Opinion | Lewis: Painkiller economics

Lately, I’ve found myself in an odd place. When I criticize Republican economic policies, people assume I must be lining up with the Democrats. When I push back on Democratic ideas, they assume I’ve gone the other direction. The reality is far less satisfying: I’m increasingly frustrated with both. Because from where I sit, both sides are going in strikingly similar and wrong directions.

Politicians argue constantly about how to quickly ease the economic pain (affordability) and almost never about what’s causing it. Housing is too expensive. Healthcare is too expensive. Education is too expensive. And the political response, almost reflexively, is to reach for something that sounds like fast relief: cap prices, raise wages, subsidize costs, protect jobs, implement tariffs. These ideas are generally well-intentioned but they are the equivalent of popping a painkiller. The approach might help some people for a while, but the pain will return, usually getting worse, as the underlying problem has not been addressed. These policy responses are what I characterize as “Painkiller Economics.”

A simple example. Most of us are aware of the rent controls and rent freezes New York City has implemented under the objective of improving housing affordability. In the short term and for a few, this had the direct positive impact of holding prices down. The problem is that it made the long-term problem worse. With no potential for profit, developers stopped building affordable units. Landlords took old apartments out of service as they could not cost-justify bringing the units up to code.

Sources claim that, if all the empty apartments were brought back into service, there would be no shortage of housing and prices would naturally drop. Price controls reduced pain in the short term but, arguably, made things far worse over time.

If you zoom out, the mechanics of economic progress are actually quite simple. Over the long run, societies get richer when they become more productive — when they figure out how to do more with less. That’s it. That’s the engine. Innovation drives that process. Friction, which comes in the form of regulation and controls, slows it down.

Support Local Journalism

Donate

On the innovation side, we’ve seen this play out clearly. A century ago, roughly 40% of Americans worked in agriculture. Today it’s closer to 1–2%. The same thing happened with shipping. Before standardized containers, loading cargo was slow, expensive, and labor-intensive. Then one simple innovation cut costs by more than 90%. In both cases, productivity rose and costs fell.

On the other hand, our insatiable institutional desire for increased safety, security, accountability, control, and the like creates friction — the negative productivity element — a very significant cost component of many products and services.

Look at the sectors where people feel the most strain: housing, healthcare, education. These are not areas where costs have fallen or even matched overall inflation; they’ve skyrocketed. And it’s not because we lack technology. It’s because the systems themselves have become more complex and more constrained — permits, approvals, regulations, requirements, delays. That’s friction. And friction behaves predictably: it reduces supply, increases cost, and raises prices. Additionally, especially for healthcare and education, the lack of any real level of competitiveness has decreased the motivators for innovation.

Where my frustration comes in is that Democrats (progressives) tend to respond by trying to shield people from rising costs using rent control, wage mandates, and subsidies. Republicans (Trump era) tend to respond by trying to shield existing industries from change using tariffs, trade barriers, and industrial nostalgia (bring back coal!). These approaches look different, but they share a common flaw. Neither one does anything about the two things that matter: improving productivity and reducing friction.

One party tries to protect people from the system. The other tries to protect the system from change.

At some point, we need to ask a different question. Not how do we artificially induce more affordably right now, but why is it so expensive in the first place. Because until we answer and address that, we’re not solving the problem. We’re just popping painkillers trying to live with it.