Last Saturday, the NY Times lede was "Doctor Shortage Likely to Worsen With Health Law." Yes, if demand expands, something has to give. The accompanying story is standard fare and reports that, "The Obama administration has sought to ease the shortage." Thirty years ago, "manpower planning" was all the rage for people unfamiliar with labor markets.
Today's LA Times' lede is more promising. "In-store clinics look to be a remedy for health care influx." The phenomenon is hard to miss. The story quotes skeptical doctors but does mention that, "These in-store clinics have performed well thus far. Studies by Rand found that these clinics provide care at costs that are 30% to 40% less than similar care provided at physician's office and that the care for routine illness was of similar quality."
Those lucky enough to have gold-plated medical insurance have choices, but many others do not. For the latter group, the likes of CVS, Target and even the evil WalMart may be a godsend.
Monday, July 30, 2012
Saturday, July 28, 2012
Let them be
Richard Florida kindly sites "Does Density Matter?" by Sandy Ikeda and myself in today's WSJ. I have cited our story a few times on this blog. It is Ch 22 in the Handbook of Creative Cities.
Sandy and I each had doubts about a "the more density, the better" view -- which we have encountered many times. The more nuanced "Jacobs density" is Sandy's phrasing, but it captures our "let a hundred flowers bloom" story.
We all want economic growth which requires human capital to be creative and inventive. That occurs when and where people can form the networks that work for best for them. Beyond that, it is very hard to specify the "best" settings. That's what land markets a for. Until we somehow become much wiser, let them be.
ADDED
Wendell Cox has more re the density confusion.
Sandy and I each had doubts about a "the more density, the better" view -- which we have encountered many times. The more nuanced "Jacobs density" is Sandy's phrasing, but it captures our "let a hundred flowers bloom" story.
We all want economic growth which requires human capital to be creative and inventive. That occurs when and where people can form the networks that work for best for them. Beyond that, it is very hard to specify the "best" settings. That's what land markets a for. Until we somehow become much wiser, let them be.
ADDED
Wendell Cox has more re the density confusion.
Thursday, July 26, 2012
Read this first
When there is rapid asset price appreciation, many people (including bankers, politicians, and many others) are tempted to leverage and buy into the boom. This helps to prolong the boom. But nothing is forever and asset prices reverse ("bubble" pops) then people are eager to de-leverage and that prolongs the bust.
That is the textbook "credit cycle" which often becomes a bigger "business cycle". That's the dry textbook version. Michael Lewis has a much better name. He prefers to call it "Boomerang".
Lewis is obviously a great writer, keen observer and very smart guy. He makes it his business to go to Greece, Iceland, Ireland, Germany and California to see and hear the real players. He calls it "a new opportunity for travel: financial-disaster tourism." In each case, he manages to tease out delightful insights (and occasional confessions). In some cases, there are also terrific character profiles. His Santa Monica bike ride with Arnold Schwarzenegger is worth the price of admission alone.
That is the textbook "credit cycle" which often becomes a bigger "business cycle". That's the dry textbook version. Michael Lewis has a much better name. He prefers to call it "Boomerang".
Lewis is obviously a great writer, keen observer and very smart guy. He makes it his business to go to Greece, Iceland, Ireland, Germany and California to see and hear the real players. He calls it "a new opportunity for travel: financial-disaster tourism." In each case, he manages to tease out delightful insights (and occasional confessions). In some cases, there are also terrific character profiles. His Santa Monica bike ride with Arnold Schwarzenegger is worth the price of admission alone.
Wednesday, July 25, 2012
Tough questions
It is sad but true that parking in U.S. cities is badly managed and so is public transit. When you put them together, the difficulties multiply.
Here is the Seattle story of parking poachers (h/t Patrick Sullivan). Put underpriced parking next to underused trains and planners have to start looking at parking rate hikes to balance the two. But that might turn away some transit riders which would further reduce train use.
The story in Denver is slightly different. Here is the WSJ's report on how and why park-and-ride lots have taken up real estate that could be used for transit-oriented development. Which is better for transit use? Very tough question.
I attended a conference some years ago (cannot recall which one) where a speaker noted that one of the Northwestern states or cities or counties (again, not sure) had welcoming poster that included a picture of a bear snaring a salmon out of a mountain stream. The speaker wondered which side an environmentalist would be on. Also a very tough question.
Here is the Seattle story of parking poachers (h/t Patrick Sullivan). Put underpriced parking next to underused trains and planners have to start looking at parking rate hikes to balance the two. But that might turn away some transit riders which would further reduce train use.
The story in Denver is slightly different. Here is the WSJ's report on how and why park-and-ride lots have taken up real estate that could be used for transit-oriented development. Which is better for transit use? Very tough question.
I attended a conference some years ago (cannot recall which one) where a speaker noted that one of the Northwestern states or cities or counties (again, not sure) had welcoming poster that included a picture of a bear snaring a salmon out of a mountain stream. The speaker wondered which side an environmentalist would be on. Also a very tough question.
Monday, July 23, 2012
Update, please
This report argues that "the suburbs" are diverse. You bet. In 2010, just the U.S. major metropolitan area's suburbs included 167 million people, more than 54 Percent of the U.S. population. That is more people than included in most countries. I have argued many times that we have to move to more refined classifications. "The suburbs" has a 1940s-1950s ring to it.
Yesterday, the NY Times tried it's hand at describing Los Angeles' San Fernando Valley, "Los Angeles? The Valley is Way Cooler".
But at 260 square miles, there is not much of a neighborhood feel to describe. There are many neighborhoods which are radically different from each other. "Valley Girls" exist in bad movies and TV shows. "The Valley" may have been a place once upon a time. But that was almost 70 years ago.
Yesterday, the NY Times tried it's hand at describing Los Angeles' San Fernando Valley, "Los Angeles? The Valley is Way Cooler".
But at 260 square miles, there is not much of a neighborhood feel to describe. There are many neighborhoods which are radically different from each other. "Valley Girls" exist in bad movies and TV shows. "The Valley" may have been a place once upon a time. But that was almost 70 years ago.
Saturday, July 21, 2012
"You didn't build that"
Peggy Noonan comments on Pres Obama's "failure to communicate" when he wandered into "you did not build that." We expect more from a Barack Obama than we do from a standard issue politician. The president has fashioned and delivered some eloquent speeches; he is clearly intelligent and he is also a savvy politician.
But gaffes are interesting because they are revealing. The "You did not build that" discussion is revealing in two ways.
First, every one of us routinely depends on an uncountable number of supply chains of unfathomable complexity that involve large numbers of strangers. So it is clear that we rely on the cooperation of strangers, but they do all this voluntarily and on the basis of mutual benefit.
Second, this is not what the president seemed to have in mind. He wanted his listeners to appreciate what they get from their government. But that is not a mutual benefit deal. In the same newspaper as the Noonan column, there is David Wessel's "Everything You Ever Wanted to Know About The Budget* ... "But Were Afraid to Ask ... A lot of what government does is siphoning money from some and giving it to others ..." People building a business will have to strain to see all this as a source of "help" to them.
But gaffes are interesting because they are revealing. The "You did not build that" discussion is revealing in two ways.
First, every one of us routinely depends on an uncountable number of supply chains of unfathomable complexity that involve large numbers of strangers. So it is clear that we rely on the cooperation of strangers, but they do all this voluntarily and on the basis of mutual benefit.
Second, this is not what the president seemed to have in mind. He wanted his listeners to appreciate what they get from their government. But that is not a mutual benefit deal. In the same newspaper as the Noonan column, there is David Wessel's "Everything You Ever Wanted to Know About The Budget* ... "But Were Afraid to Ask ... A lot of what government does is siphoning money from some and giving it to others ..." People building a business will have to strain to see all this as a source of "help" to them.
Wednesday, July 18, 2012
Their game
The new iPhone is on the way and uncountable new apps and other electronic marvels come at us daily. This is somehow the same world in which our political leaders want to build more trains. Brookings' Cliff Winston takes up the story in today's WSJ ("Paving the Way for Driverless Cars ... Instead of focusing on an enormously expensive high-speed rail system, government should promote modern highway design.") Yes, they should. But who are we talking about?
One thing that politicos are pretty good at is reading the minds of their voters. That, after all, is their bread and butter. You don't have to go far before you encounter otherwise informed and thoughtful people who seriously believe that if we build enough of these projects, people will use them and the world will be a better place.
As I write this, Gov. Jerry Brown is at LA's Union Station to sign the funding bill. There will be smiles all around. Why? Because they know their game.
One thing that politicos are pretty good at is reading the minds of their voters. That, after all, is their bread and butter. You don't have to go far before you encounter otherwise informed and thoughtful people who seriously believe that if we build enough of these projects, people will use them and the world will be a better place.
As I write this, Gov. Jerry Brown is at LA's Union Station to sign the funding bill. There will be smiles all around. Why? Because they know their game.
Monday, July 16, 2012
"Sergei Brin is still in California"
It is not surprising that many city managers, city council people and other boosters dream of their city becoming the next Silicon Valley. In fact, there are quite a few places around the world that call themselves Technopolis. City planners still hope to find the magic when it comes to creating the best clusters of high-tech firms or shells for such. But there is no known way to bottle the magic.
Randy Holcombe (in Handbook of Creative Cities) says it best. "The idea of planning a creative city misses the whole point of creativity." (p. 403).
I had not heard about Skolkova, Russia, until I found "Can Russia create a new Silicon Valley ... Sergei Brin is still in California" in The Economist. No one knows how to create the culture that links original thinkers with innovate risk takers. And these are never stand-alone. They are part of a supply chain. The Economist piece rightly refers to a proper "ecosystem".
When Russians last tried this, they got the Boikonour Cosmodrome and Sputniks. But that venture helped to bankrupt the place.
Randy Holcombe (in Handbook of Creative Cities) says it best. "The idea of planning a creative city misses the whole point of creativity." (p. 403).
I had not heard about Skolkova, Russia, until I found "Can Russia create a new Silicon Valley ... Sergei Brin is still in California" in The Economist. No one knows how to create the culture that links original thinkers with innovate risk takers. And these are never stand-alone. They are part of a supply chain. The Economist piece rightly refers to a proper "ecosystem".
When Russians last tried this, they got the Boikonour Cosmodrome and Sputniks. But that venture helped to bankrupt the place.
Saturday, July 14, 2012
Those four T's
It is remarkable that so much economic analysis ignores the public choice dimension. "Stimulus", for example, is presumed to be "well designed". Instead, it is simply a collection of political favors and bail-outs. Supporters then gasp at poor multiplier outcomes. That's the position of Joe Stiglitz in this conversation. "Timely, Targeted, Temporary and Transformative: Crafting an Innovation Based Economic Stimulus Package" adds alliterative punch and much more.
But similar criticism must be directed at public policy analysis. The overwhelming number of studies also ignore the political context. An uncountable number of benefit-cost studies seek to identify economically sensible public projects -- as though that can ever be the whole story, or that it even matters.
In today's WSJ, Allysia Finley writes about the politics of California's high-speed train project. "How Insider Politics Saved California's Train to Nowhere ... The high-speed rail line may never be built, but it will save a few Democratic seats." It's an old story, but Finley also places it in the context of Governor Brown's current campaign to raise taxes on "the rich."
But similar criticism must be directed at public policy analysis. The overwhelming number of studies also ignore the political context. An uncountable number of benefit-cost studies seek to identify economically sensible public projects -- as though that can ever be the whole story, or that it even matters.
In today's WSJ, Allysia Finley writes about the politics of California's high-speed train project. "How Insider Politics Saved California's Train to Nowhere ... The high-speed rail line may never be built, but it will save a few Democratic seats." It's an old story, but Finley also places it in the context of Governor Brown's current campaign to raise taxes on "the rich."
... Next year taxpayers will have to start paying interest on the rail bonds—about $380 million annually for the next 30 years—assuming investors bite. That's nearly as much as the governor is proposing to cut from higher education if voters don't approve his millionaires' tax initiative in the fall.
This plundering of higher education should serve as a warning to voters who think that approving the millionaires' tax will somehow save them from one day becoming sacrificial lambs on the government's altar. Nothing is sacred.
Thursday, July 12, 2012
Failure
The core lesson of economics is that specialization and exchange are the road to prosperity. The idea predates Smith and Ricardo. They and many others articluated the idea, but humans had spontaneously practiced it for millenia. There is some speculation that Neanderthals never got the hang of it and lost in the competition with our ancestors.
I have to conclude that economists have done a poor job of teaching the core lesson of their field. Michael Kinsley writes in today's LA Times about "Outsourcing's bad rap ... Even if Mitt Romney sent jobs overseas, is that so terrible?"
It seems reasonable to assume that most of the likely voters had some class in their background where some economics was taught. If so, and if any of it stuck, the current debate would not be hobbled by the kind of flat-earthism where one candidate seeks to capitalize on an outsourcing accusation and the other does a horrible job of explaining that there are serious benefits from specialization and trade. There would be plenty of sneering from commentators if party leaders argued over whether the moon was made of blue cheese.
If this level of economics cannot be explained in ways that people get it, why bother with all the rest?
I have to conclude that economists have done a poor job of teaching the core lesson of their field. Michael Kinsley writes in today's LA Times about "Outsourcing's bad rap ... Even if Mitt Romney sent jobs overseas, is that so terrible?"
It seems reasonable to assume that most of the likely voters had some class in their background where some economics was taught. If so, and if any of it stuck, the current debate would not be hobbled by the kind of flat-earthism where one candidate seeks to capitalize on an outsourcing accusation and the other does a horrible job of explaining that there are serious benefits from specialization and trade. There would be plenty of sneering from commentators if party leaders argued over whether the moon was made of blue cheese.
If this level of economics cannot be explained in ways that people get it, why bother with all the rest?
Wednesday, July 11, 2012
Where do the workers live?
I did not know much about the late Senator "Scoop" Jackson of Washington. The July/August Commentary includes (one-time Jackson staffer) Joshua Muravchik's "'Scoop' Jackson at One Hundred: The conscience of a neoconservative giant" (gated). The author presents a refreshingly modest, even shy and self-effacing, but yet successful, politician. This sounds like a rare breed.
The essay is also interesting in how the author describes the evolution of the Democratic Party. "In those innocent days before it absorbed an admixture of angry, arrogant 1960s leftism, liberalism was a vaguely defined creed that attempted to give political expression to the impulse to do good. ... The two cardinal programmatic ideas of that philosophy were devotion to the 'common man' and the conviction that government had nigh limitless power to make people's lives better. The common man was an American concept more elastic than the European notion of class. ..."
I know a few people who describe themselves as "Truman Democrats". Muravchik claims many of these folks were also "Reagan Democrats". I imagine the huge question for 2012 is whether any of them can see themselves as "Romney Democrats".
I have the occasional academic visitor from Europe who, new to LA, asks "where do the workers live?" I want to say "all over the place". Whereas I see lots of "common man" folks all around me, I do not think of them as a class of "workers" as the label is used in Europe.
This is where we usually go into social-economic mobility stories -- and data. Here Rampell sees a glass half-empty. I do not. Even those U.S. politicians who feed on class-warfare rhetoric claim to champion "the middle class" rather than "the workers".
The essay is also interesting in how the author describes the evolution of the Democratic Party. "In those innocent days before it absorbed an admixture of angry, arrogant 1960s leftism, liberalism was a vaguely defined creed that attempted to give political expression to the impulse to do good. ... The two cardinal programmatic ideas of that philosophy were devotion to the 'common man' and the conviction that government had nigh limitless power to make people's lives better. The common man was an American concept more elastic than the European notion of class. ..."
I know a few people who describe themselves as "Truman Democrats". Muravchik claims many of these folks were also "Reagan Democrats". I imagine the huge question for 2012 is whether any of them can see themselves as "Romney Democrats".
I have the occasional academic visitor from Europe who, new to LA, asks "where do the workers live?" I want to say "all over the place". Whereas I see lots of "common man" folks all around me, I do not think of them as a class of "workers" as the label is used in Europe.
This is where we usually go into social-economic mobility stories -- and data. Here Rampell sees a glass half-empty. I do not. Even those U.S. politicians who feed on class-warfare rhetoric claim to champion "the middle class" rather than "the workers".
Monday, July 09, 2012
Corner of the labor market
I had occasion today to hire some men from a nearby truck rental place to help me with some manual labor. They did good work and were well compensated. We even seemed to enjoy each others company. The two men who helped me say they had been at this for about 20 years.
I tried to learn a little about this part of the labor market. Times are slow and the guys on this lot expect about three days of work per week. Busiest days are Friday, Saturday, Sunday. The number of day-labor candidates who show up each day is in synch with this rhythm.
Other than the expected odds of getting work, is there a check on supply? This is where it gets not so pleasant. My informants report that race matters. In a black neighborhood, the number of blacks "allowed" to wait for work is unlimited but the number of Hispanics is limited. In Hispanic areas, it's the other way around.
I cannot vouch for the generality of any of this. But it makes sense. Rules make the world go round and people come up with these. By now everyone should know of Lin Ostrom's contributions on this and also Robert Ellickson's That's the good news. The bad news is that tribalism is still the basis for organization in so many places.
ADDED
Many people have enjoyed T.C. Boyle's Tortilla Curtain which is the author's patented take on the experience of Hispanic immigrants in LA.
A more than decent movie on the topic is A Better Life.
I tried to learn a little about this part of the labor market. Times are slow and the guys on this lot expect about three days of work per week. Busiest days are Friday, Saturday, Sunday. The number of day-labor candidates who show up each day is in synch with this rhythm.
Other than the expected odds of getting work, is there a check on supply? This is where it gets not so pleasant. My informants report that race matters. In a black neighborhood, the number of blacks "allowed" to wait for work is unlimited but the number of Hispanics is limited. In Hispanic areas, it's the other way around.
I cannot vouch for the generality of any of this. But it makes sense. Rules make the world go round and people come up with these. By now everyone should know of Lin Ostrom's contributions on this and also Robert Ellickson's That's the good news. The bad news is that tribalism is still the basis for organization in so many places.
ADDED
Many people have enjoyed T.C. Boyle's Tortilla Curtain which is the author's patented take on the experience of Hispanic immigrants in LA.
A more than decent movie on the topic is A Better Life.
Saturday, July 07, 2012
Just another "Bootleggers and Baptists" moment.
The late Senator William Proxmire famously awarded his annual Golden Fleece Award to the silliest or most wasteful federal program. A worthy successor migh be a Bootleggers and Baptists award, perhaps awarded by Prof. Bruce Yandle or his followers. I realize the competition would be intense because there are so many contenders.
Today's LA Times reports "California Senate vote keeps bullet train alive ... In a victory for Brown, the Legislature approves funds to begin the system in the Central Valley." California politicians do not want to surender their $3 billion federal grant. But no one has any idea how much matching from State taxpayers will be required.
No serious economist or transportation expert believes this project has any merit. I cited some of the discussion here.
The Obama and Brown Administrations have been pushing hard for this boondoggle. "Green jobs" says it all. Jobs at any cost dressed up as "green". But who can blame them? "Green jobs" is nothing but Bootleggers and Baptists. These guys know what they are doing.
ADDED
Yet another bus beats train. H/T Patrick Sullivan.
Today's LA Times reports "California Senate vote keeps bullet train alive ... In a victory for Brown, the Legislature approves funds to begin the system in the Central Valley." California politicians do not want to surender their $3 billion federal grant. But no one has any idea how much matching from State taxpayers will be required.
No serious economist or transportation expert believes this project has any merit. I cited some of the discussion here.
The Obama and Brown Administrations have been pushing hard for this boondoggle. "Green jobs" says it all. Jobs at any cost dressed up as "green". But who can blame them? "Green jobs" is nothing but Bootleggers and Baptists. These guys know what they are doing.
ADDED
Yet another bus beats train. H/T Patrick Sullivan.
Thursday, July 05, 2012
Cities, "creative" types and entrepreneurs
I had earlier blogged my appreciation of Enrico Moretti's The New Geography of Jobs. Here Adam Ozimek mentions the same book and notes that Moretti's work indicates that "Richard Florida Is Wrong About Creative Cities". Moretti describes Berlin, which is apparently a magnet for "creative" people but suffers economic stagnation.
To be fair, Berlin has a unique history. Until the fall of The Wall, the island of West Berlin was a heavily subsidized outpost kept alive at high cost for political reasons. That ended just over 20 years ago and no one knows whether an enterpreneurial culture can take root in that short a time span.
Closer to home, Stolarick, Lobo and Strumsky (SLS) take up the more interesting angle. They address a key related question when they ask, "Are Creative Metropolitan Areas Also Entrepreneurial?"
Florida suggests how to count who is "creative", but SLS look for ways to measure the presence of entrepreneurs. They study the National Establishment Time Series data base (NETS). "NETS measures the birth and death of establishments, and the change in employment associated with establishments' births and deaths, the expansion and contraction of existing establishments and the movement of establishments in and out of an area." SLS report that the average number of new firms arriving in a metropolitan region in any year is surprisingly small, about 2.2% of all new firms.
But that is not the whole story. The number of surviving, expanding or newly opened firms (“births”), also indicate the arrival of new capital and perhaps new entrepreneurs. SLS report that they have found an empirical link between entrepreneurs and an area's "creative" talent pool.
I like this study because the discussion moves beyond "creative" people and "creative cities." The magic comes from enterpereneurs. If we can identify these and where and why they move, then we have progressed.
To be fair, Berlin has a unique history. Until the fall of The Wall, the island of West Berlin was a heavily subsidized outpost kept alive at high cost for political reasons. That ended just over 20 years ago and no one knows whether an enterpreneurial culture can take root in that short a time span.
Closer to home, Stolarick, Lobo and Strumsky (SLS) take up the more interesting angle. They address a key related question when they ask, "Are Creative Metropolitan Areas Also Entrepreneurial?"
Florida suggests how to count who is "creative", but SLS look for ways to measure the presence of entrepreneurs. They study the National Establishment Time Series data base (NETS). "NETS measures the birth and death of establishments, and the change in employment associated with establishments' births and deaths, the expansion and contraction of existing establishments and the movement of establishments in and out of an area." SLS report that the average number of new firms arriving in a metropolitan region in any year is surprisingly small, about 2.2% of all new firms.
But that is not the whole story. The number of surviving, expanding or newly opened firms (“births”), also indicate the arrival of new capital and perhaps new entrepreneurs. SLS report that they have found an empirical link between entrepreneurs and an area's "creative" talent pool.
I like this study because the discussion moves beyond "creative" people and "creative cities." The magic comes from enterpereneurs. If we can identify these and where and why they move, then we have progressed.
Tuesday, July 03, 2012
What do we know?
Matt Drennan and Charles Brecher ask "Can Public Transportation Increase Economic Efficiency?" It's a great question which should include consideration of the cost side. The cost side can sink the argument if the transit choices are the high-cost political favorites -- which I have complained about many times (as recently as last Friday on this blog).
That aside, the authors study 42 U.S. metropolitan areas and consider square feet of office space in each. They pay attention to the proportion of metropolitan area office space concentrated in the area's central business district (CBD), reasoning that the high rents paid there signal the presence of agglomeration opportunities. And these must be the places where good things happen, including knowledge spillovers and information sharing.
Then it's a hop-skip-and-jump to testing, via regression analysis, whether public transit makes a difference. "For those CBDs with more than 30 percent of the total metropolitan office space, the effect of transit use on rents is small but positive and statistically significant. For suburbs in those MSAs the effect is similar. By contrast, the results show that transit use has no effect on office rents in places with a low concentration of office space in the CBD."
There are, of course, questions of mutual causation. Have new transit systems prompted new office agglomerations? And, again, at what cost?
What do we know? Transit subsidies have been growing for many years and most cities keep suburbanizing -- as they grow. Growing cities manage to capitalize on the agglomeration econonomies where they can find them. And most new office space is outside traditional CBDs.
That aside, the authors study 42 U.S. metropolitan areas and consider square feet of office space in each. They pay attention to the proportion of metropolitan area office space concentrated in the area's central business district (CBD), reasoning that the high rents paid there signal the presence of agglomeration opportunities. And these must be the places where good things happen, including knowledge spillovers and information sharing.
Then it's a hop-skip-and-jump to testing, via regression analysis, whether public transit makes a difference. "For those CBDs with more than 30 percent of the total metropolitan office space, the effect of transit use on rents is small but positive and statistically significant. For suburbs in those MSAs the effect is similar. By contrast, the results show that transit use has no effect on office rents in places with a low concentration of office space in the CBD."
There are, of course, questions of mutual causation. Have new transit systems prompted new office agglomerations? And, again, at what cost?
What do we know? Transit subsidies have been growing for many years and most cities keep suburbanizing -- as they grow. Growing cities manage to capitalize on the agglomeration econonomies where they can find them. And most new office space is outside traditional CBDs.
Sunday, July 01, 2012
Chinatown, not the movie
Art Carden summarizes all sorts of recent research on Wal-Mart here. Less formal research notes that customers line up to shop at Wal-Mart and workers line up to work there. But simple markets tests are beyond many people. This is why today's LA Times reports that "Thousands rally against Wal-Mart in Chinatown ... Several union and civil rights activists speak at the event opposing a new Wal-Mart store in Chinatown, and Rage Against the Machine guitarist Tom Morello plays 'This Land Is Your Land.'"
As with all such protests, they come from two quarters. Some are completely incoherent; others have everything to fear from competition and real people voting with their real dollars.
It is sad that these are the two groups are the natural constituencies of City Hall and much of the local news media.
The young lady in the photo holds up a banner which says "Wal-Mart: Keep your hands off Chinatown." She should know that LA's real Chinatown is now about ten miles east in the San Gabriel Valley and has been for some years. That's where LA's great Chinese restaurants are and that is where most of the region's many Chinese and/or Chinese-American shoppers go. Many of the rest of us go there when we want a really good Chinese dining experience.
The old downtown LA Chinatown is pathetic and people should be celebrating the fact that the neighborhood attracts the interest of any investors.
As with all such protests, they come from two quarters. Some are completely incoherent; others have everything to fear from competition and real people voting with their real dollars.
It is sad that these are the two groups are the natural constituencies of City Hall and much of the local news media.
The young lady in the photo holds up a banner which says "Wal-Mart: Keep your hands off Chinatown." She should know that LA's real Chinatown is now about ten miles east in the San Gabriel Valley and has been for some years. That's where LA's great Chinese restaurants are and that is where most of the region's many Chinese and/or Chinese-American shoppers go. Many of the rest of us go there when we want a really good Chinese dining experience.
The old downtown LA Chinatown is pathetic and people should be celebrating the fact that the neighborhood attracts the interest of any investors.
Friday, June 29, 2012
Expensive learning
In 1988, the late John Kain published "Choosing the wrong technology: Or how to spend billions an reduce transit use" Here is the abstract:
In the age of the auto-freeway system, "freeway flyer" buses on freeways and occasionally using special bus lanes are the appropriate form of public tranit. Flyers would be cheaper and more flexible than rail. And some of the buses could be their own feeder lines, once off the freeway. No transfers and no park-and-ride. The book followed from Ford Foundation-funded study for RAND, back in the days of great optimimism about the application of social science to "solving" urban problems.
Like many other good researchers, these scholars skipped the public choice aspect of the problem. The "wrong" technologies, rail transit, were the enthusiastic first choice because they cost billions. The 1965 book and the 1988 paper were just 23 years apart. Now, 24 years, after the 1988 study, we see the following in yesterday's LA Times:
Learning via real life experiments is nice but, as the title of Kain's 1988 title suggests, also very expensive.
In spite of a broad consensus among transportation analysts that bus rapid transit, whether operating on exclusive rights-of-way or on uncongested high occupancy vehicle lanes or general purpose limited access facilities, provides higher performance and has significantly lower costs per passenger trip than rail transit in medium and low density cities, nearly all Sunbelt cities are building or planning heavy or light rail systems. This paper reviews previous studies of the cost-effectiveness of heavy and light rail transit with bus-rapid transit and the growing experience with busways and transitways and concludes, once again, that some form of bus rapid transit would be a far more effective way of providing improved transit in these cities than heavy or light rail transit. Not only would bus rapid transit be substantially cheaper, but it would provide a higher quality of service than light or heavy rail transit for virtually all users. Finally, the paper speculates on the reasons for the continued, “blind” commitment to rail transit by policymakers in Sunbelt cities and on the refusal of policymakers in all but a few of these cities to even consider bus rapid transit.Kain was angry and frustrated because he and colleagues Robert Meyer and Martin Wohl had made the case back in 1965 in The Urban Transportation Problem, copies of which are hard to come by after all the years.
In the age of the auto-freeway system, "freeway flyer" buses on freeways and occasionally using special bus lanes are the appropriate form of public tranit. Flyers would be cheaper and more flexible than rail. And some of the buses could be their own feeder lines, once off the freeway. No transfers and no park-and-ride. The book followed from Ford Foundation-funded study for RAND, back in the days of great optimimism about the application of social science to "solving" urban problems.
Like many other good researchers, these scholars skipped the public choice aspect of the problem. The "wrong" technologies, rail transit, were the enthusiastic first choice because they cost billions. The 1965 book and the 1988 paper were just 23 years apart. Now, 24 years, after the 1988 study, we see the following in yesterday's LA Times:
Orange Line busway is Metro's quiet success story ... The Orange Line in the San Fernando Valley, which will soon be extended, has prompted a new focus on the role of rapid buses in L.A.'s transit plans.The Times has been beating the drums for rail transit in LA for as long as the idea has been around. But almost a half-century after the case for bus rapid transit was first laid out in great detail, their reporter found a successful example close to home.
As Los Angeles County pumps billions of dollars into its expanding commuter rail network, a different kind of mass transit has become an unlikely hero of the San Fernando Valley. ... The 7-year-old Orange Line, a 14-mile east-west busway connecting North Hollywood to Warner Center, has been a less-flashy workhorse of success for the Metropolitan Transportation Authority.
Less than a year after its opening, the Orange Line busway's projected ridership more than tripled to 22,000 a day, and a study by UC Berkeley researchers found it even slightly helped relieve morning traffic on the 101 Freeway, which parallels the busway. By May of this year, daily ridership had climbed to 26,670 on a line that was significantly cheaper to build than it's light-rail counterparts, such as the Blue, Green and Gold lines.
"It's much easier to ride this than it is to drive," said Gale Johnson, 52, a retired security worker who lives downtown and was riding one of the busway's sleek, extra-long buses to a doctor's visit in Van Nuys. "It's like a train on wheels."
Learning via real life experiments is nice but, as the title of Kain's 1988 title suggests, also very expensive.
Wednesday, June 27, 2012
Shout it across the Rio Grande
Every econ 101 textbook goes through the long list of reasons that GDP per capita is a poor proxy for a nation's material well-being. But happiness researchers in economics have gone a step further because they worry about non-material well being. Much has been written about all of the framing problems that come up when questionnaires ask respondents to report how happy they are. But researchers persist in telling us that self-reported happiness is only weakly related to material well being.
But it gets really silly when operational national happiness measures are proposed. Writing in today's WSJ, Matthew Sinclair has fun with the Happy Planet Index. "How Cuba Became a 'Happy Country' ... Citizens flee on rafts. But environmentalists know better."
People vote with their feet -- when they can. Migrations are powerful signals that indicate a lot about material as well as non-material well-being. Revealed preferences are always best.
But this only works if people are actually allowed to leave a place. If they are not allowed to leave Cuba, the statistical people have to meet the challenge of measuring and inferring how great a place it really is.
But look at the map. Mexico gets a better color (score) than the U.S.
And the Supreme Court had to rule on Arizona's immigration rules! These are unnecessary. People crossing the border into the U.S. are just confused. They are making a terrible mistake, not having seen the HPI. Just shout HPI scores from the rooftops and save everyone a lot of bother
But it gets really silly when operational national happiness measures are proposed. Writing in today's WSJ, Matthew Sinclair has fun with the Happy Planet Index. "How Cuba Became a 'Happy Country' ... Citizens flee on rafts. But environmentalists know better."
People vote with their feet -- when they can. Migrations are powerful signals that indicate a lot about material as well as non-material well-being. Revealed preferences are always best.
But this only works if people are actually allowed to leave a place. If they are not allowed to leave Cuba, the statistical people have to meet the challenge of measuring and inferring how great a place it really is.
But look at the map. Mexico gets a better color (score) than the U.S.
And the Supreme Court had to rule on Arizona's immigration rules! These are unnecessary. People crossing the border into the U.S. are just confused. They are making a terrible mistake, not having seen the HPI. Just shout HPI scores from the rooftops and save everyone a lot of bother
Sunday, June 24, 2012
Back to the future?
It is no secret that many conventional city governments in the U.S. are in trouble. Here is a report that cites $574 billion in unfunded city and county pensions. Voters in various places got the message and some recent ballot measures to address the problem by trimming pension benefits won handily.
A more drastic approach would extend privatization and contracting to the max. The example of Sandy Springs, Ga., is described in today's NY Times. Here is last year's video coverage by ReasonTV (h/t Yin Xie).
The Times piece cites the workability of the Sandy Springs approach, but also cites some of the possible objections. These include the threat of a "two Americas" scenario as well as a possible redefinition of what local governments are for.
In fact, the Times story goes on to evoke redistribution from Sandy Springs voters to surrounding Fulton County residents. But that approach has not been working so well. "Widening divide" concerns have been growing steadily, alongside the steady expansion of redistribution in the U.S. And that 19th-century notion does not look so bad in light of today's $574 billion of unfunded municipal liabilities.
The redistribution we have had is not all that progressive. Cronies get rich and others get crumbs. Much better to have the Sandy Springs folk be free to prosper and innovate. That might do more for the rest of Fulton County than all of the conventional redistributions that we have gotten to know so well.
A more drastic approach would extend privatization and contracting to the max. The example of Sandy Springs, Ga., is described in today's NY Times. Here is last year's video coverage by ReasonTV (h/t Yin Xie).
The Times piece cites the workability of the Sandy Springs approach, but also cites some of the possible objections. These include the threat of a "two Americas" scenario as well as a possible redefinition of what local governments are for.
HOVERING around the debate about privatization is a basic question: What is local government for? For years, one answer, at least implicitly, was “to provide steady jobs with good wages.” But that answer is losing its political tenability, says John D. Donahue of the John F. Kennedy School of Government at Harvard. “A lot of jobs in government are middle-class jobs that in the private sector are not middle-class jobs,” he says. “People aren’t willing to support conditions for public workers that they themselves no longer enjoy.”
"Local government" is an inanimate object. Better to consider the players. City and county politicians may want to be seen as "job creators", but I do not think that most city taxpayers see themselves as in the job creation business when they pay up.In a way, what Sandy Springs and other newly incorporated towns have done harks back to a 19th-century notion of taxation, which was much less about cross-subsidies and much more about fee for service.
In fact, the Times story goes on to evoke redistribution from Sandy Springs voters to surrounding Fulton County residents. But that approach has not been working so well. "Widening divide" concerns have been growing steadily, alongside the steady expansion of redistribution in the U.S. And that 19th-century notion does not look so bad in light of today's $574 billion of unfunded municipal liabilities.
The redistribution we have had is not all that progressive. Cronies get rich and others get crumbs. Much better to have the Sandy Springs folk be free to prosper and innovate. That might do more for the rest of Fulton County than all of the conventional redistributions that we have gotten to know so well.
Saturday, June 23, 2012
The fine details make all the difference
Here is Geoffrey Wests' TED talk on cities. Here is recent coverage of his group's work on cities in The Economist. The researchers are mining considerable amounts of city data, seeking regularities and even "laws". They seemingly come up with incredible amounts of generalizing. Here is an example:
Aside from that, there should be no surprise that metropolitan areas grow outward, denoting declining average urban densities. Findings like that can still bring on fainting spells in some circles.
But the size/growth story is incomplete. The reality is much richer and much more interesting. Cities grow because they can -- when they can. They compete because most labor and capital are mobile. How do mobile factors choose where to settle? Where do they sense they can most benefit from local supply chains -- chains that involve transacting as well as chains that do not, including social ties that help incubate ideas? This means interacting with many others already there -- which involves a look at location patterns as well as interaction opportunities. There is a cost side. Land and accessibility and other costs must be noted and weighed agains the benefit assessment.
Its a cinch that most expected net benefit packages are found in peripheral areas -- as the cited passage corroborates. The fact of growth and the placement of growth cannot be separated. I have noted many times in these posts that there is no single "best" density for anything. Local conditions vary considerably and offer unique packages and solutions. It is all about the fine details of spatial arrangements, not simply overall city size.
Consider the simplest cases of land use planning. How do mall developers create site and leasing plans? Is there one "best solution?" Not likely. The profit-maximizing mall developer chooses a desired site plan from a very large combinatorial space. The favored choices vary a lot; we see very little successful cookie-cutter design. And these are just the simplest of spatial arrangement problems.
Between 1990 and 2000 the surfaces of each of the 120 cities he and his team studied grew on average more than twice as fast as their populations. These rates, he says, are unlikely to change. That means that the amount of urban land will double in only 19 years, whereas the urban population will double in 43 years.Note the "on average". What was the variance?
Aside from that, there should be no surprise that metropolitan areas grow outward, denoting declining average urban densities. Findings like that can still bring on fainting spells in some circles.
But the size/growth story is incomplete. The reality is much richer and much more interesting. Cities grow because they can -- when they can. They compete because most labor and capital are mobile. How do mobile factors choose where to settle? Where do they sense they can most benefit from local supply chains -- chains that involve transacting as well as chains that do not, including social ties that help incubate ideas? This means interacting with many others already there -- which involves a look at location patterns as well as interaction opportunities. There is a cost side. Land and accessibility and other costs must be noted and weighed agains the benefit assessment.
Its a cinch that most expected net benefit packages are found in peripheral areas -- as the cited passage corroborates. The fact of growth and the placement of growth cannot be separated. I have noted many times in these posts that there is no single "best" density for anything. Local conditions vary considerably and offer unique packages and solutions. It is all about the fine details of spatial arrangements, not simply overall city size.
Consider the simplest cases of land use planning. How do mall developers create site and leasing plans? Is there one "best solution?" Not likely. The profit-maximizing mall developer chooses a desired site plan from a very large combinatorial space. The favored choices vary a lot; we see very little successful cookie-cutter design. And these are just the simplest of spatial arrangement problems.
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