Monday, December 31, 2007

Affluence has its problems

USA Today reports that "Flying round-trip from Miles City to Billings costs $88 ... Why so cheap? Because the government picks up $779 of the tab ..."

Several years ago Bent Flyvbjerg and his co-authors provided the widest compendium of government waste on transportation projects, here and abroad. The record is clear but the election season proves once again that candidates find some advantage in promising new government "solutions".

And as this week's Becker-Posner blog demonstrates, it is the best and the brightest who believe these fairy tales most.

Interestingly, BP suggest that a skewed-left education has no enduring effects; college grads vote the same as the general population. And college costs more than ever. Market failure? Or too rich to care?

Friday, December 28, 2007

Pakistan and the mid-east

It seems that jihadists have had their way in Pakistan. On such occasions, leaders and elites turn to the Arab-Israel conflict with the pathetic response that settling it would rid the world of the jihadist threat.

In this light, here are two items that I recently read. In the Winter 2008 Independent Review, there is The Last Colonialist: Israel in the Occupied Territories since 1967 by Rafael Reuveny. The title is the thesis that the author develops. But to this non-mid-East scholar, the essay seems remarkably one-sided.

The author writes, for example, that in June of 1967, "Israel went to war." Well, yes. But there was the small matter of an existential threat. Ruth R. Wisse in Jews and Power provides some of the background, including a recounting of the many unmistakably threatening actions by Eqypt's Nasser and his allies.

Wisse also writes about the rise of 19th-century European anti-semitism and its usefulness to elites that wanted to rationalize the pressures of rapid modernization. Likewise, in the mid-east in the 20th century, anti-Zionism was as handy to explain the plight of the Arabs. She also notes that the first India-Pakistan war of and the Korean war, which sandwiched the first Arab-Israeli war in time, together, created approxiumately 20-million refugees, most of which have by now been resettled. But there has been no effort to resettle the Palestinian refugees because their plight has become an indispensible political gambit.

If campus audiences could muster enough civility, it would be interesting to see both authors in debate. Until then, anyone who reads Reuveny, should also look at Wisse.

Sunday, December 23, 2007

Worthy reading re real estate development

It's been a fantastic years for books. And there is one more week.

I just finished Witold Rybczynski's Last Harvest: How a Cornfield Became New Daleville: Real Estate Development in America from George Washington to the Builders of the Twenty-first Century and Why We Live in Houses Anyway. If there is an index that ranks how much useful information and reflection can be contained in 281 readable pages, then this one would be near the top. Anyone wanting to learn about development, modern cities and modern American life will enjoy this one. It belongs on many syllabi.

On a related theme, The Economist's splendid year-end edition includes "Birth, death and shopping: The rise and fall of the shopping mall."

Happy holidays!

Friday, December 21, 2007

Real "change"

Government programs do not work for well known reasons. Advocates of a strong state role typically favor a welfare state and even welfare programs do not do what they are supposed to do. Charles Murray demonstrated the flaws of welfare as we knew it (and still do) in Losing Ground and now he has a fix, well presented as The Plan in his In Our Hands.

Murray updates and elaborates the 1960s Milton Friedman Negative Income Tax proposal. In the new version, give every American over twenty-one $10,000 a year ($20,000 for a married couple if both are of age) for life and dispose of all the existing welfare programs. The grants are phased down via a surtax when incomes get high enough. Read the book for the details.

Anything has to be better than the existing patchwork of programs. Murray renews his discussion of the link between welfare programs and the underclass. He devotes a good part of his book to describing how The Plan has a better chance of getting some of these people to change their ways for the better. (Talk about externalities (!), the favorite topic of left-leaning economists.)

Murray begins with "Ground Rules" where he writes that he is no fool and has no expectations that The Plan can be adopted. But he ends on an upbeat note: we have the resources to actually end poverty and here is how. This undermines the chorus whose members only see "underfunded" programs and "neglect."

In this very depressing election year, most candidates make the news by coming out for "change." It is obvious that none of them mean it. Murray offers the prospect of promising change but not the sort that anyone can find in the platforms of the two parties.

Besides if there were, say, income tax reform in the form or a flat tax, but with NIT-progresivity of the sort that Murray describes, what would politicians do all day? It's a serious question. Most rent-seeking and rent-extraction opportunities would have been retired.

Sunday, December 16, 2007

Where are they?

Sally Satel writes movingly about her own experiences, seeking and finally receiving a donated kidney. ("Desparately Seeking a Kidney: What you learn about people -- and yourself -- when you need them to donate an organ.") The tragic supply-demand imabalance is well known -- as is the simple fix to finally allow markets to operate.

Satel's story goes beyond that, highlighting some of the emotions and heartbreaks that perplex would-be donors and would-be recipients as they court each other. Her story has a happy ending because her acquaintance, Virginia Postrel, came through with an uncomplicated and direct offer to donate one of her kidneys. It all worked out.

But until attitudes (and political leadership) on this important issue change, many of those requiring transplants will be relegated to long waiting lists -- and many will die.

There is some comfort gained when genuine donors step forward and when smart people like Dave Undis take up the cause via his Lifesharers, decribed as a volunteer "preferred organ network." Read about it here.

As Satel writes at the end of her article, "But unless we stop thinking of transplantable kidneys as gifts, we will never have enough of them."

Where are all of the "compassionate" conservatives and liberals on this issue?

Wednesday, December 12, 2007

Must read

Many smart people take the idea of sustainability seriously. I do not know how they do it. Julian Simon and many others have worked hard to emphasize the obvious, that the "ultimate resource" (human ingenuity) is not scarce. So we simply require institutions that do not frustrate its natural expression. Thomas McCraw (Prophet of Innovation) masterfully reminds us that Joseph Schumpeter had made this point three-quarters of a century ago.

John Bratland ("Resource Exhaustibility: A Myth Refuted by Entrepreneurial Capital Maintenance", Independent Review, Winter, 2008) delivers an elegant statement of economic common sense to show, once again, that economic doomsday makes no sense.

But it is not enough to urge smart people to learn some economics. As Bratland points out, many economists are also wrong on this issue. "The myth of resource exhaustion has persisted from the nineteenth century to the present. It has been discernable in the work of different economists ranging from the neoclassical to the Austrian to the institutionalist." The paper is clear, not long -- and contains no math.

Monday, December 10, 2007

Embarrassed, anyone? anyone?

It has long been clear that Green is the religion of the modern secular world. In the name of religion, many have justified all sorts of behavior and ritual over the years. Some of these are on display today as Al Gore accepts his Nobel in Oslo today. (Here is his speech. Was anyone in the room embarrassed?)

Gregory Rodriguez does a nice job of making the Green-as-religion case in today's LA Times ("Greening of the zeitgeist"). Here is an excerpt.
Is your marriage on the rocks? Are you and the spouse always
fighting? Is the passion gone? A new study published by the National Academy of
Sciences suggests that you should think twice before considering divorce. No,
not because of the negative effects it may have on the children or even on your
pocketbook, but of what it'd do to your poor mother. Mother Earth, that is.

All kidding aside, the study's findings make sense. Because
they share resources, people in married households use energy and water more
efficiently than divorced ones. But the study also indicates how much global
climate change, which -- along with terrorism -- has replaced the Soviet Union
as the Monster Under the Bed in our national consciousness. It has reached the
level of a full-blown zeitgeist social issue, with far-reaching moral and
religious undertones.

Past national threats -- even fear of the atom bomb -- were
largely relegated to the political sphere. Most people may have worried about
nuclear warfare, but it encroached on their private lives only at the margins:
Not very many of us built bomb shelters in the backyard. But the fear of climate
change has invaded our private and everyday lives.

Indeed, because global warming and the efforts to halt it
touch on nearly every realm of policy, the environment has become a moral prism
through which all other issues are being filtered. Whether or not they actually
care about the environment, partisans of all stripes are using the issue to gain
the moral edge. Now, even the anti-divorce "family values" folks have
environmental ammunition.

There are many more examples. In July, an obscure
environmental impact report issued by the U.S. Bureau of Land Management was
quickly embraced by anti-immigration activists because it found that
undocumented migrants were an ecological threat to public lands in southern
Arizona -- when they crossed the desert in numbers, a fragile ecosystem got,
literally, trampled. Opposing advocates argued that the increasing
militarization of the border was an even greater ecological threat than the
migrants themselves.

Climate change has even entered the realm of sexual politics.
Last month, a female Swedish scientist found that "women cause considerably
fewer dioxide emissions than men, and thus considerably less climate change." A
green think tank in London has urged British couples to think of the
environmental consequences of having more than two children. It released a paper
showing that if couples had two children instead of three, "they could cut their
family's carbon dioxide output the equivalent of 620 return flights a year
between London and New York."

Similarly, last month a London tabloid featured a 35-year-old
environmentalist who asked to be sterilized so she could contribute to the
effort "to protect the planet." "Having children is selfish," she insisted.
"It's all about maintaining your genetic line at the expense of the planet."

Thursday, December 06, 2007


Anthony Downs has been astute in his analysis of the actions of city governments. Many have pursued polices that make housing less affordable. But Downs (and many others) has also been surprisingly optimistic that another layer of government (regional government) can provide a remedy.

Randal O'Toole shows that the opposite is true. Growth management at any level consistently limits housing supply and pushes up prices. Surprise!

Wednesday, December 05, 2007


Kerry Howley's "Guests in the Machine" (not yet online) in the January 2008 Reason is a thoughful summary of the immigration debate.

"Guest worker programs mean legal inequality, tight government controls, and sometimes terrible abuses. They are also the best hope many of the world's poorest people have of improving their lot in life. ... The moral calculus, then, is to be weighed between the welfare of potential workers and the preservation of an idealized narrative. Does it reflect better on the American character to lock people out than to permit them entry on limited terms? Guest worker programs do clash with deeply held mythologies about our relationship to the global poor. We live in a state of relative poltical equality nested awkwardly within a deeply unequal world, and it can seem better, kinder, to keep the inequality outside, walling it off and keeping our hands clean. Perhaps American exceptionalism, like a dress too precious to be worn, is a value too dear to expose to the rest of the world."

Heady stuff that contrasts with the presidential candidates' blather. What we hear from them is often depressing. Mike Huckabee has been able to take some high ground, citing religious reasons to not bar children of immigrants from state colleges. Never mind the economic arguments, it may take a credible Christian conservative to resist nativist populism. The left-leaning Barack Obama could (perhaps) separate himself from the pack and get the serious consideration of libertarians of all stripes if he decides to reach for the high ground on this issue. What good is charisma if it is not used?

Sunday, December 02, 2007

Genuine article

In my favorite cartoon from this week's New Yorker, two women are having a drink at a bar and chatting. One says to the other: "I hate to admit it, but a man with a big carbon footprint makes me hot."

Along vaguely similar lines, Joel Kotkin and Fred Siegel write about "The gentry liberals ... They're more concerned with global warming and gay rights than with lunch-pail joes."

Today's presidential candidates vying for the mantle of Harry Truman make crafted populist noises but are transparently not the real thing. The real thing apparently lives on the Republican side in the person of Mike Huckabee (who even the New Yorker has noticed).

A gentry liberal (from either party) will have a very tough time against the genuine article.

Saturday, December 01, 2007


The incumbent is not very popular so candidates of neither party can easily say that it is the best of times. And, as always, bad news gets all the press. Talk is cheap and this is why consmer confidence surveys tell us little. Rather, it is the actions of people that matter. Keep your eye on holiday shopping data.

I am always surprised that some candidates will gamble on the class struggle theme. It did not work for Eugene V. Debs. Even FDR waited until after elected (and after things got really bad) to sound like a class warrior. Besides, he was more or less an aristocrat so he had much more leeway that a John Edwards.

Do most Americans aspire or envy? How pessimistic or optimistic are they?

The monthly unemployment level is a misleading number. Look at the distribution of unemployment spells; the median over a period that included a mild recession was 2.4 months. Likewise, the reports of the number below the poverty level are misleading. Half the poverty spells are four months.

The most misleading discussions involve comparing year-to-year proportions of population in any income quintile. In actuality, it is mobility that matters; how likely are people to move out of the lowest quintile? Most people (86%) leave it in ten years. Others join the lowest quintile but most of these are immigrants who are better off than from whence they came.

(And this from a recent WSJ, linked to Cafe Hayek.)

We can always do etter but these are three sets of data that those on the left run away from. In a better world, gasbag news anchors would cite them when forming questions for the TV "debates."