A recent editorial I came across, “Election Season Reveals Rampant Economic Illiteracy Among Voters,” bemoans what I’ve been noticing for years: a deep and wide ignorance and rejection of basic economic principles among the American public and more specifically, voters. The article fails to put together a very good argument, instead it points to relevant data and does some head scratching. The big question is do we try to educate the public? Is it too late? What’s the alternative? How do we deal with the real damage being done to housing policy by politicians responding to what I’ve called, folkenomics, a popular belief in bad science that benefits narrow interests.

What’s the data tell us?

An American Action Network poll finds that . . . half of Democratic voters are perfectly comfortable with the idea of the government owning and/or controlling the private sector. More than half of Democrats (57%) say that socialism has a positive impact on society.

‪For left leaning ideologues it’s as if the Cold War and the collapse of the Soviet Union never happened. ‬Remember the Iron Curtain? No?

‪But how about Republicans? Republicans are supposed to support market economics, right? ‬

Republicans are more hostile to free trade than Democrats. In Pennsylvania, for example, 53% of GOP voters say trade with other nation’s “takes away U.S. jobs.” Just 42% of Democratic voters feel that way. The same gap has shown up in just about every other state where this question was asked of primary voters.

The disdain for and rejection of the reality of market forces seems to know no partisan bounds.

Of course, policies impacting the economy should be debated. Some will work better than others. But should the City, for example, own and operate housing in Seattle? Is that a credible solution? I don’t have polling data, but I’d guess a significant number of Seattle voters would want the City to start owning and operating lots of housing and controlling prices for what it doesn’t acquire.

I believe that a cash subsidy, a transfer of wealth as it were from single-family homeowners to poorer renters, is good public policy. But that’s based on my intuition about the manifestly wasteful use of limited resources by owners of big pieces of land with two or three people living on that land. Single-family housing is a luxury enjoyed at the expense of the poor; such inefficiency in the economy shouldn’t be subsidized it should be heavily taxed.

But our politics in Seattle dictates that we extract — extort really — money out of renters to pay for housing for other renters. This is Mayor Murray’s policy, Mandatory Inclusionary Zoning (MIZ). Developers won’t pay for rent restritcted housing under MIZ, renters will. Rather than identify the single greatest market failure in our housing economy, the government sponsored monopoly of single-family homeowners and making them pay for their entitlement, the Mayor is bending the City bureaucracy to impose costs and requirements on new multifamily family housing that will raise its price to subsidize other multifamily housing. He’s taxing new renters to subsidize other new renters. He’s robbing Peter in B17 to pay for Paul’s rent in B18.

This foolish and wasteful pursuit will almost entirely absorb the conversation about housing in the city for the foreseeable future, ignoring the fact that we have market based tools at our disposal that outperform MIZ like the Multifamily Tax Exemption and that we have vast swaths of City and publicly owned land that could be repurposed for housing and paid for with public financing, the cost of which would be paid by households luxuriating on single-family lots. Socialism? No, these ideas make the market more efficient by incentivizing efficiency and disincentiving inefficiency.

Back to the question, should we educate people about why they are mistaken to subscribe to folkenomics? I don’t think we have a choice. Politics dictates (and I learned many years ago working on campaigns) that to win a political fight, one identifies and sorts out people who already agree, mobilizes them, converts the wavering, in discourages turnout from opponents. That’s how one wins a political campaign. Trying to persuade people, in a rather short time frame, to make a 180 turn ideologically is folly. It’s inefficient.

But what happens when the scientifically tested view — more housing lowers prices — simply isn’t politically supportable because dominant interests are harmed by that science? Here’s a amendment to the sorting theory of politics above. Let me also say that some of the greatest challenges to the misalignment of economic interest and scientific facts (e.g. Copernican astronomy and the Papacy, slavery and the agrarian economy of the south, universal suffrage and male power, health and the tobacco industry) took a long time to change — an often involved violent and rending clashes in the streets.

It’s not pretty, but we must find — concoct — a myth that is as believable as the one that supports MIZ — that by taxing and burdening developers with penalties, fees, fines, and requirements we’ll make housing cheaper for consumers — with a myth that is as believable, as soothing and salutary to the dominate class but that does no harm to the underlying science of supply and demand. That myth must appeal to inherent, innate, and heartfelt intuitions about living life like fairness, reward for hard work, and paying our own way.

Building a heartwarming myth that supports good housing science runs counter to everything we’re trained to believe; bad ideas should respond to dosages of fact like a cancer shrinks from chemotherapy. People should do the right thing.

But creating myths has been done to great effect for darker purposes. The narrative that we need yards, light and air, views from everywhere, and design that is pleasing to whoever shows up at design review meetings is accepted as truth to support the current paradigm. Can’t we come up with a better story that also supports the facts? Our future may depend on it.

The featured image is from a brilliant animated version of George Orwell‘s Animal Farm. Yes, it’s that bad.