Have you ever noticed how every consumer group and politician always claims to be acting on behalf of the consumer? And yet every action either reduces consumer choice or leads to higher prices (and usually both)? As just one recent example, there is a big push amongst progressives to ban gas stoves in homes for new construction, as in New York, and in Berkeley.

The latest quashing of free enterprise happened in NYC, with a de facto ban of Airbnb rentals for travelers:

Many Airbnb users with bookings in New York City this Christmas are scrambling to find new accommodations.

The company announced plans to cancel and refund bookings for stays after Dec. 1, according to the Associated Press, after long-planned regulations aimed at curbing illegal short-term rentals in the city went into effect on Sept. 5.  

The regulations, which caused an uproar among travelers and short-term rental owners, require hosts be present for stays of less than 30 days, with no more than two people staying in a dwelling at a time. Hosts must also register and get approval from the city — or both hosts and booking sites may be subject to hefty fines.

The travel industry website Skift estimates Airbnb short-term listings in New York City dropped 77% from June 4 to Sept. 10, likely sending many in search of new accommodations….

“The message for your viewers is if they’re thinking about coming to New York City, they should plan to make the reservation sooner rather than later,” he said, “We expect prices will likely increase, particularly as we get deeper into the year.”

The effect of this (which is not unintended) is to shift travelers from Airbnb to hotels, which not only are more expensive, but with the decreased competition will raise rates. This is a perfectly predictable response, consistent with Public Choice economics. While seemingly paradoxical, regulation is often sought after by larger entrenched business interests to stifle competition. We should expect political actors to respond to the incentives they have, and the immobile capital in NYC of hotels makes them much more likely to pursue regulation. Only when the Airbnb homes become both large enough and organized enough should we expect a countervailing push. Regarding the hapless consumer, they are an afterthought. They are not only rationally ignorant, but they are also not usually voters in the city. The hotels are quite happy with fewer visitors coming at much higher prices, rather than many more visitors at lower prices (since the higher quantity would largely go to Airbnb operators at the margin).

And, oh by the way, is there a consistency between politicians and their desire for regulation and their political party? But of course. And is there an inconsistency between their actions and their rhetoric in favor of the little guy? Indeed there is.

Let the masses buy electric cars!