Friday, November 19, 2021

Media React to Rittenhouse Verdict: "People" Protesting are Actually the Revolutionary Communist Party USA

Click here to read the original Cautious Optimism Facebook post with comments

The news media are reacting to the Rittenhouse verdict and Yahoo!News decided to headline a piece on public reaction.

Included in the story was this photograph captioned "People react to the verdict outside the Kenosha County Courthouse."

But a quick check of the "" label on the banner reveals the "people" are organized members of the Revolutionary Communist Party USA.

Nice of them to not point that out.

Considering nearly every group outside the Kenosha County Courthouse that was hoping for an acquittal is assumed to have "white supremacist" connections by the media you would think they'd also have done readers the courtesy of pointing out the "people" in the photo are Revolutionary Communist Party USA members.

But this is the 2021 U.S. media we're talking about here, isn't it. Some of the journalists are probably in the photo.

Now if the banner had read ""...

(had to deliberately misspell that because Facebook blocked me from posting this piece for "violating community standards" with it spelled correctly, but as you can see they accept "" as if it were Visa or Mastercard) 

...does anyone think the photo caption would casually refer to them as "people reacting?" 

Full Yahoo!News story at...

Diköttter on China's Early Communist Days: Similarities Between Rice Farming and U.S. College Education

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1 MIN READ - The Cautious Optimism Correspondent for Economic Affairs and Other Egghead Stuff recently wrapped up his last book from Dutch historian Frank Dikötter's Chinese "People's Trilogy," titled "The Tragedy of Liberation: A History of the Chinese Revolution 1945-1957."

Dikötter's account of how the communist state took over ancient commercial practices between peasants and farmers forced him to ask a strange question: “What do Chinese rice farming and U.S. college education, separated by 70 years no less, have in common?”

A lot more than he thought.

From Chapter 10, “The Road to Serfdom":

“Instead of borrowing from each other, people now turned to the state – with no intention of repayment. The poor were often at the vanguard of collectivisation. In Yangjiang they accepted state grain while openly declaring that none of it would ever be returned. One man who carted away 1,500 kilos of rice was asked how he would ever be able to reimburse his loan. ‘In a year or two we will have socialism and I won’t pay back shit’ was his answer.”

Tuesday, November 16, 2021

How the Hell Can You Stand to Live in San Francisco? Part 3

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8 MIN READ - The Cautious Optimism Correspondent for Economic Affairs and Other Egghead Stuff shares more of his experiences of survival in the progressive wreck that is San Francisco—this time discussing the rising cost of renting an apartment and the effects of the City’s rent control law.

In the last segment we discussed how San Francisco voters created their own homebuying crisis/disaster by blocking virtually all new housing construction for over three decades, all while blaming relentless unaffordability on “free market capitalism.”

Now we’ll focus on soaring apartment rents and rent control, because skyrocketing home prices have condemned an increasing share of San Franciscans to accept the prospect of becoming “lifetime renters.”


So people often ask me “How can you not be affected by these skyrocketing housing prices? How can you afford to keep a roof over your head?”

To which the two answers are “I never intended to buy” (covered in Part 2) and ironically, "I’m protected by progressive rent control laws.”

In 1979 San Francisco government passed its first rent control law. Any rental unit built before 1979 was subject and landlords could only raise rent on tenants by a small percentage permitted annually by the Rent Control Board.

For the last 30+ years that increase has typically been around 1%-1.5% with 2% hikes allowed in a few rare cases.

The City made an exception for apartments built after 1979. Policymakers had a little common sense left in the 1970’s and were concerned that subjecting all future construction to rent control would discourage building of new apartments.

However, that turned out to be a moot point as just a few years later the Board of Supervisors began its practice of killing virtually all new housing construction in San Francisco. So in practice very few units have been exempt from rent control rules.

Strangely enough, in one important respect San Francisco’s version of rent control is actually less draconian than versions that have been in effect in several East Coast cities going back to World War II. When a San Francisco unit is vacated the landlord is allowed to lease it to a new tenant at current (ie. much higher) market rates whereas in many eastern cities the new tenants also pay low, controlled rents upon moving in.

So the good news is San Francisco landlords do get some relief from rent control when a unit turns over.

The bad news is it's still rare since now there’s every incentive for tenants to never move out.

If a long-term tenant moves out of a cheap, rent-controlled unit and tries to get a new apartment he’ll find his new rent is double, triple, or quadruple what he was previously paying since he was protected for decades and now “catches up” to current market prices. So he doesn’t move—ever.

Likewise if a landlord sees he’s getting decent rent on all his units save one from a four-decade old tenant he might look more closely for contract violations to evict him and replace him with a new tenant who pays triple or quadruple the rent.

The entire arrangement has produced a “rent control attorney” industry, replete with aggressive TV ads, with some lawyers representing tenants and others representing landlords—yet another drain on the local economy.


So in my case, I moved to San Francisco at the end of the dot-com bubble collapse and occupied an apartment in a very nice area at the nadir of the depressed rental market.

Good timing on my part.

Since then the Rent Control Board has permitted my landlord to raise the rent by an average of 1.1% per year with one notable exception: In 2016 San Francisco government mandated he seismically retrofit the building to withstand a major earthquake and the law permitted him to pass on the cost—estimated at over $100,000—to all six building tenants with a monthly increase amortized over 20 years.

Strangely the Rent Control Board mailed out a letter notifying me of the cost passthrough approval and was actually brazen enough to itemize the rents that residents in the other five building units were paying.

Aside from the blatant violation of privacy there’s the cost itself, so strap yourself in. 

Three of the units have been occupied by the same tenants since the late 1970’s, mid-1980’s and late 1980’s. One has two bedrooms (approx. 1100 square feet) and the other two have three bedrooms (approx. 1350 square feet).

ALL THREE were paying under $1,000 a month—in the year 2016 in the middle of a rental crisis—for units that could have been rented out at the time for $3,500 (two bedrooms) and $4,500 (three bedrooms). Since 2016 the prices have only relentlessly increased further—a dip during the 2020 shutdowns notwithstanding.

But of course my neighbors will never move out.

I ran into one of the friendlier ones outside who was paying under $1,000 at the time (splitting with a roommate!!!) and he complained to me: “Can you believe our landlord is allowed to raise our rent $150 to pay for that seismic work?”

I thought “You’re complaining?” 

I moved in around 2004 and was paying well over double what that neighbor was and, unlike your typical San Franciscan, believed under $1,000 a month was unfair to the landlord. Now he was just forced to shell out over $100,000 to prevent the building from collapsing in an earthquake and my neighbor was complaining that it’s not going to be free.

Meanwhile you can imagine how much revenue San Francisco landlords calculate they’re missing out on. 

On the flip side, today’s “market prices” are also inflated since the city government has cartelized residential real estate by making new housing construction effectively illegal for nearly four decades. So with one hand San Francisco government giveth, and with the other hand it taketh away.


As I mentioned in a previous column there’s not enough room here to cover every bad consequence of rent control but I’ll just mention two: poor maintenance/upkeep and “haves and have-nots” renter division.

1) The first is probably self-evident. When rents in an expensive city like San Francisco are being held down by the Rent Control Board at $1,000-a-month there’s a lot less money for landlords to spend on building upkeep and maintenance. The result is that old apartment buildings with classic, historic architecture are in steady states of decay, disrepair, and dilapidation.

For years nearly all my building's windows’ wood frames and sashes were literally rotting. Decades of paint layers were visibly peeling off with enough thickness that they could cut your fingers. When I moved in every garage door was of a different manual construction. Exterior doors were not fitting in their jambs due to the hinge wood rotting.

I was slow to complain since I understood the pressures the landlord was under.

The fact that I didn’t call every week demanding a repair and actually paid my rent every month—something I’ve learned militant tenants don’t do—placed me in his good graces.

A few years ago the landlord died and his daughter, who inherited the building, wanted to sell. So she paid for new windows and new paint for which I am grateful, while some of my neighbors had a “well it’s about time” attitude.

It’s easy to see the disrepair effects all over San Francisco. Most residential blocks have “owned” homes lining either side of the street until you reach the corners where the buildings (that have no backyards due to their corner locations) are usually rented apartments. The homes are visibly well-kept with fresh paint, new rooves, and nice windows, while the apartment buildings on the corners are faded and decaying. The contrast is unmistakable.

Rent-controlled tenants complain loudly about the state of their buildings while in the same breath demand their rent had better not go above $1,000 a month.

2) The second pernicious effect of “haves and have-nots renter division” is the result of artificially constrained vacancies.

Since moving means an instant doubling or tripling of one’s rent, no one ever moves out unless they’re leaving San Francisco completely.

Landlords also notoriously take their vacant units off the market during downturns, holding out for a better market if the rent is going to get locked in for decades at +1% a year. Perfectly usable, empty apartments disappear from the market and supply is reduced.

Many tenants who move out of San Francisco to buy a house in the suburbs quietly keep their apartment and openly boast online about using it as a weekend vacation home. 

And why not? It’s so cheap, thanks to rent control. More reduced supply.

There’s also a lot less incentive to rent out vacant bedrooms since the rent is so low. This is my specific case; I keep a second bedroom empty for guests, something I wouldn't do if my rent more than doubled overnight to the going market rate.

More reduced supply.

Or perhaps a widow with three bedrooms whose children have moved out keeps her large apartment two-thirds empty because downsizing, what people do in a normal market, results in a huge rent hike.

More reduced supply.

In microeconomics terms the price ceiling (ie. control) removes incentives to use space efficiently.

So rent control makes far fewer vacant units available than actually exist. And the artificially restricted supply of available apartments cruelly drives rents for new tenants even higher than what the market would have otherwise charged—all in an already superexpensive city.

The end result, perversely enough, is that rent control has created a two-tier renter “class” system. There are those on the inside who pay far below market—many of whom are quite wealthy—and those on the outside looking in, often poor or just starting out in life, facing far higher than market rent.

It’s yet another case of “haves and have-nots,” that inequality thing so derided by San Francisco progressive voters and government... once again created courtesy of San Francisco progressive voters and government.

One more phenomenon that takes units off the market is conversion to condos. As the gap between controlled rents and sale prices widens, many landlords simply put their units up for sale as a condo so they can cash in for a million dollars and walk away from all the headache.

Keep in mind the reason sale prices are so high is San Francisco has forbidden new construction in the first place, another government-created problem, so landlords are simply responding to the new incentives. Well converting rentals to condos takes even more rental units off the market—for good—which further reduces supply and drives rents up even further.

In response the city government cracked down on that practice with another intervention: a lottery system where only a tiny number of landlords were allowed to convert to a condo, and those landlords had to get lucky and win through the random annual drawing.

It’s a strange world we live in where a multi-unit building owner is not allowed to sell his own units to new owners without government permission, but that’s the mess San Francisco has created for itself.

Immediately the lottery system got backed up with applicants by over a decade so new applications were suspended a few years ago, but it's scheduled to restart soon. Here’s a short explanation of how it works.


So back to “How the Hell Can You Stand to Live in San Francisco?” one of the most common questions I get from friends and family is “how can you afford an apartment?”

Now you know. I’ve been rent controlled for nearly 18 years.

Granted as a 2004 move-in (not 1985) I’m not paying $1,000 a month, and most CO readers would probably think the rent I pay is insane when compared to their city.

But I can afford it, and let’s just say it’s very, very cheap by San Francisco standards. If I moved out right now the landlord could find new tenants willing to sign for at least double what I'm paying.

And the sweet irony?

I’m against rent control and have voted once already to banish it so long as the construction moratorium is also ended, but of course I keep losing that battle to left-wing San Franciscans who deride "greed" and evil landlords while voting overwhelmingly to keep it.

So the liberals keep winning at the polls, but keep losing in real life. Thanks to all the San Francisco housing policies they keep voting to keep in place, large swaths of them remain forced to pay an arm and a leg to find an apartment. There’s no shortage of stories of four left-wing college grads or Google software developers forced to squeeze into two-bedroom apartments for $6,000 a month in Hayes Valley while I get my own two-bedroom with a garage all to myself for a small fraction of the price: all because of rent control.

The free-market guy lives in relative comfort while the militant progressives struggle in squalor. 

What poetic justice.

But hey, they got exactly what they asked for. And so long as the voters refuse to adopt a more market-friendly attitude towards housing then I have no qualms whatsoever about continuing to benefit from rent control at the expense of liberals who suffer from the very policies they vote for… over and over again.

Friday, November 12, 2021

Tourists Warned Not to Rent Cars in San Francisco due to Epidemic of Auto Break-Ins

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The Cautious Optimism Correspondent for Economic Affairs and Other Egghead Stuff will soon be posting the third installment of “How the Hell Can You Stand to Live in San Francisco?” to discuss, among other things, skyrocketing rents and the effects of San Francisco city government-imposed rent control.

However two more developments have recently been reported in San Francisco's local news that relate directly to the first two columns: regarding car breakins and nosebleed home prices.

As previously reported under District Attorney Chesa Boudin San Francisco thieves have embraced breaking into cars with impunity, most commonly around tourist areas like Fisherman's Wharf. Well local CBS affiliate KPIX just reported this week that San Francisco hotels are now advising guests not to rent a car at all (see video):

You can see the tourist from Tampa at 1:53 thinking very long and hard searching for a diplomatic way to say “because San Francisco voters are left-wing idiots.”

There’s also footage of blatant car thievery in broad daylight.

In related news San Francisco petitioners have successfully submitted enough signatures to place Boudin up for a recall election in June. For San Francisco’s sake can we please move it up to January?

And as previously reported San Francisco’s Board of Supervisors has successfully killed nearly all efforts to construct housing in the city for decades while simultaneously complaining about high housing prices. 

The late Ed Lee was San Francisco’s first mayor in decades to make a strong push for new housing construction to relieve the artificial supply constraint and his successor, current mayor London Breed, has promised to continue his policies—which has put her at odds with the always-more-left-wing Board of Supervisors.

Well just two weeks ago the Board of Supervisors voted 8-3 to kill construction of a 500-unit housing development in the SoMa District that is currently a mostly-unused valet parking lot for a nearby Nordstrom Rack's wealthier shoppers. 

And a few weeks before that the Board of Supervisors killed a 300-unit proposed building in the Tenderloin... all while opining that "something has to be done" about the City's housing crisis. Story at:

The San Francisco Chronicle’s edgy tone does get the story right:

“24% of units would be affordable…”

“…Eight supervisors came up with new reasons to vote against it: gentrification, shadows over a plaza and seismic safety, among others."

"Like local leaders up and down California have done for years, the supervisors sought to soften their message: We’re not against building housing, they said, just this housing. Some supervisors said they preferred a 100% affordable project instead — which, in an ideal world, would be great. But we don’t live in utopia. We live in very imperfect San Francisco…”

“…The supervisors repeatedly called the project, with market-rate rents tagged at $1,500 to $4,000 a month, luxury housing. Never mind that pretty much all market-rate housing in this city has exorbitant price tags partly because the supervisors, including those who own multimillion-dollar single-family homes, keep rejecting housing…”

“…Supervisor Matt Haney, whose district includes the project, is steamed. Though supervisors almost always defer to a supervisor backing a project in his or her district, only Catherine Stefani and Ahsha Safaí voted with him.”

“’This is the kind of project we’ve been asking for, which is a lot of units built for families right by transit,” Haney said. “For God’s sake, it’s a Nordstrom valet lot.’”

Thursday, November 11, 2021

Opposition to Comrade Omarova's OCC Comptroller Nomination: "Just Three Democrats?"

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Biden's OCC Comptroller nominee Saule Omarova

The Cautious Optimism Correspondent for Economic Affairs and Other Egghead Stuff has a simple, three-word question:

Q. Just three Democrats?

Maybe if Biden pulls Saule Omarova's OCC Comptroller nomination and replaces her with Lavrentiy Beria we can get four Democrats opposed.

-Omarova attended Moscow State University as a "Lenin Scholar" while the Communist Party still controlled the USSR.

-Her Moscow State thesis was "Karl Marx's Economic Analysis and the Theory of Revolution in The Capital."

-She has written extensively on Marxist economic theory.

-She has openly praised the Soviet communist system's treatment of workers.

-She has recently participated in online Marxism discussion groups.

-She has proposed the nationalization of all private bank deposit accounts under the central bank in what she calls an "overtly radical reform."

-She has proposed the nationalization of all credit and lending policy under the central bank, removing the private banking industry from credit decisions, urging the government to "effectively end banking as we know it."

-She has recently expressed her desire to bankrupt coal, oil, and gas companies ("We want them to go bankrupt if we want to tackle climate change").

-She has recently advocated using her proposed government-controlled credit system as the instrument of the fossil fuels industry's destruction ("So, the way we basically get rid of those carbon financiers is we starve them of their sources of capital.").

-She has accused Republicans with concerns about her worldview and policy proposals of racism and sexism, stating “I am an easy target. An immigrant, a woman, a minority. I don't look like your typical comptroller of the currency."

Right, those hypocritical Republicans who confirm all the white male graduates of Moscow State University who've written on Marxism, participated in online Marxism groups, praised the Soviet system, called for the nationalization of all bank accounts and credit/lending decisions, and proposed the destruction of coal, oil, and gas companies by "starving them of their sources of capital."

I'll ask again: only three Democrats have concerns about this?

See Yahoo! story: "Biden comptroller nomination in trouble due to Manchin, Sinema, Tester opposition"

Saturday, November 6, 2021

Local San Francisco News Profiles Million-Dollar Condos Besieged by Homeless Drug Addicts

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Coincident with the Cautious Optimism Correspondent for Economic Affairs and Other Egghead Stuff's recent columns on San Francisco's homeless problem and recent building of housing units in the Van Ness corridor (after a near 30-year ban on new construction), the local news station just ran this story on, well.... both.

Take out four minutes if you want fresh images of just how bad the drug-addicted homeless have gotten squatting around million-dollar condominiums.

(KPIX-TV story: "San Francisco Luxury Condo Overlooks City's Worst Squalor")

And both sides of this twisted equation stem directly from policies supported by San Francisco voters for nearly four decades. For those who missed it, details at:

But not to worry, your trusty Economics Correspondent lives among the rich elite near Presidio Heights and Pacific Heights where limousine liberals like Julia Roberts have zero tolerance for the presence of the homeless. That's for the hoi polloi who live in only one million dollar units to deal with.

ps. In the YouTube version of this video one smart commenter asked: "You think that colorful haired gal voted for Trump or Biden?"

Friday, November 5, 2021

How the Hell Can You Stand to Live in San Francisco? Part 2

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8 MIN READ - The Cautious Optimism Correspondent for Economic Affairs and Other Egghead Stuff continues explaining how he can actually suck it up and tolerate living in the workers paradise: the People’s Republic of San Francisco—this time devoting an entire column to San Francisco’s housing crisis.

In Part 1 I explained how certain backwards San Francisco policies are making problems like homelessness, syringes, human poop, shoplifting, store closures, car breakins, and business/job departures worse, and how as Economics Correspondent I’m lucky enough to be mostly unaffected by these policies. That’s at:

Part 2 will be dedicated exclusively to San Francisco’s three-plus decade long housing crisis where home and rental prices have relentlessly spiraled out of reach for a greater and greater share of residents… most of whom still keep voting for the same policies.


First let’s review how San Francisco housing became a disaster to start with.

The City is already pretty small, surrounded on three sides by water, and is already a hotly desired living area due to its natural beauty and other urban amenities. So San Francisco housing prices have traditionally been higher than the rest of the country.

However in the 1980’s the increasingly progressive politicians and voters decided it would be best to prohibit building virtually all new housing. The one exception was a small enclave east of the South of Market District (SOMA) but that supply venue was so small it did nothing to offset what was effectively a citywide ban on new construction.

The forces behind the ban were a strange-bedfellows alliance of interest groups.

1) Standard liberal voters who considered it evil that developers can make a profit building houses so best to stop homebuilding altogether.

2) Homeless advocates who decided “If you’re not going to give new housing away for free to the homeless then we’ll make sure no one else can have it either.”

3) Conservationists who didn’t want to see anything that looked like a modern structure built anywhere in the City.

4) Wealthy high rise or hillside residents who paid for stunning views and didn’t want to chance another building going up beside theirs and blocking their scenery. In fact, city ordinance has long prohibited hotels in the Fisherman’s Wharf tourist area from exceeding five floors so as not to disturb the views for wealthy residents up on Russian Hill overlooking the Bay.

5) Homeowners in general who liked the idea of blocking new construction which effectively cartelized the supply of existing housing and drove their home values up faster.

Well standard freshman microeconomics informs us when government freezes the supply of housing—making it “inelastic” as economists say—and the demand for housing rises due to population growth, inflation, lower interest rates, and increasingly wealthy international buyers, prices for both purchase and lease will skyrocket.

And they have. Today San Francisco’s median home price has reached $1.85 million, a sevenfold increase over 25 years.

Today only a tiny minority of the wealthiest can afford home ownership with the masses condemned to eternal renting.

With such a small minority of wealthy citizens owning an asset that continues to rise rapidly in value and everyone else shut out, San Francisco has become a shining example of haves and have-nots, a pejorative that the local liberals love pinning on free market conservatives. Yet despite all their virtue-signaling about the Republican evils of inequality, San Francisco’s progressive voters and government have created a societal GINI inequality coefficient higher than Nicaragua, Sudan, Congo, and Cameroon.

Another irony is San Francisco liberals routinely accuse conservatives who oppose high taxes and wealth redistribution of having an “I’ve got mine, now F-you” attitude.

Free market conservatives of course really think “I earned mine. Now you earn yours instead of using government to steal from me.”

But the great irony is that “I’ve got mine, now F-you” is precisely how San Francisco homeowners operate. Once they navigate into home ownership they lobby government to block any more homes from being built which is truly shutting out the underprivileged and telling them to screw off.

Or as Dennis Miller likes to say: “A developer is someone who wants to build a house in San Francisco. An environmentalist is someone who has a house in San Francisco.”


For nearly four decades as San Francisco voters and city government have refused to allow new housing construction, they’ve all universally condemned rising prices—except for existing homeowners who love it.

I remember a developer who actually penetrated pretty far into the obstruction process back in the mid 2000’s. The city government had placed an unrealistic barrier of “X-percent of all units must be sold at below market price” (I can’t remember the exact number, it may have been around 15 or 20 percent) which had effectively deterred new developers while giving the Board of Supervisors culpable deniability, arguing “Of course we allow new housing. We only require developers to meet their obligations to society's underprivileged.”

Well when that developer unexpectedly agreed to the terms the Board of Supervisors was caught off guard and quickly scrambled to raise the requirement at the 11th hour. Once again I can’t remember the exact number but it was something dramatic, akin to doubling the percentage of units that had to be sold at “below market.”

The developer, who had already sacrificed plenty to get permission to build in the City, balked at what was now a moneyloser and walked away. The Board of Supervisors cheered and high-fived, San Francisco liberals declared victory, and both went back the next day to complaining about high housing prices.

I've seen multiple ballot proposals to approve new housing construction projects in the City over the years and virtually all of them have been killed by the voters.

Another side-effect of BANANA policies (Build Absolutely Nothing Anywhere Near Anyone) is gentrification.

As prices skyrocket all over the city buying homes in once unthinkable poorer neighborhoods becomes an only remaining option for higher-income workers. But once they start buying prices are driven up to a level that the poor can no longer afford. Gradually higher income (ie. usually white and Asian) residents move in, displace the old guard, and the newly arrived money leads to a once dilapidated neighborhood getting a revitalized upgrade.

But inevitably the ethnic “diversity” of the neighborhood is watered down and liberals protest that “San Francisco is becoming a whites-only city.”

The next step then is to blame racism—in the most left-wing, progressive city in America—when in fact a ten-year old can see gentrification is the inevitable “pro-white” economic consequence of their own interventionist, anti-development policies.

All throughout I’ve been amused by the online commenters who then blame “free market capitalism” and “corporate greed” for skyrocketing home prices and all these other outcomes.

We’re talking about the most heavily government-controlled housing market of any large city in the United States, and a city government blocking virtually all attempts to build new houses—while sanctimoniously declaring “housing is a human right”—somehow serving as an exemplar of free market capitalism. It's akin to calling Joseph Stalin’s gulag archipelago labor camps “the logical outcome of the Soviet free market system.”

When confronted with the objection that artificially constrained supply is what’s driving unaffordability, not imaginary free-market capitalism, the locals often drum up a standard next excuse: “Well there’s no land left to build on anyway.”

Aside from the fact that San Francisco still has plenty of empty lots, abandoned buildings, and other plots available for sale to rebuild on, there’s also the option to “build up,” an idea that former Mayor Gavin Newsom made a half-hearted attempt to champion, but he was repeatedly squashed by the always-more-leftist Board of Supervisors.

To which the lefties then object “But we want San Francisco to stay charming. We don’t want to look like Hong Kong or Blade Runner.”

OK, I understand that sentiment although I don’t think it gives anyone the right to stop someone from building a house in the middle of an affordability crisis.

But even if you accept the “government should block new housing to keep San Francisco charming” premise, then why do they still 1) complain about rising home prices which they've created, and 2) blame "capitalism?"

Part of being an adult means accepting the consequences of your actions and admitting responsibility, a concept that’s pretty much been lost here for at least half a century.

On a positive note, a few years ago former Mayor Ed Lee did manage to outmaneuver the Board of Supervisors and get some limited new construction approved during his tenure. And in the last few years I’ve seen some new, larger scale construction go up near the Van Ness corridor and around Twitter headquarters.

Ed Lee died unexpectedly of a heart attack one night shopping at Safeway but his successor, current Mayor London Breed, has promised to continue his policies.

But San Francisco is more than 30 years and over 300,000 housing units behind the curve. The rate of new construction is barely enough to keep up with new demand, let alone make up for over three decades of inaction. So my personal prediction is prices will continue to rise—albeit not as rapidly as before—and the local lefties will exclaim “Aha! You see? They’re building new housing and prices are still rising. Government was never the problem!” (eye roll)


So how does this disaster not affect me personally?

Even when I moved to San Francisco home prices were already out of reach so I arrived expecting to be one of the City’s many “lifetime renters.”

And even if you’re rich enough to make the down payment and qualify for the mortgage on a median priced home ($1.85 million) there are still lots of other problems.

With such a huge mortgage to pay—$12,250 a month PITI on a median priced home with 10% down and a 3.5% 30-year loan—all it takes is one untimely job loss to put homeowners in desperate straits.

It’s one thing to keep paying a $3,000 mortgage while the government pays you $2,000 a month in unemployment. $12,250 is another matter entirely that can bankrupt anyone in a matter of months unless they have a lot of savings available to burn through.

The property taxes are still high. Yes, Proposition 13 capped the annual tax rate at 1.2% back in the 1970’s, but on a $1.85 million home that’s still $22,200 in annual property taxes alone.

San Franciscans love to take out their frustrations by looking for things wrong with conservative Texas and criticize the Lone Star State for its roughly 2.8% property tax rate (they fail to mention there's zero income tax in Texas), but the same $1.85 million home might cost $350,000 in Houston… and a 2.8% property tax on a $350,000 home is $9,800—a lot less than $22,200 in San Francisco.

BTW in my district $1.85 million will get you three or four bedrooms and anywhere from 1,800 to 2,200 square feet. You’ll either get one floor of a "tenancy-in-common" (aka. TIC) building or your own tiny house directly attached at the sides to others (see photo).

Then there’s earthquake insurance. No private insurers are willing to take that risk on their own since a catastrophic quake that destroys the entire Bay Area would bankrupt them. So mortgagees mostly buy earthquake insurance from the California Earthquake Authority (CEA), a state agency. Although the CEA is funded by a consortium of private insurers, the funds and policies are managed by the state office.

Now I’ve never had to buy a CEA policy, but they’re famous for being incredibly expensive with as basic coverage as you can get on fairly lousy terms—but still required by many mortgage investors.

And if such a megaquake ever really struck there’s a huge question mark hanging over whether the CEA would actually be able to pay out, how long it would take, and how slow the catastrophe response and claims payout would be.

Perhaps we have some California homeowners here in CO Nation who live in earthquake zones who can provide more details on how their CEA policy works.

Also San Francisco homes tend to be very, very old—many over 100 years old. My own building was constructed in 1912.

While this makes for interesting architecture and beautiful neighborhoods—after the human poop and syringes are powerwashed away—you can imagine the cost of upkeep and repair for so much outdated/ancient plumbing, electrical systems, heating, construction… you name it.

So there’s lots of reasons not to stretch yourself too thin to buy a house in San Francisco. Unless you’re truly megawealthy with millions of dollars in the bank and can afford to be nickeled-and-dimed to death—with $5,000 and $10,000 nickels and dimes.

ps. Speaking of needing megawealth I've learned that Julia Roberts recently dropped $8.3 million for a Presidio Heights home about nine blocks from my apartment. See photo:

Monday, November 1, 2021

How the Hell Can You Stand to Live in San Francisco? Part 1

Click here to read the original Cautious Optimism Facebook post with comments

7 MIN READ - A new mini-series from the Cautious Optimism Correspondent for Economic Affairs and Other Egghead Stuff.

The view from San Francisco's superelite Pacific Heights district -
where homeless are strictly forbidden and quickly removed

The Cautious Optimism Correspondent for Economic Affairs and Other Egghead Stuff prefers the focus of his articles to be on economics, not himself.

However, over four years writing as your trusty Correspondent I’ve frequently been asked this common question:

Q. “Do you really live in San Francisco? How on earth can you stand living in that lunatic bin?"

After having explained the answer to personal friends and family multiple times it just seemed more, well… economical to write the San Francisco survival booklet down once and for all while including some tiny—but far from complete—insight into just how crazy a place San Francisco is.

So the answer in a nutshell, which I’ll elaborate in more detail with many examples, is:

A. “San Francisco *is* a lunatic bin full of insane policies... that mostly don’t affect me.”

So even being free from many of the consequences of loony-left politics, let’s start with what’s to like about the San Francisco area.


The city of San Francisco (referred by locals as “The City”) is still one of the most beautiful cities in the world—mostly. It’s effectively a 7 mile-by-7 mile square surrounded on three sides by San Francisco Bay, the Golden Gate, and the Pacific Ocean. At 49 square miles it’s very small, one-fifth the size of, say, Austin, Texas proper.

It has steep hills, beaches, neighborhoods with Victorian and Edwardian era architecture, mild weather, scenic fog that generates multiple microclimates, great outdoors venues, and for me especially it has great and scenic road bicycling with challenging hills, fun downhills, and cool temperatures.

San Francisco has great food. I’m an Asian foodie who enjoys the variety of Chinese cuisines (the dominant Cantonese plus Taiwanese, Sichuan, and a splattering of Shanghai and northern Chinese), Japanese sushi and ramen, Korean, Thai, Vietnamese, Indian, rare Burmese dishes, and even a little Singapore, Malaysian, and Indonesian.

I also estimate there are literally a hundred restaurants within a 1,000 yard walk from me plus a few more bakeries, boba teas, and bars.

San Francisco also has a great public library main branch that has a surprisingly good inventory of non-socialist economics books (for now), although I often notice I’ve been the first person to check some of them out in twenty years.

San Francisco lefties also feel the need to write their opinions in the margins. For example, once when I was reading a book about Marxism and the author concluded “history has demonstrated Marxism had failed to deliver on its promise to outproduce capitalism” a local leftie wrong “WRONG” in the margin. Well if he felt that strongly then I hope he is enjoying the superabundance of consumer goods living in Cuba or North Korea.

And the library is full of homeless shooting up or bathing in the restroom sinks. My mom from North Carolina likes the library too but exclaimed with a shocked look that “there was a man in the ladies room!” (yeah, it's San Francisco... eye roll) She put it well, concluding “It's a shame that such a beautiful library is infested with so many homeless people.”


Yes, San Francisco has had a major homeless problem for decades and it is growing. The lion’s share of the problem centers downtown around the Civic Center (with government offices, the arts venues, and the public library) and the Tenderloin District although it is spreading into surrounding areas like the Haight, Western Addition, South of Market, the Castro, and even into parts of Union Square, the Financial District, and North Beach.

Feel free to check an online map for these areas.

One of my (rare) conservative friends lives in the Castro, the gay district which has been spruced up over the decades and become a higher-dollar neighborhood, and the last two years small tent cities, trash, and open drug use have mushroomed even on the Castro’s most scenic streets. She trolls the Nextdoor website where the locals now complain endlessly about the homeless invasion, to which she reminds them “Hey, you people voted for this.” To which the reply is either “Orange man bad!” or “You’re a Russian bot!”

When friends visit from out of town part of the world class tours I give includes a drive through the Tenderloin so they can see for themselves how bad the tent cities have become. If we’re lucky we’ll spot some syringes or human poop in time for them to pull out their phone cameras and zoom in before the light turns green.

But homelessness isn’t a problem for your nonconforming Correspondent. 

No way.

I live in a nice area bordering the Presidio, and most importantly I have two of the city’s most ritzy, superwealthy neighborhoods serving as a geographic buffer between me and the problems downtown: Presidio Heights and Pacific Heights.

The difference between Presidio Heights and Pacific Heights is the latter has world-class views of the Bay, and the former’s homes tend to be in the high-single digit million dollar range while the latter is in the double-digit million range. Next comes my neighborhood (Lake Street District) followed by Seacliff, another superelite place with residents like Twitter CEO Jack Dorsey, Sharon Stone, uberliberal presidential candidate Tom Steyer, Robin Williams (up until his death) and George Soros’ son among others.

But all these exclusive fiefdoms share this in common: they’re full of rich limousine liberals who claim to care about the plight of the homeless while having zero tolerance for homeless setting foot in their own neighborhoods.

The moment a vagrant wanders into the edge of any of these districts you can expect an SFPD patrol car to show up within 30 minutes and promptly deport the undesirable out. Because the rich liberals in Seacliff, Presidio Heights and Pacific Heights are happy to vote for policies that make homelessness worse… so long as only the hoi polloi have to live with the consequences—all while they continue to bask in the isolated bubble of their wealthy hypocrisy.

So when it comes time for rich San Francisco lefties to deliver on their promises to the homeless their message is: “What, you say we pledged to help and treat you with humanity? You don’t understand. *We* don’t do that, we just force poorer people to do it for us!”

A personal anecdote: For nearly two decades I’ve rarely seen homeless anywhere near my street, but a few months ago I actually heard a crazy guy screaming at himself as I took an evening walk.

The next day the screaming got louder and I noticed the same guy had parked himself on the sidewalk right across the street from my building, tucked away in a sleeping bag as he screamed himself to sleep at 4AM.

The following morning he was even louder. At 7:30AM I looked outside my 4th floor window to see he had set up shop right outside my building.

But he had company.

Two SFPD patrol cars were curbside with four officers standing there ordering him to pack it up and watching him do it. All the screaming this time was his complaining that he was going to be homeless among middle class and poor residents again.

But if you’re a resident of a lower-echelon neighborhood like the Haight, Castro, Mission, or Lower Nob Hill (only low single-digit million dollars homes) and you call the police to complain about a homeless person, well… you get laughed off the telephone. Suck it up common people!

So that’s a valuable lesson for living in San Francisco. When choosing a neighborhood, if you don’t want to have to deal with poop and syringes move in with the rich hypocrite liberals. They’ll keep voting to ruin the city and brag about how progressive they are at Democratic fundraisers so long as they remain insulated from all the unpleasantness.


San Francisco has been in the news recently because our nutty District Attorney Chesa Boudin—raised by Bill Ayers and did pro bono work for Hugo Chavez, continuing a tradition of his grandfather who represented Fidel Castro and great grand-uncle who was a famous Marxist theoretician—is super-duper soft on criminals. Especially those criminals of historically underserved ethnic groups whom he either doesn’t charge and/or lets free, then calling his policy “restorative justice.”.

So Walgreens has closed nearly twenty stores due to ongoing property theft and also reduced hours of many of their other stores.

But the rich locals I live around don’t tolerate undesirables in their neighborhoods so nope, my Walgreens hasn’t closed. You can bet if it ever does THEN the wealthy locals will demand city government gets tough on crime.

The biggest inconvenience—and this is the first problem that has actually affected me—is Target has also tired of unpunished shoplifting and now closes all its city locations at 6PM, although one can still drive out seven or eight miles to Daly City or Colma and shop until 10PM (I have a car but many locals aren’t so mobile, a subject for another column).

One more rising problem is car breakins. Those tend to be focused in tourist areas since criminals know the chances of a tourist flying back from the East Coast or Asia for a trial that never happens anyway are virtually nonexistent. But breakins are still a problem citywide.

So far I haven’t had one yet because everyone learns “don’t leave anything that looks valuable in plain sight in your car and your odds of being a victim will drop 95%.” Plus I have a one-car garage to myself in my building—a luxury in this city—which really, really helps. Many residents have to park their cars every night curbside which adds another fiftyfold risk to being a breakin target.


Yes, San Francisco’s constantly rising taxes and corruption have chased a lot of businesses away. Right after voters passed a “gross receipts tax” in 2018 (0.5% of any large company’s topline revenues) pharmaceutical distribution giant McKesson announced it was moving its headquarters from San Francisco to Irving, Texas.

Shortly afterwards Charles Schwab relocated to Westlake, Texas. Bechtel shipped its headquarters out to Reston, Virginia. Countless other smaller corporations have left in the last three years such as SoFi, Square, Lyft, and Core-Mark, and many large Bay Area companies have announced relocations to Texas like Hewlett Packard Enterprise, Oracle, Palantir Technologies, and just recently Tesla.

The pandemic has also helped ship tech jobs and offices out of San Francisco. All the work is remote so no need to pay for expensive office space that no one is using.

But this doesn’t affect me either. My day job has been voice telecommunications consulting and architecture for over twenty years and over all that time my clients have been outside San Francisco and usually outside California.

In other words my job isn’t reliant on a healthy California economy. San Francisco politicians can turn the city into an economic North Korea (some of them would like that) and I still keep working.

I’ll continue in Part 2 with the biggest economic albatross of all in San Francisco: housing costs.