Why investors and business people often hate the free market
Recently I spoke to Pacific Beach Realtors about the benefits of Prop 13. Well received, of course. I’m seeking more such speaking engagements.
But for me the most interesting aspect was a private discussion I had with a knowledgeable lobbyist for the CA apartment industry. The rep made the solid observation that their clients — real estate trusts — LOVE to invest in California apartments (and other commercial property) because they can count on the state and local governments to do everything they can to keep out future competition. The resulting scarcity drives up rents, and increases the resale value of such properties.
It’s a point I’ve been making for decades: The free market is good for CONSUMERS, but not necessarily welcome by INVESTORS. For instance, the free market in Houston is great for home buyers and renters, but lousy for real estate investors. Any increase in demand is shortly matched by an increase in supply.
All investors and business people seek to provide goods and services that have limited competitors. In a free market that works well, but when government gets involved, it can turn into crony… Read More