Monday, October 31, 2011

Cities and information networks

Ryan Avent and Russ Roberts discuss Ryan's The Gated City in this week's EconTalk podcast.  They touch on many interesting topics, including the role of "density" and urban amenities.  They also discuss the urban productivity costs of tough land use controls. I posted my usual reservations with respect to large-area density averages at the comments section of their blog.

We expect density to be a proxy measure for the information networks we are able to form in cities.  Cities were always a good way to economize on moving goods and people.  They are now also a good way to economize on information exchange.  The "aha!" moments that we crave can occur when we combine ideas in new ways from our own heads, but it is much better when we can tap into the heads of others -- nearby and not.  But, while it is natural to look for ways that modern communications substitute to the traditional, they may also be complements.  We use the internet.  And many of us settle on a mix of commuting and telecommuting.  And we get on airplanes to attend meetings the old-fashioned way.  We choose and maintain a complex mix of information networks (in light of prices and opportunities), but asking "density" to explain all of this is asking a lot.

The internet has not made "cities" less important.  But the benefits are now available over a larger space.  Cities and their substantial suburban hinterlands are where we set up the complex networking opportunities that work best for each of us.

Saturday, October 29, 2011

Negative bang for big bucks

The U.S. Department of Transportation reported that there were 345 high-occupancy vehicle projects in the U.S. in 2008.  Estimates are that these add up to 2,500-3,000 lane-miles. What do these things cost?  This source provides a range of $7.3-$15.4 million per mile. 

There is more to it.  I live near and survived carmageddon, but while the Interstate 405 in West Los Angeles is open, the 10-mile HOV-lane add-on construction will go on for years.  This creates all sorts of neighborhood traffic bottlenecks due to barriers around the construction site.

HOV-lanes were supposed to encourage commuting by carpool.  But first-to-the-data Wendell Cox reports here that the 2010 Census found that 9.4 percent of commuters in the 51 largest metropolitan areas carpooled, but 11.8 percent did so in 2000.  In other words, there has been a 20 percent decline.  Cost-benefit analysis is amazingly simple when spending more results in declining output.  (Yes, the rebuttal now fashionable is that, "but if we had spent more ...")

With Richard Epstein, you get quality as well as quantity.  He is amazingly clear and puts quite a few words, sentences, ideas into this eight-minute PBS NewHour interview. (H/T Carpe Diem)

Note what he says towards the end re infrastructure projects now and  50-years ago.  It was not always as crazy as today.  Is it that Bootleggers and Baptists was never this potent?  If so, is there any way out?  Can we have Richard Epstein for President? 

Thursday, October 27, 2011


Among the 2010 census results that received a lot of attention was news of "The Rapid Growth of the Suburban Poor"

But most Americans now live in "the suburbs," which means that just about every group and every phenomenon, including poverty, can be found there.  There is diversity out there.

In fact, it is silly to apply one term and one set of thoughts to so large a place. This is mostly the mind set of people who still worry that "the suburbs" represent an unfortunate and alien aberration.  These folks are not among the best informed.

I did not find it easy to read this essay by Jason Griffiths, but he and his colleague did get out there to have a look.  Here is what they conclude:
Our initial impression of suburbia devolved around an abstracted idea of repetition and serialization — a dehumanized world comprised of a form of nullified architecture. Eight years and thousands of miles later, this view has shifted into a multiplicity of facets describing a place that is far more difficult to define. Our once hermetic view of the supposedly hermetic suburban world has taken on a prismatic new form — and with it a far greater sense of omnipresence.
Not the simplest prose, but I think that they too discovered that it is not so easy to summarize a vast and complex country.  "The cities" would be a poor way to describe urban America and "the countryside" does not do justice to the many faces of rural America. 

Tuesday, October 25, 2011

First things first

My October 12 post made the simple point that, while it is easy to speak up for various infrastructure improvements, no one has told us how to avoid getting into another porkfest.  Exhortations on the "need" for infrasrtucture spending (and possible "stimulus" effects) pop up wherever a Bootleggers and Baptists coalition can possibly be cobbled together.

I stand corrected because my colleague Richard Little has a September 24, 2010 essay in Ken Orski's Innovation NewsBriefs series (apparently gated).  Richard cites the Defense Base and Closure and Realignment Commission  (BRAC) process which was finally agreed to in 2005, which has apparently stood up and which allows for only simple up-or-down votes by Congress.

Reapportionment in California has also been farmed out to a new commission which may finally put an end to the awful practice of having politicians in the State legistlature select their voters.

So logjams can be broken.  My point on Oct 12 was simply that specifics on just how to avoid the pork trap must come first.  Until then, spare us another speech or one more finger-wagging op-ed about the "need" to fix America's infrastructure.

Sunday, October 23, 2011

Breaking the logjam

Alex Tabarrok is unimpressed with the Schumer-Lee buy-a-house-get-a-visitor-visa immigration proposal.  So as not to offend unions and their supporters, the visa does not allow the holder to get a job.

U.S. immigration policy is awful in many ways.  In a better world, labor and capital would be free to seek their best opportunities.  But for the U.S., the demand for labor and capital are clear while the politics continue to be protectionist and mercantilist.  Schumer-Lee seemingly looks for a compromise.

Over at EconLog, the bloggers have discussed various proposals for entrance fees (perhaps paid off over the years that the immigrant works here) that would let more people in and, perhaps, placate protectionist opponents.

I have no idea whether enough political support can be garnered in this way. To break the logjam, perhaps the entrance fee revenues could be earmarked for infrastructure projects, green energy, teachers, police and firefighters, etc.  If the new revenues could be shown to support all of the pet projects of the protectionist left, we might make some progress.   Schumer and Lee might even come on board.

Friday, October 21, 2011

Expose the popular unexamined propositions

When you close (politicize) markets, you have problems.  Cliff Winston, Robert Crandall and Vikram Maheshri recently published First Thing We Do, Let's Deregulate All the Lawyers.  One of the questions they ask is why firms that hire freshly minted lawyers have to spend so much time training them.  In fact, why do state bar exams seemingly require time and money spent on prep -- after the candidate has graduated from law school?

The WSJ recently ran "What's First-Year Lawyer Worth? Not Much, Say a Growing Number of Corporate Clients Who Refuse to Pay."

Credentialing and branding can/will occur if licensing and politics are taken out of the picture.  But this is a hard sell.  The professions will fight to keep their lock on supply when and where they have it.  Many others go along, presuming we would be lost without state sanctioned seals of approval.

Here is the bottom line from Morris Kleiner's "Licensing Occupations: Ensuring Quality by Restricting Competition?" Journal of Economic Perspectives, Autumn, 2000: "From the evidence I was able to gather, there is no overall quality benefit (measured in a number of different ways) of licensing to consumers.  Consequently, the cost of regulation to society is higher prices or longer waits for service.  An additional societal cost is the reallocation of income from consumers to practitioners of the licensed occupation as well as lost output."

Many economists want to make macro-economic forecasts (which are in demand) but are loathe to admit they cannot really pull it off.  They can teach valuable lessons about the popular unexamined propositions used to make band policies.


Here is Russ Roberts interviewing Valerie Ramey re quality of (and the prospects for improved) macro-economic forecasts.

Tuesday, October 18, 2011

Forget about it

We know that the recovery picture is discouraging.  Massive policy interventions have failed and all that we get from advocates is that their policies would have-could have succeeded if only the programs were bigger and better.  Many people did not get the hope-and-change they dreamed about.  They seemingly do not buy the excuses.

Tea Party dissatisfaction is a few years old and has had an effect, as 2010 and assorted off-year elections have demonstrated.   As I had noted a few posts ago, I have no idea how conventional politicians (namely Democrats) will handle the Occupy people.  Part of the problem is that it's hard to figure out who/what they are.  There are fewer than media coverage suggests.

Some are in love with the idea of a second chance at participating in a counterculture.  If they missed the 1960s and 1970s, here is their opportunity.  Others are legitimately frustrated as mentioned in the opening paragraph.  Arnold Kling writes about the Myth of the Median Worker.  Different workers are on very different escalators, some going up and others going down.  Some skills are valued while others not at all.  How does one switch escalators?  It may be harder than ever.

Finally, there are horrible economic misunderstandings re the current recession.  Blame Wall Street?  Blame Washington?  I had mentioned in previous posts that crony capitalism includes both.  It's a tent big enough include Democrats as well as Republicans.  The research will go on for years, but Gretchen Morgenson and Joshua Rosner implicate both.

The Occupiers make themselves feel good by railing against greed.  Do they feel the same about the other six deadly sins, including envy?

Their teachers (in and out of school) should not be left off the hook.  Every human being has the capacity to binge on every one of the deadly sins, but we have had (since at least Adam Smith) a remarkable recognition that competition in markets harnesses one of them (greed) in positive directions.  If and only if we allow competition -- and wall the economy off from crony capitalism.  It is mission that will never get traction if it is not even understood.  I fear that it is not even widely taught.

Do not even mention the Invisible Hand if you do not immediately note that it is all lost when sweetheart deals are possible.  And forget about the charms of "public-private sector cooperation."


And much closer to home than I thought.  Here is the update.


Fred Siegel on crony capitalism.

Sunday, October 16, 2011

Amazing story

I never knew the Henrietta Lacks story or about the HeLa cell line.  But Rebecca Skloot's telling of the story is superb.  Advances in medical science, problems of medical ethics, U.S. race relations history and much more are skillfully combined in this amazing story.

Gene technology is moving to where we cannot know, but it is doing so ever faster.   Ethics, law, and policy will have to keep up.  This is very likely to become a huge challenge.  If anyone wants to start thinking about these difficulties, you can start by reading this book.

Friday, October 14, 2011


I enjoyed this discussion by Bryan Caplan (and the trailing comments) about the (slow) decline of "otherness" in America.  Read them.

Many of us can see it in our own lifetimes. We can also compare the state of "otherness" here and abroad if we have spent enough time outside the U.S.

I have posted many times that I think of residual tribalism as a great evil.  "Otherness" is one of its manifestations.  Modern America may represent the world's most auspicious path out of this atavism.  Americans may pick from Barack Obama and Herman Cain based on perceptions of each candidate's personality and platform.  If so, perceived "otherness" will have become the preoccupation of the inevitable retrogrades.

These continue to exist on the "right" as well as the "left".  What's the difference?  Those on the right are properly scorned for what they are.  But those on the left are celebrated on university campuses everywhere.  "Multiculturalism" is the fancy label attached to the preservation of otherness and tribalism.  To say that they are playing with fire is understatement.  In my view, they are also missing the point.


Yesterday's NY Times included "In Strangers' Glances, Family Tensions Linger".  There is always good news and bad news on this front.  Mixed marriages and cross-race adoptions are up.  The treatment of the individuals involved is also mixed.  The insults include those that are intentional and also the ones that are unintentional, reflecting the inevitable obtuseness of many people.

This film is based on surviving minutes of the Nazis' Wanssee Konferenz, where plans for the death camps were drafted.  Watch it to see what stumped the participants.  What to do with mixed marriage (Jewish and Aryan) couples and families?  We now know the answer.  But the conferees worried over the sons of mixed marriage couples, returning from duty at the front, and seeing the Jewish mother or father was being carted off to be murdered.

Wednesday, October 12, 2011

Essential detail

Joe Nocera is one of many sober voices who points out that now is the time to move on a "sustained infrastructure program."  Yes, many of our roads and highways are a danger as well as an embarrassment.  But I wish that just one of the Smart Set would tell us how to proceed.

Much has been written about how we have wasted infrastructure funds in the past.  Flyvbjerg and his colleagues have told the story in great detail.  Pork spending episodes are almost a staple of the evening news.  Once we agree to a "sustained infrastructure program," what happens next?  The Solyndra way?  Perhaps most offensive in this mess is the inability of so many to take delivery.  ("These things happen." "There are also mistakes by private investors." etc.)

"Studies" that support any project are easily found.  How to do honest and credible assessments?  The Copenhagen Consensus rankings are a nice example.  Until procedures like this are a part of the discussion,  the exhortations are simply political posturing -- and wasting our time and attention.

Sunday, October 09, 2011

Reasons to smile

"Taken by Pirates" in today's NY Times Magazine takes readers where they do not want to go.  No one wants to be abducted, of course, but some behind-the-scenes looks at the hell-holes of Somalia makes the story worth reading.

I am reading Steven Pinker's The Better Angels of Our Nature which is living up to expectations.  It is (so far) just as good as the rave reviews (Peter Singer's is in today's NY Times).  Pinker does great work and he develops my favorite theme:  Life on the planet is slowly (if unevenly) getting better.

It is, of course, a hard sell.  See story on piracy.  See the evening news.  But moral progress may be the most profound theme.  Faith in a better world (here or hereafter) has helped people through the worst of times.  But when smart people like Pinker assemble credible evidence to buttress that faith, then we have reasons to smile.

Friday, October 07, 2011

Today's populists

The WSJ's editorial writers could not pass up "Jobs and Jobs", combining tribute to Steve Jobs with commentary on the state of the economy.  I have been scooped again!

In the age of ubiquitous photography, Flickr, Facebook the images from Occupy Wall Street will remain available.  Social historians will be able to mine these some day.  One protestor held up a simple sign that said "We Need Good Jobs."  Yes, they do.  I see that a $20 minium wage proposal is on the minds of some.  That should do it.

It's pretty clear that people like Steve Jobs created "good jobs" in abundance.  So, how do we get more such activity?  Do any of the "jobs bills" that we are likely to see help or hurt in that direction?  How about the proposed taxes on "the rich"?  I have no idea how qualified the sign-holder is for one of these "good jobs", but the odds are not good.

The same issue of the WSJ headlines "Democrats' Populist Puzzle."   Populist movements are a fact of life.  In 2010, Republicans (for the most part) managed to benefit from their Tea Party populist movement.  Will Democrats have similar good fortune with this latest populist manifestation?  That would be interesting.  I would not mind being a fly on the wall as this one is being batted around.

Wednesday, October 05, 2011

Signs of the times

My Sep 18 post includes my two cents on Solyndra.  Many others have discussed it in much greater depth (see especially various posts by Megan McArdle).  But we have reason to worry that industrial policy is coming back.  The Economist recently cited support from serious academic economists. The New Yorker's James Surowieki chimes in with his Oct 10 column.  His "pro" case is easily rebutted.  (i) Politicians make politicized choices; and (ii) they cannot assemble the detailed and dispersed knowledge that markets gather when ideas and projects are vetted.  He seemingly accepts the first as a possibility, and barely touches the second.

The downside of accelerating change is the way it leaves some people in the dust.  Add hard economic times and you may have a problem.  The confused claims and slogans of the Wall Street protestors and their allies are a depressing sight.  But what about all the others who have come think that industrial policy deserves a new look?  That may be the more dismal development.

Monday, October 03, 2011

What they "know"

Google's Ngram only takes us to 2008.  But in a 2000-2008 plot of envy, lust and greed, they all rise steadily with envy on top, lust second, and greed third (almost flat).

This may be surprising.  Some of the popular discussions (and "news") that we hear the most about have to do with distributions of income and wealth (although the two are often confused).  These discussions can be painful to listen to for many reasons.  They are emotional/political.  The key variables are very hard to measure.  There is disagreement on what to measure.  The terms are vague ("fairness", "equity", "justice", etc.) and mostly used for rhetorical effect.  Comparing "snapshot" distributions (over time or between places) is easiest, but wrong and misleading because people move (up as well as down, in and out). 

Many of these problems are taken up in this Russ Roberts discussion with Bruce Meyer.  It turns out that if the many data difficulties are actually addressed, the increasing inequality conclusion (which almost everyone "knows" to be true) may not hold at all.  The "declining middle class" idea also may be wrong.

Will Rogers was right.  It's not what people don't know.  It's all the things they "know" that are wrong.


Tom Heller emails me that it was Artemus Ward, not Will Rogers, who I should cite.  Thanks, Tom.   Mark Twain also expressed similar sentiments.

Saturday, October 01, 2011

Iconic image

Iconic images can change the world, often for the better.  Rosa Parks is a clear example.  A seemingly dignified woman claiming a simple right and not just humiliated, but also jailed by Montgomery, Alabama, cops in 1955, made a huge difference.

Today's WSJ includes "The Latest Crime Wave: Sending Your Child to a Better School" with a large photo of Kelley Williams-Bolar, handcuffed and led away by cops.  This mom registered her kids at her father's address so that they could attend a better school.  She spent nine days in jail and was convicted of two felony counts -- later to be granted clemency with charges reduced by Ohio Gov. John Kasich.

We can hope that the photo of Ms. Williams-Bolar will also help change the world.

Our Smart Set identifies "good" as well as "bad" monopolies.  Everyone in tech, large and small, innovates.  But the Googles, Microsofts, IBMs, etc. have been or will be put through costly legal battles because they are seen as "too big". 

But teachers unions are protected even though they are the guardians of monopoly education for poor families.  That puts and keeps the poorest kids in the worst schools.

This could not be made any clearer than by the photo of Ms. Williams-Bolar in cuffs.  Rosa Parks helped to change the world and we can hope that Kelley Williams-Bolar does the same.