Out of Control

Legislators in DC debate oil drilling this week, while an article on the discovery of a wrecked barge sunk to the bottom of Monterey Bay in 1990 asks, “Where can you get the most bang for the marine conservation buck?”

While the wreck has considerable historic and recreational value, the divers say, its greatest significance may be as a refuge for marine life.

Rockfish of the size and species that teem on the wreck have experienced drastic population declines in recent years, and severe fishing restrictions have been implemented to protect them. [...]

The wreck provides some empirical evidence supporting divers, anglers and conservationists who champion the creation of artificial reefs off the California coast as a means of boosting fish populations.

Their opinions, however, are by no means unanimous. Many environmentalists challenge the concept, saying ships and oil platforms require lengthy and expensive decontamination procedures before they can be safely used as rockfish condos.

The National Oceanic and Atmospheric Administration reported in its last Fishery Bulletin on a study that showed eight of California’s offshore oil and gas drilling rigs may account for 20% of the juvenile rockfishery. Sebastes paucispinis was an economically important rockfish species until overfishing reduced the population down to 7.4% of its previous size.

Skeptics be warned: the rockfish lobby may be behind the current push for opening federal waters to increased oil and gas drilling.

Well sort of, compared to our scrawny, sickly selves of a century or so ago.

I just submitted a piece that’s scheduled to run in the Los Angeles Business Journal in which I argue that life in Los Angeles is better than it was a generation ago. Much of my argument focused on progress, like medical advances, that doesn't have a whole lot to do with the specific goings on of LA politics.

I wish I had seen this fascinating NYT piece (first in a series, btw) that Peter Gordon flags.

It illustrates

what may prove to be one of the most striking shifts in human existence — a change from small, relatively weak and sickly people to humans who are so big and robust that their ancestors seem almost unrecognizable.

New research from around the world has begun to reveal a picture of humans today that is so different from what it was in the past that scientists say they are startled. Over the past 100 years, says one researcher, Robert W. Fogel of the University of Chicago, humans in the industrialized world have undergone “a form of evolution that is unique not only to humankind, but unique among the 7,000 or so generations of humans who have ever inhabited the earth.”

We’re bigger than we used to be. In 1850 the average man was 5 feet 7.4 inches and weighed 146 lbs. By 2000, the average stood 5 feet 9.5 inches tall and weighed in at 191 lbs. IQs have been increasing for decades and we live longer and healthier lives:

Today’s middle-aged people are the first generation to grow up with childhood vaccines and with antibiotics. Early life for them was much better than it was for their parents, whose early life, in turn, was much better than it was for their parents.

Peter also points out that just last month a cervical cancer vaccine became available. Some more interesting bits from the NYT article:

The biggest surprise emerging from the new studies is that many chronic ailments like heart disease, lung disease and arthritis are occurring an average of 10 to 25 years later than they used to.

…
In 1900, 13 percent of people who were 65 could expect to see 85. Now, nearly half of 65-year-olds can expect to live that long.

In the mid-19th Century life was indeed nasty and brutish as folks often segued from one disease to another:

Men who had respiratory infections or measles tended to develop chronic lung disease decades later. Malaria often led to arthritis. Men who survived rheumatic fever later developed diseased heart valves.

And more stuff for the “Overworked Americans” file:

People would work until they died or were so disabled that they could not continue, Dr. Fogel said. “In 1890, nearly everyone died on the job, and if they lived long enough not to die on the job, the average age of retirement was 85,” he said. Now the average age is 62.

A century ago, most people were farmers, laborers or artisans who were exposed constantly to dust and fumes, Dr. Costa [an MIT economist] said. “I think there is just this long-term scarring.”

Related: Nutrition and the Decline in Mortality Since 1700

Related: Rather be miner or web designer?

Stay tuned: My upcoming policy brief, Why Mobility Matters, touches on some of the ways imporved mobilty has made our lifes longer, healthier, and better.

Marc Kilmer, Buckeye Institute research associate, reports that the city of Lebanon, Ohio, is in discussions with Cincinnati Bell about unloading its municipal broadband system, which has racked up $9.8 million in debt.

The system launched in 1999, Lebanon became one of the first towns to attempt to compete with the local cable TV company. Year after year, costs outpaced return.

The failure of Lebanon’s telecommunications business illustrates why governments should not compete with private enterprise. When Lebanon was considering this venture, there was no indication that the city had the expertise or resources necessary to compete with a large multi-national corporation like Time Warner Cable.

The city’s grand plans looked good on paper, but the government soon found that the market demands results that the city could not deliver. So now the city is sitting on a telecommunications system that loses money every year and is $9.8 million in debt.

The city may realize that with advances in technology, the market for providing video services will soon become much more competitive. Phone companies are poised to enter the market with video services over their fiber optic lines. This means consumers will see more choices and lower prices through increased competition. The city-run system in Lebanon was struggling when it competed against just Time Warner. The prospect of more competition would be disastrous for that system.

Lebanon defends its venture by pointing out that cable television prices were lowered by the entry of the city-run system into the market. While cable prices are indeed lower in Lebanon due to competition, these lower prices have been subsidized by the taxpayers of Lebanon. Competition is indeed good, but this competition should not be subsidized by taxpayers.

Kilmer’s wrap-up is here. The news follows just weeks after a Buckeye report, authored by Kilmer, examining the fiscal and legal problems Lebanon’s municipal netowk has faced since Day One.

In a move designed to demonstrate they are “doing something” about on-line child predators, the House voted Thursday 410-15 to ban Amazon.com from schools and libraries.

Yes, you read that right.

The Delete Online Predators Act (DOPA) will do nothing to deal with the problem on line predation. For example, it has no provisions to encourage education about the risks of disclosing personal information on-line. DOPA orders schools and libraries receiving federal to block Internet access to any site with chat rooms and social networking features.

It is another example of the “if it’s popular and fun, then ban it” mentality toward cable TV, PC and online entertainment and applications that is sweeping Capitol Hill.

Of these social networking sites, MySpace.com has the highest profile, but hundreds of others, including Amazon.com, that offer social networking functions. Heck, as Adam Thierer at the Progress & Freedom Foundation has pointed out, the entire Internet is a social networking site.

TechDirt.com reports Rep. John Dingall (D-Mich.), ranking member of the House Energy and Commerce Committee, was one of the 15 House members who realized the sheer uselessness of the bill.

“So now we are on the floor with a piece of legislation poorly thought out, with an abundance of surprises, which carries with it that curious smell of partisanship and panic, but which is not going to address the problems. This is a piece of legislation which is going to be notorious for its ineffectiveness and, of course, for its political benefits to some of the members hereabout,” Dingall told colleagues.

TechDirt further writes:

DOPA…doesn't actually protect children at all. It’s incredibly broad, and would effectively ban things including Amazon.com and LinkedIn from schools -- hardly the places where "online predators" hang out. In fact, one of the bill's sponsors uses Facebook as one of the example sites he's worried about, despite the fact that Facebook is a closed system that you can't just sign up for without a school affiliation. Furthermore, this is a "head in the sand" type bill. Do these politicians really believe that by banning these types of sites at school kids won't use them any more? They'll either get around the filters or will keep using the same sites in other places where they're not under the watchful eye of an adult. In other words, this could make them a lot more vulnerable. Instead of trying to hide these services from kids (only making them more attractive to kids), why not fund better education programs that teach kids (and parents!) about the risks of being online so that those kids know how to deal with things if they are approached by an online predator? Pretending those predators don't exist doesn't protect the kids half as well as simply teaching those kids how to respond to a questionable approach.

Congress’ summer 2006 pandering tour continued today with yet another call for cable censorship.

Reps. Dan Lipinski (D., Ill.) and Tom Osbourne (R., Neb.) introduced the Family Choice Act, which basically offers cable operators a Hobson’s Choice of providing a la carte “family-tiers” or a threat of being held to the standards that apply to over-the-air broadcasters.

Specifically, the bill gives the cable industry three choices.

• Apply broadcast indecency standards to their programming between 6 a.m. and 10 p.m.;

• Offer an opt-out a la carte programming option, such that any channel a subscriber does not want to receive will be blocked, and the subscriber will be provided with a credit on their bill for the channels they block; or

• Allow subscribers to choose a family tier of programming; a family tier is defined to include all the channels in the Expanded Basic Tier, except those that have programming unsuitable for children between 6 a.m. and 10 p.m. (programs rated TV-Mature or TV-14), unless that programming is a news program or live sporting event.

That final stipulation of “live sporting event” is a notable attempt at micromanagement. If there is any more contentious debate beyond the mandated creation of family tiers, it’s what channels should be included in one. When Cox introduced family-tier line-up earlier this year, the family-values set was not happy, especially because ESPN, the popular all-sports channel, was not included. (Never mind that it was Janet Jackson’s “wardrobe malfunction” at a live sporting event that triggered this latest round of censorship threats.) At the time the San Diego Tribune ran an article featuring much of the whining by groups who, like all censors, came off as wanting to ban all channels except their own favorites.

Like the other populist items on the election year agenda—flag burning amendments, gay marriage amendments and Internet gambling bans, this should gain little traction once Congress adjourns. And for those who really do wish to have more control over the entertainment that comes into their homes, the Internet may make true a la carte video possible. More and more shows are being archived on studio sites and by aggregators such as YouTube and Akimbo. AOL offers TV from the fifties and sixties, including the old George Reeves Superman series.

Pretty soon you’ll be able to order only what you want when you want it. There might be a cost per download, but it could compare favorably to monthly cable. Barring that, you can always turn the infernal box off.

Today we're proud to announce the release of Reason's Annual Privatization Report 2006. For the past 20 years, APR has chronicled and analyzed the most important developments in privatization, outsourcing, and government reform.

This year's 20th anniversary edition of APR recognizes the tremendous advances in government reform over the last two decades and features special contributions by several pioneering policymakers and researchers at the forefront of privatization and government reform, including Margaret Thatcher, Indiana Governor Mitch Daniels, South Carolina Governor Mark Sanford, former Indianapolis Mayor Stephen Goldsmith, and Reason founder Robert Poole, Jr.

The full report is available for download at reason.org/apr2006.

A special excerpt featuring the articles from Margaret Thatcher, Gov. Daniels, Gov. Sanford, Robert Poole, and many other notables is available here.

The decision overturning eminent domain's use for economic development in Norwood, Ohio can be found here.

The Institute for Justice is reporting that the Ohio Supreme Court has unanimously decided the taking of private property for economic development purposes in Norwood Ohio is unconstitutional.

The following note was sent out by the Institute for Justice earlier today:

I write to inform you that the Ohio Supreme Court, in a unanimous opinion, has ruled that under the Ohio Constitution: 1) "economic development" is not, by itself, a public use that would justify the exercise of eminent domain powers; 2) Ohio courts must apply "heightened scrutiny" when reviewing statutes that regulate the use of eminent domain powers; 3) the use of the "deteriorating area" standard to justify a taking is unconstitutional "because the term inherently incorporates speculation as to the future condition of the property... rather than the condition of the property at the time of the taking"; and (as a bonus) the statutory section that ostensibly prevented appellate courts from preventing the destruction of homes after the trial court's ruling in favor of the government is also unconstitutional under the separation of powers doctrine. This opinion appears to be an unequivocal home run for property owners in Ohio.

Banking industry representatives on Monday pressed federal lawmakers to block a bid by Wal-Mart Stores Inc. to open a bank, a move they say would damage the industry and blur the divide between banking and commerce.

A coalition of 32 groups, including the American Bankers Association representing the nation's largest banks, sent a letter to every member of Congress urging them to step in before federal banking regulators act on the matter.

The Federal Deposit Insurance Corp. is weighing an application Wal-Mart filed last summer to open a state-chartered, limited-service bank in Utah, also known as an industrial loan company.

"We urge you to act so that Congress is making these policy decisions," the groups' letter states. "Until Congress is able to pass legislation on ILC policy, we hope you will insist that the FDIC reject Wal-Mart's application or, at least, hold it until Congress has the opportunity to consider the policies at stake and legislate."

Article here.

Here’s an industry letter we’ll never see:

Dear Members of Congress,

We realize it would be in our financial interest if you would prohibit Wal-Mart from competing with us, but instead of continuing the ugly process of rigging the laws to favor incumbent businesses, we will stand up for the larger, more important principle that laws should treat all companies equally and that consumers, not congressmen, should decide which firms succeed which and fail.

[Pause for Happy Hour. Resume writing]

Don’t get me wrong, we could’ve totally come up with some bullshit reason why scratching our backs would be in the “consumers’ best interest.” You should have heard this line about “blurring the divide between banking and commerce” we were going to use, but every time we said it we just busted up laughing. Plus we figured no one would buy it since the FDIC already OKed Target to run a bank and the world didn’t end or anything. So this time we’re going to try the honest approach and see how it goes. Hell, the extra competition might even whip us into shape—been sorta just going through the motions lately. You know how it goes. Hey, next time you’re in town, I’m buying.

The Banking Industry

Economic models fall into two broad genres. Macroeconomic models, the distant descendants of Phillips's machine, belong mostly in central banks. They capture the economy's ups and downs, providing a compass for the folks with their hands on the monetary tiller. The second species, known as computable general equilibrium (CGE) models, largely ignore the vagaries of the business cycle. They concentrate instead on the underlying structure of production, shedding light on the long-term repercussions of such things as the Doha trade round, a big tax reform or climate change.

That’s how a Denver councilwoman describes Highlands Ranch, the nation’s largest master-planned community which is celebrating its 25th year.

Some other assessments:

"The ugliest and most embarrassing feature of the Front Range," a resident of nearby Denver declared in a letter to the Rocky Mountain News.

And from a post on Cyburbia.org, a forum for urban planners: "Highlands Ranch represents the nexus of all that is soulless and evil in the world."

Geez, sounds almost as bad as Wal-Mart.

Still there’s some evidence that some critics of this ultra suburban area have brought their rhetoric down a notch. Consider Megan Chard:

Chard, 35, grew up in the suburb of Littleton, Colo., and fled for downtown Denver as soon as she could. In love with the sometimes rowdy, sometimes gritty atmosphere of urban life, she vowed she would never move to a soccer-mom suburb, and especially not to Highlands Ranch — "never in a million years."

Then she and her husband had their first child. Suddenly "transients in the alley, hypodermic needles on the sidewalk didn't look so good," Chard said.

With an average home price of $385,000 — but many available in the $250,000 range — the Ranch was more affordable than many suburbs closer to Denver. And it was full of kids: running from one backyard to the next, biking to the local park, splashing in the pools at the four recreational centers.

At first, Chard was so sheepish about her address, she justified it by telling friends: "We moved here for the kids."

After four years, she says proudly: "We live in Highlands Ranch. And we love it."

Article here.

Related: Schools and Sprawl

Organizers cancelled this past weekend’s Bodog.com Marketing Conference, a major confab for the on-line gambling industry, after federal prosecutors arrested the CEO of BetOnSports.com while on an airport layover in Dallas.

The arrest of David Carruthers on an indictment of racketeering and conspiracy sent a chill through other executives in international online gaming circles, who now believe they are in the crosshairs of U.S. prosecutors. Following the arrest, attendees from gaming sites, all based outside the U.S., began canceling travel plans. Future Bodog.com conferences are likely to be held outside the U.S.

Online gambling is illegal in the U.S., although it is extremely difficult to enforce. Legislators have increasingly sought to control the expansion of online gaming among Americans, which now accounts for $4 billon a year, through bills that would choke off international money transfers to gaming sites. The House passed just such a bill 317-93 July 11, but similar legislation in the Senate is not likely to reach the floor.

PC Magazine reported that Carruthers’ site, unlike most Internet gaming sites, deals in sports betting, which has been illegal to do over the phone lines long before the invention of the Internet. Carruthers indictment, brought by the U.S. Attorney for the Eastern District of Missouri, reportedly covers alleged gambling activities in the U.S. prior to his joining BetOnSport.com. Nonetheless the arrest sent chills throughout the industry, which operates legally in most other countries, including the U.K.

Many experts, however, think the increasing campaign against online wagering is counterproductive. The casino industry itself, once in favor of laws against Internet gambling, now questions them. Recently, the American Gaming Association called for a Congressional study on the benefits of regulating and taxing online casinos, although it is no secret that U.S. casino interests want a piece of the online action themselves.

"If the goal is to make it impossible for people to gamble, it's not very effective because there will undoubtedly be existing ways [to gamble],"said David C. Croson, an associate professor of strategy and entrepreneurship for the Edwin L. Cox School of Business, Southern Methodist University. "Some clever entrepreneurs will think of new ways, and they're probably working on it right now."

Croson is of the opinion that the U.S. is missing the boat by trying to prohibit online gambling altogether. Right or wrong, online gambling as it stands now does the U.S. economy no favors.

"It seems that U.S. betters as a whole lose about $4 billion each year just due to online sports betting," Croson said. "I noticed that the per capita gross domestic product of the U.S. is in the neighborhood of $40,000 per person, so that says that the economic impact of losing $4 billion is the equivalent of losing 100,000 jobs. This is kind of like taking 100,000 jobs and shipping them out of the U.S. in briefcases."

A year later, Minneapolis’ first HOT lane (MnPass) is doing well. More than 9,500 motorists have opened accounts and the revenue generated is covering operating costs.

More cars are using the lane compared to when it was an HOV lane, and yet:

despite this higher rush hour through-put, pricing has ensured that service is maintained for carpoolers and transit users. Average speeds of 50 mph are maintained 95 percent of the time, and a survey we conducted showed 85 percent of users are satisfied with the traffic flow in the lane.

We see the usual pattern with HOT lanes, apprehension, then appreciation:

I-394 users understandably were wary of this new high tech system when it was first introduced. However, it appears most are adjusting. In a recent survey, 95 percent of the MnPASS users said they are satisfied with the all-electronic operation of the system, 93 percent are satisfied with the credit card based system of funding accounts, 92 percent are satisfied with the ease of installing the transponder, 87 percent reported no problems with merging into the MnPASS lane, and 76 percent were satisfied with the dynamic toll system.

And again, the “Lexus Lane” charge falls flat:

Citizens of all income levels rated their use of I-394 in the post-MnPASS era as "enjoyable," and said MnPASS is a "good idea." Low income citizens approve of the project by nearly an overwhelming three-to-one margin. Many citizens who can't afford to use the lane every day, like the option of using this "gridlock insurance" occasionally, such as when late for day care, work or an important appointment.

More here.

Caught in an 11-mile traffic jam during the hottest July day on record sweltering motorists could only assume there had been an accident.

It was only, several hours later, as they finally approached the trouble spot, that they discovered there was no crash.

Instead, council officers had chosen the day that temperatures touched a record-breaking 97.7f (36.5c) to hold a traffic census.

And even when asked by police to call it off, they refused.

Yesterday furious drivers slammed Essex County Council, who carried out the roadside interviews on a busy main road during morning and evening rush hour.

More here.

Automakers have made no progress in improving vehicle fuel economy over the past year, continuing a nearly 25-year trend of industry stagnation on gasoline mileage, according to the Environmental Protection Agency.

In an annual report released [recently], the EPA said the industry-wide fuel economy of 2006 model-year vehicles was 21 miles per gallon, the same as the year-ago level. Detroit automakers trailed their fast-growing Japanese, Korean and European counterparts, the report found

…
Gloria Bergquist, a spokeswoman for the Alliance of Automobile Manufacturers, which represents many of the automakers, said the industry is building more vehicles with fuel-saving technology, but consumers are still buying heavier, faster vehicles in large numbers.

"The fuel-efficient models are out there, we just need to sell more," she said. "We are trying very hard."

Article here.

Fuel efficiency jumped rather dramatically during the 70s and early 80s, during tough economic times. Today, despite all the griping about fuel prices, the dough we dump into our autos represents a smaller slice of our income than it used to.

That’s one point Russell Roberts makes in his dissection of a Krugman piece that argues that fat cats are just getting fatter, sucking up most of the economic gains and leaving the rest of us to fight over crumbs.

Roberts’ point is that it’s very misleading to talk about the top 1% gaining so much year-to-year. After all, there isn’t some “1% Club” where the membership never changes and the same people just get richer and richer. While there always will be a top 1%, the faces in that group are constantly changing.

You can cut the inequality issue many ways, but the question that is perhaps most important is: “If they do the right things (stay in school, out of jail, work hard, etc.) do those starting out near the bottom have a reasonably good shot of moving up the economic ladder?

Unconfirmed reports are coming in that North Carolina Gov. Mike Easley has signed bill to create statewide video franchising.

Easley reportedly signed the bill, H2047, Thursday afternoon, after the North Carolina Senate passed the bill unanimously. The House had passed the bill 111-5, according to the Associated Press.

In a unique approach, the North Carolina bill does away with franchise fees as a separate “tax,” and instead subjects video services to the same 7 percent sales tax applicable to other goods and services. The bill stipulates that portion of the revenues collected from the tax on video services go toward broadband development.

As such, it may amount to the least discriminatory compared to the measures passed in other states, which retain many of the same basic terms of local franchise agreemens, just simply codify them at the state level. In North Carolina’s case, the approach is purely a consumption tax—technology or right of way issues to not enter. Thus, even subscribers to satellite services must pay the tax.

The vote also continues the bi-partisan momentum for franchise reform. Although Republican legislators pushed through the first franchise reform measures, Ealey is a Democrat and both houses of North Carolina’s General Assembly are controlled by Democrats.

Earlier I mentioned a recent survey which found that few workers are interested in telecommuting. I was skeptical of that then, and now comes another survey that is more typical of most examinations of employee attitudes.

According to a July 19 survey by the Hudson Employment Index:

While only 23 percent of U.S. employees work from home or are given that option, most of the work force (59 percent) believes that telecommuting at least part-time is the ideal work situation. This includes the 38 percent who think a mix of coming into the office and working from home is preferable and the 21 percent who say working at home is the best.

...

Even among workers who are not given the choice, half report that working away from the office at least sometimes would be their preference. But those who have the option of clocking in from home take advantage of it when they can – 38 percent work from home a minimum of once a week. Just 20 percent rarely or never choose this option.

Press release here.

Meanwhile, across the pond:

Almost 5.5 million Britons now spend some or all of their week working remotely from home, with the majority concentrated in London and the South-East of England.

The Broadband User Survey from research firm Point Topic has found that some 4.3 million households in Britain – 18 per cent of all homes in the country – contain someone working from home.
…

Freelancer workers make up half the total, while four out of 10 are employees working remotely. The third, much smaller group of eight per cent are running a business from home with employees.

More here.

That's been pretty well established.

But what about promoting better health in poor nations? Does that spur wealth?

Greg Mankiw points to this study:

there is no evidence that the large exogenous increase in life expectancy led to a significant increase in per capita economic growth. These results confirm that global efforts to combat poor health conditions in less developed countries can be highly effective, but also shed doubt on claims that unfavorable health conditions are the root cause of the poverty of some nations.

Mankiw’s bottom line:

Even if reformers (such as Jeff Sachs and Bill Gates) succeed in their admirable goal of promoting better health in poor countries, we should not expect that success to fix the problem of persistent poverty.

Mankiw has also woven together some different takes on income inequality. (See also this link.)

Related: When Inequality Matters

Leave it to Thomas Hazlett, Professor of Law & Economics and Director of the Information Economy Project at George Mason University to meticulously document and qualify what many of us have long-suspected—that the Universal Service Fund (USF) encourages rural phone companies to keep costs high. The more they spend, the more subsidies roll in, to the tune of $7 billion a year. Competing technologies that would drive down real costs of providing service, and relieve the USF burden on ratepayers, don’t have a chance in this regime.

Hazlett’s 91-page paper dissects the inefficiency of the USF concluding that its processes, which ignore current telecom market realities such as wireless and VoIP, actually undermine the “Universal Service” mission. Funds rarely find their way into the hands of those who truly need them, instead, they flow directly to the coffers of small and mostly rural phone companies, some in quite wealthy areas, like Jackson Hole, Wyo., where they act largely as huge reimbursements for hefty infrastructure investments, the necessity of which are never adequately reviewed.

If you really want your company to be innovative, emphasize individual achievement. So says the new study "Individualism-Collectivism and Group Creativity":

The findings may support the view that creative companies need to encourage differences rather than build teamwork, which leads to conformity, said Barry Staw, professor at the University of California at Berkeley's Haas School of Business and co-author of the study.

"The more you emphasize collectivity and team membership and orientation, the lower is the creativity," Staw said. "So much of creativity is being different, being willing to deviate and take chances and be the odd person out."

U.S. workplaces have moved toward teamwork and away from individualism for decades, originally having borrowed techniques from Japanese business models, experts say.

More here.

Perhaps another argument in favor of telecommuting?

Matthew Kahn’s new book sounds quite interesting:

Written in a lively, accessible style, Green Cities takes the reader on a tour of the extensive economic literature on the environmental consequences of urban growth. Kahn starts with an exploration of the Environmental Kuznets Curve (EKC)—the hypothesis that the relationship between environmental quality and per capita income follows a bell-shaped curve. He then analyzes several critiques of the EKC and discusses the implications of growth in urban population and surface area, as well as income. The concluding chapter addresses the role of cities in promoting climate change and asks how cities in turn are likely to be affected by this trend.

As Kahn points out, although economics is known as the "dismal science," economists are often quite optimistic about the relationship between urban development and the environment. In contrast, many ecologists and environmentalists remain wary of the environmental consequences of free-market growth.

More here.

This paper by Peter Gordon explores some of the themes mentioned above, including the EKC.

A new study from the Federal Reserve Bank by economists Morris A. Davis and Michael Palumbo finds that land makes up 50% of the value of residential property in large cities. This is up from about a third in 1982.

The implications for Smart Growth and land use regulation are pretty dramatic. This results suggest land use regulations will have an even larger impact on housing prices and housing affordability in the future. Growth management policies primarily impact the ability of developers to access land for new residential (and commercial) development. As land makes up a bigger and bigger part of housing prices, small changes in the supply of land can have bigger absolute impacts on housing prices and affordability. Affordability will be tied more and more to public policy and less to construction costs.

Moreover, most Smart Growth policies focus on increasing density. Higher densities are related to higher housing costs, mainly through the impact on land prices.

Reason has two studies relevant to this discussion. One is on urban growth boundaries, and the other on statewide growth management laws.

—especially when you consider how much it costs to have government agencies watching each others backs:

California Highway Patrol officers have been called to around-the-clock duty near the site of a major road project after some drivers' frustrations over a highway closure led to reported death threats against workers at the construction site, officials said.[…]

In one instance, a driver threatened to grab a high-powered rifle and fire at workers, Caltrans spokeswoman Terri Kasinga said.

She and project superintendent Dennis Putnam, of construction contractor Yeager Skanska Inc., said no actual violence has occurred at the job site, but the threats are being taken seriously. Kasinga said Monday she felt nervous standing near the junction of Highway 138 and Highway 2 at the north end of the project.

To our orange-clad public servants: we’re laughing with you, not at you. Really.

That’s the vaguely porno headline of this piece.

Seems that the Wal-Mart Wars have escalated yet again:

Paidcritics.com was started last week by Working Families for Wal-Mart, a group funded primarily by Wal-Mart, to reveal what it described as "the real motives of the union leaders behind the campaign against Wal-Mart."

It characterized one of its leading critics, Andrew Grossman of union-backed Wal-Mart Watch, as "a political operative with a checkered past" in a section called "Paid Critic of the Week" that also lambasted Wayne Hanley, head of the Canadian chapter of the United Food and Commercial Workers union.

The site is part of Wal-Mart's aggressive defense since last year against its increasingly organized critics. Wal-Mart won't say how much it is spending, but it has set up a political campaign-style "war room" staffed by consultants, hired Washington D.C. lobbyists, formed the Working Families group and created another Web site called Wal-Mart Facts.

In response to the new site, union-funded WakeUpWalMart.com started its own Web site Tuesday, http://www.abunchofgreedyrightwingliarswhoworkforwalmart.com, which attacks the retailer's public relations and lobbying figures.

Right wingers? But this Kerry supporter calls WM a progressive success story. And how about those low priced gay-themed flicks WM sells?

Interesting that WM is getting fiercer and softer:

The world's largest retailer has hired Harriet Hentges, a former nun and foreign conflict mediator, to help steer the company's policies on the environment, health care and labor relations -- three areas where Wal-Mart's public image has suffered.

Article here.

And WM’s attempt to make its own version of MySpace seems just wrong:

It's a quasi-social-networking site for teens designed to allow them to "express their individuality," yet it screens all content, tells parents their kids have joined and forbids users to e-mail one another.

A tightly-screened, Mom and Dad-supported, no-chatting online experience. Yeah, that’s what teens want.

Then there’s this:

users [are] "hubsters" -- a twist on hipsters that proves just how painfully uncool it is to try to be cool.

More here.

Related: Wal-Mart Foe Hyperbole Watch

Here’s Joel Kotkin:

AIDED BY MAYOR Antonio Villaraigosa, downtown Los Angeles' boosters are poised to dip again into the pockets of taxpayers to help finance a splashy new project. The cost this time is up to $300 million in loans, tax breaks and fee waivers for a $750-million, 54-story complex — including a 876-room Marriott Marquis, a posh 124-room Ritz-Carlton and 216 luxury condos — across from the Convention Center.

…

The Convention Center has been a consistent money loser for years, costing the city $30 million annually in debt service. Even Villaraigosa calls it a "white elephant."

And this pachyderm has been to the public trough before. In 1988, the city financed a $500-million expansion of the center based on promises that a bigger and more modern facility would catapult L.A. into that elite circle of cities that thrive on the convention business.

Kotkin references a Brookings study, which dismantles the economic case for publicly financed convention centers.

So if the hotel subsidy doesn't make economic sense, who benefits from the largesse? The biggest winner from the new public investment stands to be billionaire Phil Anschutz, whose $2.5-billion, 27-acre L.A. Live project — billed as "Times Square West" — is slated to be built adjacent to Staples Center. The refracted prestige of a new Ritz Carlton and luxury condos in the neighborhood would add luster to Anschutz's project, the proposed home of the West Coast headquarters of ESPN and a Grammy Award museum.

Whole thing here.

Related: Millions for Billionaires—Minneapolis Edition

Related: Hand-outs for Billionaires

Related to the previous post is this:

California's highways, the system's most costly feature by far, were once the nation's gold standard. But as the interstate highway network celebrates its 50th anniversary and the summer driving season accelerates, the state is known for something else: some of the busiest, most dilapidated and under-financed roads in the country.

…

For now, the state expects to spend $21 billion on road maintenance and improvement over the next five years. Additional money could come from $37.3 billion in bond measures on the November ballot — the only new money proposed in the state's $116-billion infrastructure plan.

Of that bond money, about $11.5 billion would go to highway and road projects across the state to patch a system that the California Transportation Commission describes as "a shambles."

Some of it would be distributed using set formulas, with cities and counties getting at least $400,000 for pavement repair. The rest — about $7 billion — is up for grabs.

"I'm convinced that there isn't enough money," said Martin Wachs, director of the Rand Corp.'s transportation program.

More here.

We often assume that severe congestion equals bad mobility. It’s true that increasing congestion means that mobility is worse than it used to be, but often mobility in a highly-congested auto-oriented place is still better than transit-oriented alternatives.

Here’s University of Chicago’s Robert Bruegmann reacting to the complaints of gridlock-weary Angelinos:

Even when speeds on the freeway decline to 20 mph, drivers throughout the Los Angeles area move more quickly than they do by car or public transportation at the center of almost any large, older city in Europe or the United States.

Clearly the problem is not that congestion is objectively worse in Los Angeles. It is that the highway builders of the 1950s and 1960s were so successful in building their way out of congestion that people became used to driving across the entire metropolitan area at a mile a minute and made choices about where they lived and worked based on that reality.

When it comes to automobile travel, Los Angeles, perhaps more than almost any other large city in the world, suffers from a deflation of greatly raised expectations. After all, the residents of Paris, New York or Tokyo never even entertained the possibility that they could drive through the center of the city at 60 mph.

Buegmann explains that as the anti-road mentality became more popular, LA decided to spend big on rail transit. And yet transit accounted for less than 2 percent of trips in the LA area in 2003, which is actually a smaller share than 20 years ago:

Why has this happened? I suggest that it is because so many people are locked into unrealistic assumptions about the way transit worked in the past or could work in the future.

First of all, and contrary to much popular opinion, it is clear that L.A.'s highways were not intended to hurt the central city, as many have suggested, nor were they part of a devious plot to eliminate alternatives to cars.

And we shouldn’t be so quick to use a city-vs.-suburbs framework. Economic growth in suburbia need not come at the expense of cities. Cities and suburbs can succeed together.

In fact, as Bruegmann points out in his new book, much urban gentrification took hold thanks to suburbanization. It’s only after manufacturing companies moved out of the city that goateed hipsters could turn the vacated buildings into airy lofts.

Back to LA:

The fact is that Los Angeles had a terrible traffic problem in the 1920s and '30s. Many downtown business owners felt that this congestion was threatening their very existence at a time when investment downtown had lagged and there was fierce competition from outlying centers such as the Miracle Mile or Hollywood.

Not surprisingly, downtown businessmen were highly enthusiastic about plans for a massive superhighway system to bring people downtown more efficiently. Starting in the 1940s, the Los Angeles area embarked on one of the most ambitious programs of highway building in American history.

This campaign was largely successful. Anyone who is old enough to have driven in L.A. or in most other U.S. cities in the 1960s or '70s can testify to the sense of liberation that accompanied the completion of the new roads. Suddenly it was possible, in a matter of minutes, to make trips that had previously taken hours. People in Santa Monica soon thought nothing of accepting dinner invitations in Pasadena. This increase in mobility meant greater choice in jobs, housing and recreational outlets. This, in turn, helped fuel an enormous amount of growth and prosperity in Southern California.

Entire LAT piece is here.

Yesterday (July 16) marked the one-year anniversary of the voter approval of a referendum in Lafayette, La., to fund a $125-million municipal fiber-to-the-home system.

To date, nothing has happened with this project. It remains tied up in court following a series of lawsuits, brought first by Cox Communications and BellSouth, the incumbent cable and telephone companies, respectively, with whom the taxpayer-backed system would compete. Lafayette Utilities System (LUS), the municipal utility, lost the first court challenge on the basis that its financial plan improperly relied on revenues from its monopoly electric utility to back the broadband bands. In May, however, LUS won approval from a U.S district judge on its revised financing plan. Still, at least three other court cases tied to the project remain. In the latest development, two Lafayette residents have announced their intention to appeal a ruling to the Third Circuit Court of Appeals, charging that LUS is already overcharging electricity customers, ostensibly to build a bankroll for broadband. If the case proceeds, a decision may not come until mid-August. If LUS wins, the earliest it will be able to sell bonds is the fall. If it can sell the bonds (a challenge itself) the earliest it will break ground would be some time in 2007.

The biggest piece of pork ever?

Representative Tom Davis (R-VA) is requesting the House of Representatives to consider an amendment (H.R. 3496, as revised) to the Deep Water Energy Resources Act (H.R. 4761) that would divert $1.5 billion of federal revenues earned through offshore drilling to subsidize the deeply troubled Metro transit system serving the nation’s capital and his congressional district. If enacted, this earmark would be one of the largest ever passed—seven times larger than Alaska’s “Bridge to Nowhere” and twice as large as Mississippi’s “Train to Nowhere.”

More from Ron Utt here.

Fitting, perhaps, that Davis is a Republican.

The latest installment of Red Rockin’ comedy night (hosted by my bro) and frequented by various libertarian types (like Glen) is this Tuesday.

I’ll be there, of course, and will be hanging out before and after the show. Stop by and I might just buy you a drink.

Tuesday’s headliner is four-time Emmy winner, Leno-Letterman-Conan regular Greg Fitzsimmons. Oh yeah, he’s also nabbed the Aspen Comedy Festival Jury Award for best comedian.

What: Red Rockin’ Comedy

When: Tuesday, July 18, 9:00pm

Where: Red Rock (upstairs lounge) 8782 Sunset Blvd., West Hollywood, CA

Cost: ZERO (and no drink minimum)

Parking: $4 Public parking across the street on Sunset, $5 valet behind Red Rock.

(not for the easily-offended)

The world has more problems than resources needed to fight them all. What to do?

Russell Roberts points to this piece by John Baden, who recalls the Copenhagen Consensus Project , and then notes that the same sort of exercise was done again:

The experiment with economists was recently replicated by John Bolton, U.S. Ambassador to the UN. Not one to shrink from controversy, he empanelled UN diplomats from seven emerging nations, including India and China, to prioritize the issues. After hearing from experts in the problem areas, they ranked global crises ranging from climate change to migration. The top four were again health care, water and sanitation, education, and child nutrition. Climate change was, of course, dead last. No honest policy analyst would be surprised by these rankings.

While most agree that climate change is occurring, many proposed “solutions” are monumentally expensive, uncertain, and distant. They are, in sum, the sorriest of investments. Providing vitamin A, on the other hand, costs less than $1 per person per year, saves lives, and prevents childhood blindness. Encouraging breast feeding cheaply and effectively promotes infant health. These nutritional initiatives do not, however, offer a stage for pretense and drama. No matter how skilled the movie director, it’s hard to make public health reform a sexy issue.

One could argue that polar bears are more important than Pakistanis. The bears are indeed threatened by the melting of Arctic ice floes. Should we then invest to retard global warming, even if that investment could instead save millions of Pakistanis from easily preventable disease?

Related: Bjorn Lomborg on environmental priorities.

The ink was barely dry on Gov. Kathleen Blanco’s veto of statewide video franchise reform when Cox Communications announced rate increases in Baton Rouge and Lafayette. The veto will slow BellSouth deployment of competitive cable TV services in Louisiana. In her veto, Blanco said she was more concerned with safeguarding the revenue flow local municipalities receive from the existing franchise fees. In other words, the demands of the tax man trump the documented consumer benefits of cable competition, at least in Louisiana.

Cox said that prices for its expanded-basic cable TV will increase by $3.34 to $46.99 for its Baton Rouge. In Lafayette, rates for expand-basic will increase $5.94. The rate hikes take effect Aug. 15.

While Cox will lower rates on its low-end basic cable tier, it removed popular channels such as The Weather Channel and ESPN, which will take over Monday Night Football broadcasts this year, from the basic line-up. Customers wanting either will have to upgrade to the more expensive expanded basic tier.

In addition, Cox will raise prices $2 across the board for its high-speed Internet service. A spokeswoman attributed the increases to increased fuel costs and recovery from Hurricane Katrina.

Tellingly, Cox is not increasing rates on its Internet-based telephone service, the one area where it competes head-to-head with BellSouth. Fortunately for Cox, apparently high fuel costs and Katrina clean-up had absolutely no impact on these operations.

The franchise reform bill would have allowed BellSouth faster entry into Louisiana cable markets. Blanco’s veto turned back legislation that passed both houses of the Louisiana legislature by a nearly 3-to-1 and bucking a growing national trend in support of franchise rules that spark cable competition.

Louisiana's example now stands in stark contrast to states like Texas, where franchise reform was followed by competition and lower cable rates.

So, one more time…Franchise reform means competition. Competition means lower rates and faster deployment of innovative technology, such as fiber to the home and Internet Protocol TV. Consumers win. Regulated monopolies and deliberate obstacles to market entry mean rate increases and delayed investment. Consumers lose.

Here’s what the very same Prof. Kannan quoted in the previous post thinks:

telecommuting is one generation removed from a huge boom as younger workers who are more comfortable with technology, the MySpace generation, move into mid-management.

He says much of the resistance to telecommuting is age related, but that will change once the new generation moves into positions of authority.

Says Kannan:

“Today’s employers will continue to adopt formal communications applications, but in time they will understand that if something needs to be recreated, it is the environment that allows workers to chitchat privately,” he said. “You will find very few managers over 30 who will agree with that.”

But informal chats at the office usually involve some level of privacy. It’s unlikely that telecommuters will feel confident if the company is providing the environment where they are supposed to be candid with each other.

“There are technologies where you can have private conversations not hosted by the company, but younger workers place a much lower premium on that kind of privacy,” he said. “Maybe their need for privacy will grow as they get older, but they are used to sharing their thoughts on computers.”

Article here.

One-quarter of the U.S. work force could be doing their jobs from home if all those able to telecommute chose to do so, according to a study on Wednesday which said many still elect to work at the office.

All those people working from home could translate into annual gasoline savings of $3.9 billion, according to the National Technology Readiness Survey.

The study found that 2 percent of U.S. workers telecommute full-time and another 9 percent do so part-time.
But another 14 percent of workers have the option of telecommuting, or have jobs conducive to the practice but choose not to, the study found.

The numbers suggest that many people would rather work at the office even if their job allowed telecommuting, said Professor P.K. Kannan, of the Robert H. Smith School of Business at the University of Maryland, which sponsored the study with Rockbridge Associates Inc., a Great Falls, Virginia research firm.

"That seems to suggest that even if employers were to say tomorrow that everybody had the option of telecommuting and you would save a lot of gas, that's not going to happen," Kannan said.

Sure, not everyone, perhaps not even most would telecommute if given the option, but that doesn’t mean we should assume workers aren’t interested in it and leave it at that. In most of the top 50 metro areas telecommuting already tops transit commuting and, apart from driving alone, it was the only commute mode to gain market share from 1980 to 2000. The evidence is pretty clear that the practice has continued to grow since 2000.

According to one recent survey, 80 percent of San Diego area folks who don’t telecommute say they would if given the chance. Do I think 80 percent of those surveyed really would telecommute? No way, but it still shows there’s pretty strong interest. And even if only, say, 20 percent really did end up working from home that would still make a big difference.

According to the National Technology Readiness Survey, of those who telecommute, most only do so one, two, or three days a week. But people should only do it as often as they want to, and the more people learn about part week (or even part day) telecommuting, the better.

My hunch is that many managers and employees quickly dismiss the idea because they assume telecommuting is an all-or-nothing choice. Few people will be able to ditch the office entirely, but as more people realize that telecommuting frequency can vary tremendously more will give telecommuting another look and figure out the best way to personalize the process of work.

Article here; thanks to Bobby B. for the tip.

Louisiana Gov. Kathleen Blanco has vetoed a bill that would have created a statewide franchising structure for cable and video service providers, turning back legislation that had passed 27-10 and 73-26 in both houses of the state legislature.

There appears no opportunity for an override, as the legislature has adjourned.

Blanco, a Democrat, becomes the first governor to veto video franchise reform, which so far has passed in the seven states, including Louisiana, where it has reached a full legistative vote. While Republicans in a number of states initiated the push for state franchising, bipartisan support has been growing, especially since rates immediately dropped when Verizon and SBC rolled out video service in Texas shortly after franchise reform passed there last year.

Louisiana was no different. Democrats in the legislature who were behind the reform push and were disappointed at the veto.

“The fact that Cox Cable just raised its rates $3.43 a month in Baton Rouge without any regulation shows they need some competition,” said state Rep. Billy Montgomery, (D-Haughton) in the Lafayette Daily Advertiser. “The consumer was left out of the process. Helping the consumer was the main part of the bill.”

Modern-day lepers will soon have an airline all their own:

A new airline for smokers only is scheduled to make its first flights in March 2007.

Smintair (Smokers' International Airways) has been founded by a German businessman, Alexander W. Schoppmann, in the hope of attracting the Asian business market as well as pro-smoking Europeans. Smintair plans to fly jumbo jets with 30 first-class and 108 business-class seats equipped with televisions, DVDs, gourmet food and "charming and beautiful" flight attendants. And ashtrays, of course.

Article here, and from the Smintair website:

Allowing our guests to smoke is one of the freedoms we are happily prepared to grant. Non-smokers will find the cabin air more refreshing than on any other flight with any other airline, as SMINTAIR adds fresh outside air to the conditioning system! This is more expensive, as it burns more fuel, but it is seen as an additional service to our guests.

Related: A Pack of Lies: The Surgeon General hypes the hazards of second-hand smoke

The Bellevue City Council on Monday night became the fourth Eastside government to say it favors light rail over buses for a high-capacity transit line planned from Seattle to Redmond.

…

The vote was 5-2, with councilmen Don Davidson and Conrad Lee voting no. Davidson said the question posed by Sound Transit — either light rail or bus rapid transit that would later be converted to light rail — was unfair and slanted.

"Sound Transit asks, 'Do you want light rail or do you want light rail?' " Davidson said. "We don't have any choice."