It is almost conventional wisdom these days that "people are moving back to the cities." Well, not exactly. Wendell Cox has assembled the 2000-2005 population growth data for the largest U.S. metros and most growth is overwhelmingly in the suburbs. And why not?
Garlic may do more to stop vampires in their tracks than the demographic facts do to stop the many commentators and journalists who are so easily confused by their own urban fantasies.
Wednesday, June 28, 2006
Monday, June 26, 2006
Thinking globally and acting locally
In today's WSJ, MIT's Richard S. Lindzen writes that "There is No 'Consensus' on Global Warming ... So what, then, is one to make of this alleged debate? I would suggest at least three points.
"First, nonscientists generally do not want to bother with understanding the science. Claims of consensus relieve policy types, environmental advocates and politicians of any need to do so. Such claims also serve to intimidate the public and even scientists - especially those outside the area of climate dynamics. Secondly, given that the question of human attribution largely cannot be resolved, its use in promoting visions of disaster constitutes nothing so much as a bait-and-switch scam. That is an inauspicious beginning to what Mr. Gore claims is not a political but a 'moral' crusade.
"Lastly, there is a clear attempt to establish truth not by scientific methods but by perpetual repetition. An earlier attempt at this was accompanied by tragedy. Perhaps Marx was right. This time around we have farce -- if we are lucky."
But we may not be so lucky. Today's LA Times reports that, "State lawmakers will consider a bill to address global warming with indstry mandates."
State mandates would have serious costs but no benefits. This is a classic Prisoner's Dilemma -- completely irrelevant in the world of posturing.
"First, nonscientists generally do not want to bother with understanding the science. Claims of consensus relieve policy types, environmental advocates and politicians of any need to do so. Such claims also serve to intimidate the public and even scientists - especially those outside the area of climate dynamics. Secondly, given that the question of human attribution largely cannot be resolved, its use in promoting visions of disaster constitutes nothing so much as a bait-and-switch scam. That is an inauspicious beginning to what Mr. Gore claims is not a political but a 'moral' crusade.
"Lastly, there is a clear attempt to establish truth not by scientific methods but by perpetual repetition. An earlier attempt at this was accompanied by tragedy. Perhaps Marx was right. This time around we have farce -- if we are lucky."
But we may not be so lucky. Today's LA Times reports that, "State lawmakers will consider a bill to address global warming with indstry mandates."
State mandates would have serious costs but no benefits. This is a classic Prisoner's Dilemma -- completely irrelevant in the world of posturing.
Friday, June 23, 2006
Best DVDs
In no particular order, here is my updated list of favorites from Netflix.
There is no accounting for taste and when I see my friends' list of favorites, I usually cannot believe my eyes.
De Tweeling (Holland)
Open Hearts (Denmark)
Cenizas del Paraiso (Spain)
Love Serenade (Australia)
Beg to Inform (U.S.)
To Live (China)
Walk on Water (Israel)
You can Count on Me (U.S.)
Divided We Fall (Czech Republic)
Under the Sun (Sweden)
Cinema Paradiso (Italy)
Il Postino (Italy)
Solas (Spain)
L'Auberge Espagnole (France)
Chaos (France)
Burnt by the Sun (Russia)
Lawless Heart (U.K.)
Mostly Martha (Germany)
In the Bedroom (U.S.)
Spellbound (U.S.)
Nowhere in Africa (Germany)
The Crime of Padre Amaro (Mexico)
The Housekeeper (France)
The Big Night (U.S.)
Shall We Dance? (Japan)
Jew-Boy Levi (Germany)
The Mystery of Rampo (Japan)
Together (China)
Dirty Pretty Things (U.K.)
East-West (France)
Russian Ark (Russia)
Man on the Train (France)
The Thief (Russia)
Swimming Pool (France)
Indochine (France)
Sex and Lucia (Spain)
The Barbarian Invasions (French Canada)
My Wife is an Actress (French)
Wannsee Konferenz (German)
There is no accounting for taste and when I see my friends' list of favorites, I usually cannot believe my eyes.
De Tweeling (Holland)
Open Hearts (Denmark)
Cenizas del Paraiso (Spain)
Love Serenade (Australia)
Beg to Inform (U.S.)
To Live (China)
Walk on Water (Israel)
You can Count on Me (U.S.)
Divided We Fall (Czech Republic)
Under the Sun (Sweden)
Cinema Paradiso (Italy)
Il Postino (Italy)
Solas (Spain)
L'Auberge Espagnole (France)
Chaos (France)
Burnt by the Sun (Russia)
Lawless Heart (U.K.)
Mostly Martha (Germany)
In the Bedroom (U.S.)
Spellbound (U.S.)
Nowhere in Africa (Germany)
The Crime of Padre Amaro (Mexico)
The Housekeeper (France)
The Big Night (U.S.)
Shall We Dance? (Japan)
Jew-Boy Levi (Germany)
The Mystery of Rampo (Japan)
Together (China)
Dirty Pretty Things (U.K.)
East-West (France)
Russian Ark (Russia)
Man on the Train (France)
The Thief (Russia)
Swimming Pool (France)
Indochine (France)
Sex and Lucia (Spain)
The Barbarian Invasions (French Canada)
My Wife is an Actress (French)
Wannsee Konferenz (German)
Sunday, June 18, 2006
Sunday mystery
Today's NY Times Magazine includes "If It's Good For Philip Morris, Can It Be Good For Public Health?" It appears that big-tobacco execs want FDA regulation and the FDA's David Kessler, who badly wants to regulate, is suspicious.
The story notes, in passing, the recent rise "of about 100 small cigarette companies --with names like Liberty Brands and Virginia Brands -- that now undercut the big boys on price."
Could it be that writer Joe Nocera has missed the big story all through his very long cover story? No need to be suspicious; the big boys know a cartelization opportunity when they see one.
The story notes, in passing, the recent rise "of about 100 small cigarette companies --with names like Liberty Brands and Virginia Brands -- that now undercut the big boys on price."
Could it be that writer Joe Nocera has missed the big story all through his very long cover story? No need to be suspicious; the big boys know a cartelization opportunity when they see one.
Heat islands
There was a global cooling consensus in the 1970s and there is now a global warming consensus. Available data for the last 12,000 years show that the Earth has gone through many of both as parts of continuous cycling.
The current controversy involves charges that the latest warming trend can be traced to our sins -- and that we had better reform. But most of the measurements are taken near cities. These are misleading beacuse cities are "heat islands".
And the heat islands are hottest in their centers and less so in their suburbs. One more reason to be wary of industrial policies that seek to reverse suburbanization and create strong city centers.
"Confessions of an 'Exx-Con'"
By ROBERT L. POLLOCK WSJ, June 17, 2006; Page A10
"Global-warming alarmists take it for granted that they have the 'scientific consensus' on their side. The truth is that their views can be as much an article of faith that avoids or elides basic facts.
"I was reminded of this recently after suggesting on our weekly television show -- The Journal Editorial Report on Fox News Channel -- that 'everyone agrees there has been some warming over the past century, but most of it happened before 1940.'
"'Not true,' declared a subsequent editorial in the New Republic magazine. 'The last three decades have seen the sharpest rise.' TNR suggested I was what they've dubbed an 'Exx-Con' -- that is, a conservative whose views on climate change are so unmoored from reality that they can only be explained by a slavish devotion to Exxon and other big oil firms.
"But it is TNR that's having trouble with the facts here. I'll grant that my off-the-cuff remarks could have been worded a bit more precisely. I probably should have said 'more than half' instead of 'most.' But that doesn't change the fact -- as the NASA charts nearby illustrate -- that the early 20th century saw a rise in global and U.S. temperature, followed by about three decades of declining or stable temperatures that global-warming alarmists have a hard time trying to explain. (Don't let the slope of the chart scare you either; we're looking at small variations here.)
"The relevant part of TNR's May 25 piece seems to be based on an innumerate May 16 attack on me at the far-left Web site Mediamatters.org. Mediamatters said almost identically that 'the last three decades (1976-2005) have seen a sharper rise in global air temperature.' But rather than fess up to its source, TNR responded to my complaint with the pretense of assigning a fact-checker to the case before deciding there would be no correction.
"The Mediamatters attack suggests I'm wrong because the difference between the coldest early-20th-century year and the warmest mid-century year is very slightly smaller that the difference between 1976 and 2005. But if the issue is by what date 'most' of the warming occurred, there are three relevant data points, not four -- the 1970s trough doesn't matter. And the difference between 1907 (the coldest year) and 1944 (the warmest mid-century) is .59 degrees Celsius, while the difference between 1944 and 2005 is .42 degrees. "Most" of the warming that has taken place over the last century had indeed occurred by about 1940.
"One could leave it at that. But I want to avoid the other mistake my critics make, which is thinking that long-term temperature trends should be measured by the difference between single, and possibly anomalous, years. That's why the NASA graphs contain a line representing the five-year rolling average. Looking at things this way still supports my point, admittedly a bit less so.
"In any case, the graph at issue presents a challenge to those who claim that the recent warming trend is primarily caused by carbon dioxide and is not part of a natural rebound from a cool 19th century. The early 20th century saw a rise in temperature rise at least as great. And far, far more CO2 has been pumped into the atmosphere in the years following 1940 than the years before.
"What's more, there's a debate over whether recent global data is biased upward by the fact that many measuring stations are located in or near cities around the world that have grown rapidly over the past half-century. Anyone who's ever crossed the George Washington Bridge can understand the concept of the urban 'heat island' effect.
"In that regard, a recent study of Greenland -- where allegedly melting glaciers are allegedly threatening a catastrophic sea-level rise -- published in Geophysical Research Letters is fascinating. It finds that Greenland is no warmer today than it was in the 1920s, and that 'although there has been a considerable temperature increase during the last decade (1995-2005) a similar increase occurred during the early part of the 20th century (1920-1930) when carbon dioxide or other greenhouse gases could not be a cause.' The U.S. temperature graph shows much the same. The U.S. inarguably produces more reliable data than most other countries, or the sparsely sampled oceans that cover most of the globe, and we've seen very little warming since the 1930s.
"Finally, a word about motive. Why wouldn't I want to be on the safe side and embrace the Kyoto Protocol? Not because of an attachment to oil companies, but because meaningful CO2 cutbacks would entail drastic reductions in energy use by billions of people in places like China and India who are finally getting a chance at a better life. The New Republic doesn't seem to have addressed such consequences in any serious way. Attempting to wave someone out of the argument by calling them an Exx-con is much easier than confronting the difficult facts beneath the global warming debate."
The current controversy involves charges that the latest warming trend can be traced to our sins -- and that we had better reform. But most of the measurements are taken near cities. These are misleading beacuse cities are "heat islands".
And the heat islands are hottest in their centers and less so in their suburbs. One more reason to be wary of industrial policies that seek to reverse suburbanization and create strong city centers.
"Confessions of an 'Exx-Con'"
By ROBERT L. POLLOCK WSJ, June 17, 2006; Page A10
"Global-warming alarmists take it for granted that they have the 'scientific consensus' on their side. The truth is that their views can be as much an article of faith that avoids or elides basic facts.
"I was reminded of this recently after suggesting on our weekly television show -- The Journal Editorial Report on Fox News Channel -- that 'everyone agrees there has been some warming over the past century, but most of it happened before 1940.'
"'Not true,' declared a subsequent editorial in the New Republic magazine. 'The last three decades have seen the sharpest rise.' TNR suggested I was what they've dubbed an 'Exx-Con' -- that is, a conservative whose views on climate change are so unmoored from reality that they can only be explained by a slavish devotion to Exxon and other big oil firms.
"But it is TNR that's having trouble with the facts here. I'll grant that my off-the-cuff remarks could have been worded a bit more precisely. I probably should have said 'more than half' instead of 'most.' But that doesn't change the fact -- as the NASA charts nearby illustrate -- that the early 20th century saw a rise in global and U.S. temperature, followed by about three decades of declining or stable temperatures that global-warming alarmists have a hard time trying to explain. (Don't let the slope of the chart scare you either; we're looking at small variations here.)
"The relevant part of TNR's May 25 piece seems to be based on an innumerate May 16 attack on me at the far-left Web site Mediamatters.org. Mediamatters said almost identically that 'the last three decades (1976-2005) have seen a sharper rise in global air temperature.' But rather than fess up to its source, TNR responded to my complaint with the pretense of assigning a fact-checker to the case before deciding there would be no correction.
"The Mediamatters attack suggests I'm wrong because the difference between the coldest early-20th-century year and the warmest mid-century year is very slightly smaller that the difference between 1976 and 2005. But if the issue is by what date 'most' of the warming occurred, there are three relevant data points, not four -- the 1970s trough doesn't matter. And the difference between 1907 (the coldest year) and 1944 (the warmest mid-century) is .59 degrees Celsius, while the difference between 1944 and 2005 is .42 degrees. "Most" of the warming that has taken place over the last century had indeed occurred by about 1940.
"One could leave it at that. But I want to avoid the other mistake my critics make, which is thinking that long-term temperature trends should be measured by the difference between single, and possibly anomalous, years. That's why the NASA graphs contain a line representing the five-year rolling average. Looking at things this way still supports my point, admittedly a bit less so.
"In any case, the graph at issue presents a challenge to those who claim that the recent warming trend is primarily caused by carbon dioxide and is not part of a natural rebound from a cool 19th century. The early 20th century saw a rise in temperature rise at least as great. And far, far more CO2 has been pumped into the atmosphere in the years following 1940 than the years before.
"What's more, there's a debate over whether recent global data is biased upward by the fact that many measuring stations are located in or near cities around the world that have grown rapidly over the past half-century. Anyone who's ever crossed the George Washington Bridge can understand the concept of the urban 'heat island' effect.
"In that regard, a recent study of Greenland -- where allegedly melting glaciers are allegedly threatening a catastrophic sea-level rise -- published in Geophysical Research Letters is fascinating. It finds that Greenland is no warmer today than it was in the 1920s, and that 'although there has been a considerable temperature increase during the last decade (1995-2005) a similar increase occurred during the early part of the 20th century (1920-1930) when carbon dioxide or other greenhouse gases could not be a cause.' The U.S. temperature graph shows much the same. The U.S. inarguably produces more reliable data than most other countries, or the sparsely sampled oceans that cover most of the globe, and we've seen very little warming since the 1930s.
"Finally, a word about motive. Why wouldn't I want to be on the safe side and embrace the Kyoto Protocol? Not because of an attachment to oil companies, but because meaningful CO2 cutbacks would entail drastic reductions in energy use by billions of people in places like China and India who are finally getting a chance at a better life. The New Republic doesn't seem to have addressed such consequences in any serious way. Attempting to wave someone out of the argument by calling them an Exx-con is much easier than confronting the difficult facts beneath the global warming debate."
Tuesday, June 13, 2006
No learning curve in sight
Americans like to hopscotch around European capitals to sample cozy city centers. That part of the continent is now our Disneyland-for-adults.
Some tourists return with the idea that we can reproduce such places here. And a few sign on to the idea that U.S. cities' traditional downtowns can and should be "revitalized."
The 800-lb. gorrilla in the story is the city-backed industrial policy that feeds on jobs programs and other hand-outs to favored groups.
The front page of today's LA Times includes "L.A. Convention Center to Get Major Hotel Tower ... The complex would give dowtown the magnet for business conferences it has lacked for year ..."
One has to get 90% of the way through about forty inches of breathless prose to find that, "[t]he project has attracted controversy because nearly half the cost will be financed by city subsidies and loans."
This is all standard. L.A.'s downtown has been trembling on the brink of revitalization for half a century and taxpayers have regularly been asked to shell out mega-bucks to redeem the long list of previous mega-project fiascos.
Even when we visit the new downtown Disney Concert Hall, most of us scurry home at the end of the performance rather than stick around to sample the charms of downtown L.A.
Among offialdom and its booster club, there is no learning curve to speak of.
Some tourists return with the idea that we can reproduce such places here. And a few sign on to the idea that U.S. cities' traditional downtowns can and should be "revitalized."
The 800-lb. gorrilla in the story is the city-backed industrial policy that feeds on jobs programs and other hand-outs to favored groups.
The front page of today's LA Times includes "L.A. Convention Center to Get Major Hotel Tower ... The complex would give dowtown the magnet for business conferences it has lacked for year ..."
One has to get 90% of the way through about forty inches of breathless prose to find that, "[t]he project has attracted controversy because nearly half the cost will be financed by city subsidies and loans."
This is all standard. L.A.'s downtown has been trembling on the brink of revitalization for half a century and taxpayers have regularly been asked to shell out mega-bucks to redeem the long list of previous mega-project fiascos.
Even when we visit the new downtown Disney Concert Hall, most of us scurry home at the end of the performance rather than stick around to sample the charms of downtown L.A.
Among offialdom and its booster club, there is no learning curve to speak of.
Sunday, June 11, 2006
How bad things are
I thought that I had reason to worry when the NY Times Magazine's "Money Issue" arrived this morning, including Niall Ferguson's "Reasons to Worry ... Why You Could Be Excused for Feeling a Little Uneasy About the Collapse of Household Savings, the Rise in Home-Mortgage Debt, a Large and Growing Trade Deficit and the Fact that Asian Countries Hold So Many Treasuries"
The popular discourse thrives on unnormalized comparisons. that sensationalize -- and in the process obscure. Ferguson tries to have it both ways in his piece.
This is why The Skeptical Economist runs, as a regular feature, its debt-to-GDP ratio -- which has been trending down of late.
And, yes, it moves much too slowly to be on any electronic billboard's "debt clock."
The popular discourse thrives on unnormalized comparisons. that sensationalize -- and in the process obscure. Ferguson tries to have it both ways in his piece.
This is why The Skeptical Economist runs, as a regular feature, its debt-to-GDP ratio -- which has been trending down of late.
And, yes, it moves much too slowly to be on any electronic billboard's "debt clock."
Thursday, June 08, 2006
Timely op-ed
In the June 19 Forbes, Frederic Sautet of GMU's Mercatus Center writes "Don't Tempt Me ... States and cities lure businesses with promises of tax abatements and other goodies. They'd do better with broad-based tax cuts." This is common sense. Yet, it is like being serious about a simplified tax code: in the event, what would politicians do all day?
Mine is a serious comment. The Genie is out of the bottle. They have tasted the heroin.
Bad policy choices bite but in the long run which few politicians care about. In the short term, they spread the goodies and reap the personal rewards. In that context, essays like Sautet's are a step forward.
Teach economics to journalists and teach op-ed writing to economists.
Mine is a serious comment. The Genie is out of the bottle. They have tasted the heroin.
Bad policy choices bite but in the long run which few politicians care about. In the short term, they spread the goodies and reap the personal rewards. In that context, essays like Sautet's are a step forward.
Teach economics to journalists and teach op-ed writing to economists.
Tuesday, June 06, 2006
Holy grail postponed
As I write this, financial markets are in a deep funck because "stagflationary" (the worst kind) of expectations are in the air.
How convenient, then that The Economist writes about James Tetlock's upcoming "Giving Content to Investor Sentment", forthcoming in the Journal of Finance. See Economic Focus: In a sentimental mood ... What bulls and bears can learn from the hacks. (Link includes link to PDF version of the paper.)
Will this cause us to re-think random walks? Tetlock reports the extent to which we measure market sentiment by word-counts (and the use of taxonomies) with columns like the daily "Abreast of the Market" in the WSJ.
But "[t]he power of the financial press, whatever, its source is fleeting. The pall that a column can cast over the stockmarket soon lifts ... the damage is reversed within five days. Prices rebound, and cool-headed arbitrageurs earn their just reward for taking shares off skittish investors' hands."
Getting ahead of the random walk is investors' holy grail. My reading of Tetlock's paper is that he has not actually found the holy grail. Stay tuned. Buy and hold.
How convenient, then that The Economist writes about James Tetlock's upcoming "Giving Content to Investor Sentment", forthcoming in the Journal of Finance. See Economic Focus: In a sentimental mood ... What bulls and bears can learn from the hacks. (Link includes link to PDF version of the paper.)
Will this cause us to re-think random walks? Tetlock reports the extent to which we measure market sentiment by word-counts (and the use of taxonomies) with columns like the daily "Abreast of the Market" in the WSJ.
But "[t]he power of the financial press, whatever, its source is fleeting. The pall that a column can cast over the stockmarket soon lifts ... the damage is reversed within five days. Prices rebound, and cool-headed arbitrageurs earn their just reward for taking shares off skittish investors' hands."
Getting ahead of the random walk is investors' holy grail. My reading of Tetlock's paper is that he has not actually found the holy grail. Stay tuned. Buy and hold.
Sunday, June 04, 2006
"Bigger social concerns"
What causes countries to prosper and grow? What causes cities to prosper and grow?
With respect to nations, we know that better institutions poise human capital to be productive. With respect to cities, we know that institutions as well as the spatial arrangement of human capital matter most.
The latter prompts agglomeration economies but their best spatial expression is not simple and depends on history. There are agglomeration economies in Manhattan as well as in Silicon Valley -- although no one would seriously advocate building the former from scratch today.
Today's NY Times includes Nicolai Ourousoff's "Skyline For Sale ... Frank Gehry and Bruce Ratner are proving how much influence architects have with developers and how troublingly little."
The piece concerns the proposed Atlantic Yards project for Brooklyn and allows Ourousoff to indulge in stale ruminations about art vs. Mammon. The author worries about the architect making a "pact with the Devil" by helping the developer to maximize profits(!). Ourousoff also worries that the powers that be in NYC are seemingly marginalized -- or their high-minded "bigger social concerns" have been marginalized.
This is silly. NYC government is nothing but a collection of interest groups who are very much involved in the process -- for better or worse.
The question unasked remains how the project impacts what matters, local institutions and the spatial arrangements of human capital. Nothing that we know compels optimism. Politicized mega-projects usually pull us in the wrong directions.
With respect to nations, we know that better institutions poise human capital to be productive. With respect to cities, we know that institutions as well as the spatial arrangement of human capital matter most.
The latter prompts agglomeration economies but their best spatial expression is not simple and depends on history. There are agglomeration economies in Manhattan as well as in Silicon Valley -- although no one would seriously advocate building the former from scratch today.
Today's NY Times includes Nicolai Ourousoff's "Skyline For Sale ... Frank Gehry and Bruce Ratner are proving how much influence architects have with developers and how troublingly little."
The piece concerns the proposed Atlantic Yards project for Brooklyn and allows Ourousoff to indulge in stale ruminations about art vs. Mammon. The author worries about the architect making a "pact with the Devil" by helping the developer to maximize profits(!). Ourousoff also worries that the powers that be in NYC are seemingly marginalized -- or their high-minded "bigger social concerns" have been marginalized.
This is silly. NYC government is nothing but a collection of interest groups who are very much involved in the process -- for better or worse.
The question unasked remains how the project impacts what matters, local institutions and the spatial arrangements of human capital. Nothing that we know compels optimism. Politicized mega-projects usually pull us in the wrong directions.
Saturday, June 03, 2006
Unintended self-parody, NYC chapter
It's easy to be a lazy blogger when stuff like this comes along.
From today's NYT:
"Delusions of the Rich and Rent-Controlled"
By JOHN TIERNEY,
"Who knows what evil lurks in the soul of a New York tenant? Nora Ephron knows — sort of."
"She has broken the code of silence of Manhattan's most exclusive aristocracy. She became the crème de la crème of the city's rent-regulated tenants by bribing her way into an eight-room apartment for $1,500 a month at the Apthorp, the palatial building at Broadway and West 79th Street.
"Her expulsion from rent-control paradise, told in the current New Yorker, isn't exactly a heartbreaking story. But it gives a rare inside look at the rentocracy, the system allowing affluent New Yorkers to pay below-market rents and pass along the apartments to their children.
"Ephron is a smart, funny writer who now acknowledges the injustice of the system. But during her days in the Apthorp she was indignant when a new law stripped away her rent protection because her household income was more than $250,000 per year. She couldn't imagine anyone would dare charge her what the apartment became worth: $10,000 per month.
"'I was a character in a story about mass delusion and the madness of crowds,' she writes. 'I was, in short, completely nuts.'
"She was also, in short, utterly typical of her class. I can't claim to have reached her social heights, but I did live in regulated apartments for 17 years, and I'm still amazed at the self-delusion that prevailed.
"I spent long dinners hearing rentocrats earnestly explain that while the free market may work for the rest of apartments in America, rents must be regulated in Manhattan because it is an island with a limited supply of housing. (If an out-of-towner suggested to these Manhattan theorists that the rent they charged for their vacation homes in Nantucket should also be regulated, they would explain that Nantucket is a different kind of island.)
"In her article, Ephron complains that the law deregulating her apartment allowed landlords to be 'utterly capricious' in charging her 'fair-market value' for her eight rooms.
"This sounds odd coming from a Hollywood director — was Ephron any less capricious in charging whatever she could get for 'Sleepless in Seattle'? — but it's the rentocrat, not the director, talking here.
"Like European nobles in crumbling castles, rentocrats are above money grubbing. They deserve their homes because of their longevity and their virtues. They compare rent control to Fulbright scholarships — a stipend wisely provided to worthy intellectuals and artists. They will announce, with a straight face, that they're entitled to keep their apartments because of the extensive "emotional investment" they have made in the buildings.
"They scorn tacky landlords obsessed with getting higher rents so they can pay for nonemotional investments like furnaces. Ephron writes witheringly about the beehive hairdo and pink silk suits of the building manager, a "frightening" woman — and a resident of New Jersey. The Apthorp tenants were appalled at the landlords' efforts to renovate the property — how bourgeois! — so they could get permission to charge higher rents.
"The Apthorp tenants did consent to some profiteering of their own by charging illicit "key money," like the $24,000 that Ephron paid to the previous tenant in order to get her apartment. But what was acceptable for tenants became a "crime," as Ephron tells it, when one of the landlords started taking a cut of the action. Why should he get anything? It's only his building.
"Now that she's left the Apthorp and become the happy owner of her own apartment, Ephron ascribes her former madness to being so deliriously in love with her old home that she couldn't imagine leaving it. But I can't buy the love diagnosis. As a recovering rentocrat, I think our madness has more to do with guilt.
"No matter how much you love your rent-stabilized apartment, no matter how smug you feel bragging to your friends about your deal, in your heart you know it's not fair you're paying so little. It's like buying stolen goods: you can revel in the low price, but you know it comes at someone else's expense.
"And you know exactly who that someone is. You're living on his property. You're a squatter, but you don't want to admit it. So you tell yourself it's not really his property anyway, and you're more worthy of it than he is, and you couldn't survive anywhere else, and anyway this is all about something far more profound than money. But it's not."
From today's NYT:
"Delusions of the Rich and Rent-Controlled"
By JOHN TIERNEY,
"Who knows what evil lurks in the soul of a New York tenant? Nora Ephron knows — sort of."
"She has broken the code of silence of Manhattan's most exclusive aristocracy. She became the crème de la crème of the city's rent-regulated tenants by bribing her way into an eight-room apartment for $1,500 a month at the Apthorp, the palatial building at Broadway and West 79th Street.
"Her expulsion from rent-control paradise, told in the current New Yorker, isn't exactly a heartbreaking story. But it gives a rare inside look at the rentocracy, the system allowing affluent New Yorkers to pay below-market rents and pass along the apartments to their children.
"Ephron is a smart, funny writer who now acknowledges the injustice of the system. But during her days in the Apthorp she was indignant when a new law stripped away her rent protection because her household income was more than $250,000 per year. She couldn't imagine anyone would dare charge her what the apartment became worth: $10,000 per month.
"'I was a character in a story about mass delusion and the madness of crowds,' she writes. 'I was, in short, completely nuts.'
"She was also, in short, utterly typical of her class. I can't claim to have reached her social heights, but I did live in regulated apartments for 17 years, and I'm still amazed at the self-delusion that prevailed.
"I spent long dinners hearing rentocrats earnestly explain that while the free market may work for the rest of apartments in America, rents must be regulated in Manhattan because it is an island with a limited supply of housing. (If an out-of-towner suggested to these Manhattan theorists that the rent they charged for their vacation homes in Nantucket should also be regulated, they would explain that Nantucket is a different kind of island.)
"In her article, Ephron complains that the law deregulating her apartment allowed landlords to be 'utterly capricious' in charging her 'fair-market value' for her eight rooms.
"This sounds odd coming from a Hollywood director — was Ephron any less capricious in charging whatever she could get for 'Sleepless in Seattle'? — but it's the rentocrat, not the director, talking here.
"Like European nobles in crumbling castles, rentocrats are above money grubbing. They deserve their homes because of their longevity and their virtues. They compare rent control to Fulbright scholarships — a stipend wisely provided to worthy intellectuals and artists. They will announce, with a straight face, that they're entitled to keep their apartments because of the extensive "emotional investment" they have made in the buildings.
"They scorn tacky landlords obsessed with getting higher rents so they can pay for nonemotional investments like furnaces. Ephron writes witheringly about the beehive hairdo and pink silk suits of the building manager, a "frightening" woman — and a resident of New Jersey. The Apthorp tenants were appalled at the landlords' efforts to renovate the property — how bourgeois! — so they could get permission to charge higher rents.
"The Apthorp tenants did consent to some profiteering of their own by charging illicit "key money," like the $24,000 that Ephron paid to the previous tenant in order to get her apartment. But what was acceptable for tenants became a "crime," as Ephron tells it, when one of the landlords started taking a cut of the action. Why should he get anything? It's only his building.
"Now that she's left the Apthorp and become the happy owner of her own apartment, Ephron ascribes her former madness to being so deliriously in love with her old home that she couldn't imagine leaving it. But I can't buy the love diagnosis. As a recovering rentocrat, I think our madness has more to do with guilt.
"No matter how much you love your rent-stabilized apartment, no matter how smug you feel bragging to your friends about your deal, in your heart you know it's not fair you're paying so little. It's like buying stolen goods: you can revel in the low price, but you know it comes at someone else's expense.
"And you know exactly who that someone is. You're living on his property. You're a squatter, but you don't want to admit it. So you tell yourself it's not really his property anyway, and you're more worthy of it than he is, and you couldn't survive anywhere else, and anyway this is all about something far more profound than money. But it's not."
Wednesday, May 31, 2006
"City Lite"
The front-page of today's WSJ features "City Lite ... Fake Towns Rise, Offering Urban Life, Without the Grit ... Mix of Office, Home and Play Threatens the Real Thing: But Where's the Grocery?" (see below).
The piece tells once more how attempts to resurrect old downtowns are hopeless (and a huge waste) and that most people are getting what they want in terms of urban centers from suburban developers.
The article wrongly ascribes this to New Urbanist theorists. Developers read the market, not the theorists. Urban (and suburban) forms are always evolving in response to changing tastes and changing possibilities. And there is only one known way to to discover and implement these.
To be sure, some of the old downtowns now have the occasional block or two of trendy restaurants, mostly catering to young singles (and young couples). But you gotta ask: At what cost?
By THADDEUS HERRICK, WSJ. May 31, 2006; Page A1
"PLANO, Texas -- On a recent Friday night, Bishop Road was hopping. Land Rovers and Lexuses inched down the two-lane street. On the brick sidewalks, a steel band played Bob Marley tunes as couples strolled past boutiques, bars and restaurants, lines spilling out the door.
"Until a few years ago, Bishop Road was a grassy field in the midst of a gargantuan office park. Today, it's the main drag of Legacy Town Center, a 75-acre development 20 miles north of Dallas that's home to 4,000 people. The project has been such a hit that developers are building on an additional 75 acres across the street.
"Legacy Town Center is one of dozens of faux downtowns popping up across the country, from Kansas City to Washington, D.C., spurred by a demand for urban living scrubbed of the reality of city life. A careful mix of retail, residential and office space built with traditional materials such as stone and brick, Legacy looks like a city but has neither panhandlers nor potholes. Many residents rarely venture even to downtown Dallas, which has been trying to turn itself into place to live for almost a decade.
"'There's too much riffraff down there,' says Ron Pettit, a 36-year-old contractor, as he snacks on brie and grapes at a table outside Bishop Road's Main Street Bakery and Bistro.
In Flagstaff, Ariz., buyers have snapped up almost all of the 125 residential units on offer at Presidio in the Pines, a town center under construction on 91 acres of forest. North of Charlotte, N.C., on the site of a former dairy farm, is Birkdale Village, which consists of 52 acres intended to recall a New England coastal town. It features 320 apartments, most of which are stacked above shops and restaurants.
"Even though these faux downtowns contain tinges of suburbia, they're taking advantage of a growing backlash against the sprawl that rings Dallas and other U.S. cities. The reaction began in the 1980s with the rise of New Urbanism, a movement of architects and planners calling for a return to traditional towns where people work, shop, live and play.
"Among the most prominent of those theorists was Andrés Duany, a leading figure behind Seaside, a planned pedestrian community on the Florida Panhandle that was the setting for the 1998 movie, "The Truman Show." Suburban growth, Mr. Duany argued, was unsustainable because it consumes land at a high rate while creating horrendous traffic.
"In the 1990s, Americans started venturing back into cities that had emptied out in prior decades. Basking in the glow of falling crime rates and glamorized by television shows such as 'Seinfeld' and 'Friends,' cities themselves began to woo residential and retail development.
For a developer, however, it's much easier to make a fake city than it is to work on real downtowns with their patchwork landholdings and planning restrictions. The developers of Legacy were able to carve up the land pretty much as they pleased. The result: more than 1,500 apartments and town houses, some 80 shops and restaurants, two mid-rise office towers and a Marriott Hotel.
"The concept also attracted developers looking for alternatives to malls, a concept rapidly losing favor among shoppers. Only one mall has opened in 2006, according to the International Council of Shopping Centers, a New York City-based trade group. By contrast, more than 60 so-called lifestyle centers -- outdoor shopping areas with plazas, fountains and pedestrian streets -- are planned to open this year and next.
"To attract more shoppers, and therefore retailers, developers started building homes on these sites. Steiner + Associates of Columbus, Ohio, a leading builder of town centers, initially included only retail and office space at the $300 million Easton Town Center near Columbus, which was completed in 2001. When another developer added apartments across the street, Yaromir Steiner, chief executive of Steiner + Associates, noticed the low vacancies and high rents. 'We realized how a commodity apartment could turn into a specialty product,' he said.
"When Mr. Steiner built Zona Rosa, a 93-acre project on farmland north of Kansas City, he included 33 loft apartments. One of his latest projects, The Greene, near Dayton, Ohio, is built on woodland and will include 136 residential units when it opens this summer.
"These projects could be bad news for real downtowns, especially those competing with redeveloped sites near the city center. AIG Global Real Estate Investment Corp. and Jacoby Development Inc. are redeveloping a massive steel mill just north of downtown Atlanta into a community known as Atlantic Station. The developers had to remove 165,000 tons of contaminated material. They now intend to build a small city on the 138-acre site, which could house as many as 10,000 residents.
"Houston has poured some $4 billion into downtown stadiums, roads and light rail in the past decade. But 27 miles to the north, the Woodlands Town Center has sold out of newly constructed lofts and replica brownstones in the midst of an affluent planned community.
"'The question is whether this demand for urban-style living -- density, transportation alternatives, proximity to work -- is broad enough to accommodate the resurgence of traditional downtowns,' says Bruce Katz, founder and director of the Metropolitan Policy Program at the Brookings Institution, a Washington, D.C., think tank.
"Just like the real thing, faux downtowns are vulnerable to the vagaries of the local economy, a problem that's magnified by the big upfront investment required. Federal Realty Investment Trust bet heavily on Santana Row, a $455 million project three miles from downtown San Jose that opened in 2002 on the site of a former shopping center. With its Mediterranean-inspired architecture, Santana Row was intended to provide an urban island for professionals in Silicon Valley.
"But the collapse of the tech industry, the Sept. 11, 2001, terrorist attacks, and a catastrophic fire buffeted the project. Some high-end retailers that considered opening there ended up not making commitments, city officials say. In 2003, Federal Realty Chief Executive Steve Guttman resigned.
"Departing from the script, the company lured big-box stores such as Best Buy to generate foot traffic. As the economy improved, so too did the fortunes of Santana Row. Today, city officials say the project -- with 70 shops and 19 restaurants and a mix of town homes, condominiums and apartments -- is a draw for Silicon Valley residents.
"Don Wood, the current chief executive of Federal Realty, says building an instant city is considerably harder than a standard development. Santana Row took seven years to complete. 'Over that period of time, the world changed,' he says. 'We started construction in one economic environment and finished in another.'
"Legacy Town Center is built in a contemporary style, with hints of Frank Lloyd Wright. Its use of brick and limestone give it an old-time veneer. Retail buildings have been built at different heights to make the town center look like it's evolved over decades.
"It's situated on 2,700 acres acquired by Electronic Data Systems Corp. under then-chairman Ross Perot in the late 1970s. EDS built its headquarters on one parcel in 1985 and began selling the remaining parts to other companies, including J.C. Penney Co., which also built its headquarters there.
"By the late 1990s, the Legacy area was an impressive industrial park, but little more. Although tens of thousands of people worked there, it didn't have a restaurant, a gas station or a dry cleaner.
"Marilyn Kasko, who ran the office park for EDS at the time, says she was troubled that employees had to live, work and shop in separate places. She also felt EDS needed to offer something more to attract new companies to set up shop there. She didn't know exactly what.
"One answer was provided by Mr. Duany of the New Urbanist movement. In the late 1990s, Ms. Kasko hired Mr. Duany's Miami-based architecture and planning firm, Duany Plater-Zyberk & Co., to sketch out a vision for the empty land. His idea: a lively urban enclave with little surface parking. By carefully setting distances between offices and shops and apartments, Mr. Duany tried to make Legacy a walking community. 'The issue was how to bring people closer to the places they go,' said Mr. Duany.
"Like many such projects, Legacy began to slide back into the classic suburban mold. Fehmi Karahan, whose Karahan Companies developed the retail portion of the project, wanted to lure national retailers, even though Legacy Town Center is sandwiched between two giant malls in Frisco and Plano.
"One big out-of-town retailer, furniture chain Robb & Stucky of Fort Myers, Fla., had little intention of following the New Urbanist playbook. The company wanted more than 100,000 square feet for a store, plus surface parking. The upshot was a compromise: The Robb & Stucky store was built at an angle to the road to disguise its size, and its facade was covered in various textures to mitigate the big-box feel.
"At the demand of other prospective retailers, Mr. Karahan built surface parking lots in front of shops facing six-lane Legacy Drive. Built in four phases, The Shops at Legacy opened in April 2002 with about a dozen stores, including Starbucks. Mr. Karahan also went after established Dallas retailers and managed to attract popular restaurants such as Bob's Steak & Chop House and Mi Cocina.
"Retailers that pushed for surface parking turned out to be wrong. Today, the hottest location isn't Legacy Drive but the narrow Bishop Road, where the stores are a sidewalk's width from the curb. Nancy Chesser closed her "vintage vogue" boutique Ambrosia, which was on Legacy Drive. "The [foot] traffic was terrible," she says.
"Mr. Karahan says business on Legacy Drive is adequate. He has other headaches to worry about. Speeding has become a problem, so he's installing speed bumps on Bishop Road. Several retailers have reported thefts, despite the security cameras mounted on exterior walls and roofs.
"For many, Legacy provides a sense of community that is lacking at typical suburban apartment complexes. The development is built around a three-acre park, complete with a man-made lake, a destination for runners and dog walkers. In the evening residents gather along Bishop Road, where jazz is piped through speakers beneath mature live oaks. Some live in town homes that sell for more than $400,000. Others are renting studio apartments for about $600 a month.
"It's perfect for someone who doesn't want to come home from work, sit on the couch and watch TV," said Mr. Pettit, the contractor.
"On the recent Friday night, couples waited two deep to order Cabernet Sauvignon at $18 a glass at a wine bar called Crú. Up the street, the five-screen Angelika Film Center was showing John Malkovich in "Art School Confidential."
"But the most striking thing about Legacy Town Center is what it doesn't have. Like a modern suburb, it has no nearby hardware store. It has no churches or libraries. Nor is Legacy home to many children. The closest public elementary school is three miles away.
"Legacy has no public transportation, so almost everyone has a car. Residents who work at corporate headquarters less than a mile away often drive to work because outside of Legacy there are no sidewalks. Residents jump in their cars to run errands at Plano malls and shopping centers as if they lived in a local subdivision.
"Jon Stewart, 43, who moved here from suburban Maryland two years ago, says he's happy with the amenities, with one exception: "The only thing lacking is a grocery store."
The piece tells once more how attempts to resurrect old downtowns are hopeless (and a huge waste) and that most people are getting what they want in terms of urban centers from suburban developers.
The article wrongly ascribes this to New Urbanist theorists. Developers read the market, not the theorists. Urban (and suburban) forms are always evolving in response to changing tastes and changing possibilities. And there is only one known way to to discover and implement these.
To be sure, some of the old downtowns now have the occasional block or two of trendy restaurants, mostly catering to young singles (and young couples). But you gotta ask: At what cost?
By THADDEUS HERRICK, WSJ. May 31, 2006; Page A1
"PLANO, Texas -- On a recent Friday night, Bishop Road was hopping. Land Rovers and Lexuses inched down the two-lane street. On the brick sidewalks, a steel band played Bob Marley tunes as couples strolled past boutiques, bars and restaurants, lines spilling out the door.
"Until a few years ago, Bishop Road was a grassy field in the midst of a gargantuan office park. Today, it's the main drag of Legacy Town Center, a 75-acre development 20 miles north of Dallas that's home to 4,000 people. The project has been such a hit that developers are building on an additional 75 acres across the street.
"Legacy Town Center is one of dozens of faux downtowns popping up across the country, from Kansas City to Washington, D.C., spurred by a demand for urban living scrubbed of the reality of city life. A careful mix of retail, residential and office space built with traditional materials such as stone and brick, Legacy looks like a city but has neither panhandlers nor potholes. Many residents rarely venture even to downtown Dallas, which has been trying to turn itself into place to live for almost a decade.
"'There's too much riffraff down there,' says Ron Pettit, a 36-year-old contractor, as he snacks on brie and grapes at a table outside Bishop Road's Main Street Bakery and Bistro.
In Flagstaff, Ariz., buyers have snapped up almost all of the 125 residential units on offer at Presidio in the Pines, a town center under construction on 91 acres of forest. North of Charlotte, N.C., on the site of a former dairy farm, is Birkdale Village, which consists of 52 acres intended to recall a New England coastal town. It features 320 apartments, most of which are stacked above shops and restaurants.
"Even though these faux downtowns contain tinges of suburbia, they're taking advantage of a growing backlash against the sprawl that rings Dallas and other U.S. cities. The reaction began in the 1980s with the rise of New Urbanism, a movement of architects and planners calling for a return to traditional towns where people work, shop, live and play.
"Among the most prominent of those theorists was Andrés Duany, a leading figure behind Seaside, a planned pedestrian community on the Florida Panhandle that was the setting for the 1998 movie, "The Truman Show." Suburban growth, Mr. Duany argued, was unsustainable because it consumes land at a high rate while creating horrendous traffic.
"In the 1990s, Americans started venturing back into cities that had emptied out in prior decades. Basking in the glow of falling crime rates and glamorized by television shows such as 'Seinfeld' and 'Friends,' cities themselves began to woo residential and retail development.
For a developer, however, it's much easier to make a fake city than it is to work on real downtowns with their patchwork landholdings and planning restrictions. The developers of Legacy were able to carve up the land pretty much as they pleased. The result: more than 1,500 apartments and town houses, some 80 shops and restaurants, two mid-rise office towers and a Marriott Hotel.
"The concept also attracted developers looking for alternatives to malls, a concept rapidly losing favor among shoppers. Only one mall has opened in 2006, according to the International Council of Shopping Centers, a New York City-based trade group. By contrast, more than 60 so-called lifestyle centers -- outdoor shopping areas with plazas, fountains and pedestrian streets -- are planned to open this year and next.
"To attract more shoppers, and therefore retailers, developers started building homes on these sites. Steiner + Associates of Columbus, Ohio, a leading builder of town centers, initially included only retail and office space at the $300 million Easton Town Center near Columbus, which was completed in 2001. When another developer added apartments across the street, Yaromir Steiner, chief executive of Steiner + Associates, noticed the low vacancies and high rents. 'We realized how a commodity apartment could turn into a specialty product,' he said.
"When Mr. Steiner built Zona Rosa, a 93-acre project on farmland north of Kansas City, he included 33 loft apartments. One of his latest projects, The Greene, near Dayton, Ohio, is built on woodland and will include 136 residential units when it opens this summer.
"These projects could be bad news for real downtowns, especially those competing with redeveloped sites near the city center. AIG Global Real Estate Investment Corp. and Jacoby Development Inc. are redeveloping a massive steel mill just north of downtown Atlanta into a community known as Atlantic Station. The developers had to remove 165,000 tons of contaminated material. They now intend to build a small city on the 138-acre site, which could house as many as 10,000 residents.
"Houston has poured some $4 billion into downtown stadiums, roads and light rail in the past decade. But 27 miles to the north, the Woodlands Town Center has sold out of newly constructed lofts and replica brownstones in the midst of an affluent planned community.
"'The question is whether this demand for urban-style living -- density, transportation alternatives, proximity to work -- is broad enough to accommodate the resurgence of traditional downtowns,' says Bruce Katz, founder and director of the Metropolitan Policy Program at the Brookings Institution, a Washington, D.C., think tank.
"Just like the real thing, faux downtowns are vulnerable to the vagaries of the local economy, a problem that's magnified by the big upfront investment required. Federal Realty Investment Trust bet heavily on Santana Row, a $455 million project three miles from downtown San Jose that opened in 2002 on the site of a former shopping center. With its Mediterranean-inspired architecture, Santana Row was intended to provide an urban island for professionals in Silicon Valley.
"But the collapse of the tech industry, the Sept. 11, 2001, terrorist attacks, and a catastrophic fire buffeted the project. Some high-end retailers that considered opening there ended up not making commitments, city officials say. In 2003, Federal Realty Chief Executive Steve Guttman resigned.
"Departing from the script, the company lured big-box stores such as Best Buy to generate foot traffic. As the economy improved, so too did the fortunes of Santana Row. Today, city officials say the project -- with 70 shops and 19 restaurants and a mix of town homes, condominiums and apartments -- is a draw for Silicon Valley residents.
"Don Wood, the current chief executive of Federal Realty, says building an instant city is considerably harder than a standard development. Santana Row took seven years to complete. 'Over that period of time, the world changed,' he says. 'We started construction in one economic environment and finished in another.'
"Legacy Town Center is built in a contemporary style, with hints of Frank Lloyd Wright. Its use of brick and limestone give it an old-time veneer. Retail buildings have been built at different heights to make the town center look like it's evolved over decades.
"It's situated on 2,700 acres acquired by Electronic Data Systems Corp. under then-chairman Ross Perot in the late 1970s. EDS built its headquarters on one parcel in 1985 and began selling the remaining parts to other companies, including J.C. Penney Co., which also built its headquarters there.
"By the late 1990s, the Legacy area was an impressive industrial park, but little more. Although tens of thousands of people worked there, it didn't have a restaurant, a gas station or a dry cleaner.
"Marilyn Kasko, who ran the office park for EDS at the time, says she was troubled that employees had to live, work and shop in separate places. She also felt EDS needed to offer something more to attract new companies to set up shop there. She didn't know exactly what.
"One answer was provided by Mr. Duany of the New Urbanist movement. In the late 1990s, Ms. Kasko hired Mr. Duany's Miami-based architecture and planning firm, Duany Plater-Zyberk & Co., to sketch out a vision for the empty land. His idea: a lively urban enclave with little surface parking. By carefully setting distances between offices and shops and apartments, Mr. Duany tried to make Legacy a walking community. 'The issue was how to bring people closer to the places they go,' said Mr. Duany.
"Like many such projects, Legacy began to slide back into the classic suburban mold. Fehmi Karahan, whose Karahan Companies developed the retail portion of the project, wanted to lure national retailers, even though Legacy Town Center is sandwiched between two giant malls in Frisco and Plano.
"One big out-of-town retailer, furniture chain Robb & Stucky of Fort Myers, Fla., had little intention of following the New Urbanist playbook. The company wanted more than 100,000 square feet for a store, plus surface parking. The upshot was a compromise: The Robb & Stucky store was built at an angle to the road to disguise its size, and its facade was covered in various textures to mitigate the big-box feel.
"At the demand of other prospective retailers, Mr. Karahan built surface parking lots in front of shops facing six-lane Legacy Drive. Built in four phases, The Shops at Legacy opened in April 2002 with about a dozen stores, including Starbucks. Mr. Karahan also went after established Dallas retailers and managed to attract popular restaurants such as Bob's Steak & Chop House and Mi Cocina.
"Retailers that pushed for surface parking turned out to be wrong. Today, the hottest location isn't Legacy Drive but the narrow Bishop Road, where the stores are a sidewalk's width from the curb. Nancy Chesser closed her "vintage vogue" boutique Ambrosia, which was on Legacy Drive. "The [foot] traffic was terrible," she says.
"Mr. Karahan says business on Legacy Drive is adequate. He has other headaches to worry about. Speeding has become a problem, so he's installing speed bumps on Bishop Road. Several retailers have reported thefts, despite the security cameras mounted on exterior walls and roofs.
"For many, Legacy provides a sense of community that is lacking at typical suburban apartment complexes. The development is built around a three-acre park, complete with a man-made lake, a destination for runners and dog walkers. In the evening residents gather along Bishop Road, where jazz is piped through speakers beneath mature live oaks. Some live in town homes that sell for more than $400,000. Others are renting studio apartments for about $600 a month.
"It's perfect for someone who doesn't want to come home from work, sit on the couch and watch TV," said Mr. Pettit, the contractor.
"On the recent Friday night, couples waited two deep to order Cabernet Sauvignon at $18 a glass at a wine bar called Crú. Up the street, the five-screen Angelika Film Center was showing John Malkovich in "Art School Confidential."
"But the most striking thing about Legacy Town Center is what it doesn't have. Like a modern suburb, it has no nearby hardware store. It has no churches or libraries. Nor is Legacy home to many children. The closest public elementary school is three miles away.
"Legacy has no public transportation, so almost everyone has a car. Residents who work at corporate headquarters less than a mile away often drive to work because outside of Legacy there are no sidewalks. Residents jump in their cars to run errands at Plano malls and shopping centers as if they lived in a local subdivision.
"Jon Stewart, 43, who moved here from suburban Maryland two years ago, says he's happy with the amenities, with one exception: "The only thing lacking is a grocery store."
Tuesday, May 30, 2006
Quants
The May 27 WSJ included "Funds That Are Managed by Computers".
"It's not surprising that technology plays a major role in running mutual funds. What is surprising is the decision-making power many fund managers give to computers.
"Stocks in so-called quantitive funds are bought, sold and analyzed according to the stony regimen of a computer. While humans program the machines to find stocks to meet certain investment criteria, searches are completed with speed and efficiency. 'Quant' managers then plug these electronic assessments into a portfolio and let the computer tell them which positions to trade and when."
The accompanying table showed the three-year annualized returns for four of the Quant funds. They ranged from 13.7% to 17.0%.
Over the same period, the Russel 2000 turned in 25.7% (three-year annualized) and the Fidelity Total Market Index fund hit 17.0% (three-year annualized).
Why bother? Computers (and their programmers) finally beat the world's best chess player. Yet, high-tech finance cannot beat efficient markets.
"It's not surprising that technology plays a major role in running mutual funds. What is surprising is the decision-making power many fund managers give to computers.
"Stocks in so-called quantitive funds are bought, sold and analyzed according to the stony regimen of a computer. While humans program the machines to find stocks to meet certain investment criteria, searches are completed with speed and efficiency. 'Quant' managers then plug these electronic assessments into a portfolio and let the computer tell them which positions to trade and when."
The accompanying table showed the three-year annualized returns for four of the Quant funds. They ranged from 13.7% to 17.0%.
Over the same period, the Russel 2000 turned in 25.7% (three-year annualized) and the Fidelity Total Market Index fund hit 17.0% (three-year annualized).
Why bother? Computers (and their programmers) finally beat the world's best chess player. Yet, high-tech finance cannot beat efficient markets.
Monday, May 29, 2006
Fat chance
New Urbanists' claims that sprawl causes obesity were suspect the moment they were first uttered. Recent research by Siim Soot and his colleagues at the University of Illinois, suggests that even the correlations do not stand up.
U.S. DOT's periodic NPTS/NHTS passenger travel surveys can be disaggregated by "central city" vs. "suburban" place of residence of each respondent and there have never been significant travel pattern differences between these aggregates.
It is a simple point but it bears repeating because the NU crowd is eager to rearrange other people's lives (for those people's own good, of course).
In the March 2006, Journal of Economic Literature, there is a fine review (by Angus Deaton) of Robert Fogel's The Escape from Hunger and Premature Death, 1700-2100. Deaton writes, "... explosions of obesity and associated diseases ... often come on the heels of a looseing of nutritional constraints, when those whose parents were undernourished, who were themselves undernourished in utero, move into an environment in which food is plentiful and heavy manual labor is no longer required."
U.S. DOT's periodic NPTS/NHTS passenger travel surveys can be disaggregated by "central city" vs. "suburban" place of residence of each respondent and there have never been significant travel pattern differences between these aggregates.
It is a simple point but it bears repeating because the NU crowd is eager to rearrange other people's lives (for those people's own good, of course).
In the March 2006, Journal of Economic Literature, there is a fine review (by Angus Deaton) of Robert Fogel's The Escape from Hunger and Premature Death, 1700-2100. Deaton writes, "... explosions of obesity and associated diseases ... often come on the heels of a looseing of nutritional constraints, when those whose parents were undernourished, who were themselves undernourished in utero, move into an environment in which food is plentiful and heavy manual labor is no longer required."
Sunday, May 28, 2006
Time for a shave
Whole Foods is big and getting bigger. WalMart will start selling organic food. Where will it all end?
Most economists are happy to have consumer choice be exogenous and mysterious. It is all in the eye of the beholder. So why agonize over the merits and demerits of all of the choices that people make?
Because agonizing over these choices is an ancient preoccupation that will not go away. The New Yorker of May 15 includes "Paradise Sold : What are you buying when you buy organic?" (by Steven Shapin). "What particular fungi, and trace elements lurk in the soil of your sustainable community farm? Does your friendly local farmer use a tractor or a horse? If a tractor, does it use fuel made from biomass? If a horse, are the oats it eats organic? If the oats are organic, does the manure with which they were grown come from organically fed animals? How much of this sort of knowledge can you digest?"
Are people making good or bad choices? Are they paying too much? Are the workers being compensated adequately (are the cash and noncash compenents of their pay the right ones)? Do the owners and/or the managers earn to much? How about the many distributors involved in the various supply chains? Many more such questions can be posed and debated ad nauseum.
I have not read Michael Pollan's The Omnivore's Dilemma, just his NY Times Magazine version. But I have read Tim Harford's The Undercover Economist, who reminds us that it is all about price discrimination. If there are enough people willing to pay enough extra for any attribute of any product, including the "organic" history of bananas (or whatever), then let them.
Occam's razor wins again.
Most economists are happy to have consumer choice be exogenous and mysterious. It is all in the eye of the beholder. So why agonize over the merits and demerits of all of the choices that people make?
Because agonizing over these choices is an ancient preoccupation that will not go away. The New Yorker of May 15 includes "Paradise Sold : What are you buying when you buy organic?" (by Steven Shapin). "What particular fungi, and trace elements lurk in the soil of your sustainable community farm? Does your friendly local farmer use a tractor or a horse? If a tractor, does it use fuel made from biomass? If a horse, are the oats it eats organic? If the oats are organic, does the manure with which they were grown come from organically fed animals? How much of this sort of knowledge can you digest?"
Are people making good or bad choices? Are they paying too much? Are the workers being compensated adequately (are the cash and noncash compenents of their pay the right ones)? Do the owners and/or the managers earn to much? How about the many distributors involved in the various supply chains? Many more such questions can be posed and debated ad nauseum.
I have not read Michael Pollan's The Omnivore's Dilemma, just his NY Times Magazine version. But I have read Tim Harford's The Undercover Economist, who reminds us that it is all about price discrimination. If there are enough people willing to pay enough extra for any attribute of any product, including the "organic" history of bananas (or whatever), then let them.
Occam's razor wins again.
Friday, May 26, 2006
Oregon tea party
Fifty-five million Americans now live in private communities and most of them have chosen to trade off property protections gained for property rights surrendered. In the market for private communities, these trade-offs have to pass a market test.
There is no other way for the many complex packages of trade-offs desired to be identified and supplied.
That's the problem with trade-offs mandated via large geographic jurisdictions. The Oregon Prop 37 revolt illustrates the point.
And the rebellion may be spreading. Thanks to Brad Hill for the pointer.
There is no other way for the many complex packages of trade-offs desired to be identified and supplied.
That's the problem with trade-offs mandated via large geographic jurisdictions. The Oregon Prop 37 revolt illustrates the point.
And the rebellion may be spreading. Thanks to Brad Hill for the pointer.
Wednesday, May 24, 2006
An unwittingly revealing read
David Warsh's Knowledge and the Wealth of Nations has received a lot of favorable comment -- as it should. It is beautifully and clearly written. Who would have thought that the history of economic thought could be a fun read?
The Economist of May 20 includes a very useful review ("The growth of growth theory"). Yet, the book and its story are poignant for Austrian economists, whose contributions are hardly acknowledged. The question that goes unasked is: What has the neo-classicists' journey of discovery, as sketched by Warsh, contributed that is worthy beyond the Austrians' long-held focus on entrepreneurial discovery?
The Economist of May 20 includes a very useful review ("The growth of growth theory"). Yet, the book and its story are poignant for Austrian economists, whose contributions are hardly acknowledged. The question that goes unasked is: What has the neo-classicists' journey of discovery, as sketched by Warsh, contributed that is worthy beyond the Austrians' long-held focus on entrepreneurial discovery?
Sunday, May 21, 2006
The thick and the thin
Jim Lewis recounts the "Battle for Biloxi: The New Urbanists thought they had just the plan for remaking the Mississippi Gulf Coast city after Hurricane Katrina. FEMA, the mayor and a councilman thought otherwise." His report points to the obtuseness of the NU planners and the predictable consequences. It all reads like the basis for a script for the first movie about Gulf Coast rebuilding.
Whatever happens in the area, it must take account of what real people in the environs actually want for their built environment. A minimal role for local government and a maximal role for private developers is the only way that this requirement will be met.
I just attended a Liberty Fund meeting devoted to a discussion of private communities. One point raised concerned how the scope for private communities and governance is limited and "thin" as long as that for the local area public governance (usually mandated by the states) remains "thick".
The Gulf Coast will have to turn this corner if stories like Lewis' are not to be repeated up and down the coast.
Whatever happens in the area, it must take account of what real people in the environs actually want for their built environment. A minimal role for local government and a maximal role for private developers is the only way that this requirement will be met.
I just attended a Liberty Fund meeting devoted to a discussion of private communities. One point raised concerned how the scope for private communities and governance is limited and "thin" as long as that for the local area public governance (usually mandated by the states) remains "thick".
The Gulf Coast will have to turn this corner if stories like Lewis' are not to be repeated up and down the coast.
Thursday, May 18, 2006
Road pricing news
Robin Lindsey surveys what economists have to say about road pricing in the latest Econ Journal Watch. Yes, most economists think that rationing via price is best. Ken Orski presents a news round-up that suggests we may be near a "tipping-point" -- and tipping towards a more favorable reception by policy makers.
That would be nice. I recently attended a workshop at Churchill College in Cambridge and learned a bit about the London experience. It appears that implementation costs were high enough to suggest that the benefit-cost ratio is unfavorable. That may a case of early adopers. But the role of early adopters -- absorbing high prices and permitting them to start falling -- is well established in the markets for new products. Whether it applies in the policy world is anybody's guess.
That would be nice. I recently attended a workshop at Churchill College in Cambridge and learned a bit about the London experience. It appears that implementation costs were high enough to suggest that the benefit-cost ratio is unfavorable. That may a case of early adopers. But the role of early adopters -- absorbing high prices and permitting them to start falling -- is well established in the markets for new products. Whether it applies in the policy world is anybody's guess.
Monday, May 15, 2006
Pols gone wild
Most U.S. urban planning and policy curricula include the field of "community economic development". This refers to strategies and plans to revitalize poor neighborhoods. At its worst, it includes primers on the politics of attracting government office facilities and jobs.
The field is also subject to fads and the latest involves Richard Florida's ideas on how to attract a "creative class." A good friend refers to it as the "Sex and the City" fantasy.
The costs of this silliness are nicely summarized in Joel Kotkin's op-ed in today's WSJ ("The Ersatz Urban Renaissance" reg. req.). Kotkin notes that this charade misses the harsh reality that many creative (and other worthy) people like to go where the taxes and the rents are low and where governments do what they are supposed to do, such as provide decent schools and safe streets.
Forgetting about all this and funding expensive baubles (concert halls, museums and even subsidized high-end hotels -- by celeb architects, of course) is poison. But it's not boring.
The field is also subject to fads and the latest involves Richard Florida's ideas on how to attract a "creative class." A good friend refers to it as the "Sex and the City" fantasy.
The costs of this silliness are nicely summarized in Joel Kotkin's op-ed in today's WSJ ("The Ersatz Urban Renaissance" reg. req.). Kotkin notes that this charade misses the harsh reality that many creative (and other worthy) people like to go where the taxes and the rents are low and where governments do what they are supposed to do, such as provide decent schools and safe streets.
Forgetting about all this and funding expensive baubles (concert halls, museums and even subsidized high-end hotels -- by celeb architects, of course) is poison. But it's not boring.
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