The Real Purpose of Regulation

Matt Yglesias discovers bureaucracy.  The American Interest gloats:

As Yglesias’ experience shows, the move for government reform does not need to be an ideological or partisan issue: liberals should fight pointless, expensive, poor-exploiting and opportunity-killing regulation as hard as conservatives.

But it has, to some degree, become a partisan issue because upper middle class progressive intellectuals often know nothing about the real effect of the regulations they do so much to promote. The reason for this is simple: they are almost never in the position of running businesses.

It’s touchingly naive to assume upper middle class progressives, or the upper middle class in general, spends much time worrying about the effect of their regulatory policy on the poor.  I propose an alternative explanation:  local regulatory policy helps liberals avoid the consequences of their stated beliefs in immigration and Civil Rights.

Immigration swells the population and, with it, the demand for housing and government services.  Regulating the supply of housing and, more importantly, enforcing occupancy regulations slows the increase in population and increases the value of the existing housing stock, to the apparent benefit of existing residents.

Civil Rights laws with respect to housing makes it relatively difficult to defend against minority encroachment in a straightforward way.  It can be done – my own community does it through mechanism I only partially understand – but it helps to be upper middle class.  But working-class neighborhoods are in constant churn:  minorities move in, whites move out, the neighborhood declines and becomes a slum, then in some cases it gentrifies depending, presumably, on location.  But regulations written, not in the interest of development or “the poor”, but to raise the cost of movement, can arrest this process.

On the other hand, DC is in the process of gentrifying, an eventuality that upper middle class progressives would want to encourage to the extent they have political power.  I don’t actually know whether the particular regulations Yglesias finds so odious help or hinder it.