Economic Illiteracy

[ndrosen]

An article in Slate describes insurance companies as preying on the victims of wildfires, which means charging higher premiums to people living in areas where devastating fires are highly likely. If Ms. McDaniel thinks that this is unreasonable, she might try going into the insurance business, and not charging high risk customers premiums which reflect the danger of their homes burning down; she might soon be bankrupt. Furthermore, if she were to do this, she would encourage people to build or rebuild in forests subject to periodic droughts, which would result in more homes destroyed by wildfires, and sometimes in people getting killed, whether homeowners who don’t evacuate in time, or firefighters trying to rescue them or put out the blazes.

In Berlin, the voters have endorsed seizing or buying apartment buildings from private owners, being upset about the high rents. The article explains why this is a bad idea, and can even be criticized from a socialist point of view, in that it would mean lower rents for some fortunate tenants, while not fixing the housing shortage for others. The article isn’t written from a Georgist perspective, and doesn’t provide my views of what should be done to increase the housing supply and reduce rents, but, as it happens, I recently heard a talk by a German about property taxation in Germany, and plan to post about that later.

Comments

[selenite0]

The amount of money the gov't spends encouraging people to self-harm is boggling.