A generation ago, the then-president “essentially reverse[d] the New Deal of the Roosevelt legacy, repositioning the U.S. on the course of economic prosperity” (according to Zoltan Acs). Since then, administrations of all stripes have continued down this path with greater or lesser enthusiasm — to the extent that, of the OECD countries, only Chile, Mexico and Korea have lower overall tax burdens than we do. The results of this course of economic prosperity have been striking: In 1981, 80 percent of men of working age had a full-time job; at the end of 2016, 70 percent did. In 1981, their median weekly wage was $380 — at the end of 2016 (allowing for inflation), it was $380.
For a generation now, the talking heads have argued that low-tax, business-friendly policies will unleash entrepreneurs’ animal spirits and unlock limitless economic growth. And for a generation now, they haven’t. Whether those leftovers from voodoo economics were lies or catastrophic mistakes doesn’t matter — we tried them, they failed. It’s time to move on. It’s time to ignore the kleptocrats, hacks and trolls and start thinking for ourselves.
It is certainly time to start thinking creatively about our city’s multiple, interconnected problems. Tweaking the UDO here and a user fee there is not going to get us very far.
We hear complaints that there is too much traffic downtown. To a true believer in the free-market fairy’s magic, there is no such thing as too much traffic — the cost of driving and parking downtown is simply below the market-clearing price. Raise that cost, and the amount of traffic will fall. Could it work?
Of course. Here’s one way. Raise the fees at city-owned parking structures to, say, $10 an hour (I’m sure there are smart people at UNCA who could tell us what that rate should really be), and at the same time, start running a free shuttle service, funded by those fees, between Tunnel Road and downtown with stops at the Sears and Innsbruck Mall car parks (with their businesses in terminal decline, both of them are woefully underused). There’s no coercion — private operators of downtown parking lots can choose whether to compete with the shuttle or the city’s parking fees, or position themselves somewhere in the middle. And both residents and visitors have more options than before.
There are always externalities. In this case they are positive: As the idea of using the shuttle takes hold, demand for parking spaces downtown falls and land wasted on unused parking capacity can be released for affordable housing. With less traffic moving through downtown, the permanent pedestrian precinct that downtown’s buildings, residents and visitors desperately need could become a reality.
So simple solutions can work for simple problems. How about something harder, like the twin problems of starvation wages and unaffordable housing?
Businesses can get away with paying starvation wages because there are too many people looking for work. Landlords and property speculators can get away with ever-rising prices because there are too many people looking for housing. Again, a fearless true believer in the market fairy’s magic would argue that the problem isn’t that there are too many people — it’s that the costs of moving to and living in Asheville are below the market-clearing rate for the benefits you gain by doing so. Raise those costs and two things happen: The number of people immigrating to our city falls, and the number of people emigrating rises. With fewer people in the city the labor market tightens (wages rise) and the housing markets weaken (rents and property selling prices fall). Could it happen?
Of course. Here are two ways. One: We do nothing. The current situation — declining wages coupled with ever-increasing housing costs — drags on forever. The costs of moving to and living in Asheville continue upward and eventually choke off the flow of immigrants. Along the way, landlords and property speculators large and small make out like bandits while the city staggers along behind, unable to afford to fix the damage done to our neighborhoods and communities by past sins, or whatever horrors await us in the future.
Two: We act. We raise the property tax rate — say from 40-something cents to $2 (again, the smart people at UNCA could help). There’s no coercion — would-be incomers get to decide for themselves whether they are willing to pay that price to live here; residents who find that price unpalatable are free to leave — those who believe that they deserve privileged access to the benefits of living here for less than the market-clearing rate are free to discuss their case with the Buncombe County tax people. Wages rise, housing costs fall, and the city has tens of millions of dollars a year extra to pay off the bonds early, spend on projects in and around our schools, fund infrastructure projects and affordable housing trusts, and so on. Neat, huh?
There are always externalities. In this case, they are negative. There are families for whom access to the benefits of living in our city for less than the market-clearing rate is a matter of life and death. There are families for whom moving somewhere else is not an option. Our true believer is assuming that externalities like these, that cannot be expressed in dollars, can be ignored. The result is policies that afflict the afflicted and comfort the comfortable. And if the malevolence and immorality of these ideas is not immediately obvious to you, perhaps you should try rereading Luke 10:25-37 and pay attention this time.
Simple solutions don’t work for complicated problems. As long as we have a democratically elected Council, there’s some hope that it could find a path forward somewhere between allowing the status quo to drag on and following (in H.L. Mencken’s phrase) “neat, plausible and wrong” policies while tackling the inevitable collateral damage.
A gerrymandered Council would have far less trouble with its conscience — the proposal’s supporters have already told us so. With the status quo untouched, the undeserving are to be driven out, and property speculators large and small allowed to run riot before moving on to their next victim, leaving our city a smoldering wreck in their rear-view mirrors.
— Geoff Kemmish