Reason‘s Scott Shackford reports,

A small St. Louis suburb has agreed to stop trying bankroll its government with a vicious regime of petty fines so excessive that the town has cited more than a third of its population.

The town is Pagedale. When I look at it on the map, I see it is where I lived from about age 3 to about age 10. I had remembered my home town as Olivette, but now I see that Olivette is a nearby community, sort of in between Pagedale and Clayton. A few random memories:

1. St. Louis County has many tiny jurisdictions, and they have always had to rely on fines for revenue. My first and only speeding ticket came from one of those places, where the speed trap was the main money-maker.

2. When I lived there, Pagedale was not racially integrated. But its social class range was wide, mostly lower middle class but including some professionals and even a few wealthy businessmen. One of the businessmen owned a small electronics factory where I worked a couple of summers in college. Another owned a drive-in movie theater that showed porn, which got him arrested more than once. He and his wife also had a vacation home and a boat on the Lake of the Ozarks, and I got to go water skiing with them once. I guarantee you that today no one living in Pagedale has a vacation home and boat. A couple of years ago I saw house advertised for well under $50K. It was on the same street where the theater owners used to live, and it was the same type of house as theirs.

3. When the Fair Housing Law was passed, real estate agents told residents to sell ASAP, before the Negroes (the 1960s term) started to move in and property values went down. This prophecy (aka “blockbusting”) became self-fulfilling. Probably at least 80 percent of homeowners did sell, and Pagedale quickly became a black neighborhood. We had been renters, not homeowners, and we happened to be away on my father’s sabbatical while the blockbusting took place. When we returned, my mom’s best friend insisted that we move to the jurisdiction with the best reputation for schools, which was the suburb of Clayton. So Pagedale faded out of my life, although I still go back there every time I visit St. Louis.

Nick Rowe writes,

People like crowding, so move towards the more crowded location, until everyone lives in the same location.

You have to read the whole post. He is not claiming that people like crowding, but if they do want to be around more people, then they will tend toward a single city.

My thinking is a bit more nuanced, but it pushes in a similar direction. I think that to some extent other people are amenities. For me, having enough folk dancers in an area is an important amenity. If you have young children, then other people with young children are important amenities. If you like pro sports, then having other sports fan in an area is an important amenity–otherwise, there won’t be local pro sports teams. If you like bluegrass music, then other bluegrass music fans become an important amenity. You get the idea.

In general, the more people an area has, the more likely you will find the people-as-amenities that you are looking for. So that is one factor in creating cities that are in some sense larger than they need to be. Of course, at some point, the negative externalities of crowding start to kick in. That is why we don’t all move to one big city.

Some people insist that there is still a working class. For example,

Capitalists are those who obtain a majority of their incomes from capital (interest, dividends, capital gains, profits).

Workers are those who can reasonably expect to get a majority of their income in their lifetimes from wages, salaries, piece-work, or contract labor (1099 workers).

I am not convinced. This amounts to saying that class is determined by IRS regulations and arbitrary accounting conventions. It has very little relationship to how an economist would think about the source of income. For example, think of a doctor. To an economist, the designation of the doctor as “capitalist” or “worker” depends primarily on whether you count the doctor’s investment in medical school as an acquisition of (human) capital. Instead, if we follow the commenter’s approach, it depends on whether the doctor’s medical practice pays compensation in the form of salary or profits.

Moreover, it has very little relationship to how sociologists think of class. The “working class” will include workers with high autonomy as well as low autonomy. It will include workers with high social status and low social status. It becomes worthless as a way of predicting anything else about the person’s outlook, tastes, or norms of behavior.

On mental transaction costs, someone wrote,

There are plenty of counterpoints to this mental transaction costs model. Places where the number of choices and costs have proliferated. Fast food, and restaurants, for example. Most places offer a far larger selection with different prices than they used to. Upsize your fries or not, etc.?

I should have defined mental transaction costs more precisely. They are the costs that you incur when price is introduced as a consideration that otherwise could have been avoided. It is not a proliferation of choices, per se. Speaking of fast food restaurants, why don’t they charge for ketchup, or napkins? Why do they have three drink sizes, instead of charging by the ounce? I assume that mental transaction costs are a factor.

I think that they are really good. Here is one example:

Give up a lot to be at a funeral

You can always find an excuse for not going. It’s in the middle of the day, you have a lot to do, the person is already gone, the family of the one who’s gone will understand, and most of all, how important is it really? Try to go anyway. Attending any funeral is a reminder of what’s important in life. Attending a funeral of someone who touched your life builds gratitude and is a kindness to those left behind.

My wife taught me this one. If a relative of one of our friends dies, we try to attend the funeral even if we did not know that relative very well.

Funeral services are deeply life-affirming. Eulogies provide a valuable perspective on life. They remind you of what is important. They remind you of what is best in people. And they tell stories of the variety of human experience.

In last week’s podcast, she says,

what tends to happen is that, like, moderate Right-wingers will see the extremes of the Left and become convinced that this represents the Left. And that the whole of the Left has to be opposed drastically. This is an existential threat. And the moderate Left will do the same to the Right; and they will see the alt-Right [alternative Right] or the far Right as defining the Right. And so, when they are talking on social media, or when we’re reading analyses of politics, then we will hear, ‘The Left does this,’ and ‘The Right does that.’ As you saw, we had a little graphic in our essay, which just sort of demonstrates it, that these are the fringes. And most of the people in the middle in this graphic are saying ‘Shut up. Shut up. Shut up.’ Except that because of the existential–the perception of this existential threat right now, people are internalizing. They work the most faulty narratives of their own side in order to defend against what they see as the existentially dangerous threats on the other side.

Later, Lindsay puts it,

it became very fashionable to find the most extreme lunatic on the other side from your own, and then present them as if they are typical, in order to fear monger, or to whip up a base, or to radicalize. And this works. This has been–you know, I know that for instance Fox News got accused of it several years ago, of looking for the most lunatic liberal they could find, or to put a guy up there in the most–you know, bizarre, stereotypically, maybe almost hippie outfit there, or something–to say something crazy and then be like, ‘Well, there you go, Audience. This is what the Liberals look like and think.’ And this was, this is a form of not exactly journalism that I think has driven a lot of polarization.

This sounds a bit like Yuval Levin. That is, we have gravitated toward exaggerating the evils of the other side. This makes for apocalyptic thinking. This aggravates authoritarian tendencies on all sides.

I think that there are a lot of people out there who are not totally committed to one tribe or the other. The challenge in the United States today is that neither party wants to cater to that moderate majority. The intolerant wings of each party are ascendant, at least during primary season.

Edward Glaeser and Joseph Gyourko write,

Empirical investigations of the local costs and benefits of restricting building generally conclude that the negative externalities are not nearly large enough to justify the costs of regulation. Adding the costs from substitute building in other markets generally strengthens this conclusion, as Glaeser and Kahn (2010) show that in America building restrictions are higher in places that have lower carbon emissions per household. If California’s restrictions induce more building in Texas and Arizona, then their net environmental effect could be negative in aggregate. If restrictions on building limit an efficient geographical reallocation of labor, then estimates based on local externalities would miss this effect, too.

Read the whole paper, or at least the conclusion.

Sarah Chaney (WSJ) reports,

Rents are rising at the slowest pace in more than a year…

A measure of what Americans are paying for rent was up 3.7% in October and again in November from a year earlier. Rent inflation dipped to that level in September 2016 but was last consistently that low in the opening months of 2016, according to Labor Department data.

My impression is that housing construction is still low relative to potential demand, so I was not sure what to make of this. I recommend Ed Yardeni’s charts, particularly figure 16, which shows the percent of households who rent rather than own. That soared between 2005 and 2015, but it has edged down since then. Also, figure 20 shows that the rental vacancy rate was falling until 2015, but it has been rising more recently.

For a Heritage Foundation volume. In my chapter, I write,

One obvious improvement would be to eliminate all government subsidies for mortgages to non-owner-occupants. It seems likely that this policy change alone could have greatly reduced the severity of the financial crisis or prevented it altogether.

By request. I probably should look up earlier statements before writing this, but I hope I am consistent. Consider an education intervention and a set of tests that it must pass. The intervention could be “more spending” or “method X used in the classroom” or “longer school days” or “charter schools” or what have you.

1. It should show a meaningful difference under experimental conditions, meaning that selection bias is eliminated.

2. The difference should persist, rather than fade out. If you show a difference in first grade but by third grade or fifth grade the experimental group is on on the same level as the control group, then there is fade-out.

3. The results should be replicated. One experiment that works one time does not count.

4. The intervention should be scalable. The intervention does not depend on a uniquely gifted teacher.

The Null Hypothesis is that no intervention passes all four tests.