Tuesday, April 30, 2013

Engaged but not detached.

David Brooks writes about fellow pundits in today's NY Times ("Engaged or Detached?"). It's a great question. Who among us is "objective"?  Start by looking for those who make the loudest claims that they are objective.  It is a great goal, but is it ever really met? I do not know. I have great respect for many writers and thinkers. I am now reading Steven Pinker's How the Mind Works and am dazzled. The author is a truth-seeker but only human.  No reader should accept anyone's work as gospel.

My students have an easy time telling which of Arnold Kling's three axes I emphasize. I do not try to mask it and doubt that I could if I tried.

But I do not demean those who disagree -- as one lecturer on my campus was recently seen doing.  There are many more like this man.  Administrators who were put on the spot came up with the lame defense that the lecturer is a practitioner and has views that students should hear.  In reality, students at most major universities get a steady diet of "sustainability" and "social justice" and the like as if it were the one true faith.

In the non-Brooks world I operate in, the students who enjoy my classes (where the good that markets do is emphasized and where the cronyism behind the many train wrecks in our lives is highlighted) report that they hear things that they have never heard before.  Matt Ridley recently complained that he will not forgive his teachers for never telling him about the gains from trade and comparative advantage. "What were my school teachers doing not teaching me about this"?

Saturday, April 27, 2013

A hope

The Economist discusses auto industry "Gloom and Boom" and ends up very optimistic about driverless cars.  At Reason (June 2013 gated), Greg Beato writes about "Google's Driverless Future ... Will self-piloting vehicles rob us of the last of our privacy and autonomy? ... Buckle up, America! We're in for a safe, efficient and oppressively intrusive ride."  And one might say that our privacy is already a thing of the past. Most people have embraced smart phones and connectivity.

But as one who misses his stick-shift, I am reminded of Loren Lomasky's indispensible "Autonomy and Automobility."  Being in charge of our own mobility offers a very special and deeply appealing independence, unmatched at the price.

Is this where people will draw the line? Will not even Google and friends cross it?  One can hope.


But there are also some privacy surprises.  H/T Volokh Conspiracy

Wednesday, April 24, 2013

Ngram lessons

Dan Klein sent me "Ngrams of the Great Transformations" where he shows Ngram viewer put to good use.  I seem to have posted four Ngram posts (use search box at left if interested) in recent years.  Only four because once you start, you cannot stop. Here is "market failure" vs. "governement failure".  No real surprises.

What will we do once Google expands Ngram past 2008?  When did "liquidity trap" peak? How about "stimulus"? "Too big to fail"? "Stress test"? "Crony capitalism?" "Ninety-nine percent"? "Debt and growth"? The list goes on.

We have more facts more easily accessible than ever. Will all this good stuff prompt more good ideas? Dan's paper suggests that the answer is "yes."

Monday, April 22, 2013


Ross Selvidge sent me this delightful photo.  Economists love to talk about "signaling."  Trouble is that almost everything we do can be said to be part of our signaling routine. 

There is considerable debate about how much of the value of our college degrees is due to learning and how much is due to the signal the degree sends that we got into (and graduated from) a good place.  So signaling is easy to spot (the brassy guys pictured may be at the extreme), but how can we know it when we are engaged in behavior that is not signaling? Are there situations when there is no one around to impress?

Surveillance from mounted cameras (put there by private or public security people) as well as from an uncountable number of smart phones are here to stay.  Forget about figuring out a way not to signal.   

Saturday, April 20, 2013

You know who you are

There has been considerable research on how commuting travel times respond to metropolitan area size.  Alex Anas concluded that, “The data on the largest U.S. MSAs show that commute times increase only slightly with city size: the elasticity of the average commute with respect to the number of workers is about 0.1 in 1990 and 2000” (p. 146 of Brooks, Donaghy, Knaap). This means that a large city with 2-million workers and an average commute time of 25 minutes (one-way), can add 200,000 workers and the average trip time goes up by 15 seconds.

This is good evidence for the co-location of employers and employees.  No "traffic doomsday".  Of all the data sources on journey to work, NHTS provides disaggregate data so that metro area means as well as variances can be computed.  In 2009, across the set of large U.S. MSAs, the correlation between area mean and variance was 0.82.  This means that variances, likewise, are only moderately sensitive to MSA population.  But variances are more sensitive to outlier values than means.  This one simple finding adds to the strength of the co-location hypothesis.

People are not stupid. They (employers and employees) do what they can to accommodate to the challenges of big-city life.  But traffic doomsday has constituents.  You know who you are.  Hint.

Tuesday, April 16, 2013


"Why can't we all get along?" Arnold Kling has an interesting response via his three-axis (ones favored by progressives, conservatives, libertarians) model which he has cited at various times on his blog.  He elaborates in his e-book, which strikes me as including an amazingly high ratio of insights per dollar (or reading time) spent.  He adds that life would be better if we understood where adversaries are coming from?  Give them a break by trying to understand their favored axis.  He admits that this is a tall order because confirmation bias runs deep; we are more likely to be status-seekers within our respective tribes than truth-seekers.

Stalin, Che, Mao, the Castro brothers, Hugo Chavez and others (Kim Jong-un?) have had their defenders among affluent and intelligent Westerners.  Fellow travelers seemingly emphasize the oppressor-oppressed axis (the progressives; the other two axes are civilization-barbarism, favored by conservatives and freedom-coercion emphasized by libertarians).

Taking sides is the easy part.  Thinking about what those we disagree with are up to is the harder part.

Sunday, April 14, 2013

Be more like Europe?

Big Data certainly changes our lives; it is a triviality that "we ain't seen nothin' yet." Auto use around the world grows every year. As it does, so does the use of the various "apps" that track and record traffic conditions.  The likes of Tomtom are on the rise with data gathered from 80 million probes in 31 countries. Those of us who are trying to learn about cities around the world get a new data source. Tomtom's recent report includes road congestion information for 133 major cities on four continents.

For each city, we get the percent of traffic flowing at less than free-flow speeds, reported five ways (overall, AM peak, PM peak, highways and non-highways).  Here are the five proportions for the average of the 59 European cities: 24, 48, 50, 17, 31.  Here are the five comparables for the 59 North American cities (53 U.S. and 6 Canadian): 18, 30, 45, 11, 27.  Traffic conditions are better in the auto-oriented cities.  That's where there are fewer congestion externalities.

Friday, April 12, 2013


Readers of this blog know that I have been flogging certain ideas for many years. There is no "traffic doomsday" because people are not stupid lemmings.  In spite of the policy failure of too few road pricing projects (and pockets of congestion), overall traffic in U.S. cities is not that bad.  The 2009 NHTS big-city 24-hour averages for solo auto one way journey-to-work were 28 minutes (New York metro area), 26 minutes (Los Angeles area), 27 minutes (Chicago area), etc.  The Atlanta metro area was the worst at 31 minutes.  The co-location of workers and their employers is in each sides' interest.

Wendell Cox pounces on urban data faster than any man alive and reports that U.S. Suburbs Approach Jobs-Housing Balance.  "Balance" is one of those unfortunate terms but it has made its way into the short list of urban planner's policy ambitions.  I understand that policies that get in the way of location choice can extend trip lengths, but short of challenging these, we can expect workers and employers to look after the commute. To be sure, both sides make complex trade-offs along the way; they have other worries and priorities. These can only be attended to by the individuals involved. The only policy worth considering is one that assures that policies do not get in the way.

Wednesday, April 10, 2013

Thatcher and pickpockets

Just as people are remembering Margaret Thatcher's dealings with the UK unions of her day, the Louvre's workers walk off the job (h/t Roni W).  Too many pickpockets at the Louvre.

Here Alvaro Vargas Llosa notes that conservatives worried that Thatcher was too libertarian, but libertarians worried that she was too conservative.  Given the alternatives (the pickpockets I read about in my daily newspaper), that is not a bad set of headaches.

We live in the world that Mancur Olson described some years ago -- one where established interests are pretty much in charge. A periodic shake-up is the best we can hope for.  We get sequesters as the way to cut public sector spending because not enough politicians can afford to go on record cutting off any one of a thousand special interests.  Another Margaret Thatcher in these circumstances would be pretty good. 

Sunday, April 07, 2013

Positive externalities

Steven Pinker (How the Mind Works) makes the case that we have "combinatorial, adapted" minds.  New things are new combinations of old things (Paul Romer); new ideas are new combinations of previously existing ideas.

The latter probably involve new networks formed in our brains and/or among the brains of people in our network.  Most people get this and understand that networking is profitable in many ways.

How to be creative and how to be succesful (and more) depend on our networking successes.  We know that we network in a variety of ways.  "The social network" is now associated with the thing we do on the internet, but has always been around.

What is new is how we manage and juggle the many networking opportunities in our lives.  This includes what we do at the office, on the internet, as well as our various travels within and between neighborhoods and cities (and continents).

Some of this came to mind as I was reading "Engineering Serendipity ... How to boost creativity on the job? Put bigger tables in the cafeteria," in this morning's NY Times

But as firm managers study these problems, each of us considers the challenge of managing our own personal networks.  We study the networks available to us here, there and there and there, etc. We may even change residences as we seek improved networking options.

Being Free to Choose is a wonderful thing, but rejected by many who worry about "negative externalities."  But the network externalities that I am talking about here are very big and very positive.

Friday, April 05, 2013


Randall Holcombe writes about "Crony Capitalism: By-Product of Big Government" in the current Independent Review (gated, but wait for it or look at this similar piece by Randy). The article is a useful guided tour through the relevant writings of Acemoglu, Baumol, Becker, Coase, Downs, etc. Randy also mentions that the academic literature has not given enough attention to crony capitalism.

As of this morning, Google Scholar shows 105,000 hits for "market failure" and 28,200 for "government failure" and only 9,940 for "crony capitalism."

Most of Holcombe's essay makes the point that expansive government is not the antidote but, more pluasibly, the cause of cronyism.  This is why Francis Fukuyama was so wrong about the "end of history."  Cronyism replaced communism in Russia and crony capitalism is practically unassailable in the democratic West.

The writings and arguments that Holcombe cites are widely available and clear.  But post-2008, it is still not widely accepted that cronyism was largely responsible for the mess (here and abroad), and that it is not the way to get us out.

Wednesday, April 03, 2013

Laugh or cry? Laughing is better.

The daily "news" include a lot that is depressing.  But there are also the items you want to file in the "laugh-or-cry" department. 

Today's WSJ includes "White Hair, Wrinkles Aren't Valid ID At These Drinking Establishments ... Universal Carding, Flattering to Some, Aims to Halt Profiling: 'Record Was 96 Years Old'." I am not yet 96, but I do get carded once in a while.  Three themes from modern America are in play. As mentioned, there is the fear of "profiling". There is also some merchants' desire to adopt a fool-proof position in case the ID police drop in. Finally, even the dimmest employee can easily be taught to implement the simplest policies.

The condition of the roads where I live is abysmal and embarrassing. Public sector union-run L.A. is that way. But it seems that the UK has its own problems in that department.  Here is feminist icon Germaine Greer making the case (H/T Patrick Sullivan).  But Pat adds an important punchline: "Though she doesn't appear to be aware that the Millau Viaduct was built as a business venture. Which probably explains it being built on time, under budget and turning a profit, all the while being beautiful." He send us to this wonderful video.