Episode 246: Why The Rent Is Too Damned High

July 9, 2024

Central Thesis

Rent is artificially high due to collusion among landlords using algorithmic price-fixing software, enabled by weak antitrust enforcement, not simply supply and demand.

Key Arguments

• Economists Are Often Politically Motivated: The host critiques economists who offer sweeping pronouncements without sufficient data, aligning themselves with political agendas and benefiting specific interests.
• Housing Shortage is a Diversion A common assertion states that rent increases are primarily caused by a housing shortage, exacerbated by short-term rentals. However the host contends that this explanation does not fully account for the skyrocketing rents.
• Traditional Landlording Practices are Obsolete: Traditional property management focused on maximizing occupancy.
• Algorithmic Price-Fixing: Software like RealPage's Yieldstar enables landlords to collude and fix prices, keeping units vacant and driving up rents beyond what the market can bear. This is a nationwide cartel manipulating the rental market.
• Antitrust Enforcement is Weak: The DOJ's failure to prosecute airline price-fixing in the 1990s set a precedent for third-party price-fixing schemes.
• Government Intervention is Necessary: Free markets are a myth used by the wealthy to justify exploitation. Government agencies like the FTC and DOJ are essential to prevent feudalism and protect renters.
• Biden's Administration offers Hope Current government figures signal a move away from neoliberal policies and a greater focus on combatting monopolization and illegal price-fixing.

Notable Passages

• "Seriously, fuck those economists and the assholes who pay them."
• "We have a crisis about how we know what things to believe, when the heuristics that we use to figure out which experts are trustworthy and which ones aren't break down because the industries are so concentrated that they don't need to fear regulatory retaliation. We can't figure out which experts not to trust."
• "People like to bitch about how inept and un-presidential our current president is. But nobody really gives old Joe the credit he is due. Our current president, for the first time in fucking forever, is no... ...neoliberal."
• "The very concept of Econ 101 being the answer to all of life's pricing problems is itself a whole pile of batshit insanity, foisted on us by wealthy assholes who endlessly propagandized that... ...free markets actually exist."

Rhetorical Approach

The host uses a conversational tone, employing personal anecdotes (his roommate, work observations) to frame a data-driven argument. He uses humor, sarcasm, and direct language to express his disdain for specific economic theories and actors. He uses analogies to clarify his position.

Connections

References Episode 219: "Not Totally Without Historical Significance" on home ownership, Whitelaw Reed's quote on evidence, Dilbert cartoon's economic critique, KMFDM music, Cory Doctorow's commentary on experts, American Prospect articles, Jimmy Carter's airline deregulation.