Brookings confirms what basic economics predicted about Biden’s open border

The Brookings Institution released a study last week confirming something that anyone with a semester of economics could have told you four years ago: When a government floods a housing-constrained country with millions of additional people in a short period, rents go up.

Congratulations to the researchers for formalizing what every landlord and renter in Los Angeles, Phoenix, and Chicago had figured out by 2022.

The paper, titled “How Did the Post-Pandemic Migration Surge Affect Labor and Housing Markets?” examined major U.S. metropolitan areas from 2021 through 2024. The authors estimate the country absorbed roughly 6.5 million people above pre-pandemic migration trends during that period. Their conclusions: metropolitan rents rose an estimated 1.4 percent to 1.6 percent, and average hourly wages across the entire workforce may have dropped by up to 1.5 percent, as large numbers of new arrivals entered the lower end of the wage distribution. Native-born workers fared somewhat better. Their wages actually rose on net by 0.9 percent, and metropolitan GDP climbed by 1.5 percent.

In short, rents went up, average wages went down and GDP gains were concentrated among those already here. Better than nothing, I suppose.

I have spent 30 years in institutional finance, working alongside some of the most sophisticated investors in the world. Risk management isn’t complicated: You price the position before you open it, not after you have closed it at a loss.

The Biden administration ran an unhedged book for four years. The results were higher rents, suppressed wages at the low end of the distribution, school systems absorbing students they hadn’t budgeted for, emergency rooms eating uncompensated care.

The exposures were obvious going in, but the administration refused to mark them. Now Brookings has done it for them. But the economics are the polite part of this story.

While American renters were paying more for apartments they could barely afford,........

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