17 Nov 2009

Kill the growth zombie!

In my article, I discuss how the "iron triangle" of politicians, water managers and real estate developers have driven growth beyond sustainable, beyond our limited water supply.

As if on cue, we get these amazing stories:
  • Sacramento bureaucrats overrode control systems to issue more building permits to K. Hovnanian Homes in Natomas (my favorite candidate to be the next Atlantis). The bureaucrats have been put on administrative leave, but one is the son of a local politician. This was NOT an accident. Here's more on the city employee who caught the crime, and the Mayor Johnson's attempts to cover it all up. Pathetic.
  • A Temecula water district rejects a moratorium on new buildings when developers convince the board that new houses will lead to growth and jobs. Is anyone paying attention the crappy real estate market? or are they just working for developers? Temecula is in Riverside county!
  • Meanwhile, (more clever) water managers are asking for a hookup moratorium in Monterey.
Bottom Line Growth and development are fine when they are sustainable, as in this proposal. Building in floodplains or areas with poor supply is NOT sustainable. Unfortunately, homeowners and taxpayers will pay the price of the iron trangulates' stolen gains.

hattip to DW


  1. Timing issues

    Is there any structure in economics, macro or micro, that deals explicitly with timing.

    For example, an economic issue that is decided in Northern California today to impact Southern California six months from now and then to impact Northern California, negatively, three years from now.

    It seems, from the discussions here, that few people are considering how long an economic system might take to come to equilibrium and what that equilibrium might be once all of the factors settle out.

  2. @Eric -- that's what insurance, futures markets and property rights are all about: they bring timing back on to the table.

    Not that pols pay attention :(

  3. Is there insurance or a futures market against California politicians passing a bill on coal which then beggars Ohio which then can't produce the steel for Californians cars.

    I have never seen such insurance or futures markets.

    Also, trying to determine the policy rates for such an event would be nightmarish.

    The insurance might be worthwhile though.

  4. @Eric -- that's not what I was saying. Insurance markets *can* take care of things, but they need to be free of political intervention to work. It's the difference between risk (you can insure) and [Knightian] uncertainty.


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