising.  See last Friday's jobs report.

Where to begin? It appears that politicized water allocations in California ship most water to almond growers. But polite company only sees "drought" and the "need" for more water wisdom from Sacramento. I do not think that these people have ever put "price" and "water" into the same sentence. More awfulness will follow.

The latest Economist leads with "Space and the City: The high cost of wasting land."  Bingo. Restrictions push up prices. "Affordability" problems follow.  But somehow the leader's author also thinks that better top-down land use planning is possible.  Good luck.

The follow-up piece in the same issue cites recent research by Enrico Moretti and Chang-Tai Hsieh ("Growth in Cities and Countries").  The authors model the economic costs of U.S. workers separated from the jobs where they would be most productive -- separated by the high costs of living nearby. They find that the annual cost is $1.7 trillion (with a "t").

And then comes another possible "fix". "Alternatively, a possible solution is the development of forms of public transportation that link local labor markets characterized by high productivity and high nominal wages in local labor markets characterized by low nominal wages. One obvious example is the high speed train currently under consideration in California ..." (p. 7).

Among the "root causes" of the Watts riots cited in the McCone Commission analysis of events was joblessness caused by poor transit connections to jobs centers. Ever since, public transit funding has been promoted as a remedy for unemployment. The money was duly spend but inner city unemployment never got better. It's those "fixes" again.