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As he notes, quoting from his 2016 book, Specialization and Trade.
The policy pattern that consists of subsidized demand and restricted supply is not limited to the housing market. It pervades government regulation of industry. . .From the standpoint of the theory of market failure, the subsidized-demand, restricted-supply model almost never makes sense. If a market failure results in underproduction of a good, then it makes sense to subsidize both demand and supply. If a market failure results in overproduction, then it makes sense to restrict both demand and supply. . .However, from the standpoint of another theory, called public choice, in which government policy tends to serve concentrated interests. . .The pattern of subsidized demand and restricted supply is what you would expect to result from interest-group politics in a specialized economy.
Wikipedia has an expanded discussion of Public Choice, but it does come down to the elegant summary: Government policy tends to serve concentrated interests. You see it everywhere and it messes with markets, introducing bad signals and the misallocation of scarce capital. All for noble reasons of course.
The housing market, energy markets, healthcare markets, educational markets - All of them characterized by government limiting supply and subsidizing demand. To the financial benefit of concentrated interests and to the detriment of consumers everywhere. It is notable that all of them have extended histories of dramatic increases in costs over decades whereas consumer good costs, white goods costs, dining out costs - all of which have held steady or declined (reflecting improvements in productivity). The more competitive the market, the more productive. The more the marketplace is shaped by Public Choice conditions, the lower the productivity.
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