Friday, July 03, 2015

Certainties and uncertainties

It's pretty awful that if you type "climate change de ..." into Google' search window, you quickly get "climate change deniers" (as in Holocaust deniers?) and thousands of links. Of all places, science should not be the place for lockstep agreement and thought police. Yet, that is where we are.  Matt Ridley makes the point brilliantly.

When will coastal property values crash?  This blogger is certain they will and says that the "deniers" will (someday) be the only buyers. And then we'll see!

This report speculates which communities will be threatened by rising sea levels. But I have seen no evidence that this has actually happened in anywhere the U.S. In fact, Al Gore recently bought sea-front property in Montecito, California. What was he thinking?

Prediction markets are best. Asset markets are prediction markers. Uncertainties everywhere but keep your eyes on the relevant markets.

Wednesday, July 01, 2015

Wrong drift

I am a huge fan of Joseph Epstein but not much of politics as we know it. Epstein's "The Unstoppable Appeal of 'Going Forward'" in today's WSJ (gated) does it for me. "Going forward" is one of those anodyne (probably road tested) phrases, contrived for feel-good appeal but committing to nothing. "Hope and change"?

Many people are wise to this stuff and turned off.  Many others enjoy the team sports appeal of politics. I suppose that there is a third group grudgingly optimistic that the effort must be made to make the best of a bad situation -- and at least slow down the bad ideas and even promote some good ones.

This is one reason why in a federal system, the more that is done locally, the better.  The more local, the greater the chance that real discussions of real questions occur.  Too bad that our drift is in the opposite direction.

Sunday, June 28, 2015

Our highways, our culture


Massive car ownership and driving came to China very recently and very fast. In their cars or not, people jostle for position. On the roads, voluntary yielding only occurs after two drivers have engaged in what we would call a “game of chicken”.  Much honking of horns comes first. Established customs rather than unevenly enforced traffic laws rule the road; whoever manages to nose in first, goes on his/her way. I have not seen data on how much (what we would call) “road rage” there is in China. I suspect very little. But what you see among drivers (as well as drivers vs. pedestrians) would surely lead to confrontations and even shootings in the U.S.
Kudos, then, for Chinese culture and less so all for ours. I cannot say much about China, but we may have a problem.

Tuesday, June 23, 2015

"Balance" is too vague and too simple



I have just spent a few days attending a large meeting (this time in China) of people (researchers and officials) interested in cities. I don’t do many of these but it is always disappointing to see that bad old ideas don’t go away. One of these is the idea of “jobs-housing balance” – and that top-down planners can somehow achieve it by arranging/re-arranging land uses. Advocates claim they are addressing the problem of job access, lengthy commutes, and highway congestion.  But not all jobs are the same; matching problems are considerable; job search is not trivial. It’s the knowledge problem again – this time ignored by embracing a stunningly naive view of labor markets.

I asked whether the problem of finding a mate was simple or complex, whether a matching problem of this difficulty could usefully be addressed by well-meaning but crude spatial policies
Google scholar shows 2349 papers (yes, some that do ask question) in the "jobs-housing balance" sub-field and (I can now say) many more on the way. Students are seemingly encouraged to conduct another and then another pointless study.

People attached to this view also have to face up to the fact that there are many locations that households may be attracted to; they may select residences based on a variety of factors, including spouse’s workplace, children’s schools, friends, shopping and entertainment, assorted amenities, and many more. "Balance" is too vague and too simple.

Saturday, June 13, 2015

It has to get very bad first

Matt Ridley directs our attention to An Ecomodernist Manifesto. Thinking seriously about resources does not require Luddism. Ridley notes,

"Imagine a city on a desert coast at the end of the 21st century. Its main business is software. Its energy comes from advanced forms of nuclear power. Its food is grown in multi-storey, hydroponic factories in the desert, which exclude pests and use sunlight, LEDs, desalinated water and fertiliser manufactured from the air. The city’s metal comes from ore; its glass from sand; its plastic from oil. Its demands on the wild landscapes, free-flowing rivers and fertile soils of the rest of the planet are virtually nil. All just about feasible today."

But how do we get from here to there? Ridley wants the Manifesto to somehow get onto the G-7 agenda as they meet in Bavaria. That would be nice but I expect that the participants and their followers are firmly on board with the green policies we have. The Elon Musks of the world get it. This morning's WSJ includes "High-Tech Solar Projects Fail to Deliver ... $2.2 billion California project generates 40% of expected electricity." Where did the money go? I am reminded of stories of the bad old East bloc days like this one from Charles Wheelan:
 
“… by the time the Berlin Wall crumbled, some East German car factories were actually destroying value. Because the manufacturing process was so inefficient and the end product so shoddy, the plants were producing cars worth less than the inputs used to make them.” (p. 34)

How do we get from here to there? It has to get very bad first.

Thursday, June 04, 2015

No paradox

I had previously posted that "Death of distance" and "Smartphone city" are not quite here yet. But is the glass half-full or half-empty? In 2013, 4.3% of U.S. workers reported that their primary place of work is the home. Growth in the number who report doing this is faster (and fast approaching) the number who commute via public transit -- and at vastly lower public expense. But some of these (hairdressers, child care workers, etc.) may have a home shop that does not involve "telework" of "telecommuting." Wendell Cox offers perspective on the U.S. trends here.

A new paper in the Journal of Transport and Land Use (ungated) by Glenn Lyons is worth reading. The author uses UK data which includes the various ways of teleworking. The more expansive definition shows 33.1% doing so in 1997 and 58.7% in 2010. But the author is after much bigger game. This is how he begins:
This paper contends that a fundamental transition is occurring in those societies which have hitherto embraced and centralized the motorcar and which are now (also) embracing the digital age. It suggests that we are some years into a process of gradual yet significant change away from the car as a foreground innovation in human connectivity with its important symbolic as well as functional meaning. This change is taking us into a recast form of society brought about by the affordances of the digital age revolution in which the car is set to become a background, functionally supporting technology. It will be accompanied and overshadowed by a much greater richness in forms of being able to reach people, goods, services and opportunities made possible by information and communications technologies (ICTs). Car dependence will abate as the spatial and temporal configurations of social and economic participation in society become more flexible. This will have major implications for our transport and land use systems. 
Lyons believes that, "we are in the middle of a regime change transition for transport." (p. 13). Perhaps. Cities change slowly but changing lifestyles are another matter. But that's OK. We may have passed "peak car" and "peak VMT; Lyons even sees a "low-carbon transition." People who are able to visit a place of work less frequently can tolerate greater distances. This means more suburbanization. But that is very old. Plus ça change, plus c'est la même chose.

Monday, June 01, 2015

Diversity we seldom hear about

There are pedestrian islands in most large (auto-oriented) American cities. Shopping malls are a superb example and why not? Making eye contact, people watching, random encounters are still popular.

I have always enjoyed living in pedestrian friendly parts of West Los Angeles. I walk every day -- and encounter awful sidewalks as well as desperate homeless. There are, of course, less of each in private shopping malls.

But none of this should suggest that walking to work is plausible for any but a small sliver of big-city Americans. David Levinson calls our attention to data on how many jobs are accessible in major American cities via a 30-minute walk.

Studies like this are misleading.  First, not all jobs are interchangeable. Some people have very good reasons for rejecting very accessible jobs. It also appears that walking to work seriously constrains options -- and economic opportunities.

This is all obvious but romantics (locavores) cling to the dream that a car-less/motor-less world is within reach. Consider the cost.

All this leads me to recommending Charles Murray's "The United States of Diversity." Some of his themes are as in his Coming Apart.
It is difficult to exaggerate how different life is in a city of a million people or more and in a small city or town. I don’t mean that people in big cities lack friends or even that they cannot have an important a sense of community in their neighborhood. I refer instead to differences in quotidian culture that bear on the nature of the role of government.
Many from America's elite know very little about all this. They do know a little bit about the big cities where they may live but give little thought to the America they do not see. The America that they do see is beset with "problems" that are amenable to the "programs" elites love -- and love to run.  Thank you, Charles Murray.

Thursday, May 28, 2015

Inequality and our cities

Here is Paul Krugman writing about inequality and the urbanism we have.

I have often commuted to and from USC, eastbound ("inbound") in the AM and westbound ("outbound") in the PM.  For as long as I can recall, the heavy AM traffic is "outbound" and the heavy PM traffic is "inbound". In a monocentric city model, this makes no sense. But LA is certainly not monocentric and there are many decent-to-good jobs on the "westside" where housing tends to be expensive and much more low-rent housing on the "eastside".  This is an awful "mismatch" if one cares about commuting efficiencies and/or the plight of lower-income eastsiders.  These are all general statements; generalizing about large metropolitan areas, where there can be stark contrasts block-to-block, can be tricky.

Los Angeles is as "blue" as major American cities get. Urban visionaries and progressives claim to address spatial mismatch as well as the problems of the less well off. But they don't. The local planning process is mainly a politicized, cumbersome and an expensive dogfight. Here is just one high-profile example. Stuff like this is in the news almost daily. Who (besides the rent-seekers) needs it?

Bent Flyvbjerg and Russ Roberts discuss megaprojects here. They do cite rare successes but how do we get from here to there? How to get more successes? More politics is surely not the answer. Flyvbjerg suggests that infrastructure contracts be written clearly so that it there is no question who bears the burden in the event of the inevitable contingencies. How about public posting of all contracts several months in advance? Allow some months for wiki-editing. Then see if the usual suspects still line up to sign.

In the July Reason (gated), Greg Beato writes about "Better Government Through Crowdsourcing."  He likes government's challenge website and the effort get government agencies to work in tandem with large crowds to discover "bold new ideas". So it should be with megaproject contracts.



Wednesday, May 27, 2015

Not from The Onion

Today's LA Times reports this:
Labor leaders, who were among the strongest supporters of the citywide minimum wage increase approved last week by the Los Angeles City Council, are advocating last-minute changes to the law that could create an exemption for companies with unionized workforces.
Not a lot of comment is required. People who politic for a "level paying field" are typically not so candid about what is meant.  In this case, however, it could not be clearer: provide unionized shops anything bit a "level playing field."  How will our lapdog city council handle this one? I expect brain trusts are churning. Stay tuned.

Monday, May 25, 2015

Big questions and big answers

The big question for many historians and social scientists is still "how did we get so rich?" Economists have come full circle and have again started addressing the role of "society" and "culture".  But these too evolve and are not really exogenous.  What then is?  Jared Diamond says it is geography -- and its own slow (exogenous) shifts. Ian Morris in Foragers, Farmers and Fossil Fuels: How Human Values Evolve takes human hunger (the necessity for energy capture; the more calories per day, the better) and historic climate change (post-ice age warming) as the real exogenous forces. They made it possible for humans to shift their attention from foraging to farming to fossil fuel users. And as they did, their values changed. 

Morris' Table 4.1 (p. 134) is the summary: The four "universal" values listed on the left best serve the three activity types if they are accorded the status shown in the the body of the table.

                        Foragers         Farmers                    Fossil-Fuel Users
Political
Inequality         Bad                 Good                         Bad

Wealth
Inequality         Bad                 Good                        Middling

Gender
Inequality         Middling         Good                        Bad

Violence            Middling         Middling/bad        Bad

The book includes the reactions of four eminent respondents as well as Morris' rejoinders.
                                               


Thursday, May 21, 2015

Minimum wage

The LA Times has been popping corks over the LA City Council's vote to hike the minimum wage. This morning's lead editorial, however, exhorts the Council to also mandate more and better jobs. Why not?

Matt Kahn sees the LA wage hike as an opportunity for a natural experiment. James Pethokoukis notes its a gamble, at best.  But Joel Kotkin points out that the experiment has been running for some time and the findings are not pretty: regulations, mandates and taxes kill growth and jobs -- and worsen inequality along the way. Alex Tabarrok offers a useful visual to (perhaps) chasten the Law of Demand deniers. Don Boudreaux has been hammering this group for some time. Bryan Caplan and Mark Perry cite slow phase-ins as a gadget to mask unemployment downsides of mandated wage hikes.

Central planning is hard work; the "helping people" part is extraordinarily difficult.

ADDED

Megan McCardle

Sunday, May 17, 2015

Not easy or simple

Central planning is hard work. This is why they usually get it wrong. This morning's NY Times includes "Brown's Arid California, Thanks Partly to Father ... Pat Brown Used Water For a Booming State. His Son's Era Is Far Different." Southern California "needed" lots of water and the elder Brown pushed through the costly California State Water Project to channel water from the north to the south. The south grew and now "needs" even more water. The younger Brown has responded with his own rationing-by-edict plan. No one said it would be simple.

Departing from its policy of never mentioning "price" and "water" in the same piece, the same NY Times also includes "How to Get People to Pitch In ... We cooperate because it makes us look good." Yes, to some extent, you can shame people into being ostentatious conservationists. Interesting, but I doubt that this alone will get the job done. Widespread conservation is surest if it responds to incentives. Incentives must respond to conditions. That would also be "cooperation."

The op-ed continues, "The 'Pigouvian' approach to encouraging cooperation ... Make water more expensive ... But Californians are stubbornly unresponsive to higher water prices. Estimates suggest that a 10 percent increase in price would result in reductions in water use of 2 to 4 percent."

Yes, pricing is also hard work. Trial-and-error discovery of the right price is widespread, essential, challenging and ongoing. We encounter proclamations of "sale" and the like a thousand times. These sellers are looking to discover a better price, not from econometric estimations but from hands-on experiments.  Water planners would have to do the same.  Not easy or simple.

Friday, May 15, 2015

Our infrastructure and theirs

Taxpayers are often asked to spend ever more, even as they get less in terms of services. Los Angeles' political leaders cannot manage to make sidewalks safely walkable and it takes an ADA lawsuit to compel them. This LA Times summary tells the story. Note that the story hints at new taxes to meet the lawsuit requirements -- because the old money had "dried up." I guess, left out in the noonday sun, money will do that. Today's WSJ highlights the same phenomenon with respect to the Amtrak derailment tragedy.

I recently spent about two weeks cruising Germany's amazing autobahn. The riddle is how they manage to keep surfaces so smooth while back in Los Angeles the potholes jar cars as well as drivers. This is not a cheeky comment; our road surfaces are perilously bad in many places. OECD reports that as a percent of GDP, the U.S. and Germany spend about the same. Germans, apparently get more bang-for-buck than Americans do.

Is too much of our spending politicized? Do our leaders see infrastructure spending as mainly a jobs program? As the Amtrak story unfolds, we will see more evidence on this.

ADDED

Amtrak's budget

Sunday, May 10, 2015

Charter city rules

Paul Romer has long argued the case for "charter cities". There is a growing (and unmet) demand for urban living, especially in poor countries. How can "start-up cities" help?  If they are able to offer and enforce rules that respect private enterprise and property, they are likely to attract labor and capital -- and to thrive.

It is important that these rules allow the operation of flexible land markets. Cities can be "engines of growth" as long as labor and capital are able to seek and find propitious locations. What does this mean? We are used to simplistic definitions of location, e.g, journey-to-work, distance from CBD, etc. But these will not do. People and business interact with many others. And they interact in complex ways. including via physical and electronic access. Physical access can by via a variety of transportation modes.

People and businesses manage a variety of networks -- and they choose sites and networks simultaneously. Flexible land markets are the only way to accommodate all this.

In fact, transactions costs evolve -- as networking options expand. Networking and location choices will change accordingly.

The current mode of land use planning is quite the opposite.  It s guided by top-down "visions" of how land use arrangements ought to look and evolve. Any such visions are clearly inappropriate.  The complexity to be managed is far beyond the ken of top-down planners.