HERE’S WHY STATEWIDE RENT CONTROL IN CALIFORNIA IS BAD NEWS FOR THE POOR.

The California state legislature just passed statewide rent control. It goes into effect January 1, 2020. If you want to know what’s the problem with rent control, just take Econ. 101 at Cal. Whenever there is a shortage of a commodity, the price of that commodity will go up. (That’s in ‘Microeconomic Theory’,  the Econ. 101 textbook.) When the government fixes the price of a commodity, including rental housing, at a price that is below the market rate, it creates a shortage and make an existing shortage worse. (That’s also in ‘Microeconomic Theory.’) The truth is that it is hard to find a noted economist anywhere who supports rent control, even here in Berkeley.

Why is the rent in California so damn high? We have a huge rental housing shortage in California, and it is getting worse every year. In 1970, the population of California was 20 million. Today, it is 40 million. In 1945, the population of California was only 8 million. That means that for every 1 person who lived in California in 1945, there are now 5 people living here. Up until the 1960s, new apartment construction kept up with population growth, but then a gap started developing, and the resulting shortage has grown with time. This happened for a long list of reasons: the NIMBY movement ‘Not In My Back Yard’ started here. I know people who are perfectly willing to concede that we need to build a lot more housing, but they just don’t want that housing built near them. We also have high permit fees, restrictive zoning regulations, historic landmarking, environmental laws – including greenhouse gas emission restrictions, and lawsuits – lots and lots of lawsuits. And now we have to add to that list statewide rent control.

We need to build 200,000 new housing units in California every year just to keep up with population growth, but we are building less than 100,000 units a year, and this has been going on for over 20 years. Here in the Bay Area, the shortage is even worse. In San Mateo County, the heart of Silicon Valley, for every 4 jobs created over the past 10 years, 1 housing unit was built. It is this gap between supply and demand for housing in California that explains why house prices and rents are so high. We need to build a lot more rental housing in California, but who is going to build that housing and where will the money come from to build it? Rent control is not an incentive to build rental housing. It is a disincentive.

I have been expecting statewide rent control for a long time. It’s the reason why I never bought an apartment house. I prefer to rent houses and condos, which are exempt from rent control. I once owned a 3 unit property in Oakland, but I converted it to condos. Now that we have statewide rent control, I expect that a lot of apartment house owners across the state will convert buildings to condos and then sell them to owner-occupants, but that will just make the rental housing shortage even worse.


What happens to the poor? Statewide rent control in California is especially bad news for the poor. Whenever there is a shortage of a commodity that everybody wants, like housing, who gets it? Do the poor really get an equal shot at it with the rich? Suppose a landlord has an apartment for rent, and he receives 10 or 20 applications for it. Who is he going to rent to? How will he choose among the many people who want it? Will he rent this apartment to a wealthy applicant who can easily afford to pay the rent, or will he rent the apartment to a much poorer applicant, someone who can pay the rent, but only with difficulty? You know the answers to these questions. Whenever there is a shortage of something that everybody wants, it is the rich who get it first, and the poor who get it last, if they get any at all. Throughout the history of the world, this has never changed. You may not like that, but it’s the way things are.


Trump’s Trade War With China Is Making Things Worse. The California Building Industry Association estimates that President Trump’s tariffs on Chinese imports have increased the cost of building a new home in California by $30,000, a figure that they expect will rise. The National Association of Home Builders agrees, pointing out that over 500 types of products commonly used in housing construction are imported from China, including appliances, lighting, countertops, cabinets, tiles, nails, and laminates. The price of some lines of Chinese kitchen and bathroom cabinets has doubled since the trade war began. Needless to say, these costs are ultimately passed along to the people who live in newly constructed houses and apartments.

DONALD TRUMP IS JUST PLAIN WRONG ABOUT CALIFORNIA FOREST FIRES.

President Trump has repeatedly threatened to cut off FEMA (Federal Emergency Management Agency) funds for California firefighters. Trump claims that California’s forest fires are the result of poor forest management by the state. In January, Trump tweeted: “Billions of dollars are sent to the State of California for Forrest (sic) fires that, with proper Forrest (sic) Management, would never happen. Unless they get their act together, which is unlikely, I have ordered FEMA to send no more money. It is a disgraceful situation in lives & money!”

There are 2 big problems with Donald Trump’s argument.

1. Most really big forest fires in California start on Federal land, not land owned by the state of California. That’s not surprising since the Federal government owns 48% of all the land in California, including most of the forest land in the state. For example, this past summer’s Carr Fire started in a recreation area owned by the United States Forest Service. The fire then moved onto private land and then into the city of Redding itself, where the fire destroyed over 1,000 houses. The most destructive and deadliest wildfire in California’s history was this past summer’s Camp Fire, which also started on land owned by the U.S. Forest Service. It was the world’s costliest natural disaster in 2018. A long list of Federal agencies own big chunks of California real estate in addition to the Forest Service, including the Bureau of Land Management, the National Park Service, the Department of Defense, and the U.S. Fish and Wildlife Service. All of these agencies are under the direct control of President Trump. While it is true that forests in California have been and are being badly managed, most of these forests are under the control of the president of the United States, not the governor of California.

2. Climate change and global warming are major factors in California’s forest fires. Over the past 100 years, the average temperature in California has risen by 3 degrees. In addition, the average annual rainfall in California has fallen. This warmer, drier air sucks water out of plants and the soil, leaving trees and grass drier than they used to be. The California fire season used to be late summer, but now, it is nearly all year round. California used to get some rain in late October that wet things down, but now, the rain doesn’t come until November or December. Global warming is not a controversial theory within the scientific community, but unfortunately, President Trump and most of the people in his cabinet believe that it is.

Sonny Perdue. The U.S. Forest Service is under the control of the Secretary of Agriculture, Sonny Perdue. Perdue believes that global warming is a hoax. He calls global warming “junk science” and “a running joke.” Perdue is also one of the neo-Confederates in Trump’s cabinet. For as long as I can remember, neo-Confederates have always frustrated me. I grew up in Maryland, which was a slave state until the end of the Civil War. When Perdue talks about slavery and the Civil War, he sounds like the pro-Confederate schoolteachers I had when I was a kid. When Perdue was governor of Georgia, he tried to put the Confederate battle flag back into the Georgia state flag, and he made April ‘Confederate Heritage Month’. Perdue believes that most slaves supported the Confederacy and that large numbers of them fought for the Confederacy too. Perdue’s claim that there was widespread support for the Confederacy among the slaves has come under a lot of criticism from historians, just as his speeches on global warming have come under a lot of criticism from climate scientists. When I was living in Maryland, I knew white people who shared Sonny Perdue’s belief that black people didn’t mind being slaves and that during the Civil War, their sympathies were with their owners and the Confederacy, just like in ‘Gone With The Wind’; however, I have never met a black person in my life who shared that view.

WILL THE U.S. GET BACK THE BUSINESS WE ARE LOSING IN TRUMP’S TRADE WARS?

In reaction to Donald Trump’s tariffs on Chinese-made products, China has stopped buying U.S. soybeans, and China buys a lot of soybeans. China will now be getting their soybeans from Russia. As a result, the price of soybeans in the U.S. has fallen by about 20%. For soybean farmers, that’s the difference between making money and losing money. However – the bigger concern is this – once this trade war is over or when Trump leaves office, will China ever come back and buy U.S. soybeans in the future? Maybe not. Once a country determines that they don’t want to be dependent on a particular foreign source of some commodity, they often find new sources and never go back. That happened in the Civil War.

In 1860, the manufacture of cotton textiles was Europe’s biggest industry, and European textile mills got over 90% of their cotton from the American South. However, as soon as the Civil War began, the Union navy began blockading Southern ports. Within a year, European textile mills began running out of cotton. Hundreds of thousands of Europeans lost their jobs. It was called the ‘Cotton Crisis’ in England, which was especially hard hit. Britain and many other European countries started looking for other sources of cotton. The British began getting their cotton from India. (Cotton is native to India.) Other European countries with overseas colonies also started growing cotton in lands they controlled. By the time the Civil War was over, the big European cotton buyers all had new sources for their cotton. Growing cotton for export to Europe had made Southern cotton plantation owners rich, but they lost the European market as soon as the Civil War began, and they never got it back. Southern cotton plantations were never as profitable after the Civil War was over as they had been before the war. I wonder – will history repeat itself? Will China and other countries that have been buying agricultural and mineral commodities from the U.S. come back and buy these products from the U.S. again after this trade war is over? Or – have we lost these markets forever?

SHOULD SCHOOLTEACHERS CARRY GUNS?

On March 13, 2018; Dennis Alexander, a math teacher at Seaside High School (Monterey County, California) brought his gun to class to give his students a lecture on gun safety. During his lecture, Mr. Alexander’s gun accidentally discharged, firing a bullet into the ceiling. A piece of the ceiling flew off, hitting a 17 year old male student and lodging in his neck. The student was taken to the hospital and is expected to recover. Mr. Alexander is very experienced in gun use. He is a reserve police officer and a member of the Seaside city council. He supports President Trump’s call to arm schoolteachers who, like himself, have gun training. I teach American history at Orinda Intermediate School, and my students are unanimously opposed to arming teachers (including me!)

32 MARIJUANA STORES IN BERKELEY?

I have long believed that in order to get elected to public office Berkeley, you have to have delusions of grandeur. The Berkeley city council is now considering how many marijuana stores to license. Most council mayors, including the mayor, support capping the number at 32, but that is opposed by the Berkeley Cannabis Commission, which wants a much higher number on the grounds that limiting the number of marijuana stores in Berkeley to 32 would ‘stifle innovation.” To put this into perspective, Berkeley has 1 Trader Joe’s, 2 Target stores, 3 Safeways, 6 Starbucks, 6 Walgreens, and 11 ice cream and frozen yogurt stores. All these stores added together still doesn’t get you up to 32. The idea of 32 marijuana stores in a city the size of Berkeley is insane.

Executing Drug Dealers? On the other side of drug madness, President Trump is proposing executing drug dealers, citing southeast Asian countries, where such executions are common. Trump isn’t the only politician advocating executing drug dealers, but this idea overlooks the fact that most Americans who are addicted to opiates don’t get their drugs on the black market.  In movies and TV shows, addicts usually get their drugs from sleazy criminals working for the Mafia or a Mexican drug cartel, but the reality is that most opioid addicts in the United States get their drugs at Walgreens or CVS with prescriptions. Unfortunately, there are a lot of doctors and dentists in this country who dole out prescriptions for opiates like they were Tic Tacs. I am sure that those doctors and dentists are not the people who President Trump is talking about executing. About 5% of the world’s population live in the United States, but we consume 80% of the world’s opiates. We are not going to get control over our nation’s opioid epidemic until the government makes it much, much harder for doctors to prescribe these drugs.

NEW IN MY CHOCOLATE ROOM. Chocolate Covered HYDROX COKIES.

What is a Hydrox? Hydrox was the original sandwich cookie. In 1908, the Sunshine Biscuit Company began selling Hydrox cookies, and they were an immediate success. Hydrox was so successful that in 1912 the much larger National Biscuit Company (Nabisco) starting making Oreos, a copycat of Hydrox. Oreos quickly began outselling Hydrox. In 1999, Sunshine stopped making Hydrox cookies after the company was purchased by Keebler. Hydrox cookies looked like Oreos, but they didn’t taste the same. Hydrox cookies were not as sweet as Oreos. I think that is because Hydrox cookies were made with sugar, and Oreos were and are made with corn syrup.  Hydrox cookies are back on the market, but they can be very hard to find in stores or online. Hydrox cookies are still made with real sugar and contain no corn syrup.

Jews & Hydrox. When I was a kid, Jews who kept kosher ate Hydrox cookies, never Oreos. Oreos were made with lard, and therefore, were not kosher. Hydrox cookies were always made with vegetable oil and were always kosher.  In the 1990s, American consumers began shifting away from products made with lard as part of a general interest in eating healthier food. As a result, many products, like Bisquick, replaced the lard in their products with vegetable oil. In 1997, Nabisco stopped putting lard in Oreos and replaced it with vegetable oil as well. As a result, Oreos are now kosher.

Kosher Hot Dogs. Surprisingly, the great majority of American buyers of kosher foods are Christians. A lot of people will pay extra for kosher certified processed foods because they know that if there is a kosher seal on a product, that means that it doesn’t contain pig snouts, mechanically separated cow butts, or a long list of other unappetizing animal parts and also that a rabbi is regularly inspecting the factory looking for unsanitary conditions, and inspecting it more frequently than government food inspectors. I sometimes see 1 pound packages of hot dogs at dollar stores and wonder: ‘What are all-meat hot dogs that sell for $1.00 a pound made out of?’ Perhaps it is best not to think too much about such questions. You sure can’t buy kosher hot dogs for $1.00 a pound!

Donald Trump vs. Oreos. President Trump has urged Americans to boycott products that used to be made in the U.S. but that are now made in Mexico. In 2015, Nabisco moved the production of Oreos from Chicago to Mexico. Then-candidate Trump said: “I’m never eating another Oreo again!” and told his supporters to boycott Oreos as well. Donald Trump talked about Oreos frequently during the presidential campaign. Hydrox cookies were always made in the U.S., and they still are. So what do you think?  Will eating Hydrox cookies ‘make America great again’?

THE TOUGHEST LANDLORD IN MARYLAND

Many states have strange landlord-tenant laws. For example, in Maine it is a crime to bite your landlord. This law just criminalizes biting your landlord, not kicking, stabbing, or punching him. (I wonder what incident led to the passage of this law.) In every state in the U.S., a landlord can evict a tenant for non-payment of rent. A landlord can also sue a former tenant for unpaid rent after the tenant has moved out. However, in my home state of Maryland and a few other states, landlords and real estate investors can also have former tenants arrested and sent to prison for non-payment of rent. (Sounds medieval, doesn’t it?)

As Robert Reich recently wrote: “Jared Kushner’s real estate company uses arrest warrants to collect debts owed by low-income tenants. In recent years, the firm has sought 105 warrants for former tenants in Maryland, more than any other landlord in the state, according to the Baltimore Sun. The debts average less than $5,000, but Kushner tacks on thousands of dollars in legal fees. In some cases, people aren’t even aware they owe Kushner money because his company purchased the debt from a previous owner. When a tenant fails to pay, the company seeks an arrest warrant in a process known as ‘body attachment.’ This predatory practice can result in jail time. Kushner owns 9,000 properties in Maryland, which turn a $30 million annual profit. Since 2015, the company also received $6.1 million in rental subsidies from the federal government.”

Baltimore Sun Article on Kushner.  Donald Trump also uses this same practice in his business, having people arrested and sent to jail for non-payment of rent.

The penalties for non-payment of rent have been much harsher at various times in history. For example, in ancient Rome, a landlord could have a tenant sold into slavery to recover unpaid rent. Incredibly, there are some places in Asia where this practice is still going on. In medieval England, if a serf’s house burned down, he was still obligated to pay his landlord the same amount of rent, and if he refused to pay the rent or ran away, he could be hanged. Now just in case you were wondering….In California, you cannot be arrested, sent to jail, hanged, or sold into slavery for non-payment of rent. However, you can go to jail in California for biting your landlord. That’s assault.

 

Charles de Gaulle & Donald Trump.

In October of 1962, during the Cuban Missile Crisis, President John F. Kennedy sent former Secretary of State Dean Acheson to Paris to meet with President Charles de Gaulle. De Gaulle had often opposed U.S. foreign policy, and Kennedy wanted a united front against the nuclear missiles in Cuba. At their meeting at the Elysee Palace, Dean Acheson offered to show de Gaulle CIA surveillance photos of the Russian nuclear missile complexes in Cuba. Acheson said: “Here, let me show you the photos.” President de Gaulle waved off Acheson and said: “No. No. No. No. I don’t need to see the photos. The word of the president of the United States is good enough for me.”

Now, I wonder – what world leader today would say the same thing about Donald Trump? “No. No. No. No. I don’t need to see any evidence. The word of President Trump is good enough for me.” Hmmm. Well, who would say that?

The Birther Issue

Donald Trump. When Barrack Obama first ran for president in 2008, Donald Trump claimed that Obama did not meet the Constitutional requirements to be President of the United States. Because that became a major issue in the election, I gave my history students a class on the Constitutional requirements for the job of president. I plan to give that class again later this month because the birther issue is back in the news. Ted Cruz was born in Canada, and because of that, a number of people (including some famous experts on Constitutional law) have questioned whether Ted Cruz is qualified to be president. Here is what I told my students in 2008.

There are 3 requirements for the job of President of the United States in the U.S. Constitution.

  1. The president must be 35 years of age.
  2. The president must have lived in the United States for at least 14 years. (The people who wrote the Constitution put in this provision because they wanted to be sure that the president was someone who understood the American people and was familiar with the country. They didn’t want someone who had spent his life in foreign countries.)
  3. The president must be a natural born citizen.

Birth Certificates. You will notice that there is no Constitutional requirement that the president has to have a birth certificate. You sometimes hear people say that the president has to have a birth certificate to prove that he was born in the United States, but that isn’t true. Although it is now standard procedure for someone to issue a birth certificate when a baby is born in a hospital in the United States, very few people prior to the 20th Century had birth certificates. Most of America’s 18th and 19th Century presidents were born at home, and on farms or on the frontier. There was nobody present when they were born to issue a birth certificate. The first U.S. president to be born in a city was Teddy Roosevelt, and he was a 20th Century president. We know that George Washington did not have a birth certificate. Neither did Thomas Jefferson, Andrew Jackson, or Abraham Lincoln. There is nothing in the U.S. Constitution about birth certificates.

Natural Born Citizen. The Constitution says that in order to be a senator or congressman, you merely need to be a citizen, but in order to be president, you have to be a natural born citizen. What’s the difference? Nobody knows for sure. The Constitution does not define the term ‘natural born citizen’. Congress has never passed a law defining this term, and the Supreme Court has never made a ruling on this issue. A number of people have run for president who were born in foreign countries, but none of them won, so the Supreme Court never heard a test case about this question. Below are the names of some of the men who ran for President of the United States, but who were not born in a state. 

  • George Romney, the Governor of Michigan and father of Mitt Romney. He ran for president in 1968. George Romney was born in Mexico. His parents lived in Mexico most of their lives and were married in Chihuahua. Was George Romney a natural born citizen? (I once met George Romney. It was at the Oakland Airport Hilton while he was Secretary of Housing and Urban Development.)
  • John McCain was the Republican candidate for president in 2008. He born in the Panama Canal Zone, which never part of a state. McCain came very close to getting elected. He got 48% of the popular vote.
  • Al Gore was born in Washington, D.C., which is also not a state.
  • Barry Goldwater was born in Arizona, but when Arizona was a territory, not a state.
  • Lowell Weicker, the Governor of Connecticut, ran for president in 1980. He was born in Paris, France.

Is Ted Cruz A Natural Born Citizen? If Ted Cruz is elected president, the Supreme Court will undoubtedly be immediately petitioned to decide whether he is or isn’t a natural born citizen. Ted Cruz could have a problem. The Panama Canal Zone was under the jurisdiction of U.S. law when John McCain was born there, and Washington, D.C. has always been under the jurisdiction of U.S. law. However, Canada is a foreign country and has never been under the jurisdiction of U.S. law. Also, both of Ted Cruz’s parents applied to vote in Canadian elections. That could be a big problem for Cruz. There is a long established legal principal that says that if you are a U.S. citizen and move to a foreign country and vote in their elections, that is evidence that you no longer consider yourself a U.S. citizen. Is Ted Cruz qualified to be president? A number of famous legal scholars have written articles on this subject. Some say that Ted Cruz is a natural born citizen. Others say he isn’t. If Ted Cruz is elected president, the Supreme Court will have to decide the question.