The Daily View, 1/28/2024: YIMBY-ism, Fast Food, Twitter, etc.

By Noah Smith:

In particular, rent has now come down. A report by finds that median rents have fallen for 8 straight months now, caused in part by a boom in new apartment construction. (Yes, it turns out that YIMBYs are right and increasing supply makes housing more affordable.)

This is some of the most egregious goalpost moving I have seen in a long while. YIMBY-ism is always in the context of home prices, not rent. The objective is to make homes more affordable, not the rent. Home prices have shown no signs of slowing since 2010, even when adjusted for inflation:

Of course, rents are going to be more volatile than home prices. It’s easier to lower rent and ride out the downturn, than sell at a loss. There are affordable homes in the US, but the problem is they are far away from the good-paying jobs, or are undesirable in other ways. It’s not a coincidence that areas in which people are reliably making six or even seven-figures annually in tech or finance also have very expensive housing markets; this is what would be expected according to elementary assumptions of supply and demand. Why would a huge inflow of capital into a region/city leave home prices unchanged? That makes no sense.

Existing home owners are stakeholders who paid into the system, and unsightly high-density housing hurts those people by lowering property values, and also negative secondary effects like crime and noise. The only way the YIMBY solution is tenable to pay off the stakeholders. A one-sided policy debate that ignores the interests of existing homeowners, is not viable.

From The Guardian, Will weight loss drugs kill the fast food business?

The prospect of thousands of people using the appetite-suppressing drugs has spooked fast-food chains and sellers of sugary food and drinks, triggering a sell off of share prices across the food sector. The McDonald’s share price, for example, fell by 17% between the end of June and mid-October, wiping almost $38bn (£30bn) off its market value, but has since recovered.

That is because, in large part, the entire market fell, as shown below, than concerns over weight loss drugs hurting business. The S&P 500 fell 11% and McDonald’s stock fell 17%:

Maybe the larger decline (17% vs. 11%) can be attributed to such concerns. Hard to say, but I am optimistic about both the future of these weight loss drugs and McDonald’s, even if these seem at odds with each other.

1. Food companies can make up the difference by raising prices and reducing portion size (which is already a thing, called shrinkflation), and diversifying to new offerings such as food that is specifically marketed to people who are on these drugs, at a markup.

2. People on these drugs still need to eat, but not as much. This varies a lot by person.

3. Response is highly variable, with anywhere from 20-50% of people losing only between 0-15% of initial weight, which may not be enough weight loss to justify the side effects and costs. People who do not lose much weight will still be overweight or obese, and given the costs and side effects, will likely discontinue usage and resume old eating habits.

Read the fine print

Reading comprehension is hard as they say. If this is your competition, you have no excuse to not make money in life. Here is what happened:

The home was originally sold to the new owner on 3/15/2023 for $730,000.

The new owner on 9/10/2023 listed it for sale at $760,000.

There were no takers at the inflated price, which was gradually lowered.

On 12/19/2023 it was lowered again to $719,000.

This represents only a 1.5% decline from the purchase price, not 5.5%. The 5.5% figure is from the inflated re-listing price. A 1.5% decline over a 9-month period is tiny, and is less volatility than even 3-year treasury bonds. Even with the leverage of a mortgage it is not much.

Are students from elite schools liberal? Yes:

That’s because selective colleges tend to be in blue states. This is the most likely explanation. A more useful comparison would be to compare the political leanings of students from highly selective colleges to the state average or non-selective schools from that state or region. I hypothesize that they are less woke. That is, Ivy League students, despite being liberal overall, are not as woke compared to non-elite students for the same state or region. Grads from prestigious schools have more status and better career options, and also tend to be better at critical thinking due to high IQ, and thus are less inclined to assimilate the ideology of the far-left wholesale for career advancement, due to having more/better career options.

Donut or do not? For some reason this went viral:

How is a carb-donut in Italy any different from that same carb donut in the US? Maybe the 3 pounds is just water weight or fluctuations. This proves nothing.

A hypothetical winning political platform:

Yes, if only there was a button to press to stop illegal immigration. I wonder if some of these people even understand how politics in the US works.