A staple of 1980s hand-wringing was "manpower planning". That seems to have waned even though there are still occasional stories from the genre that make the news. This morning's WSJ includes: "Oil-Rich Calgary Finds Boomtimes have a Downside ... A Hot Real Estate Market Suffers Big Labor Shortage; Office Vacancies Near Zero." It makes good copy but most people understand that labor markets, if left alone, funnel labor to its highest and best uses.
Seeming "imbalances" in land use and transportation also get top billing. Yesterday's L.A. Times included: "L.A., O.C. Traffic Patterns to Switch ... Orange County has long had more outgoing commuters. Within 20 years, that's expected to reverse as jobs multiply ..."
The second article cites the concerns of local planners and politicians who have been chasing the "job-housing balance" chimera for years.
No human has an idea of what the proper "balance" would be (at what level of geography, at what skill level, how to balance against non-job draws, etc.); if they somehow did, what would they/could they do with the knowledge?
Our planners and politicians refuse to price road access. As a result there is road traffic ("gridlock") that they want to "solve" by somehow manipulating land and housing markets. It is pure nonsense but, again, no joke because their interventions stymie land and housing markets -- creating another "crisis" to "solve", the "housing affordability" problem.
Wednesday, August 30, 2006
Monday, August 28, 2006
PBS discovers Roger Rabbit
TV is a wasteland and the sanctimonious pledge breaks that PBS-affiliated stations like to run repeat the point endlessly to push the idea that their product is much better and worthy of support -- with donations as well as tax dollars. Compelling the unwashed to support "good causes" is, of course, the hat trick of the elites.
Tonight, on PBS' "History Detectives," the high-minded reached for Roger Rabbit to evoke the idea the we no longer use streetcars because of corporate conspiracies.
This is dumb (and weird) and has been shot down many times, first by economic historian George Hilton, (in 1976!) and many times since then.
It seems that the high-minded can be astonishingly closed-minded when venting their hatred for the automobile and its many fans. But cars are not just the staple of NASCAR-nation; BMWs and Volvos (and SUVs) and other fine cars can be found in the parking lots of better wine stores and organic food stores everywhere.
Tonight, on PBS' "History Detectives," the high-minded reached for Roger Rabbit to evoke the idea the we no longer use streetcars because of corporate conspiracies.
This is dumb (and weird) and has been shot down many times, first by economic historian George Hilton, (in 1976!) and many times since then.
It seems that the high-minded can be astonishingly closed-minded when venting their hatred for the automobile and its many fans. But cars are not just the staple of NASCAR-nation; BMWs and Volvos (and SUVs) and other fine cars can be found in the parking lots of better wine stores and organic food stores everywhere.
Saturday, August 26, 2006
Policy trades
Today's WSJ includes, "In Tony Monterey County, Slums and a Land War ... Environmentalists fight to preserve scenic beauty while immigrants cram into housing and garages ... Who will pick the vegetables? ... Monterey County is torn by competing priorities. On one side are farmers, developers and immigrant advocates who want to see more housing built. On the other are environmentalists and residents, including those in the upscale coastal towns who want to preserve open space and their quality of life. As the two camps fail to reach a middle gound, low-income immigrants have borne most of the fallout: limited housing with sky-high prices."
It is the old story. The high-minded hector Wal-Mart and others about low wages but, at the same time, work hard to block development if it threatens to infringe on their own life styles. In the bargain, they also get to feel good about themselves as the protectors of the environment.
At the time of the NAFTA debate, many Americans pressed for assurances that our labor and environmental standards would be extended south of the border. A quid pro quo might have been Mexican insistence that Americans do something about their land use practices.
It is the old story. The high-minded hector Wal-Mart and others about low wages but, at the same time, work hard to block development if it threatens to infringe on their own life styles. In the bargain, they also get to feel good about themselves as the protectors of the environment.
At the time of the NAFTA debate, many Americans pressed for assurances that our labor and environmental standards would be extended south of the border. A quid pro quo might have been Mexican insistence that Americans do something about their land use practices.
Wednesday, August 23, 2006
Gloom fetish
Virginia Postrel writes about "The American Standard of Whining ... Supposedly only the rich are living better, while everybody else stagnates or falls behind. But if so, who is buying all those flat screens at Best Buy?"
She even quotes Adam Smith, who noted back in 1776, "A continued Series of Prosperity would not give us near so much pleasure in the recital as an epic poem or a tragedy which make but one continued Series of Unhappy Events."
At a time when the great middle class encompasses a larger proportion of the population than ever, we still hear all the talk about "the rich" and "the poor". Most of us are neither, but the romance of class struggle is just too good to put aside. Perhaps so many have most of their intellectual capital tied up in such thinking that they would they be muted without it.
Unheard of material wealth and longevity just don't cut it. They do not, after all, contribute to greater happiness.
Small wonder. We cherish our gloom.
She even quotes Adam Smith, who noted back in 1776, "A continued Series of Prosperity would not give us near so much pleasure in the recital as an epic poem or a tragedy which make but one continued Series of Unhappy Events."
At a time when the great middle class encompasses a larger proportion of the population than ever, we still hear all the talk about "the rich" and "the poor". Most of us are neither, but the romance of class struggle is just too good to put aside. Perhaps so many have most of their intellectual capital tied up in such thinking that they would they be muted without it.
Unheard of material wealth and longevity just don't cut it. They do not, after all, contribute to greater happiness.
Small wonder. We cherish our gloom.
Monday, August 21, 2006
Managed business cycles
The Economist of Aug. 19 includes "The uses of adversity: Why some people think that a recession is good for America."
It is the old story. There will be business cycles because investors and others are just human and will, on occasion, plan imperfectly. The good news is that markets correct and life goes on -- mostly to the good. If left alone.
But most economists and many others are so sure that they so thoroughly understand all of the forces involved that they seriously embrace the idea of managing the cycle. But is the cure worse than the disease? When has there ever been an engineered "soft landing?" Or how many have there been? The answers range from very few to none. Yes, Great Depression-type policy debacles have been avoided of late. But why are we so sure that the policy-facilitated business cycles that we now have are better than what we would have without the help?
Perhaps the only answer is that Congress is inevitable and the consequences of its actions can be costly. With luck, central bankers can lean the other way so that policy-induced cycles are not as disastrous as they otherwise might be.
It is the old story. There will be business cycles because investors and others are just human and will, on occasion, plan imperfectly. The good news is that markets correct and life goes on -- mostly to the good. If left alone.
But most economists and many others are so sure that they so thoroughly understand all of the forces involved that they seriously embrace the idea of managing the cycle. But is the cure worse than the disease? When has there ever been an engineered "soft landing?" Or how many have there been? The answers range from very few to none. Yes, Great Depression-type policy debacles have been avoided of late. But why are we so sure that the policy-facilitated business cycles that we now have are better than what we would have without the help?
Perhaps the only answer is that Congress is inevitable and the consequences of its actions can be costly. With luck, central bankers can lean the other way so that policy-induced cycles are not as disastrous as they otherwise might be.
Wednesday, August 16, 2006
With friends like these ...
Big-city leaders believe in industrial policies and have economic development departments and staff and budgets and policies to implement them. Sometimes they even have enough money (as in Chicago) to fund studies by academics wedded to the idea that new businesses must somehow be screened in terms of how much they might undermine existing sellers. (Others of us think that competition is a good thing.)
It gets even crazier when job-destruction policies are sponsored by the same well-meaning politicos. Today's WSJ includes a Chicago update.
"Big Box Rebellion," August 16, 2006; Page A10
"Well, that didn't take long. Just as Mayor Richard Daley and these columns predicted, the law recently passed by Chicago's City Council requiring a super-minimum wage is driving big retailers out of the city.
"Target was the first big chain to react, recently cancelling plans to open a new superstore in a run-down area on the city's North side. Only a few months ago the project was hailed by city leaders as an anchor for redeveloping that depressed neighborhood. Now it gets to stay depressed. Wal-Mart has also announced that its plans to build 20 new stores in the city over the next five years are "on hold" until the wage issue is resolved.
"This isn't what the politicians said would happen when they mandated that certain mostly non-union 'big-box' retailers pay a minimum of $13 in wage and health benefits by 2010, or more than two-and-a-half times the national minimum wage. 'This is a great day for working men and women of Chicago,' said Alderman Joseph Moore, who sponsored the ordinance but clearly doesn't think very far ahead, if he thinks at all. The Council was warned that stores would flee to the suburbs or not be built. But instead it heeded such activists as Annette Bernhardt, chief economist at New York University Law School, who claimed that 'We're very confident that retailers want and need to be in Chicago.' Whoops.
"This liberal red-lining may yet be overcome by common sense. Mayor Daley seems intent on vetoing the bill, which he says would result in higher property taxes to compensate for lost sales-tax revenue once stores leave. Alderman Shirley Coleman voted for the law but has since changed her mind now that a Wal-Mart in her district may never be built. At least three other aldermen who voted for the measure are also reportedly now open to giving Mr. Daley the votes he needs to sustain his veto.
"The entire 'living-wage' movement is the latest product of upper-income politicians who want to stick it to non-union companies in the name of helping the poor. But the working poor lose twice in Chicago: first, in lost retail jobs and then in less access to low-cost goods. Alderman Carrie Austin, who represents the area where the Target store was supposed to locate, puts it this way: 'My colleagues are saying, 'Don't worry they [the big box retailers] will come.' Well, mine just left.'"
It gets even crazier when job-destruction policies are sponsored by the same well-meaning politicos. Today's WSJ includes a Chicago update.
"Big Box Rebellion," August 16, 2006; Page A10
"Well, that didn't take long. Just as Mayor Richard Daley and these columns predicted, the law recently passed by Chicago's City Council requiring a super-minimum wage is driving big retailers out of the city.
"Target was the first big chain to react, recently cancelling plans to open a new superstore in a run-down area on the city's North side. Only a few months ago the project was hailed by city leaders as an anchor for redeveloping that depressed neighborhood. Now it gets to stay depressed. Wal-Mart has also announced that its plans to build 20 new stores in the city over the next five years are "on hold" until the wage issue is resolved.
"This isn't what the politicians said would happen when they mandated that certain mostly non-union 'big-box' retailers pay a minimum of $13 in wage and health benefits by 2010, or more than two-and-a-half times the national minimum wage. 'This is a great day for working men and women of Chicago,' said Alderman Joseph Moore, who sponsored the ordinance but clearly doesn't think very far ahead, if he thinks at all. The Council was warned that stores would flee to the suburbs or not be built. But instead it heeded such activists as Annette Bernhardt, chief economist at New York University Law School, who claimed that 'We're very confident that retailers want and need to be in Chicago.' Whoops.
"This liberal red-lining may yet be overcome by common sense. Mayor Daley seems intent on vetoing the bill, which he says would result in higher property taxes to compensate for lost sales-tax revenue once stores leave. Alderman Shirley Coleman voted for the law but has since changed her mind now that a Wal-Mart in her district may never be built. At least three other aldermen who voted for the measure are also reportedly now open to giving Mr. Daley the votes he needs to sustain his veto.
"The entire 'living-wage' movement is the latest product of upper-income politicians who want to stick it to non-union companies in the name of helping the poor. But the working poor lose twice in Chicago: first, in lost retail jobs and then in less access to low-cost goods. Alderman Carrie Austin, who represents the area where the Target store was supposed to locate, puts it this way: 'My colleagues are saying, 'Don't worry they [the big box retailers] will come.' Well, mine just left.'"
Monday, August 14, 2006
Wine, status and babies
Most of us work hard for extra material gain but social scientists have now joined forces with those philosophers who have long been warning us that "money cannot buy happiness." Those of the male perusasion can argue (in their own defense) that females are attracted to the things that money can buy and, therefore, acquisition by males is simply part of the evolution-bred procreation dance. What, then, explains acquisition by hard-working females? I have no clue but and R-squared near 0.5 is not so bad (in some precincts).
Replace the idea of money (and baubles) with the idea of status (and baubles) and things get much more interesting. Consumption-based analysis is usually safer than income-based analysis because of all of the obvious measurement problems eased.
Last Sunday's NY Times included "In Vino Veritas? Wine Ratings Might Not Pass the Sobriety Test ... " It turns out that an 89 vs. a 90 (on a 50-100 rating by the Wine Spectator) works out to a huge difference in terms of sales. But, how many of us can tell an 89 from a 90?
Were there a five-point scale, many of us could tell the As from the Ds and Fs, and occasionally from the Bs and Cs. But why are we going nusto over a 90 over an 89?
It must be the status-thing. And procreation and all that.
Replace the idea of money (and baubles) with the idea of status (and baubles) and things get much more interesting. Consumption-based analysis is usually safer than income-based analysis because of all of the obvious measurement problems eased.
Last Sunday's NY Times included "In Vino Veritas? Wine Ratings Might Not Pass the Sobriety Test ... " It turns out that an 89 vs. a 90 (on a 50-100 rating by the Wine Spectator) works out to a huge difference in terms of sales. But, how many of us can tell an 89 from a 90?
Were there a five-point scale, many of us could tell the As from the Ds and Fs, and occasionally from the Bs and Cs. But why are we going nusto over a 90 over an 89?
It must be the status-thing. And procreation and all that.
Thursday, August 10, 2006
Costs of pieties
Political correctness rules and any hint of "profiling" is out of the question. But all choices (including liberal pieties) have costs. In this case, the screening all airline passengers for all personal belongings all the time will be very messy, to say the least. Bob Poole has been arguing this for some year.
But this time, the costs will not be hidden costs. We know that.
But this time, the costs will not be hidden costs. We know that.
Tuesday, August 08, 2006
An idea whose time has come
Robert Nelson has documented the current migration into private communities which now house 55-million Americans. Governance is by homeowners associations (HOAs) and markets are vetting the trade-offs of property rights protections vs rights losses that most property owners look for. The fly-in-the-ointment is an oldie: the problems of democracy are well documented and are real at all levels of government, whether it be federal, state, local or private.
This is why Spencer MacCallum has predicted that HOAs are just a waystation and better forms of governance will replace them. He suggests the hotel as his model, where governance is by contract rather than by democracy.
This is now unfolding. The NYTimes.com reports, "A High-Priced Sliver of Hotel Luxury ... NOT everyone can afford a posh second home in NY city, but an increasing number of people may soon be able to own at least part of one, thanks to the emergence of time-share properties in urban areas. Once found exclsively in resort areas, time shares are now steadily expanding into big cities. ..."
Thanks to Hardy Wronske for the pointer.
This is why Spencer MacCallum has predicted that HOAs are just a waystation and better forms of governance will replace them. He suggests the hotel as his model, where governance is by contract rather than by democracy.
This is now unfolding. The NYTimes.com reports, "A High-Priced Sliver of Hotel Luxury ... NOT everyone can afford a posh second home in NY city, but an increasing number of people may soon be able to own at least part of one, thanks to the emergence of time-share properties in urban areas. Once found exclsively in resort areas, time shares are now steadily expanding into big cities. ..."
Thanks to Hardy Wronske for the pointer.
Sunday, August 06, 2006
Vertical sprawl
"Urban sprawl" is vague and used to score rhetorical points. Auto-oriented development is much clearer. So now the NY Times introduces "vertical sprawl" in "Cities Grow Up, And Some See Sprawl."
The trouble with the new discussion is that no one has a clue as to which settlement densities are either "too high" or "too low" at a multitude of sites -- for a multitude of time periods. There is no science here. This is why we have land markets.
Strangely, however, the idea of land markets is never acknowledged and industrial policy is presumed. This introduces politics and conflict and rhetoric. It provides fodder for oceans of (seemingly) learned discussion.
Progress would involve moving away from conflict and politics by expanding the opportunities for exchange. Even externalities management is now widely done via tradeable and marketable rights.
Markets are exotic (and vaguely sinister) in the mindset of the best and brightest. And it is much worse when it comes to land markets.
The trouble with the new discussion is that no one has a clue as to which settlement densities are either "too high" or "too low" at a multitude of sites -- for a multitude of time periods. There is no science here. This is why we have land markets.
Strangely, however, the idea of land markets is never acknowledged and industrial policy is presumed. This introduces politics and conflict and rhetoric. It provides fodder for oceans of (seemingly) learned discussion.
Progress would involve moving away from conflict and politics by expanding the opportunities for exchange. Even externalities management is now widely done via tradeable and marketable rights.
Markets are exotic (and vaguely sinister) in the mindset of the best and brightest. And it is much worse when it comes to land markets.
Sunday, July 30, 2006
But are we happy?
My favorite New Yorker cartoon is the one with two cave dwellers chatting over their campfire. One says to the other: "Something's just not right -- our air is clean, our water is pure, we all get plenty of exercise, everything we eat is organic and free-range and yet nobody lives past thirty."
That's why it's so good to see this Sunday's N.Y Times ("So Big and Healthy Nowadays, Grandpa Wouldn't Know You") feature Robert W. Fogel's important work on longevity, stature, nutrition, etc.
The article mentions fndings that point to, "what may prove to be one of the most striking shifts in human existence -- a change from small relatively weak and sickly people to humans who are so big and robust that their ancestors seem almost unrecognizable ... The difference does not involve changes in genes, as far as is known, but changes in human form."
Fogel himself is quoted as citing, "'a form of evolution that is unique not only to humankind, but unique amolng the 7,000 or so generations of humans who have inhabited the earth.'"
The Times piece does not go so far as to say that it is all about prosperity, economic growth, markets and economic freedom. But then many of its readers might faint.
All of this reminds me of a Times piece at the time of the millenium. One of their features asked many worthies what century they would have preferred to live in. Many opted for the years of the Renaissance. Others chose various other interesting historical periods
Intellectuals say the darndest things.
That's why it's so good to see this Sunday's N.Y Times ("So Big and Healthy Nowadays, Grandpa Wouldn't Know You") feature Robert W. Fogel's important work on longevity, stature, nutrition, etc.
The article mentions fndings that point to, "what may prove to be one of the most striking shifts in human existence -- a change from small relatively weak and sickly people to humans who are so big and robust that their ancestors seem almost unrecognizable ... The difference does not involve changes in genes, as far as is known, but changes in human form."
Fogel himself is quoted as citing, "'a form of evolution that is unique not only to humankind, but unique amolng the 7,000 or so generations of humans who have inhabited the earth.'"
The Times piece does not go so far as to say that it is all about prosperity, economic growth, markets and economic freedom. But then many of its readers might faint.
All of this reminds me of a Times piece at the time of the millenium. One of their features asked many worthies what century they would have preferred to live in. Many opted for the years of the Renaissance. Others chose various other interesting historical periods
Intellectuals say the darndest things.
Friday, July 28, 2006
Context matters
The New Yorker's James Surowiecki is usually smart and provocative. In the July 31 magazine, he writes about "The Fatal-Flaw Myth" and elaborates Airbus' current woes and the temptation by many to conclude that industrial policy is a loser. Surowiecki suggests that in the not too distant past Boeing also had its problems. We should look at context in addition to innate characteristics.
Of course. It is easy to be fooled; cause and effect are elusive; we are easily fooled by randomness (as in the book).
Fair enough. But industrial policy is a big chunk of context. Spend enough money and government agencies can put men on the Moon. Given them enough money and enough time and they come up with space stations and space shuttles.
Of course. It is easy to be fooled; cause and effect are elusive; we are easily fooled by randomness (as in the book).
Fair enough. But industrial policy is a big chunk of context. Spend enough money and government agencies can put men on the Moon. Given them enough money and enough time and they come up with space stations and space shuttles.
Thursday, July 27, 2006
Who killed the EV?
I have no plans to see Who Killed The Electric Car? but the reviews are not promising. Even worse is the praise from those who liked it which reveals a bottomless ignorance, not just about markets but also about what sort of evidence is required to make which sort of claim.
But, I have just read about the introduction of the Telsa, the Zenn, the Dynasty and the Xebra. "The Electric Car Gets Some Muscle ... Latest Models Go Faster, Further on a Single Charge, Sticker Price Up to $110,000 ... The elctric car is trying to shake its puttering image and be reborn as a futuristic high-speed sports vehicle ... " (WSJ, July 27, reg. req.).
This suggests an alternate theory (and movie). It was not big-auto-big-oil-big-pharma that killed the EV. Rather it was the likes of Tesla Motors Inc, Wrightspeep Inc., Phoenix Motorcars Inc. , etc.
Sequel to the current movie?
But, I have just read about the introduction of the Telsa, the Zenn, the Dynasty and the Xebra. "The Electric Car Gets Some Muscle ... Latest Models Go Faster, Further on a Single Charge, Sticker Price Up to $110,000 ... The elctric car is trying to shake its puttering image and be reborn as a futuristic high-speed sports vehicle ... " (WSJ, July 27, reg. req.).
This suggests an alternate theory (and movie). It was not big-auto-big-oil-big-pharma that killed the EV. Rather it was the likes of Tesla Motors Inc, Wrightspeep Inc., Phoenix Motorcars Inc. , etc.
Sequel to the current movie?
Wednesday, July 26, 2006
Don't worry, be happy
Material wealth and welfare are greater than ever. The census bureau reports that the median size of new single-family homes in 2004 was over 2,000 square feet, up from just over 1,500 square feet in 1975. Longevity keeps lengthening and new medicines, including a cervical cancer vaccine made available last month, keep arriving.
And the happiness researchers (and pollsters) show that it means almost nothing to most of us. Is the research nuts or are survey respondents nuts?
Listen to someone who is surely not nuts. Alain de Botton notes (IHT, Sep 7, 2004; link gone missing):
"The most remarkable feature of the modern workplace has nothing to do with computers, automation or globalization. Rather, it lies in the Western world's widely held belief that our work should make us happy.
"All societies throughout history have had work right at their center; but ours -- particularly America's -- is the first to suggest that it could be something other than a punishment or penance. Our is the first to imply that a sane human being would want to work even if he wasn't under financial pressure to do so. We are unique, too, in allowing our choice of work to define who we are so that the central question we ask of new acquaintances is not no where they come from or who their parents are, but rather what it is they do -- as though only this could effectively reveal what gives a human life its distinctive timbre."
And the happiness researchers (and pollsters) show that it means almost nothing to most of us. Is the research nuts or are survey respondents nuts?
Listen to someone who is surely not nuts. Alain de Botton notes (IHT, Sep 7, 2004; link gone missing):
"The most remarkable feature of the modern workplace has nothing to do with computers, automation or globalization. Rather, it lies in the Western world's widely held belief that our work should make us happy.
"All societies throughout history have had work right at their center; but ours -- particularly America's -- is the first to suggest that it could be something other than a punishment or penance. Our is the first to imply that a sane human being would want to work even if he wasn't under financial pressure to do so. We are unique, too, in allowing our choice of work to define who we are so that the central question we ask of new acquaintances is not no where they come from or who their parents are, but rather what it is they do -- as though only this could effectively reveal what gives a human life its distinctive timbre."
Monday, July 24, 2006
It's hard and thankless work being the artistic and intellectual elite
"'Cookie-Cutter' Homes Suit Some Critics' Taste After All ... Yes, it's suburbia. But at 25, a Denver-area master-planned community is finally getting some respect -- if grudging ... HIGHLANDS RANCH, Colo. -- This is the biggest fastest-growing master-planned community in the nation. And quite possibly the most insulted ..." From this morning's LA Times.
I am trying to fight the impulse to poke fun, but failing. The story is just too good. The experts and the non-profit-advocacy types have finally caught up with the people who have made this the most successful community of its type.
Bob Bruegmann's work is cited. "Through the ages ... sprawl has drawn the derision of the urban elite. As row houses sprouted on the outskirts of Victorian London, for instance, 'the artistic and intellectual elite called them ugly little boxes, destroying the countryside, put up by greedy developers, ' Bruegmann said. Today those row houses are hailed as smart, even graceful urban design."
I am trying to fight the impulse to poke fun, but failing. The story is just too good. The experts and the non-profit-advocacy types have finally caught up with the people who have made this the most successful community of its type.
Bob Bruegmann's work is cited. "Through the ages ... sprawl has drawn the derision of the urban elite. As row houses sprouted on the outskirts of Victorian London, for instance, 'the artistic and intellectual elite called them ugly little boxes, destroying the countryside, put up by greedy developers, ' Bruegmann said. Today those row houses are hailed as smart, even graceful urban design."
Sunday, July 23, 2006
More Bad News Bearers
In some areas of social science, static analysis can be poison. Perhaps none moreso than the study of income distributions. Today's NY Times includes the latest update of a favored theme: "Cities Shed Middle Class, And Are Richer and Poorer For It."
The article lists the five metro areas with the smallest percentage of middle class families: New York, Los Angeles, McAllen, Baksersfield, Miami. Might these also be the ones with the largest immigrant populations? Is it safe to say that almost all of the immigrants (by definition) have moved up in the world? Especially in terms of their prospects?
Growing numbers (and proportions) of "high income" families mean that middle-income people are moving up. Growing numbers of "low income" families are largely explained by immigration.
Even the static analysis data shown can be seen in a positive light.
The article lists the five metro areas with the smallest percentage of middle class families: New York, Los Angeles, McAllen, Baksersfield, Miami. Might these also be the ones with the largest immigrant populations? Is it safe to say that almost all of the immigrants (by definition) have moved up in the world? Especially in terms of their prospects?
Growing numbers (and proportions) of "high income" families mean that middle-income people are moving up. Growing numbers of "low income" families are largely explained by immigration.
Even the static analysis data shown can be seen in a positive light.
Saturday, July 22, 2006
Labels and puzzles
Best quote from today's WSJ interview with Milton Friedman (reg. req.): "I have found over a long time, that some people are natural economists. They don't take a course, but they understand -- the principles seem obvious to them. Other people may have Ph.D.'s in economics, but they're not economists. They don't think like an economist. Strange, but true."
Everyone who teaches principles sees some students who quickly get it and many others (some quite smart) who have a much tougher time. Some people are not comfortable with a non-zero sum world. Others can never get over the fact that self-serving behavior is OK -- let alone that it can serve a greater good. Still others think in terms of "ecological footprints" and do not fathom substitutions and technological progress.
Who are the real utopians? Those who are romantics about changing human nature accept inhumane ways to get there. But many who accept the limits of human nature celebrate what real people can (have) accomplish(ed) when left free to do so. At a recent conference, my discussant referred to me as a utopian. I reject the label and it took me some time to figure out how my thinking so puzzled my critic.
Everyone who teaches principles sees some students who quickly get it and many others (some quite smart) who have a much tougher time. Some people are not comfortable with a non-zero sum world. Others can never get over the fact that self-serving behavior is OK -- let alone that it can serve a greater good. Still others think in terms of "ecological footprints" and do not fathom substitutions and technological progress.
Who are the real utopians? Those who are romantics about changing human nature accept inhumane ways to get there. But many who accept the limits of human nature celebrate what real people can (have) accomplish(ed) when left free to do so. At a recent conference, my discussant referred to me as a utopian. I reject the label and it took me some time to figure out how my thinking so puzzled my critic.
Monday, July 17, 2006
Question never asked
Marginal Revolution points us to various blogs on both sides of the current Israel-Islamist war in the mid-east. The blogs are interesting -- and more proof that reading blogs can be a much better use of time than reading conventional media reports.
I read those as the Syrian ambassador was interviewed on PBS. His position (and that of many others) is that Israel has been an occupier of Arab lands since 1967 and he and his allies simply want them to return to the pre-1967 borders.
But before the 1967 war, which Arab leader accepted those borders? None, I think. But it's a question that is never asked.
I read those as the Syrian ambassador was interviewed on PBS. His position (and that of many others) is that Israel has been an occupier of Arab lands since 1967 and he and his allies simply want them to return to the pre-1967 borders.
But before the 1967 war, which Arab leader accepted those borders? None, I think. But it's a question that is never asked.
Saturday, July 15, 2006
Economic models and economic bottom lines
The Economist of July 15 includes "Big questions and big numbers ... We cannot live without big and ambitious economic models. But neither can we entirely trust them. ... But all models should ultimately be seen as pedagogical devices, their calculations a means to the end of helping policymakers think through their decisions. ..."
In a better world, the produces and the consumers of the models would heed this advice. In this world, modelers can and often do oversell while policy makers have been known to use models as window dressing to misrepresent and further their real agenda. Bent Flyvbjerg's work exposes the dark side.
Post-WW II U.S. economic growth has been impressive and without a major recession but it has piled up crushing unfunded liabilities in Social Security, Medicare and its recent expansions. Have good and/or bad models had a hand in the successes and the failures?
In a better world, the produces and the consumers of the models would heed this advice. In this world, modelers can and often do oversell while policy makers have been known to use models as window dressing to misrepresent and further their real agenda. Bent Flyvbjerg's work exposes the dark side.
Post-WW II U.S. economic growth has been impressive and without a major recession but it has piled up crushing unfunded liabilities in Social Security, Medicare and its recent expansions. Have good and/or bad models had a hand in the successes and the failures?
Monday, July 10, 2006
"Smart" growth
Not to beat a dead horse, but today's LA Times includes a front-page feature, "Roads at Breaking Point" which begins this way: "California's highways, once the gold standard of the interstate system, are today some of the busiest, most dilapidated and under-financed roads in the country ..."
Nowhere does the article mention that the 30-year old crackpot idea (cheered by the Times at every turn) of diverting funds from roads to transit explains the mess.
Nowhere does the article mention that the 30-year old crackpot idea (cheered by the Times at every turn) of diverting funds from roads to transit explains the mess.
Sunday, July 09, 2006
Lapdogs, not watchdogs
As per yesterday's theme, there are several people who combine journalistic flair with good ideas (and persistence). Today's LA Times even includes a section on "urban myths". And the two articles featured debunk some myths that the Times has been forever fond of.
Robert Bruegmann writes "What gridlock? L.A. traffic isn't as bad as you think. Try speeding through the center of Paris." He reminds us that L.A.s multi-billion dollar rail transit investments have been hugely expensive but otherwise mostly irrelevant as a commuting option for most Angelenos.
Joel Kotkin writes "Don't feed the white elephant ... Aided by Mayor Antonio Villaraigosa, downtown Los Angeles' boosters are poised to dip again into the pockets of taxpayers to help a splashy new project. The cost this time is up to $300 million in loans, tax breaks and fee waivers for a $750-million 54-story complex -- including a 876 room Marriott Marquis, a posh 124-room Ritz-Carlton and 216 luxury condos -- across from the Convention Center." Kotkin goes on to explain that the center has been a sink for other people's money for many years.
Both writers are too polite to mention that the dumb ideas that were used to justify all of these catastrophic projects had been championed by the Times for many years. In a better world, journalists and editors would have been watchdogs instead of lapdogs.
Robert Bruegmann writes "What gridlock? L.A. traffic isn't as bad as you think. Try speeding through the center of Paris." He reminds us that L.A.s multi-billion dollar rail transit investments have been hugely expensive but otherwise mostly irrelevant as a commuting option for most Angelenos.
Joel Kotkin writes "Don't feed the white elephant ... Aided by Mayor Antonio Villaraigosa, downtown Los Angeles' boosters are poised to dip again into the pockets of taxpayers to help a splashy new project. The cost this time is up to $300 million in loans, tax breaks and fee waivers for a $750-million 54-story complex -- including a 876 room Marriott Marquis, a posh 124-room Ritz-Carlton and 216 luxury condos -- across from the Convention Center." Kotkin goes on to explain that the center has been a sink for other people's money for many years.
Both writers are too polite to mention that the dumb ideas that were used to justify all of these catastrophic projects had been championed by the Times for many years. In a better world, journalists and editors would have been watchdogs instead of lapdogs.
Saturday, July 08, 2006
Work to be done
Kimberly Strassel interviews Bjorn Lomborg ("Get Your Priorities Right") in today's WSJ. Lomborg is impressive, not just because of his research and his writing but also for his follow-up efforts to get the message delivered.
I recently blogged about David Warsh's Knowledge and the Wealth of Nations and reported my appreciation of a readable inside-baseball rendering of progress in modern economic science.
Yet, Lomborg's efforts to get grown ups to think about the simple stuff (trade-offs and scarcity, decisions at the margin, costs and benefits, etc.) is where the real action is.
One only has to look at today's NY Times ("How to Be a Good Neighbor")which includes an op-ed by NYU's Greg Grandin who wants the U.S. to urge a recount of Mexican votes because Lopez Obrador would renegotiate NAFTA so that Mexico could return to self-suffiency in beans and corn (!!!)
I recently blogged about David Warsh's Knowledge and the Wealth of Nations and reported my appreciation of a readable inside-baseball rendering of progress in modern economic science.
Yet, Lomborg's efforts to get grown ups to think about the simple stuff (trade-offs and scarcity, decisions at the margin, costs and benefits, etc.) is where the real action is.
One only has to look at today's NY Times ("How to Be a Good Neighbor")which includes an op-ed by NYU's Greg Grandin who wants the U.S. to urge a recount of Mexican votes because Lopez Obrador would renegotiate NAFTA so that Mexico could return to self-suffiency in beans and corn (!!!)
Wednesday, July 05, 2006
Messy politics
A bad old political joke (mainly told by Jews) is that American Jews live like Episcopalians but vote like Puerto Ricans.
The update is by Stephen Ansolabehere, Jonathan Rodden and James M. Snyder, Jr., who's "Purple America" appears in the latest Journal of Economic Perspective (reg. req. Spring, 2006).
They conclude: "Ultimately, individuals' beliefs about what is right or fair economic policy for the nation are difficult to explain. They are only related weakly to one common indicator of self-interest -- income -- and they are nearly uncorrelated with cultural issues. Since these policy preferences appear to be one of the main forces driving voting behavior, however, explaining them is clearly a key question in American political economy."
The update is by Stephen Ansolabehere, Jonathan Rodden and James M. Snyder, Jr., who's "Purple America" appears in the latest Journal of Economic Perspective (reg. req. Spring, 2006).
They conclude: "Ultimately, individuals' beliefs about what is right or fair economic policy for the nation are difficult to explain. They are only related weakly to one common indicator of self-interest -- income -- and they are nearly uncorrelated with cultural issues. Since these policy preferences appear to be one of the main forces driving voting behavior, however, explaining them is clearly a key question in American political economy."
Sunday, July 02, 2006
"Car culture"
" ... car culture is taking root in China, and in many ways it looks like ours." That's the view taken in a very interesting piece in today's NY Times Magazine ("Capitalist Roaders").
But rather than the mysterious "car culture" virus, it is simply that as people become moderately affluent, they choose the personal freedom offered them by personal transportation.
But the simple explanation is not ominous enough.
"On a snail-paced drive back into Beijing, Zhu had passed through a zone on the edge of town that had been bulldozed and was being rebuilt as upper-income, car-friendly suburbs. In fact, this was happening around cities all over China: new gated communities, new themed enclaves, all for the car-owning class. What was conspicuously missing was a corresponding investment in mass transit, in public spaces and public access. And, in heavy traffic at the end of a tiring trip, it was easy to worry that the Chinese, rather than charting an innovative, alternate route into the automotive era, were on their way down a road that looks a little too familiar."
And what would that "innovative, alternate route" be? This is where the piece ends so we can only speculate what the author had in mind.
But rather than the mysterious "car culture" virus, it is simply that as people become moderately affluent, they choose the personal freedom offered them by personal transportation.
But the simple explanation is not ominous enough.
"On a snail-paced drive back into Beijing, Zhu had passed through a zone on the edge of town that had been bulldozed and was being rebuilt as upper-income, car-friendly suburbs. In fact, this was happening around cities all over China: new gated communities, new themed enclaves, all for the car-owning class. What was conspicuously missing was a corresponding investment in mass transit, in public spaces and public access. And, in heavy traffic at the end of a tiring trip, it was easy to worry that the Chinese, rather than charting an innovative, alternate route into the automotive era, were on their way down a road that looks a little too familiar."
And what would that "innovative, alternate route" be? This is where the piece ends so we can only speculate what the author had in mind.
July 4 story
There are many stories of what people will do to come to these shores. Here is one that involves Cubans. This remarkable episode is must reading for walled-border enthusiasts as well as for the Noam Chomsky left.
Voices lost
From the dust jacket of Irene Nemirovsky's Suite Francaise:
"In the early 1940s, when Ukrainian-born Irene Nemirovsky began working on what would become Suite Francaise -- the first two parts of a planned five-part novel -- she was already a highly successful writer living in Paris. But she was also a Jew, and in 1942, she was arrested and deported to Auschwitz: a month later she was dead at the age of thirty-nine. Two years earlier, living in a small village in central France -- where she and her husband, and their two small daughters had fled in a vain attempt to elude the Nazis -- she'd begun her novel, a luminous portrayal of human drama in which she herself would become a victim. When she was arrested, she had completed two parts of the epic; her daughters took the manuscript with them into hiding. Sixty-four years later, at long last, we can read Nemirovsky's literary masterpiece."
I am reading the novel and am dazzled by it -- even via the translation by Sandra Smith. There is, in addition, the awful feeling of knowing that the author would soon be murdered. A little like reading Anne Frank but Nemirovsky's work is not a memoir.
The murder of innocents is tragic. The tragedy is brought home to us all the more when the innocents have the skills and the means to report from their perilous vantage.
"In the early 1940s, when Ukrainian-born Irene Nemirovsky began working on what would become Suite Francaise -- the first two parts of a planned five-part novel -- she was already a highly successful writer living in Paris. But she was also a Jew, and in 1942, she was arrested and deported to Auschwitz: a month later she was dead at the age of thirty-nine. Two years earlier, living in a small village in central France -- where she and her husband, and their two small daughters had fled in a vain attempt to elude the Nazis -- she'd begun her novel, a luminous portrayal of human drama in which she herself would become a victim. When she was arrested, she had completed two parts of the epic; her daughters took the manuscript with them into hiding. Sixty-four years later, at long last, we can read Nemirovsky's literary masterpiece."
I am reading the novel and am dazzled by it -- even via the translation by Sandra Smith. There is, in addition, the awful feeling of knowing that the author would soon be murdered. A little like reading Anne Frank but Nemirovsky's work is not a memoir.
The murder of innocents is tragic. The tragedy is brought home to us all the more when the innocents have the skills and the means to report from their perilous vantage.
Wednesday, June 28, 2006
Urban fantasies -- and facts
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.
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.
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.
Sunday, May 14, 2006
Read all about it
Many smart people think that life in the suburbs make you fat -- and mean and angry and Republican, etc. Now we have news (thanks, Wendell Cox) from Australia that the suburbs actually make you thin!
It appears that having a large backyard to romp around in the early years has lifelong health benefits. So, a larger "footprint" in the way of low density living works out to a smaller "footprint" all the rest of your days in terms of how much it will take to support your appetite.
It appears that having a large backyard to romp around in the early years has lifelong health benefits. So, a larger "footprint" in the way of low density living works out to a smaller "footprint" all the rest of your days in terms of how much it will take to support your appetite.
Friday, May 12, 2006
Good and bad culture
Corruption makes the poor poorer. And corruption is linked to culture. To make it worse, the power of incentives does little to overcome the culture of corruption.
This is essentially what economist Raymond Fisman found (and reported in the May 22 Forbes). He looked at which diplomats in NYC pay traffic fines and which do not. Those that pay do so out of a sense of obligation because they enjoy diplomatic immunity. The researcher found that payments correlate with how the diplomat's home country ranks on an opinion survey of corrupt countries.
Finns, Danes, Norwegians and Swedes tend to pay. Diplomats from Chad and Bangladesh tend not to.
Fisman concludes: "Reformers of economic of social institutions must be aware that local values may undermine their efforts. Changing the law is helpful but not by itself sufficient to induce change in a compact world."
Little is understood about cultural change and evolution. Except that American culture (media, movies, fashion, food, music, schooling, etc.) are almost universally seductive. Good thing.
This is essentially what economist Raymond Fisman found (and reported in the May 22 Forbes). He looked at which diplomats in NYC pay traffic fines and which do not. Those that pay do so out of a sense of obligation because they enjoy diplomatic immunity. The researcher found that payments correlate with how the diplomat's home country ranks on an opinion survey of corrupt countries.
Finns, Danes, Norwegians and Swedes tend to pay. Diplomats from Chad and Bangladesh tend not to.
Fisman concludes: "Reformers of economic of social institutions must be aware that local values may undermine their efforts. Changing the law is helpful but not by itself sufficient to induce change in a compact world."
Little is understood about cultural change and evolution. Except that American culture (media, movies, fashion, food, music, schooling, etc.) are almost universally seductive. Good thing.
Thursday, May 11, 2006
Closing in fast
Some years ago, Milton Friedman wrote that the U.S. was socialist. He considered not only the size of state and local goverments but also their reach and came up with a number larger than half of GDP.
Today's WSJ includes an a propos summary of recent research (below) from the Mercatus and Weidenbaum Centers. The study estimates the size of the expanding federal regulatory state. Also mentioned are estimates of the annual costs of federal regulation, about $1 trillion. Presumably, there are also some benefits but surely very much smaller.
In any case, this suggests that the $2 trillion federal government (expenditures, 2002 GDP data) had an influence-mutliplier. If the $1.6 trillion state and local sector had a similar influence, we may not (yet) be in Friedman's "ballpark", but recent red tape growth rates cited suggest that we are closing in very fast.
"Tale of the Red Tape"
WSJ, May 11, 2006; Page A16
"Federal spending isn't all that's been on steroids in recent years in Washington. A report to be released this week by the Mercatus Center at George Mason University and the Weidenbaum Center at Washington University finds that the feds have also been on a regulatory rampage that needs squelching.
"From 2001 to 2006, the number of federal regulatory personnel has risen by one-third (or 66,000 more snoopers); regulatory budgets are up by 52% after inflation; and the Federal Register -- which prints all that regulatory verbiage -- has climbed by more than 10,000 pages. (See nearby chart.) The Institute for Policy Innovation calculates that if you stacked up all the registries from the Nixon Presidency through the present, the pile would reach higher than the Washington Monument.
"The biggest increases in enforcement personnel and dollars have gone to such customer-friendly agencies as the Securities and Exchange Commission, the Food and Drug Administration, the IRS, the Bureau of Alcohol, Tobacco and Firearms and the Antitrust Division of the Justice Department. Just last week Mr. Bush announced an intention to expand the reach of one of Washington's more absurd regulatory regimes: automobile fuel-mileage standards, which push consumers into smaller, less-safe cars and increase traffic fatalities. So much for regulations making us safer.
"Federal regulations now cost the U.S. economy about $1 trillion in lost output a year, or about $8,000 per household, according to a 2005 study by the Small Business Administration. Many regulations, such as clean air and water statutes, do have large societal benefits and can be justified in economic terms for addressing "externalities" that no one else but the government can address.
"But as with everything in Washington, good intentions typically trump any consideration of costs, and so Congress has never passed a law requiring cost-benefit calculations when implementing new rules. This is a particular failure of the Republican Congress, which came within one Senate vote of passing such a requirement in 1995, but has since given up. This hurts small companies especially, because they have fewer employees and revenues across which to spread the costs of meeting federal rules.
"We'll give the Bush Administration credit for at least resisting the mother of all super-regulatory contraptions -- the Kyoto Protocol on global warming. But if Republicans manage to get through November with their majorities in Congress intact, they ought to revisit their campaign promises of yore and look for ways to lighten government's regulatory load."
Today's WSJ includes an a propos summary of recent research (below) from the Mercatus and Weidenbaum Centers. The study estimates the size of the expanding federal regulatory state. Also mentioned are estimates of the annual costs of federal regulation, about $1 trillion. Presumably, there are also some benefits but surely very much smaller.
In any case, this suggests that the $2 trillion federal government (expenditures, 2002 GDP data) had an influence-mutliplier. If the $1.6 trillion state and local sector had a similar influence, we may not (yet) be in Friedman's "ballpark", but recent red tape growth rates cited suggest that we are closing in very fast.
"Tale of the Red Tape"
WSJ, May 11, 2006; Page A16
"Federal spending isn't all that's been on steroids in recent years in Washington. A report to be released this week by the Mercatus Center at George Mason University and the Weidenbaum Center at Washington University finds that the feds have also been on a regulatory rampage that needs squelching.
"From 2001 to 2006, the number of federal regulatory personnel has risen by one-third (or 66,000 more snoopers); regulatory budgets are up by 52% after inflation; and the Federal Register -- which prints all that regulatory verbiage -- has climbed by more than 10,000 pages. (See nearby chart.) The Institute for Policy Innovation calculates that if you stacked up all the registries from the Nixon Presidency through the present, the pile would reach higher than the Washington Monument.
"The biggest increases in enforcement personnel and dollars have gone to such customer-friendly agencies as the Securities and Exchange Commission, the Food and Drug Administration, the IRS, the Bureau of Alcohol, Tobacco and Firearms and the Antitrust Division of the Justice Department. Just last week Mr. Bush announced an intention to expand the reach of one of Washington's more absurd regulatory regimes: automobile fuel-mileage standards, which push consumers into smaller, less-safe cars and increase traffic fatalities. So much for regulations making us safer.
"Federal regulations now cost the U.S. economy about $1 trillion in lost output a year, or about $8,000 per household, according to a 2005 study by the Small Business Administration. Many regulations, such as clean air and water statutes, do have large societal benefits and can be justified in economic terms for addressing "externalities" that no one else but the government can address.
"But as with everything in Washington, good intentions typically trump any consideration of costs, and so Congress has never passed a law requiring cost-benefit calculations when implementing new rules. This is a particular failure of the Republican Congress, which came within one Senate vote of passing such a requirement in 1995, but has since given up. This hurts small companies especially, because they have fewer employees and revenues across which to spread the costs of meeting federal rules.
"We'll give the Bush Administration credit for at least resisting the mother of all super-regulatory contraptions -- the Kyoto Protocol on global warming. But if Republicans manage to get through November with their majorities in Congress intact, they ought to revisit their campaign promises of yore and look for ways to lighten government's regulatory load."
Wednesday, May 10, 2006
Bottom lines
In politics, people agree to disagree by not agreeing to an appropriate bottom line. As the Bush tax cuts are extended, some emphasize a growing budget deficit; others cite expanding tax revenues while others note that as the revenues expand so do the expenditures. In fact, the latter usually outpace the former.
The Skeptical Economist helps by continuously posting the ratio of national debt to GDP. That looks like a useful bottom line -- and it has been slowly falling.
The Skeptical Economist helps by continuously posting the ratio of national debt to GDP. That looks like a useful bottom line -- and it has been slowly falling.
Friday, May 05, 2006
Soft landing
In "Froth in the Silicon Valley Housing Market"?, John Quigley examines why the bursting of the dot-com bubble in 2000 did not cause an equally precipitous drop in Santa Clara county's house prices.
The author makes a number of interesting points. One of them is the tightly regulated supply-side of the housing market in California -- the pride of many planners as they continue to make "the rich" richer but promise that more regulations and developer arm-twisting will enhance the pool of "affordable" housing.
Quigley also notes that many Santa Clara residents found work outside the county in the greater San Francisco area job market. A willingness to commute as well as passable commuting connctions helped the market to absorb the shock.
Quigley also notes that many people enjoy high-amenity Santa Clara county and that its natural charms are also in short supply.
Re the commuting safety-valve, we can manage the auto-highway system better with time-of-day pricing and/or build capacity. In California, we have done too little of each. But it seems that the state's movers and shakers have dodged another bullet. As usual, the choices made by market participants bailed them out.
The author makes a number of interesting points. One of them is the tightly regulated supply-side of the housing market in California -- the pride of many planners as they continue to make "the rich" richer but promise that more regulations and developer arm-twisting will enhance the pool of "affordable" housing.
Quigley also notes that many Santa Clara residents found work outside the county in the greater San Francisco area job market. A willingness to commute as well as passable commuting connctions helped the market to absorb the shock.
Quigley also notes that many people enjoy high-amenity Santa Clara county and that its natural charms are also in short supply.
Re the commuting safety-valve, we can manage the auto-highway system better with time-of-day pricing and/or build capacity. In California, we have done too little of each. But it seems that the state's movers and shakers have dodged another bullet. As usual, the choices made by market participants bailed them out.
Wednesday, May 03, 2006
Bad news bearers
I remember reading an interview with Julian Simon where he tried to fathom why the pessimists (notably Paul Ehrlich) were drawing crowds while he was addressing small roomfuls of listeners. Bob Nelson suggests that it is the attraction of "Calvinism without God."
AEI's Joel Schwartz ("Air Pollution and Health: How Do Popular Portrayals Reflect the Scientific Evidence?") addresses the latest batch of environmental bad news bearers.
There is always piling on by the high-minded. I attended a grade school "winter sing" in Los Angeles a couple of years ago where the poor kids were made to sing about recycling. Parents and teachers around the room appeared to be quite comfortable with the substitution of modern concerns for the seasonal cheer that they may have grown up with.
AEI's Joel Schwartz ("Air Pollution and Health: How Do Popular Portrayals Reflect the Scientific Evidence?") addresses the latest batch of environmental bad news bearers.
There is always piling on by the high-minded. I attended a grade school "winter sing" in Los Angeles a couple of years ago where the poor kids were made to sing about recycling. Parents and teachers around the room appeared to be quite comfortable with the substitution of modern concerns for the seasonal cheer that they may have grown up with.
The view from space
"A view of urban sprawl from outer space" is probably not unintended self-parody -- although one can never be sure.
Defining urban sprawl as scattered development (instead of "planned" and "uniform"?), the researchers used satellite data and aerial photography to find that Los Angeles sprawls less than Boston and that Miami is compact while Pittsburgh sprawls.
Outer space, of course, is where most of the discussion has been. I have never been able to grasp planners' idea that unless there was a clean and clipped urban boundary, there was a problem. But such is the nature of much of the discussion: ad hoc in the service of flimsy notions on behalf of tougher top-down controls.
Thanks to Ashwani Vasishth for the pointer.
Defining urban sprawl as scattered development (instead of "planned" and "uniform"?), the researchers used satellite data and aerial photography to find that Los Angeles sprawls less than Boston and that Miami is compact while Pittsburgh sprawls.
Outer space, of course, is where most of the discussion has been. I have never been able to grasp planners' idea that unless there was a clean and clipped urban boundary, there was a problem. But such is the nature of much of the discussion: ad hoc in the service of flimsy notions on behalf of tougher top-down controls.
Thanks to Ashwani Vasishth for the pointer.
Tuesday, May 02, 2006
Warm glow
May Day in Europe (May 1) is now Labor Day -- not to be confused with U.S. style Labor Days, which are like any other 3-day weekend in America but with the addition of some newspaper editorials and political speeches that allude to the historical contributions of the labor movement and working men and women, etc.
We are in Barcelona, the weather is good, the tourists are everywhere and a moderate-sized parade made its way down Gran Via de les Cortes Catalanes and Via Laietana and then seemed to disperse. There were hammer-and-sickle red flags, Catalonian flags, labor union flags, Cuban flags, Mexican Flags and banners espousing immigration to the U.S.
The shoppers and tourists making their way through all this made for a humorous set of images. Nevertheless, the loudspeakers, drums, and noisemakers probably got the class-warfare juices flowing for some.
Julio Videras and Ann Owen write about the "warm glow" that people get when they participate in high-minded behaviors, including recycling and making contributions to environmental causes. The paper is worth reading.
It is always sad when some economics students learn about pure public goods analysis and infer that the model describes how everyone acts -- and that it prescribes that this is how people should act. Not exactly.
We are in Barcelona, the weather is good, the tourists are everywhere and a moderate-sized parade made its way down Gran Via de les Cortes Catalanes and Via Laietana and then seemed to disperse. There were hammer-and-sickle red flags, Catalonian flags, labor union flags, Cuban flags, Mexican Flags and banners espousing immigration to the U.S.
The shoppers and tourists making their way through all this made for a humorous set of images. Nevertheless, the loudspeakers, drums, and noisemakers probably got the class-warfare juices flowing for some.
Julio Videras and Ann Owen write about the "warm glow" that people get when they participate in high-minded behaviors, including recycling and making contributions to environmental causes. The paper is worth reading.
It is always sad when some economics students learn about pure public goods analysis and infer that the model describes how everyone acts -- and that it prescribes that this is how people should act. Not exactly.
Saturday, April 29, 2006
SPR and FRB
High gasoline prices probably bring out the worst in politicians. Econbrowser evaluates some of the proposals now coming from the White House.
But what if Strategic Petroleum Reserve manipulation becomes the norm? Markets have been trained to react to Fed policy swings (real and expected). They will now be trained to react to SPR policy swings (real and expected) in approximately the same way.
The parallel is worth thinking about. FRB policy calls have only recently become respectable and there is clamor for transparency. Will SPR policy become as problematic? Is that the price we pay for having -- and manipulating -- an SPR?
Perhaps not. Oil will sooner be replaced as a source of fuel than will U.S. dollars as a medium of exchange.
But new policies do create new worries.
But what if Strategic Petroleum Reserve manipulation becomes the norm? Markets have been trained to react to Fed policy swings (real and expected). They will now be trained to react to SPR policy swings (real and expected) in approximately the same way.
The parallel is worth thinking about. FRB policy calls have only recently become respectable and there is clamor for transparency. Will SPR policy become as problematic? Is that the price we pay for having -- and manipulating -- an SPR?
Perhaps not. Oil will sooner be replaced as a source of fuel than will U.S. dollars as a medium of exchange.
But new policies do create new worries.
Friday, April 28, 2006
Jane Jacobs
Most people find fault with what politicians do. Yet, these critics divide into two camps. Most cherish the dream of a better class of politicians and better outcomes. Others believe that this is naïve and/or silly. They pin their hopes on less politics instead of better politics.
The same divisions apply to the fans of Jane Jacobs. All sorts of people claim her as an ally. Her advocacy of more open-ended spontaneity and less ham-fisted top-down planning has been embraced by most city planning academics who, at the same time, love to assert that “regional problems have regional solutions.” In other words, in this view, Jacobs pointed to the need for “reform” and top-down planning but of a better sort.
Others see her analysis as more proof that top-down planning, even by the most worthy souls, does not hold a candle to a limited ambit for top-down interventions.
The same divisions apply to the fans of Jane Jacobs. All sorts of people claim her as an ally. Her advocacy of more open-ended spontaneity and less ham-fisted top-down planning has been embraced by most city planning academics who, at the same time, love to assert that “regional problems have regional solutions.” In other words, in this view, Jacobs pointed to the need for “reform” and top-down planning but of a better sort.
Others see her analysis as more proof that top-down planning, even by the most worthy souls, does not hold a candle to a limited ambit for top-down interventions.
Friday, April 21, 2006
Congestion pricing and happiness
I am in Lisbon, appreciating Fado and reading about happiness economics in the Journal of Economic Perspectives. A much wiser blogger would be able to comment on how Fado relates to happiness.
The two papers are "Developments in the Measurement of Subjective Well-Being" by Daniel Kahneman and Alan B. Krueger and "Some Uses of Happiness Data in Economics" by Rafael Di Tella and Robert MacCulloch (unable to link at the moment). Knowing very little about the field, the two papers offered me a splending survey.
Kahneman and Kruger cite a happiness rating by "mean net affect". At the top are"intimate relations," "socializing after work," "relaxing." At the bottom are: "evening commute," "working," and "morning commute."
And there are policy implications. "For example, interventions that reduce the amount of time spent commuting alone (such as congestion taxes and carpool subsdidies) could possibly have a beneficial effect on individuals' emotional states." (p. 21).
The two papers are "Developments in the Measurement of Subjective Well-Being" by Daniel Kahneman and Alan B. Krueger and "Some Uses of Happiness Data in Economics" by Rafael Di Tella and Robert MacCulloch (unable to link at the moment). Knowing very little about the field, the two papers offered me a splending survey.
Kahneman and Kruger cite a happiness rating by "mean net affect". At the top are"intimate relations," "socializing after work," "relaxing." At the bottom are: "evening commute," "working," and "morning commute."
And there are policy implications. "For example, interventions that reduce the amount of time spent commuting alone (such as congestion taxes and carpool subsdidies) could possibly have a beneficial effect on individuals' emotional states." (p. 21).
Friday, April 14, 2006
Separation of race and state
The 1987 German language film Wanssee Konferenz is reputedly based on the actual minutes of the meeting. The film is well done and, of course, chilling. In several of the scenes, the primitives gathered around the table grapple with racial definitions and get stuck when it comes to consistent classifications of mixed marriages -- and who precisely should be murdered first.
We also know that leaders of apartheid-South Africa felt compelled to come up with racial categories. And the famous "one-drop" rule from U.S. history ludicrously classifies millions of mixed-race Americans as "black". These labels are all politicized and often lethal.
Yet, these days, racial categories are the bread and butter of the U.S. political left -- which is unlikely to ever retain significant power unless old racial categories and grievances are stoked.
The good news is that eventually dumb ideas die. Too slowly, to be sure, but they do recede. Today's WSJ includes the following:
"We Are All Rainbows Now"
"For decades, TV journalist Geraldo Rivera has battled the old rumor that he changed his name from Jerry Rivers to qualify as a Hispanic and thus become eligible for some news outlet's minority-hiring program. As inaccurate as the story may be, it's easy to see why many people believed that someone holding an ethnic card might try to cash it in -- and how the tale fed cynicism about America's emerging system of racial and ethnic 'preferences.'
"A serious legal debate about affirmative action rages on today and will not end anytime soon. Yet once again, an absurd story is drawing attention to the essential difficulty of trying to engineer diversity or make up for past racial wrongs generations after they occurred. Actually, there are two stories, but they both raise the same question: What if everyone in the U.S. is now holding an ethnic chip, theoretically redeemable at some college or workplace or government program? If we all try to cash them in, will the preference edifice collapse?
"We're not there yet, but some signs are pointing in that direction. The first comes from Peter Kirsanow, a member of the U.S. Commission on Civil Rights. Writing about a commission hearing on the development of questions for the 2010 census in the April 12 National Review Online, Mr. Kirsanow noted that the 2000 census let respondents define themselves according to 126 racial/ethnic categories -- up from just five in 1978. Such information is more meaningless than ever, Mr. Kirsanow writes: 'The rapid proliferation of racial and ethnic classifications does little to dampen suspicions that the categories are, at a minimum, arbitrary -- and probably specious. Someone may have been Black of Hispanic origin in 1990, but today that person might be Cuban or 'some other race.''
"What criteria should we use to determine a person's race? Some Americans are trying to use DNA testing to win success or riches in the diversity sweepstakes. A New York Times article Wednesday opened with the story of adopted twins, born of white parents. Since DNA tests purport to show that the boys have a bit of Native American and African blood, their father hopes the newfound ethnicity will help them qualify for college financial aid. Is this the new 'one-drop rule'?
"Then there is the 98% 'European' woman who applied to college as an Asian after a DNA test found a 2% "Asian" strain. And with all that casino money out there, it's no wonder that some Indian tribes face people demanding a share of it based on only DNA 'evidence.'
"Evidence is in quotation marks because DNA testing for genealogy involves as much supposition as science at this point. Human beings have so many genes in common that assigning slight variations to countries of origin or specific ethnic groups is often just guesswork. Even so, it is not that difficult to imagine a flood of Americans trying to milk the preference cow this way. Now picture officialdom struggling to respond. In a world where everybody is a rainbow, where does the sorting begin?
"Come to think of it, though, this was always the ultimate goal of people of goodwill: no sorting by race, color or creed. It may just happen by ways and means we never expected."
We also know that leaders of apartheid-South Africa felt compelled to come up with racial categories. And the famous "one-drop" rule from U.S. history ludicrously classifies millions of mixed-race Americans as "black". These labels are all politicized and often lethal.
Yet, these days, racial categories are the bread and butter of the U.S. political left -- which is unlikely to ever retain significant power unless old racial categories and grievances are stoked.
The good news is that eventually dumb ideas die. Too slowly, to be sure, but they do recede. Today's WSJ includes the following:
"We Are All Rainbows Now"
"For decades, TV journalist Geraldo Rivera has battled the old rumor that he changed his name from Jerry Rivers to qualify as a Hispanic and thus become eligible for some news outlet's minority-hiring program. As inaccurate as the story may be, it's easy to see why many people believed that someone holding an ethnic card might try to cash it in -- and how the tale fed cynicism about America's emerging system of racial and ethnic 'preferences.'
"A serious legal debate about affirmative action rages on today and will not end anytime soon. Yet once again, an absurd story is drawing attention to the essential difficulty of trying to engineer diversity or make up for past racial wrongs generations after they occurred. Actually, there are two stories, but they both raise the same question: What if everyone in the U.S. is now holding an ethnic chip, theoretically redeemable at some college or workplace or government program? If we all try to cash them in, will the preference edifice collapse?
"We're not there yet, but some signs are pointing in that direction. The first comes from Peter Kirsanow, a member of the U.S. Commission on Civil Rights. Writing about a commission hearing on the development of questions for the 2010 census in the April 12 National Review Online, Mr. Kirsanow noted that the 2000 census let respondents define themselves according to 126 racial/ethnic categories -- up from just five in 1978. Such information is more meaningless than ever, Mr. Kirsanow writes: 'The rapid proliferation of racial and ethnic classifications does little to dampen suspicions that the categories are, at a minimum, arbitrary -- and probably specious. Someone may have been Black of Hispanic origin in 1990, but today that person might be Cuban or 'some other race.''
"What criteria should we use to determine a person's race? Some Americans are trying to use DNA testing to win success or riches in the diversity sweepstakes. A New York Times article Wednesday opened with the story of adopted twins, born of white parents. Since DNA tests purport to show that the boys have a bit of Native American and African blood, their father hopes the newfound ethnicity will help them qualify for college financial aid. Is this the new 'one-drop rule'?
"Then there is the 98% 'European' woman who applied to college as an Asian after a DNA test found a 2% "Asian" strain. And with all that casino money out there, it's no wonder that some Indian tribes face people demanding a share of it based on only DNA 'evidence.'
"Evidence is in quotation marks because DNA testing for genealogy involves as much supposition as science at this point. Human beings have so many genes in common that assigning slight variations to countries of origin or specific ethnic groups is often just guesswork. Even so, it is not that difficult to imagine a flood of Americans trying to milk the preference cow this way. Now picture officialdom struggling to respond. In a world where everybody is a rainbow, where does the sorting begin?
"Come to think of it, though, this was always the ultimate goal of people of goodwill: no sorting by race, color or creed. It may just happen by ways and means we never expected."
Tuesday, April 11, 2006
C'est la vie
France is the world's #1 tourist destination country and Paris is the #1 tourist destination city. And most Paris visitors go to their Disney Park (!); the Louvre is second.
The center of Paris, the only part that most tourists ever see, is certainly splendid and most (not all) of the surroundings look pretty awful. Yet the Ville de Paris (the core) lost population -- from 2.9 million in 1921 to 2.1 million in 1999. Over the same period, Ile de France (the greater Paris area) grew from 5.9 million to 11 million. (Thanks, Wendell Cox.)
And what are Paris planners doing? They are converting boulevard traffic lanes to bus lanes. This is supposed to get people out of their cars and onto transit. Sound familiar? As usual, people are not cooperating. So the cars move more slowly and foul the air more. Claude Raines would be shocked(!).
Prof Remy Proud'homme and his colleagues have done the math and found a $1 billion annual net loss.
Central planning will always be hard work. Tourists will keep coming to the city (including it's Disney Park) and Parisians will keep moving to the suburbs.
The center of Paris, the only part that most tourists ever see, is certainly splendid and most (not all) of the surroundings look pretty awful. Yet the Ville de Paris (the core) lost population -- from 2.9 million in 1921 to 2.1 million in 1999. Over the same period, Ile de France (the greater Paris area) grew from 5.9 million to 11 million. (Thanks, Wendell Cox.)
And what are Paris planners doing? They are converting boulevard traffic lanes to bus lanes. This is supposed to get people out of their cars and onto transit. Sound familiar? As usual, people are not cooperating. So the cars move more slowly and foul the air more. Claude Raines would be shocked(!).
Prof Remy Proud'homme and his colleagues have done the math and found a $1 billion annual net loss.
Central planning will always be hard work. Tourists will keep coming to the city (including it's Disney Park) and Parisians will keep moving to the suburbs.
Saturday, April 08, 2006
Teaching economics
Does teaching economics make a difference? Many of us fervently hope so. Today's International Herald Tribune (April 8-9), includes the following front page story:
"Economics, French-style...looking behind the rebellion on jobs law ... PARIS: Danielle Scache tries to avoid using the term 'capitalism' in her economics class because it has negative connotations in France. Instead, she teaches her high school students about the market economy, a slightly less controversial term she started using last year after a 2-month internship at the dairy giant Danone. That was an experience that did away with one of her own predjudices, she said. 'I was surprised to see that people actually enjoyed working in a company,' said Scache, who is 59. 'Some of them were more enthusiastic than many teachers I know.'... Scache, who has been teaching economics for 37 years, said her stint at Danone made her realize how little the official syllabus focuses on the market...."
The article is priceless in how it depicts economics instruction in France. Many of us hope that ours in the U.S. is more friendly to the idea of markets and spontaneous orders -- but you never know.
I have been teaching in Paris for two weeks now and must say that my students were bright, attentive and open -- and much more sophisticated than the curriculum described in the IHT piece.
"Economics, French-style...looking behind the rebellion on jobs law ... PARIS: Danielle Scache tries to avoid using the term 'capitalism' in her economics class because it has negative connotations in France. Instead, she teaches her high school students about the market economy, a slightly less controversial term she started using last year after a 2-month internship at the dairy giant Danone. That was an experience that did away with one of her own predjudices, she said. 'I was surprised to see that people actually enjoyed working in a company,' said Scache, who is 59. 'Some of them were more enthusiastic than many teachers I know.'... Scache, who has been teaching economics for 37 years, said her stint at Danone made her realize how little the official syllabus focuses on the market...."
The article is priceless in how it depicts economics instruction in France. Many of us hope that ours in the U.S. is more friendly to the idea of markets and spontaneous orders -- but you never know.
I have been teaching in Paris for two weeks now and must say that my students were bright, attentive and open -- and much more sophisticated than the curriculum described in the IHT piece.
Friday, April 07, 2006
A world of internalities
The Economist (April 8, 2006) includes "The new paternalism: The avuncular state," a nice summary of the views of "behavioural" economists and the policy implications that follow.
Referencing company pension plans, the article cites a study of "soft paternalism" whereby the default was changed from the employee not in the plan (and he has to join but with minimal effort) to the opposite (and he can withdraw with minimal effort). The punchline is that the enrollment rate jumped from 49% to 86%, indicating a benign application of policy.
Who can object? There is always the slippery slope argument. One can imagine all sorts of intrusions being sold under the guise of SP. For example, the article mentions "internalities", a reference to how our demons can dominate our better angels. Taxes and subsidies could help the good side win.
Acquiesce to that program and the slippery slope becomes the precipice that no one wants. Most of my students have been weaned on the idea of an external cost (and an associated fix) around every corner. Economists have now compounded the problem by adding a world of internalities.
Referencing company pension plans, the article cites a study of "soft paternalism" whereby the default was changed from the employee not in the plan (and he has to join but with minimal effort) to the opposite (and he can withdraw with minimal effort). The punchline is that the enrollment rate jumped from 49% to 86%, indicating a benign application of policy.
Who can object? There is always the slippery slope argument. One can imagine all sorts of intrusions being sold under the guise of SP. For example, the article mentions "internalities", a reference to how our demons can dominate our better angels. Taxes and subsidies could help the good side win.
Acquiesce to that program and the slippery slope becomes the precipice that no one wants. Most of my students have been weaned on the idea of an external cost (and an associated fix) around every corner. Economists have now compounded the problem by adding a world of internalities.
Monday, April 03, 2006
It's not easy being rich
China's move to prosperity includes more suburbs and more chunky folks. Therefore suburbs make you fat.
According to the messages from the people at National Public Health Week, almost anything in our surroundings contributes to our being fat or unhealthy. Add the no trade-offs mentality to the no personal responsibility view and you get their menu of "solutions" to redesign the world.
Good, then, to see that the Transportation Research Board's Does the Built Environment Influence Physical Activity? Examining the Evidence leans in the agnostic direction.
Yes, our French brothers and sisters are thinner than so many shockingly fat Americans. So, by all means, let's not let our fellow citizens (oops, and non-citizens) off the hook by painting them as simply victims of their environment.
According to the messages from the people at National Public Health Week, almost anything in our surroundings contributes to our being fat or unhealthy. Add the no trade-offs mentality to the no personal responsibility view and you get their menu of "solutions" to redesign the world.
Good, then, to see that the Transportation Research Board's Does the Built Environment Influence Physical Activity? Examining the Evidence leans in the agnostic direction.
Yes, our French brothers and sisters are thinner than so many shockingly fat Americans. So, by all means, let's not let our fellow citizens (oops, and non-citizens) off the hook by painting them as simply victims of their environment.
Manifestations
Time stops when you're in love or in revolution.
I have met any number of Parisians over a certain age who are neither. In fact many are embarrassed by the "manifestations" (great word) that emerge at train stations, monuments and highways -- at odd moments. The participants that I have seen seem to be rag-tag, young and prone to the romance of the barricades.
What is so sad is that they are willing to trade job security at their first job (!) for the prospect of growth and development. Sinecure over career prospects and challenges.
One Parisian, writing to the International Herald Tribune (April, 3, 2006) muses: "The unemployment among French young people is linked to global unemployment. If you reduce job security, you also reduce the faith people have in their future and, by the way, reduce their consumption. If there is a decrease in consumption, France will have to face a decrease in growth which will produce an even higher unemployment rate. If that is the aim of the French government, fine; but do not expect reasonably not-too-stupid students let France go to ruin."
The writer apparently eschews "Anglo-Saxon" economics. We may like our demand curves downward-sloping but that may simply be an acquired taste.
I have met any number of Parisians over a certain age who are neither. In fact many are embarrassed by the "manifestations" (great word) that emerge at train stations, monuments and highways -- at odd moments. The participants that I have seen seem to be rag-tag, young and prone to the romance of the barricades.
What is so sad is that they are willing to trade job security at their first job (!) for the prospect of growth and development. Sinecure over career prospects and challenges.
One Parisian, writing to the International Herald Tribune (April, 3, 2006) muses: "The unemployment among French young people is linked to global unemployment. If you reduce job security, you also reduce the faith people have in their future and, by the way, reduce their consumption. If there is a decrease in consumption, France will have to face a decrease in growth which will produce an even higher unemployment rate. If that is the aim of the French government, fine; but do not expect reasonably not-too-stupid students let France go to ruin."
The writer apparently eschews "Anglo-Saxon" economics. We may like our demand curves downward-sloping but that may simply be an acquired taste.
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