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Sunday, December 16, 2007


Controlled burns causing sprawl???

This article talks about the training program the certain fire officials go through in order to execute "controlled burns". The program manager talks about "allowing fire to return to its natural role." The makes no sense when used in context with the idea of "controlled burns."

What the program manager is implying is that in ecosystems, in natural growth and destruction, cycles, fire serves the purpose of a destroyer, of a crop thinner, of a wheat-from-chaff separator. In addition they say that this natural function it provides is a good one to make sure that things do become overgrown or that things don't grow, or "sprawl" where they shouldn't.

The problem I have though, is that these burns are meant to r3educe the amount of fire that is actually in it's natural role. Controlled burns get rid of the fuel for the growth-inhibiting fires. If regions are deemed safe by way of controlled burning, then people are more likely to sprawl into them, not only hurting themselves, but ruining and crowding the forest.

Yes, fire has a natural role, but controlled burning does not let it do its natural job. It takes the natural role out of nature's hands.

Saturday, December 15, 2007


City Sprawl and Gasoline Prices

I have recently been thinking about the relationship between gas prices and real estate. An obvious question is whether such a relationship exists in the first place and if so- what is the relationship? Here is the way things seem to work. Suppose we are measuring the quantity of gasoline on the x-axis and the quantity of everything else on the y-axis. Theory suggests that an increase in gasoline price will rotate the budget constraint line (BCL) around the y-axis, decreasing the distance between (0,0) and the x-intercept (that is, the point where the BCL intersects with the x-axis), leaving everything else constant.
However, we can objectively agree that when gasoline prices go up, consumers have less disposable income to spend on everything else. An important point to make: it would most likely be represented as a parallel shift (a decrease) in the consumer budget constraint line on an indifference curve mapping.

Given that the demand for gasoline is quite inelastic in the short run, in the long run consumers will be more likely to switch to alternative means of transportation such as public transportation in densely populated metropolitan areas. But what about cities like Colorado Springs where public transportation grids are not as dense? Given that sufficient gasoline price increases will significantly affect consumer budgets, a family that might have otherwise moved out away from the core of the city to the city outskirts may defer doing so due to anticipated high costs of commuting. That leads to my question: is there a tradeoff between the gasoline prices and “horizontal” growth rate of cities? Do high gasoline prices cause less sprawl? If yes, how can we conclusively measure it?

Friday, December 14, 2007


perfect storm


In this article, Steve Fraser argues that a “perfect storm” of
economic disasters is steadily advancing on the U.S. economy, and it will be
hitting us right around the 2008 presidential election. This storm is
comprised of three main factors: bad business practices due to deregulation,
the collapse of the housing market, and the devaluation of the U.S. dollar
due to drastic increases in oil prices.

The collapse of the housing market is likened to the bursting of the
dot-com bubble, brought about by poor lending decisions by banks and rampant
borrowing from under qualified borrowers. Will the effects of this will be
bad for construction industry and the lending industry, the worse of it will
be felt by the general collapse of the credit structure which has “shored up
consumer capitalism for decades.” The vanishing equity in houses will put a
crunch on a lot of people, as well as lifelines of credit that have allowed

Sunday, December 09, 2007


Bumper to Bumper Traffic

With continuing urban growth and development there are many issues that may arise. One issue in particular is that of increased traffic congestion. In an article released by the Associated Press on September 18, 2007, author Stephen Ohlemacher gives readers statistics about their everyday commutes to work. “Drivers waste nearly an entire work week each year sitting in traffic on the way to and from their jobs, according to a national study…” Why are people in their cars so much? Living further from the city center tends to be less expensive, and therefore encourages more commuters on a day to day basis. With more and more people moving outside the city there is then an increase in the number of vehicle, often carrying only one person, driving in the same direction to work on a daily basis. According to a census, about one quarter of the population has at least two people per vehicle.

Another reason for the congestion, aside from an increase in the population that lives outside the city limits, it that the original planning of the roads and highways was not intended for such high volumes of traffic. “We’ve used up the capacity that had been bequeathed to us by a previous generation, and we haven’t replaced it. The study summed it up this way: ‘Too many people, too many trips over too short of a time period on a system that is too small.’” Although there has been a decrease in optional driving, there has not been a substantial decrease in the number of people and vehicles that commute to work.

Increased city size, and greater amounts of urban growth mean longer commuting times for most people. A fairly simple solution to the problem is to focus on ways to make public transportation in and out of congested urban areas more convenient, efficient and easy to use.

Jenna Cluley


Fear of Foreigners

The United States is not alone in the question regarding what to do about immigration. Europe is facing many of the same concerns as the United States as more and more people are immigrating to Western Europe from not only Africa, but also Eastern Europe. The questions some ask are: does it harm natural born citizens, and what will it do to our economy?

The arguments over the benefits of immigration are fairly complicated. Immigrants themselves clearly gain, since they move usually in order to work for higher pay than they can get at home. There is some evidence that European economies that have taken in many migrant workers have also benefited, not only in total output but also in terms of GDP per head. However, some native workers, such as fruit-pickers, builders and waiters, obviously lose because immigration holds down their wages. Even this has an upside, since it has helped to hold down inflation in places like London.

There is an obvious advantage to the workers who migrate to Western Europe, but are the advantages enough to out weigh the perceived and real problems? Many times the workers only come to the area to make some more money and then return to their native country to begin their own businesses and to help boost their own economies. Some immigrants also work for a while and then return to where they came from because there is a shortage in the labor supply in their own country.

The article from the Economist online also points out that there will be and is a slowing of the population growth in Western Europe. The additional people and migrant workers may actually be necessary in order to keep the economy as it is and has been. According to the article, acceptance is key and political policy and persuasion will play a huge role in whether or not immigration will continue to work at the same rate as it has been. Many feel that it will become necessary to help to integrate immigrants into the Western European culture by helping them with language skills, and improvement on infrastructure that will then allow for a larger population. Whether or not these things will happen is all up to the people, and ultimately government intervention.


Tuesday, December 04, 2007


Dubious homeowners and the Congress

No doubt, most of us are aware of the crisis (both present and impending, evidently) in the mortgage business, and its probable disastrous effects on the economy. As the son of a realtor, this topic is particularly interesting, since I have seen the negative side effects of this development.

But now I have been made aware that Secretary of the Treasury Henry Paulson is pushing the Congress to do something about it (effectively shifting the blame for anything that may happen). I'm not sure about the details, but I know that both Paulson and the Congressmen on Capitol Hill think it a good idea to further regulate the mortgage industry.

But I gotta ask, what's with the regulations? Didn't the people who signed up for these dumb loans read the fine print?

Oh, that's right, they didn't. Because most of them weren't responsible enough and didn't possess the means to purchase a home. And now they're paying the price. Beefing up regulations is not going to make things any better, either. Consider the following: In the 1990's, the wonderfully benevolent Congress set their attack dogs (regulations) on the mortgage industry and 'encouraged' them (yes, through regulation) to not 'discriminate' against those who borrow at the subprime level (in other words, those who probably shouldn't be buying a house).

So that's why they gave so many loans to unworthy borrowers. In any case, we know that the borrowers shouldn't have accepted the loans in the first place by the simple fact that most of them are defaulting on loans before they have even readjusted. That means the 'initial' rate that the sneaky mortgage people tricked these unwitting, poor people of the lower classes into signing off on were not affordable in the first place.

But what will regulations do? Hard to say, really. My guess is that, as usual, they probably will increase the cost of doing business, and maybe prevent mortgage companies from giving out as many loans, thus diminishing their capabilities of making profits. Mortgage companies will undoubtedly raise interest rates on their mortgages (or perhaps the initial fees they charge-again, hard to say). Either way, the Congress will probably see to it that not nearly as much borrowing happens in the coming decade, and less homes will be bought, at least in this lower income level.

Well, maybe since all the poor people will be moving back into apartments, we'll see increases in density. That should keep the anti-sprawlers at bay for a while.

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