Today, John Cochrane breaks down what is really driving the American affordability conundrum. Steven Davis speaks with a scholar exploring the economic effects of high-skill migration on the US and source countries. And Josh Rauh and Ben Jaros explore the growth of California’s unaccountable, wildly costly “homelessness-industrial complex” under Gov. Gavin Newsom.
The Economy
Affordability has become the new economic buzzword—but what does it actually mean? In this week’s Grumpy Economist Weekly Rant on Freedom Frequency, Senior Fellow John H. Cochrane explains why rising wages and slower inflation have not translated into lower living costs for many Americans. The answer, he argues, lies not in income or price indices alone but in where prices rose most sharply: housing, healthcare, education, and other services shaped by regulation and government intervention. Cochrane walks through a series of policy responses—from subsidies and mortgage support to banning institutional property buyers and imposing rent control—and explains why each fails to improve affordability when supply is constrained. The core lesson is straightforward: demand-side fixes cannot solve supply-side problems. Lasting affordability requires keeping inflation low, removing barriers to supply, and allowing productivity growth to lower costs over time. Watch his rant here.
Immigrants from five Asian countries—India, China, South Korea, Japan, and the Philippines—account for much of the growth in the numbers of US software developers, scientists, engineers, and physicians since 1990. What forces drove this migration of foreign talent? What are the economic effects in the United States and in the source countries? Economics, Applied host Steven J. Davis talks about these matters with Gaurav Khanna of the University of California, San Diego, who has done extensive research on high-skilled immigration and its economic consequences. Watch or listen to the episode here.
Reforming K–12 Education
It’s National School Choice Week, and Hoover Fellow Michael T. Hartney reports on the progress toward universal school choice: the strong support seen in public opinion polls versus the roadblocks set up in the rough-and-tumble world of politics and tradeoffs. School choice referenda continue to be shot down in the states, Hartney says, for a variety of reasons. Families who live in communities with low-performing schools may favor choice, for instance, but those with better schools (and higher property values) might not see any benefit in it. In place of a single, one-size-fits-all structure, he says, there are multiple avenues including microschools, charters, and homeschooling that can promote choice regardless of where students live and even help fulfill the goals of teachers and principals. Read more here.
California Policy & Politics
In the newly established California Post, Hoover fellows Joshua D. Rauh and Benjamin Jaros argue that homelessness has risen during California Governor Gavin Newsom’s term, despite the state’s spending $37 billion on measures to counter it since 2019. “That generous sum works out to almost $200,000 per homeless person, reflecting what Sacramento calls ‘compassion’—and what everyone else would call a $37 billion fiasco,” they write. Making matters worse, state auditors have no way to track outcomes of all of this spending. The authors offer four recommendations that they say would get California’s homelessness response back in gear and put an end to “mindless spending.” Read more here.
Revitalizing History
The Hoover Institution Library & Archives has acquired the wartime journals of Captain Ichirō Shimoda, an officer in the Imperial Japanese Navy who served as a naval aviator during the Second World War. Captain Shimoda participated in several major Pacific War operations, including the attack on Pearl Harbor, and was killed in action during the Battle of Tinian in 1944. The journals span the years 1939 to 1944 and document Shimoda’s naval service, including assignments aboard the battleship Nagato and the aircraft carrier Hiryū. Written primarily as a professional record of duty, the entries provide detailed firsthand accounts of naval aviation operations and carrier warfare during the early and middle years of the Pacific War. Read more here.
Related Commentary