(FEE)—In a household of four guys, fridge space is what you might call prime real estate. I know this because I happen to live in one such household.
For months we tried sharing the one fridge in the house. It was not pleasant. We had to have regular negotiations about how to allocate the limited space. These negotiations were complicated by the fact that everyone had an assortment of short and tall objects they wanted to store in the fridge, and with the layout of the fridge tall space was especially scarce.
The issue got particularly pressing when multiple members of the household, each on their own schedules, would happen to do groceries on the same day. On those days, putting our food in the fridge felt like playing a game of Tetris. We eventually started shifting our diets so we would need as little fridge space as possible. Creating big containers of leftovers also became quite risky, so we had to pivot away from large meals.
Frustrated at the situation, one of my housemates finally came up with an ingenious solution: buy a mini fridge. His motives were purely selfish—he made it clear that the mini fridge would be for his food only. Yet the increased supply in the face of scarcity was a clear benefit to us all, so we eagerly approved the decision. The minor increase in our electricity bill and the reduction of space in the living room were negligible costs compared to the immense practical benefit.
Of course, once there is a little more breathing room, things lower on the priority list start to become viable contenders for fridge space (leftovers, alcohol, etc.). As such, the main fridge was still rather crowded. But with the idea of increasing supply as a solution to high demand now in our heads, we knew what to do next. A few months later, a second housemate got a mini fridge, and a few months after that a third housemate got one as well.
So yes, our house now has a main fridge and three mini fridges. I’m pleased to report that fridge space is now very plentiful. We have so much of it that we have now put everything in our fridges that we would ever want to, and we still have more space left.
Artificial Scarcity
Our household’s creative solution to our fridge-space problem got me thinking about another shortage-of-space problem: the housing crisis.
It’s no secret that housing affordability is becoming a serious issue. The median house price in the US was $417,700 in Q4 of 2023 compared to $329,000 in Q1 of 2020, a 6.8 percent increase after adjusting for inflation ($417,700 in December 2023 is $351,282 in January 2020 dollars). Rents have likewise outpaced inflation, increasing from a median of $1,600 in early 2020 to $1,964 in December 2023—a 3.2 percent increase in 2020 dollars.
And prices were already high in 2020.
Younger people in particular feel the weight of these trends. In a 2022 study by Freddie Mac, 34 percent of Gen Z adults said homeownership at any point seems out of reach financially, up from 27 percent in 2019.
How does fridge space relate to the housing crisis? Well, we simply need to recognize that fridge space is a kind of real estate, and the parallels quickly follow.
In the housing market, like the fridge-space market, real estate is scarce. There are more people who want a house than there are houses. This means there will be a lot of competition for a relatively small number of properties.
To address this problem, the resources need to be rationed in some way, that is, allocated to various individuals. In our household fridge, we rationed it by giving everyone roughly a quarter of the space. In the housing market, rationing takes place using the price mechanism, with houses for sale going to the highest bidder.
In both cases, more scarcity means more dire circumstances. If we had an additional housemate or a smaller fridge (assuming no mini fridges), fridge space would have been even tighter. Likewise, a housing market with more people or fewer houses would result in higher prices. This is the basic logic of supply and demand.
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But the parallels don’t stop there.
Let’s say our landlord has a prejudice against mini fridges for some reason. Maybe he doesn’t like the way they look, or he doesn’t like them taking up space in the living room. To dissuade us from adding mini fridges, he could make an elaborate set of rules about their use. “You’re allowed mini fridges, of course. I care about you having fridge space,” he might say. “But I need to have some oversight here. The rule is, you can only put mini fridges outdoors or in your bedrooms. Also, you need to receive a permit before you add a mini fridge.”
What would this do to our household fridge economy? Clearly, it would be detrimental. While we would certainly appreciate the right to put mini fridges outdoors or in our bedrooms, those aren’t very convenient places for them. It would almost be better to go without. And the paperwork adds yet another barrier which makes us think twice before bringing in a mini fridge. If someone was on the fence about adding a mini fridge (“on the margin” in economic terms), these rules might well be the deciding factor. That is, they would decide against adding a mini fridge, even though they would have decided for a mini fridge if the rules hadn’t been in place.
While it’s true the landlord hasn’t prohibited mini fridges outright, and has even expressed his concern about limited fridge space, it’s clear that his actions are getting in the way of a solution to the fridge-space issue. Whereas the freedom to add mini fridges empowered us to deal with our scarcity problem, the restrictions mean fridge space will continue to be hard to come by. And if we had another person come live with us—if the “population” of the house grew—the scarcity would become even worse.
The analogy to housing should be obvious. When a government places restrictions on the development of new housing, such as with land-use regulations and cumbersome permitting schemes, they are making it harder to add new supply to the market. “You can’t put a mini fridge in the living room, only in your bedroom” is like saying “you can’t build housing in this conveniently located greenbelt area, only way outside of town where the inconvenience likely outweighs the benefit.” Zoning a certain neighborhood for low-density housing is like zoning the living room to only allow one mini fridge instead of three. Demanding that a laundry list of permits and licenses be acquired for new developments is like giving the housemates tons of paperwork for adding a mini fridge.
If the population of a region increases even slightly with all these supply restrictions in place, is it any wonder why housing prices get out of control? Just as more people competing for a limited amount of fridge space necessitates more stringent rationing, fiercer competition for a limited amount of housing also necessitates more stringent rationing—which translates to higher prices when we’re talking about a good on the market.
Identifying the Culprits
Note that the housing problem would be solved quite easily in the absence of government land-use regulations, just like our fridge problem was easily solved because our landlord wasn’t micromanaging how we use the space in the house. When people perceive that a resource is especially scarce, they act to increase its supply. It is only when increasing the supply is artificially restricted that scarcity remains a significant problem.
To put it another way, the problem is not so much that there is scarcity, but that the forces which would normally reduce scarcity are being interfered with.
Once we understand this, it becomes clear who the real culprits are for the housing crisis: the very politicians and bureaucrats who market themselves as the “solution” to this problem.
This is hardly a new insight. Economists and other scholars have been making this point for decades, and in recent years there has been a growing cross-ideological consensus on the matter. As the left-leaning economist Paul Krugman has said regarding zoning, “this is an issue on which you don’t have to be a conservative to believe that we have too much regulation.”
The appeal of this issue to left-leaning economists begins to make more sense when we recognize that zoning laws confer a kind of monopolistic privilege on certain landowners. Edward Facey cites a penetrating book review making this point.
If several real estate developers agreed together to restrict the number of apartment buildings in a community so as to give themselves a monopoly advantage, the public would be scandalized. But if these same developers were to go to the local zoning board and suggest that good urban planning, protection of property values, (whose? theirs?) and preservation of the existing pattern of community life called for such restrictions, then this would be civic responsibility of a high order and applauded by all right-thinking people. This is because we persist in thinking that monopoly is bad but zoning is good. Tunnel vision like this keeps us from seeing zoning for what it is—an agency of monopoly and government granted private advantage.
Landlords are often vilified for high rents. But the people who really deserve the blame are those who advocate for stringent zoning laws, greenbelts, permits, and the like. Of course, sometimes those advocates are landlords, especially since homeowners are the main beneficiaries of restrictionist land use policies. But it’s important to conceptually distinguish landlords qua landlords from those lobbying for housing restrictions.
The true villains in this story are not the people bringing more supply to a market characterized by artificial scarcity. It’s the people imposing that artificial scarcity in the first place who need to answer for the crisis they’ve created.
About the Author
Patrick Carroll is the Managing Editor at the Foundation for Economic Education.
Five Things New “Preppers” Forget When Getting Ready for Bad Times Ahead
The preparedness community is growing faster than it has in decades. Even during peak times such as Y2K, the economic downturn of 2008, and Covid, the vast majority of Americans made sure they had plenty of toilet paper but didn’t really stockpile anything else.
Things have changed. There’s a growing anxiety in this presidential election year that has prompted more Americans to get prepared for crazy events in the future. Some of it is being driven by fearmongers, but there are valid concerns with the economy, food supply, pharmaceuticals, the energy grid, and mass rioting that have pushed average Americans into “prepper” mode.
There are degrees of preparedness. One does not have to be a full-blown “doomsday prepper” living off-grid in a secure Montana bunker in order to be ahead of the curve. In many ways, preparedness isn’t about being able to perfectly handle every conceivable situation. It’s about being less dependent on government for as long as possible. Those who have proper “preps” will not be waiting for FEMA to distribute emergency supplies to the desperate masses.
Below are five things people new to preparedness (and sometimes even those with experience) often forget as they get ready. All five are common sense notions that do not rely on doomsday in order to be useful. It may be nice to own a tank during the apocalypse but there’s not much you can do with it until things get really crazy. The recommendations below can have places in the lives of average Americans whether doomsday comes or not.
Note: The information provided by this publication or any related communications is for informational purposes only and should not be considered as financial advice. We do not provide personalized investment, financial, or legal advice.
Secured Wealth
Whether in the bank or held in a retirement account, most Americans feel that their life’s savings is relatively secure. At least they did until the last couple of years when de-banking, geopolitical turmoil, and the threat of Central Bank Digital Currencies reared their ugly heads.
It behooves Americans to diversify their holdings. If there’s a triggering event or series of events that cripple the financial systems or devalue the U.S. Dollar, wealth can evaporate quickly. To hedge against potential turmoil, many Americans are looking in two directions: Crypto and physical precious metals.
There are huge advantages to cryptocurrencies, but there are also inherent risks because “virtual” money can become challenging to spend. Add in the push by central banks and governments to regulate or even replace cryptocurrencies with their own versions they control and the risks amplify. There’s nothing wrong with cryptocurrencies today but things can change rapidly.
As for physical precious metals, many Americans pay cash to keep plenty on hand in their safe. Rolling over or transferring retirement accounts into self-directed IRAs is also a popular option, but there are caveats. It can often take weeks or even months to get the gold and silver shipped if the owner chooses to close their account. This is why Genesis Gold Group stands out. Their relationship with the depositories allows for rapid closure and shipping, often in less than 10 days from the time the account holder makes their move. This can come in handy if things appear to be heading south.
Lots of Potable Water
One of the biggest shocks that hit new preppers is understanding how much potable water they need in order to survive. Experts claim one gallon of water per person per day is necessary. Even the most conservative estimates put it at over half-a-gallon. That means that for a family of four, they’ll need around 120 gallons of water to survive for a month if the taps turn off and the stores empty out.
Being near a fresh water source, whether it’s a river, lake, or well, is a best practice among experienced preppers. It’s necessary to have a water filter as well, even if the taps are still working. Many refuse to drink tap water even when there is no emergency. Berkey was our previous favorite but they’re under attack from regulators so the Alexapure systems are solid replacements.
For those in the city or away from fresh water sources, storage is the best option. This can be challenging because proper water storage containers take up a lot of room and are difficult to move if the need arises. For “bug in” situations, having a larger container that stores hundreds or even thousands of gallons is better than stacking 1-5 gallon containers. Unfortunately, they won’t be easily transportable and they can cost a lot to install.
Water is critical. If chaos erupts and water infrastructure is compromised, having a large backup supply can be lifesaving.
Pharmaceuticals and Medical Supplies
There are multiple threats specific to the medical supply chain. With Chinese and Indian imports accounting for over 90% of pharmaceutical ingredients in the United States, deteriorating relations could make it impossible to get the medicines and antibiotics many of us need.
Stocking up many prescription medications can be hard. Doctors generally do not like to prescribe large batches of drugs even if they are shelf-stable for extended periods of time. It is a best practice to ask your doctor if they can prescribe a larger amount. Today, some are sympathetic to concerns about pharmacies running out or becoming inaccessible. Tell them your concerns. It’s worth a shot. The worst they can do is say no.
If your doctor is unwilling to help you stock up on medicines, then Jase Medical is a good alternative. Through telehealth, they can prescribe daily meds or antibiotics that are shipped to your door. As proponents of medical freedom, they empathize with those who want to have enough medical supplies on hand in case things go wrong.
Energy Sources
The vast majority of Americans are locked into the grid. This has proven to be a massive liability when the grid goes down. Unfortunately, there are no inexpensive remedies.
Those living off-grid had to either spend a lot of money or effort (or both) to get their alternative energy sources like solar set up. For those who do not want to go so far, it’s still a best practice to have backup power sources. Diesel generators and portable solar panels are the two most popular, and while they’re not inexpensive they are not out of reach of most Americans who are concerned about being without power for extended periods of time.
Natural gas is another necessity for many, but that’s far more challenging to replace. Having alternatives for heating and cooking that can be powered if gas and electric grids go down is important. Have a backup for items that require power such as manual can openers. If you’re stuck eating canned foods for a while and all you have is an electric opener, you’ll have problems.
Don’t Forget the Protein
When most think about “prepping,” they think about their food supply. More Americans are turning to gardening and homesteading as ways to produce their own food. Others are working with local farmers and ranchers to purchase directly from the sources. This is a good idea whether doomsday comes or not, but it’s particularly important if the food supply chain is broken.
Most grocery stores have about one to two weeks worth of food, as do most American households. Grocers rely heavily on truckers to receive their ongoing shipments. In a crisis, the current process can fail. It behooves Americans for multiple reasons to localize their food purchases as much as possible.
Long-term storage is another popular option. Canned foods, MREs, and freeze dried meals are selling out quickly even as prices rise. But one component that is conspicuously absent in shelf-stable food is high-quality protein. Most survival food companies offer low quality “protein buckets” or cans of meat, but they are often barely edible.
Prepper All-Naturals offers premium cuts of steak that have been cooked sous vide and freeze dried to give them a 25-year shelf life. They offer Ribeye, NY Strip, and Tenderloin among others.
Having buckets of beans and rice is a good start, but keeping a solid supply of high-quality protein isn’t just healthier. It can help a family maintain normalcy through crises.
Prepare Without Fear
With all the challenges we face as Americans today, it can be emotionally draining. Citizens are scared and there’s nothing irrational about their concerns. Being prepared and making lifestyle changes to secure necessities can go a long way toward overcoming the fears that plague us. We should hope and pray for the best but prepare for the worst. And if the worst does come, then knowing we did what we could to be ready for it will help us face those challenges with confidence.
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