Tuesday, April 29, 2008


Bart Reed of the L.A.s Transit Coalition and I will be going at it all week in this week's LA Times on-line "Dust-up." Readers of this blog will have seen many of the arguments before.

Predictable repetition makes one seem like a bore, but silence in the face of the mendacity that we call local politics is not an option. Catch-22.

Sunday, April 27, 2008

Role model

Philip Roth's Exit Ghost is enjoyable for many reasons. Roth even gives us a thumbnail definition of happiness. Nathan Zuckerman had been on self-imposed exile in the Berkeshire's and, on re-entering New York city life, is stunned to discover that George Plimpton had died.
George escaped his glamour without losing his glamour, only
further enhancing it in autobiographical books seemingly driven by
self-deprecation. Climbing into the ring with Archie Moore he is
simply practicing noblesse oblige in its most exquisite form -- a form,
moreover that he had invented. When people say to themselves 'I want to be
happy,' they could as well be saying 'I want to be George Plimpton': one
achieves, one is productive, and there's pleasure and ease in all of it. (p.

Friday, April 25, 2008

War on drugs

A good colleague is writing an op-ed trying to get the candidates to do a better job of addressing domestic and urban issues. I replied that the politicians are better at creating problems than addressing them. Schools, housing, health care, transportation and others suffer from too much political attention.

I had left out a discussion of the War on Drugs. The folly and the costs are well known. But this morning's USA Today includes "Drug cartels in Mexico put up 'help wanted' ads ... Fliers, banners urge soldiers to defect for good pay, free cars, better food." The photo that goes with the story is all you need. Have a look. Somewhere in Reynosa, Mexico, a truck full of Mexican soldiers is passing under a bridge. A huge banner hung over a freeway pass reads "The Zetas operations group wants you, soldier or ex-soldier. We offer you a good slary, food and attention for your family. Don't suffer hunger and abuse any more."

The accompanying story mentions that the cell phone number on the banner was soon disconnected and the banner taken down.

Put a richer country next to a poorer on and there will be migration. Add a War on Drugs and there will also be drug smuggling.

Tuesday, April 22, 2008

Earth Day

We try to teach anyone within earshot that property rights beget exchange which begets prices which beget efficient allocations. Absent this, we have prisoners dilemma problems and inefficiencies. There are also the dynamics of remediation, e.g., political interventions (for the starry-eyed) or evolutions based on purposeful decentralized actions that beget wider and deeper markets (for those who look at history) -- if we can resist the former.

Michael Pollan amplifies some of this ("Why bother?" ... being Green) over several thousand words in last Sunday's NY Times Magazine. But where does that get us? "Let there be peace on Earth and let it begin with me," is charming, a bit pietistic but ultimately misleading. That's what Earth Day has become.

Saturday, April 19, 2008

More than raging hormones

U.S. stock market indicators were up yesterday and I know why. I read yesterday's WSJ which included Robert Lee Hotz's Science Journal that noted the latest in behavioral economics.
Testosterone May Fuel Stock-Market Success, Or Make
Traders Tipsy

Every morning for a week, 17 harried securities traders at
a London brokerage firm began their business day by spitting for science. After
analyzing their saliva samples, researchers at Cambridge University concluded
that they were watching a stock market on steroids.

The tests revealed a curious fact about the biochemistry
of profit and loss: The higher a trader's morning level of testosterone, the
more likely that trader would have a profitable day -- up to a

Expanding the ambit of economic research is a wonderful thing. And no one can tell where behavioral economics will lead us. But it should not distract us from two central truths. Most of us are much better off than our ancestors (they would swap their nasty, brutish and short lives for our "unhappiness" in a heartbeat) and we can explain this amazing occurrence to be a result of human action. We are living the rewards of the positive evolution of favorable institutions. Purposeful action dominated raging hormones.

Friday, April 18, 2008

Investing in the future

In political sleight-of-hand, transfers are promoted as wealth creation. Building new highways creates wealth only to the extent that it enahnces economic productivity. It is supply-side, not demand-side. "Creating jobs" in construction or operations is really no such thing, as has been recognnized by economists since at least Bastiat's Negative Railroad (the more stops, the more jobs "created").

In fact "transfers" is too benign a term because it costs taxpayers more than a dollar for government agencies to spend a dollar. Heritage has just made some of these points in a response to the latest U.S. Department of Transportion claims re the "job creation" effects of highway spending.

The candidates love to talk about "investments in infrastructure." Unless the productivity effects are significant, these are poor investments. If I have to raise $1.25 (or more!) to spend a dollar, how could it be otherwise?

Sunday, April 13, 2008


John Dawson counts the pages of the Code of Federal Regulations and finds that they grow every year. Clint Bolick has documented the parallel growth of local government in the U.S.

But a new "narrative" is upon us -- that today's credit market problems are the result of excessive government deregulation in recent years. Peter Goodman echoes this one in today's NY Times ("A Fresh Look at the Apostle of Free Markets").

How much has been written about the New Deal curing the Great Depression? About how the depression was caused by "market excesses?" I recall Doris Kearns Goodwin once explaining to the audience of PBS' Jim Lehrer News that the 1930s downturn was caused by "inequity" during the 1920s. Such is the way of narratives.

Friday, April 11, 2008

Worthy legislation

This is from today's WSJ, but slightly too big for a bumper sticker.

The Tax Me More Act

We recently suggested that if Bill and Hillary Clinton are
eager to pay more taxes, they should write a personal check to the U.S. Treasury
to compensate for the lower tax rates they so frequently decry. And lo, here
comes legislation to make it easier for the former first lady and other
pseudo-populists to do just that.

California Republican John Campbell yesterday introduced in
the House his "Put Your Money Where Your Mouth Is Act," which would amend the
tax code to allow individuals to make voluntary donations to the federal
government above their normal tax liability. The bill would place a new line on
IRS tax forms to make this easy.

Mr. Campbell says he has heard the "cries" of those wealthy
Americans – Mrs. Clinton, Warren Buffett, Barbra Streisand – who reject the
lower tax rates passed in 2001 and 2003 and complain that they and their fellow
rich don't pay enough. "It's a great injustice that citizens wishing to fulfill
their dream of paying more taxes cannot simply check a box on their 1040 form to
make a donation," he says. His bill would give liberals a chance to salve their
consciences without having to raise taxes on millions of Americans who already
feel overtaxed as it is.

Still, don't expect many to take Mr. Campbell up on his offer.
The Treasury already accepts voluntary donations to decrease the nation's debt;
last year it received all of $2.6 million.

Apparently even most liberals would rather keep their money,
or bequeath their estates to charity rather than to the IRS.

Pricing and politics

Nobelist William Vickrey famously wrote about congestion pricing and thought that entry and exit to and from Manhattan would be a good place to try it. Almost 40 years later, a version of the idea for Manhattan was proposed and defeated. The New York State legislature balked.

Ken Orski reports that: "What emerged from our conversations with opponents as well as advocates of the plan, including several state legislators from both parties, is a complicated tale of a bungled strategy to steer a complex and politically vulnerable proposal, in an election year, through an alienated state legislature that was predisposed to treat the mayor’s initiative with skepticism." Politics is very difficult.

He also writes (Innovation Brief. April 10, 2008; not yet online, as far as I could tell) that outer-borough auto commuters to Manhattan thought they would bear the costs while the funds would be used to improve transit service within Manhattan. Here I have to mention again that Don Shoup and his colleagues ("The political calculus of congestion pricing") have stressed that any pricing revenues must be carefully directed so as to assemble a winning political coalition. They suggest, for example, that communities traversed (and perhaps injured) by freeways be supported first.

The legacy of Robert Moses is that New York has plenty of such neighborhoods. That would have been a place to start.

Wednesday, April 09, 2008

The rest of the story

I think that Fred Smith was the first to recognize public transit as collective transportation vs. autos as personal transportation. Guess which is more popular with people and which is more popular with planners. This link was sent to me by a colleague and it fills out the contours.


Saturday, April 05, 2008

Back to reality

The most frequent questions that I get from reporters concern whether the downtowns are "coming back", whether transit-oriented development (and transit use) are in our future, etc.

The hype and the wishful thinking have overcome many. That's just the way it is. Many who should know better also believe that localities can meaningfully confront "climate change", end the "addiction" to fossil fuel, command the tides, etc. The LA City Council has even adopted a 40-hour moratorium on violence in honor of the anniversary of MLK's death.

Back to reality. Wendell Cox has just published the data on metro growth since 2000. Over ninety percent has been in the suburbs. Here are the data.

Thursday, April 03, 2008


In a better world, everyone would have sense of history. Economists would learn economic history along with economic theory. But in our second-best world we do have great books like Angus Maddison's The Contours of the World Economy, 1-2030 AD.

The book is full of interesting data and analysis. Maddison's China/world GDP per capita ratio (1990 $) trend goes from 1.06 in 1500 to 0.2 in 1973 to 1.33 in 2030 (Table 3.25).

Coincidentally, I just looked at "The Wonder Years: Boom times in a Chinese village" in the March 31 New Yorker.

Can Maddison's optimisic forecasts be squared with accounts such as this? I have no idea but the question is more than fascinating.

Wednesday, April 02, 2008

We've come a long way

This morning, a good friend mentioned that he would like to know the date of his death, so that he can plan better. This evening, I read Michael Kinsley's "Mine is Longer than Yours ... The last boomer game ... Extending your life is the most selfish motive imaginable for doing anything. Do it by all means" in the current New Yorker. Both themes are oldies that prompt some of the best thinking (and more).

Kinsley concludes that, "It is a treasured corollary of the American Dream that most people who are successful in midlife were losers in high school. As you enter adult life, values change and the deck is reshuffled. You get another chance, and maybe, if you're lucky, the last laugh. But it isn't the last laugh. The deck is reshuffled again as you enter the last chapter. How long you live, how fast you age, whether you win or lose the cancer sweepstakes or the Parkinson's bingo -- all these have to do with the factors that determined your success or failure in the previous round."

The American Dream lines up against the capriciousness of the universe that we call unfairness. We have come a long way.