Saturday, April 30, 2005

Is that all there is?

Evolution via natural selection is tautologically correct. This applies to the almost uncountable and mostly wonderful capabilities that most of us walk around with. Evolutionary psychologists add that natural selection also explains our many wants and preferences.

So, is that all there is? David Sloan Wilson, among others, has fun with this question in Darwin's Cathedral.

Sharon Begley in yesterday's WSJ ("Evolutionary Psych May Not Help Explain Our Behavior After All") cites David Buller's Adapting Minds (which I have not read) as a source of counter-evidence to the evolutionary psychology approach. Most young women like hot young guys, rather than older richer providers, as the EP line suggests.

Capabilities as well as wants are really all about complex distributions, rather than yes-no traits. This truism makes things interesting.

"'Why did God make us love so much what we mustn't do' [muses Tamara Petrovna]? He [I.A. Serebin] didn't know."

-- dialogue from Alan Furst's Blood of Victory, another of his WW II thrillers-with-brains, in the Graham Greene tradition.

Friday, April 29, 2005

Politics as usual

Porfirio Diaz wielded power in Mexico for almost half a century. He is also credited with the thought: "Poor Mexico, so far from God, so close to the U.S."

Yes and no. With about $75 billion (compared to $430 billion GDP) in annual remittances from US-based Mexicans each year, the world's largest market and source of capital next door, and a steady opportunity to export unemployment, there are also some benefits.

In recent days, the Mexican powers-that-be bowed to popular demand and backed down from (questionable) attempts to keep Mexico City Mayor Andres Manuel Lopez Obrador from seeking the nation's presidency next year. Lopez Obrador is that popular. And he is no fool, offering monthly cash hand-outs to everyone over 70 years old -- and, according to The Economist, planning to fund the program by diverting funds from Mexico City's sewer system maintenance budget.

The current hero of Mexico's left has plenty of support from the country's greens. Like greens around the world, they only see pollution and crowding as "market failures" and, therefore, favor bizarre economic and social policies.

Their man exemplifies the political failures that help to make Mexico City incredibly polluted and crowded. Like his American compadres (and unlike London's "Red" Ken Livingston), Lopez Obrador has not grasped that there is one (and only one) "solution" to road and highway congestion (and the bad air it creates): proper pricing.

He does know a thing or two about garnering votes, however.

Wednesday, April 20, 2005


The Economist calls attention to Jason Shogren's recent paper in the Journal of Economic Behavior and Organization. In "Human Evolution: Homo economicus?" the magazine's writer reports:

"Since the days of Adam Smith and David Ricardo, advocates of free trade and the division of labour, including this newspaper, have lauded the advantages of those economic principles. Until now, though, no one has suggested that they might be responsible for the very existence of humanity. ... Dr. Shogrun is suggesting that trade and specialisation are the reasons Homo sapiens displaced Homo neanderthalensis (Neanderthal Man), and emerged triumphant as the only species of humanity."

Sounds like great fun. I just hope that now protectionists do not end up being labeled as Neanderthals.

Tuesday, April 19, 2005

Wrong paradigm

Here is the latest Marginal Revolution post on housing-bubble talk.

They missed Mike Davis' contribution in this morning's LA Times ("The Bubble, Then the Blues") -- probably for good reason. Davis rambles all over the place, touching on many of the favorite class warfare chestnuts ("underfunded" schools and health care, globalization, George W. Bush, etc.).

Can those of us who are skeptical of bubble talk take comfort in the Davis column? Take comfort in Paul Ehrlich's doomsday forecasts? Do these examples and many similar ones actually help us?

Very smart people can be very wrong when they subscribe to poor theory (poor paradigms). Cleaning my office (a steady and loosing enterprise), I came across a nine-year old column by Rutgers Prof. Robert Fishman ("Reimagining Los Angeles", LA Times Sep 10, 1996). He wrote:

"As the Los Angeles autopia reaches a state of permanent crisis, the seemingly buried Los Angeles of the era of trolleys, local-centers and a vital downtown has become increasingly 'visible'. Every major 'progessive' project put forward by our most committed avant-garde designers constitutes a revival of the best features of the 1920s city ... The most obvious and important project is the work of the MTA to make Los Angeles in the 21st century once again a world center of light-rail transportation, and also an important commuter rail and even subway city. The imptus toward a balanced transportation system for Southern California seems unstoppable."

Like it or not, all of us have to make good forecasts all the time in order to survive. In doing so, we have to gather and process lots of data.

It may sound harsh, but vital parts of the puzzle are the prognostications of smart people who are off on the wrong (paradigmatic) track.

Monday, April 18, 2005

Just the facts

After many years of practice, public discussions of traffic and transportation in the U.S. have almost jelled into a standard format. The two sides divide roughly as follows:

1. Those who have the any understanding of markets argue that the accurate pricing of access to roads and parking is the no-brainer remedy and that nothing else comes close.

2. Those to whom markets remain impossibly exotic argue for anything but pricing, including high-cost rail transit -- which has, either, a narrowly rational (but unacknowledged) political pork basis or an irrational (romantic) basis in the urban fanatsies of the uninformed

The two camps have, for the most part, been unable to communicate.

Trying to bridge the gap, I used to cite the factoid that 50% of morning peak travel is for non-work purposes; while 60-70% of afternoon travel is for non-work. So there are may be more than a few trips that could be tolled off the peaks -- before we build again.

I was wrong. The 2001 National Household Travel Survey (NHTS) includes data that show the non-work share of person-trips in the Mon-Thurs morning peak (6-9 am) is actually 62%; the afternoon (4-7 pm) non-work share is 76%. These numbers have jumped since the last time I looked, making the case for peak-load pricing stronger than ever.

Saturday, April 16, 2005

Home schooling and the alternatives

Over a million kids are now being home-schooled throughout the U.S. Many parents have discovered that they can do better than send their kids to the abysmal public schools found in too many cities of the U.S.

Susan Wise Bauer writes in The Well-Trained Mind:

"But I was nervous when I went away to college. Although I'd done well on standardized exams, I'd never really sat in a regular classroom, facing inflexible deadlines. I was used to taking tests from my mother."

"I shouldn't have worried. I tested out of thirty hours' worth of college courses; by my second semester, I was taking 400-level courses. I had host of strange skills: I could diagram sentences; I could read Latin; I knew enough logic to tell whether an assertion was true or faulty. And I was surrounded by 18-year olds who couldn't write, didn't want to read, and couldn't reason."

I have encountered thousands of undergrads over the years who are pretty much as Wise describes. International comparisons reveal that U.S. students fall further behind, the longer they attend the public school system. They are victims of a system run by and for a politicized and unionized cadre responsible for the foremost social and economic problem of our time.

Friday, April 15, 2005

Preferences over hubris

Exurban growth in the U.S. has been known about since the late 1970s. Early on, some analysts mistook it for a reversal or urbanization. Rather, it is more of the same: the continued outward expansion of metro areas (the label "city" is almost quaint).

Yet, April 15, 2005, is the date that the story makes it as the headline of USA Today. Years and years of "smart growth" planning, all the rage all over the U.S., has not put a dent into some very powerful forces -- which emanate from people's excercise of their pereferences.

But what do they know?

Thursday, April 14, 2005

Death and taxes

The Estate Tax is once more being debated in Congress and in the op-ed pages and elsewhere.

A column from today's WSJ (below) makes interesting reading because it cites the view that for tax relief for a very small group to succeed it must be because of the evil-genius political capabilities of "the rich" and/or the ineptitude of everyone else.

I have not read the Graetz-Shapiro book. The WSJ summary suggests that the authors cannot abide the idea that more of the elctorate is disposed to aspiring than envying. They are, then, left to espouse a devil theory of politics.

"Populist Scythe Aids 'Death Tax' Foes"

"When we last left the estate tax -- or, if you prefer, the death tax -- Congress had slaughtered it. Well, not exactly. President Bush signed a bill that reduces the estate tax gradually until it vanishes altogether in 2010. But the tax will be resurrected in its pre-Bush glory in 2011 unless Congress acts before then.

"The House of Representatives voted 272-162 yesterday to wipe out the estate tax permanently. But as my colleague Brody Mullins has reported, some Senate Republicans doubt the repeal can get through the Senate. They are sniffing around for a compromise that would keep the tax alive with a rate as low as perhaps 15% and a threshold that exempts all but the wealthiest of the wealthy.

"Before another round in this debate begins, pause to consider the facts -- and the unusual politics that have made a populist issue out of repealing a tax that hits only the best-off Americans.

"The estate tax this year will fall on those who leave assets of more than $1.5 million. That is about 18,800 of the 2.5 million people expected to die this year, according to the Brookings Institution-Urban Institute Tax Policy Center. Only 440 -- that isn't a typo -- will be estates in which half or more of the assets are farms or family-owned businesses, the cases so highly publicized by those who want to kill the tax.

"The tax will bring in about $18 billion this year, enough to fund the National Aeronautics and Space Administration, with a few billion dollars left over.

"All this has Michael Graetz, a Yale Law School professor and the top Treasury tax official in the first Bush administration, wondering: 'How could a tax that applies only to the richest 2% of the American public become anathema to 70% of the population and be repealed by bipartisan votes in both the House and the Senate?'

"In a new book, 'Death by a Thousand Cuts,' that tries to unravel the mystery, Mr. Graetz and Yale political scientist Ian Shapiro show how defenders of the tax underestimated the tenacity and shrewdness of the other side and mistakenly thought reciting facts would keep public opinion on their side.

"Advocates of repeal steered the issue away from facts to morality, declaring the estate tax an unfair levy on success. They also put faces on it -- U.S. farmers and small-business owners, never rich fellows who wanted to bequeath mansions or portfolios. One of the most prominent belonged to Chester Thigpen, a tree farmer from Mississippi, who testified in favor of repeal at age 83 in 1995. 'It turns out,' Mr. Graetz reports, 'that Thigpen's estate was too small to be affected by the estate tax, but that was just a detail.'

"Those opposed to repeal never found a way to counter such stories. 'The only reason you were given to oppose repeal,' Bill Frenzel, a former Republican congressman from Minnesota, said the other day, 'was that somebody else whom you don't know...and none of your friends or neighbors know, who lives in a gated community in the Caribbean, is going to pay this tax.'"

"With hindsight, Mr. Graetz says estate-tax defenders (of whom he is one) should have focused on the children who were lucky to be born to wealthy people. 'We could have called it the Paris Hilton Benefit Act,' he says.

"The public case for repeal revolves around stories about those who would be forced to sell the family farm or business to pay the levy. A 1997 law to help them proved so complex that hardly any used it. Taxing only estates larger than $5 million would exempt most small businesses. But the small-business lobby, at least so far, won't accept that.

"We've been fighting this on the grounds that it's an unfair tax, and if you believe that, it's hard to argue for anything except repeal," says Dena Battle, a lobbyist for the National Federation of Independent Business.
The ability of estate-tax foes to hold onto the 'fairness' argument is a remarkable milestone. The modern estate tax dates to Teddy Roosevelt, who famously declared that the 'man of great wealth owes a particular obligation to the state because he derives special advantage from the mere existence of government.'

"The case that the well-off should be taxed at higher rates than others remains popular in polls but no longer is a given in American politics. Just listen to the talk about a flat tax or a national sales tax. "This death-tax effort has been a critical piece of an attack on the very idea of progressive taxation in America...that those who have more should contribute a larger share of their resources to support the government,' Mr. Graetz says.

"As both sides realize, the stakes in this year's estate-tax debate are larger than the small number of people it hits. It is part of a debate about how much to use the tax code to arrest the widening gap between rich and poor."

Tuesday, April 12, 2005

Space in our time

John Cassidy's New Yorker piece re Jeffrey Sachs and and his new book ("Always With Us?" in the April 11 issue, re The End of Poverty: Economic Possibilities for Our Time) includes this quote from Sachs: "In all my training, the ideas of physical geography and the spatial distribution of economic activity had not even been mentioned." Sachs managed to overcome the deficiency.

Yet, the quote will cause many readers to smile. Space means transactions costs and these were not discovered until Coase (1937) and are just now being taken seriously by significant numbers of economists (see, for example, Institutions and Economic Theory: The Contribution of the New Institutional Economics by Eirik Furubotn and Rudolf Richter).

Textbooks (and undergrads) will have to wait a bit longer. Alchian-Allen-Heyne-Boettke-Prytchitko provide the notable exceptions.

Monday, April 11, 2005

University diversity

This morning's WSJ op-ed by Joe Lieberman (and soon-to-be Hillary Clinton) political consultant Dan Gerstein ("Why the Democrats Are Losing the Culture Wars"; link only good for subscribers) neatly summarizes the I'd-much-rather-be-elitist in-good-standing-than-win view held by many on the left.

Dan Klein has done more than anyone to document the extent of left-leaningness among U.S. university faculties. Dan also shows the extent to which it is self-perpetuating.

Those who are the most shrill about diversity also prefer to live in a world of smug presumptions of shared assumptions.

Paul Krugman's NY Times op-ed on this ("An Academic Question") was pure unintended self-parody. He explained that there is nothing odd about Klein's findings because, after all, how can anyone seriously expect a bunch of creationist know-nothings to get tenure. I expect that he sincerely believes in the wisdom of his explanation .

And therein lies the problem.

Saturday, April 09, 2005

Tall buildings

Some years ago, Peter Drucker neatly summarized the evolution of cities in the modern age.

"In 20 years Japanese office workers may still commute, packed shoulder to shoulder, to downtown towers. But no one else in the developed world will. Office work, rather than office workers, will do the traveling. Tomorrow’s big city is no longer going to be the office center.

"The exodus is already under way …

"The modern big city is the creation of the 19th century’s ability to move people. Everyone in Dickens’ London walked to work except the owners, who lived over their shops or their counting houses. But then, beginning in mid-century, people began to acquire wheels – the railroad first, then the omnibus and the streetcar (horse-drawn, of course, for many decades), the subway and the elevated train, the automobile, the bicycle. Suddenly large masses of people could move over great distances to where work was. And the elevator added vertical mobility. It was this ability to move people, that, more than anything else, made possible large organizations, business, hospitals, government agencies and universities.

"By 1914, every single one of the means to move people into an office-centered large city – and to enable the office workers to live outside it – had been developed. But they did not have their full impact until after World War II. Until then only two cities had skyscrapers – New York and Chicago. Now every mid-sized city world-wide boasts a “skyline” and even in mid-sized cities people commute.

"This trend has clearly reached its end, has indeed widely overshot the mark. Tokyo’s office workers have to live more than two hours away just to get a seat on the train. ….

“Information and the Future of the City” by Peter F. Drucker, The Wall Street Journal (April 4, 1989).

The Economist has just published a list of cities with the most skyscrapers ("Tall buildings"). According to Drucker, the ranking must be read in (roughly) the reverse order, indicating the extent to which cities have overshot the mark. Perhaps island cities (downtowns) get special consideration.

"Hong Kong has 7,417 skyscrapers, more than any other city, ... a building must be over 35 metres tall to qualify as a skyscraper. New York ranks second with 5,444 skyscrapers; Los Angeles has just 450 ..."

Of course, downtown boosters everywhere are still pushing to move skylines in the wrong direction. And to get there they revert to some of the worst excesses (and largest subsidies) available to local governments.

Friday, April 08, 2005

Let's (not) talk about race (contd.)

Having suggested, yesterday, that it is poison to mix race with politics, I am reminded that politics and race are also routinely intermixed with education. More poison.

David Beito calls my attention to events at Grand Valley State University. Beito's post suggests that Professor David Leidig at GVSU could benefit from some instruction re free speech and free inquiry. Such as: OK to disagree; not OK to censor; not at universities; not at universities in the U.S.

Alas, episodes like this are all too common. Exposing them is a full-time necessity.

Thursday, April 07, 2005

Let's (not) talk about race

The Census Bureau has just released a first report ("We the People of More than One Race") on findings related to their innovation in 2000, allowing respondents to identify themselves as belonging to more than just one race.

Casual observation suggests that mixed-race pairings are increasing -- as are mixed-race offspring. If the trend continues, as I expect it will, the politics of race in the U.S. may be upset, as I hope it will be.

The U.S. Census Bureau began collecting data on race in 1790, for all the wrong reasons. They continue the practice, in my view, for all the wrong reasons.

There has never been a discussion of race that has not been politicized. We scoff at Nazi and Apartheidist and Jim Crow race classifications but (read the report) continue to do much the same, straining to come up with pseudo-scientific politically correct definitions.

Self-assessments of race and national heritage have, in any event, been shown to be subject to fads and politics.

There is hope. As the increasingly ambiguously defined mixed-race population grows, as it will, many will begin to find the whole business laughable. And the race-mongers (mostly now on the left) will be put out of business.

Wednesday, April 06, 2005

The blink of an eye

Most people crossing streets and boulevards make it to the other side. Most of them look at oncoming traffic and make a judgment. Or somewhere in their nervous system, they are specifying, estimating, solving complex systems of equations, inverting matrices, extrapolating and deciding -- very quickly.

In Blink: The Power of Thinking Without Thinking, Malcolm Gladwell covers a lot of ground, evoking examples, episodes, studies and science that support the idea that our snap decisions tend to be pretty good. We often wisely decide (know?) that the marginal costs of extra serach are not worth it.

As we get wiser about actual decision making, we pose ever more challenges to conventional decision theory. We also get wiser about many related topics, as addressed in a terrific symposium on the "Distinction Between Information and Knowldege in Economics" in the current Econ Journal Watch.

Monday, April 04, 2005

Evidence with theory

Yesterday's LA Times (April 3) ran a banner op-ed by Richard Rothstein that included various quotable passages. For example, "Cheapskate Conservatives Cheat Students ... True, spending and achievement don't always go hand in hand, but the conservative argument still doesn't make sense."

Well, uh, yes. Unless one can explain the failure of spending to matter. A government-run highly politicized and unionized system is not up to the job, no matter how much is spent.

Wendell Cox offers a compelling set of statistics on transit use in America's largest urbanized areas (in 2002). Transit's share in all of the U.S. urbanized areas is just 1.6%; remove NYC and it is barely over 1%.

This is after many hundreds of billions of dollars of taxpayers subsidies. By itself, the numbers prove nothing. But what Richard Rothstein and the LA Times and the other special interest toadies omit is that there is a very good explanation for the numbers. Most people prefer personal transportation and purchase it as soon as they can. They also prefer personal communications (few in cell-phone-nation could fathom party-line telephone service), personal over communal kitchens, personal toilets over communal privies, etc.

Not only is there good "theory" to go with the data. But the explanations are simple and intuitive.

This morning's WSJ includes a letter to the editor by a writer who identifies himself as a law professor. Responding to P.J. O'Rourke's recent op-ed re transit, the writer notes, "[i]f 'nobody' uses mass transit, why do I usually have to stand up every time I am in the New York and Washington subway?" The writer explains that there are cities where transit use is low but that is because transit service is low in these places.

No, it is not "chicken and egg". The proof is the negligible impact of mega-dollar transit subsidies -- over, at least, the last forty years.

Sunday, April 03, 2005

Too little, too late, but historic

James Carroll's Constantine's Sword: The Church and The Jews -- A History is built around the thesis that the Holocaust was the logical outcome of Christianity's history and evolution. Carroll writes that Vatican II was an important break with the past, but did not go far enough and that a Vatican III is necessary.

Through all of this, Carroll gives great credit for the progress that has been made to Pope John Paul II and to the role that Cardinal Karol Wojtyla played in the 1965 conclave and, in particular, in shaping Nostra Aetate, absolving Jews of responsibility for the Crucifixion.

Very late in the game but, nonetheless, a historic shift. Carroll's narrative is bleak with very few heroes, making his depiction of John Paul II so auspicious.

Friday, April 01, 2005

Paying too much for roads

Just a few years ago, Dan Klein wrote about "Planning and the Two Coordinations," a timely piece because we hear again and again about the virtues of top-down coordination. Top-down planners may cede the point that North Koreans do not live nearly as well as South Koreans -- even that central planning is the problem -- but will usually suggest that some systems just cannot function without coordination from the top.

The regular Congressional spending orgies over fuel tax moneys, highway trust funds and many thousands of resulting pork projects are usually justified by the logic that widespread networks must spring from centralized authority.

The latest to examine (explode) this idea is Gabriel Roth who authored Cato's Policy Analysis No. 538, "Liberating the Roads: Reforming U.S. Highway Policy."

Roth reminds readers that decentralization, federalism and choice worked well before the trust fund and can do the job again, and much better than the existing system.

Here is the executive summary:

Deliberations on reauthorizing the federal fuel tax dragged on through the summer of 2004 and were not completed in the 108th Congress. Whether the fuel tax and the transportation programs it funds should be renewed is the central question of this paper.

A federal role may have been necessary to finance the Interstate Highway System in 1956—the year the federal fuel tax was enacted—but the system is now complete. The Federal Highway Trust Fund was established specifically as a means to finance highway construction. It is now a slush fund for Congress to fund programs aimed at appeasing special interests and financing non highway projects. The power of Congress to finance road projects was supposed to sunset in 1972 but instead continues to this day. In addition, federal regulations increase construction costs and stifle innovative policy experiments in the states.

Before the federal government took on the role of financing highways in 20th century, that role was assumed entirely by state governments and, before that, the private sector. This study makes the case that there is no longer any role for the federal government in the construction and financing of roads. Significant reform must include phasing down the federal fuel tax and giving back to the states full responsibility for highway programs.