City lists

Here is FT's 2010 list of "Top 25" cities. Most people object to lists and rankings but peek at them anyway. Healthy voyeurism?

There are many potshots that one can think of. But if there are going to be city rankings, how about two lists? "Best" to visit vs. "best" to live in? Visitors can stay near historic centers where many locals would not really want to live. There are many cities that would score much higher on one such list than the other. The living vs visiting experiences are vastly different.

Best to visit and/or live in with vs. without young children? Work or retire? Less than one year vs. longer? With or without significant funds? One could go on.

Listen to the micro

In a better world, markets would trump politics and labor would migrate to its highest and best uses. But that is unlikely to happen and Gary Becker suggests how enlightened politicians (???) could or would manage immigration policy in seemingly rational ways. This week's Economist summarizes the strengths and weaknesses of the proposal here.

As so often happens when prohibitions replace markets, we get black markets, criminality and horrid human outcomes, including exploitation and in this case even enslavement.

Becker's proposed immigration market means new sources of revenue. He notes that $50,000 per immigrant means $50 billion for each million immigrants admitted. In the world of political pork, there ought to be ways to divvy up these proceeds to elicit some political interest.

At a time when macro-economists are routinely beaten over the head right and left, how about some attention to what the micro-economists are suggesting?

Some call it "sprawl"

Wendell Cox has been doing a fine job checking the various claims that "the cities are back." Today's WSJ includes "Suburb Population Growth Slows" which cites a recent Brooking study of 2008-2009 population growth in the top 100 cities (not metro areas). The report suggests that recession-year residential moves are down.

But the boundary issues again muddy some of the picture. Five of the top-ten (by population) cities that grew faster than the national average over the 12 months involved here are very spread out. Some would say that they "sprawl". The cities Houston, Phoenix, San Antonio, Dallas and San Jose cover huge areas (average 400 square miles) that include neighborhoods that many of us would think of as suburban.

Best Blogs for Civil Engineers

Betty Jones let me know that I am included in 50 Best Blogs for Civil Engineers. Thank you!

The trouble with averages

Higher urban densities are almost a Holy Grail among many urban planners and urban economists. But as I may have said before, because of data limitations we usually take these measures over areas that are too large and varied for the averages to be useful.

The PUMS areas (PUMAs) are smaller and closer in size to what we would call a neighborhood. There are just over 2,000 of them in the U.S. that are within metro areas; these 2000+ had an average population just over 139,000 in 2005.

Trouble is that as of now, there are only data for these areas for the years 2005-2008. In that interval, many areas became denser and many became less dense. The relationship between initial density and increased densification was very weak (very complex) with a correlation of less than -0.10.

Some would say that the benefits of density are clear and the dense should/would become even denser. This is apparently not what's going on.

We will know more once we get results from the 2010 census, but only if we stop discussing city-wide or metro area-wide averages.

No one embarrassed

The WSJ's Laura Saunders writes that Roth IRAs may be eventually be taxed. Governments "need" the money.

I have a much better idea. Tax all conspiracy allegations. Here are two places to send the tax collector.

This morning, NPR included an interview with Dan Schorr in which he patiently explained to Scott Simon that we, after 40 years of talk, are still "addicted to oil" because various moneyed interests want it that way. Not a shred or even a mention of evidence-shmevidence.

Same thing last night on the PBS Evening News, when Jeffrey Brown interviewed Daniel Weiss and Kenneth Green on energy policy. Daniel Weiss floated the same conspiracy idea.

Ken Green had a witty retort. But just like high-brow-NPR, high-brow-PBS goes with the flow and accepts conspiracy-silliness-with-no-evidence because it goes down well. No one is embarrassed.

What mainstream?

The Tea Party idea is that the federal government has gotten too big and too intrusive. I suppose we shall see in November how widespread this view is. When commentators bemoan the divides in American politics and invoke a mythical "mainstream" view, I suspect that they see themselves as squarely in the reasonable middle.

In yesterday's WSJ, Alan Blinder dismissed the "diehards" who are not on board with the idea that FDR's New Deal ended the Great Depression. But I learned back in high school that prosperity came after WW II ended and government spending (as well as conscription) was scaled down. I think that Bob Higgs has some things to say about this.

In today's NY Times (not The Onion) there is an unbelievable piece about school authorities wanting to end the practice of young kids having best friends. Where to start? Is this their mission or their core competency? How many parents send kids to school for this kind of "help"? Is this dumb idea really from some Tea Party plant in the educational establishment? Will we soon hear that advocates of best-friend interventions are actually part of the "mainstream"?

Talk about growing divisions in American politics.

Read both

We hear many people make claims that they had long known that the U.S. was in a housing bubble through the early 2000s. But most of them did nothing about it. We now know that a very few did and they made a lot of money. Michael Lewis tells that story beautifully in The Big Short: Inside the Doomsday Machine. It takes us inside the sausage machine like nothing else I have seen.

We encounter many insiders (some we had heard of and others not) that we would not enjoy having as friends or neighbors. Lewis has an easy time citing their "greed" and linking it to so many not-so-wise choices and bad behavior.

Russ Roberts' paper includes the argument that a history of hundred-cents-on-the-dollar bailouts explains bondholders' tolerance of the many ill-fated gambles that Lewis describes.

You have to read both. Lewis hardly goes where Roberts treads and leaves readers with an incomplete understanding. It's much too easy to go with the greed (and accompanying hideous traits) explanation and leave it at that.

I have to add that Lewis' book will lend itself to a better movie than would Roberts' paper.

Get real?

The June 28 Forbes includes Philippe Legraine's "Let Them In ... Opening America's Borders is Morally Right, Economically Beneficial -- And Would Even Make America Safer."

Our politicians (either party) don't quite put it this way.

But read the article and consider the graphic "How long must I wait ... estimated time to acquire a U.S. green card." The range is from six months (for a 40-year-old British PhD bio-engineer) to 131 years (!) for a 30-year old Mexican with a high-school diploma and sister who is a U.S. citizen.

Unbelievable. Most choose not to wait 131 years and who can blame them? Just like the flat-tax proposal, discard the entire apparatus and offer a one-size-fits-all four-year (or whatever) renewable green card. One-size-fits-all has its problems but it beats the monstrosity now in place.

Strange review

I just read William Easterly's NYTBR review of Matt Ridley's The Rational Optimist. I had to look twice to be sure of the name of the reviewer.

Yes, Ridley makes the case for optimism, but is it reasonable for a reviewer to wheel out the straw man of the unblemished "free market"? I recall the book's discussions of markets, but never an allusion to the textbook straw person. Knocking that one down is child's play and an argument easily available to anyone.

No, this is not paradise, but evidence of progress is powerful. And good things happened to humanity in the twentieth century despite two horrid world wars, the Great Depression, the Cold War, the influenza epidemic of the 1920s, etc. Ridley likes "half-full" better than "half-empty", but to mention that he forgot Lehman Bros and Richard Fuld's salary is a cheap shot.

We do not have "free markets", we have crony capitalism with way too much of "crony", but in spite of the obvious shortcomings, no informed person would trade places with his/her ancestors. That's an awesome fact and the best explanation we have is the workings of the market -- even the imperfect type.

UPDATE

Here is Ridley summarizing the book.

Magic trick

In the current New Yorker, Laura Miller asks: "What's behind the boom in dystopian fiction for young readers?" Good question and I will leave it to others to decide how satisfying her answer is.

I am much too old to get my head around the young dystopians' worries. But I am greatly enjoying Matt Ridley's The Rational Optimist: How Prosperity Evolves. I have no idea whether young dystopians would be moved by the historical record which establishes just how amazingly well off most young dystopians are. Ridley is a fine writer and if he cannot move the young dystopians, perhaps nothing can.

Why didn't I think of this way of describing comparative advantage? "It is common to find two traders that both think their counterparts are idiotically overpaying: that is the beauty of Ricardo's magic trick."

Getting real

Today's LA Times includes "Blue Line cuts across L.A. County's invisible boundaries ... The oldest light-rail line is a rolling improv theater with a lively cast of characters running 22 miles from Long Beach to downtown L.A." Reporter Mike Anton has fun with a day in the life of the train.

They are strangers on a train. Text-messaging businessmen and hawkers selling pirated DVDs, cotton candy and drugs. Teenage mothers pushing strollers and weary scavengers with strollers heaped with cans and bottles. Students quietly reading textbooks and proselytizers shouting passages from the Bible.

There is the blind man who takes out his glass eyes for money and the tightly coiled gangbangers with whom direct eye contact is not advised. Commuters lost in their iPods next to full-throated yakkers broadcasting personal confessions.

The Metro Blue Line cuts up the middle of Los Angeles County, from Long Beach to downtown, like a surgical incision, exposing an element of the metropolis many never see.

In a place dominated by freeways and the automobile's numbing isolation, the 22-mile light-rail line — the oldest in L.A. County, marking 20 years of service this summer — is a rolling improvisational theater where a cast of thousands acts out a daily drama that is by turns poignant, sad, hysterical and inexplicable.

Whoa! Did a guy just get up from his seat and urinate before stumbling off the train?

Yes, folks, he did.

Five bucks gets you a day pass to one of the most unpredictable shows in town.

Trouble is that the perennially optimistic ridership forecasts that boosters like to use to justify the huge costs involved ($864 million of capital costs and $64 million in annual operating costs, 2005, serving just 78,000 boardings per day) presume that there is a middle class audience for these systems -- just like the European systems that fans once visited and forever pine for.

As much fun as the reporter had with the story (and that some readers might have with it over their morning coffee), it tells us quite a bit about why so many Americans avoid so many public spaces and public facilities.

For love or for money?

If you teach economics (for love or for money), you quickly find out that the thought of cooperation via exchange goes down better with some than with others. It seems that some are able to grow up but still hang on to a suspicion of any exchange that is not based on love. Hence, they are baffled by much of the real world - including the market economy. Dan Klein reports that this describes children as well as those on the political left. Here is the detailed report.

Good news, bad news

Today's WSJ reports that "Intermarriage Rate in 2008 Hits New High". This is good news because tribalism has outlived any usefulness and often turns ugly. In fact political scoundrels around the world and through recorded history have used it for their own advantage. The separation of race and state should be high on anyone's list of priorities.

I have seen no data that compares intermarriage rates for countries with mixed populations. My guess is that the U.S. would rank high if not first -- if such a cross-country comparison could be done. And if there is any discussion of American exceptionalism, then include this accomplishment.

It is nothing but atavistic when U.S. politicians (and others) embrace identity politics. But with enough intermarriage, this ploy may be on the way out.

UPDATE

Here is the view of the tone-deaf, who only want to know with which group the offspring of mixed marriages will identify/vote with.

Borders

There are quite a few illegal immigrants in Japan. Better than any wall, Japan has ocean on all sides. But put a rich country near poorer countries and labor markets kick in. This is all obvious and helps to put into perspective the shallowness of arguments to "put a fence" at the US-Mexican border. An extra 1,200 or 6,000 agents will make little difference.

This morning's WSJ includes "The Meaningless Mantra of 'Border Security'", The writer remind us that

The most secure border in modern history was probably the Cold War border between East and West Germany. To keep their people from leaving—logistically much easier than keeping others from entering—the East Germans built more than 700 watchtowers, sprinkled more than a million antipersonnel mines, created a deep no-man's zone of barbed wire and electric fencing, and deployed nearly 50 guards per square mile with shoot-to-kill orders. Even so about 1,000 people each year somehow managed to find a way across.

Renewable work permits that would legalize a large number of crossings would make managing the border easier. But a political constituency for a sensible border-labor policy is apparently not yet formed. Instead we get lots of naive talk about how we can or should "close the border."