Category Archives: Politics

Are People Really Moving Back to Cities?

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Joel Kotkin writes,

The last decennial census showed, if anything, that suburban growth accounted for something close to 90 percent of all metropolitan population increases, a number considerably higher than in the ’90s. Although core cities (urban areas within two miles of downtown) did gain more than 250,000 net residents during the first decade of the new century, surrounding inner ring suburbs actually lost 272,000 residents across the country. In contrast, areas 10 to 20 miles away from city hall gained roughly 15 million net residents.

I had the opportunity to discuss urban economics with Phil Longman the other night. He had many interesting points.

1. The distribution of income both within metro areas and across metro areas is much wider than it was in the 1970s. In the 1970s, Manhattan was not so much richer than Staten Island. New York was not so much richer than Detroit.

2. Some cities are now “colonial economies” in the sense that they are dominated by businesses owned elsewhere, with few local-owned businesses. He cited St. Louis as an example. When I grew up there, we had McDonnell-Douglas and Monsanto. Now even Anheuser-Busch is not locally owned.

3. So many venture capitalists are in San Francisco that it’s not clear that San Jose is still the capital of Silicon Valley.

4. Whatever happened to the death of distance? It seems that people will pay up to live in cities.

Of course, my theory is that cities are dominated by the New Commanding Heights of universities and hospitals. This brings in highly-paid professionals. So cities that were blue-collar in 1950 and became ghetto by 1980 are becoming yuppie now.

Kotkin’s finding of growth in outer-ring suburbs is really counter to the anecdotal picture of people being attracted by the new urbanism. I think it might be best to think about location choices in the aggregate as driven by supply elasticity. Take it as given that development in cities and close-in suburbs is restricted. If the overall trend is to move away from small towns and rural areas, then the increased demand shows up in P in the city and the close-in suburbs, while the Q shows up in the last place the pundit class would expect it–the distant suburbs.

Why Jonathan Gruber is Paid the Big Bucks

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Tyler Cowen comes to his defense.

I’ve disagreed with Gruber from the beginning on health care policy and I thought his ObamaCare comic book did the economics profession — and himself — a disservice. But I’m simply not very interested in his proclamations on tape, which as far as I can tell are mostly correct albeit overly cynical.

My remarks:

1, Gruber is not paid the big bucks to be a political tactician. In particular, whether or not Obamacare was sold deceptively was not his call to make.

2. For me, the problem with democracy is not the intelligence, or alleged lack thereof, among voters. I just think that the wisdom of crowds is channeled more effectively through exit than through voice. As for democracy, it is a good way of arranging for the routine replacement of high-level officials. It is otherwise much over-rated.

3. Gruber is paid the big bucks because he has a quantitative model of how insurance health reforms will play out. Relative to most academic economists and policy makers, my level of trust in such models is rather low. For me, it would be a better world if Gruber and his model were not held in such high regard. But I would have made this point, and probably did so, before the recent controversy.

4. If you need proof of Gruber’s contempt for your intelligence, all you need to do is skim the comic book to which Tyler refers. The comic book left me with the impression that Gruber lives in a Krugmanesque bubble, in which any disagreement must be dismissed as stemming from extreme ignorance and/or evil intent.

5. I think that the extent to which the attacks on Gruber have become personal is something that every economist, regardless of ideology, will come to regret. I am all for criticizing the ideas and the world view that underlie Obamacare. However, a world in which every economist who steps into the policy arena is subjected to opposition research and “gotcha” attacks is not going to be pretty.

Political Donations vs. Industry Affliation

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Business Insider reports,

Lobbyists are, perhaps unsurprisingly considering their role in the political system, similarly split

Actually, you need to read the article. Pointer from Tyler Cowen. Some remarks.

1. Although both liberals and conservatives receive large donations from lobbyists, the donations of people in the media skew very heavily liberal. I am not sure that this is easy to explain. I would think that the market would produce a bulge in the media at both extremes, not at one.

2. I am not surprised that the auto, banking, pharmaceutical, and real estate industries donate heavily to both liberals and conservatives. When you have a close relationship with government, you need to hedge your bets.

Jonathan Haidt on Political Bias in Sociology

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He is quoted by Chris Mooney as saying,

When the facts conflict with…sacred values, almost everyone finds a way to stick with their values and reject the evidence. On the left, including the academic left, the most sacred issues involve race and gender. So that’s where you find the most direct and I’d say flagrant denial of evidence. I think the results of this study do clearly show that political concerns influence the willingness of sociologists to consider a major class of causal factors in human behavior.

Read Mooney’s whole piece. The study he refers to is by sociologist Mark Horowitz and two colleagues.

Plus, there is this article on Haidt on social psychology. Pointer from Jason Collins.

Should All Public Officials Wear Cameras?

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The Washington Post editorializes,

It’s not hard to think of instances in which video evidence would do much to settle or shed light on bitter disputes about the use of force by police — think of the Michael Brown killing in Ferguson, Mo., this summer. And while some civil liberties groups have expressed concern about intrusive filming of citizens, that worry seems a little archaic. The truth is that anyone can be filmed in public at virtually any time, without their knowledge, given the proliferation of security and phone cameras. Their use by police is overdue.

This struck me as very David-Brin like. Could we extend it to include public officials other than police? Suppose that when they meet with bankers, for example, Fed officials had to wear cameras and audio recorders, which could be obtained by FOIA requests. Or suppose that IRS officials had to wear cameras, for example, when they wrote emails or engaged in discussions about dealing with tax-exempt groups.

The intended consequences of the camera rule would be, as with having police wear cameras, to make sure that public officials remember that they are being watched and to reduce instances where they are wrongly suspected of acting against the public interest.

What might be the averse unintended consequences of forcing high-level public officials to wear cameras and recording devices when engaged in their ordinary duties?

UPDATE: This op-ed by Jason Grumet argues that transparency has adverse unintended consequences. However, I doubt that Grumet has any grasp at all on public choice theory (not that public choice theory would make one optimistic about getting good results from using cameras).

Threat Exaggerated or Minimized?

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Robert Wright writes,

A central lesson of the disastrous Iraq War is that one job of a post-9/11 president is to calm fears, not feed them. Some of us voted for Barack Obama thinking he would do that, and help restore reason to foreign policy discourse. For a while it looked like we were right. Now it looks like we weren’t.

He suggests that the threat to the U.S. from ISIS is exaggerated. Here are some reasons to agree:

1. The threat from Saddam Hussein was exaggerated.

2. It is in the interest of government officials to exaggerate (at least some) threats in order to expand their power.

The alternative view is that the threat has been minimized. Some reasons to agree are:

1. We have been way too optimistic that civilized values will prevail in that part of the world.

2. We have been reluctant to hold Muslims to our standards of civilized behavior. It could be that this “soft bigotry of low expectations” comes from a deep-down instinct that predicts a lot of uncivilized behavior.

I could argue either side of this issue.

Politics, Reasoning, and Group Affiliation

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Daniel Kahan writes that one should view culturally motivated reasoning (CMR)

as a form of reasoning suited to promoting the stake individuals have in protecting their connection to, and status within, important affinity groups. Enjoyment of the sense of partisan identification that belonging to such groups supplies can be viewed as an end to which individuals attach value for its own stake. But a person’s membership and good standing in such a group also confers numerous other valued benefits, including access to materially rewarding forms of social exchange (Akerlof & Kranton 2000). Thus, under conditions in which positions on societal risks and other disputed facts become commonly identified with membership in and loyalty to such groups, it will promote individuals’ ends to credibly convey (by accurately conveying (Frank 1988)) to others that they hold the beliefs associated with their identity-defining affinity groups. CMR is a form of information processing suited to attaining that purpose.

That sounds right to me. I wonder if Kahan would consider the possibility that this description applies as much to climate-change activists as it does to their opponents.

Related and recommended: Scott Sumner’s post on intellectual decay.

Thought on a Strategy

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What should be our strategy?

Think about what has worked and what has not worked for us in Iran, Afghanistan, and the Arab world. Consider the various types of regimes, and ask how well we have been able to work with them to achieve American interests:

1) Islamic totalitarian
2) Democracy
3) Kingdom
4) Military strongman

In my view, these are listed in order from worst to best (or least bad), in terms of how well they have worked to align these countries with our interests in general, and with restraining Islamic militancy in particular. If that is correct, then the obvious strategy is to try to replace the Islamic totalitarians (Iran, ISIS, Hamas) with military strongmen.

What is interesting is that no one is proposing this. I would not expect the left to support a policy that favors a military strongman. And I would not expect libertarians to support any attempt to actively shape another country’s political system. But I do not even hear any conservatives proposing such a solution. The neocons thought that democracy was going to be the panacea. Do they still think that?

James Manzi on a Basic Income Guarantee

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He writes,

There was a further series of more than 30 randomized experiments conducted around the time of the welfare debates of the 1990s. These tested many ideas for improving welfare. What emerged from them was a clear picture: work requirements, and only work requirements, could be shown experimentally to get people off welfare and into jobs in a humane fashion. These experiments were an important input into the decision to make work requirements a central tenet of the new welfare regime when the welfare system was converted from AFDC to TANF in 1996.

In spite of these studies, I suspect that the long-run response of work effort to incentives is high. Imagine two children, one growing up in a household where parents work at low-wage, low-status jobs, and the other growing up in a household that lives primarily on government support. Suppose that the consumption basket of the two households is approximately the same. Do we believe that the child of the parents who work will want to work when he or she grows up?

That said, I recommend the entire essay. Manzi also writes,

if part of the motivation for giving adults income is that they spend it supporting their children, would we really allow parents receiving taxpayer money to spend it any way they want with no requirements for child welfare beyond child abuse laws? And as another, a huge and growing portion of the cost of the welfare state is health care. Suppose we gave every adult in America an annual grant of $10,000, and some person who did not buy health insurance with it got sick with an acute, easily treatable condition. Would we really bar them from any urgent medical care and just say “Tough luck, but it’s time to die”?

I tend to agree that large cash transfers with zero paternalistic oversight is not a likely political outcome.