Sunday, June 30, 2013

All those networks

The many Club of Rome-type "doomsday" forecasts have not done well.  There have been the similar outcomes for the peak-this-or-that forecasts. "Peak oil" (many titles like this at Amazon) looks sillier by the day as the shale revolution progresses. The Economist reports that even Vladimir Putin and his people have had to admit that shale gas is big ("Spooked by shale").

But "peak auto" has also been around for a while.  It has long been promoted by nostalgics who dream of a return to 19th-centruy cities and lifestyles.  In today's NY Times, Elisabeth Rosenthal writes about "The End of Car Culture ... Younger people are less likely than their predecessors to have licenses."

We know that many young (and not-so-young) do a lot of networking electronically.  That is not an unmixed blessing. But Rosenthal writes that, "President Obama's ambitious goals to curb the United States’ greenhouse gas emissions, unveiled last week, will get a fortuitous assist from an incipient shift in American behavior: recent studies suggest that Americans are buying fewer cars, driving less and getting fewer licenses as each year goes by."  Even the shale revolution provides a fortuitous, though seemingly unwelcome, assist.

But most of us are learning to manage (and trade off) many networks in our business as well as our social lives.  A mountain of formal literature by urban economists, urban geographers, urban planners and others evokes the journey-to-work as the basis for understanding the self-organization of cities.  But that was then.  Location patterns in cities and beyond will be better understood as the product of how all of us manage and trade off the many networks in our lives -- including electronic and conventional (and even including the occasional trip to the airport).  

Wednesday, June 26, 2013


Bill Fischel has just posted his "Fiscal Zoning and Economists' Views of the Property Tax."  As usual, Fischel provides a great summary of the problem. We get zoning for fiscal reasons.  Yes, when it comes to nuisance control, the common law offers "retrospective remedies" and these may not be adequate. But economists have established a more plausible rationale for fiscal zoning, emphasizing it over conventional arguments re nuisance control.

There is a lot to learn re-reading Robert Murray Haig's 1926 essay on the topic.  Haig argues for zoning in the traditional way. "A glue factory on the corner of Park Avenue and 50th Street might show a net profit, considered by itself and ignoring the losses of its neighbors" (p.433). This is the version that has made its way into popular discourse and many people still buy it.  I seriously doubt that glue factories would have been located at that address even in the 1920s.  Land markets do not place glue factories where they have no business.

The fiscal zoning story is better because it is a political economy story.  Rather than a panel of wise men and women coming together to do "Regional planning, based on economic analysis ..." (Haig), there are a bunch of self-interested people politicking (fighting) to get the zoning that is best for them.

This morning's LA Times includes "Westside development fuels debate over growth -- smart or otherwise." One simply cannot read it (and a thousand like it) without thinking of Bruce Yandle's bootleggers and baptists.

Sunday, June 23, 2013

Tough choices

Tyler Cowen linked to this Joe Satran post about LA vs NY food (also look at the video). LA vs NY stuff is always interesting, especially when food is involved. Predictably, the discussion evokes "sprawl" and "density" and ease of access to a variety of choices.  As readers of this blog know, some of these are bad words.  "Sprawl" is pejorative and vague. "Density" is also vague and is often used when agendas are in place.

Both, NY and LA, are much too big to be described by just plain "density;" I keep noting that if one must play that game, then one has to face the fact that the LA urbanized area is denser that NY's -- and has been for at least the past 25 years. Overall "density" is a poor descriptor.

In this discussion, when the foodies compare, they rely on the poor descriptors. How easily can I access a rich variety of eateries?

The question of where one can find a better quality of life intrigues planners and others. But that question does not work. Preferences and resources vary and we each look for a niche (in this case a neighborhood) that works best in light of our preferred lifestyles -- including restaurant styles, prices, access, variety, etc.

A good friend once confided that he would like Manhattan outside his front door and Santa Monica outside his back door. Until we make progress on this package, we will have to evaluate the trade-offs involved in the packages available and make our choices. 

Thursday, June 20, 2013


Today's WSJ includes a (seemingly) whimsical piece, "If the World Were Run Like Airlines ... Sandwich Prices Would Spike at Peak Hours and 'Priority' Elevators at the Hotel Would Cost Extra."

What is all the fuss? Price is determined by the interesction of supply and demand. Five little words.

Joking! It's a serious question and the textbooks are not always the best source.

Here is another shot: Sellers charge what they can. That's also five little words and it highlights the fact that pricing is dynamic, on-going, all about feedback, learning-by-doing adjustments and never stops being difficult and challenging. Business people know all this.  It is their "bread and butter," so to speak. Bundle or unbundle services? Charge by level of service, including time-of-day and season-of-the-year?

There is another aspect. What kind of resistance will there be from a public (and media) that routinely expect cost-based prices (whatever that is). Anything that can plausibly be linked to "cost" (not opportunity cost) may be justifiable as "fair". Otherwise, be very careful.

I presume that this is all very simple and basic -- but often beyond the elites who make (and comment on) the policies we have. 

Tuesday, June 18, 2013


Economist Robert Frank wrote in the NY Times "What Sweden Can Tell Us About Obamacare." One could add that the U.S. is not Sweden.

The differences are clear but often overlooked by those who look to European policy examples.  This morning's LA Times celebrates the various "pocket parks" being opened in LA. "Mayor Antonio Villaraigosa unveils new donwtown L.A. park."

The story also notes "Downtown residents, although excited that construction is complete, were already buzzing about the potential problems that could befall Spring Street Park — including crime, litter and pet waste."

I recently blogged about a pocket park in my neighborhood that was fenced off almost as soon as it was built because it became an encampment for homeless as soon as it opened ("City not beautiful").

To borrow from my friends in Washington DC, can we at least have "a conversation" about the fact that street life (and civic life) in U.S. cities is not promising until we find a better way to deal with the "homeless" that we put on the streets because we cannot figure out what to do with/about them?  We do have many "conversations" about how awful it is that so many Americans withdraw to private communities and private spaces.

Saturday, June 15, 2013

Can we all just get along?

World War II ended in the popular imagination when the troops came home to victory celebrations and reunions. There may have been a lot of these in the U.S., but the war was much too big and too tragic in Europe for there to be simple endings.  This fact is well documented by Keith Lowe in his Savage Continent: Europe in the Aftermath of World War II.

From the Conclusion: "There were many reasons not to love one's neighbor in the aftermath of the war ... The sheer variety of grievances that existed in 1945 demonstrates not only how universal the war had been, but also how inadequate is our traditional way of understanding it ..."  Communists and nationalists have exploited these grievances with tragic results. Ethnic cleansing in the the former Yugoslavia is fresh in our memories, but massive ethnic cleansings had been in force before 1945, after 1945 and through most of the 20th century.  Ethnically "pure" nation states had been a goal for many groups for many years.  Current economic crises in Europe provide new openings for the demagogues.  In comparison, our own immigration debates seem pretty tame.

"Can we all just get along?" Perhaps. But first we have to (all) learn and digest enough history. Lowe's book is, in my view, a great place to begin.

Many movies simply build on the cliches of history. But there are some that are worthy because they prompt deeper reflections. I liked these: Lore, Inheritance, Worse Than War.

Wednesday, June 12, 2013


Urban planners generally love densities. Many call it "smart growth." Urban economists and urban geographers have embraced density as a proxy for networking opportunities and have suggested that all manner of positive interactions are made possible at high enough urban densities. Richard Florida expects "creative people" to seek high density settings.

I have previously suggested that it is inevitably more complex than that. First, it is misleading to characterize whole metropolitan areas by their overall density because that masks considerable variation within areas. Second, we know that there are successful clusters in high-density Manhattan as well as much lower density Silicon Valley. Path dependence is powerful and we do not expect either place to evolve so as to become like the other.

I have just read "Travel and the Built Environment: A Meta-Analysis" by Reid Ewing and Robert Cervero.  The authors survey the many elasticities that various researchers have estimated.  They admit right off the bat that, "Surprisingly, we find population and job densities to be only weakly associated with travel behavior once these other variables are controlled."  I am not surprised.

One meta-finding (of many) is the elasticity of vehicle miles traveled (VMT) with respect to household or population density (their Table 3) which they report is -0.04. This is very small but, for practical purposes, what does it mean?

New development occurs mostly at the fringes of metropolitan areas but there is also considerable "infill" development. In most cases, there will be pressures to develop the project at a higher density in the name of less VMT.  But there are two problems. First, more people traveling a little less could still generate more overall VMT. Second, if the higher density leaves more space available, would the space be developed? If so, we get even more people and more VMT.  If not, the space will have to be traversed by anyone going to or from the new development, creating more VMT. Simple rules are never adequate.

That aside, Google scholar yields 39,800 hits for the paired words "density" and "sustainability" since just 2009. A small sampling of these involves studies or tomes that link the two in a positive way.  That suggests yet another meta-study.


Tuesday, June 11, 2013

Hard work

This morning's WSJ includes "Rail Lines Bring Housing Clashes ... Cities Take Steps to Promote Affordable Housing While Rents Rise Near New Transit Stops." 

Those who comment on the economic problems of the EU point out that a common currency and and independent fiscal policies (politics) can clash in a big way.  One cannot have both.  And this simple trusim is how we got to all the head scratching and the occasional hand wringing.

If your transit policy requires a transit-oriented development policy, then there will be consequences for the low-rent housing (and occupants) that had been in place.  Planners embrace and also scorn gentrification.

How to escape the conundrum?  The answer has been to subsidize favored developers and coax them into including quotas of new but affordable housing units in their projects. This enriches certain developers and solidifies city hall crony capitalism.

On a bad day, it also takes some developers and some development out of the picture, causing housing to become more expensive. But when people move out of central cities, dysfunctional city government (including public schools) as well as costly housing are often in the mix

Fixing a policy error by piling on more policies is never promising.

Monday, June 10, 2013

On our own

"Eat your spinach," "Take your vitamins," "Live like a caveman."  There is lots of accumulating evidence on how to live longer and better.  I learned a lot from Marlene Zuk's Paleofantasy: What Evolution Really Tells Us About Sex, Diet and How We Live, and have abandoned plans to do the caveman thing.

The serious research never stops and we learn new things all the time.  We have better access to information than ever and the responsibility to go on seeking, learning and deciding is each individual's personal responsibility. 

Agencies like the Food and Drug Administration are supposed to help us in this project.  But the FDA operates in a political context, as does every set of regulators. (This truism is often overlooked as part of the blame for the financial crisis is placed on "deregulation" or "inadequate" "lax" financial sector regulation.)

Yesterday's NY Times included "Don't Take Your Vitamins".  It appears that there is accumulating evidence of real health danger from megadoses of some vitamins. 

And the same story reports that the FDA has been politicized! There are shocking revelations each day. The IRS, the SEC, the NSA, and now the FDA.

I still have no idea what it will take to wean some Americans away from their faith in "regulation."

Here is the punch-line from the Times story:
In December 1972, concerned that people were consuming larger and larger quantities of vitamins, the F.D.A. announced a plan to regulate vitamin supplements containing more than 150 percent of the recommended daily allowance. Vitamin makers would now have to prove that these “megavitamins” were safe before selling them. Not surprisingly, the vitamin industry saw this as a threat, and set out to destroy the bill. In the end, it did far more than that.

Industry executives recruited William Proxmire, a Democratic senator from Wisconsin, to introduce a bill preventing the F.D.A. from regulating megavitamins. On Aug. 14, 1974, the hearing began.

A little more than a month later, Mr. Proxmire’s bill passed by a vote of 81 to 10. In 1976, it became law. Decades later, Peter Barton Hutt, chief counsel to the F.D.A., wrote that “it was the most humiliating defeat” in the agency’s history.

As a result, consumers don’t know that taking megavitamins could increase their risk of cancer and heart disease and shorten their lives; they don’t know that they have been suffering too much of a good thing for too long.
We are on our own and it was foolish to ever believe otherwise

Saturday, June 08, 2013

The queue

Most of life's goodies are rationed by price.  Economists like it that way.  Without price, we have to invent and defend alternate rationing mechanisms; we also have to somehow find ways to elicit supply.  Scarcity is a hard fact and rationing is a tough problem.

Nevertheless, many people find great virtue in rationing by queueing.  Last Sunday's NY Times Magazine included "Why the simple line is under attack andwhy we must fight to preserve it. ... Lines operate as self-protecting organisms. The line takes care of its own."  The author goes on to beg the question by invoking "fairness" as though that were a simple and trivial matter.  Saying that waiting in line is "democratic" is also rhetorical. Unlike money, we all have equal amounts of time available, so why not use the queue?

Trouble is that not everyone's time is equal. Yesterday, for example, there were a few traffic jams and re-routings in the West L.A. area to accommodate President Obama's visit to raise funds for his political campaigns. That represented the workings of our democracy as well as the fact that his missions are more important than mine; I had to spend my time so that his could be spared.

On a recent visit to London, my wife reports visiting a McDonald's in The City.  She reports that there was an express line and signs that indicated it was for Bond Traders.    

Thursday, June 06, 2013

It's about time

In all of the debate over RR vs Krugman about debt, the bigger point about what and how we count seldom comes up.  But here it is.  Kudos to Kotlikoff and PBS.

Ground zero

We chuckle about "bridges to nowhere" and "trains to nowhere."  For California's bullet train, there is even the occasional Churchillian, "never will so many pay so much to transport so few."  But these people are serious. 

Yesterday's LA Times reported on more California's casino politics.  Gambling laws in the U.S. are crafted to invite political manipulation.  In fact, they coincide with our unique nation-within-a-nation reservation governance arangements.  The Wikipedia entry mentions that "This jumble of private and public real estate creates significant administrative, political, and legal difficulties."

Not many people know much about Madera, California.  But even if you have never been there, you now know two things: 1) The Times story mentions that "a rare ruling from the Obama administration and a deal approved by Gov. Jerry Brown would allow one tribe to build a casino on a 300-acre property once slated to be a NASCAR racetrack in the Central Valley town of Madera. The prospect has divided Indian tribes and touched off an intense fight in the Capitol."; and 2) Madera county is "ground zero" for California's $65 billion (and counting) high-speed rail project.

Once sleepy Madera is now front-and-center of two expensive and politicized boondoggles.  Chinatown (the movie) is almost forty years old.  The LA Aqueduct story is 100 years old.  I hope they do the Madera movie while I am still around.

Monday, June 03, 2013

Cronies meet their match and lose one

Driving around LA, you cannot help noticing that there is something different.  The digital billboards have gone dark.  Here is the story.

I have mixed feelings about billboards.  If you are going to have them, the digital ones can add a touch of Las Vegas to otherwise drab cityscapes.  This supposes that they do not divert drivers (and bikers and walkers) to the extent that they cause accidents.

But read the story. There was apparently a "backroom deal" in LA's City Hall to allow the digital billboards. But the dealers overreached.  "The digital billboards, which are largely located in West L.A. and Hollywood, have angered homeowners, who complain about the glare."  Do not place these things where they upset residential property owners.  People care very much about their neighborhoods and neighborhood associations have clout.

Crony capitalism does have its limits.  In this case, the cronies had met their match.