‘Poor’ Americans, Amply Served by the Market

Another great letter from Don Boudreaux Cafe Hayek.

"Here’s another letter to the Wall Street Journal, using a different angle than the last, on Peter Donovan’s claim that government subsidies to finance the construction of down-market residential apartments are necessary to keep poor Americans “out of the cold”:

Peter Donovan asserts that failure of government to subsidize loans to build lower-end rental units would result in poor Americans being homeless (Letters, May 3).

Nonsense. Unsubsidized markets do not cater exclusively to the middle-income and rich. Quite the contrary. Automakers produce not only luxury vehicles such as Lexuses but larger numbers of low-end makes such as Chevys (not to mention the existence of a thriving market in used cars). We see not only high-end retailers selling the likes of hand-crafted Stickley furniture but also, and more abundantly, Wal-Mart and other discount retailers selling inexpensive household furnishings. America boasts not only pricey restaurants such as the Inn at Little Washington but, far more commonly, inexpensive eateries such as Olive Garden, Denny’s, and (dare I mention it?) McDonald’s.

This same pattern holds for clothing, hotels, groceries, entertainment, works of art, and nearly every other species of goods and services in our economy. It’s unreasonable to suppose that without government-subsidized loans to developers, housing would be built only for middle-income and rich Americans."