Juncker problems and hard problem
The housing crisis is a campaign promise being fulfilled
(Not to be confused with the Junker Fallacy, which is completely unrelated)
Jean-Claude Juncker, former EU Commission President, once said of social security funding:
Solving the problem is easy. We all know how to solve the problem. What we don’t know is how to get re-elected after we solve it.
This was a classic Kinsley gaffe (when a politician tells the truth1).
I think we should call any problem that has these features, where we know how to technically solve it, just not how to get reelected afterwards, Juncker problems
Some Juncker problems
Housing prices. As I have remarked many times on Twitter, there is actually widespread consensus on how to make housing cheaper: build more housing.2 What politicians don’t know how to do is to get re-elected after they make building more housing legal.
Sometimes politicians will accidentally make housing cheaper. Then, they panic and try to quickly undo the damage or promising to make housing cheaper but also not cheaper.
Other times, they just straight out come and promise that housing prices will not go down. The housing crisis is not an accident, it is a campaign promise being fulfilled.3Social security funding. This is the original Juncker Problem. Everyone knows that most systems are over-extended and you need to cut costs. Nobody agrees who should lose and when, but over the long-term, almost everyone will move to something like the Australian system: public pensions to avoid elderly poverty and anything above that will need to come from private savings. There really isn’t much room to maneuver, but nobody wants to be the politician that is up for reelection after doing the obvious.
Some hard problems
I don’t want to make the argument that everything is easy, that would be too facile4. There are hard problems, problem that only have bad solutions and we must weigh the tradeoffs.
How to deal with drugs (including alcohol). I used to have a very left-libertarian view of drug policy. Basically, prohibition strictly made things worse and legalization was the obvious right thing. Now, I am still generally pro-legalization, but more in sorrow than in celebration. Drugs really do destroy people’s lives.
Disability policy. This is just tragic, however, you look at it. There are people who deserve a decent life despite being unable to be economically productive for no fault of their own, but any flexibility in the system quickly gets exploited by unscrupulous people into a boondoggle.
Crime. It’s tradeoffs all around.
Related previous post: Most good policy ideas are unpopular
In another instance, Jean-Claude was caught on an obvious lie and said “sometimes you have to lie.”
The actual policy is not building more housing. The policy is stop threatening people who want to build housing with fines and prison.
Sometimes politicians do stupid things because voters want stupid things in that they don’t see that their ideas have a negative side effect (e.g., price controls). In this video, the party campaigning to be reelected just straightforwardly is promising that prices will continue to rise. I had heard politicians in Luxembourg say exactly the same thing.
When you start looking for it, you see how any hint that housing prices are going down is treated as a bad outcome.
This is a common view, that politicians (or “they”) don’t want to fix something because it benefits them, but if we only got people who really cared about it, it would all be so easy.