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

*<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

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.


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.

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 Gaithersburg, Maryland, is one of the best known examples of a new urbanism community. It incorporates many elements aimed at perpetuating community, socializing, borrowing sugar form neighbors, and etc. Examples include: many sidewalks, dense housing, garages tucked in behind the residence, and large open spaces for various public use. Kentlands has been around since 1988 so it has become the perfect proving grounds for the desired effects of new urbanism. The article author, Katherine Salant, interviewed just six residents before coming to the conclusion that the proximity planning of new urbanism does in fact manifest community. This opinion is shared by Joongsub Kim, an architecture professor at Lawrence Technical University, who has lived in and studied Kentlands and another nearby conventional subdivision for 10 years now. Kim claims to be reserved in nature but asserts that "When you walk down the street, you see all the activity and you feel like you want to be a part of it." Kim attributes this social utopia to proximity. The streets are narrow to bring houses together; some porches are only six feet away from the sidewalk and the parking garage alley ways behind houses provide good places for kids to play and adults to socialize when they’re parking their car.

It appears that in the long run new urbanism community planning has worked for Kentlands. The proximity will in fact bring community as reported by Salant and Kim but is this really a breakthrough? Is this something people never knew? I could have told you that fact after the first semester in the dorms my freshman year. The question that remains relates to individual preference. What does the consumer want? New urbanism might manifest community but is that what most people want? I suggest that time will tell. Shining examples of its success like Kentlands might prove new urbanism to be effective but whether or not it truly is the way people want to live will be shown in the long run as the trend continues or fizzles out.

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.

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!

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.

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.

Wednesday, November 28, 2007

Why live in a new urbanism community?

After a semester of discussing this subject I thought it was about time that I asked the question “why live in a new urbanism community?”. While the advantages of new urbanism are clearly staggering (at least if you are a supporter of it), there are also blatant disadvantages. But are the advantages great enough to outweigh the disadvantages?

Without going into too much detail, the major advantages are being within walking distance to most major activities (work, school, shopping), and more neighborhood activities. While all of these advantages derive from preference, let’s assume they all are desirable.

The advantages that come from being within walking distance to most major activities stems mainly from America’s dependence on the car and the view that it is bad. However, being closer to these activities do have some real advantages too. When you can walk most places, you will burn more calories, have more time to think up excuses as to why you didn’t do your homework, and not spend as much money shopping because you know you will have to carry it back with you on your walk home. Also, with a reduced dependence on a car, you would save money on gas, maintenance, and perhaps you might be able to forgo a vehicle all together.

The presence of more neighborhood activities presents more advantages as well. With more people being involved in the community it could be expected that the crime rate will be lower then in other areas. By getting to know your neighbor it is likely that they will look out for you and your family. They might even let you stash Christmas presents at their place or let you borrow some flour Christmas Eve so you can make cookies for Santa, saving you a brisk walk to the store that would be closed because it was a mom and pop store.

While there are many disadvantages to a new urbanism community (narrow streets, small lot sizes, short driveways, being able to say hi to your neighbor during your morning pee) I will focus on one, which I feel is the biggest, personal liberty. What bothers me most about new urbanism communities is not how they are set up or any of the disadvantages listed above, but that it is someone’s idea that everyone should live that way and desires to use the coercive power of the government to see it happen. When someone tells you what to do and how to do it, they are taking away your voice in the market, which would ultimately reduce the efficiency with which the market operates.

I guess there is no easy answer to the question “why live in a new urbanism community?”. Will the advantages outweigh the disadvantages in your specific case? If so, I would say you should CHOOSE to live there. But keep in mind that choice is not what these communities are about and don’t be surprised if the home owners association requires you to own only a certain type of dog or face eviction.

Tuesday, November 27, 2007

Liberty vs. Stupidity

An Article in the Seattle Times (November 12, 2007) written by Neal Peirce is the antithesis of personal freedom and economic liberty. The Article’s title is “You Should Listen to Ron Sims” and as the title suggests, Peirce wants readers to embrace the actions of King County Executive Ron Sims in opposing a 17 billion dollar road and rail project. Not only are Sims and Peirce’s objections to this project unfounded and unsupported by evidence, but their grandiose claims signify the end of economic liberty in favor of government control and regulation.

Pierce says, “The overall package would have raised the area's carbon-dioxide emissions by 18 million to 28 million tons over the next 50 years” and “already, notes Sims, as many greenhouse gases are emitted in Washington State as the Philippines, which has 12 times Washington's population. Metro areas, he says, can't claim they're expanding for economic efficiency "and then go down to Brazil and say please don't cut your tropical rain forest””.

First, I cannot say for certain, but Ron Sims is not clairvoyant or psychic in any way, and therefore, he cannot make claims about future carbon monoxide emissions because he DOES NOT KNOW. The cars made in the next 50 YEARS will be noticeably different in the amount of emissions and may not emit carbon monoxide at all. Second, the analogy between Washington State and the Philippines is certainly not equitable. The GDP per capita (PPP) in the Philippines is 5,000 (US dollars) and in Washington State alone is more than 53,000 (US dollars). The number of roads in the Philippines that are paved is only 10%, and its national GDP is measured only in the billions. There is no comparison between Washington and the Philippines, especially economically. Third, advocates for economic efficiency do not waste time worrying about Brazil. The irony, is that those individuals who support “growth limits — tighter, denser communities”, also try to infringe on the economic freedoms of people in Brazil.

The socialist rhetoric and twisted values purposed by Peirce do not end with Brazil. He says:

“No one should have to commute more than a half-hour from home, Sims suggests."The human body," he said, "was not designed to be pounded from the stress and strain of long commutes." Plus, he said, we all need "time with our families, to live." That translates too into time for a mix of exercise and sociability, walking and biking and talking with neighbors — which reasonably compact communities make easier””.

Wow! Finally, a doctor, a psychic, a family psychiatrist, and an economist all in one! I find this statement as ridiculous as it is flawed. My freedom to NEVER meet my neighbors or walk my dog is worth the so called “problems”. In no way should anyone listen to Ron Sims or Neal Peirce and we are all a little more stupid for having done so already.

Saturday, November 24, 2007

Urban Spral = Global Warming

Urban sprawl. In its simplest term, the unplanned development of land. In reality, it is the modern day epidemic, sweeping the nation and destroying everything in its path. Urban sprawl can now be held responsible for its contribution to global warming. President Bush once told us “Our duty is to use the land well, and sometimes not to use it all.” Smart growth advocates promote this idea through the implementation of ideas that encourage pedestrian and bicycle usage versus extended commuting times. Public transportation that has been well created is is said to be an option to reducing sprawl and minimizing the amount of CO2 emitted by everyday transportation. The increase in urban sprawl puts more people away from the center of the city which increases the amount of driving time per household, the amount of CO2 emissions, traffic congestion and of course the amount of open space that is designated to parking lots and shopping malls.

This increase in people wanting to move away from pollution and overpopulation is only recreating the same problem further away. The government is then of course not only responsible for urban sprawl and its solution but also the impact it is having on global warming. If the government would implement smart growth boundaries then development could be quarantined to a much smaller area, allowing preservation if open space. Advocates are suggesting solutions such as an increase in land use planning, the development of public transportation that is accommodating to a greater range of people and housing that would place community members closer to school and jobs and homes that are more energy efficient. The problem with this is that many of these solutions to not consider that most of these solutions do not accommodate the lower class. Those that are already living paycheck to paycheck cannot afford the rent in housing close to the city core that is impacted by the rent gradients. The increased upfront cost for a hybrid is not in the budget for many as well as the higher cost for energy efficient windows or better insulation. If you choose to recycle through your garbage company, you actually have to pay them. Many of these options are just not an option for a family with a limited budget. So, until it is affordable to Go Green, environmentalists can continue to blame the government for urban sprawl and its contributions to pollution rather than the market that is making a big buck off of the consumer efforts to conserve.

http://www.sierraclub.org/sprawl/globalwarming.pdf

Thursday, November 08, 2007

Inner Economist

If you are looking for a winterim course, then you might be interested in my Econ 398 Inner Economist. Maybe another title for this course would be "Economics For My Life." The course will involve reading two books: (1) Tyler Cowen, Discover Your Inner Economist: Use Incentives to Fall in Love, Survive Your Next Meeting, and Motivate Your Dentist, and (2) Tim Harford, The Undercover Economist: Exposing Why The Rich Are Rich, The Poor Are Poor -- And Why You Can Never Buy A Decent Used Car! The course will culminate with a set of assignments suggested by The Economic Naturalist. Perhaps a better title for the course would be: "Economics for My Life." You could almost expect to find this stuff in the "self help" section of your favorite bookstore.

Wednesday, November 07, 2007

Creative Construction

Zoning used in defense of morality- Creative Construction

Zoning and controls can make construction and development very difficult. In an article from Economist.com, the author suggests a circumstance where zoning could be used to hinder construction of a Planned Parenthood building in Aurora, Illinois.

Aurora’s battle nominally centered on a permit and how Planned Parenthood obtained it… When Planned Parenthood applied for permits in Aurora last year, it used the name Gemini Office Development, a subsidiary, hoping to keep the project quiet for as long as possible. When pro-life activists learned of the building’s true purpose in July, they were furious, claiming that Planned Parenthood had committed fraud… The lawyers found no wrongdoing, however, so the clinic opened just two weeks late.

The construction of the building has caused controversy, not because of where it is being built, but because of the types of services and procedures that it provides. The most controversial procedure offered by the clinic being abortion. The controversy in Illinois is not the first and certainly will not be the last for Planned Parenthood. In 2003 a similar situation arose in Austin, Texas. The main contractor pulled out and after boycotts from many subcontractors, and Planned Parenthood stepped in to assume the contractors role. The same problems may arise in Denver where another Planned Parenthood is scheduled to start construction in November.

Although the question of zoning has not been raised in the battle in Aurora, Illinois it has been used to deter and to prevent businesses to be built where they were initially planned. Fortunately, for the Planned Parenthood in Aurora the area is zoned for medical use, and can not be barred from being built based on zoning requirements. Zoning regulations seem to hinder development in many areas, but are put in place to enhance, or help guide the direction of growth and economic development. The case of Planned Parenthood wanting to move in seems to be a classic example of how zoning laws and regulations may be used to help certain parties while they hinder others. Whether or not it is fair seems to be subjective based on whether you win or lose.


JENNA CLULEY
Source: http://www.economist .com/world/na/PrinterFriendly.cfm?story_id=9946963

Thursday, November 01, 2007

Smart Growth??

According to the 2007 growth and transportation survey ¾ of people surveyed claimed they feel smart growth is important and the way of future city growth. The main solution listed was to improve public transportation and current roads, and to stop building new roads. This smart growth is supposedly the answer to city traffic and congestion. Half of the people surveyed would push for public transportation to be improved. However in our own city the public transportation system is struggling. The city is increasing the rates for mass transit due to a decline in users. This system is good in theory, but people are ultimately going to be unwilling to change their preferences. Driving is a preference and it has been proven in cities that have implemented mass transit over expansion to increase traffic and congestion. The misconception is that everyone will change their preferences in order to move towards this idea of smart growth, but that has not proven to be the case.

Wednesday, October 31, 2007

Only you can prevent forest fires

A ten year old boy admits to starting one of southern California's fires. Later down in the article, Dr. Jeff Victoroff is quoted as saying, "At least one study suggests that if you take a population of boys between kindergarten and fourth grade, sixty percent of them have committed unsupervised fireplay, which is to say that fireplay is a common and absolutely normal part of human development." Another part of normal human development is not building your house in areas prone to recurring disasters. Just like the people in New Orleans, communities built in areas with high risk of disasters should not be surprised when disasters occur. The fire department also probably shouldn't be kicking back bottles of champagne after catching this mad ten year old fire bomber.

However, the real culprit is government. Government will bail these people out and thereby distort local knowledge and these distortions will cause further stupid behavior. For example, if it wasn't the government maintaining the levies in New Orleans, a private firm would have the incentive to ensure the levies never failed. They would also have the incentive to charge a high price to balance out the risk associated with maintaining the levies.

Before blaming a ten year old boy, entire communities of adults should ask themselves why they lived in a place where the hand of fate resembles the Ritalin riddled digits of a ten year old with matches.

Credit Card Debt, Whose Fault Is It?

The first credit card was created in the 1950's and made popular in the 1960's. The original idea was to allow consumers the ability to access funds when traveling or anytime they were away from their home based financial instition. What was seen as simply an item of convenience has since become the American way. "Buy now, pay later". But what happens when we buy, buy, buy but cannot afford to pay; not now or later. Whose fault is it?

A lot of attention is currently being paid to credit cards and the evil policies that surround them and the innocent and unknowing consumers that are affected. The overwhelming problem of credit card debt and the steadily increasing rate of debt has caused Congress to focus heavily on this issue and consider passing several bills to further regulate the growing problem.

One practice being investigated is that of universal default. Universal defalut is currently a legal practice that allows your credit card company to increase your interest rate based on the status of any of your other accounts. Exceeding your credit line (even by just a few dollars), carrying a debt to income ratio that is deemed too high, utilizing more than 50% of your available credit on other accounts, excessive number of inquiries on your credit report, making a payment that is rejected for non sufficient funds or taking out an additional loan with another lender are all consumer actions that can result in universal default. Fair? It's legal. All of this information is provided to you at the time of application. Who reads all that fine print, right?

Now, while all of these practices can simply be avoided by mainintaing a good grasp on your finances and making sure you make timely payments on all accounts, Congress is posing the question; "Are the penalties too high?" Sure, the information is available to us and yes we do have the option to educate ourselves before signing anything but when we don't or when we make a mistake, who is responsible? Not the consumer, of course not! How could we possibly be held responsible for our actions when the price to pay is so steep. So Congress says that rather than hold consumers responsible for their actions, the government must intervene. The 850 billion dollars that Americans owe in revolving debt is said to be leading this country into a downward spiral as more and more families are turning to bankruptcy for freedom from debt. Is this something that the government should place more emphasis on and provide more rules for everyone to follow and if so at what point do we point to the consumer and say "Stop Spending!"

Saving traditon... or stuck in the past.

In Wisconsin, in several regions near towns, there are owners of family farms who are "struggling" to maintain their "way of life."

The problem is that they cannot buy or rent new cropland. The cost of land in the area around these farms is prohibitively high.

Using economic reasoning to examine the situation,I would conclude that the reason the cost of land on the outskirts of these towns is sky rocketing is because there is a greater numer of highly valued uses. More and more people are bidding the land up.

If the goods and services offered by these small family farms were highly valued, they would be profitable. If they were profitable, then they ould be able to afford more land for expansion.

In short, these family farms are not valued because there are more efficient ways of producing food. There desire for a preserving of their way of life I equate to a sliderule maker wishing to maintain his way of life. It is the same as the postal sevice wishing the internet and email had not taken a lot of its business.

On the surface it may seem tragic, but it is not. Things come and things go. New, better ways of doing things are devised and champions of the old ways find themselves with skill sets that are now obsolete, in this case running a small farm.

These farmers would probably be best to cash out, sell their valuable for the top dollar for which it would undoubtably sell and retire, living luxuriously.

Sometimescertain ways of life go out of style or a very small sub sect of the economy for the benefit of the whole. Fighting to preseve them is usually not for the economic value, but for the novelty value of preserving these relics. It is an uphill battle. Sorry family farm, it might be time to join your friends in the buggywhip business.

Credit Card Debt,

IHS Essay Contest

The Institute for Humane Studies has an essay contest you might be interested in. You can find the information on the contest here. The topic is: What factors lead to prosperity, progress, and human flourishing?

Congress funds more unprofitable business

Great news from the Wall Street Journal. Our wonderful leaders in Congress have decided to provide more funding for Amtrak, the wonderful rail line we all use quite regularly. The reason: Why, to stop global warming of course. We Americans, with our horrible use of cars and pollution of mother earth need to be using the rail more. We need to sacrifice our precious time to take long commutes on a rail system that allows the environment to 'green up'.

I won't even question the 'sincerity' of our leaders. They are all politicians. Enough said.

But I do question the funding of a business that if allowed to run in the real world would be OUT of business because it is unprofitable and caters to a virtually non-existent demand.

We all know our Congressional leaders lack the skills to carefully think about something like this. Obviously, or they would have cut the program once they figured out it had LOST money, let's see, EVERY YEAR since its inception in 1997. But a few things about this bill are incredibly moronic and thus worth noting.
First, part of the $12 billion, 6 year project (1.8 billion) would be devoted to paying off the debts of the unprofitable business. Wonderful. Is it just me, or does it seem pointless to try to reduce a debt that is constantly growing (and will be as long as we Americans prefer driving)? By financing this sort of debt, the government is diverting tax-payer's hard earned money to what boils down to a pointless exercise in 'debt management.'

Next, the project grants $1.4 billion to NEW RAIL PROJECTS run by the individual states. Great, we now know that the government wants to fund MORE losing businesses.
Let me explain why I think this is bad (I know you all agree with that premise...). The government is funding losing businesses. Businesses that otherwise would fail (if run on a scale as large as Amtrak-perhaps smaller scoped rail lines would be run efficiently) in a free market society accumulate debt, and if that debt is financed by the gov’t, it comes from taxpayers. Taxpayers are thus incurring costs that most of them are not receiving the corresponding benefits for, and thus there is a distorted (and unfair) diversion of funds.
Now, one thing about the bill is somewhat reasonable. In the past, the government has financed Amtrak with the goal of making it financially self-sufficient. Since it hasn’t been able to do that, it is trying something else with most of the funds: Make the trains better. Improve service, quality, speed, and overall efficiency. That, in my mind, is at least a better use of funds than trying to pay off debt that will continue to accumulate for all time…

But you cannot change people’s preferences (at least not ethically), and that is the crux of the matter. The government is attempting to stem global warming by making us all want to use a rail service that it finances. I would argue, though, that if Americans truly valued train service over cars, train services would have developed prior to Amtrak, because somebody could have made some money. Clearly, Americans don’t value rails, and this applies even more directly to Amtrak: Government goods and services are, quite honestly, shoddy at best and hardly as good as free-market driven goods (in most instances). I think that unless the people’s preferences change to reflect greater demand for rail, the funding of Amtrak is inefficient (because it artificially creates something for which there is a relatively small demand) and unfair (because it takes our money and allocates it to something that I, for one, do not use). Theoretically, money could be allocated much more efficiently if we were allowed to have it, but obviously the government thinks we are too stupid to know what’s best for ourselves and use our resources accordingly.

Bush Is A Baby Killer

An article in the Gazette titled, “Bush Goes After Democrats on Health Care” (Oct31) is a perfect example of political rhetoric masking an economic debate. The article should have been titled, “Bush Attempts to Harm America’s Children!” The AP focused on the President’s veto of a House Bill that increased the number of children on the Federal Payroll to 6 million. This would increase the budget of that particular health cost from bellow 5 billion to over 35 billion dollars.

Making President Bush’s remarks seem politically motivated, crass, and unsympathetic toward dying children, the AP suggested that his speech was directed toward Hillary Clinton. The article ended with a quote from chairman of the Democratic Caucus Rahm Emanuel, “"At 1600 Pennsylvania Avenue, President Bush is having what he calls SCHIP Halloween - it's all trick no treat. He's preventing health care for millions of kids."

This AP article has missed the President’s reasoning for vetoing the bill altogether. A step toward Federalized Health Care in America would cost taxpayers too much money. In an American society where the national budget has run a deficit almost every year for the past 40 years, it seems unintelligible why this discussion is even occurring. A state owned enterprise (ie, government health care) has little incentive to be forward thinking, is often a loss making enterprise, costs the state a substantial amount of capital and financing, and not to mention the lack of quality that will eventually arise in the system! It is no surprise that the former Soviet Union was not known for its efficient use of resources and the manufacturing of high quality goods.

Before the AP runs an article bashing the President for his baby killing vetoes, maybe the discussion should be more economic in nature. The American budget will soon not be able to support its own social security system and the House of Representatives wants to increase spending on health care by 30 billion dollars! The intelligence of the federal government is again beyond anything we lesser plebes can ever hope to understand.

City of Colorado Springs Budget Cuts

The City of Colorado Springs Colorado has recently gone on the record stating they have a budget shortfall for 2007. As part of this budget shortfall, the city government are looking to adjust the bus routes within the city. This will in turn cut the budget for mass transit. This adjustment is to be made through fare increases along with service route cutbacks. The bus routes are the only form of mass transit within the city of Colorado Springs.

Transportation costs, in specific fuel costs have increased over the last two years. I can understand fare increases as a method of cutting costs. Although, the price elasticity for a 10 percent increase is only 3.3% decrease in ridership, for many individuals bus travel is their only means of public transportation. It does not make sense to cut the routes currently offered by the city. In the past year ridership on the bus routes has increased every month. As this is the only means of mass transit in the city it will greatly effect this primary source of transportation to work, schools, medical appointments and travel in general.

I don't belive that a fare increase will reduce ridership due to price elasticity. People understand that transportation costs have risen over the last year. It is being proposed that routes to newly emerging economic growth areas, such as Fort Carson and Fountain are slated to be cut. This makes little sense as these growth areas require transit for workers to these areas along with other areas that have a need for workers. The bottom-line is that I propose fare increases, yet don't propose cutting bus routes as a budget cutting method. It may be a good time to explore deregulation of this city service and allow private enterprise to more efficiently provide this valuable service to the Colorado Springs market.

Tuesday, October 30, 2007

The Unnoticed Link Between Trick-R-Treating and Urban Sprawl

This blog posting is going to discuss how urban sprawl and trick-r-treating are related. Based on the trick-r-treater’s dilemma, “where to go trick-r-treating to maximize candy collection while minimizing walking distance”. This is a question that I’m sure we can all remember asking our selves or our friends before heading out on that spooky night. When we were thinking that as kids, we were limited to where our parents would take us and once we were old enough to drive, we were too old to trick-r-treat. But were would have been the ideal place, the inner city, the suburbs or a “smart growth” community?

Let’s start with the inner city. This is where walking distance will be minimized. In the inner city, most of the residents are located in tall apartment buildings. This presents a situation with a high door count to square mile. The door count to square mile ratio should mean more treats but another equation also needs to be taken into account. Answers to doors knocked, this ratio, from personal experience, seems to be exceptionally low in apartments. So while the door count to square mile is high, the answers to doors knocked is low, resulting in an ineffective night of trick-r-treating.

So if the inner city isn’t the best place to go, how bout the suburbs? The suburbs seem to be the opposite of the inner city, a low door count to square mile, but a high answers to doors knocked. The reason for the difference in the door count to square mile ratio is simple, suburbs have a tendency to be a sprawling community, as people require more space for the kids to play in the yard while having a bigger driveway and garage to park their cars, they tend to move farther away from each other. The higher answers to doors knocked ratio is a little harder to pin down, while they do need a little more research to confirm, I will offer my personal experience. Most of the inhabitants of the inner city are D.I.N.K.s (Dual Income No Kids) and poor families. The first usually don’t have the time or desire to devote to decorating and passing out candy while the former usually don’t have discretionary income required for the same activities. Out in the suburbs though, there are a greater number of young families that enjoy the experience of Halloween and taking their kids out on that night. So they decorate their oversized front yard and one parent stays home to pass out candy to all the neighbors while the other goes out with the kids to keep them safe and make sure they don’t get lost. All of these factors will lead to more walking but will also return more candy.

So is there a place where we can find the ultimate mix? It could be in a “Smart Growth” community. While these communities focus on everything being closer and easier to walk to, they also try to attract young families. The effect of this returns the high answers to doors knocked ratio that we see in the suburbs while only slightly increasing the doors to square mile ratio seen in the inner city, giving us the best of both worlds.

The problem with this is there is not an abundance of “Smart Growth” communities to trick-r-treat in. This could be leading to families with kids from the inner city traveling out to the suburbs to go trick-r-treating and over time we may actually be seeing people moving out to the suburbs due to the lack of trick-r-treating opportunities found in the inner cities. The solution to this “problem” could be to require inner city citizens to participate in the Halloween tradition until there are enough “Smart Growth” communities… but I would suggest we just let the economy take its course without more regulations.

Sunday, October 28, 2007

Is it time to rethink California fire policy?

Professor Minnich, a professor of earth science at the University of California, wonders when California will admit a policy failure when faced with the fact that 1.4 million acres have burned within the last four years. The idea is that when comparing San Diego County and Baja California in Mexico we see that Mexico's fires are smaller and burn out by themselves and that this occurrence clears out the brush and overgrowth that perpetuate the super-fires that plague California. Fire policy north of the border emphasises fire suppression and, in turn, keeps fires from their natural cycle for clearing out the overgrowth.
Furthermore, the rapid growth of the San Diego area endangers more people and developments. If the recent fires had occurred in 1980 only 61,000 homes would have been within close proximity to the fires. Today the number is around 125,000 according to analysis by the University of Wisconsin.

California State Fire Marshall Kate Dargan claims that discussions have begun at the highest levels of Californian government on how to address the issue but action is between 5 to 10 years away due to the size of the endeavor. There are currently some actions in effect to prevent these problems. In 2004 laws were made to enforce strict building code in fire prone areas. These new rules mandate that new homes locate attic vents away from the forest and decks with overhangs are regulated as well. Voluntary standards include fire-resistant building materials, sprinkler systems, and fire-resistant vegetation controls. These voluntary standards seem to be working as housing projects built under voluntary standards have all survived the fires.

Even with these new laws the fact remains that California experiences these fires because of its unwillingness to follow the effective methods of Mexico in it's Californian Baja. Building codes do little to clear the hillsides of the large amount of brush that the natural fire cycle would consume. Californian cities will continue to sprawl/grow and the threat of these super-fires will not subside without changing fire policy.

A city in turmoil

A recent article in the Wall Street Journal talked about Houston and the affects of not having zoning laws. Houston, is the fourth largest city, and happens to be the only U.S. city that does not have zoning. Because it does not have these regulations you get a lot of strange combinations in the city. Condo towers are next to schools and there is even a pay-by-the hour motel near a Baptist church. The residents of a well to do neighborhood are angry because there is a development group that wants to build a 23-story condominium tower among the million dollar homes. The residents have hired a lawyer to help them fight their cause. The issue now is because there are no zoning regulations they cannot stop this project. The developers have done everything the city has required of them from sewer upgrades to impact fees, and do not plan on scaling down the project. Since there are no zoning laws in the city you can bet the price they paid for that land was quite high considering were the land is located. From an efficiency standpoint, the land went to the most valued user since the neighbors did not see it in their best interest to buy the land before the developers. Is it a negative externality? To answer this question I would have to ask my self if who would we tax? I do not think there is any party to tax; therefore, it is not a negative externality. The residents who oppose this transaction can sell their property. The developers obviously see an opportunity in building these condos or they would not be willing to pay such a high price for the land and the development.

Saturday, October 27, 2007

Preparing for the next time

"Yes, fires are a part of life in California. No, that's no excuse for bad zoning, sprawl and a lack of preparedness." This was heading of an article titled, "Preparing for next time" in the Los Angeles times, published on October 27th.
Cities in California, like San-Diego, have sprawled out into remote, inaccessible, fire-prone canyons and forests. Bad zoning practises are to blame, the article says. As a result, there is a lack of protection for these residents. Cities like San-Diego do not have enough money to pay for the fire protection they require. The Cities are simply too sprawled out. The limited number of fire fighters and fire engines cannot cover the entire area of the sprawled out cities.
The article then mentions that residents in these areas commute farther, increasing carbon emissions, contributing to global warming, and worsening drought.
Personally, I would blame the southern California's climate rather than the residents that live in sprawl. I think anyone who lives in southern California needs to be aware that their house may some day end up in a fire, just like those in Florida or Louisiana may end up in a hurricane. The people who live in these fire prone areas take the risk of fire in exchange for the luxury of living on the edge of the city. I don't think any zoning practices would have prevented the wild fires and even if I had lost my house in the fire, changing zoning regulations would most likely not be on my mind when it comes to preventing wild fires in the future.

Sunday, September 30, 2007

The new phase of "new urbanism"

A recent article in the New York Times mentioned how many suburban ares are turning old malls into life-style centers. Where people live just above the mall or as they would like to call it. Upscale retailers, condos, and restaurants are built around what looks like a city street. One company in Boston is spending $370 million to turn an old mall in to a life- style center. They say that people will be excited about these developments because it is like living in the city but you are still in the suburbs. Are these kinds of developments really what people are looking for where down town is down stairs? It's almost as if they are building a downtown for older people who still want to live in the suburbs. As I continued to read the article I thought sure these places are nice but are they worth it? My initial guess would be no, people are not willing to give up their homes just to move into a condo above a mall. The article went on to mention that only 15% of the units had been sold since March. So, this also says to me that people are not willing to move into these "new urban" yet suburban developments. Sure the center is just being built so people are a little hesitant because they are not sure what it is going to look like; however, the price tag for these condos are quite steep. These condos start at $425,000 and go up to $1.6 million. I think that people would much rather get a house with some land starting at that price. Also, I think that the developers will see that the mall does well because people are driving from surrounding areas to shop but they are not in a hurry to move in above the mall. Will this new phase of new urbanism turn out just to be a phase? Guess we will have to let the market decide on that.

Clean Energy, Dirty Money

In a release from Gov. Ritter's office on Tuesday, a proposal was made to put $3.5 of the $7 million dollars for the Clean Energy Fund towards economic development. The senate bill 246 was passed by Senate and signed by Gov. Ritter in 2007. Already, the governor is trying to redirect these funds elsewhere.

According to the proposal, up to a million dollars will be made available to companies seeking funding assistance from state grants. As we have seen in the past, companies that need this kind of funding are generally high risk investments, the kind that apparently only our government will invest in. I agree that this funding will help bring new businesses and more jobs into Colo., but will they stay. Generally high risk businesses are just that, high risk. Many of these types of "schemes" do not succeed. In bringing these kinds of businesses here, the Governor is trying to make or economy even more unstable. I'll agree that we need more and better-paying jobs (my bank account can vouch for that), but why should we count on the government to boost our economy. It is a proven method, leave the market alone and it will correct itself.

I'd like to see a renewable source of energy sometime soon, but lets be realistic, big oil definitely won't let that happen until we have used up all there is of our dinosaur companions. Plus if you ask me the oil companies already have whatever it is our cars will run off in 20 years, they are just waiting for the right time to strike (but that's just a little of my conspiracy theorist coming out.

I don't think we are in Kansas anymore, Mark Funkhouser

According to the Kansas City Star, mayor Mark Funkhouser, is holding a conference of editorial writers to devise new ways of pressuring federal policy makers to take an active stance in Creating policy to help and encourage economic growth in urban areas. That is, he wants the central government to take a more active stance on the microcosmic economies of cities. He beleives this would encourage more sustainable.

This sounds like a very bad idea. First of all, situations, people and preferences change from city to city. The idea of federal policies and regulations is that when a law is made on the FEDERAL level, it is a blanket regulation for all of the land. If a regulation is going to help a specific region (and that is a big "if") it would need to be tailored to that specific region. There is no place for federal government here. Not only states have the power to play on their own state-specific strengths, but,by virtue of being localized, they most likely have better information about the region which they are regulating.


Beyond this initial absurdity that leaders in Washington should make better decisions about a region as opposed to the leaders within that region, we have the added concern of greater market regulations. These things are done for the stated purpose of "increasing economic growth" which usually involved governmental subsidies to allow for greater production of selected industries and firms. Not only is this rife with rent-seeking implications, where lobbyists will try to get their specific industry "stimulated" with a subsidy, but there is the looming chance and likelihood of these stimulating the wrong sectors, creating surplus goods that are not demanded by consumers. So, instead of leaving the money in the hands of customers wo can stimulate whichever sector they want by merely buying it, they are taxed and there money is spent on other items they do not want.

The best means for economic growth is less regulations, not more regulations that are misplaced, since they come from the federal government.

'Business-friendly' tax plan mat not have intended effects

On September 25, 2007, Governor Bill Ritter proposed a change in the corporate tax code that would allegedly boost the Colorado economy by encouraging “export” businesses to locate in Colorado. The current tax code makes it unattractive for multi-state businesses to locate here because it taxes based on the amount of capital investment and the size of the payroll, instead of instate sales. Ritter’s plan would simply change this so that instate sales were the tax base.

So, from what I can make of it, the plan would change the tax base from capital and operating costs to gross income. Ritter claims this plan would bring in more businesses and boost the Colorado economy by creating more jobs. But it seems to me that Ritter’s plan may not have the effect it intends to: that is, create jobs. True it will encourage businesses that do most of their sales out of state to move to Colorado. I’m sure Colorado has some lack of such businesses, because of its current tax code, so undoubtedly it will bring more of these types in.

But what about the businesses who do most of their sales in state? These companies, I imagine, rather enjoy the current tax code. After this tax plan passes, as Ritter claims it certainly will, these businesses might see a rise in tax payments because the source of those payments will change to a base of larger volume. They’ll probably try to weather the new costs by increasing their prices, so the Colorado consumer will ultimately be affected.

Of course, I’m sure Ritter thinks (if he has considered it, that is) this decrease in business activity will be more than offset by the forthcoming ‘boost’ in jobs from the ‘export’ companies. But they may not move in immediately. Furthermore, they will probably bring in quite a few out-of-state employees, because it is easier for multi-state businesses to draw employment this way. I would say there will be no significant increase in jobs, at least in the short run, because so many new employees will come from out-of-state that original Colorado residents won’t see much change. Furthermore, the increase in taxes will raise prices, which will affect quantity demanded and thus eat into in-state sales, which may possibly cause job cuts in those businesses currently favored by the tax code. This is a good example of politically motivated public policy that is made without careful consideration for its actual economic effects.

Is Colorado Springs one of the Best Cities ti live in?

In 2006 Colorado Springs was voted one of the top cities in America to live in by Money Magazine, however many people who live in Colorado Springs are complaining that it is not. Recently in the gazette several locals claimed that they do not make nearly enough money to support themselves and their families. So why do people choose to live in Colorado Springs? Is it the scenery; the job market perhaps? Common sense seems to reason that if someone is unhappy with where they live, they should move. Generally people will try to better their economic situation. However according to the gazette rather than let market forces determine where someone should live the government should step in and aid these people that cannot make it in the city in which they reside. Is this a case of government failure? Is it the government’s job to protect families whose average income lies above the national rate of poverty, but are still unable to live comfortably?

As a result Colorado is trying to elevate the current poverty line to a higher more ‘’realistic’’ level. The gazette states the following: “The Colorado Fiscal Policy Institute in 2004 issued a report identifying the income required for self-sufficiency in each Colorado County. For a one-person household in El Paso County, the institute said income of $16,475 is required to be self-sufficient. For a household with two adults and two children, self-sufficient income is $42,145, the institute said.’’ (The Gazette 9/30/07)

The people interviewed in this article are suffering from the unfortunate consequences of their actions. That begs the question as to whether the people profiled should and/or are able to move to a cheaper location. It seems to be a catch twenty-two; if they are not able to adequately provide for themselves, they most likely will not have the resources to move to a more economical location. The article argues that the local government should be doing more to help these individuals. Providing economic assistance to help these people afford to live in a comparatively expensive area seems a bit absurd. The ultimate question here seems to be why these people are staying in an economic situation that is not allowing them to live how they wish. Increasing the poverty rate and allocating more food stamps may be a quick fix, but generally people will live where they can prosper. When the city in which you reside is simply to expensive to maintain a comfortable live style, maybe the question that one needs to ask themselves is whether a cheaper location will provide a more favorable circumstance.

www.gazette.com/topstories

Green Mountain Falls vs. Evil Sprawl

The metropolis that is Green Mountain Falls boasts a population of 915 full-time residents and is located on U.S. highway 24 between Colorado Springs and Woodland Park. Mayor Pro Tem Dick Bratton stated that “In the past, the town hasn’t looked outside its boundaries. We haven’t been concerned about what’s happening around us.” Now residents are looking to prevent growth and are willing to go to great means to do so. The threat of sprawl is a battle to be fought on two frontiers as Woodland Park and Colorado Springs threaten to grow in Green Mountain Falls direction at any moment. Woodland Park has a planning area extending three miles south into Crystola where it has annexed land. Colorado Springs is currently attempting to expand up the mountain pass as developers are planning to build 55 homes near Chipita Park and 67 in Cascade, both just south east of Green Mountain Falls on Highway 24.

Town officials are looking into ways in which they can stop sprawl before it starts. They have hired a planning consultant to help them deal with the problem and are looking into annexing land surrounding the town in order to establish growth boundaries. Another method being considered is an intergovernmental agreement with El Paso County and other nearby towns to address the problems with a group effort.

Green Mountain Falls needs to annex nearby land and establish growth boundaries if they want to win the war on sprawl. Woodland Park and Colorado Springs are both embracing their growth and even planning for more in the future. The Mayor and town board seem to believe that growth or sprawl (or whatever you’d like to call it) is not inevitable and that no one will ever take notice of their peaceful mountain dwelling. I would assert that there is a certain group of people that don’t want one of the numerous tract homes that cover the eastern side of Colorado Springs. Some individuals won’t want a house that is identical to every other on the block and will be intrigued by the mountain living so close to Colorado Springs. These individuals will look up the pass to Cascade, Woodland Park and even Green Mountain Falls. Growth is inevitable and sprawl is coming.

Jordan Ford

Colorado Springs - Highway 24 Redevelopment

The City of Colorado Springs has recently been addressing the issue of widening Highway 24, heading west from downtown Colorado Springs to Manitou Springs. This area is the gateway to the mountains, attractions, Old Colorado City and Manitou Springs. The project is deemed necessary due to the increased traffic congestion along with areas along this roadway being in a 100-year flood plain. I have paid some attention to this issue through the local newspapers, however I attended a meeting last week and realized the apparant reason behind this project.

The widening of the highway will require in the exact words of the planners "taking" of land along the current roadway for redevelopment. The road will be widened and bridges and drainage improved to accomodate the current flood plain issues. The redeveloped land will then be parceled off and sold to the highest bidder. This will assist the local government in the costs of this project. I question what happens to the current property owners who are having their land "taken". Will be paid market value for their property as-is or as redeveloped? The answer is as-is as the redeveloped land will be further developed to accomodate strip centers, restaurants and potential for chain stores. I personally feel this is against what "west-siders" want with the redeveloped land. This redeveloped land will be more densely zoned to generate a higher tax base for the City of Colorado Springs in the future. It will not allow some current "mom and pop" businesses to relocate to this area as land rent and property values will increase with the property improvements.

I feel the highway project is necessary for future growth in this area, however some businesses and property owners will be driven from this area. I asked the question at this meeting - "What do you mean by redeveloped"? he answer I was provided said that new business or developers would come in to oversee this portion. I can only hope that the West-Side and Manitou Springs will push to keep their unique nature and not allow large box stores or retail to overtake this "redeveloped" land. The west-side is an area where people live who don't want this type of business in their backyard. I don't look at this as economic growth, rather reallocation of tax base to this area, when they can shop 3 miles away on 8th Street. I realize it is a process of change, yet sometimes change is not a good thing.

Bicycle Tax Fund

The 2007 Colorado Springs budget outlines a 115,000 dollar budget for "providing a funding source for bikeway improvements throughout the city." The source of revenue is a sales tax on the purchase of all new and used bicycles.

This is a good example of a continual distortion of local knowledge because of intervention. I have no doubt that the group of morons that came up with a bicycle tax thought it would be a great idea BIKES ARE SUPERDUPER AFTER ALL!!! but what it really demonstrates is an almost repulsive ignorance of basic human interaction. Furthermore, these oh-so sagacious legislators expose their flippant attitude to an individuals liberty.

What is the optimal amount of bikeways in a city? Most people with an IQ north of Quasimodo realize you cant answer the question in a concrete quantifiable number of units. Apparently though, there happens to be an optimal amount. The idea is that we can maintain more bikeways (a good thing) with this source of revenue (bike tax). However, what it does it create a change in the price of bikes and bikeways. People who previously owned bikes now get this bikeway for a reduced price since they don't burden the bike tax. Because of these manipulations in prices, prices lack the same "knowledge communicating" efficacy they previously had in a natural system. Ergo, distortions in the use of bikes, bikeways, their substitutes, inputs, complements; in a word, everything in the economy, is shifted ever so slightly away from efficient (in the proper sense of the word) allocation.

Furthermore, what a simple minded "tax and allocate" and its nonchalant use shows is a lack of respect for other persons property on the part of its advocates. What it means is that, the government of Colorado Springs knows how to use the money of people who buy and sell bikes than the people themselves. Taking money to pay for unwanted projects is no less theft.

How to Help Skinny Ethiopians

An article in the Denver Post, written on September 29, 2007, is titled: Hunger to do good helps Ethiopian kids. During this interview Noel Cunningham, a local entrepreneur and restaurant business owner, helped buzz his own program that aims at helping the "unfortunate" of Ethiopia. Cunningham's program,"Quarters for kids", collects money from high school students and donates them to needy Africans. The program also attempts to impress the value of the US dollar and their own economic "fortune" into their minds. I find this article to be inconsistent with an effective means of helping "unfortunate" Ethiopians.

Cunningham says, "In Ethiopia, here's the significance of a dollar: A quarter will buy breakfast, a quarter will buy lunch, a quarter will help pay for education, and a quarter will help to pay for a school uniform and shoes." Giving for the sake of giving, with no expectation of return or gain, is fine. Nevertheless, I suggest that this seemingly harmless act of giving money to Ethiopians is the wrong way to create positive economic improvement. Two specific arguments support this thesis: First, giving money or food to African countries does nothing to solve the most basic economic problem in the region: corrupt/predatory government. Second, charitable donations do more than quench hunger pain, they also quench the fire for change that is needed for African economic and political upheaval. If hungry Ethiopians want change badly enough, THEY must fight it themselves.

Instead of promoting programs that mask instead of create real change, the American people are perpetuating a growing problem. Government should allow economic freedom for the success of all African entrepreneurs. If young risk-taking Africans feel as though their investments will be left to the guns of militant militia, there will be little growth! Allowing Africans to feel the pains of hunger, help fight predatory governments, and providing economic and business education, will allow a country with an abundance of resources to drastically increase its GDP and quality of life.

It may seem harsh to promote an idea that says, "Don't give!" Yet, giving a hand "up" is always better than a hand "out".

Friday, September 28, 2007

A City Within the Springs

A city within the Springs
A huge new subdivision kicks off growth on Colorado Springs' east side


This article highlights the debut of Colorado Springs' newest community and prominant example of sprawl: Banning Lewis Ranch, located on the northeast side of Colorado Springs. After years and years of awaiting zoning approvals, the 24,000 acre property is finally breaking ground. The developers are promoting a picture perfect reality.

"That's why you'll find things like tree-lined streets and open-rail fences. Natural green spaces and feathery wild grasses. A new community center complete with pools and ball fields. The new Banning Lewis Ranch Academy, a K-8 charter school. And beautiful new homes in a variety of architectural styles, displaying rich character and neighborhood crafting. All interconnected by a network of trails and footpaths. It's the kind of place you just don't find much anymore. (banninglewisranch.com)"

This new community is promising much more than just a place to live, potential buyers are paying for small town living in the midst of city chaos. With a high emphasis being placed on 'small', prepare to pay for schools, parks and other commuity features like coffee schops and movie theaters; all within walking distance from home. Local trails and exercise centers that invite the community to come and get to know each other; enjoy a fresh breath of Colorado air, as long as you dont mind sharing that fresh breath with the dozen otehr neighbors scrambling for that same 'Leave it to Beaver' lifestyle. The houses will also follow suit with the small scene, the average size home for this community will be 2,400 sq ft. According to Colorado-Springs-realestate.com, the average size home for this area is closer to 3,200 sq. ft; however, at a starting price of about $220,000 are you really getting the most bang for your buck or are you being swept away by sprawl?

Wednesday, September 26, 2007

America’s Addiction to Cheap Money and the Resulting Effects on Sprawl

America seems undoubtedly addicted to cheap money, since 1984 the Federal Funds rates has not gone above 10% and has spent the majority of that time below 6%. The current rate, 4.75, is still lower then LIBOR, which is the rate that most of the rest of the developed world borrows at. There has also been a trend developing, the spread between the Fed Funds rate and the LIBOR rate has been widening. Although there has recently been a small correction down in the LIBOR rate, the spread and the trend still exist. This means that most every other developed country realizes that this rate is too low to sustain without dramatic inflation and other consequences.

In a supply and demand world, however, these low rates have been a blessing to our economy and real estate. Being one of the primary drivers of our economy, real estate values have seen large appreciation values in the past 20 years. This is due in part to people making more money then they were 20 years ago and wanting to have a bigger house, but with such low interest rates it is possible for people to demand more expensive houses then they could have otherwise afforded. This has not only caused an increase in property values inside the city, but also in the suburbs, leading to some people moving even farther away from the center of the city.

Sprawl is, among other things, the outward expansion instead of the upward growth of a city. This is undoubtedly being caused by our addiction to cheap money. Since 1984, rates have dropped from their highs and stayed relatively low, this is where we get into the supply and demand issue. Since price of money had been falling people have been spending more (Americans on average spend more then they make) and with a house being the most expensive good that most people buy, home prices have been greatly effected by this increase in demand. With the low price of money more people have been demanding newer, bigger, nicer houses, resulting in higher prices and greater appreciation of house values. This higher demand has lead to people moving to where they could build the same house for cheaper, the suburbs. People will even move out to a small town just outside the city and commute in to work (i.e. Monument, CO). But now, as the two cities have grown together, even they have a small suburb developing, Flying Horse. Good or bad, sprawl is happening and is due, in part, to the low interest rates.

The demand supply equation is out of balance in this case, although the housing supply has reacted accordingly to demand, the money supply has not. It is being kept at low levels to feed our addiction. This is not just one person’s opinion, but the majority of the world also agrees with me. This can be seen from exchange rates (found at finance.yahoo.com) and the dollar’s weakening value compared to other stable currencies. For example one US dollar is now worth one Canadian dollar, where as just five years ago, it was worth almost 1.6 Canadian dollars. There has also been a steady trend in this direction, not just in Canadian dollars but also in Euros, Yen and other major currencies. This shows that other people around the world see the inflationary potential that keeping a borrowing rate this low has.

Tuesday, September 25, 2007

Blogging Assignment Illustrated

If you want to see a couple of examples of what I'm looking for with your blogging assignments, then you might take a look at this post of mine as well as this post by a former student.

Sunday, September 23, 2007

Hitler youth buttons

Last Thursday U.S District Judge Joseph A. Greenaway Jr. sided with two kids from New Jersey saying the kids can wear buttons featuring a picture of the Hitler youth to protest a school uniform policy.
The students had been threatened with suspension last fall for wearing the buttons and the students parents then proceeded to file a federal lawsuit claiming the district violated the children's free speech rights. The Judge also added that the students could not distribute the buttons.
When deciding this case the Judge cited a 1969 case in Iowa involving students who wore black armbands to protest the Vietnam war, saying students have the right to express themselves as long as it is not disruptive to the work and discipline of the school.
This case seems to be a classic example of organizations that possess a little bit of power going crazy. I am thrilled the kids won. I don't agree with the hitler youth, but threatening to suspend students because they were wearing buttons is a clear violation of the 1st amendment.
This case also shows how the students parents were useing the coercive power of government to get what they wanted. Normall I am aginst people trying to use government to get their way but in this case the parents were just protecting their kids right to free speech.
It is good to see that the judges in Washington don't screw up all the time.

Saturday, May 12, 2007

Stormwater bills are public, after all

I have paid my storm water bill. Is it a tax? Well, I'm not sure. Many think it is and if it turns out it is, then we should vote on it. The city says no, but this article tells how a lien can be put on your house if the bill is not paid. Now, when I received my bill, I was suspicious. Here I am, paying my property taxes, when I get a bill out of nowhere. The bill says that if I do not pay the bill, the city will put a lien on my house. So, using the knowledge I did in class, I analyze the bill.

If I enter into a contract with a lender, such as my mortgage company, then they can use government's coercive force to enforce the contract. But what contract did I enter into with the city concerning storm water runoff? This is a classic case of governments coercive power. I agree with those who see this as a tax. In Colorado, we have to vote on new taxes- we didn't vote.

My next question is why didn't we vote on it. The city says it doesn't have the money to do the projects concerning storm water and runoff. My first question is why? Is this a new problem that has surfaced? Why hasn't the city been planing for this for years, why such the urgency. The answer, I believe, is the city does not know how to budget. Can the city really tell us this came as a surprise?

The city has not taken into account if there is any actual runoff form the property to the city drains. There is no mention in the bill I received to contest if I were saving any run off of rain. And another thing, what if there is a drought and there is no run off, then what are we being charged for. Probably the reason it was not introduced as a tax might be because there is not a efficient amount of run off. If this goes to the Colorado Supreme Court (if challenged), I would hope that they have a corrective state of mind in deciding the case.

I also think this issue will coincide with the issue before the state right now concerning the new education bill- many think it is a new tax, supporters (like the storm water bill) disagree. I suppose the courts will decide.

Wednesday, May 09, 2007

Burrowing increases. fed out of touch?

And article on Yahoo recently posted that comsumer borrowing in the month of march rose at an annual rate of 6.7 percent. this shows good growth after a slight slump in the first quarter this year.

This sounds to me like the fed is out of touch, after a year of holding the target rate constant, they recently announced that they are continuing to hold the target rate constant. This seems out of touch with the economy.

The article in Yahoo claimed that the high consumer borrowing is remarkable, due to high prices and rates. For this reason and the fact that the first quarter had been week, (growth around 1.3 percent) the fed should have been lowering the rate. It would have helped last quarter and strengthened the consumer spending that had been strong in march, making it potentially even stronger.

Senate Panel approves higher required feul economy

The nationwide fleet fuel economy required for cars and truck has been increased by the Senate Commerce Science and transporation rom 25 to 35 miles per gallon.

"This is not a perfect bill, but I think we have reached a stage where most parties would say this is fair," said Sen. Daniel Inouye. My problem with this is that if "most parties" involved would be ok with this, and I am assuming that "most parties" he means businesses and firms who are in the transportation industry. If this is true and if businesses could easily comply with these standards then competition would have already induced them to have done this already.

If this bill is to improve the industry, then it is just a regulation that will do more harm than good, reducing the number of cars that can be sold, since, now we have both fuel efficient and non- fuel efficient cars in the market. The higher requirments won't dramatically increase the number of efficient cars, just dramatically reduce the number of innefficient cars.


The only way this bill would work is if it is INTENDED to reduce the number of cars one the road. this however does not seem to be what the bill's intended consequence is. It seems like they are trying to turn the innefficient cars being produced, into efficient ones, but if all cars could be efficient already, then they already would be.

Thursday, May 03, 2007

Imus suing CBS

As many of us may remember Don Imus was somewhat recently fired for his comments about the Rutgers basketball team. Well now Don Imus is suing CBS for 40 million dollars which was the amount of his contract that he was left unpaid due to him being fired. Imus and his lawyer are filing a breach of contract, citing a specific part of his contract, "Imus' services were "unique, extraordinary, irreverent, intellectual, topical, controversial." Now I must make clear that I do not agree with what Imus did but the 1st amendment does guarantee freedom of speech and even if what he says does offend others, this was acknowledged in his contract. So again, although I do not agree with what Imus has done, after looking at his contract and the 1st amendment I would side with Imus in a court case and would award him his 40 million.

On a side note. Personally I think contriversial topics are the best to discuss and need to be addresed and I beleive that everybody is offended by something and as long as you market your talk to show to be offensive you should be able to discuss these topics. Look at the howard stern show, he was donig all sorts of crazy things, but that was expected becasuse it was the howard stern show. Personally I would not have fired Imus.

Tuesday, May 01, 2007

Senate Discusses Overhauling PDUFA Act; Disincentive to Investment.

The Senate has been recently debating the possibility of overhauling the FDA. It would do this by amending and extending the Prescription Drug User Fee Act created in 1992. The Act was originally created to defray the costs the FDA incurred while reviewing prescription drugs. The FDA's proposal to Congress would have the drug industry pay $393 million in annual fees (Bridges, Associated Press). This spending would go to new drug and food safety measures. It would include provisions to ensure the safety of child drugs and devices as well as the safety and effectiveness of drugs currently on the market. The renewal of the Act also promises to make the approval process of drugs more quick and predictable. The provisions set forward however, do not allow for the importation of drugs nor generic drug approvals (all facts, from attached link, Andrew Bridges, the Associated Press).

This is sort of a grey area of market failure. There is market failure, but it may protect consumers to an extent. It creates a barrier to entry through government licensing, therefore violating perfect competition. It also violates the PC model by heterogeneous products and asymmetrical information. Generic drug companies and foreign companies have been left out of the new provisions so far. This renewal and amendment to the PDUFA Act was brought to the Senate by the FDA itself. There may be rent seeking on the part of the FDA and possibly the large drug corporations. The FDA can not act efficiently, so it seeks legislative coercion for additional aid. The larger drug corporations may not necessarily be too adversely affected by the increased costs, but may benefit from reduced competition. Although the Act promises to cut costs the FDA incurs by reviewing drugs, the Act is still economically inefficient. It seems to limit competition in the prescription drug market. It also promises to make the approval process faster by introducing more legislation into the drug industry.

Monday, April 30, 2007

High-Speed Police Craziness

In a case dated April 30, 2007 the Supreme Court decided that police are now able to use force in a high-speed pursuit to stop an individual that is driving recklessly from harming others. The 8-1 decision in Scott v. Harris No. 05-1631 that gives police extended powers during high speed pursuits was not found to be a violation of the Fourth Amendment. This amendment gives an individual the right to be free from unreasonable searches. Justice Scalia said that this decision by the court holds true “even when it places the fleeing motorist at risk of serious injury or death.” Deputy Scott had hit the car that the 19-year-old Harris was driving. Harris lost control of his vehicle. He is now paralyzed and has attempted to sue. Since the Fourth Amendment was not violated he cannot sue for damages.

Harris was being chased because he was speeding. I know that the job of the police is supposed to be to protect all people. I wonder though, how well are they protecting all people if they are including themselves in the high-speed chase over speeding tickets? Could more people possibly be harmed from police forcing drivers off of the road for crimes such as a speeding ticket? Could the outcome not have been perhaps an extra fine of some sort for Harris? I’m kind of torn over this case. I want the police to be able to protect me, but at the same time I want my rights protected and not to see a police chase every time someone goes speeding down the highway. The courts have decided to give the police force more police power in order to “protect the people.” I just wonder where it ends. Hopefully it won’t go beyond this point.

Saturday, April 28, 2007

Large Acres of Land Selling to the Rich

For the very rich billionaires and the millionaires there is a new fad of buying up open land in the US. Brad Kelley has almost 800,000 acres of land that he is purchasing for ranching. There are others, like Roxanne Quimby, who buy forest landfrom logging companies and open land used for ATV trails, and plan to use it as conservation land. It seems the rich are beginning to do the opposite of what Americans were doing in the early 19th century, of preserving the land and maintaining it not selling.

It seems that most of the private property owners are protecting the land from development, not preparing it to be sold to developers. If we consider economic prosperity of this effort, it clearly support the right of private property. It is also a good example of the corrective state involving preservation of land and natural resources. Maybe this fad will catch on.

As James Madison stated in his Essay on Property in 1792, "Government is instituted to protect property of every sort; as well that which lies in the various rights of individuals, as that which the term particularly expresses. This being the end of government, that alone is a just government which impartially secures to every man whatever is his own". So how is the Government going to react to these land purchases? Will they press for more eminent domain to take over the land to sell and make a profit, keep it as a public use? Even though it seems most of the private landowners will protect it. How will the Supreme Court react when faced with a case for the Takings Clause that has no grounds? Will they redefine takings and public use language again to come up with a public purpose policy? Or will they agree with common sense and let the private property remain private without government intervention?

Friday, April 27, 2007

Hmmmm Can she do that?!

In early April of 2007 House Speaker Nancy Pelosi went over to the Middle East to conduct foreign policy. The concern that myself as well as author Frank Salvato has is that the Constitution does not authorize the Speaker of the House to conduct foreign policy in the manner in which Pelosi did. That power is strictly delegated to the Executive Branch of government. As Salvato writes “this isn’t to say that Congress doesn’t have any authority over the formulation of US foreign policy, it certainly does.” Article 2, section 8 is the part of the Constitution that gives Congress the power to regulate commerce with foreign nations, States, and Indian Tribes. However, Salvato notes that it is Article 3, Section 2 that authorizes the President to make treaties, appoint Ambassadors, Judges of the Supreme Court, etc. Congress has the power to regulate business in the US and foreign nations and the President has the ability to appoint individuals to represent the US in foreign affairs.

Knowing all of the information presented above leads me to ask why the Speaker of the House thought it was appropriate for her to go over to the Middle East. She took an oath to uphold the Constitution of the United States. So why, then would she even take this step? Some have suggested that this is an attempt by Congress to undermine President Bush or for Congress to overpower the Executive Branch period. I guess that it doesn’t really matter why she chose to do it. The point is that the Constitution clearly leaves that area of foreign policy to the Executive Branch. It is the choice of the Secretary of the State to go to foreign countries for diplomatic reasons, not the choice of Nancy Pelosi. I agree with author Frank Salvato that this situation has created a constiutional crisis.

Abortion battle...Again.

The supreme court has recently upheld the 2003 partial birth abortion ban act. The decision was 5-4 in favor of the laws constitutionality. The Democrats are appalled, the Republicans applaud. Several people are arguing that the decision would have gone the other way if O'Connor will still on the bench. The dissent argued that the main problem with the law was that it does not allow any exceptions for medical reasons. President Bush said the prohibition "represents a commitment to building a culture of life in America. Today's decision affirms that the Constitution does not stand in the way of the people's representatives enacting laws reflecting the compassion and humanity of America," The article also seems to take offense to the conservative nature of the court and repeatedly points out that two members of the majority were nominated by Bush.

Personal feelings aside I believe that the court has made the wrong decision. The court has turned over Roe v. Wade. Obviously, as it has proven several times, the court has no respect for precedent. The country is founded on the principles of life, liberty and the pursuit of happiness. Of course there is the age old argument, does a fetus have a right to life? Are they people until they are born? At what point do they become people. Either way there is no statement in the constitution that can be used to justify banning abortion.

For me personally I am in favor of banning partial birth abortion. I would support a medical stipulation to the ban. Still, I am not sure that there would be no awareness of health risks that far along in a pregnancy. This is causing a paradox for me between liberty and morals. Who's to say that anyone has the right to tell someone whether or not they can have an abortion. I do not know if one could say that an abortion causes negative externalities and therefor justifies government interference. If we could say that it was a negative externality to the fetus then the solution would be to tax abortion, it seems like a strange solution but maybe it is the correct one. There seems to be no concrete answeres to these questions. It seems that whoever has the power of the White House determines which way this law will go. We will continue to see laws on abortion change.