Planes, Trains, Automobiles, George Will and Paul Krugman

I haven't blogged in awhile, so I am catching up a little....

Paul Krugman writes two blog posts about rail, one of which I like, and one of which I don't.

This one is, I think, correct:

Oh, boy — this George Will column (via Grist) is truly bizarre:

So why is America’s “win the future” administration so fixated on railroads, a technology that was the future two centuries ago? Because progressivism’s aim is the modification of (other people’s) behavior.

Forever seeking Archimedean levers for prying the world in directions they prefer, progressives say they embrace high-speed rail for many reasons—to improve the climate, increase competitiveness, enhance national security, reduce congestion, and rationalize land use. The length of the list of reasons, and the flimsiness of each, points to this conclusion: the real reason for progressives’ passion for trains is their goal of diminishing Americans’ individualism in order to make them more amenable to collectivism.


As Sarah Goodyear at Grist says, trains are a lot more empowering and individualistic than planes — and planes, not cars, are the main alternative to high-speed rail.

And there’s the bit about rail as an antiquated technology; try saying that after riding the Shanghai Maglev.


But anyway, it’s amazing to see Will — who is not a stupid man — embracing the sinister progressives-hate-your-freedom line, more or less right out of Atlas Shrugged; with the extra irony, of course, that John Galt’s significant other ran, well, a railroad.

Will nowadays seems to get the vapors over anything like a public good.  Air travel is indeed the alternative to rail, and it really is awful. The Acela in the Northeast is often prefrable to air travel, and my understanding is that it is profitable.  Perhaps similar quality service from, say, San Diego to Ventura County, along with a few other high density corridors, would work (I am skeptical about the ability of high speed rail to compete with Southwest Airlines, but let's leave that for another time).  Cars, moreover, do indeed produce environmental damage and congestion that is not priced properly,  European gas taxes and Singaporean congestion fees make lots of economic sense.  One could even use the revenue to hold low-income people harmless from the increased cost of auto transporation.

But in his next blog post, Krugman says:

And don’t get me started on how much more freedom of movement I feel in New York, with subways taking you almost everywhere, than in, say, LA, where you constantly have to worry about parking and traffic.

Well, trains take you almost everywhere on the West Side of Manhattan.  The trains are also mostly radial lines into Manhattan--try going from someplace in Queens to someplace in Brooklyn, and you will see that trains are not so wonderful.  Look, I think the New York City Subway System (and Metro North and the Long Island Rail Road and Path), are great things, but I am not sure how "liberating" it is to live in New York is you can't afford to live in Manhattan. My daughters lived in Brooklyn last summer, and getting around was not a walk in the park for them (except when they walked through a nearby park).

So I decided to look at American Community Survey Data (click on the spreadsheet) comparing the benighted among us who live in LA with those liberated New Yorkers.  The mean travel time for workers in Los Angeles County is 29 minutes.  In New York County it is 30 minutes.  In the four boroughs outside of Manhattan, it is 42 minutes in Kings, Queens, and Richmond Counties, and 41 minutes in Bronx County.  In metropolitan Los Angeles, 11 percent have a one-way commute of more than one hour; in metropolitan New York, almost 20 percent have such a long commute.  


[Update: in response to Minka's comment, I looked up the average one-way commute in metro San Francisco--it is the same as LA.  As for LA being a cultural wasteland, anyone who would say that after living here is willfully ignoring the music, theater and restaurant scene here.  LA is also far more diverse than San Francisco, which for me makes it a more interesting city.]

 


.

Mike Lea and Tony Sanders diss the 30 year fixed rate mortgage

They do so in a paper.  I think Mike and Tony are smart guys.  But I think their reasoning is flawed here..

They basically argue that Fannie and Freddie were responsible for the 30-year fixed rate mortgage, and that they have been a catastrophe, and that therefore the 30-year fixed rate mortgage was a catastrophe.  But had FF done two things--stuck to prime 30-year fixed rate mortgages and matched the duration of their liabilities to the duration of their assets by using callable debt--they almost certainly would not have imploded.

FF imploded because they invested in AAA tranches of low quality mortgages (which were originated and securitized in the private sector) and Alt-A mortgages, and because they had to roll over too much short-term debt in 2008.

Lea and Sanders also argue that there is "nothing special about housing finance."  I am not sure I agree.  It is the one method households have to take on large amounts of leverage, and households are not in the position to hedge risk (not that our financial institutions proved to be particularly good at hedging).  

James Madison Harris 1915-2011

My father-in-law, James Madison Harris, died on Feb 26, 2011. As a young man in the Philippines, he was a cliff-diver. He played baseball and soccer professionally, and recorded 13 holes in one on the golf course. He was in the Army Signal Corp during World War II, and was a boilermaker on the Southern Pacific Railroad. He was in the railroad union and he played the violin. He was married to Flora Harris for 59 years. He was kind to everyone, and had a hell of a fine daughter.

Why aren't there more foreclosures in Europe?

Dwight Jaffee shows that mortgage foreclosures in Europe are still rare, even in distress countries such as Spain and the United Kingdom.  The question is why.  I have heard people in seminars suggest that it is because of recourse--it is ubiquitous in Europe.  But perhaps it is because the social safety net in Europe is stronger.   When Americans lose their jobs, it is hard for them to make mortgage payments.  When Europeans lose their jobs, it is still hard, but perhaps less so than in the US.  Just a thought....

Why I admire Mark Zandi

He work is speedy enough to be of use to the business community and policy debates; his work is rigorous enough to be credible.  He also doesn't take himself too seriously.  This short piece in Slate sums him up nicely.

Joel Kotkin cannot find evidence of a "Back to the City" movement

He puts together a table of suburban and core urban growth based on 2000 and 2010 census data.

MSA                   Core Growth                         Suburban Growth                             Total Growth

Austin	20.4%	56.1%	37.3%
Baltimore	-4.6%	9.9%	6.2%
Chicago	-6.9%	9.0%	3.9%
Dallas-Fort Worth	0.8%	30.2%	23.4%
Houston	7.5%	39.3%	26.1%
Indianapolis	5.0%	28.3%	15.2%
San Antonio	16.0%	43.7%	25.2%
Washington	5.2%	16.8%	15.4%
Total	3.2%	21.7%	15.7%

These are places for which the Census had released data by mid-February. Some of the places for which data has been released since then--St. Louis, Las Vegas and Birmingham--have the same pattern: in all cases suburban growth has outpaced central city growth. St. Louis' population has dropped to its lowest level since 1870.

The results seem particularly surprising for Chicago and Washington, which have had successful redevelopment in their urban cores. But redevelopment can actually reduce density. Gentrification often means that wealthy households rehabilitate mult-family properties into single family homes. This can lead to an increase in wealth in cities, but does not necessary translate into a relative increase in population.

I have long rooted for cities (although I confess that I myself live in an "urban" suburb). But facts are facts, and the facts from the 2010 census at this point do not support the idea of a reversal from suburbanization to urbanization.

From my daughter's blog: Hannah in Paris: Politics or nostalgia? » North by Northwestern

Hannah in Paris: Politics or nostalgia? » North by Northwestern