When I took economics, we had a little squib in there about price controls. But it was about something nobody would actually think to do these days . . . mandatory cheap bread or something. It was a historical example. At any rate, it’s overwhelming conventional wisdom in the United States that price controls are bad. If I suggested that the city implement price controls on Diet Coke, people would say that it would lead to shortages. And if I proposed dealing with the ensuring shortages by saying that anyone who wants to build a new building needs to also provide millions of dollars worth of Diet Coke to people in the neighborhood, people would look at me as if I were insane. Creating the Diet Coke shortages is not a favor to anyone—neither fans nor haters of Diet Coke benefit—and the regulatory mandate is an absurd subsidy to Diet Coke drinkers with no conceivable policy justification. It’s bizarre. But people have a strong bias toward the status quo, so they tend to assume that status quo policy just must be non-bizarre, no matter how at odds it is with everything else.
It kind of reminds me of dollar beer night at the racetrack. At first you're all excited--beer for only $1!--but when you get there, and you see the gigantic lines, and realize you'll have to wait for like half an hour just to get a stupid Budweiser, you end up wishing that it was more like $3 or $4 beer night. Well, the same applies to parking here in San Francisco: it is basically 0$ parking night every night. And so you get the long lines...
(Photo by Mark Strozier)