Thursday, December 26, 2019

Homelessness ticks up in the U.S., despite unprecedented prosperity

You would think that with record low unemployment, record numbers of people in the workforce, record employment totals and income growth among the lowest income earners that we'd see a corresponding decline in the numbers of homeless Americans.

And you'd be right if it weren't for a certain part of our country that's quite literally playing with fire. History's convincing lesson is that socialism and its requisite authoritarian control of economic activity distorts market processes, pollutes natural market incentives and quietly deceives people into doing things that harm their own interests. Guess where that's happening, and guess what that means:
The Department of Housing and Urban Development is reporting its third consecutive uptick in its homelessness projection for the country, based on a summary of its annual report obtained by The Associated Press.

President Donald Trump has been highly critical of the homeless problem in California, and HUD said the increase seen in its January snapshot was caused "entirely" by a 16.4% increase in California's homeless population.

"As we look across our nation, we see great progress, but we're also seeing a continued increase in street homelessness along our West Coast where the cost of housing is extremely high," HUD Secretary Ben Carson said. "In fact, homelessness in California is at a crisis level and needs to be addressed by local and state leaders with crisis-like urgency."
A deeper dive into the data shows that California and her left coast sister states Oregon and Washington are collectively making the whole country look as if it's descending into a death spiral of abject human misery. But if you take those states out of the mix, the homelessness situation in this country is improving.

There is a strong correlation between tax & regulatory burden and homelessness statistics. Another can be found between those burdens and other indicators of social decay, such as drug abuse and violent crime. The same report linked above shows that Mississippi, Louisiana, Alabama, Virginia and North Dakota are the best five states in terms of homeless persons per 10,000 in population. Furthermore, if you remove the metropolitan areas of New Orleans, LA; Birmingham, AL and Jackson, MS the numbers for those states are even more impressive. The states with the lowest income and property taxes have the lowest rates of homelessness, and they'd be even better off if it weren't for the largest metro areas in their states. Those metro areas are (of course) governed by people of the same ideological persuasion as the states with the worst homelessness problems.

When your governing philosophy consists of heavily progressive taxation, oppressive regulatory burdens and strictly limited personal liberty, the hardest hit are always on the lowest rungs of the economic ladder because they are the least capable of adapting or leaving. These governing principles are also highly correlated with income inequality. The more meddlesome and oppressive the regime, the greater the difference between the haves and the have-nots. When you tighten restrictions, only those who can't escape them are restricted. The homelessness problem will thus always get worse, never better.

Dr. Carson is absolutely right that the problems out west need to be addressed "with crisis-like urgency." But I don't think the leaders at the state and local levels there are capable of even comprehending what they need to do. Rolling back decades of regulations would be a good start but decreasing the role of government is not a tool in their kit. It's going to take someone else.

President Trump is also right to be concerned about the west coast. Those three states are responsible for about 19% of total U.S. economic output. A significant downturn in those states' economies could have profound impacts on U.S. productivity and global economic progress in the years ahead. This is the reason for my "playing with fire" comment in the second paragraph of this post. America is poised to lead the world again in another peacetime expansion of global free trade, economic freedom and individual prosperity. Having children in California, Oregon and Washington playing with the deadly authoritarian conflagration of socialism is not going to help that happen.

Millions are already leaving California each year. The population growth rate has reached its lowest rate since 1900. Emigration from the state looks eerily like the diasporas from pre-Soviet revolutionary Russia, pre-Mao China, pre-Castro Cuba, pre-Chavez Venezuela... The most striking similarity is that the people leaving are the hated bourgeoisie class so-despised by Marxist ideologues. They are the people with the means, education and desire to prosper. Those they leave behind are the ones who will suffer.


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