Million Dollar Babies: Economic Fact versus Popular Fancy in L.A.
By Bryan Caplan
I just got back from another vacation in Los Angeles. As they say, it’s a “city of contrasts,” but the most interesting contrast is rarely mentioned. On the one hand, even pretty ordinary Angelenos – especially the elderly – reside in homes worth about a million dollars. On the other hand, the people of L.A. – and its self-absorbed local media – never stop complaining about how bad they’ve got it. Any resident I talked to for more than five minutes starting ranting about crime, gangs, natural disasters, health care, and, above all, “illegals.” And these same issues dominate every newscast and the front page of every newspaper. Los Angeles media make the New York Times look like the Julian Simon Sentinel.
Unfortunately, vacation is so exhausting that I didn’t have the energy to set L.A. straight. But now that I’m home, here’s what I’d like to have said:
Angelenos: Turn off the news. Cancel your newspaper subscriptions. If you want to really understand your city, all you need to do is take a look at housing prices. If your house is worth a million dollars, then life in your neighborhood is excellent, and will continue to be excellent for a long time. The problems you keep complaining about are minor drawbacks for people who live in cheaper areas. If your home is worth a million dollars, these problems barely affect you at all.
What makes me so sure? People don’t pay a million dollars to live in a hellhole. They don’t pay a million dollars to live somewhere that is going to be a hellhole in ten years. If popular opinion and local media imply otherwise, they’re wrong. In fact, they’re so wrong that they don’t deserve your time.
A useful comparison: Once a GMU grad student got a job offer in South Africa. He could have bought a glorious mansion there for $80,000. The drawback was that, by buying that house, he would have painted a big target on his back saying “Kidnap me.” He didn’t go, and who can blame him? There’s got to be something horribly wrong with a place where mansions go for $80,000.
Lest I be misunderstood: I am not making an “If you don’t like it in L.A., leave,” argument. If things were as bad as Angenelos keep telling me, they wouldn’t have attractive exit options. Their homes would be worth peanuts. They couldn’t afford to sell their homes and move somewhere good.
My argument, rather, is: “The fact that you stay, despite your enormous real estate values, shows that you do like it in L.A. Most people in this country would be happy to trade places with you. So stop complaining and appreciate what you have.”