Hernando de Soto is quite a guy. He has a good idea, he researches and writes about it compellingly. Then he follows up with all manner of speeches and appearances.
And now he gets Bill Clinton (!) to explain it at tout le monde.
"Helping the Poor Register Land"
WSJ, By SALLY BEATTY, September 29, 2006; Page W2
"Establishing land rights for the poor in developing nations turned into the sleeper issue at the second annual Clinton Global Initiative in Manhattan last week, where celebrities, heads of state and the super-rich gathered to raise funds to help solve the world's problems.
"Former President Bill Clinton secured commitments totaling $7.3 billion at this year's conference, up from $2.5 billion last year. But the buzz in the hallways centered on a topic that until recently most philanthropists all but ignored: registering poor people's property so they could borrow against it to build businesses, pay taxes or for other purposes. Many citizens of developing countries don't formally have title to their land, and many economists -- including Peruvian economist Hernando de Soto, another conference attendee -- see this as a key source of urban poverty. According to Mr. de Soto's research, the value of unregistered land in developing countries totals over $9 trillion. Mr. Clinton told the audience that these assets 'cannot be converted into collateral for loans -- wealth locked-up and locked-down -- keeping people in grinding poverty instead of being an asset that can lift them up.' Up to 85% of urban land parcels in the developing world are unregistered, Mr. Clinton said, citing Mr. de Soto's research.
"But standing in the way of widespread land-ownership records are insufficient legal frameworks, confusing procedures and corrupt property registries. And establishing land ownership is all but impossible in communist and socialist countries, where property usually is owned by the state, said John Bryant, chief executive of Operation Hope, a nonprofit in Los Angeles that provides financial services to the poor.
"Calling land ownership 'the cornerstone of economic stability in any region,' Craig DeRoy, president of First American Corp., a seller of title-insurance and credit information, said his company would commit $1 million in cash and in-kind services to develop a 'template' to give the poor in developing countries a way to establish land titles.
"More foundations are beginning to think about land ownership. Patty Stonesifer, chief executive of the giant Bill & Melinda Gates Foundation and another conference attendee, called the discussion about land registration 'intriguing.' Though her group hasn't announced any involvement in the effort, it said earlier this year it will move into funding financial services for the poor."
Friday, September 29, 2006
Wednesday, September 27, 2006
Modest proposals
Elite opinion in L.A. (and many other places) cannot let go of the idea of more subways. Writing in today's LA Times, Christopher Hawthorne suggests that, "... it's time to redefine exactly what cost-efficiency means in a city of Los Angeles." Actually, local know-nothings have been doing so for many years.
This is why it is good to have Gabriel Roth's Street Smart in print. Twenty of today's smartest transportation people assemble and survey some of the best thinking around when it comes to urban transportation.
Now if we could only get elite opinion to stop talking and start reading (and thinking).
This is why it is good to have Gabriel Roth's Street Smart in print. Twenty of today's smartest transportation people assemble and survey some of the best thinking around when it comes to urban transportation.
Now if we could only get elite opinion to stop talking and start reading (and thinking).
Tuesday, September 26, 2006
A little history
Some of us recall the Newsweek cover of the mid-1970s that showed the Earth covered with ice. Global cooling was the fad.
Randall Holcombe poses the question in the Fall 2006 Independent Review, "Should We Have Acted Thirty Years Ago to Prevent Global Climate Change?" To ask the question is to anwer it.
Likewise, Kevin Shapiro asks, in the September Commentary, "Global Warming: Apocalypse Now?"
Patrick J. Michaels in Cato Policy Analysis No. 576 wonders, Is the Sky Really Falling? A Review of Recent Global Warming Scare Stories.
Part of the current discussion is the ineluctable demand for bad-news-coupled-to-feel-good-policy-antidotes. The science is being debated on terms that are beyond many lay people. The policy stuff elicits yawns. Perhaps evoking the global cooling discussion is useful.
Nothing like a little recent history.
Randall Holcombe poses the question in the Fall 2006 Independent Review, "Should We Have Acted Thirty Years Ago to Prevent Global Climate Change?" To ask the question is to anwer it.
Likewise, Kevin Shapiro asks, in the September Commentary, "Global Warming: Apocalypse Now?"
Patrick J. Michaels in Cato Policy Analysis No. 576 wonders, Is the Sky Really Falling? A Review of Recent Global Warming Scare Stories.
Part of the current discussion is the ineluctable demand for bad-news-coupled-to-feel-good-policy-antidotes. The science is being debated on terms that are beyond many lay people. The policy stuff elicits yawns. Perhaps evoking the global cooling discussion is useful.
Nothing like a little recent history.
Saturday, September 23, 2006
Fool's errand
Most people cling to the feel-good view that regulations protect consumers. A few grumpy economists (and some others) point out that most regulations also limit competition and choice -- with the effect that prices are high and quality low.
When it comes to taxicab service, many of us spend more getting to and from airports than flying between them. The airlines compete and the taxis are regulated. Oh yes, the regs are there to protect us.
Todays' LA Times includes "Taxicabs Take L.A. for a Ride ... Sting operation finds that 'scenic routes' and potentially rigged meters inflated costs half the time ..."
Deregulation and more competition, anyone? Government failure, anyone? Naw!
When it comes to taxicab service, many of us spend more getting to and from airports than flying between them. The airlines compete and the taxis are regulated. Oh yes, the regs are there to protect us.
Todays' LA Times includes "Taxicabs Take L.A. for a Ride ... Sting operation finds that 'scenic routes' and potentially rigged meters inflated costs half the time ..."
Deregulation and more competition, anyone? Government failure, anyone? Naw!
Tuesday, September 19, 2006
The basics
Supply and demand each matter. "Everybody" knows this. Well, not exactly. Many land use and housing regulators live in their own world, where their actions presumably make little difference. Then on odd days they fret over housing "affordability."
Actually, there are only trade-offs (another headline grabber). To help us make the point, Wendel Cox has just published his second annual housing affordability index. LA (my hometown) is in the worst shape of all.
And, yes, this morning's LA Times includes stories on plans to extend the County's disastrous Red Line subway. The one that costs taxpayers $8.50 for each and every boarding -- and that chalks up social losses of "only" $8.25 for each and every boarding, once we consider all those externalities.
The third shocker is that there is exit and voice. Until we leave, we only have one choice: keep on making the point, repetitious though it may be. The variation is to find new and better ways to make the point.
Actually, there are only trade-offs (another headline grabber). To help us make the point, Wendel Cox has just published his second annual housing affordability index. LA (my hometown) is in the worst shape of all.
And, yes, this morning's LA Times includes stories on plans to extend the County's disastrous Red Line subway. The one that costs taxpayers $8.50 for each and every boarding -- and that chalks up social losses of "only" $8.25 for each and every boarding, once we consider all those externalities.
The third shocker is that there is exit and voice. Until we leave, we only have one choice: keep on making the point, repetitious though it may be. The variation is to find new and better ways to make the point.
Monday, September 18, 2006
Hard work being concerned
"Fair" trade is a popular but useless label. So when it pops up at Stabucks, one must be wary (or put hand over wallet). Many economists have noted that it is just an application of price discrimination. The Undercover Economist refers to it as pricey "coffee for the concerned."
This morning's LA Times includes: "Fairtrade Coffee Not Living Up to Label in Peru ... 'Ethical' coffee is being produced in Peru, the world's top exporter of Fairtrade coffee, by laborers paid less than the legal minimum wage."
This morning's LA Times includes: "Fairtrade Coffee Not Living Up to Label in Peru ... 'Ethical' coffee is being produced in Peru, the world's top exporter of Fairtrade coffee, by laborers paid less than the legal minimum wage."
Sunday, September 17, 2006
Win-win
Today's NY Times real estate section features "Apartment Living, Home Schooling"
"By day, Baldwin Village is a pleasant Los Angeles neighborhood of two-story apartment buildings, most of them with metal gates and lushly planted courtyards. By night, residents say, the neighborhood is anything but lovely. When George Pino and Joe Killinger, a pair of real estate investors, began buying buildings in the neighbrohood, eight miles southwest of downtown L.A., in 2003, the police asked them to trim their shribery so that drug deaklers would have fewer places to hide. ... Now, in two of their buildings, the partners operate resource centers where the children play educational games. The centers are operated by teachers who arrive at 3:30 p.m. and stay until 6 p.m. each weekday.
"In an neighborhood where vacancy rates average about 5 percent, the partners said, the vacancy rate in their five buildings, which have a total of 104 units, is about 1 percent."
I have heard of experiments like this before and they make great sense. Renters and landlords (and buyers and sellers) have a common interest. It is old hat -- if the zoners and the educators will just let it be.
"By day, Baldwin Village is a pleasant Los Angeles neighborhood of two-story apartment buildings, most of them with metal gates and lushly planted courtyards. By night, residents say, the neighborhood is anything but lovely. When George Pino and Joe Killinger, a pair of real estate investors, began buying buildings in the neighbrohood, eight miles southwest of downtown L.A., in 2003, the police asked them to trim their shribery so that drug deaklers would have fewer places to hide. ... Now, in two of their buildings, the partners operate resource centers where the children play educational games. The centers are operated by teachers who arrive at 3:30 p.m. and stay until 6 p.m. each weekday.
"In an neighborhood where vacancy rates average about 5 percent, the partners said, the vacancy rate in their five buildings, which have a total of 104 units, is about 1 percent."
I have heard of experiments like this before and they make great sense. Renters and landlords (and buyers and sellers) have a common interest. It is old hat -- if the zoners and the educators will just let it be.
Tuesday, September 12, 2006
"Do you want some health insurance with that hammer?"
Many people have figured out that free exchange is the source of our well being. But at least as auspicious is what markets bring forth in spite of the many roadblocks from the world of politics. (Yes, many ironies in light of the mantra by the regulators and their supporters that they are in the business of "helping people.") The story below cites new ways that people can purchase health care coverage. Yes, it's from entrepreneurs interested in profit -- the real "helping professions."
"Out Front Home Remedy"
by Suzanne Hoppough
Forbes, 09.18.06
"Can't get health insurance? Try shopping at Home Depot."
"To keep customers coming back, retailers try everything from store-issued credit cards to loyalty cards that get punched with every purchase. Now the Home Depot is going one better. It's treating its most faithful shoppers--plumbers, electricians, small-home builders and contractors--almost like employees. These customers can now have their businesses' payroll, credit-card processing and personnel paperwork done through Home Depot. They can get their mobile phones and shipping services through Home Depot. Most notably, they can sign up for health insurance through Home Depot.
"The hardware chain has been rolling out the program since January, doing little to publicize it beyond putting stacks of brochures next to cash registers. Nevertheless, 12,000 customers have signed up. Home Depot plans to announce the program in the media later this month.
"The program, dubbed Home Depot Business ToolBox, could be a boon for small-business owners who can't get health insurance at affordable rates. Members pay for the insurance and other services but take advantage of Home Depot's group rates. In return, they don't need to do anything, not even promise to shop at Home Depot instead of archrival Lowe's.
"It's a bold but risky move, so what's in it for the country's second-largest retailer? Chief Executive Robert Nardelli came up with the idea as a way to keep expanding sales to the professional market, which account for 30% of the chain's $82 billion annual total. The program is also open to other small employers: shops and restaurants, even churches, day care centers and other nonprofits. He figures that the program will instill a deep loyalty to Home Depot. It is not exactly a charitable activity on the company's part, because the company gets fees from the 13 companies--so far--that provide the services; they include Sprint, JPMorgan Chase and DHL. But evidently the bottom-line benefit, if any, is going to come through higher sales of hardware.
"Nardelli certainly needs the boost. The company's share price is down 21% since he took over in December 2000, and investors are in an uproar over everything from his fat paycheck to how he ran the annual meeting.
"So far, his plan has worked for Margaret Lade, owner of Lade Insurance Agency in Burnsville, Minn. She switched to the payroll processor offered by Business ToolBox, PrimePay, and says she's saving 40%. She also might change her credit-card processor to Chase. 'Now I definitely use Home Depot before [Midwest hardware chain] Menards,' she says. 'They're going out of their way for their customers. I do the same thing for mine, trying to get that warm-and-fuzzy feeling.'
"Some 38% of Business ToolBox members tell Home Depot that they plan to sign up for health insurance. Wendy Hendricks, who runs a 15-employee Pittsburgh firm called Warehouses by Design that outfits warehouses, already had insurance when she learned about the program from an insert in her Home Depot credit card bill. But she was paying $800 a month for her family of five, so she called the toll-free number and reached Phoenix broker BenefitProtect. She switched to Assurant Health and now pays $450 a month.
"The retailer put BenefitProtect through lots of hoops before picking it as Business ToolBox's insurance broker. 'Home Depot wanted assurances that we can grow with their plan,' says Kyle Williams, the company's chief executive. He says some applicants have serious conditions and don't qualify for major medical insurance but can get limited coverage.
"Of course, funneling thousands of customers into all sorts of services could prove a huge administrative headache for Home Depot. It has already lost one customer. Celeste Gothorp, owner of a small power-washing company in Graham, N.C., signed up for Business ToolBox online and followed up with an e-mail to no avail. 'I got a prompt e-mail back saying someone would be in touch,' she says. 'That was six months ago.'
"Home Depot brushes off such concerns. James Stoddart, the retailer's senior vice president for growth initiatives, says it's ready for the volume that's expected once the program gets more publicity. In fact, he says, Business ToolBox is adding new services, such as dumpster rentals and help for contractors in maintaining their certifications, while also expanding into Mexico and Canada. Throughout North America, cashiers may soon be saying, 'Do you want some health insurance with that hammer?'"
"Out Front Home Remedy"
by Suzanne Hoppough
Forbes, 09.18.06
"Can't get health insurance? Try shopping at Home Depot."
"To keep customers coming back, retailers try everything from store-issued credit cards to loyalty cards that get punched with every purchase. Now the Home Depot is going one better. It's treating its most faithful shoppers--plumbers, electricians, small-home builders and contractors--almost like employees. These customers can now have their businesses' payroll, credit-card processing and personnel paperwork done through Home Depot. They can get their mobile phones and shipping services through Home Depot. Most notably, they can sign up for health insurance through Home Depot.
"The hardware chain has been rolling out the program since January, doing little to publicize it beyond putting stacks of brochures next to cash registers. Nevertheless, 12,000 customers have signed up. Home Depot plans to announce the program in the media later this month.
"The program, dubbed Home Depot Business ToolBox, could be a boon for small-business owners who can't get health insurance at affordable rates. Members pay for the insurance and other services but take advantage of Home Depot's group rates. In return, they don't need to do anything, not even promise to shop at Home Depot instead of archrival Lowe's.
"It's a bold but risky move, so what's in it for the country's second-largest retailer? Chief Executive Robert Nardelli came up with the idea as a way to keep expanding sales to the professional market, which account for 30% of the chain's $82 billion annual total. The program is also open to other small employers: shops and restaurants, even churches, day care centers and other nonprofits. He figures that the program will instill a deep loyalty to Home Depot. It is not exactly a charitable activity on the company's part, because the company gets fees from the 13 companies--so far--that provide the services; they include Sprint, JPMorgan Chase and DHL. But evidently the bottom-line benefit, if any, is going to come through higher sales of hardware.
"Nardelli certainly needs the boost. The company's share price is down 21% since he took over in December 2000, and investors are in an uproar over everything from his fat paycheck to how he ran the annual meeting.
"So far, his plan has worked for Margaret Lade, owner of Lade Insurance Agency in Burnsville, Minn. She switched to the payroll processor offered by Business ToolBox, PrimePay, and says she's saving 40%. She also might change her credit-card processor to Chase. 'Now I definitely use Home Depot before [Midwest hardware chain] Menards,' she says. 'They're going out of their way for their customers. I do the same thing for mine, trying to get that warm-and-fuzzy feeling.'
"Some 38% of Business ToolBox members tell Home Depot that they plan to sign up for health insurance. Wendy Hendricks, who runs a 15-employee Pittsburgh firm called Warehouses by Design that outfits warehouses, already had insurance when she learned about the program from an insert in her Home Depot credit card bill. But she was paying $800 a month for her family of five, so she called the toll-free number and reached Phoenix broker BenefitProtect. She switched to Assurant Health and now pays $450 a month.
"The retailer put BenefitProtect through lots of hoops before picking it as Business ToolBox's insurance broker. 'Home Depot wanted assurances that we can grow with their plan,' says Kyle Williams, the company's chief executive. He says some applicants have serious conditions and don't qualify for major medical insurance but can get limited coverage.
"Of course, funneling thousands of customers into all sorts of services could prove a huge administrative headache for Home Depot. It has already lost one customer. Celeste Gothorp, owner of a small power-washing company in Graham, N.C., signed up for Business ToolBox online and followed up with an e-mail to no avail. 'I got a prompt e-mail back saying someone would be in touch,' she says. 'That was six months ago.'
"Home Depot brushes off such concerns. James Stoddart, the retailer's senior vice president for growth initiatives, says it's ready for the volume that's expected once the program gets more publicity. In fact, he says, Business ToolBox is adding new services, such as dumpster rentals and help for contractors in maintaining their certifications, while also expanding into Mexico and Canada. Throughout North America, cashiers may soon be saying, 'Do you want some health insurance with that hammer?'"
Keep it handy
Jonathan D. Fisher and David S. Johnson just published "Consumption Mobility in the U.S.: Evidence from Two Panel Sets" Here is their abstract:
"This paper examines inequality and mobility using measures of income and consumption. Consumption is claimed to be a better measure of permanent income and thus well-being, but most studies of inequality and mobility using U.S. data use income.
"This paper uses cohort data from the Consumer Expenditure Surveys on total consumption to impute consumption in the Panel Study of Income Dynamics. Then, we use this imputed consumption and actual income from the PSID to examine changes in inequality and mobility. Similar to earlier findings, we show that there has been a large increase in income inequality but no concurrent increase in consumption inequality in the 1990s. Conversely, income mobility and consumption mobility are similar during this time period.
"Finally, we link the concepts of inequality and mobility using a social welfare function. The results suggest that income mobility and consumption mobility more than offset the increases in inequality."
Straight intertemporal comparisons of groups that do not include the same people -- only to set up great displays of profound concern over the findings -- is one of the most bone-headed plays in our popular discourse.
So, keep Fisher and Johnson's paper nearby.
"This paper examines inequality and mobility using measures of income and consumption. Consumption is claimed to be a better measure of permanent income and thus well-being, but most studies of inequality and mobility using U.S. data use income.
"This paper uses cohort data from the Consumer Expenditure Surveys on total consumption to impute consumption in the Panel Study of Income Dynamics. Then, we use this imputed consumption and actual income from the PSID to examine changes in inequality and mobility. Similar to earlier findings, we show that there has been a large increase in income inequality but no concurrent increase in consumption inequality in the 1990s. Conversely, income mobility and consumption mobility are similar during this time period.
"Finally, we link the concepts of inequality and mobility using a social welfare function. The results suggest that income mobility and consumption mobility more than offset the increases in inequality."
Straight intertemporal comparisons of groups that do not include the same people -- only to set up great displays of profound concern over the findings -- is one of the most bone-headed plays in our popular discourse.
So, keep Fisher and Johnson's paper nearby.
Fooled by Randomness?
We tell our students: "No theory without numbers and no numbers without theory."
But Forbes (Sep 18) includes: "Economic Dexterity ... Left-handed men with college educations earn 15% more than similarly schooled right-handed men, an academic study says. Using a detailed 1993 government survey of 5,000 persons, Lafayette College's Christopher S. Ruebeck and Johns Hopkins' Joseph E. Harrington, Jr. and Robert Moffitt found no differences for women. Over 33 pages they suggest no firm explanation for their conclusions, writing, 'We do not have a theory that reconciles all of these findings.'"
But Forbes (Sep 18) includes: "Economic Dexterity ... Left-handed men with college educations earn 15% more than similarly schooled right-handed men, an academic study says. Using a detailed 1993 government survey of 5,000 persons, Lafayette College's Christopher S. Ruebeck and Johns Hopkins' Joseph E. Harrington, Jr. and Robert Moffitt found no differences for women. Over 33 pages they suggest no firm explanation for their conclusions, writing, 'We do not have a theory that reconciles all of these findings.'"
Monday, September 11, 2006
Worthy re downtowns
Much of "informed opinion" takes it for granted that (i) downtowns (and especially LA's) are "coming back"; and (ii) they ought to be further encouraged to keep it up; and (iii) this effort should be paid for by everyone else.
Randy Crane takes a sober look at all this. His blog on the topic is worth reading.
Randy Crane takes a sober look at all this. His blog on the topic is worth reading.
New and improved housing markets
Yesterday's NY Times included "The Pork-Bellies Approach to Housing" which described the marketing of the Case-Shiller house-price indices as housing market hedges.
The indices are metro-area specific and, therefore, limited. "When pressed on this, Shiller and Masucci observed that metro-level price changes do explain roughly half the variation in price for a typical house. Whether that's good enough for hedging purposes remains to be seen."
As with any hedge and/or insurance, it's not for everyone but the fact that is is now available (and selling) says a lot. There is lots wrong with housing markets and how they are treated by tax and zoning laws. Given all of this, the availability of these new opportunities is good news even if we stay on the sidelines.
We may get fewer interest rate jitters, less bubble talk (and possibly fewer bubbles), as well as thicker and better informed markets.
The indices are metro-area specific and, therefore, limited. "When pressed on this, Shiller and Masucci observed that metro-level price changes do explain roughly half the variation in price for a typical house. Whether that's good enough for hedging purposes remains to be seen."
As with any hedge and/or insurance, it's not for everyone but the fact that is is now available (and selling) says a lot. There is lots wrong with housing markets and how they are treated by tax and zoning laws. Given all of this, the availability of these new opportunities is good news even if we stay on the sidelines.
We may get fewer interest rate jitters, less bubble talk (and possibly fewer bubbles), as well as thicker and better informed markets.
Friday, September 08, 2006
Terms of trade
Well-offness is hard to measure. Economists and many others have tried but all manageable indices are bound to fall short. Census income comparisons have well known shortcomings and the BLS has recently taken to making consumer expenditure comparisons (tanks, Ted Balaker).
Cox and Alm (1999) provided many illuminating examples of what an average worker could buy per hour of work, now vs. a hundred years ago, etc. And guess what? We are better off now!
Last week, The Economist published the UBS international index of how long an average worker has to toil to buy a Big Mac. This is an elaboration of the magazine's well known Big Mac Index (see chart), which offers a rough measure of international comparative purchasing power. This latest version divides the local price of a Big Mac by the local average hourly wage.
Tokyo workers have the most Big Mac purchasing power in the world, better than their New York counterparts. Terms of trade, indeed!
Cox and Alm (1999) provided many illuminating examples of what an average worker could buy per hour of work, now vs. a hundred years ago, etc. And guess what? We are better off now!
Last week, The Economist published the UBS international index of how long an average worker has to toil to buy a Big Mac. This is an elaboration of the magazine's well known Big Mac Index (see chart), which offers a rough measure of international comparative purchasing power. This latest version divides the local price of a Big Mac by the local average hourly wage.
Tokyo workers have the most Big Mac purchasing power in the world, better than their New York counterparts. Terms of trade, indeed!
Sunday, September 03, 2006
Hand-wringing
The Census issues periodic reports on income distributions and, like clockwork, stern commentators emerge to comment how much worse-off the median earner is today -- than 5, 10, 20, 30, whatever, years ago.
This is silly for two reasons. One, of course, is that very few of us spend a lifetime as median earners. The median earner today is very likely to move up as he gets older. Second, Don Boudreaux suggests a useful but simple mental experiment: think seriously about life as it was in 1986, 1976, etc., and what it is that you now take for granted that you did not have available to you: ATM's, wi-fi, broadband, Google, cell phones everywhere, almost anything you find at Best Buy, etc.
Not a gadget person? OK, how about today's medical science?
This is silly for two reasons. One, of course, is that very few of us spend a lifetime as median earners. The median earner today is very likely to move up as he gets older. Second, Don Boudreaux suggests a useful but simple mental experiment: think seriously about life as it was in 1986, 1976, etc., and what it is that you now take for granted that you did not have available to you: ATM's, wi-fi, broadband, Google, cell phones everywhere, almost anything you find at Best Buy, etc.
Not a gadget person? OK, how about today's medical science?
First run at the trough
Three light-rail lines have been added to L.A. county's transit system in the last 20 years. Together, these cost $2.5 billion in capital costs, they serve about 125,000 passengers per day and account for a fiscal loss of approximately $252 million per year -- if one acknowledges that capital costs are real, something that transit operators and boosters often neglect.
If one wants to believe that there are external benefits, a variety of optimistic assumptions on auto trips replaced, cuts the loss to "only" $245 million/year. These are simple spreadsheet calculations that anyone can do. Further, no one alleges that the three lines have had any impact on L.A. area traffic conditions. In fact, complaints about "gridlock" are a staple -- and the pricing cure is still deemed too esoteric and/or sinister. In fact, there are no correlations known to man or woman to show that projects like this relieve traffic.
None of these simple facts made it into today's LA Times coverage, which is reproduced below because it is all so breathtaking. Billions of dollars are at stake and a know-nothing debate is respectfully cited -- when it is simply about which part of town and which politician gets first run at the trough.
"Which Way for the Next Light-Rail Line in L.A. County?
L.A. transit agency weighs competing plans for lines to the Westside and San Gabriel Valley."
By Jean Guccione, Times Staff Writer
September 3, 2006
"As they prepare to set spending priorities for the next quarter-century, Los Angeles County transit officials are bracing for a head-on collision over where to build the next light-rail line.
"Should the Westside's proposed Expo Line be extended all the way from downtown to Santa Monica? Or should Pasadena's Gold Line grow 13 miles east to Montclair?
"Though construction is still years away, long-range planning decisions reached over the next several months will determine the pecking order for major county transit projects through 2030.
"Even if both light-rail proposals are considered worthy, some transit officials doubt that the federal government would spring for two $1-billion transportation projects in the same county at the same time, escalating the competition for federal dollars.
"'There is no question that traffic is getting worse everywhere,' said Los Angeles County Supervisor Zev Yaroslavsky, who wants the Westside's Expo Line extension built next. 'Now the question is, if you have a limited amount of money, where do you spend it?'
"Rep. David Dreier (R-San Dimas) says funds should be allocated to the San Gabriel Valley, where thousands of new, affordable homes are luring workers and increasing freeway congestion.
"Dreier envisions someday extending the line even farther east, to Ontario Airport — a move that he argues also would benefit the Westside by shifting some travelers away from Los Angeles International Airport.
"'We need to build Expo, but the Gold Line is my priority,' Dreier said in an interview Thursday. 'I think we have the potential to do both.'
"The dueling proposals are attracting more attention now as the Metropolitan Transportation Authority moves closer to deciding which of dozens of proposed transit improvements should be funded in coming years.
"Projects must be part of the agency's long-range plan to qualify for federal funds. The plan is scheduled for adoption early next year.
"This year's competition is particularly fierce as officials anticipate how they might spend up to $12 billion on one-time capital projects if voters approve the state transportation bond issue in November. Without voter approval, the agency would allocate an estimated $7 billion in existing funds to new projects.
"Even with the state bond money, transit officials said, they still would have to seek matching federal funds to begin building light-rail extensions within the next few years. The MTA's capital funds cover streets and highways, as well as buses and rail.
"'Money is going to be very tight,' said Carol Inge, chief planning officer. 'We have a longer list of projects than we have money overall.'
"Officials have yet to decide which projects they will request funding for in the long-range plan, Inge said.
"Construction priorities are based on ridership projections and cost effectiveness, measured in costs per mile and costs per passenger, according to MTA board policy.
"In 2001, the last time projects were ranked, the MTA board of directors gave the Expo Line a high priority.
"Construction is scheduled to begin soon on the first part of the line — from downtown Los Angeles to Culver City.
"The next proposed segment, from Culver City to Santa Monica, is in the long-range plan but has not yet been funded. It is expected to cost $750 million to build.
"The Gold Line extension did not make it into the MTA's 2001 long-range plan. A preliminary draft of the agency's 2006 priorities shows other, more costly, projects — such as Los Angeles Mayor Antonio Villaraigosa's proposed subway to the sea — ranking higher.
"Because ridership on the Gold Line's 14-mile route between Union Station near downtown Los Angeles and Pasadena turned out to be lower than expected, a further extension of the line was placed somewhere in the middle of this year's preliminary long-range plan.
"Ridership on the Pasadena line hit a high of 20,000 weekday boardings in July, according to the MTA. Weekend ridership, however, has dropped significantly over the last year.
"Duarte City Councilman John Fasana, who sits on the MTA board, said ridership would increase if the Pasadena-based line were extended farther into the fast-growing San Gabriel Valley.
"The region's three east-west freeways are packed with big trucks serving the ports of Los Angeles and Long Beach, as well as thousands of commuters, many traveling from their homes in the Inland Empire.
"Last year, the counties of Riverside and San Bernardino issued 51,000 residential building permits, and their region ranked seventh in the nation for new-home growth, according to California Department of Transportation statistics. More than 153,000 permits were issued in those two counties in the four previous years.
"Still, Yaroslavsky said the Gold Line ridership numbers, estimated at 6.3 million boardings a year, do not support the proposed extension at this time. Statistics, he said, favor additional mass transit on the burgeoning Westside as a top countywide priority.
"'If you look at this objectively and leave the politics out, it bears no comparison to anything else,' he said of the Westside's need.The Westside has no commuter rail line. Its two freeways, the Santa Monica and San Diego, are "parking lots," he said. And the area's major hubs — Santa Monica, Century City, Westwood and Culver City — are experiencing major residential and commercial growth.
"Duarte's Fasana said he expects that the Gold Line extension would be included in the upcoming long-range plan — and that, if the state bond measure passes, 'I think there is an ability to build both projects.'
"Gold Line proponents aren't taking any chances. They are trying to leap-frog ahead of the proposed Westside line by appealing directly to Congress for funds.
"Habib Balian, chief executive officer of the Gold Line Foothill Extension Construction Authority, is leading the charge. He acknowledges that the strategy is 'totally unconventional.'
"The construction authority was created by the Legislature to oversee construction but not operation of the Gold Line to Pasadena. The MTA runs the line.
"Balian doesn't view his renegade tactics as distracting support for the Expo Line in any way."I believe all meritorious projects will be funded," he said.Balian pointed out that he is not asking the MTA to pay for construction of the extension. The agency simply would have to commit to run the extended Gold Line — at a cost of about $10 million a year — after it is built.
"The MTA needs to promise to pay for operation of the rail line for federal construction funds to be secured, he said.
"While waiting for decisions, both sides are proceeding as if their projects have made the cut.
"Even before ground has been broken on the Expo Line to Culver City, its construction authority is seeking proposals for an environmental study of construction from Culver City to Santa Monica.
"The Gold Line construction authority, meanwhile, is studying the effect of its proposed two-phase extension: 10.5 miles from Pasadena to Azusa, followed by 13.1 miles to Montclair.
"People on both sides acknowledge that the county's need for public transportation is great everywhere.
"Despite his support for the Gold Line project, Dreier said freeway congestion on the Westside and elsewhere affects all Los Angeles County residents, no matter where they live.
"'My constituents want to have the ability to go to the beach, the mountains, the desert or wherever,' he said."
If one wants to believe that there are external benefits, a variety of optimistic assumptions on auto trips replaced, cuts the loss to "only" $245 million/year. These are simple spreadsheet calculations that anyone can do. Further, no one alleges that the three lines have had any impact on L.A. area traffic conditions. In fact, complaints about "gridlock" are a staple -- and the pricing cure is still deemed too esoteric and/or sinister. In fact, there are no correlations known to man or woman to show that projects like this relieve traffic.
None of these simple facts made it into today's LA Times coverage, which is reproduced below because it is all so breathtaking. Billions of dollars are at stake and a know-nothing debate is respectfully cited -- when it is simply about which part of town and which politician gets first run at the trough.
"Which Way for the Next Light-Rail Line in L.A. County?
L.A. transit agency weighs competing plans for lines to the Westside and San Gabriel Valley."
By Jean Guccione, Times Staff Writer
September 3, 2006
"As they prepare to set spending priorities for the next quarter-century, Los Angeles County transit officials are bracing for a head-on collision over where to build the next light-rail line.
"Should the Westside's proposed Expo Line be extended all the way from downtown to Santa Monica? Or should Pasadena's Gold Line grow 13 miles east to Montclair?
"Though construction is still years away, long-range planning decisions reached over the next several months will determine the pecking order for major county transit projects through 2030.
"Even if both light-rail proposals are considered worthy, some transit officials doubt that the federal government would spring for two $1-billion transportation projects in the same county at the same time, escalating the competition for federal dollars.
"'There is no question that traffic is getting worse everywhere,' said Los Angeles County Supervisor Zev Yaroslavsky, who wants the Westside's Expo Line extension built next. 'Now the question is, if you have a limited amount of money, where do you spend it?'
"Rep. David Dreier (R-San Dimas) says funds should be allocated to the San Gabriel Valley, where thousands of new, affordable homes are luring workers and increasing freeway congestion.
"Dreier envisions someday extending the line even farther east, to Ontario Airport — a move that he argues also would benefit the Westside by shifting some travelers away from Los Angeles International Airport.
"'We need to build Expo, but the Gold Line is my priority,' Dreier said in an interview Thursday. 'I think we have the potential to do both.'
"The dueling proposals are attracting more attention now as the Metropolitan Transportation Authority moves closer to deciding which of dozens of proposed transit improvements should be funded in coming years.
"Projects must be part of the agency's long-range plan to qualify for federal funds. The plan is scheduled for adoption early next year.
"This year's competition is particularly fierce as officials anticipate how they might spend up to $12 billion on one-time capital projects if voters approve the state transportation bond issue in November. Without voter approval, the agency would allocate an estimated $7 billion in existing funds to new projects.
"Even with the state bond money, transit officials said, they still would have to seek matching federal funds to begin building light-rail extensions within the next few years. The MTA's capital funds cover streets and highways, as well as buses and rail.
"'Money is going to be very tight,' said Carol Inge, chief planning officer. 'We have a longer list of projects than we have money overall.'
"Officials have yet to decide which projects they will request funding for in the long-range plan, Inge said.
"Construction priorities are based on ridership projections and cost effectiveness, measured in costs per mile and costs per passenger, according to MTA board policy.
"In 2001, the last time projects were ranked, the MTA board of directors gave the Expo Line a high priority.
"Construction is scheduled to begin soon on the first part of the line — from downtown Los Angeles to Culver City.
"The next proposed segment, from Culver City to Santa Monica, is in the long-range plan but has not yet been funded. It is expected to cost $750 million to build.
"The Gold Line extension did not make it into the MTA's 2001 long-range plan. A preliminary draft of the agency's 2006 priorities shows other, more costly, projects — such as Los Angeles Mayor Antonio Villaraigosa's proposed subway to the sea — ranking higher.
"Because ridership on the Gold Line's 14-mile route between Union Station near downtown Los Angeles and Pasadena turned out to be lower than expected, a further extension of the line was placed somewhere in the middle of this year's preliminary long-range plan.
"Ridership on the Pasadena line hit a high of 20,000 weekday boardings in July, according to the MTA. Weekend ridership, however, has dropped significantly over the last year.
"Duarte City Councilman John Fasana, who sits on the MTA board, said ridership would increase if the Pasadena-based line were extended farther into the fast-growing San Gabriel Valley.
"The region's three east-west freeways are packed with big trucks serving the ports of Los Angeles and Long Beach, as well as thousands of commuters, many traveling from their homes in the Inland Empire.
"Last year, the counties of Riverside and San Bernardino issued 51,000 residential building permits, and their region ranked seventh in the nation for new-home growth, according to California Department of Transportation statistics. More than 153,000 permits were issued in those two counties in the four previous years.
"Still, Yaroslavsky said the Gold Line ridership numbers, estimated at 6.3 million boardings a year, do not support the proposed extension at this time. Statistics, he said, favor additional mass transit on the burgeoning Westside as a top countywide priority.
"'If you look at this objectively and leave the politics out, it bears no comparison to anything else,' he said of the Westside's need.The Westside has no commuter rail line. Its two freeways, the Santa Monica and San Diego, are "parking lots," he said. And the area's major hubs — Santa Monica, Century City, Westwood and Culver City — are experiencing major residential and commercial growth.
"Duarte's Fasana said he expects that the Gold Line extension would be included in the upcoming long-range plan — and that, if the state bond measure passes, 'I think there is an ability to build both projects.'
"Gold Line proponents aren't taking any chances. They are trying to leap-frog ahead of the proposed Westside line by appealing directly to Congress for funds.
"Habib Balian, chief executive officer of the Gold Line Foothill Extension Construction Authority, is leading the charge. He acknowledges that the strategy is 'totally unconventional.'
"The construction authority was created by the Legislature to oversee construction but not operation of the Gold Line to Pasadena. The MTA runs the line.
"Balian doesn't view his renegade tactics as distracting support for the Expo Line in any way."I believe all meritorious projects will be funded," he said.Balian pointed out that he is not asking the MTA to pay for construction of the extension. The agency simply would have to commit to run the extended Gold Line — at a cost of about $10 million a year — after it is built.
"The MTA needs to promise to pay for operation of the rail line for federal construction funds to be secured, he said.
"While waiting for decisions, both sides are proceeding as if their projects have made the cut.
"Even before ground has been broken on the Expo Line to Culver City, its construction authority is seeking proposals for an environmental study of construction from Culver City to Santa Monica.
"The Gold Line construction authority, meanwhile, is studying the effect of its proposed two-phase extension: 10.5 miles from Pasadena to Azusa, followed by 13.1 miles to Montclair.
"People on both sides acknowledge that the county's need for public transportation is great everywhere.
"Despite his support for the Gold Line project, Dreier said freeway congestion on the Westside and elsewhere affects all Los Angeles County residents, no matter where they live.
"'My constituents want to have the ability to go to the beach, the mountains, the desert or wherever,' he said."
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