Across the Great Divide

Bailing Out Sprawl: When Helping Hurts.

The Strib asks today,"Was cash for clunkers a clunker?" Apparently the pickup crowd was a major beneficiary of the trade-in program designed to help out car companies and put more fuel efficient vehicles on the road. Ford F-150 drivers in particular tended by a wide margin to buy another F-150.

This reminded me of another questioned posed by Streetsblog San Francisco — "Has the government been bailing out sprawl?" (h/t Jon Commers)

Unintended consequences from good intentions abound in the bailout biz, but once things start to go south, there are also perils in failing to act.

Smart growth advocates have long pointed out the costs of continuing to encourage and even subsidize urban sprawl. The post cogently presents some of the other bad consequences of the housing bubble that only became apparent after it burst. And it has suggestions for smarter policy.

I found myself copying too many sections of the piece to include here, so this is just a taste:

[R]ising housing demand led to construction on the urban fringe. It also led to higher prices in center cities, which pushed many low- and middle-income families to move to places with cheaper housing markets, which increased demand for homes on the fringe and led to even more construction. Rising demand for exurban living led to construction of exurban housing, and rising demand for urban living led to construction of exurban housing.

Another way to say this is that center-city housing markets experienced a correction, while exurban housing markets entered a vicious cycle leading to wrenching housing price declines that will likely push prices below replacement costs in some areas.

This is a dangerous place for neighborhoods to be. Vacant homes will begin to deteriorate, and occupied homes unlikely to sell for more than replacement costs (or more than the value of the owner's mortgage) will suffer from disinvestment. The housing stock will become second-rate.

As neighborhoods fall apart, wealthier and more mobile homeowners will move away, while excess inventory and rock bottom prices will attract low-income households. The tax base will fall and so services will decline, and the general desirability of such areas will drop. Some, and perhaps many, of these neighborhoods will become slums.

[...]

In short, the government isn't just subsidizing sprawl. It's subsidizing the deterioration of sprawling areas.

Once government acts, it's impossible to measure the price of inaction. We can't know if the economy would've gone into a death spiral if lawmakers had stood on the sidelines rooting for the free market to perform the rescue operation.

Critics of government intervention won't have to directly face the question: "what if we'd done nothing?" Instead, they can gather political ammunition without ever having stood in the line of fire.

Meanwhile, those who believe intervention averted disaster should consider the sort of consequences now manifest in the housing market.

Revenge Conservatives and de Facto Americans.

Over the weekend, I spoke with a former diplomat and World Bank type who had lived in Toronto for 20 years. He was lamenting how American ignorance of other cultures and countries made us so susceptible to anecdote-based lies — in this case, about the Canadian national health care system.

I didn't take notes on that conversation, but this post (h/t Hal Davis) from a Canadian centrist built very nicely on the theme (emphasis mine).

It pains me to see my American cousins being denied affordable and effective health care. It pains me even more the reasons it is being denied is a series of grand deceits.

Many conservatives proudly introduce themselves as "fiscal conservatives" as if to imply they have a monopoly on money matters. If they are politically inclined their "expertise" extends to public expenditures. It is mainly conservatives who are telling Americans they cannot afford universal single payer Medicare when the reverse is true America cannot afford to not implement such a program. Many governments learned long ago that the only cost effective way to deliver certain services, specifically Medicare, to the public was through universal programs where the cost was spread over the entire population; in other words a collectivity-or that dreaded word that strikes fear in to the heart of every American-socialism.

This writer has the benefit of our national Medicare plan, a group benefit plan through my employer, and government run universal car insurance. These services become affordable or much more affordable only because a very large number of people make it so by pooling resources. A so-called fiscal conservative who denies the cost benefits and efficiencies of this sort of collectivity denies an immutable truth and one that is ageless.

The idea the private sector provides goods and services more efficiently than government is only one of the big lies of our times- and another of the sins of the revenge conservatives has been to denigrate the role of government to facilitate their greed.

Commissioner Johnson's Watchdog Act.

UPDATE: On Friday, I had contacted Commissioner Johnson for more information on the proposal he criticized, and he is sending me an electronic version so I can look in more detail. Based on his response, I've made a few edits to this post and may do another after I see more. [UPDATE 2: Nope, he sent me the same page I've already linked to below, so I'll give him points for responsiveness, but not for accuracy.]

Hennepin County Commissioner Jeff Johnson's latest post at his  Taxpayer Watchdog blog at caught my attention with a smart headline:

“Sorry kids, but we had to mortgage your future.  Here, have a bike helmet.”

Johnson's target was a county decision (with Johnson alone dissenting) to apply for $10 million in federal stimulus funds through a Center for Disease Control program aimed at encouraging healthy lifestyles. The discussion took up the final third of a recent County Board meeting (see video).

Johnson raises a legitimate issue when he writes, "programs like this are more about social engineering, or, as one of my colleagues on the county board admitted, 'this is about changing people’s behavior,' not creating jobs."

However, the decision on how to allocate the funds has already been made at the federal level; the matter before the commissioners was simply an authorization to submit a proposal.

Even some of us willing to use incentives to change behavior might agree that this is not a great use of stimulus money — but I don't know the jobs impact, and am not sure Johnson does, either. At the meeting, no details were provided about what employment would be created in the county, and other proposal details are still being worked out.

Johnson's post didn't link to the actual item considered at the meeting [Download PDF], which would have made clear that the county has not "requested federal stimulus funds." It is still preparing a proposal, which isn't due until December 1st.

Johnson took a general statement about $2.7 million in commuter incentives, such as "subsidized bicycles, helmets, walking shoes and transit passes for those who walk/bike or take transit to work and school” and conflated it into "millions for bike helmets and walking shoes."

(The Strib account appears to have been provoked by Johnson's post. It appeared several days after the meeting and picks up on Johnson's framing of the grant, though the commissioner contributed nothing but a soundbite to the discussion by the Board.)

The commissioner also says he is at a loss "as to how sitting in a train instead of a car addresses obesity, physical activity, or nutrition."

Let's help him.

Thursday, I had a meeting in St. Paul. If I drove, the total round trip would have involved walking and carrying a computer bag approximately 100 yards.

Had I taken the bus, I would have walked 3/4ths of mile from my house to catch an express bus, transferred twice, and then walked another two blocks to the building, for a total of more than two miles.

Instead, I rode my unsubsidized bike 25 miles round trip, got two hours of moderate exercise and saved at least one hour in commuting time over the bus.

Price incentives, such as transit passes, can induce people to try a new way of getting to work. Zoning changes and better connections to destinations also can make a difference. Smart Trips in St. Paul and other cities has helped commuters shift to healthier modes of transportation, showing sometimes all it takes is better information about choices.

Weekend'S nooze.

Two NWA pilots ignored radio transmissions for more than an hour, overshot their airport by 150 miles, and the first officer on the flight says, "I can assure you none of us was asleep,"

"Honey, it's not what you think," says the husband pulling on his pants while the sister-in-law pulls the covers over her head.

*****

Okay, maybe it's true Albert Einstein, Mozart and Shakespeare didn't watch "educational videos" when they were kids. But now they're saying "Baby Einstein" videos didn't turn kids into geniuses? How can that be, when rap CDs have turned so many white boys into gangstas?

Next thing you know, they'll be telling us fizzy sugar water is unhealthy and Wonder bread doesn't build strong bodies 13 ways.

Oh, they have?

*****

Gov. Pawlenty has again seized the reins of state government, ordering the sex offender program his administration runs to transfer new flat screen TVs to veteran's homes. (They can still enjoy suggestive televised imagery in the privacy of their rooms.)

The costs of a few TVs pales in comparison to the cost growth from Pawlenty's campaign to lock up more sex offenders, and to keep them locked up after they have served their sentences. For example, more than a third of the emergency funding in the governor's 2006 supplemental budget recommendations went "to fund sex offender commitment growth." And it continues, as we continue to hold people because of their potential to commit crimes.

*****

Meanwhile, Hennepin County Commissioner Mike Opat wants to know why homeless and chronic drinkers are getting free $60 Vikings tickets. To a Twins fan, $60 tickets sound steep, but a quick look at the Mall of America (!) Stadium map shows that they'll put you in the end zone upper deck.

Putting chronic drinkers in seats next to binge drinkers may work as aversion therapy, as long as the tickets are for early season games. I'd advise against playoff tickets, however. The chances of relapse on the field might trigger similar behavior in the seats.

*****

For wonks only: Are national polls indicating voter preferences stacked against Republicans? Or is GOP party identification in decline? You could just ask Sarah Palin.

*****

Adrian Monck (with h/t to Hal Davis) extracts this gem from a Harvard Business School working paper:

"Another possibility for decreasing such behavior [justifying and rationalizing questionable preferences] is to make people accountable for their decisions, requiring them to explain the reasons underlying their choices (Lerner & Tetlock, 1999). Given people’s demonstrated desire to seek out acceptable justifications for questionable preferences, however, accountability pressures may simply motivate people to look even harder for justifications, rather than stop them from behaving poorly. In fact, in some situations accountability can enhance bias, as with its amplifying effect on commitment to decisions (Simonson & Staw, 1992). Indeed, when Norton et al. (2004) made participants accountable for their decisions in choosing between a Black and White high school student for admission to college, not only did requiring participants to explain themselves fail to decrease preferences based on racial bias, it made them look even more carefully through the resumes to find additional evidence in favor of their questionable decisions. "

ACORN-Busters to "Extend the Brand."

The ACORN-busting pimp James O'Keefe was shivering without his fur coat, and his faux-hooker sidekick looked like she needed a hug. The pair were in Minnesota to shoot the pilot episode of a new reality show, only this time, they're staying behind the camera — as producers.

"Our undercover days are over," he said, explaining the couple's career change. "We're just too famous now. We needed a way to extend the brand, and I thought, why not go after government itself, using the very people getting screwed?"

The new show, tentatively titled "City Hall," is an attempt to attract the national talk radio audience to television with exposes that strike closer to home. If the concept of doing undercover busts of local government bureaucracies sounds a bit like Candid-Camera-meets-Public-Access-Channel, O'Keefe assures us there's plenty of slime and stink in every small town — especially those run by tax-and-spend liberals.

O'Keefe explained, "Let's face it. To have an ACORN office in town, you need a lot of paroled criminals and poor black people. But everybody has a city hall with incompetent bureaucrats."

And why choose Minnesota for the pilot?

"Minnesota is full of liberals and you're crazed about clean water. That means you have a lot of governments that want to force sweet old couples to make costly fixes to their sewer and septic systems. I mean, you guys are king of the sewer nazis."

It's debatable whether nazis of any stripe would have a king, but it's true. Local news reports are rife with stories about sewer disputes. 

O'Keefe says all the ingredients of a good reality show are present here: "Pissed off people, government injustice, and lots of free sewer-cam video."

Grand Rounds: Nice Place But...

The Grand Rounds, a system of parkways that encircles Minneapolis, has been named one of the nation's Great Public Spaces for 2009 by the American Planning Association.

That's great, but the Grand Rounds represents a vision that's well over a century old. The land was acquired and most of it was built before any of us were born. And the investment that finally completed it just got in under the wire; it would never have survived another term of Pawlentyism.

What are we leaving future generations? Besides the debt thing, I mean.

Where Will Tax-Loving Liberals Strike Next?

Phil Krinkie of the Taxpayers League of Minnesota takes offense at suggestions our Absentee Overlord's no-new-taxes pledge might underlie the state's budget problems.

The explanation for why Minnesota has such dire budget problems is always, “It’s Gov. Pawlenty’s steadfast commitment not to raise taxes.” This is what the tax-and-spenders point to as the underlying cause of Minnesota’s budget problems.

So, as the left starts to crank up their propaganda against the term “no new taxes,” let’s set the record straight.

With, of course, some tax-and-spender propaganda of his own. Krinkie claims "tax increases are a way of life in Minnesota" because Republican Governors Al Quie and Arne Carlson saw a need to raise taxes in past decades.

Krinkie goes on to enumerate other increases, always careful to roll up the pennies, nickles and dollars that individual taxpayers might pay into billions of dollars of shared burden counted up over decades.

Krinkie wants government to live within its means, which is not a bad request on the face of it. But it requires a certain amount of cooperation from the taxpayers who demand services and the marketplace that provides them. 

Otter Tail County’s cost for buying salt this winter is expected to increase by 29 percent, shocking Highway Engineer Rick West and leaving commissioners wondering if there were alternatives.

How much the Highway Department spends on salt will affect how much road construction is completed the following summer. If the department goes over what is budgeted, that amount is taken out of the budget for road construction, West explained.

I doubt Otter Tail County is run by tax-loving liberals, but officials there may soon go on Krinkie's watch list if they try too hard to solve the problem.

West said he suspects the increase in cost was caused by a consolidation in vendors.

In other words, the free market wants a tax increase.

A Year After the Collapse, Is it Really Over?

As I was making my way back to coach on September 11th, I got to hear a bit of the conversation of a player in first class. He had his Bluetooth ear pod in place and his laptop open to spread sheet.

We'll do a retroactive discretionary bonus to cover the salary cuts in Q1 and do the same thing in Q2, he said.

In other words, the executives who had their pay cut earlier in the year were going to have it returned to them. It's not that previous bad quarters could be rewritten, but the sacrifices they'd made because of the poor economy, bad decisions or poor performance might as well have not happened.

I don't know the company or the particulars. I might've done the same thing if my company was starting to recover and could afford to do it.

But something told me this decision was for the top dogs, and I wondered if that company had shed employees, cut salaries of worker bees or reduced benefits, as many have over the past year. Were workers going to be recalled or have their pay cuts restored?

Impossible to say. But the execs in that company were apparently going to be spared some of the pain from whatever had gone before.

The same day, the New York Times published a story looking back at the collapse of Lehman Brothers and seeing very little change on Wall Street.

In fact, though, regulators and lawmakers have spent most of the last year trying to save the financial industry, rather than transform it. In the short run, their efforts have succeeded. Citigroup and other wounded banks have avoided bankruptcy, and the economy has sidestepped a depression. But the same investors and economists who predicted, and in some cases profited from, the collapse last fall say the rescue has come at an extraordinary cost. They warn that if the industry’s systemic risks are not addressed, they could cause an even bigger crisis — in years, not decades. Next time, they say, the credit of the United States government may be at risk.

[...]

Despite the predictions last year about pay cuts, those bonuses appear secure. Kian Abouhossein, an analyst at J.P. Morgan in London, predicted this week that eight major American and European banks would pay the 141,000 employees in their investment banking units $77 billion in 2011 — about $543,000 per worker, not far from the 2007 peak — even after minor regulatory changes are adopted.

Because the rewards are so rich, the banks will not change unless regulators and lawmakers force them, Mr. Taleb said.

“I don’t know anyone on Wall Street who goes to work every day thinking of anything but how to increase their bonus,” he said.

Now, Ben Bernanke says the recession is likely over, but what has really changed?

Watch the video that accompanies the story. Wall Street is still based on reaping rewards and dumping the risks. The executives who took bonuses on gains that later evaporated for shareholders aren't giving the money back. There's been little reform or regulation to prevent companies from becoming too big to fail.

And most of all, the boys who helped the meltdown happen are still in first class, still wheeling the deals.

How Do Communities Thrive: By Maximizing Wealth or Redistributing it?

The comments at This Road is Designed to Kill You have drifted a bit off topic — from the safety effects of traffic roundabouts to incentives for people to live closer to work to flight from city schools to the influence of school district size on student achievement. (Go ahead and read them if you haven't. I won't make many explicit references here.)

Running through the discussion is a divide that often surfaces here, and in fact simmers under most of what passes for debate in politics today. Whether the topic is health care, schools, the economy, taxes or infrastructure, it boils down to the merits of government intervention versus free market solutions as ways to solve big problems.

Another, less common way to put it is this: Communities thrive by redistributing wealth or by maximizing opportunities to accumulate wealth.

For example, Mark and Jeff had a back-and-forth over whether a single, large school district that allocated dollars first to lagging schools would help improve student performance, especially in inner city schools.

Mark says: "Turn all contiguous metropolitan areas into a single school district, with funding prioritized so as to deal with the lowest performing schools first."

Jeff responds: "The measure that shows the greatest correlation with school performance isn't funding, and it isn't class size. It's school district size. Kids in smaller school districts do far better."

Jeff is correct that studies show smaller school districts tend to have better student achievement, but size matters only insofar as it negatively affects the factors that really produce learning outcomes.

It's worth noting that school districts usually are large because a) they were formed to encompass large city boundaries with their diverse populations and the education challenges that go with them. Or b) they were consolidated from smaller districts experiencing enrollment declines, substandard offerings or funding issues that led them to seek economies of scale. In both cases, upsized districts are a consequence of factors other than pure pursuit of improved student achievement.

Mark is talking about disparity of income between districts, not size; a super district would be just one way to redistribute money to aid lower-performing schools. Of course, a similar move — giving more responsibility for school funding to the state — was tried and then has been slowly dismantled by Gov. Pawlenty. But redistributing school aid dollars isn't really the whole answer, either. Living in economically advantaged communities tends to be accompanied by other factors that relate to school performance, and these advantages are more difficult to export — or to benefit students who are bused in to those communities.

Growth & Justice delivered a research-based report last year that summarized three factors that were most critical for getting students from pre-K all the way through college. Each of these has financial implications, not necessarily tied to what we think of as "school funding."

Quality academic preparation and alignment. Children receiving sustained quality instruction, rigorous curriculum, and meaningful, ongoing assessments are more likely to succeed at the next education level.
Social supports. Relationships between children and adults in early childhood, school, and non-school settings are significant to academic success. Parents contribute to a child’s educational success when they are involved with care providers, teachers, mentors, and tutors.
Access and financial support. Access to quality providers, programs, and institutions places children and students in a position to take advantage of learning opportunities. But limited financial means can be a barrier to access. Subsidized childcare, preschool, and post-secondary tuition grants expand access to quality learning experiences for students at all income levels.

To over-simplify my point, I'd say the education discussion drifted toward comfortable positions for Mark and Jeff, but got richer as they shared the research and the complexities became more evident.

In another post, I'll discuss one other angle their discussion raised — taking personal credit for successes and blaming government for failures.

If Cash for Clunkers Were Really About Retiring Clunkers, It Would Offer More Options.

Can we all agree that Cash for Clunkers wasn't really designed to get older, polluting vehicles off the road? That it is just a government-sponsored dealer-incentive program to get more expensive, unsold cars off dealer lots?

Maybe the short-term economy will breathe easier, but the long-term environment will hardly notice.

If America were really heading toward clean-air socialism, its program would offer the lowest incentives for buying a new car and provide greater rewards in the form of transit passes, car sharing incentives and bicycle purchases.

In fact, that's what our Canadian friends have done with Retire Your Ride. 

Owners who retire an operational 1995 or older model vehicle can receive $300 in cash or a discount of $350 to $490 of the price of a commuter bicycle, as well as up to 15 percent off parts and services.

In some provinces or regions, the incentives may be even richer. Prince Edward Island offers a $500 discount on the purchase of a 2004 or new car. Victoria, B.C., offers $1,250 toward participation in a car share co-op or $1,250 toward the purchase of a bicycle or electric bike.

Oh, yeah. Besides the lower incentives for new car purchases, here's how to tell Retire Your Ride is really about enviro-socialism:  It's administered by primarily non-profit partners and funded by the Canadian government — to the tune of $92 million over four years. 

(h/t Hal Davis)