The I-70 traffic-jams are a problem that all Colorado skiers are acutely aware of. As a skier myself, I have experienced this regular occurrence first-hand. On January 25, 2008, the Colorado Springs Gazette ran an article in regard to this dilemma. “Rush Hour Could Cost You,” by Chris Barge gives a brief overview one senator’s proposal for creating an incentive structure to relive the highway congestion during peak traffic hours.
Senator Chris Romer, D-Denver, proposed that skiers could be charged up to $12 for driving I-70 during the weekend rush hour. Romer explained that, “You’re just reallocation money from those who are time-sensitive to those who are price-sensitive, and that’s a perfect market-based solution.” Romer admits that most people will not be happy about paying for something that is currently free. For this reason he suggests giving a positive incentive to the people who choose to stay off the road during the most desirable times. For example “skiers who choose to go early or wait until after the rush could get a $25 check in the mail, or a coupon to spend that much at a slopeside restaurant while they wait out the afternoon rush. “
It is true that charging people to drive on I-70 will decrease the number of people who wish to be on the road. However, the problem is far too complex to be explained by a simple supply and demand graph. There are two main quandaries with Romer’s proposal. First off: is charging people to drive on I-70 an exploitation of a public good? I admit that I-70 is not a true public good. The space on the road is obviously rival as no two cars can occupy the exact same place at the same time. However, this interstate was paid for by taxpayer dollars and was intended to benefit the general public. Taxes are used to prevent free-riders. That means, in theory at least, that every driver on the road at rush hour has already paid to be there. By charging taxpayers to use I-70, the road is no longer a public good. Imposing a fee on drivers would make the road excludable, and therefore, a collective good. It may be economically more efficient to simply use price as a form of rationing for the highway in high demand. However, the struggle between efficiency vs. equity is impossible to overlook.
Secondly, Romer recommended offering an incentive to drivers who chose not to use the road during rush hour. This method of traffic reduction seems plausible at first and does not involve exclusion. However, offering a selective incentive for inaction has the potential to create a regulation nightmare. Romer envisions the ski resorts recording the time that each vehicle arrives and using that information to determine when the car was on the road. Gathering this data could be expensive and time consuming for the resorts. Would ski resorts willingly choose to bear the cost of solving a problem that is not their own?
Rush hour traffic on I-70 is a real dilemma. However, the unintended consequences of “fixing” the problem are equally real. Whether you are a skier or an economist, it may be worthwhile for you to ponder the implications of Senator Romer’s proposal.
Friday, February 29, 2008
Add snappy title here...
Link to the article: http://www.nytimes.com/2008/02/29/business/29cnd-tanker.html?_r=1&hp&oref=slogin
Here is a perfect example of special interest groups getting disrupted by one person shining a light on what they were doing. So to fill everyone in a bit, Boeing and Airbus are the two biggest commercial airline manufacturers in the world. Boeing has also been a major supplier of aircraft for the Unites States government. One would think that to be the natural result because Boeing is a U.S company and Airbus a European conglomerate. It’s only natural to think that a government should give business to companies in its own country. But could this hurt the country by sticking with its own businesses?
Boeing for the longest time has been buddy-buddy with the U.S government and has been handed deal after deal. However, even with how well their lobbying has been and how good their track record was, their expectations with the government fell trough and bit them in the ass. The Air Force is in need of replacing their fuel tanker aircraft. Boeing thought that they could easily get a deal with the government and reap the benefits. Well Senator John McCain being on the Senate Armed Forces Committee had the power to scrutinize the dealings between the Air Force and Boeing which lead the spot light to uncover the scandal within. A few of the Air Force and Boeing top officials were caught padding the deal for personal gain. Two people are in prison and more have resigned from their positions, one even committed suicide over the scandal.
John McCain brought to light that the public was getting raked over the coals with this deal that Boeing and the Air Force was trying to slide under the radar. This shows that there is still a little hope in defending the masses from the powerful small groups. But most likely it wasn’t from a benevolent feeling that McCain had. It seems as thought it was two special interest groups keeping each other in check. In the article it said at the very end that both sides spent millions in lobbying and advertising in Washington. But hey, we the people are getting more for our taxes now because the government is going with Northrop and Airbus for the deal as it is costing less than the Boeing deal would have been.
Here is a perfect example of special interest groups getting disrupted by one person shining a light on what they were doing. So to fill everyone in a bit, Boeing and Airbus are the two biggest commercial airline manufacturers in the world. Boeing has also been a major supplier of aircraft for the Unites States government. One would think that to be the natural result because Boeing is a U.S company and Airbus a European conglomerate. It’s only natural to think that a government should give business to companies in its own country. But could this hurt the country by sticking with its own businesses?
Boeing for the longest time has been buddy-buddy with the U.S government and has been handed deal after deal. However, even with how well their lobbying has been and how good their track record was, their expectations with the government fell trough and bit them in the ass. The Air Force is in need of replacing their fuel tanker aircraft. Boeing thought that they could easily get a deal with the government and reap the benefits. Well Senator John McCain being on the Senate Armed Forces Committee had the power to scrutinize the dealings between the Air Force and Boeing which lead the spot light to uncover the scandal within. A few of the Air Force and Boeing top officials were caught padding the deal for personal gain. Two people are in prison and more have resigned from their positions, one even committed suicide over the scandal.
John McCain brought to light that the public was getting raked over the coals with this deal that Boeing and the Air Force was trying to slide under the radar. This shows that there is still a little hope in defending the masses from the powerful small groups. But most likely it wasn’t from a benevolent feeling that McCain had. It seems as thought it was two special interest groups keeping each other in check. In the article it said at the very end that both sides spent millions in lobbying and advertising in Washington. But hey, we the people are getting more for our taxes now because the government is going with Northrop and Airbus for the deal as it is costing less than the Boeing deal would have been.
Economic Stimulus.... Really? Mr. President, Really?
President Bush entered his predidency when our nation was at a stong point since the late 70's and early 80's recession. Clinton made the economy stronger and ran down the national debt, than it had been for a long time. Between all the natual disasters, consecutive wars and attacks from 911 our nation's economy has seen many ups and downs. None have equalled the slowdown that we are now experiencing. Stocks down, oil up, housing market down, and general economic instability all face us.
I recently heard Bush's speach on the state of the nation, and I can say his view on the economy is correct, however he is off on the severity of the current state. Mr. Bush thinks that the nation is in a slowdown period, and he may very well be right, however I believe that we are on the verge of a major recession. We are currently in a GDP slump, and in one case an actual GDP loss. I have noticed the rate of unemployment has also risen, and I believe that this is because bussiness' have reacted to the early stages of a national economic meltdown.I would like to bring some of my own insight to Bush's economic stimulus plan. Instead of putting money into the hands of those who do not need it, I would have focused on the national debt. Our national debt is an estimated 9,345,296,162,390.31, and I believe that this has caused the value of the American dollar to dramitically decrease. The decrease in the value has caused a currency deficit with other countries. If we were to decrease the national debt considerably, I believe that this will create a stronger dollar and give markets more security. Most of the U.S. is going to receive 600.00 per household. If we are approaching a recession, wouldn't most people opt to save their money instead of spending? Bush hopes that people will go out and spend spend spend money, but if it were me and I knew the threat of a recession lurked near I would drop that 600.00 in the bank.
I conclude with Economic stimulus....really?............ I mean really? <----probably not!
On the Web No One Can Hear You Scream
Because I enjoy arguments I’m going to attempt to flesh out a conversation held in class that became drowned in yelling and a myriad of attempts to define the word rational. Hopefully I can be controversial enough here to break the trend and generate at least one comment, or God forbid (an apt choice of words) a legitimate discussion.
I would submit it’s fairly obvious the church, specifically the Christian one because it’s what I’m most familiar with, is a large group, and as thus, under the theory put forth in Mancur Olson’s Logic of Collective Action there’s some question as to how it manages to hold itself together.
We explored previously the idea of social incentives playing a role and I think it’s difficult to miss the logic in that. Churches may not operate exactly like Cheers, where everybody knows your name, but to some extent it’s surprising if you’ve been attending for a fair amount of time and haven’t formed a bond with at least a few other attendees. Moreover every local church I can think of offers a variety of activities throughout the course of the week that could double as a social life for the interested parishioner, or at least help them form a social tie strong enough to require their continued attendance.
What we left largely unexplored, however, was the possibility of the church as a federation, i.e. a large group comprised of a series of smaller groups, which by their very nature are easier to hold together. I’d think this would be a fairly obvious assumption to make as when we make reference to “the church” we’re often referring to the religion as a whole, or at the very least a specific denomination of it, for example Baptists, or Lutherans. But when you ask an individual about their church rarely will they go on a diatribe about the health of the religion in general, instead they’ll make reference to a specific place, perhaps somewhere down the street; they’ll tell you about the pastor and what time the service is on Sunday. This is important to remember. A person’s relation to the church generally isn’t to the entire infrastructure, but to their one, local, piece of it.
Finally, let’s move on to the one issue that’s most likely to get people upset. Olson says compulsion is perhaps the most effective way to hold together a large group, and at the very least you can see it in the church’s past. There was certainly a period where the choice was join up or die in a variety of progressively unappealing ways, and, not surprisingly, membership was quite high at the time. But such things are no longer the case, at least not in this country, I leave you to your own analysis of foreign locales, and befitting Olson’s theory one would note, per capita, membership has fallen off quite a bit as we’ve branched out religiously since those policies were lifted.
Some would argue, however, that compulsion is still at play. It’s been suggested that the threat of hell should you leave the church is compulsive, especially if you’ve been raised to fear such a place, but there is the large caveat that such a threat is only coercive so long as you believe in the ability to back it up, which would require membership in the church to begin with trapping us in a bit of circular logic. So in that regard I leave the question up to you. Have at it boys and girls, let’s hear what you think.
Jaeson Madison
I would submit it’s fairly obvious the church, specifically the Christian one because it’s what I’m most familiar with, is a large group, and as thus, under the theory put forth in Mancur Olson’s Logic of Collective Action there’s some question as to how it manages to hold itself together.
We explored previously the idea of social incentives playing a role and I think it’s difficult to miss the logic in that. Churches may not operate exactly like Cheers, where everybody knows your name, but to some extent it’s surprising if you’ve been attending for a fair amount of time and haven’t formed a bond with at least a few other attendees. Moreover every local church I can think of offers a variety of activities throughout the course of the week that could double as a social life for the interested parishioner, or at least help them form a social tie strong enough to require their continued attendance.
What we left largely unexplored, however, was the possibility of the church as a federation, i.e. a large group comprised of a series of smaller groups, which by their very nature are easier to hold together. I’d think this would be a fairly obvious assumption to make as when we make reference to “the church” we’re often referring to the religion as a whole, or at the very least a specific denomination of it, for example Baptists, or Lutherans. But when you ask an individual about their church rarely will they go on a diatribe about the health of the religion in general, instead they’ll make reference to a specific place, perhaps somewhere down the street; they’ll tell you about the pastor and what time the service is on Sunday. This is important to remember. A person’s relation to the church generally isn’t to the entire infrastructure, but to their one, local, piece of it.
Finally, let’s move on to the one issue that’s most likely to get people upset. Olson says compulsion is perhaps the most effective way to hold together a large group, and at the very least you can see it in the church’s past. There was certainly a period where the choice was join up or die in a variety of progressively unappealing ways, and, not surprisingly, membership was quite high at the time. But such things are no longer the case, at least not in this country, I leave you to your own analysis of foreign locales, and befitting Olson’s theory one would note, per capita, membership has fallen off quite a bit as we’ve branched out religiously since those policies were lifted.
Some would argue, however, that compulsion is still at play. It’s been suggested that the threat of hell should you leave the church is compulsive, especially if you’ve been raised to fear such a place, but there is the large caveat that such a threat is only coercive so long as you believe in the ability to back it up, which would require membership in the church to begin with trapping us in a bit of circular logic. So in that regard I leave the question up to you. Have at it boys and girls, let’s hear what you think.
Jaeson Madison
A public good via self-defense
Whilst browsing blogs, I came across a post entitled Meditations on Self Defence, written by LawDog, who I believe to be a policeman in Texas. He essentially argues that if everyone learned how to defend themselves, then a public good would be created in the form of a lower crime rate. If you want to argue that point, you should comment on the original blog, as I'm going to assume that self-defense does in fact provide a collective good. What I'm interested in if this will ever actually be provided, so I will look at it using ideas from The Logic of Collective Action by Mancur Olson.
The first thing to consider is that the benefit would go to every member of society, whether or not they as individuals help in any way. Society would then definitely be a latent group, or a group that is too large to actually organize sufficiently without the use of selective incentives or coercion. Each member has little incentive to act because the group is so expansive that his individual effort would not really be noticeable, but he would still receive the collective good.
There is really no coercion currently in place in the United States. Government is the major source of coercive force, and it allows self-defense, but it doesn't force anyone to do it. Some other countries have compulsory military service, which would probably result in the same thing in a roundabout way, but many people object to the idea. I have yet to hear of any lobbying for any other kind of forced instruction.
As for selective incentives, there's really only one, but it's a big one. You improve your chances of keeping your property and avoiding harm. Some people argue that attempting to defend yourself might actually only exacerbate matters, but again, anyone who wants to argue that can comment on the original blog. Apparently, this is not enough of an incentive for most people, probably because it also incurs so much cost in terms of time and effort. Also, part of the problem is that because crime is spread throughout the whole latent group, individuals assume that they, personally, won't be attacked.
So actually lowering the crime rate using self-defense would obviously require some other type of coercion or selective incentive, which seems unlikely to occur.
I would appreciate any comments or questions.
The first thing to consider is that the benefit would go to every member of society, whether or not they as individuals help in any way. Society would then definitely be a latent group, or a group that is too large to actually organize sufficiently without the use of selective incentives or coercion. Each member has little incentive to act because the group is so expansive that his individual effort would not really be noticeable, but he would still receive the collective good.
There is really no coercion currently in place in the United States. Government is the major source of coercive force, and it allows self-defense, but it doesn't force anyone to do it. Some other countries have compulsory military service, which would probably result in the same thing in a roundabout way, but many people object to the idea. I have yet to hear of any lobbying for any other kind of forced instruction.
As for selective incentives, there's really only one, but it's a big one. You improve your chances of keeping your property and avoiding harm. Some people argue that attempting to defend yourself might actually only exacerbate matters, but again, anyone who wants to argue that can comment on the original blog. Apparently, this is not enough of an incentive for most people, probably because it also incurs so much cost in terms of time and effort. Also, part of the problem is that because crime is spread throughout the whole latent group, individuals assume that they, personally, won't be attacked.
So actually lowering the crime rate using self-defense would obviously require some other type of coercion or selective incentive, which seems unlikely to occur.
I would appreciate any comments or questions.
lobbying in politics
With the political races heating up and trying to find out who is going to be the representatives for each party it is interesting to see how they are able to get the money to fund these extravagant campaigns. The answer is they get the money from all kinds of different lobbying groups. Most people know this is the case as this has been the case for a very long time. These groups have backed candidates for a very long time. The trouble with the situation that I have is what makes it worth their while. They are investing their money and obviously have to get something out of it. The problem is for the most part the public is not exposed to what these benefits actually entail. There has to be a lot of corruption and "under the table" dealings that go along with these situations. The politicians are ghiving the power back to these groups and are causing problems at every level of society. As we talked about in class this leads to the slowing down of the entire economy for a few people to be better off. Until we find a better way to produce campaigns this will continue to happen and we will have these side effects on the entire society.
Thursday, February 28, 2008
Sacrifice Freedom for the Common Good?
I was reading Somebody's Gotta Say It by Neal Boortz last night and I came across a quote by Adolf Hitler. After reading Olson's Logic, I felt this quote would make for some interesting conversation. Hitler states:
It is thus necessary that the individual should come to realize that his own ego is of no importance in comparison with the existence of his nation; that the position of the individual ego is conditioned solely by the interests of the nation as a whole...that above all the unity of a nation's spirit and will are worth far more than the freedom of the spirit and will of an individual...This state of mind, which subordinates the interests of the ego to the conservation of the community, is really the first premise for every truly human culture...we understand only the individual's capacity to make sacrifices for the community, for his fellow man.
With his deep understanding of the individual's instinct to serve their own self-interest, I believe Olson would scoff at the concept of individuals being willing to put aside their own egos and interests to serve the common good for a long period of time. Hitler obviously had little understanding of human nature.
I am no scholar and my knowledge of history is severely limited, but from my observation, it is usually those individuals - the ones that advocate limitations on individual rights - that seem to be pushing that agenda to serve their own ambitions and self-interests. The most dangerous individuals are those that seek to diminish the significance of the individual and to enslave the hearts and minds of the people (through the sacrifice of personal freedoms for the common good) for some misguided and impractical "ideal".
It is thus necessary that the individual should come to realize that his own ego is of no importance in comparison with the existence of his nation; that the position of the individual ego is conditioned solely by the interests of the nation as a whole...that above all the unity of a nation's spirit and will are worth far more than the freedom of the spirit and will of an individual...This state of mind, which subordinates the interests of the ego to the conservation of the community, is really the first premise for every truly human culture...we understand only the individual's capacity to make sacrifices for the community, for his fellow man.
With his deep understanding of the individual's instinct to serve their own self-interest, I believe Olson would scoff at the concept of individuals being willing to put aside their own egos and interests to serve the common good for a long period of time. Hitler obviously had little understanding of human nature.
I am no scholar and my knowledge of history is severely limited, but from my observation, it is usually those individuals - the ones that advocate limitations on individual rights - that seem to be pushing that agenda to serve their own ambitions and self-interests. The most dangerous individuals are those that seek to diminish the significance of the individual and to enslave the hearts and minds of the people (through the sacrifice of personal freedoms for the common good) for some misguided and impractical "ideal".
Friday, January 04, 2008
The Truth about Taxes and Economics Papers
So far Harford’s book has been pretty interesting. He’s pretty fair with most of the issues, it seems. Every time I think of a criticism, thinking I have the great talking point for my review due in a week, I come across his acknowledgement of the criticism, and his arguing his way out of it. Honestly, it’s a little annoying.
Probably the best example of this is his treatment of taxes and their efficiency, which I find incredibly fair and enlightening. Generally, you get people on one side of the spectrum, saying taxes are always bad, or on the other, saying taxes are always good. But Harford treats the issue fairly and, I think, accurately, which is why I have chosen to spend thirty minutes writing an entire page about it.
I gather that Harford is a realistic person who acknowledges that, yes, government will take your money. Too bad, nothing you can do about it. He also acknowledges that taxes are inefficient, because they don’t convey any information, like prices do. Taxpayers know they’re gonna pay, so they don’t think about it in their decisions. The free market works differently, because every dollar is considered in making purchases, purchases that convey information about seller and buyer as far as costs and benefits go. This is not really how I had viewed taxes beforehand, but it makes a lot of sense.
Basically, Harford believes that taxes may be inefficient, but that this might be offset by gains in other areas, like fairness or stability. Of course, his view of what is fair is, as any view of what’s fair will be, normative and subject to his own opinion. Point is, if taxes are used correctly, they might be worthwhile. This fits well with my own worldview, which is always, always, always questioning government action in the economy. I don’t necessarily condemn it, I just think it should be a careful prospect. After all, government takes our money without really asking us (at least, I’ve never been asked), so it isn’t subject to the same natural checks that free market firms are. This is why you have to question what the government does with taxes in a somewhat market oriented economy. It didn’t get that money in a free market manner, so using it in the free market is very suspicious and difficult to do correctly (but not impossible).
This also goes to say that any paper by any math-loving-economist that uses taxes-as-costs analysis to judge efficiency is basically a load. I mean, honestly, can anyone say that they consider how much they paid for the roads this month (or, how much was taken from them for the roads this month), and drive accordingly? No. So we don’t think about those taxes in considering costs and judging our behavior. I’ve read a few papers that use just such analyses of taxes versus usage to show something to the effect that “taxpayers underpay for the roads, and therefore use them too much, and therefore via my incredibly complex, ninety-nine variable calculus equation, which I spent more time writing than actually thinking about, pollution is bad and needs to be taxed more!” or some nonsense like that. Now that we know such papers are useless, we should simply ignore them.
I’ll be the first to thank Mr. Harford for saving my otherwise wasted time.
Probably the best example of this is his treatment of taxes and their efficiency, which I find incredibly fair and enlightening. Generally, you get people on one side of the spectrum, saying taxes are always bad, or on the other, saying taxes are always good. But Harford treats the issue fairly and, I think, accurately, which is why I have chosen to spend thirty minutes writing an entire page about it.
I gather that Harford is a realistic person who acknowledges that, yes, government will take your money. Too bad, nothing you can do about it. He also acknowledges that taxes are inefficient, because they don’t convey any information, like prices do. Taxpayers know they’re gonna pay, so they don’t think about it in their decisions. The free market works differently, because every dollar is considered in making purchases, purchases that convey information about seller and buyer as far as costs and benefits go. This is not really how I had viewed taxes beforehand, but it makes a lot of sense.
Basically, Harford believes that taxes may be inefficient, but that this might be offset by gains in other areas, like fairness or stability. Of course, his view of what is fair is, as any view of what’s fair will be, normative and subject to his own opinion. Point is, if taxes are used correctly, they might be worthwhile. This fits well with my own worldview, which is always, always, always questioning government action in the economy. I don’t necessarily condemn it, I just think it should be a careful prospect. After all, government takes our money without really asking us (at least, I’ve never been asked), so it isn’t subject to the same natural checks that free market firms are. This is why you have to question what the government does with taxes in a somewhat market oriented economy. It didn’t get that money in a free market manner, so using it in the free market is very suspicious and difficult to do correctly (but not impossible).
This also goes to say that any paper by any math-loving-economist that uses taxes-as-costs analysis to judge efficiency is basically a load. I mean, honestly, can anyone say that they consider how much they paid for the roads this month (or, how much was taken from them for the roads this month), and drive accordingly? No. So we don’t think about those taxes in considering costs and judging our behavior. I’ve read a few papers that use just such analyses of taxes versus usage to show something to the effect that “taxpayers underpay for the roads, and therefore use them too much, and therefore via my incredibly complex, ninety-nine variable calculus equation, which I spent more time writing than actually thinking about, pollution is bad and needs to be taxed more!” or some nonsense like that. Now that we know such papers are useless, we should simply ignore them.
I’ll be the first to thank Mr. Harford for saving my otherwise wasted time.
Thursday, January 03, 2008
Special Interests
A Wall Street Journal editorial takes a look at John Edwards campaign rhetoric regarding greedy corporations:
But given his egalitarian impulses, we also wondered if the former Senator would include billionaire trial lawyers among those who'd have their earnings capped, et cetera. We called the campaign to ask, and a spokesman offered the following: "Entrenched interests are anyone lobbying for their own corporate greed against the best interests of America's middle class." We'll take that as a no.The WSJ seems to think candidate Edwards is just a bit narrow with his concern about special interests:
As lobbying loopholes go, this is the Marianas Trench. Modern tort firms are giant, multibillion-dollar enterprises that affect nearly every business in America. The payouts for tobacco, silicosis, breast implant and shareholder "strike" suits, among many others, often make CEO pay look piddling.
These firms also have more than a little clout in Washington, especially in the current Congress. Trial lawyers were responsible for a provision in a Food and Drug Administration bill that they hope will make it easier to sue drug companies over labels. Bill after bill introduced in 2007 included a provision to reduce non-lawsuit dispute settlement; the lawyers make sure it's in there almost as a preamble.
Mr. Edwards's populism, then, would seem to work like this: If you're a business that creates wealth, you're a special interest. If you redistribute that wealth, you're not.Given the nature of politics I'm not too surprised about this. I'm curious how you might find Olson's Logic of Collective Action applicable to the candidate's populism?
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.
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?
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
*<http://www.latimes.com/news/printedition/opinion/la-op-fraser9dec09,1,1306484.story?coll=la-news-comment&ctrack=2&cset=true>
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
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
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.
JENNA CLULEY
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.
JENNA CLULEY
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.
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.
Friday, November 30, 2007
Kentlands: A Model of New Urbanism
http://www.washingtonpost.com/wp-dyn/content/article/2007/11/01/AR2007110102849.html
Kentlands community, located near
How to "own" land in Boulder
I have recently finished reading an article by Rich Tosches in the Colorado Springs Independent this past week. This article was titled How to "own" land in Boulder. If you have not heard or read any of Mr. Tosches article, he is an accomplished writer/humorist who has written for the Colorado Springs Gazette and the Rocky Mountain News. Although, I do not place alot of factual merit on newspaper articles, he certainly is a trusted source in reporting during my time in Colorado Springs. This article was written in response to a land-use and the efficient use of property rights. I have not read the ruling on this specific case, yet the outcome is ludicrous.
In the city of Boulder Colorado a Judge recently ruled that the owners of a 4,700 square foot parcel of land must give one-third of this land to adjacent property owners. The "rightful" owners (Kirlin) of this land had owned the land for 23 years and had plans to build their dream house on this property. In the time they had owned this land they had paid property taxes along with Home Association Dues (HOA) on the vacant land. The adjacent property owners' (McLean & Stevens) had been using the land during this period as a resting place and for a pathway to the back of their home. The judge ruling for the McLean & Stevens (plaintiff) was as follows: "Plaintiff's attachment to the land is stronger than the true owners' attachment. Whereas the Kirklins were unaware of plaintiffs' use of the land during virtually their entire period of ownership, plaintiffs have efficiently used the land on a daily basis. Given this history of use, the equities favor transfer of title."
It is hard to imagine a life without individual property rights, rule of law or common sense. All these have been thrown aside with this with this judges ruling. I find little equity in the transfer of ones property rights to another strictly on a unauthorized use of the property over the last 23 years. I see no efficiency in the use of an others property without their consent. The final slap in the face is McLean and Stevens are seeking to have their attorney's fess paid for by the Kirklins. This is a sad period for the "People's Republic of Boulder and the State of Colorado.
In the city of Boulder Colorado a Judge recently ruled that the owners of a 4,700 square foot parcel of land must give one-third of this land to adjacent property owners. The "rightful" owners (Kirlin) of this land had owned the land for 23 years and had plans to build their dream house on this property. In the time they had owned this land they had paid property taxes along with Home Association Dues (HOA) on the vacant land. The adjacent property owners' (McLean & Stevens) had been using the land during this period as a resting place and for a pathway to the back of their home. The judge ruling for the McLean & Stevens (plaintiff) was as follows: "Plaintiff's attachment to the land is stronger than the true owners' attachment. Whereas the Kirklins were unaware of plaintiffs' use of the land during virtually their entire period of ownership, plaintiffs have efficiently used the land on a daily basis. Given this history of use, the equities favor transfer of title."
It is hard to imagine a life without individual property rights, rule of law or common sense. All these have been thrown aside with this with this judges ruling. I find little equity in the transfer of ones property rights to another strictly on a unauthorized use of the property over the last 23 years. I see no efficiency in the use of an others property without their consent. The final slap in the face is McLean and Stevens are seeking to have their attorney's fess paid for by the Kirklins. This is a sad period for the "People's Republic of Boulder and the State of Colorado.
Hawaii loves to conserve!
I stumbled upon a report from the South Kona- Kau coastal conservation task force to the 2007 legislature in Hawaii. They apparently had the governor stop all construction and development for a year in South Kona so that they could prepare a report about the development and subsequent preservation of this land. This task force would like for the state to deem these lands undevelopable unless the development doesn't impact the environment. Also they are asking that there be a boundary set up for this preservation area. They would also like to set up a trust in which people who donate their land to the trust will be given a very good tax break. And finally they would like to fund this strictly through private monies.
There are many people out there that would love to conserve nature and would finance this, but I know many more that would pay a lot of money to be able develop the land. This is kind of a classic example of the government not trusting the people to do the right thing. Instead of finding a way to buy the land and conserve it, the task force is looking to the government to do it for them. I wish that these task force people would see that it is also in the interest of developers not to ruin the islands, because if they did, less and less people would want to visit and they would loose business. Hawaii depends a lot on tourism and can't afford to stifle the growth of that industry, in the end it will mean more unemployment and a failing economy. Taxing the land that is bought by developers if they are ruining the land, is much more effective than just saying they can't develop at all!
There are many people out there that would love to conserve nature and would finance this, but I know many more that would pay a lot of money to be able develop the land. This is kind of a classic example of the government not trusting the people to do the right thing. Instead of finding a way to buy the land and conserve it, the task force is looking to the government to do it for them. I wish that these task force people would see that it is also in the interest of developers not to ruin the islands, because if they did, less and less people would want to visit and they would loose business. Hawaii depends a lot on tourism and can't afford to stifle the growth of that industry, in the end it will mean more unemployment and a failing economy. Taxing the land that is bought by developers if they are ruining the land, is much more effective than just saying they can't develop at all!
Thursday, November 29, 2007
Goodbye balcony
According an article in the Denver Post, cities big and small are experiencing a dramatic return to urban living. People are seeing that urban sprawl has its disadvantages, they are recognizing that if you can live in the city, walk to work and have a great view, there’s a great benefit to living in cities.
The article references that these urban condos are geared to singles who want to experience all the great amenities that come with living in the city. Personally I think it is good that more high rises are being built. Let’s keep the young singles who like to have fun in the middle of the city where all the action is. This way, we can save the edges of the city for the older people with families who probably like driving an hour to work everyday to escape their screaming kids.
The article references that these urban condos are geared to singles who want to experience all the great amenities that come with living in the city. Personally I think it is good that more high rises are being built. Let’s keep the young singles who like to have fun in the middle of the city where all the action is. This way, we can save the edges of the city for the older people with families who probably like driving an hour to work everyday to escape their screaming kids.
Colfax and New Urbanism
A recent article I read in the New York Times talked about how Denver was trying to clean up Colfax Ave. Being from Colorado and spending time downtown I know what they are talking about. You never know what you may find walking down the street. The article says that Colfax is the Rocky Mountains equivalent Haight-Ashbury in San Francisco and Greenwich Village in New York. Greenwich and Haight-Ashbury have changed due to gentrification, but Colfax remains the same. The city of Denver is trying gentrify Colfax by rezoning, increasing police and other policies they think might work. They have taken steps to rezone blighted areas so that they can turn it into Denver's Main Street.
From an economic standpoint if people thought there was a bright future for Colfax the government would not have to step in and blight areas. These areas would be bought at a price that both the buyer and seller would agree upon. Some one would have all ready seen the incentive to redevelop that area--not government. Crime is also a big concern for redevelopment along Colfax. The city has increased police and crime has dropped, but that did not make anyone want to move there. The people who all ready live in that area are aware of the crime. I think it is something they factored in before they decided to live there. The city can try all it wants to make Colfax Main Street America, but the reality is people have all ready decided what they want and it is not Colfax. They have moved away and have realized they are better off for the decisions they have made.
From an economic standpoint if people thought there was a bright future for Colfax the government would not have to step in and blight areas. These areas would be bought at a price that both the buyer and seller would agree upon. Some one would have all ready seen the incentive to redevelop that area--not government. Crime is also a big concern for redevelopment along Colfax. The city has increased police and crime has dropped, but that did not make anyone want to move there. The people who all ready live in that area are aware of the crime. I think it is something they factored in before they decided to live there. The city can try all it wants to make Colfax Main Street America, but the reality is people have all ready decided what they want and it is not Colfax. They have moved away and have realized they are better off for the decisions they have made.
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