Sunday, November 25, 2007

Amazing stuff

Elevating talk of a "creative class" to a matter of public policy always made me queasy. Here Richard Florida explains and expands the idea. We are actually all creative. Who knew?

But how can one really tell? There are these things called labor markets that value our effort. What about cities as the engines of growth? These labor markets and these land markets place all of us creative types in the places where we are the most creative (productive). It's all pretty amazing.

Thanks to an anonymous source for the tip.

Friday, November 23, 2007

Voting with feet, if not with ballots

Writing about cities and human settlement, Joel Kotkin usually gets it right. In today's WSJ, he recalls the beginnings of post-war suburbanization in the U.S.

Elite opinion had completely missed the point. Critics objected how large numbers of people were able to dramatically improve their lives on the wings of entrepreneurial discovery, in this case by the Levitt's and their followers.

Interestingly, little has changed. The pseudo-science of "sustainability planning" is invoked to stymie development, drive up prices and put housing affordability out of reach of most young people. Not to worry, their housing will be provided by new politicized housing initiatives.

In 2004, most eligible voters voted for neither Bush nor Kerry. Bush was actually second and Kerry third. Rational ignorance was first.

Interestingly, a majority do vote with their feet. Most Americans have moved away from central cities where the political corruption (lower-case as well as upper-case) is worst.
Suburban Development

I didn't grow up in Levittown, N.Y., the iconic American
suburb founded 60 years ago. But you could call North Woodmere, the Long Island
town my parents moved to in 1957, a close relation.

In 1963, poet Richard Wilbur wrote "To an American Poet Just
Dead": "In summer sunk and stupefied/ The suburbs deepen in their sleep of
death." Many of us who were raised in these places would have agreed. Some might
even have cheered the news announced a couple of weeks ago that the Levitt Co.
has gone bankrupt.

The streets of our suburbs were often roughly paved at first;
trees were slim sticks that provided little shade. Everyone was similarly aged
and, for the most part, from one of the three major New York social food groups:
Italians, Irish and Jews. Boredom could be relieved only by a train ride to
Manhattan. In our innocence, we did not know why our parents moved to these
pre-packaged wonderlands. The only times we got an inkling was when visiting
relatives still back in Brooklyn. They lived in apartments on blocks with no
yards and often attended dangerous schools.

Our parents, as we understood only when we got older, knew
what they were doing. They were part of a nationwide revolution in expectations
among middle- and working-class city dwellers for whom a move to suburbia meant
the chance to flee the crime, crowding and other ills of urban

What made this revolution possible was in large part what made
cars, refrigerators and TV sets luxury goods no longer: mass production. Like
most geniuses, William Levitt, the founder of Levittown, worked on a simple
premise. If you could build houses on an assembly line and remove cost-creating
encumbrances (most famously, basements), you could make them affordable for
average Americans. "Any damn fool can build homes," Mr. Levitt, who made the
cover of Time in 1950, once noted. "What counts is how many you can sell for how

Previously, homeownership had been a prospect for only the
affluent or people in the hinterlands. But Mr. Levitt, using production
techniques he perfected in the Navy, offered amazingly cheap homes: The first
Cape Cods went for $6,990 in 1947 (when median family income was $3,031). With
the aid of mortgage financing from the GI Bill, buyers could get along with down
payments as low as $100 and monthly installments of as little as

By the time he was finished, 17,500 homes were completed in
Levittown. This was not a singular achievement but one repeated by Mr. Levitt
himself in Philadelphia's suburbs and by imitators from coast to coast. Indeed,
by the mid-1980s America enjoyed a rate of homeownership -- roughly two-thirds
of all families -- double that of Germany, Switzerland, France and Britain.
Nearly three-quarters of AFL-CIO members and the vast majority of intact
families owned their own homes.

Thursday, November 22, 2007


This is the best holiday. No gifts or gifting.

But gifting has just gotten a boost. Today's LA Times includes "Want not? Waste not ... Regifting grows more popular as a way to save money and recycle."

This also means that the well known Joel Waldfogel research on the topic (that gifting includes large dead-weight losses) has to be rethought. When you receive a necktie, fuzzy scarf, key chain, bread maker, scented candle, cordless drill, coffee mill, cocktail shaker, stuffed animal, snow globe, oven mitt, placemat, indoor grill, back massager (list from the article), the dollar amount that you would be willing to pay for the item is just a small part. Add to it the pleasure you get from regifting it, the pleasure that the regifter gets from regifting it again, etc., etc.

We are, therefore, post-economist-as-scrooge and that means post-Thanksgiving not be so bad.

Wednesday, November 21, 2007

Pick up the ball

There's an odd piece by the usually astute James Surowiecki in this week's New Yorker ("Sovereign Wealth World"). The writer looks at standard everyman fears of Chinese government-owned funds investing heavily in U.S. assets, notes that national defense-linked assets will always be off-limits, that owners are unlikely to be suicidal, that the discipline of market competition will overpower any non-market aspirations -- and that, "[t]he prospect of American companies being sold to foreigners is, to be sure, disconcerting. But it's a problem of our own making. The reason that sovereign wealth funds are so flush with cash is all the dollars we spend on oil and Asian consumer goods."

If Lou Dobbs has made it to the New Yorker, how can we complain about the spread of know-nothing protectionism in other venues and precincts?

The power and the attraction of globalization is that it spreads good (market) behavior beyond our shores; it works to blur political boundaries and cultural limits.

The good news must be articulated on the left as well as on the right. When the right drops the ball (as it often does), the left has to pick it up.

Monday, November 19, 2007

Out of the mouths of adults

Russel Roberts writes about Why We Trade in Foreign Policy. It is all common sense but miles from what one hears from the presidential candidates. The politicians may have dumped the rhetoric that romanticizes socialism; they have even moved beyond "liberal" and are now "progressive" but the programs that they prescribe all involve a larger role for the state. Bastiat noted that government is the illusion that all could live at the expense of everyone else. Silly as that sounds, it is at the core of so many current proposals.

Last night's Sixty Minutes included an episode that seemed to take seriously the efforts of the New York City health commissioner to "take on" the fast-food chains, get them to be more up front about caloric content, and strike at widespread obesity.

Actually, undisciplined adults will always find ways to stuff themselves. And there is little that the health commissioner can do about it.

Monday, November 12, 2007

Not smart, not sustainable

I just returned from the fourth of Randal O'Toole's American Dream Coalition meetings. An impressive group of speakers was assembled. We also toured San Jose and this is a must for all "smart growth" and "sustainable planning" advocates. The "revitalized" downtown is dead, the light rail is empty and fully one-third of the city is designated as "blighted" -- so that the SJ revedelopment agency can take even more private property to implement more stupid projects. Many of the "blighted" neighborhoods, by the way, are very attractive.

The tour was led by Lorraine Wallace Rowe (Coalition for Redevelopment Reform) who shared many eminent domain horror stories, some involving her own property near downtown San Jose. She grew up there and wants to stay. We also met some of the victims, "Mom and Pop" business people who are running businesses that real people actually patronize but who are being bullied so that San Jose can get a Neiman-Marcus (!) among other things.

Ms. Rowe's "Not for sale by owner" story was especially jarring. He group had made "for sale"-type signs to stick into their front lawns that read: "Not for sale by owner but call xxx if you think you qualify to take our property." The phone number posted was that of the redevelopment authority and, as expected, their phones rang off the hooks.

The agency wanted the police to remove the signs -- from private property. If you can trample on the Fifth Amendment, why not the First too? The police chief wisely demurred. But the agency sent out city staff to take the signs. Ms. Rowe had expected this and urged her fellow owners to be alert and take descriptions and license plates.

The agency was eventually embarrassed into returning the signs.

Other speakers (including keynote Joel Kotkin) demonstrated the housing affordability problems created in the various smart growth markets had barred many aspiring homeowners from realizing their American dream. "Bubble" aside, many prices are still at historic highs. Limiting supply will do that.

Today's "progressives" who do not miss a chance to bemoan "inequality" have helped to create a group of housing "have-nots," who have no prospect of owning their own home. Unless, as Wendell Cox showed, they leave California, Florida, the northeast for the fly-over cities that are not yet in the sustainability planners' cross-hairs. Many have already left.

Many of the pricey cities are becoming gentrified with just enough run-down areas to house the immigrants who will work for the well-to-do. But many young middle class families have gone missing. The result is neither smart nor sustainable.

Thursday, November 08, 2007

Bet on David over Goliath

Will it be A-380-Super-Jumbo-type air travel or will it be private planes and air taxis? Some of each, it is safe to say. But this morning's LA Times includes "Private planes to fly at public prices ... Flying in a private jet has been typicallty reserved for the privileged few who can easily drop $20,000 for a weekend ski trip to Aspen, Colo. But two Santa Monica High School graduates are starting a no-frills 'air taxi' service that could allow more people to join the jet set."

Private cars, once a "play thing of the rich," became inexpensive enough to be the mode of choice for most people. It is hard to resist the analogy of public transit to today's airlines. Most people now travel in large groups and experience all of the associated pain. But they will only do so as long as more personal conveyances are priced out of reach. But that will change. It is already starting to.

Sounds like David vs. Goliath. Personal transportation is best. And smaller groups are better than larger groups -- let alone super-jumbo crowds. So bet on the two guys fron Santa Monica High over the Airbus consortium.

Wednesday, November 07, 2007


I may have to reconsider Saturday's blog. Seattle's voters have just defeated a 47-billion dollar tax hike, most of which would have gone to build light rail. Recent coverage in the Christian Science Monitor notes that some greens saw light rail as counterproductive. LRT causes highway congestion; ridership is low, diversion from auto use is negligible and funds are diverted from road projects that would speed traffic -- which would make the air cleaner.

Green meets pork -- and blinks.

Sunday, November 04, 2007

Less than meets the eye

Wherever there is a "crisis", there is a well entrenched government program responsible for the problem. Thomas Sowell cited just three examples among recent "crises": wildfires, housing affordability, and water shortages.

But it is actually a very long list. Healthcare and education surely belong near the top. Each has been heavily politiczed for many years and each has its problems. The irony that Sowell dwells on involves the widespread impulse to seek "solutions" via more politics. Very few critics consider the possible merits of less politics. Let people choose where they want to spend whatever refund is due them from government.

In light of all the confusion, it is good to have Prof Greg Mankiw's clarifications in this morning's NY Times ("Beyond Those Health Care Numbers"). He notes that better Canadian health readings, 47-millions "uninsured" and ever greater amounts spent on health care by Americans are three factoids that demand examination. Each time, there is less than meets the eye.

Saturday, November 03, 2007

Anything goes

It's official. Obesity is caused by too many calories. Here is the NBER study. It's not urban sprawl of global warming.

But dumb ideas do not go away easily. This morning's LA Times includes the latest installment of the "subway to the sea" discussion about extending the Red Line west to the beach (but not yet beyond). The existing Red Line is about 16-miles of guideway that cost $4.7 billion to build, serves just 115,000 riders per day and costs $78 million a year to operate (the last time I looked). I have reported many times that this amounts to a $323 million/year loss -- which shrinks to $286 million/year if the most optimistic non-rider benefit assumptions (reduced auto use) are added.

These details are never addressed in the discussion of whether to spend another $6 billion on the 6-7 mile extension. The Times' coverage does mention that current daily bus boardings along the route are 64,300 (or 34,900, depending on the alignment chosen). It also mentions that costs on the currently-under-construction "Expo" light-rail line are running 23% above budget.

When pork meets green, anything goes.

Thursday, November 01, 2007

Space or civility?

This week's New Yorker includes "Digitization and its discontents," which begins with one of those charming and amazing recollections of the good old days at the N.Y. Public Library on Fifth Ave. and Forty-second Street. "In 1938, Alfred Kazin began work on his first book, 'On Native Grounds.' The child of poor Jewish immigrants in Brooklyn, he studied at City College. Somehow, with little money or backing, he managed to write an extroardinary book, setting the great American intellectual and literary movements from the late nineteenth century to his own time in a richly evoked context. One institution made his work possible ... 'Anything I had heard of and wanted to see, the blessed place owned ...'"

The rest of the article goes on to speculate that the digitization of printed matter will soon render the blessed place obsolete. We will have gained something as well as lost something.

But it is mostly lost anway, Google or not. The LA Times describes libraries in L.A. today as places of thuggery and assault where security guards are required to keep the peace ("Refuge for readers can be risky.")

Public spaces in America are not what they once were and do not compare favorably with their European counterparts.

There are always push and pull forces that work together to keep us away.

Planners and others plead for "more open space" but it is not a matter of acreage or square feet. It requires civility which has receded in too many places and which the open-space advocates never mention.