Silicon Valley exodus: Bay Area tech companies leaving for Texas

This is a really good point, and this framing helps me understand your argument much better, thanks!

> The incentive to build is low because most existing property owners want to continue living somewhere in the Bay Area and if they move, their taxes reset.

I don't think this is right, though -- the incentive to move is low, but the incentive to build is high. Since people do move, even though there is a strong counterincentive, we find that properties do come on the market, and overwhelmingly the reason they are not bought by developers to build larger structures with more units is zoning.

If developers could buy a SFH for $2m and build a 4-plex, selling each unit for $1m (numbers that are pretty common in wealthy Bay Area neighborhoods), then they absolutely would and we'd see this all over the place. In my neighborhood this happens every time edge cases in zoning allow it. (Large enough lot that it can be split? Developer buys it, builds two units. Weird commercial conversion with higher floor limits? Developer buys it, builds three units.)

I agree that prop 13 has an impact here, but zoning in most neighborhoods literally prohibits new construction -- so I don't think a prop 13 repeal would have nearly as much of an impact on new housing construction as upzoning or other zoning mitigation. Of course, from an economic perspective both are highly problematic distortions of pricing (along with rent control!), and both need to be reevaluated -- but if I had to pick one, I'd pick zoning!

Maybe. Or they know if they buy today and make it hard to build, they can go somewhere new with a big pile of money later. They got theirs, and they don't care about the others.

In actually, it's a big and heterogeneous group of people. I expect some never learned, as you say. Some are jerks, as I described. Some just don't think deeply enough about their policy choices, and some think there are post-Econ 101 reasons why the Econ 101 dynamics (while important) aren't what dominate.

And of course there are some of us Californians, staying and leaving, who do think it should be easier to build.

And Wall Street was great in New York until they moved to Florida, North Carolina, and Hawaii... and Oil headquarters were huge in California until they moved to Texas... and Big Auto was big in Michigan until they moved to the South and on and on.

What is so mind-boggling about all these people not seeing the trends is acting like what is is what has to be. There's no divine right for these companies to remain in California. It has a terrible business climate. Were it not for oil, agriculture, and defense in parts of CA the Bay Area loathes, there would be very little actual "stuff" produced in California. Software has no geographic attachment to the land like ag or oil, so there's no reason they have to be forced to the Central Valley. They can just leave.

You use non-specialised staff, which is what they were willing to do earlier in the year.

I think there's a huge expectations gap that's developed here. It's not just in Sweden, the same can be seen in other countries: doctors are arguing that anything abnormal at all should be justification for sweeping lockdowns. Lockdowns are utterly destructive and evil partly because they relieve the healthcare sector from any expectation to increase capacity. They just say "no we won't" and everyone loses their minds as if that's the last word.

I think frankly we also have to remember that doctors aren't angels. They are ordinary people who can exaggerate, lie or lose perspective like anyone else. For example in Switzerland doctors recently complained to the government that the healthcare system was about to collapse. A few days later the official dashboard added hospital capacity graphs which showed the system was running at 75% load and when COVID patients started turning up outside of ICU, the total number of beds went up to preserve the headroom. 75% load is very low, it's typical for ICUs in other countries to run at 90%+ utilisation even in normal times. So one must ask, how can they be claiming they're stretched past breaking point when there are so many free beds? Either the national statistics are wrong, or they are wrong, or the stats are hiding important details.

From reading an interview with them (in Switzerland) it became clear that there were a few sources of problems:

1. Basically all COVID patients are very, very old. Past the average life expectancy. The doctors were arguing that they had to increase the number of staff per patient because the cases were so "complicated". This can be seen another way: yes, life extension is quite complicated. Of course if you feel like you should battle to extend every life by another six months and there are no limits to how much effort should be made, or how many sacrifices must be made by others, then it will seem like a lot of cases are incredibly complex and only the most specialised staff are acceptable.

2. They were in denial about hospital-caused infections. They even said nosocomial infections were a "taboo topic". Hospitals are by now generating a large fraction of all cases but they weren't discussing how to fix that, they were just ignoring it. Why bother when they can demand society self-destruct at their behest and the government will do it?

3. They weren't discussing how to increase capacity at all. Anyone could come up with a dozen ideas for what to do in a crisis, especially doctors. They weren't interested.

4. Their attitude to the destruction of public life they were creating was simple. It was words to the effect of, businesses can be rebuilt but a life can't be brought back. In other words they don't recognise that tradeoffs in healthcare exist. In fact, most of the businesses they destroy will never come back, they'll be as dead as the patients - and then who will pay the health insurance premiums? The doctors appeared as oblivious to that question as they were to questions of infection control or capacity increases.

The risk is that thousands of people would die, both from Corona and the fact that hospitals will be closed to all patients Corona or not.

How do you figure hospitals would be closed to all people? Are you saying you think the rate of discharge would drop to zero? Why? There are no situations in which hospitals would become closed to "all people", even if they became full. There'd still be a steady stream of discharges and deaths that free up capacity for new admissions.

300,000 people have died in the United States so far as a result of Coronavirus

No they haven't, not even close: they have died with the virus but many of those were simply relabelled.

Look at Sweden: 2020 will have total all cause deaths a few percent higher than previous years once December is counted. It's not a big number for a supposedly deadly global pandemic. A lot of COVID deaths are ambiguous.

Who would pay for this? We have a private healthcare system, not a public one. The City of LA is not in the business of purchasing and operating helicopters for medical use. There is no budget for that.

Are you really going to cite procedural and budget issues when the chosen alternative is to lock people in their homes and totally destroy the tax base? Lockdowns are such a totally extreme policy that basically anything is cheaper and more politically plausible than that.

I mean you're acting like the government paying hospitals for work is totally unthinkable even though the level of borrowing required to pay for lockdowns is astronomically higher than any hospital bill could ever be. Yes! Buy beds in nearby areas where hospital loads are lower! For crying out loud this is an utterly trivial thing to do compared to what's really being done. Lockdowns are perhaps the most expensive form of virus mitigation anyone could ever invent, literally anything is going to be cheaper than that.

As for size, none of my proposals are scale-dependent. I'm not sure why being bigger would matter.

I don't know that putting California, and Los Angeles in another lockdown is being interpreted as niceness here

Amongst the establishment it certainly is. I am 100% certain that Newsom etc are convinced that they're making the moral choice, the "nice guy" choice and if they told the hospital system to do whatever it took to increase capacity but no, we aren't going to lock down, they'd be pummelled from all sides with accusations that they were heartless, cruel monsters who cared only about money.

Sure, for the people on the receiving end it doesn't seem nice but the people making these decisions and pushing for them are all insulated from the effects by government power. No government health officials are getting pay cuts this year.