Links! Links! Links!

US Population Growth Slowing (Wonkblog)

A Baguette Vending  Machine (Matt Yglesias)

Where Unused Gift-Cards Go (Wonkblog)

America's Best & Worst Airports (Atlantic Cities)

I would read this book (The Economist)

More Apartments less Single Family Homes (Matt Yglesias)

on Investing for Retirement

As I continue to read The Big Short by Michael Lewis it is becoming more and more evident to me that a lot of what happens in the investment world is either fucking someone over or using them to take exorbitant fees. So one should not be surprised that I agree with Matt Yglesias that investing should not be for normal people. It's complicated, people who spend their whole life in finance still struggle to be good at it so why do we think the average Joe can manage it on top of everything else in life?

Putting money aside for retirement should be easy, not detrimental to your retirement itself.

Links! Links! Links!

Where have all the hitchhikers gone? (Freakonomics)
Again, screwing with the sex ratio is not going to help in the long run. (Freakonomics)
The World's Next 20 Tallest Skyscrapers. (Atlantic Cities)

Links! Links! Links!

Wired:
The rise and fall of Bitcoin.
Amazon is the future.

The Economist:
South Koreans are insane when it comes to standardized testing.

A great Radio Lab short, just listen to it.

From Matt Yglesias, online piracy is not exactly theft.

From Atlantic Cities can we save Suburbs?

Links! Links! Links!

Bloomberg:

Afghanistan really was a no good very bad place, from a logistics standpoint, for the US to have invaded.

Leaving a party when you are the largest military force on the planet is a lot more complicated than you think.

I think Lithuania is getting one of the worst deals when it comes to the debt crisis.

China continues to experience growing pains.

The Economist:

Language continues to be weird.

And so does America and Religion.

3D printing marches onward.

Including Taxes in the Posted Price

In Colin Grey's video Death to Pennies he mentions how it is absurd that we do not include tax in posted prices at stores. As a result of this oversight individuals are unable to efficiently use their change to pay for items. My problem is with inefficiency of the whole affair; calculating the tax one time when marking the price on the shelf as well as the price being constantly priced and repriced in the heads of the customers and then recalculated again at the register. While the register does that instantaneously we humans tend to struggle even with the most basic of math. The result must be lost time, more stress and I would assume lost sales.

I think the excuse that if we include the tax in the prices people will be dismayed by the higher prices. I is exaggerated. Individuals take tax into account when making a purchase so why would they not switch from expecting tax to expecting higher prices?

Some Thoughts on Dollar Coins

The US government is ending the dollar coin program because they have 1.4 billion of them all ready in storage. Matt Yglesias jokingly (at least I think it's a joke) says we should pick 1,400 random people and give each of them a million of them. I certainly would love to receive that many dollar coins as would many 5 year olds but I can't say the same for the rest of society. I would assume they would for the most part end up back at the Federal Reserve.


Instead I think we should do away with the dollar bill all together and force people to use the coins. If coins are indeed more cost effective to use then we should be pushing individuals to use them not simply giving them the option. 


While we're at it how about we do away with the penny and add a 50 cent piece and a $2 coin to reduce the amount of coinage out there. I can't find a GAO report on that but I would expect that reducing the amount of currency by increasing denominations would save money. 


And for those of you who will complain about having to carry around pockets full of coins I would like to point out that with implementing $1 $2 & 50¢ coins and the elimination of the penny (also if you use them efficiently) you should never have more than 6 coins in your pocket at any given time. Think about it.

China is Screwed Continued

From Businessweek:

"at some point it doesn't make sense to keep on building," says Chovanec. "China has built tomorrow's infrastructure and housing today so what is it going to build tomorrow?"

Something tells me this chart is going to level off at some point, and a lot of people are not going to be happy about it.....

Some Critical Thoughts on China

Whenever I see an article that references China's success I always feel the need to comment on how much they still have to work out. Now the article got me going this time was actually a great article and the author did nothing wrong but I still feel the need to put China in it's place.

The point of the article is that China is booming and as a result fewer Chinese people are seeking out their futures in America. That's great, go China! In my opinion the more awesomeness in the world the better. But fewer emigration does not a successful society make. China has many unresolved problems that will crop up.

1. They have far more young men than young girls as a result of their one child policy. From this one can assume that their will be many sexually frustrated men in the coming decades. Either China embraces polygamy and or prostitution (both of which have numerous detractors globally) or it must seriously address the problem.

2. Another casualty of China's one child policy is it's aging population. In order to cope with this problem China is going to have to allow for a lot of immigration. Which we all know is never a hot button issue. More on this later.

3. Endemic favoritism and corruption. Not only will this get in the way of liberalizing an economy but this will stoke social and ethnic tensions. One can an imagine a situation in which Han Chinese officials prefer to do business with fellow Hans and not the countries minorities.

Which leads me to...

4. China's lack of an open society will be its Achilles heal. Without a proper way to air grievances how will China ever be able to overcome the effects of a gender gap, inequality, a need for rising immigration, disgruntled minorities and corrupt officials? Without a credible system what citizenry will stand by as the government ignores problems in order to maintain power and enrich itself? We are currently seeing A Russian population is growing weary of the implicit bargain that a limited society equals better living standards. What happens when China inevitably slows down (India all ready is)? I for one don't see the Occupy movement going over well in China.

While China is prospering now I do not see a happy ending if it maintains its current path.

For further reading I recommend The Economist's special report on China.

Blame Hitler for Suburbs

Kind of....

Edward Glaeser's Triumph of the City:

Levitt's average earned home buyer earned about half that amount ($8000 in 1950) per year. Few of them would have had eight grand to put down for a new Levitt house, but the federal government was splurging on housing subsidies. The GI Bill offered no-down-payment housing loans for veterans, and the Federal Housing Administration guaranteed up to 95 percent of mortgages for middle income buyers. With a government-guarenteed loan, Levitt's buyers only needed to come up with $400 to buy a home packed with modern appliances and surrounded by leafy space

Aaaaand if you want to really stretch it you could blame him for the culture of home buying that led to the housing crisis......

William Levitt invented the low cost suburb the predecessor of what we know as the modern day suburb.

Update: It should also be noted that another well known anti Semite in Henry Ford is also to blame for Suburbs.

Some Thoughts on SPLOST (and the Green Line Extension)

A SPLOST or a special purpose local-option sales tax is what the State of Georgia is putting to a vote in order to improve their pitiful commute times. I think this is a great idea, primarily because it localizes a normally toxic statewide issue. The  situation that comes to mind is what happens in Massachusetts every time funding for an MBTA project is brought up. At those times residents in the Western part of the Commonwealth howl (justifiably I might add) that they have had it with funding transportation projects for Boston and it's suburbs. As a result projects tend to die or not get the proper funding they need. 

For years the Green Line Extension Project has been bandied about but has yet to be fully funded. For situations such as this in comes a mechanism like SPLOST, which if localized down to a municipality or a series of municipalities, could make community specific transportation projects easier to fund, and funded by those who would benefit the most.  It would properly puts the cost of living in a high density urban environment on the people who live near and benefit from it. Now as a resident of Somerville I would have no problem being assessed an extra 1% on my purchases made within Somerville in order to pay for the project. I'm sure many people in Somerville, Cambridge & Medford (not to mention other North Shore towns and I-93 Commuters) would feel the same way.

I do not know the specifics of how or if you could pass something of this nature in Massachusetts but I think localized tax vehicles are a serious option in attempting to rectify the growing infrastructure spending deficit in this country.

Some Thoughts on Squares & Transportation

I was idly thinking about how transportation (be it mass transit, roads or highways) corresponds to population centers (more specifically squares and neighborhood centers) and I came to the realization that it is your classic chicken or the egg quandary. In order for people to travel to and from a location they need a means of transport, but in order for their to be a means of transport their needs to be a location. Which leads to the question why do we build new or better transportation? Is it because the population demands it or is it in anticipation of the coming population? I would say it's probably a mixture of both with their being extremes on both ends. Governments build bridges to nowhere and subsidize rural airports but they also are forced to add lanes to highways and expand train/plane capacity. An interesting thought experiment either way. 

Some Thoughts on Sentimentality

Humanity as a whole is a pack rat. Our sentimentality often gets in the way of sound economics and progress. Before we go any further I would like to point out that I am not for wholesale destruction of history in the name of new developments, I am a large fan of historical sights and history centered vacations. I'm just thinking maybe we shouldn't classify everything that is old as historic, maybe some of it is just not worth saving. To prove my point I went to try and find a specific article I read months ago on the Domino Sugar Factory in Brooklyn only to find it crowded out by many other articles about inane New York landmark classifications. I think we may be going a little preservation heavy.

Edward Glaeser puts it this way in Triumph of the City:

There is great value in protecting the most beautiful parts of our urban past, but cities shouldn't be embalmed in amber. Too much preservation stops cities from providing newer, taller, better buildings for their inhabitants. Height restrictions, in Paris and New York and Mumbai, may seem like obscure arcana of interest only to planning professionals. Nothing could be more wrong. These rules are shaping the future of our cities and our world. If the cities' history becomes a straightjacket, then they lose one of their greatest assets: the ability to build up.

While in DC a couple months ago, Katy and I went looking at apartments in Arlington just to see what you could get for how much. Before even entering an apartment it was amazing to see how because of DC's arcane height restrictions all of the large apartment complexes were pushed out into Virginia. Then when actually looking at the apartments we were shocked at how expensive they were if you wanted any semblance of access to the DC metro. To reiterate we were shocked at prices in Arlington and we have lived in downtown Boston, one can only imagine the prices in DC.

Of course the high prices are justified, DC is booming which results in more people flocking to the city. At the same time the supply of real estate is kept artificially low by the restrictions placed on developers who through market forces would love to build higher. As a result of high demand and a low supply you have high prices. It is because of laws like DC's and thinking that we are all going to be swallowed up by the city that strangles innovation and slows an economy. If people can't afford to get to the city in the first place how are they going to innovate? If people are paying more and more on living costs how are they going to spend money in other sectors of the economy?


Or as Ryan Avent (I wish he had a wiki page for me to link to) puts in in his book The Gated City

Our thriving cities fall short of their potential because we constantly rein them in, and we rein them in because we worry that urban growth will be unpleasant. The residents of America’s productive cities fear change in their neighborhoods and fight growth. In doing so they make their cities more expensive and less accessible to people with middle incomes. Those middle-income workers move elsewhere, reducing their own earning power and the economy’s potential in the process.

Our sentimentality is what stops us from progress that could cure diseases and help lift the poor out of poverty among many many many other advancements. But personally I would like to see a change in mentality solely so we can have all of America as a giant national park sans NH.

Some Thoughts on Urban Rings, Gentrification and it's Antonym

I have finally gotten around to reading Triumph of the City by Edward Glaeser. I've been enjoying this book and as a result you will be subjected to quotes of the book at length and my thoughts about it. You should pick it up; especially if you, like me, think cities are tantamount to a living organism.

I've always known that there are wealthy areas and there are poor areas but I have never really thought anything more of it until Mr. Glaeser put it like this:

New York, Boston, and Philadelphia have four transit income zones: an inner zone (like central Manhattan or Beacon Hill) where the rich commute by foot or public transit, a second zone (the edges of New York's outer boroughs, or Roxbury in Boston) where the poor commute by public transit, a third zone (Westchester County or Wellesley) where the rich drive, and an outer zone comprising distant areas where less wealthy people live and drive. Paris likewise has excellent public transportation and consequently has an inner zone where the rich use the Métro or walk. The next zone has the poor living in more distant areas that are still connected to the city by train.

That innately makes sense when you think about it. Just take a commuter train from the end to the city and you'll notice there are two separate patterns (this of course can vary from line to line, my example is the Rockport line) the first is the people who get on at the end of the line (Gloucester) and get off in the later third (Salem, Swampscott, Lynn, Chelsea) and the second are those who get on in the middle (Manchester, Beverly Farms, and Beverly) and get off in the city. Those who live at the end of the line for the most part live too far away to commute into the city every day (though some do) the next third is just far enough away from the city to be quaint and cosy but close enough to work there. The final third is the not yet gentrified area or where the former urban poor are being pushed to as a result of gentrification (reverse gentrification).

All gentrification is is the ever expansion of the inner city (which is now for rich people, not the urban poor) through the reversal of white flight. For whatever reason, the wealthy (white is not all that accurate) love living in the city and because of their penchant for quaint town houses there is an inevitable limit in the supply of real estate. Those of you who know Boston think of the ever expanding South End. The dividing line between the South End and Roxbury is Massachusetts Avenue, or maybe it's Melnea Cass Blvd. Regardless most can agree that with every passing year the latter is becoming more and more true. As a result of the demand developers buy up Roxbury and resell it as the South End. The constant demand insures that the city will continue to grow up and out, pushing the less fortunate and businesses to the periphery

What does this mean? I don't know really. I like to think of it as the city growing, harvesting the raw materials that surround it and growing ever larger. As transportation links become better and more common we will see the city continue to grow as more real estate becomes available and more desirable to those who work and play in the city. Is this how it should be? Again I don't know. While I myself love my two family and the square I live in I feel guilty for not living in a large apartment complex which is better environmentally and far more efficient. Yet you can not just make people live in high rises and tell others they can not afford to live in the neighborhood they grew up in. We should be integrating not alienating those people. Is that possible? I would like to think that in the end society tends towards equilibrium in order to avoid conflict.