The evils of price controls
The evils of price controls are limitless. This is something that is most disturbing to a poor Icelandic boy like me. Many years ago I saw quite funny movie, 'The Super' with the then unknown actor Joe Pesci. He is the little guy that is hanging in mid air in the poster on the left.
Pesci did play an feisty super that was torturing the poor inhabitants of a rental-building (turned out to be a good guy in the end, in a cheeky Hollywood-style ending). This sort of war between the landlord and the tenants was something I had never seen in real life. I of course thought that the reason was that in the big US, and especially in the very big city of New York, people would be exploited due to some un-definable social phenomenon that I did not care about anyway.
But why was the setting of this movie New York? It turns out that people of the capital of money and capitalism a most devious system has been in place. This system, that was imposed by wise politicians, is called 'price control'. The price for the rent of apartments is fixed by the officials of New York.
What do landlords do when they cannot raise the rent to keep up with inflation or rising prices due to increased prosperity. I'll tell you what they do not do. They absolutely don't spend a penny in restoring the buildings. So what´s the point? The result is a war between the evil landlords (according to the politicians that make the rules) and the victim-tenants. The waste is evident in buildings in a poor state and widows that are living in way-to-large apartments in good neighbourhoods.