Conversations

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.

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.

Meta-stuff

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.

   

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.

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

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.    

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.
 

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.

Dots to connect

This morning's LA Times editorializes about the "The 501(c)(4) fiasco ... the public needs to be assured that the IRS can enforce the law independently and fairly ... ."  You bet.

Trouble is that the IRS code we have (courtesy of Congress) is bizarre. The Economist (May 25) reports ("Why Americans love the IRS") Since 2001, there have been 4,680 code changes. The tax code includes four-million words. Each year, three-million man-years are spent complying with the tax code; $168-billion a year is spent complying.  The list goes on.

Today's WSJ reports "In Lithuania, the Tax Man Cometh Right After the Google Car Passeth ... Assessors Use Web Giant's Street View Photos To Find Signs of Undeclared Wealth ... More than 100 people have been identified so far after investigators compared Street View images of about 500 properties with state property registries looking for undeclared construction ..."

Big government advocates want big taxes but that means big politics -- and big and usually awful tax administration.  The latter is just a symptom. That's true in the U.S. and in Lithuania and everywhere.  These are easy dots to connect.

The back door

Paul Bloom had another wonderful essay in a recent New Yorker ("The Baby in the Well: The case against empathy").  It is all about hard to achieve wisdom and perspective. "...[w]hen [Natalie] Holloway disappeared, the story of her plight took up more television time than the concurent genocide in Darfur."

And there is this: "The government’s failure to enact prudent long-term policies is often attributed to the incentive system of democratic politics (which favors short-term fixes), and to the powerful influence of money. But the politics of empathy is also to blame. Too often, our concern for specific individuals today means neglecting crises that will harm countless people in the future."

We are not very good at preference aggregation, but what if we were? Our jumble of preferences is often messy. Writers like Bloom usually end with some wistful hope for better government someday.

The latest Cato Policy Report features "The Public Choice Revolution in the Textbooks" by James Gwartney.  Most of the essay is about how the revolution is slow in coming.

The exclusion of public choice analysis is particularly strong at elite schools like those of the Ivy League and the University of California, Berkeley. Buchanan is exceptional among American Nobel prize-winners in that he has never held a teaching or research appointment at an elite school.


The underrepresentation of elite schools among public choice economists is readily observable at the annual meeting of the Public Choice Society, the professional organization of public choice scholars. For example, 296 public choice scholars presented papers at the March 2012 international meeting of the Public Choice Society held in Miami. Only 5 of the presenters were from either an Ivy League school or the University of California, Berkeley. Among the 5, only 1 was a faculty member with an appointment in an economics department.

Underrepresentation of public choice in the economics departments of elite schools has been a major deterrent to the dissimination of the analysis. These departments supply a substantial share of the new faculty members at other departments throughout the nation. They also command prestige, and faculty at other schools often follow their lead. Thus, it is quite difficult for a new theory or methodology to exert widespread impact without attracting support from the top tier of schools.

But Gartney ends on this positive note:

... there has been a virtual explosion of literature that is now referred to as the new institutional economics during the past two decades. In contrast with the derivation of optimal conditions under restrictive assumptions that characterizes so much of modern economics, the new institutional approach focuses on comparative analysis. Building on the work of Nobel laureates Friedrich Hayek and Douglass North, the methodology of the new institutional economics examines how alternative forms of economic, political, and legal institutions impact the performance of economies. This literature and its methodology are penetrating the elite schools and journals to a greater extent than has been the case for public choice analysis, paving the way for greater integration of public choice into mainstream economics.

Public choice could enter public broader public discourse via this back door.  That may be the only way.  "Experts" will always promote the faith in governance by experts. 

Unemployment and commuting

A recent NY Times story called attention to research by Profs David Blanchflower and Andrew Oswald ("Challenge to Dogma on Owning a Home").  The study shows that states with higher home ownership rates have higher unemployment.  Here is a punchline (from the Times story):

"If the correlation is real, what could be the cause? The professors say they believe that high homeownership in an area leads to people staying put and commuting farther and farther to jobs, creating cost and congestion for companies and other workers. They speculate that the role of zoning may be important, as communities dominated by homeowners resort to “not in my backyard” efforts that block new businesses that could create jobs. Perhaps the energy sector would be less freewheeling in North Dakota if there were more homeowners."

I worry about the use of state averages.  Variations within and between metropolitan areas are big. (ADDED, not to mention urban vs rural areas.)  And I could find no correlations between metropolitan unemployment rates amd commuting. BLS provides metropolitan area unemploymwent rates as well as year-to-year unemployment rate changes. NHTS provides household level commuting data for the metro areas. The correlations that I found for the 43 areas for which I could get data for both variables were these: 2009 mean commute time (minutes, solo drivers) and 2012 unemployment -0.07; 2009 commute time variance and 2012 unemployment -0.12; 2009 mean commute time and 2012-2013 change in unemployment, -0.08; 2009 commute time variance and 2012-2013 change in unemployment -0.10. For the commuting-unemployment link, there is apparently not much there.

More generally, the default assumption has been that homeownership is chock full of positive externalities. So the more the merrier.  So pour on the policy. That has not worked out so well. The theoretical argument goes for market determined homeownership rates, not the ones that have been generated by years of policy push.

Understaffed, overworked, underfunded

The Cincinnati IRS office is understaffed, overworked and underfunded. So says this in the NY Times.

I suppose every agency of government likes to make such claims.  We have heard it from failing public schools for as long as I can recall.

But the unfolding IRS story suggests two entirely different thoughts.

First, in any two-party electoral contest, the strategic choice is between firing up the true believers or moving to the center.  Obama chose the former and it worked.  But a hyper-partisan White House will inspire hyper-partisans all the way down the line.

Second, some of us like the idea of a flat tax because the 60,000+ word IRS code we have is cumbersome, user-unfriendly to the extreme, and simply a way to accommodate thousands of politicized special deals.  The argument has been made many times. Here is a quick summary.

But the politicized administration of this rotten code only makes a bad deal worse.  This does bring the tax code problem home to almost everyone.  Most Americans fear the IRS.  To see the politicized misuse of its awesome powers exposed brings the flat tax argument home to those who had tolerated the tax code status quo.

Ain't seen nothing yet

Contracts beat conflicts.  And when it comes to stagnation or not, we ain't seen nothing yet. Here the NY Times reports on crowdfunding when it comes to real estate development. This may put a damper on NIMBY (h/t TMG). Contracting can replace a bunch of conflicts.

I have mentioned several times that when it comes to the way cities grow, it appears that preferences trump policies -- in spite of the thicket of politics we encounter everywhere.  The scales will tip more towards preferences as we give locals a chance to buy in to more local development possibilities.

ADDED

The Economist (May 18) describes Civic Crowdfunding for infrastructure. Crowdfunding, then, can go to public or private projects. It can include donations as well as investments. I like it.

Puzzles indeed

Today's WSJ includes "Beijing Puzzles Over Urban Growth ... Government Entertains Debate on How to Manage Population Gains as It Seeks Lift From Bigger Cities."  There are no "good" or "bad" city sizes, just as there are no "good" or "bad" city densities.  But many urban theorists and planners continue to chase these gross simplifications.

Cities contribute to productvity and economic development if they allow labor and capital to be productive.  The many agents that we aggregate into "labor" and "capital" can each be productive in urban settings if they manage to find the networking opportunities (conveying things as well as thoughts and ideas) that work best for them.  This describes the intricate locational puzzle that we call "urban structure" -- and that we cannot solve top-down.

Economic growth requires economic freedom, but some wonder about political freedom. In these discussions, there is always someone always who suggests China when trying to make the point that political freedom is not required.  But that means politicized meddling which inevitably gets things wrong ("Beijing Puzzles ...").  It surely gets cities wrong. Sandy Ikeda tells the story a bit more elegantly here.