Saturday, March 29, 2014

Signs of hope and disappointments

Everyone wants to believe in the Mandela-inspired optimism for South Africa. Yesterday we visited Kliptown in Soweto. The poverty is heart-breaking but the people are seemingly friendly to visitors. The Kliptown Youth Program was a bright spot, engaging the very young in computer-based learning as well as song and dance.

One of our touring group asked about funding and the guide mentioned it is all private. The guide did not know why there was no government support.

This morning's South Africa Times reported "Politicians want free flights for 10 years after they retire." The Sunday Independent reported "The ANC's tops brass have all but absolved President Jacob Zuma of any wrongdoing in the 246 million Rand [$25 million] upgrade of his Nkandla residence ..." Otherwise, it's all about the Oscar Pistorius trial.

Saturday, March 22, 2014


If in the Capetown area take the Robben Island tour.  It is the place where Nelson Mandela and many other "political prisoners" wasted away good portions of their lives.  It is incredibly ugly, desolate and dismal.  The tourist can only get the faintest idea of the horrors of incarceration in this place.

The tour guide was an ex-inmate and his recollections complemented the sights and smells.  At the end of the tour, the guide echoed Mandela's famous call for reconciliation. To my surprise, he thanked us (the foreigners in his group) for the boycotts, sanctions and protests.  He mentioned that they helped to end apartheid and (paraphrasing) "made his dream come true."

Sanctions are in the news and the big question is whether they matter to V. Putin and his group. If there are gains from trade, there must be losses when trade (and economic ties) are severed. This is why there are blockades in wartime.

But sanctions and even blockades are porous.  It's a big world.  Blockades involve force; sanctions require lots of voluntary cooperation.  The pariah South African regime apparently prompted just enough voluntary cooperation for there to have been an effect.

From what one can gather from news bites from Washington, U.S.-E.U sanctions against Russia are selective and porous.  Will the crisis drive world oil and gas prices up or down? If up, does that not enrich the oligarchs? The Economist has a piece that explores this. Driving the price down might be a weapon. But pipeline and other fossil fuel investments are anathema to the Obama administration. Facing down Putin is nothing compared to facing down the environmentalists.

Conflict has nothing but losers. Who will be the biggest loser when all is said and done?  Among them will be the populations of Russia as well as Ukraine. Both are stuck with corrupt regimes and weak economies. It is hard to see whether any of these weaknesses are remediable.  

Wednesday, March 19, 2014

Incoherence and panderers

I was recently asked to referee a paper wherein the authors took great pains to prove that neighborhood accessibility improvements cause gentrification. I recall that Thomas Sowell once asked (I am paraphrasing) "Why do they write so much when they have so little to say?"

Back to that paper, better access means raised land values which screen out low bidders. Not very deep. The harder part is that the facts of life are not easily squared with casual notions of "fairness".

I thought of this when I saw the PBS NewsHour's "How private tech industry buses became a symbol of the economic divide in San Francisco."  Have a look. To the producers' credit, the report mentioned that high rents can be linked to the area's tight land use regulations.  One commenter also noted that most people, most cities, would rejoice having the benefits of the world's premier high-tech hub located nearby.

But the rest was not pretty. Transit is a "good" thing but not when privately provided. Not when offered just to techie-types. People want "affordable" living in one of the planet's most desirable places. They want it as a matter of right, etc.

Incoherent yearnings are nothing new. What is troubling is a political leadership class that panders to them.  The Spring 2014 Independent Review (issue temporarily gated) includes a "Symposium on Successful Presidential Economic Policies." The collection includes Brandon Dupont's essay on Grover Cleveland's presidency, "'Henceforth, I Must Have No Friends' ..." The author cites Cleveland's famous veto of the "Texas Seed Bill":  "I can find no warrant for such an appropriation in the Constitution ..." Political leaders do not have to pander to the incoherent.

Saturday, March 15, 2014

Driverless cars and bumper cars

Most of the cool things that make our lives better have a downside.  Most people like the convenience of texting but some do it when they should not -- and walk or drive in horrible ways.  Examples of two-edged swords are easy to find.  But most of us do like painless dentistry.

"If a driverless car runs a red light, who's to blame?" I have no idea and I hope judges and lawmakers can work it all out. Fixing blame and liability are huge. The annual cost of auto mishaps is in the hundreds of billions of dollars.

What about the Peltzman effect?  Over a hundred studies are referenced in Google scholar.  My quick survey shows the weight of the evidence is that the effect is real: those who know their brakes are more reliable (or that their seatbelts will protect them) will take more risks. It is found in NASCAR competition as well as in the use of visors on the ice rink.

If the odds that other cars are  programmed to watch for (and automatically avoid) you go way up, what will you do?  Will you revert to your bumper-cars style?  Is there a tipping point?

At some point, if enough car owners in your town have installed lo-jack, there is no point in paying to have it installed. Thieves know how to play the odds and move on to another town (or trade). One can free ride. But with driverless cars, the bumper-car wannabees will surely avoid getting that new car because of the anticipated fun of being reckless but safe.

Tuesday, March 11, 2014

"New" money

Does taxation lead government spending? Or is it the other way? Or are they somehow synchronized? The question and the data are tantalizing. This study uses U.S. data to find mutual causation.

But what do politicians do when there are windfall revenues? Mostly it is not good. There is even a technical name, the natural resource curse.

Colorado pot legalization advocates are today cheering that the State has garnered an extra $3.5-million in the first month of legal pot sales in that state.

Regardless of what one thinks of legalization, think about what the "windfall" means.  This new pot spending is not new wealth. It is diverted from other spending.  If the diversion is away from gangsters, great. But we should not assume that all of the money being spent on legal pot is from that source. Some, for example, may have been at the expense of donations to worthy causes or spending at fine and upstanding businesses.

Will the new money going to Colorado State coffers necessarily go to "good causes"?  Will any of it pay for new pension promises or new highways, bridges, trains, airports to nowhere?  What do you think?

Thursday, March 06, 2014

Let the people choose

This has been mentioned many times but it is bizarre and bears repeating.  Many on the left profess to worry over inequality and the plight of the poor.  Yet, many like the "progressive" NYC mayor insist that some of the poorest send their kids to the worst schools.

The votes and support of the education establishment are the ticket to office and that is that. Del Blasio is not alone.  Most erstwhile civil rights champions are AWOL on school choice. Look at the video.  But there is also NY Gov Cuomo breaking ranks with many on his side. Del Blasio and Cuomo depend on essentially the same political coalition so it will be more than interesting to see what the consequences of their positions will be.

Schools will only improve if there is innovation.  There will only be innovation if there is choice and competition. The establishment of education technocrats think that they know a thing or two about educating but they have had their chance and they have failed.  Malfeasance and arrogance have very serious costs that are foisted on the poorest.   

Finally, here is also the simple but profound point about liberty and letting people choose. Parents, even low-income and minority parents, are people whose individual integrity ought to be respected, even by progressives. Parents know the score and they realize that better schools are their kids' only chance at a better life. It takes more than a boost in the minimum wage.


Peggy Noonan (gated) says is better/

Monday, March 03, 2014


The Jan 11 post (Smartphone City) contained several small numerical inaccuracies.

Here are the correct results:

Commuting Times (Minutes, Solo Drivers, One-Way)
Second City
Town and Country

Home-Based Shopping Trips (Minutes, Solo Drivers, One-Way)
Second City
Town and Country

Home-Based Social/Recreational Trips (Minutes, Solo Drivers, One-Way)
Second City
Town and Country
Source:  Calculated from 2009 NHTS data
The story remains the same. Within MSAs, most people live and work in the "Urban," "Suburban" or "Second City" settings. Average trip times (and in some cases variances) for three trip purpose types do not vary significantly among these. No "costs of sprawl".

Saturday, March 01, 2014


Limits on immigration leave trillion dollar bills on the sidewalk -- as Michael Clemens famously puts it. The idea is common sensical to poor people around the world, many of whom do what they can to enter the richer countries.  It is also relevant to the much discussed "Mobility Myth".  For the U.S. case, unless the data used to study mobility include those who have made it across the border, the analysis is incomplete -- and misleading.

Mobility studies necessarily pick a time window and follow people (or their families) over whatever span the data allow.  This means that any who arrived within that time frame are left out; their forbears were not on hand to be included.  The most upwardly mobile are systematically excluded from the analysis.  This skews the results.

Raj Chetty and his co-authors follow U.S. parents and offspring over about 30 years. Anyone who arrived in the interim and stayed is left out.  But these are plausibly the most upwardly mobile.  How many arrived? This source says at least 20 million legal arrivals in that period. This source suggests many more.

Foreign born or not, they are all people.  We should want them all to have the chance to move up.  The more, the merrier.  I wish a way could be found to let more people settle where they want to.  In the interim, let's celebrate those who made it -- and who managed to improve their families' prospects. 

They are, for the most part, good news that must be included against all of the hand-wringing over mobility.