Those knowledge problems

I greatly enjoyed Arnold Kling's Unchecked and Unbalanced. The author writes about the financial crisis and finds serious culpability in Washington as well as on Wall Street. As always, when these two hold hands, we have problems. It's that old crony capitalism and both political parties practice it.

Kling also writes about the ratio of governors to governed. He likes the ratio in Switzerland better than ours. One canton has more elected officials but fewer people than Kling's home county in Maryland. It's always a stretch to believe that elected officials can possible know enough to fully understand all the problems they presumably want to "solve." So it's Fatal Conceit all over again.

The March 28 Forbes included "Ban Bulb Lunacy"

Next year the federal government begins the phaseout of traditional incandescent lightbulbs, giving us yet another enlightening example of politicians short-circuiting free markets. The 100-watt bulb will be banned on New Year's Day, and all the rest by 2014.

This prohibition of the standard lightbulb is justified on the grounds that it will save energy. Well, if that were true, don't you think consumers would figure it out for themselves? The chief replacement is the compact fluorescent lamp (CFLs)--those things that look like frozen pasta. They will cost six to ten times the amount of the old bulbs, but Washington politicians assure us that consumers will ultimately save money because CFLs will last longer.

But they might not. Warns expert Myron Ebell of the Competitive Enterprise Institute: "Cost savings are exaggerated. First, the [new] bulbs are tested under ideal conditions. Some household uses approximate these ideal conditions. Most do not. For example, if you turn a light on and off a lot, such as a bathroom light, you will save very little electricity because CFLs use a lot of electricity to start up. Second, CFLs tend not to last as long as advertised. Therefore, you end up replacing CFLs before they have achieved the savings needed to make up the [cost] difference [of the old-fashioned bulb]."

There's an even bigger problem: mercury, a poison. Heaven help you if you break one of these things. The EPA has numerous instructions on what you're supposed to do when this happens.

It also goes into detail on how to handle vacuuming carpeting or rugs:

- The next several times you vacuum the rug or carpet, shut off the H&AC system if you have one, close the doors to other rooms and open a window or door to the outside before vacuuming. Change the vacuum bag after each use in this area.

- After vacuuming is completed, keep the H&AC system shut off and the window or door to the outside open, as practical, for several hours.

The EPA also has bulletins on what to do when the bulb burns out.

You can't make this stuff up. ...

How likely is it that the millions of pages of rules and regs in the Federal Register are much better than this?

Working at home

The 2010 census data are just arriving, but I did not know that considerable working-at-home data are available from the Survey of Income and Program Participation, the latest for 2005.

In that year almost 8 percent of those working worked at home at least some of the time. Almost a third of these reported a "mixed" schedule, whereby they also spent some time at a traditional workplace. Both groups came from the higher income and more educated respondents.

Of those who reported being wholly home-based, 53 percent were self-employed and the rest were employees. Both of these groups were about evenly divided between males and females.

Of the three groups (only at home, mixed, and traditional workplace), the mixed group averaged the most hours worked per week.

Surprisingly (to me), the majority in both of the work-at-home respondents said that their schedule was a "requirement of the job". Only 5 percent mentioned better child care.

There is much more and we'll soon see how these numbers developed in 2010.

Is less face time with colleagues a plus or a minus? Which group will be most productive? Those with the "mixed" schedules? Many questions remain to be addressed.

Conventional wisdom wrong again

It is an article of faith for almost anyone with any exposure to economics (basic and beyond) that government policy makers should come to the rescue when markets "fail".

Tom Rubin recently presented commuting travel time data (from the 2005-2007 American Community Survey) for the 74 U.S. Urbanized Areas with more than 500,000 population in 2007. For the group, the average commute times (one-way, all modes) were just over 26 minutes for "central city" residents, but just under 26 minutes for suburban residents. To be sure, these are overall averages and the various urbanized areas differed as to where the average commutes were of shorter duration, but they were always quite close.

Pengyu Zhu has combed the 2001 and 2009 National Household Travel Surveys (NHTS) and also found that "suburban" average commute times were less that "urban" average commute times in both surveys (22.3 minutes vs 26.7 minutes in 2001; 23.6 vs 24.4 minutes in 2009; also one-way, all modes). ACS and NHTS use slightly different definitions, but the results are consistent.

With electronic transponders, transactions costs of time-of-day tolling are now very low. Ignoring the tolling option and letting crowding be the default rationing mechanism is then a policy failure.

But the travel times that we observe undermine the standard traffic doomsday talk. They also upend the "worsening traffic is a cost of sprawl" trope.

Employers and employees are (for the most part) finding ways to co-locate in ways that avoid both concerns.

Land markets (such as they are) are coming to the rescue of a policy failure.

"Density" again

"Density" is a favorite among almost anyone who thinks about cities. Most people agree that it's a "good thing" and also that there is not enough of it in a world of "sprawl".

I have often blogged about all this with the view that (1) yes, it's a "good thing", but often defined much too vaguely; city-wide average density measures are not adequate; (2) there are enclaves of creative activity in high-density Manhattan as well as in low-density Silicon Valley -- and many other places like it; (3) as the 2010 census data become available, we see continued suburbanization; (4) there is enough suburbanization around the world, to cause us to doubt that it is an artifact of peculiar U.S. policies.

Today's WSJ includes their annual list of "Top 50 Start-Ups". Precise addresses are not given, but I count eight in "San Francisco" (am guessing the city because start-ups located in its suburbs are labeled by their suburban locations) and I count three in "New York" (am assuming Manhattan because another firm on the list is placed in "Brooklyn"). Thirty-nine of the top-fifty start-ups are in places decidely less dense.

Sad story, but a great case study

Fred Siegel and Sol Stern explode the Mayor Michael Bloomberg bubble in this piece in the March Commentary.

The electorate includes (i) those who never vote; (ii) those who do vote, but on the basis of paper-thin due diligence and sophistication (hence the value of glitzy TV ads); and (iii) those with something tangible at stake (New York's public sector unions and many others who could be bought with gobs of Bloomberg money in the Siegel-Stern story).

The Mayor could orchestrate all of this beautifully -- until he muffed snow removal in the recent snow storms. There was also that business about the recession and declining revenues accruing to New York City government.

Read the article. It is apparently non-gated. It belongs in the next local politics case study compendium.

Freedom? Austerity? Naw!

Once people have enough money, they want a car. This is an international story. Dargay and Gately have been documenting it for some years. People do like the freedom that goes with amazing range and mobility.

As a result, cities keep suburbanizing. Wendell Cox has been keeping an eye on 2010 U.S. Census data which show that the trend continues.

Paul Krugman thinks that it's all a huge mistake. People are actually freer when they choose trains.

George Will notes that trains are not really chosen by many people any more, but those who know better want to make that choice for them.

In fact, the State of Florida had to go to the State's Supreme Court to be allowed to turn down the Obama Administration's (one not yet bitten by the austerity bug) generosity towards helping that State get going on high-speed rail.

It is becoming very hard to resist Will's interpretation.

Good coffee

For some of us, the best coffee we drink is the stuff we do not brew ourselves. And the more likely we are to look for third place venues, the more of these there will be, the more competition and the better the coffee.

So it's no surprise that readers of Travel and Leisure rated Seattle, Portland and San Francisco as America's top three best-coffee cities. (H/T Planetizen)

There was a time, not long ago, when visitors from abroad would scoff at American coffee. But when the timing is ripe, there will always be a Julia Child or a Howard Schultz or a Robert Mondavi who are the first to figure it out -- and act on their intuition.

Hard work

Central planning is very hard work. Here is a piece of archival research by USC Prof Mike Gruntman (H/T Jim Moore) on the troubles of fixing compensation for the first Soviet cosmonauts. Here is an excerpt:

Imagine the communist rulers of
a superpower pondering questions of
how many ties and socks should be
allocated to Yuri Gagarin or underwear
sets to his wife. Later they would struggle
with the similar challenges of determining
the number and types of head
scarves, underwear sets, stockings, and
blouses for the first woman cosmonaut
Valentina V. Tereshkova.

This stuff could not be left to standard military procedures (as in the U.S.) nor to (gasp!) the market in the event of a private space program.

There is always the old voyeuristic fun from examnining the compensation packages of "stars" -- whether in business, entertainment, sports, etc. But this story of how the Soviets did it is serious. How to balance proper rewards to national heroes with egalitarian politics? Not simple at all.

Big questions, new index

Are we in The Great Stagnation (as Tyler Cowen argues)? Will Chinese economic growth continue after off-the-shelf technologies have been used up? Will newly democratic nations in the Arab world (assuming we get any) be any more prosperous than in despotic days? How to answer these big questions?

The Feb 26 Economist's Schumpeter column ("Uncorking enterprise ... Policy makers are desperate to promote enterprise. A new index could help") points to a newly developed Global Entrepreneurship and Development index by Profs Zoltan Acs and Erkko Autio.

The Schumpeter column review is mixed, but it all sounds like a worthy first step. The news coverage from North Africa often falls into the trap of suggesting that once the autocrats are gone, there will be prosperity. Perhaps it is much more about any newly open societies making entrepreneurship possible. The new index can re-direct the discussion this way.

Multiple choice

UCLA Prof Peter Baldwin writes about the value of California higher education. He wants to voice enthusiasm for continued generous state support for the UC system, but he says kind things about the rise of Califronia private universities in the State also (including mine). It really is an amazing story and his comparisons with the Northeast are interesting.

There is lots of nostalgia in California for the "good old days" when the California public sector seemingly "worked." What has changed since the early 1970s or so? (a) Climate change; (b) The rise of the Internet; (c) Unionized government employees; (d) All of these; (e) None of these.

You can pick (c) if you like, but it is not really mentioned when this question comes up in polite company.

Reversal/renaissance still on hold

My favorite quote from Robert Bruegmann's Sprawl: A Compact History is this one:

Most American anti-sprawl reformers today believe that sprawl is a recent and peculiarly American phenomenon caused by specific technological innovations like the automobile and by government policies like single-use zoning or the mortgage interest deduction on the federal income tax. It is important for them to believe this because if sprawl turned out to be a long –standing feature of urban development worldwide, it would suggest that stopping it involves something much more fundamental than correcting some poor American land-use policies. In the following chapters I will argue that the characteristics we associate today with sprawl have actually been visible in most prosperous cities throughout history. Sprawl has been as evident in Europe as in America and can now be said to be the preferred settlement pattern everywhere in the world where there is a certain measure of affluence and where citizens have some choice in how they live. (p. 17)

But there is always the steady drum-beat of opinion that the trend is a "market failure" that must be addressed and/or that it already has been reversed because we have finally gotten smart via "Smart Growth" policies.

I mentioned last week that early census 2010 returns are dribbling in and the reversal/rennaisance of central cities is not yet in evidence. Here is more on the latest from Census via Aaron Renn and Wendell Cox.

Smart Growth policies do not do well against people's preferences. Or as Witold Rybczynski summarizes: “Virtually every technological innovation of the last fifty years has facilitated, if not actually encouraged urban dispersal” (italics added). p. 170.

Good graphic and good news

New York and other big cities have supposedly been able to reduce crime by improving police tactics, including the clever use of geographic data, applying tools like this one.

But this report suggests that other city services could do as well (H/T Planetizen).

The Wired story suggests that 311 calls are as rich a source of data as 911 calls. I love the graphic at the top. But why all the calls about street lights in the late morning and at noon? This stuff is surely not simple, but perhaps the other NY departments can learn from the NY cops.

Those beer commercials are not a joke

Today's WSJ includes excerpts from Kay Hymowitz's Manning Up: How the Rise of Women Has Turned Men to Boys. The piece is titled "Where Have the Good Men Gone?" and will surely work its way up the Journal's most-emailed list.

"The guys we find, says one woman are 'more like the kids we babysat than the dads who drove us home.'" And "What explains the peurile shallowness? I see it as an expression of our cultural uncertainty about the social role of men. It's been an almost universal rule of civilization that girls became women simply by reaching physical maturity, but boys had to pass a test. They needed to demonstrate courage, physical prowess or mastery of the necessary skills. The goal was to prove competence as protectors and providers. Today, however, with women moving ahead in our advanced economy, husbands and fathers are now optional and the qualities of character men once needed to play their roles -- fortitude, stoicism, courage, fidelity -- are obsolete, even a little embarrassing."

Perhaps. And this is the time to insert that there are no unmixed blessings. Most of us like the modern world, but modernity has always had a downside. Affluence brought the option of adolescence. That has now become extended adolescence. Many politicians had given up on reforming our high schools and suggested that it's time to send everybody to a two-year college. Governments' budget troubles may have put that one on hold, but it was brilliant. Do not mess with the education establishment, but grow it instead.

What matters most is that finally tapping into the female talent pool is a wonderful thing. Some of the most talented students and colleagues that I encounter at my university and other places that I pass through are now female. Seeing them at work makes one wonder how we ever managed to get by without them.

Back to Hymowitz and the men. "Relatively affluent, free of family responsibilities, and entertained by an array of media devoted to every pleasure, the single young man can live in pig heaven -- and often does. Women put up with them for a while, but then in fear and disgust either give up any idea of a husband and kids or just go to the sperm bank and get the DNA without the troublesome man. But these rational choices on the part of women only serve to legitimize men's attachment to the sandbox. Why should they grow up? No one needs them anyway. There's nothing they have to do. They might as well just have another beer."

Have you looked at the beer commercials on TV? You have to assume that the producers know their audience.

Not just here

As I like to point out, urban economists and urban planners like to prescribe higher "density" -- which sounds like a good thing when we think about the benefits of agglomeration economies. But they presume that city-wide or metropolitan-wide densities are what count. An associated presumption is that low densities and suburbanization (and "sprawl") are a uniquely U.S. phenomenon because of our peculiar policies.

There are also perennial discussions of "urban revival" and "urban renaissance" in the U.S. With respect to these, we are beginning to get the 2010 census data and we shall see. Yesterday's news re Chicago signals continued central city decline. There are probably pockets of success within the city, so again we shall see. Again, the whole city-wide density discussion is much too broad.

What about international comparisons? The data are not simple. I am aware of two sites that help a little. Urban audit covers the EU cities. This UN site covers many others. Again, we are stuck with large spatial units. For those places for which we have city and surrounding area data (correction: city and metro area data) for at least two years, which one grew most? (The data for the two years must be from the same source; do not mix and match.)

I was so inspired by the dribs and drabs coming from the U.S. Census Bureau, that I looked at non-U.S. metro areas. I found readings for at least two dates for central city and their suburbs for seven prominent places abroad. For Berlin (1991-2004), Montreal (2001-2006), Toronto (2001-2006), and Stockholm (1999-2006), the suburbs grew fastest. For London (1991-2004), Brussels (2001-2007) and Amsterdam (2001-2007), the central city grew fastest.

What can we say? We need more cases. And we have to be careful about international reporting peculiarities. But suburbanization does happen way beyond the reach of U.S. policies.

We'll know more as the rest of the 2010 U.S. census data arrive.

Titanic

I hated all the movies and dramatizations I ever saw of the the sinking of the Titanic. This analysis by Bruno Frey and his co-authors in the latest Journal of Economic Perspectives is much better. When there is breathing room, people (for the most part) do the right thing. Social norms do their work.

The empirical analysis is consistent with the view that the effects of status
(passengers traveling in higher classes have a better chance of surviving) and social
norms (such as saving women and children first) depend on time. It seems that on
the more slowly sinking Titanic pro-social behavior played a larger role, while more
selfish conduct prevailed on the rapidly sinking Lusitania. Of course, time may not
be the only factor at work. Natural experiments based on naval disasters may well
have other factors for which control variables would be useful.

This morning's WSJ cites progress on implementation of the Paul Romer charter city idea in Honduras. Sebastian Mallaby is quoted: "We'll develop both different laws, perhaps, but importantly different norms about right and wrong." It's not just about the legislated rules.

High-speed rail savings

Wendell Cox cites Transportation Secy LaHood as admitting that high-speed rail might be a "patchwork" system. That has actually been the suspicion for some time.

But not to worry. Mark Perry cites very low cost (as low as $1 a ride) inter-city bus transportation. With enough such entrepreneurial rescue, the administration can pare down the high-speed rail waste.

Laugh or cry?

Doing what comes naturally

The New Yorker's James Surowiecki is optimistic about President Obama's Sputnikonomics. He is optimistic about federal spending that is not simply "stimulus," but rather serious investment in education, infrastructure, research, etc. He does stipulate that, "Of course, when government is involved, there’s a danger of political considerations trumping economic ones, but our track record of using public money to foster innovation is good." Not sure where high-speed rail fits, but I have my suspicions. I have also blogged about the fact that Californi'a pavements are worse than I have found in some Third World countries.

And Michael Boskin reports the following in this mornings WSJ:

The strongest case for stimulus is increased military spending during recessions. But infrastructure spending, as the president proposes, is poorly designed for anti-recession job creation. As Harvard economist Edward Glaeser has shown, the ARRA's transportation spending was not directed to areas with the highest unemployment or the largest housing busts (and therefore the most unemployed construction workers). Indeed, last September Wendy Greuel, the City of Los Angeles controller, shocked the country when she revealed that the $111 million in ARRA infrastructure money her city received created only 55 jobs—that's a whopping $2 million of federal stimulus per job created.

And the WSJ also reports "Pentagon Loses War to Zap Airborne Laser From Budget" which documents the various weapons systems that three Republican Defense Secretaries had tried to end, but which hang on via Congress and friends doing what comes naturally.

I had previously blogged that I was worried that there were no constituencies in the world for austerity. But many of the Europeans as well as several U.S. governors (Cuomo, Christie, Brown and others) have seemingly proven me wrong. Now it's the U.S. Congress (and friends) that are the problem.

Several economics bloggers have recently mentiond that public choice economics remains underappreciated. How about ignored?

UPDATE

I should say ignored by the many stimulus optimists.

False choice

Here is David Brooks, writing about Chicago, politics, cities, Ed Glaeser's new book:

Many of us are drawn to the big power politics of Washington, but city politics is better than national politics because the problems are more tangible and the communication is more face to face.

This is a point Edward Glaeser fleshes out in his terrific new book, “Triumph of the City.” Glaeser points out that far from withering in the age of instant global information flows, cities have only become more important.

That’s because humans communicate best when they are physically brought together. Two University of Michigan researchers brought groups of people together face to face and asked them to play a difficult cooperation game. Then they organized other groups and had them communicate electronically. The face-to-face groups thrived. The electronic groups fractured and struggled.

Cities magnify people’s strengths, Glaeser argues, because ideas spread more easily in dense environments. If you want to compete in a global marketplace it really helps to be near a downtown. Companies that are near the geographic center of their industry are more productive. Year by year, workers in cities see their wages grow faster than workers outside of cities because their skills grow faster. Inventors disproportionately cite ideas from others who live physically close to them.

For years, cities like Detroit built fancy towers and development projects in the hopes that this would revive the downtown core. But cities thrive because they host quality conversations, not because they have new buildings and convention centers.

The cities that have thrived over the past few decades tend to have high median temperatures in January (people like warm winters and other amenities). But even cold cities like Chicago can thrive if they attract college grads. As the number of college graduates in a metropolitan area increases by 10 percent, individuals’ earnings increase by 7.7. This applies even to the high school grads in the city because their productivity rises, too.

When you clump together different sorts of skilled people and force them to rub against one another, they create friction and instability, which leads to tension and creativity, which leads to small business growth. As Glaeser notes, cities that rely on big businesses wither. Those that incubate small ones grow.

All true, of course, but people can also "rub against one another" when not in a downtown. The creative people that Brooks and Glaeser and many others write about also find each other and become inventive in places like Silicon Valley and many other such venues outside the Northeast. Looking into the future, will we be building more 19th century-type downtowns or more Silicon Valley-type places? So it is not simply downtown vs "electronic groups".

Mobility

What kind of society do you wnt to live in? One that is stuck in old hierarchies or one where upward mobility is a realistic option? The answer is a no-brainer and I always enjoy studies that find that people at the top came from all sorts of backgrounds -- including all sorts of universities.

I expect that these days, attendance at an elite institution may be good for entree (cheap screening by employers), but quickly fades. After a while, it's "what have you done for me lately?" It would be great to have international (as well as intertemporal) comparisons, but the empirics are difficult.

Here is a study that looks at the evidence from Israel. (H/T Freakonomics) As hoped for, the data show that elite diplomas are good for entree, but you cannot fool the market for long; it (competition) is able to draw deeper conclusions after not too much time has elapsed.

Super Sunday and super buzz

Perhaps the strangest national holiday of the year occurs tomorrow. People with and without an interest in the game gather to watch the spectacle -- including, of course, the commercials.

Time to wheel out the old John Wanamaker worry re "Half the money I spend on advertising is wasted; the trouble is I don't know which half."

But just as there is an advertising industry, there is a related industry hard at work to resolve Wanamaker's problem. Social media can be used to create a sea of buzz, as this piece in yesterday's NY Times describes.

And here is a WSJ blog that describes a project to plumb that newly discovered ocean. What would the old man say now?

New data, old story

Today's WSJ includes "American Idle: On the Road" which describes the latest Texas Transportation Institute report on urban traffic congestion. Same old story. If price is not allowed to ration, crowding will. And if policy makers insist on using highway money for expensive rail transit and high-occupancy lane projects, we get worse crowding. (I know; it's supposed to work the other way.)

Traffic conditions are not even worse than TTI reports because land markets do what they are supposed to (when allowed) and prompt origins and destinations to co-locate and disperse from crowded centers.

My friends and I just presented this paper at the Transportation Research Board meetings in Washington DC. We tested the effects of tolling Los Angeles' freeways in the peak hours (we tested 10 cents and 30 cents per mile). It's a simulation on a real network and many substitutions occur. As expected, peak-hour freeway speeds increase, some people switch to surface streets and that traffic slows, some switch to off-peak hours and some (very few) travel less. And politicians take in a lot of money! That's for the 10-cent toll. The 30-cent toll overloads the surface streets. Many other options can be tested, including only tolling some of the freeways.

Planners have voiced concern that tolling the freeways would overload surface streets. There is probably a "sweet spot" that can easily be found. We also plan to look for effects on freight travel as well as travel by income groups.

Antidote to the scourge

Separation of church and state is a good thing. Separation of Wall Street and state would be nice as would be separation of race and state. I could name others. It's too bad that the U.S. Census still counts people by race, although it's a good that they finally allow respondents to check more than one box.

Most of us have limited knowledge of the racial/ethnic mix among our many ancestors. But if we want to self-define, fine.

Today's NY Times includes "Black? White? Asian? More Young Americans Choose All of the Above". The piece cites a recent Pew Research Center survey which found that "Nearly 9 percent of all marriages in the U.S. in 2009 were interracial or interethnic, more than double the percentage fo 30 years ago." With any luck, it will keep spreading and doubling.

Tribalism is a scourge. Look at a map of the world's conflicts, now and in years past. They are usually about racial or ethnic differences. Inter-marriage is probably the best way to dispose of them.

Not "smart"

The President feels that it's a safe call to say that we should invest more in infrastructure. And he's the man who likes to say that the spending should be "smart". And the smart set typically nods approvingly.

But we spend a lot on infrastructure and we do not get good returns because we spend "stupid." The last ten years for wich we have data on Federal highway disbursements (see Table 1090) tell the story. These include revenue sharing with state and local governments, much of it matched with local funds, and show a 59 percent increase. Over the same period, total vehicle miles traveled grew by 11 percent (same link, Table 1100).

Some of the discrepancy is due to the commitment to add high-occupancy vehile (HOV) lanes to encourage carpooling. But carpooling is down.

Democratization of hubris

Tyler Cowen's The Great Stagnation argues that we (Americans) have gathered the low-hanging fruit (free land, the easy technological breakthroughs and educating the undeducated) and are now in for a slowdown. Moreover, our measurements are badly flawed and often misleading. To be sure, all the econ textbooks enumerate the many flaws and limits of GDP accounting and measurement is always tricky. But the problem of misimpressions will only get worse. We got a lot of very cool stuff for free on the internet, but this does not show up in GDP.

But GDP is not a plausible bottom line. How about long life?Cowen discusses health care and shows that we Americans spend a lot but do not get commensurate payoffs. Longevity is up, but our numbers do not match our expenditures.

But this is also a measurement artifact. National data aggregate over all the people who smoke, take drugs, avoid exercise and consume all the wrong foods. The actual payoff from modern medical science is that we can now choose the possibility of greater longevity than our ancestor could. Every life expectancy calculator asks all the obvious lifestyle questions.

The real payoff to Cowen's argument comes near the end of his book when he writes about the current economic woes and asks how so many mistakes could have been made by so many people. His answer: "We thought we were richer then we were." If so, it's best to take his story seriously. On the heels of the democratization of lxury and the democratization of temptation there is now the democratization of hubris.

Teaching moments

Voyeurism was never like this. There is reality-TV (dubbed "human zoo" by some), YouTube and its many imitators and all of the cameras that come with our cell phones. There is also tourism. Americans have trooped to old Europe for years and treat it pretty much as a museum. Eco-tourism is similar and, again, offers the charm of peeking at "the natives." Want to see farmers farm the old-fashioned way? Travel to a country where it is not yet mechanized.

So it's almost inevitable that we get stories like this one in today's WSJ: "Japan's Belching Smokestacks Draw Industrial-Strength Sightseers ... Kojo Moe Fans are Infatuated By Factories; Night Cruise Past Steel Plants."

How else to explain to the kids that grandpa (and perhaps grandma) used to toil in one of these (though not as modern) eons ago?

Uber-mom and Tiger-mom

Here is David Brooks writing about cognition in the New Yorker. Here he is podcasting on same topic at a recent Aspen Institute appearance.

As usual, Brooks delivers with a sense of humor. In this case, it's about an uber-mom set on getting her kids into Harvard but clueless about the emotional intelligence the kids will need to succeed. Just when we have learned how to game college admissions, we are also learning that getting in and out of an elite school by itself is not enough.

The teachers that each of us remember most fondly and that have left a lasting impression are the ones with whom we had formed an emotional connection. There are all sorts of emotional connections, but whatever they are, they are a necessary condition for lasting impacts.

Does Tiger Mom know anything about this?

Various

Mark Perry says that "Shale Gas Will Rock the World". Julian Simon, wherever he is, is probably smiling.

Peak-oil people may not be listening, but peak-natural gas people apparently have a 250-year cushion.

Aidwatch reports on the possibility of a Paul Romer-type Charter City in Honduras. Why not in one of the U.S. states?

Thomas Garrett and Russel Rhine show that those U.S. states that rank highest on the economic freedom scale experience best job growth.

The economic-recovery-via-green-industrial-policy dream takes a hit (as expected). Two-fers are hard to find anyway.

Modernity

We celebrate the democratization of luxury, but Daniel Akst (We Have Met the Enemy: Self-Control in an Age of Excess) reminds us of its evil twin, the democratization of temptation. Battling one's demons has always been a problem, but the fact that so much is now "cheaper, easier and faster" means more demons for more people.

Akst quotes Joseph Schumpeter: "The capitalist achievement does not typically consist of providing more silk stockings for queens, but in bringing them within the reach of factory girls in return for steadily decreasing amounts of effort." That's the upside. The downside is that cheap calories (and microwave ovens), widely available sex and drugs along with the rejection of old taboos and self-control fatigue account for a million pre-mature deaths in the U.S, each year.

But that's not all. Shameless borrowing and re-financing (along with cheap credit) gave us the housing bubble and the financial collapse of 2008.

The book is a lively read that takes us through the various pre-commitment devices that people have invented to try to manage themselves. There are many funny passages about tatoos of the names of spouses to deter infidelities -- and the predictable and expensive tatoo removals, of which there are about 100,000 each year.

There are surely controversies that the author skirts (the number of deaths caused by second-hand smoke). Greater opportunities could as well prompt greater effort (deferred consumption) by some as it prompts greater indulgence by others.

Modernity is always a two-edged sword, but I'll gladly take it.

Never like this

The Economist (Jan 15) includes "Logoland: Why consumers balk at companies' efforts to rebrand themselves."

The story mentions various "electronic lynch mobs" that form when loyal consumers take on a re-branding they don't want. Gap, Tropicana and the UK Royal Mail had to back off when they tried on new logos. The article mentions that "people have a passionate attachment to some brands."

Branding allows buyers to reduce risk and sellers to charge premium prices. Both sides come out ahead. What is so interesting is the sensitivities and passions involved. Branding was always high risk-high return, but never like this.

This morning's WSJ mentions that the Tunisian revolt took off when a grisly protest self-immolation circulated through Tunisia via Facebook. Regime change was never like this.

Public spaces in America

Dr. E. Fuller Torrey has been writing about the shameful way in which we handle the problem of untreated schizophrenics for many years. Here he is again in light of the Tucson shootings.

A 2008 study out of the University of Pennsylvania that examined murders committed in Indiana between 1990 and 2002 found that approximately 10% of the murders were committed by individuals with serious mental illnesses. There are about 16,000 homicides a year in this country. Using the Indiana study as a guide, roughly 1,600 of them are likely committed by people with serious mental illnesses.

I am fortunate to live in one of LA's nice areas. And I walk every day. And I encounter at least one of the pathetic figures that Torrey cites, each and every day.

I cannot count how many pieces I have seen about plans for better downtowns and better public spaces. But all of this well-meaning talk manages to dodge the most important aspect. Many of the public spaces that we do have are blighted by people who we (our strange mix of policies and attitudes) have dumped onto the streets.

Here is the latest on Eli Broad's generous gift to LA, for a new downtown contemporary arts museum (H/T Ross Selvidge). This is cheered all around as people see it as another big step in downtown revitalization. But downtown is still not a place where you want to go for long walks at night. All of the folks who will show up for major openings via chauffeured limos will not notice.

The idea of public spaces is appealing, but putting up new and glamorous structures while looking right past the obvious tragedies is pointless.

Scary thought

Today's WSJ includes two pieces that are seemingly unrelated, but I wonder. First, Holman Jenkins writes about the Tucson shootings and others like it. " ... Pima officials are likely to be haunted by the findings of the panel investigating the Virginia Tech massacre. That investigation found that state officials had booted ample opportunity under the law to corral a dangerous person. They failed to even provide the simply accurate record that would have disqualified him from purchasing a gun." So none of the usual suspects (lax gun laws, talk radio, Sarah Palin, etc.) Just incompetence.

The piece right below Jenkins' is by Lenore Skenazy ("Eek! A Male!") which highlights what the author calls "worst-first thinking. ... Given the level of distrust, is it any wonder that, as the London Telegraph reported last month, the British Musicians' Union warned its members they are no longer to touch a child's fingers, even to position them correctly on the keys?"

We hear about zero-tolerance embarrassments all the time. Do we embrace zero-tolerance because we are simply incapable of anything less nutty? It's a scary thought.

UPDATE

Instead of facing the troubling truths cited by Jenkins, today's LA Times' front page (not on-line) expressed the hope that the President's speech on the shootings will "bring us together."

Travel tidbits

USC's Pengyu Zhu and I are having fun with results from the 2009 National Household Travel Survey (NHTS).

I had previously noted that in the earlier surveys (1990 and 2001), most peak-hour travel was for non-work purposes (including just the NHTS categories "family/personal" and "school/church" and "social/recreational"). This continued to be the case in 2009.

Looking at person-trips in just the Monday-Thursday peaks (Friday is slightly different), the two recent surveys (2001 and 2009) are remarkably consistent. The AM peak (6-9am) included 62 % nonwork trips and 38% worktrips in 2001, but the corresponding results for 2009 were 63% and 37%. For the PM-peak (4-7pm), the non-work shares were even greater, 76% in both years.

Peak-load road pricing anyone?

Travel per capita was down slightly from 2001. Was it the 2009 economic troubles? Was it the internet? We are testing.

Context

Critic David Denby (New Yorker, Jan. 10) writes about the re-realease of Claude Lanzmann's "Shoah". He asks why the re-release (on the documentary's 25-year anniversary) and answers by alluding to fact that we now have Timothy Snyder's Bloodlands which I have mentioned a couple of times.

The book provides context that many of us (Denby notes) had not really understood when we first viewed "Shoah" years ago. "... the Nazis and the Soviets may have been trying to destroy each other in the ferocious combat of 1941-1945, but, if one looks at the entire thirteen-year period [1933-1945] that he [Snyder] describes, the two totalitarian powers occasionally acted in a weird kind of concert, in which each side emboldened and enabled the other."

Having this story available, Denby suggests that we see Lanzmann's work again.

The beat goes on

Politicians in most of the states caved in to insurance companies and prohibited health insurance sales across state lines.

Politicians in Washington left this alone when they "reformed" health insurance last year.

This bad combo now comes home to roost and Blue Shield of California wants to raise rates by as much as 59% on some policies.

Bad policies create problems that often spawn more bad policies. But we now have two bad policies interacting. The "solution" that we hear about is pressure from HSS on Blue Shield and others to roll back/reconsider rate hikes.

They are not yet being pressed to stay in business. Not sure how hat would work. Perhaps a bail-out. But bail-outs are not exactly uncharted territory.

It now appears that there are more bad policies on the way.

Simple questions for a great mind

The recently deceased Tony Judt was a treasure. His Reappraisals is one of my favorite reads re 20th-century history and his many essays were always a treat, the kind of thing you flip to and read first.

The December 23, 2010, issue of the New York Review of Books contained Judt's "The Glory of the Rails," a wonderful sketch of rail travel and how it changed the post-1830s world. Quite predictably, this was followed by Judt's "Bring Back the Rails" (Jan 13). The author emphasizes what he sees as rail's key contribution to civil society.

But Judt never asks "at what cost?" And he does add this: "... it is possible (and in many places today actively under consideration) to imagine public policy mandating a steady reduction in the nonnecessary use of private cars and trucks."

Which trips are "nonnecessary"? And who does the "mandating"? I will never understand how and why well meaning and smart people can be so casual about other people's liberties and so naive about the economy about which they opine.

Both of Judt's essays are non-gated and worth reading.

Itches and forecasts

Forecasting is hard work, but we must do it. Here is an indispensible blog that compiles past forecasts that now look silly (H/T Virginia Postrel). And here is a post that looks at the 100 trends to look for in 2011 (H/T Mark Perry).

The Dec. 2010 Journal of Economic Literature includes "Designing Climate Mitigation Policy" (gated, here is the abstract). The article provides a wonderful survey of what we know and cites several 100-year climate change forecasts. But these come with incredibly wide uncertainties.

Do we embrace expensive policies in light of such uncertainties? I am OK with Bjorn Lomborg's conclusion, that for now it is best to invest in basic research re cleaner fuels.

This brings up an odd pairing of articles in the December Atlantic. "Dirty Coal, Clean Future" makes a couple of good points. (1) It's all about China; if China creates less carbon, then there would be a measurable difference in atmospheric accumulations; if project X or city Y in the U.S. "go green", it means very little without China; (2) "Clean coal" (gassify the stuff while it is still underground) is plausible and China leads in this technology.

But this report is paired with Kenneth Brower's "The Danger of Cosmic Genius" (gated). It's about Freeman Dyson: "How could someone as smart as Dyson be so dumb about the environment? The answer lies in his almost religious faith in the power of man and science to bring nature to heel."

Dumb? Religious? In today's NY Times, David Pogue frets over "Getting Over the Two-Year Itch". We tend to throw out our electronics every two years because they are so quickly dated.

Bigger than we think

It may have been Robert Nelson who wrote that private communities are where most Americans want more governance. This makes sense. Most Americans have most of their wealth tied up in their home. And there are all sorts of commons problems associated with neighborhood quality and neighborhood change. Hence the demand for rules. The rules amount to rights vs. protections trade offs that the market for homes in private communities is supposed to vet.

But the new layer of governance brings on a new layer of politics, which is never simple. Add to that the wave of foreclosures. And add to that a very slow foreclosure process. "You can get away with living for free for two years ..." The quote is from this WSJ piece re the extra difficulties at a Florida condo association with 15 percent of the owners behind on their association fees. The report describes all of the neighbor-vs-neighbor acrimony that results. The housing mess is bigger than we think.

No unmixed blessings

Maps that plot obesity levels by state circulate occasionally. Here is one that suggests it is the "red" states or even the more rural states that have the biggest problem.

Other investigators have been loooking for ways to link "urban sprawl" to levels of obesity. Here is a prominent example.

But the democratization of luxury has been widely noted, as has obesity among poorer Americans. Gorging oneself was once a sign of wealth proudly displayed. Bill Bryson offers detailed descriptions of the meals consumed by wealthy Victorians.

So what do we know? Wealth does not guarantee happiness -- but it beats being poor. Affluence does not guarantee long life or a slim and healthy appearance -- but it beats hunger. Who ever expected unmixed blessings?

UPDATE

I just found this.

Scrooges

"I gave at the office," was the punchline to many old jokes. It alluded to a quick way to respond to all of the "asks" that come our way, especially at holiday time.

But Arthur Brooks' research suggests that it may have a new meaning. Surveys show that the most outspoken redistributionists tend to be the stingiest when it comes to their own charitable giving. They do their "giving" via the taxes that they work hard to levy on the general population.

Brooks mentions all this in an op-ed in today's WSJ:

The most recent year that a large, nonpartisan survey asked people about both redistributive beliefs and charitable giving was 1996. That year, the General Social Survey (GSS) found that those who were against higher levels of government redistribution privately gave four times as much money, on average, as people who were in favor of redistribution. This is not all church-related giving; they also gave about 3.5 times as much to nonreligious causes. Anti-redistributionists gave more even after correcting for differences in income, age, religion and education.

There are surely generous and well-meaning people among all political and philosophical persuasions, but if you had to make a random draw you would get a more giving person from the group that is less likely to compel others to do the giving.

Arnold Kling has suggested using public moneys to prompt matches. There would be less "giving" via coercion and a greater opportunity for those with strong preferences for various causes to put their money where their mouth is. I can think of a few government programs that I would love to contribute less to.

In Sunday's post re "A Physicist Solves the City", I emphasized the parts that I liked (re Jane Jacobs complexity). But there are now about a half-million links to the article and some objections to this:

After two years of analysis, West and Bettencourt discovered that all of these urban variables could be described by a few exquisitely simple equations. For example, if they know the population of a metropolitan area in a given country, they can estimate, with approximately 85 percent accuracy, its average income and the dimensions of its sewer system. These are the laws, they say, that automatically emerge whenever people “agglomerate,” cramming themselves into apartment buildings and subway cars. It doesn’t matter if the place is Manhattan or Manhattan, Kan.: the urban patterns remain the same.

Yes, that kind of thing is jarring (and is hard to square with Jacobs complexity). I come back to this piece because I have just refereed a paper re urban densities which elaborates the importance of distinguishing between daytime and night time densities. The authors use population and employment densities (for areas in a major city abroad) to illustrate.

That's a fair point and I always worry that the areas chosen for analysis are small enough to be meaningful. Consider that average citywide densities for the top-ten U.S. cities in 2000 varied from 26,401 pop. per square mile (New York) to 2,808 (San Antonio).

But we can get smaller-area data (as in 100 PUMS areas for the Los Angeles metro area). We can then create population density deciles. The densest LA PUMAs had an average population density of 26,738 and an employment density of 9,425. The correlation among the densities of the PUMAs in the decile was 0.95. Areas that housed 10 percent of the population provided 9% of the region's jobs.

The next decile of densest population housed another 9% of the region's jobs. In fact, each of the ten population deciles housed near 10% of the region's jobs (the range was 8.6% to 11.1%). To be sure, the correlations between the densities within each decile varied considerably, from 0.06 to 0.98.

What does it mean? Within and between neighborhoods there is glorious Jacobs complexity. It is way beyond anyone's ability to predict with 85% accuracy.

New toy

Google's Ngram Viewer is the toy of the week. My first try came up this way.

"Urban sprawl" was trumped by "global warming" which was overtaken by "climate change" in the early 1990s. "Sustainability" beat both but could not keep up with "sustainable".

But where will they go? What's next? Ngram futures markets?

MORE

Here are five ways that have been used to describe cities and urban life.

"Solving" the cities

The NY Times Magazine's "A Physicist Solves the City" ends on this high note: "Cities can't be managed, and that's what keeps them so vibrant. They're just these insane masses of people, bumping into each other and maybe sharing an idea or two. It's the freedom of the city that keeps it alive."

Earlier in the piece (by Jonah Lehrer and citing the work of Geoffrey West), Jane Jacobs' insights are approvingly noted, as is West's description of life at his Santa Fe Institute, where smart folks are encouraged to seek "chance encounters."

Yes, it is all about the exchange of ideas (within and among our brains) and letting it all happen. As at the Santa Fe Institute, this means that we must find a way to stand back and let people find each other. But this is the hard part that is not addressed.

Instead the piece cites Pres Obama's White House Office of Urban Affairs and it's mission to develop a "policy agenda for urban America." Guess where that one will end up?

Tough hurdle

"Balance" and "imbalance" usually have no clear meaning, but are widely used. The same applies to "over" or "under" anything, as in "overcrowded", "overpopulated", etc. This is more rhetoric than anything else. The same applies to assertions of "too much choice" or "too many varieties".

This week's Economist includes "The tyranny of choice: You choose" which re-hashes research re the psychic costs of too many choices. "The average American supermarket now carries 48,750 items ... more than five times the number in 1975.

What is the proper number? Now one knows. Inventory size and composition (on the shelf) or in the warehouse are some of the toughest problems retailers face. So the proper number of anything can only be found via (drum roll) market competition. The Economist's coverage manages to include this:

Many of these options have improved life immeasurably in the rich world, and to a lesser extent in poorer parts. They are testimony to human ingenuity and innovation. Free choice is the basis on which markets work, driving competition and generating economic growth. It is the cornerstone of liberal democracy. The 20th century bears the scars of too many failed experiments in which people had no choice. But amid all the dizzying possibilities, a nagging question lurks: is so much extra choice unambiguously a good thing?

But "unambiguously a good thing" takes in very little of the known (modern) world.

Just in time for the holidays

I never knew about the Danish idea that soaking both feet in vodka can cause drunkeness. Scientists have now debunked this approach to merriment. Here is the LA Times' coverage --along with other science updates.

"Energy efficiency" again

David Owen writes about "The Efficiency Dilemma: What's the best way to use less energy?" (only abstract is not gated) in the current New Yorker. He notes that Stanley Jevons figured out many years ago that commodity-specific "efficiency" gains result in lower prices which prompt increased consumption. Many people simply call it the Law of Demand.

This suggests once more that "energy efficiency" is a dumb idea. It may make sense to engineers and even have some intuitive appeal, but all resources are scarce and markets are there to mediate the uncountable trade-offs that are prompted. Sounds simple, but it isn't.

There are enough problems when we discuss plain old efficiency (as in Pareto), but it gets crazy when we focus on efficiency with respect to just one commodity.

As long as we are unable or unwilling to price a commodity with substantial unpriced attributes, we will face the conundrum. But the climate change discussion involves a global commons. Serious global agreements re carbon taxes or cap-and-trade are unlikely. Local efforts (by individual states or cities) are mainly feel-good and (as Jevons reminded his readers) not likely to amount to anything.

The Owen piece is worth reading because he recounts how much extra energy his family has consumed over the years in the way of how many refrigerators and air conditioners they acquired over the years -- as energy (and other) prices fell. He also takes a stab at a verbal explanation of the general equilibrium effects.

Put "energy efficiency" into Google scholar and over 400,000 citations pop up. My own small sample showed that most of them take it seriously. "Sex" has only just over four times as many searches (in Google scholar).

Perceived densities?

In the current issue of Access, Eric Eidlin writes about "What Density Doesn't Tell Us About Sprawl."

Urban planners love to talk about density and sprawl. Trouble is that both are hard to define. Eidlin cites recent work on "perceived" density. But this is really a weighted average of densities across a metro area's small spatial units (he likes census tracts).

I have previously blogged about problems with the density idea. Creative people are apparently comfortable in low-density Silicon Valley as well as in high-density Manhattan. How can that be? It is the whole package that matters. I am not sure that the whole package can be assessed via the cited "perceived" density measure, but if analysts insist on looking for simple ways to characterize whole metropolitan areas, then let them. In this case, I worry that calculating the weighted averages of Silicon Valley vs Manhattan densities will not provide much in the way of new insight.

First stump of a rump system

Plans for high-speed rail are moving in the predictable direction: all pork and no tangible benefits. The Economist has this update which includes Pres Obama's model of travel demand.

“IMAGINE,” Barack Obama instructed Americans last year, “boarding a train in the centre of a city. No racing to an airport and across a terminal, no delays, no sitting on the tarmac, no lost luggage, no taking off your shoes. Imagine whisking through towns at speeds over 100 miles an hour, walking only a few steps to public transportation, and ending up just blocks from your destination. Imagine what a great project that would be, to rebuild America.”

This has always been the way large bets have been placed with other people's money.

Keynesian stimulus boosters either deny the public choice concern that negative NPV projects will be funded or they do not care as long as funds are spent.

Wendell Cox notes that we will probably end up with a useless rump system. The Corcoran-to-Borden stump will be first at a cost of unknown billions. Even boosters admit to just under $5 billion. Readers are welcome to look up these places and/or find them on a map.

A nearly useless rump rail transit system is what LA got. Pieces have been running for just over 20 years, but ridership is still miniscule and traffic impacts are zero.

The really interesting thing is that very few people know or care.

UPDATE

The Los Angeles MTA has just announced further bus service cutbacks. No reports of shutting down their high-cost rail lines.

Off topic

I rarely blog about movies, but I keep a list of my favorites here.

But Inheritance is special. Synopses and reviews are at the link. Suffice it to say that the documentary depicts the recent meeting between Amon Goeth's (the concentration camp commander portrayed by Ralph Fiennes in Schindler's List) daughter and one of the survivors, who was also a slave/servant in Goeth's household, and who was eventually rescued by Schindler himself.

Both women are unbelievably strong.

I had recently blogged about Bloodlands here. The book takes us through Europe's 20th-century killing fields and is profoundly jarring. The book involves millions and the movie is centered on the meeting of two people (actually three because the survivor brings her adult daughter along). In my view, the book is indispensible. But I now think that the film is too.

Help is on the way

"South LA Still Being Protected Against Fast Food". No, it's not The Onion.

This ordinance invokes land use planning which seemingly can be enlisted for a variety of politically correct efforts. Note that "Mixed-use developments are exempt from the ban." How about organic fast food?

In the imaginations of LA leaders, mixed-use fosters walking and bicycling and even transit use (it would add to density). But would they actually be adding to auto traffic by prompting longer drives for a fast-food fix? Social engineering is very hard work.

There is Nanny State stuff in the news almost every day. You can laugh or cry, but the statists can always line up a litany of grievances to get a majority.

"Laptopistan"

Some years ago, Ray Oldenburg published The Great Good Place and also Celebrating the Third Place. He was celebrating neighborhood hangouts (including general stores, bars. beauty parlors, etc.) where folks meet and entertain each other. Oldenburg was also worrying about the demise of these places.

Urban economists love to celebrate cities as places where ideas are exchanged and spawned. "City lights" are an important element in entrepreneurial discovery and economic development.

What to make of yesterday's NY Times report on "Destination Laptopistan"? The piece mentions entrepreneurial activity, but also notes that local etiquette limits the sort of chat that Oldenburg prized.

The internet changes everything -- we hear. We can retreat to cyberspace to work, to think, to be entertained and even communicate. And we can do this alone or in a public space. Is Laptopistan a Great Good Place? Does it suggest that we are Bowling Alone? Starbucks and many wannabees are great success stories because the founders and backers had sensed that most people do not want to be alone with their laptop. As I so often say, there are many manifestations of "density."

The other unemployment

Unemployment benefits are in the news, but we hear much less about other ways that people find to support themselves when not working. Here is a comparison (from this week's Economist) of various countries re how much they spend on disability, sickness and unemployment benefits. For the U.S., unemployment compensation is far smaller than the other two. There are similar patterns in most of the other countries. The comparisons of proportions allocated to the three programs between countries are a bit misleading because the U.S. has the largest defense budget. As a percent of total spending, we are tied with the UK and Australia (Denmark is close) in spite of our large defense budget.

Here (see Figure 1) are trend data for just the U.S. Unemployment compensation is cyclical, but disability payments are on a long-term upward trend.

What animates U.S. politics?

Here is a nice discussion by William Voegeli re whether class warfare animates U.S. politics. The author says "no". It did not fly in the recent election.

This morning's WSJ includes "In California, a Road to Recovery Stirs Unrest ... State Engineers Sue Over a Highway to Golden Gate Bridge, Protesting Foreign Investors." California's roads are in awful shape and the state's leaders have redirected highway funds to all the wrong projects. What to do? Attract private investors? Attract capital to California that otherwise would not come here? Not exactly.

What does animate politics? My students and I owe a lot to Bruce Yandle because Baptists and Bootleggers nicely illustrates public choice economics. But are either of these interest groups native or foreign? It seemingly makes a big difference.

Another mandate? Another gadget?

I recently blogged re the reports of the Cameron government's interest in compiling data on the happiness of Brits. This week's Economist asks "Should governments pursue happiness rather than economic growth?"

But are they any good at either one?

I have never been convinced that the "happiness" or the "nudge" research were good ideas. Happiness will always be hard to define and a moving target. Even the non bi-polars have their mood swings. And when I picture the cast of characters that are busy trying to improve our lives, whether in Washington or Sacramento or Los Angeles (my case), I do not want them nudging me. In fact, I want them to not even entertain the thought.

But Bruno Frey and Alois Stutzer claim to square the circle here. Their wrap-up is copied below:

Happiness research and public choice can both benefit from taking each other’s key insights into account. Improvements in the measurement of individual welfare allow us to confront
public choice hypotheses in a new way with empirical evidence. This has been illustrated for basic assumptions on the partisan model of political business cycles, theories of government size and rents in the public bureaucracy.

The huge progress in the measurement of individual welfare makes it tempting to pursue the old dream of maximizing aggregate happiness as a social welfare function. Improvements in individual welfare are claimed to be directly measurable, and politics is seen as following advice and implementing it with suitable interventions in the political process.

Based on public choice analysis, we argue that the appropriate approach is not to maximize aggregate happiness directly by seeking to improve outcomes through direct interventions. Rather, we see the role of happiness research as seeking to improve the nature of the political processes. Individuals should have more opportunity of advancing what constitutes their idea of the good life, both individually and collectively. They should bemade aware that different issues require different measures and indicators of well-being. Happiness research should remain open to constructing a number of different indicators, reflecting well-being according to different aspects of life. Plurality is a necessary consequence of the procedural view outlined. This is in stark contrast to the maximization approach requiring one single objective. From a constitutional standpoint, we conclude that people are best served with comparative institutional analyses on subjective well-being.

I'm not sure I buy it. For better or worse, I walk around with mental images of the cast of characters. Do we want them to have yet another mandate and yet another research gadget?

Not so simple

There is the "creative" city, the "consumer" city, the "mega-city", and who knows how many others. Joel Kotkin writes about the "efficient" city in today's WSJ.

While Kotkin makes international comparisons, he singles out the "big gainers" for the U.S., places with 100,000-2.5 million residents. That's a wide range and whenever "cities" are discussed, many analysts refer to metropolitan areas. I prefer the "urbanized areas" (UZAs) when looking at the U.S. case. These do not follow political boundaries, but represent more functional units. Their data are, however, only reported for the census year.

Matt Kahn comments on Kotkin's piece here. He also evokes "mellow" and "superstar" cities.

What do we know? "Cities" compete and must adapt to survive. They also specialize to varying degrees. They also include a complex mix of different spatial enclaves.

If we collect data for national aggregates, we expect that national economic growth benefits from a well-performing system of cities -- which can include many of the types listed above. And they cannot all be above average. They cannot all belong to the class of cities that performs best in some window of time. I have already commented on the amazing stability-at-the-top of city-size rankings.

As mentioned in my last post, UZA data are available for the census years, 1950-2000. No idea when we will get 2010.

For each of the decades, population size and subsequent population growth are negatively associated -- as expected. Looking at just the top 50 UZAs (in 1950), here are the five size-growth associations: 1950 size vs 50-60 growth, 1960 size vs 60-70 growth, etc.: -0.26, -0.27, -0.25, -0.14, -0.07. The effect of size on subsequent growth had been falling.

Using the 2.5 million cut-off, the sample gives us the top 15 (San Diego - New York; 2.67 to 17.8 million in 2000) and the smaller 35 (Birmingham - Minnesota; 0.66 to 2.39 million. The average 1990-2000 growth for the bigger group was 21% vs.19% for the smaller group. For that decade, bigness was not a handicap.

Prompts from near and far

Most U.S. data for urban areas locks us into "central city" vs. "suburbs" categories. Not great, but that's the way it is. Do these places perform as complements or substitutes? The central city "exploitation" by their suburbs was a staple of some of the early literature, but Richard Voith showed us in 1992 that complementarity dominated -- for 28 MSAs of the Northeast and North-central census regions. Though there were negative growth correlations for populations in the 1960s, they were positive for the 1970s and 1980s.

Robin Leichenko published an analysis for the 1970s, 1980s and 1990s and also found a complex pattern but leaned to complementarity.

I had previously mentioned that Wendell Cox pointed me to population data that go back to the 1950s. A sample of twenty-four areas across the U.S. is available if we want populations for the urbanized areas, their core cities and the remaining suburbs.

What were the inter-decadel population growth correlations?

The positives have it, but the associations get weaker over time. Growth prompts now come from far and wide.

"Needs vs. wants"

Today's LA Times includes an op-ed by Milken Institute researchers James Barth, Tong Li and Rick Palacios Jr., titled "McMansion economics ... The typical American home has grown about 40% larger over the last 30 years. Downsizing houses would free up income for education and healthcare."

Some of this is well known. Tax and other policies have for years favored home ownership. But the authors do not mention this. Instead they discuss American's "love affair with McMansions." They want the love re-directed towards education, cultural enrichment, infrastructure, etc. They do not look for new policy measures. "It only involves individuals rethinking their needs versus their wants."

What a thin reed! Some of us have a tough time pinning down needs vs. wants -- especially when we consider all of the margins of consumption. We only want policy to be neutral so that we can enjoy the freedom to choose.

Third way?

I was just going to call reader's attention to a nice Buttonwood (in this week's Economist) summary of Austrian business cycle theory, in contrast to the popular deference to either-or Keynesian vs monetarist explanations of the current crisis. In the nick of time, I noticed that David Theroux has already done this. So, best to look at Buttonwood via Theroux here.

Laugh or cry?

The 9/11 terrorists may have been stupid enough to think that disabling the Twin Towers would cripple American capitalism. But they were smart enough to realize that terror and the ensuing fears leavened with just enough bureaucratic-political stupidity would hand them a win. Our TSA and it's patrons provide pretty clear evidence.

Art Carden provides a lucid summary here.

Bob Poole has been arguing for saner measures for a long time here.

Reason.tv has chimed in with great commentary and video here and here.

Is our "cerebral" but recently "shellacked" President going to cede this one to the Tea Party too?

UPDATE

The WSJ's Eric Felten finishes his wonderful column on TSA nuttiness with this:

The old saw is that a conservative is a liberal who got mugged. Tom Wolfe riffed that "a liberal is a conservative who has been arrested." We might add one more variation: A libertarian is anyone whose wife and children have had their groins groped by the TSA.

Generosity

James Surowiecki notes that a majority of seniors voted Republican in the recent election. He finds some irony, but is not surprised, that seniors' attitude prompted by Obamacare was "I've got mine -- good luck getting yours." It's linked to today's economy. He cites Benjamin Friedman's The Moral Consequences of Economic Growth. People are less likely to be generous when times are bad. Yes, Social Security was enacted in bad times, but things were so bad then that social solidarity took over.

There is always more than one story. People not living in welfare states tend to be more generous. Here is a cross-country comparison of charitable giving. Daniel Hannan cites US-UK comparisons of giving that are even more stark.

I hope that the evolution of the US welfare state has not pushed us to the point where we are less generous with others.

Livability

Readers of this blog know my thoughts. Alan Pisarksi says it best. Read it and pass it on.

What would George Orwell say?

It appears that the Cameron government is about to launch a UK happiness survey.

Perhaps it might be the better to Nudge the Brits with.

Many people can lead long and perplexed lives in search of elsuive happiness. But what do they know? I can easily see that policy makers with a new toy will be able to argue for a host of new policies (or excuses for failed policies) with the survey results in their pockets.

Happy to see that the Brits are ahead of us on this one.

The long run

Bjorn Lomborg argues that the wise thing to do about global warming is to accelerate research on alternative energy sources.

World-wide public spending on research and development for clean energy technologies is a paltry $2 billion a year. Increasing this to $100 billion a year could be a game-changer. Not only would it be almost twice as cheap as the $180 billion a year cost of fully implementing Kyoto, but the effect of this kind of spending would be hundreds of times greater. But this should not be our only response to global warming. We should also invest considerably more in adaptation to global warming's effects, and research geo-engineering technologies as a potential backstop.

George Gilder suggests that market forces have been and are pushing us towards cleaner energy.

The irony is that a century-long trend of advance in conventional "non-renewable" energy—from wood to oil to natural gas and nuclear—has already wrought a roughly 60% drop in carbon emissions per watt. Thus the long-term California targets might well be achieved globally in the normal course of technological advance. The obvious next step is aggressive exploitation of the trillions of cubic feet of low-carbon natural gas discovered over the last two years, essentially ending the U.S. energy crisis.

But most people have fallen for the "green jobs" idea. We get economic recovery and environmental improvement as a two-fer. Californians just elected Jerry Brown on such a platfrom -- and approved the State's AB 32 by a wide margin.

But picking winners is a bad idea. (1) It is politicized; (2) it assumes that the we have knowledge we do not have; (3) it relies on impossible long run forecasts; (4) it embraces autarky.

Re the latter, 20 or so years ago, some smart people suggested that Los Angeles not only go with the switch to rail transit use, but that we also build the trains in Southern California!

Where are they now?

They now want us to produce green energy and "green jobs" in California. What the hell. It gets votes and contracts. Where will they be in 20 years? I have no idea. Long run forecasts are for the smart set.

A mountain to climb

For those of use not seeking political office, balancing the federal budget using this NY Times interactive site is quick and easy -- and fun.

Trouble is that there are not enough options at the site. But perhaps the Times' effort will spawn similar gadgets. I would add this: "no payments or credits to anyone above the poverty line." There are, of course, many other possibilities. But making a game out of it (even an app?) makes it slightly less abstract and may (perhaps) involve more people in serious thought about the mountain to climb.

UPDATE

Here is a better "modest proposal".

UPDATE

According to this writer (and many others), all of this deficit cutting is inappropriate in a weak economy. Yes, if you buy into the failure-of-aggregate-demand story. But what if radical deficit cutting restores confidence in the U.S. economy? In my view, to ask the question is practically to answer it.

What will they do?

I have no idea how people who have shoehorned themselves into endorsing federal support for the Atlanta streetcar -- or a thousand similar proposals -- will live with the principles articulated by the fiscal commission, But they would not be where they are if they had not mastered the art of political rhetoric, whereby they are able get away with precisely this sort of sleight of hand.

It does take two to tango. The politician has to be flashy (charismatic?) and shameless. The electorate has to be disengaged to the point where they are not bothered by inconsistent positions. But these are the people we have.

So these are interesting times. We will do well if I am completely off base. I hope so.

Walter Isard

Walter Isard, who passed away the other day, was my mentor at U. of Penn. and an original. Like many others, I was smitten by his Location and Space-Economy book (the one published in the late 1940s, I believe; oops, see NY Times obit, below). He made the case that space, distance and location had been overlooked by most of economics and that this was no small matter. I had an interest in cities and urbanization and Isard's insights were an inspiration. This is why I applied to his program.

Oddly, urban economics was not emphasized -- even though Bill Alonso's book was based on the first dissertation out of Penn's Regional Science program. But Isard was an enthusiastic big-tent guy and would never exclude anything from his vision of Regional Science. It was the 1960s and most social scientists were optimistic. Isard was eager to develop tools of analysis that sophisticated regional planners and policy makers could utilize.

I do not know how long Walter held this view. But he was an enthusiast.

I now lean to the view that cities are spontaneous orders. The New Urbanist view that they are the purview of planners, it seems to me, is a Fatal Conceit. Sandy Ikeda and I have a paper (forthcoming) that speculates on how the insights of Jane Jacobs and F.A. Hayek mesh in this regard. But there are many loose ends. Randall Holcombe has an insightful paper on these problems wherein he suggests a division of labor between markets and planners. The latter do the best infrastructure planning they can and let land markets do what they do best.

The problem is that infrastructure planning is usually anchored to some view of what the land use arrangements are or will be. This is OK in a static world, but very difficult in a dynamic context. Urban designers can invoke a dozen cliches (put office high rise near transit station), but these fall way short. Real life complexity is another galaxy.

English speakers learn about a city by consulting a city map. In many other languages, these are referred to as the "city plan". People get a document that can be construed as a plan only in a static world.

UPDATE

Here is more abut Walter Isard. A full life.

Divided government

In "Divided we thrive", Jonathan Rauch notes that there has been divided government in Washington DC for 21 of the past 30 years. He develops an explanation that goes back to the realignment of the two parties. With the demise of the Southern Democrats, the parties became more ideological and less able to compromise. "... Democrats, when in total control, have little choice but to govern from the left." It can work the other way too and that's no way to govern the country and stay in office.

But there is also the old problem that power corrupts. And hubris is a turn-off. And overreach follows.

Just the other day, Allan Meltzer wrote about Fed policy and entered the fray on what Milton Friedman would say. He also made his case for the best alternative policy. Uncertainty is the biggest problem. "I want a moratorium on new regulations and on tax rates."

Is Rauch's story the way to Meltzer's policy? Does this explain 21 for 30? Perhaps.

Poison

Is there good reason to be optimistic about moral progress? In Guns, Germs and Steel, Jared Diamond retells his conversation with a Guinean native who actually began life in the Stone Age. His companion tells Diamond that if he encountered anyone not from his tribe, the first decision he would have to make was whether to try and kill the stranger or not. Has tribalism receded in our day?

We are now in Germany and in this lifetime, it was policy to murder me an many like me for tribal reasons. Germany has seemingly changed (and to be fair, Germans, unlike many others, acknowledge their crimes). I mentioned Timothy Snyder's Bloodlands in my Oct 27 post. Bryan Caplan quotes one of many chilling passages from the book that shows how easily tribalism can trump normal civility. This echoes Daniel Goldhagen's work. Snyder recounts mass murder orchestrated by Stalin as well as by Hitler.

Snyder shows how class warfare as well as race warfare each provided a banner for under which mass murder could occur. While not in the same league, U.S. elites still toy with too much of each. I think that each is poison.

So is there moral progress? I do not know. I enjoyed Robert Wright's The Evolution of God. Kwame Anthony Appiah's The Honor Code is next on my list. It will take quite a bit to get over Bloodlands.

Tuesday and Paris

When Parisians hit the streets to protest working to age 62, it was noticeable that many of the protestors were young. One young man told the TV interviewer that if this change is allowed, there may be no retirement benefits when he reaches retirement. One would think that the opposite is true.

Traveling and speaking with the occasional European, it's easy to get the impression that when members of the middle class do not expect upward mobility in their lifetime, then a future via welfare state benefits is what is left. And as long as Americans do bet on upward mobility in their lifetime, they have less interest in welfare state benefits.

How to interpret the results of Tuesday's election? The welfare state promises of the 2008 majority were just not that attractive. Benefits via upward mobility is still idea favored by most Americans.

It is fashionable to scoff at upward mobility as a realistic prospect. But what do we know? Immigrants routinely place big bets on the prospect of personal advance via their own efforts. Tuesday's results suggest that a majority of voters feel the same way.

No surprise

Housing in the U.S. has been politicized for many years. The recent boom-bust were inevitably touched by politics. The question of exactly how much of the "perfect storm" (which and how many weather fronts) originated in Washington DC is a difficult question that will occupy researchers for many years. Here is new evidence of the political roots of subprime lending.

There are still many people who sincerely believe that the consequences of growing political involvement are benign -- or even progressive (as in progressive redistribution). Many of the same folks also bemoan increasing inequality. I have no idea how they square that circle. But when several trillion dollars of GDP are politicized, there will be consequences -- and it is not a good bet that the resulting consequences will be either benign or progressive.

Young and crazy

The question of whether striving and acquiring make us happy will probably always be a teaser and conversation starter. But Virginia Postrel suggests that the attractions of the trappings that go with success are worthy because they incite the actions that go with progress.

What about procreation? In past times, natural lust was thought to take care of that. But ever since that link has become an option, we can ask about the priors that would-be parents start with. Perhaps crazy optimism among the young is a good thing. Julian Simon would probably agree. Pessimism and caution in old age also seem to be useful adaptations. It is pessimism among the young that has no easy explanation -- and that is seemingly rare.