Housing remains a frequent topic of discussion for people in North Dakota. Most of the discussion falls under the heading of “affordability”, a suitably vague term essentially guaranteeing little to no progress on the issue, if it is a problem at all. What is the affordability issue? My suspicion is that people are thinking of something similar to the following graph:
So J.T. and I discussed my post on tobacco bonds while I was on the radio today. One of the things that amazed him, and me too, was the notion the rate of smoking fell more than assumed. So, doing what I do, I went online and got some data, this time from the OECD.
The Washington Post had an excellent piece on states and how they handled their tobacco settlement dollars (available here). It is a longer article but well worth the read given that it is one of the first analyses of what states are doing with the money from this settlement. The answer for many: squandering it. I am not going to rehash all the details of the article but there are bigger issues to tackle.
I get a significant number of questions about markets and market interventions when I am on the radio. Part of this is due to the economic circumstances in North Dakota where significant growth is creating social tensions and frictions. Another key ingredient is the financial resources available to the state. Tax collections continue to do well, feeding the interventionist tendencies of politicians and policy makers.
The subtitle for this post could be why we need to resist the “temptation” to meddle with housing markets in North Dakota. There are times and places for interventions, but you need clear standards for action, clear goals, and clear exit strategies.