Our Word is Our Weapon

"The region’s major highways are, at almost any time, a mess. Congestion is perpetual. Tolling of central business areas and major highways could meaningfully reduce congestion while generating enough money to significantly increase and improve transit service. Politicians struggling to figure out how to fund Metro should just walk down to 14th Street near the Potomac at 5 on a Friday, or to I-270 in Maryland at basically any time. The money is sitting right there, in the form of red brake lights as far as the eye can see."

"at a couple of moments along this race the conservatives won the argument and Democrats were ready to buckle. Credit for not buckling goes to Nancy Pelosi and other gutsy leaders. But it also goes to the GOP. They wouldn’t take “yes” for an answer when lots of people wanted to surrender and settle for something much smaller. Instead, whipped up into a frenzy of ideological fanaticism and overconfidence, they decided to take no prisoners. So nobody surrendered! And that’s how Mitch McConnell brought universal health care to America."

"Does openness increase volatility? This column argues that it doesn’t when countries are sufficiently diversified. These results amount to a powerful argument in favour of export differentiation policies as a means of deriving larger benefits from trade openness and shielding against global shocks."

This is one of those 'just introduce all these complementary policies and you'll be fine' arguments that are sometimes not very helpful to developing countries operating under real constraints., You could just as easily say the evidence suggests that low-income countries who don't have diverse export baskets should be more cautious about opening up too quickly.

No, say Ann Harrison and Jason Scorse in a new AER paper (ungated):

We find that anti-sweatshop campaigns led to large real wages increases for targeted enterprises. We also examine whether higher wages led these firms to cut employment or relocate elsewhere.

The results suggest that there were some costs in terms of reduced investment, falling profits, and increased probability of closure for smaller plants, but we fail to find significant effects on employment.

Small problem with Craig Richardson's 'before and after' pics of Zimbabwean farms. They're the same image, from the same point in time, just processed differently. So says Stefan Geens, anyway, and he's the type who knows these things.

Obama talks to Democrats:

"Something inspired you to get involved, and something inspired you to be a Democrat instead of running as a Republican. Because somewhere deep in your heart you said to yourself, I believe in an America in which we don’t just look out for ourselves, that we don’t just tell people you’re on your own, that we are proud of our individualism, we are proud of our liberty, but we also have a sense of neighborliness and a sense of community — (applause) — and we are willing to look out for one another and help people who are vulnerable and help people who are down on their luck and give them a pathway to success and give them a ladder into the middle class. That’s why you decided to run. (Applause.)"

"Fertilising the oceans with iron to absorb carbon dioxide could increase concentrations of a chemical that can kill marine mammals, a study has found.
Iron stimulates growth of marine algae that absorb CO2 from the air, and has been touted as a "climate fix".
Now researchers have shown that the algae increase production of a nerve poison that can kill mammals and birds.
Writing in Proceedings of the National Academy of Sciences, they say this raises "serious concern" over the idea."

Scott Sumner is surprised at Paul Krugman. Me too.

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Does it matter who you went to school with? This column presents evidence from England suggesting strong peer influence among secondary school classmates. But the effects vary with gender and ability. Girls significantly benefit from more interactions with very bright peers, whereas it can impair boys – especially those with higher ability. "

Dani Rodrik:

"What made finance so lethal in the past was the combination of economists’ ideas with the political power of banks. The bad news is that big banks retain significant political power. The good news is that the intellectual climate has shifted decisively against them. Shorn of support from economists, the financial industry will have a much harder time preventing the fetish of free finance from being tossed into the dustbin of history."

"zoning is used as a tool to keep low-to-moderate income people out of suburbs. The town next door to mine–San Marino–has zoning requirements so onerous that it is not possible to build small housing there. Even my town, Pasadena, which at least has a bunch of apartments, prevents construction of granny flats on lots smaller than 15,000 square feet. These rules keep out the poor, which reduces expenditures on social services, which makes property values higher, which keeps out the poor, which…

Of course poor people must live somewhere, and so they live in cities with old housing stock that was built before the era of stringent zoning. So cities with old housing stock are placed at a fiscal disadvantage, which induces people with means to leave, which puts them at a greater fiscal disadvantage, etc…."

Will Wilkinson discusses some research by Jonathan Haidt into the moral sentiments of liberals, conservatives and libertarians. Haidt adds more in comments:

"Libertarians are liberals who lack bleeding hearts. Libertarians look much more like liberals than like conservatives on most measures, EXCEPT those that have anything to do with compassion, on which libertarians are lower than liberals AND conservatives. The lower levels of compassion, and higher levels of need for cognition and tendency to "systemize" rather than empathize, are probably related to the love of markets."

Good to know.

"When I asked Klaus Bondam, the Mayor of Copenhagen, what was the most difficult but most important decision he has made to make Copenhagen cycle friendly he gave a clear answer: replacing car parking space with spacious, segregated cycle lanes. The action plan makes no mention of of these kind of hard decisions that are needed for London to be transformed from a place where we cycle in spite of the city into a place where the city encourages us to ride bikes."

Well put: "If people are saving in anticipation of higher future taxes, then presumably they are depositing money with banks, which they can then lend on. And if they’re saving, then they don’t want to borrow.
You can believe in Ricardian crowding out. You can believe in financial crowding out. But you can’t believe in both, as one offsets the other."

Should we spend more on improving statistical capacity in developing countries?

"This is Steve. Steve works in a statistics office, earning less than £90 a day. Steve works on assessing poverty indicators and informing policy makers of the appropriate data, but has no computer. His office is dangerously understaffed (one out of every two government statisticians is poached by development partners every year). Please, when you're deciding where to send your check this Christmas, think of Steve."

If only anyone could have seen this coming!

"HOAs are basically nonprofit associations that homeowners form to maintain their development’s common areas, with a bottom-line mandate to protect their property values. Each homeowner pays a monthly “assessment,” or fee, to finance common expenses, like maintenance of the landscaping, repairing of walks and roads, and keeping pools swimmable. Fees are also supposed to fund a reserve of money to take care of big jobs, such as reroofing, that might come up. Even though each owner has a deed to his/her home, they agree to a set of rules that restrict their independence — including a recognition of the HOA board’s right to foreclose on your home, just for not keeping up with the monthly HOA assessments …"

It says a lot about the psychological sway of car culture that Kit Malthouse (and he's not the only one) sees fit to complain about a London Cycle Hire docking point being built on a 'quiet' residential street in Westminster, but not about the dozens of cars which are habitually parked there and which each make far more noise.

"But a more pertinent question might be to ask just how much credit really is due Chicago-school economics for Chile's current relative prosperity? Mining alone accounts for 20 percent of Chile's GDP, and it is very much worth noting that the country's crown jewel, the copper industry, is completely dominated by one state-owned company, Codelco. Ponder that, for a second: Latin America's poster child for Chicago school economics features state control of the single most important economic resource. Huh."

Sweet:

"Flexible labor markets require geographically mobile workers to be efficient. Otherwise, firms can take advantage of the immobility of workers and extract monopsony rents. In cultures with strong family ties, moving away from home is costly. Thus, individuals with strong family ties rationally choose regulated labor markets to avoid moving and limiting the monopsony power of firms, even though regulation generates lower employment and income. Empirically, we do find that individuals who inherit stronger family ties are less mobile, have lower wages, are less often employed and support more stringent labor market regulations. There are also positive cross-country correlations between the strength of family ties and labor market rigidities. Finally, we find positive correlations between labor market rigidities at the beginning of the twenty first century and family values prevailing before World War II, which suggests that labor market regulations have deep cultural roots."

"Consider: According to various reports, 19 deaths have been associated with Toyota’s gas pedal problem over the past decade. But over the same decade, a total of 21,110 people have been killed in Toyota vehicles, with an additional 1,261 killed in Lexus cars (based on analyzing 1999-2008 fatality data from National Highway Traffic Safety Administration). Almost none of these deaths had anything to do with technology, faulty or otherwise. Almost all of them were the result of driver behavior."

Sometimes I think we should just accept that humans have decisively proven they shouldn't be allowed drive cars. Tom Vanderbilt has a somewhat more considered take.

Nice life-sustaining ocean you've got there. Would be a shame if something happened to it.

"Sometimes I want to say that something about mass transit drives conservatives batty. Other times I want to say that the conservative discourse about mass transit simply illustrates the fact that it’s an ideology driven by inchoate resentments rather than any ideas about policy or the role of government."

Both of those things seem to be true, at least in the US. I think we're going to see more of the 'inchoate resentment' style of conservative rhetoric in the UK too, particularly when it comes to climate change.