Never let an economist get his hand on a lever

As if to prove the truism that most modern mainstream economists have never seen a policy lever they’ve never liked, the BNZ’s Tony Alexander came out over the weekend with a list of ways in which to meddle in the housing market.

Tony’s Plan, as economist Eric Crampton* called it in criticising it**, consists of eight points ranging mostly from the fanciful to the farcical, including the creation of a Super-SOE “whose sole purpose is to undercut existing building materials suppliers,” “a new large state house building programme” using some sort of “efficient building systems” that presumably only a large state house building programme will be able to dream up, and “a tax on all houses owned by Kiwis offshore with the aim of encouraging them to sell them.”

I’ve got a better idea. How about we tax economists who blurt out fatuous nonsense.  If the government had a thousand bucks for every time that happened, you could virtually pay for a small, rights-recognising government and have plenty left over for refunds.

My advice to Tony until my own policy prescription is picked up is this: Shut up. Then you’ll only be thought a fool.

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* Eric being one of the few modern mainstreamish economists to forego the profession’s knee-jerk eagerness for lever pulling.
**…and mostly, and deservedly, demolishing it…