What Happens When Government Subsidizes Demand but Restricts Supply?
Give every buyer $100,000 when there are still only ten houses, and the check goes to the buyer while the money goes to the seller. How much depends on one thing: supply.
Zesht principle
Prices contain information
A high price can be painful without being meaningless. Sometimes it tells us something has become scarce, risky or expensive to produce. Suppressing the price does not necessarily eliminate the scarcity. It can hide it.
California Cut What It Pays for Rooftop Solar. Did It Fix the Right Problem?
Under NEM 3.0, an exported kilowatt-hour can earn a fraction of a cent at spring noon and over a dollar on an August evening. That's a price telling the truth. Is the rest of the bill?
California Tried to Control Insurance Prices. What Happens When Insurers Stop Selling Insurance?
You can control the premium. You cannot control the risk. When the allowed price doesn't cover the risk, the response isn't cheaper insurance — it's no insurance.
Is Your California House Actually in a Fire Zone?
California's fire map shows hazard. Your insurer prices risk. They aren't the same thing — and the difference is where a homeowner's money is made or lost.
Is Southern California “Overdue” for the Big One? What the Odds Actually Say
People talk about earthquakes like buses. Elapsed time does nudge the odds up — but faults keep no schedule, and your address matters more than the countdown clock.
The rest of the framework
Other principles
People respond to incentives
Change the cost or reward attached to an action and people change their behavior.
Every subsidy has an incidence
Someone receives the benefit, someone finances it, and sometimes a producer captures it.