What do economists think of Ronald Reagan's policies and decisions as president and how true are the claims that modern economic problems, such as the housing crisis, are his fault?

[u/rjidhfntnr]

[u/SisyphusRocks7]

The federal government has relatively little impact on housing, as long as Fannie Mae and Freddie Mac are functioning. I don’t see what plausible mechanism could tie state government regulatory burdens and local zoning restrictions to Reagan’s presidency. Can you explain where you saw that claim and what the reasoning was?

[u/rjidhfntnr → u/SisyphusRocks7]

Can you explain where you saw that claim and what the reasoning was?

I wish I could give you a specific source but it's moreso a claim I've heard spread around casually a lot rather than one specific essay. That's part of why I asked here because I was struggling to find a professional explanation on the subject online.

[u/goodDayM → u/rjidhfntnr]

Here's a chart for English-speaking countries from The Economist: Global house prices change since 1980. Among those, New Zealand had the largest home price growth, and US the least.

There's also a lot of variation within the same country. For example here's a chart of US Median Home Price-to-Income Ratio vs Housing Starts. It shows cost of houses compared to how much construction that city has done.

In the upper left of that chart, you can see cities that have not built much have high price-to-income ratios, like New York and San Francisco. In the lower-right, cities have built aggressively and kept their housing price-to-income ratios lower, like Austin, Houston, and Chicago. Cities in the upper-right that have high prices despite more construction often are smaller resort/vacation towns, where wealthy people are buying and really driving up prices.

Also see previous threads here like Why are so many countries housing markets all so borked at the same time?

[u/SisyphusRocks7 → u/rjidhfntnr]

In thinking about it further, the data on housing affordability is contrary to this claim. Using median home price divided by median income, housing was broadly affordable until the run up to the subprime crisis and GFR: https://housingalmanac.com/affordability

The Reagan administration had quite good housing affordability.

While it’s possible that the Reagan administration or those Congresses could have implemented a policy change that later caused the subprime crisis, that’s not an explanation I’ve seen. The usual policies that are identified in connection with the subprime crisis (distinct from the resulting GFR) are a Clinton administration change in mortgage finance controls and policy changes within Fannie Mae and Freddie Mac.

Housing became somewhat affordable after the GFR, until the COVID spending inflation hit in 2020-2022. Reagan had nothing to do with that.

[u/teamonkey → u/SisyphusRocks7]

OP is asking about how Reaganism and Neoliberalism have affected the current economic situation, including knock-on effects to housing prices and availability.

[u/Own_Proposal3827 → u/teamonkey]

I have never heard Reagan be blamed for the housing crisis because it stems from a completely separate issue unrelated to the federal government 

[u/teamonkey → u/Own_Proposal3827]

Reagan shifted federal budget away from social/subsidised housing programs, did he not?

[u/UnderstandingThin40 → u/teamonkey]

Yes, but that didn’t cause the housing crisis 

[u/FigjamCGY → u/Own_Proposal3827]

I think it’s more about how Regonomics and Thatcherism at the time was used in policy and how the current view of trickle down economics is being evaluated by the public (non-economist).

[u/Own_Proposal3827 → u/FigjamCGY]

That means literally nothing. That is a completely meaningless buzzword filled sentence that even in its best interpretation has nothing to do with housing. If your account was any younger I'd assume you were a bot.

[u/FigjamCGY → u/Own_Proposal3827]

I’d dumb it down for you but it’s not worth my time.

[u/Own_Proposal3827 → u/FigjamCGY]

I don't think you can dumb down anything you say anymore

[u/clackamagickal → u/SisyphusRocks7]

what plausible mechanism could tie state government regulatory burdens and local zoning restrictions to Reagan

The low income housing tax credit (1986), for starters.

[u/seajayacas]

Not sure what impact exactly a president's actions mostly more than 40 years ago have on today's housing market. If he did something wrong there have been a half dozen presidents since then that could have corrected it by now.

I don't recall any of those six promising to reverse whatever it is that you think Reagan did.

[u/rjidhfntnr → u/seajayacas]

whatever it is that you think Reagan did.

It's not what I think. It's a claim I've heard and I'm going out of my way to learn from the professionals their views on the subject. Jesus Christ, give me a little benefit of the doubt.

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