Private vs Public City Planning

Both private and public developers make judgments about the future market for their projects. When private developers’ judgments turn out to be wrong, they lose their money. When public developers’ judgments turn out to be wrong, they lose your money.

The Omaha By Design plan adopted by the City of Omaha envisions 72nd and Dodge framed with eight 10-story buildings and other taller structures stretching to a large residential complex at 76th Street. The drawings don’t resemble Bourn’s strip malls.
Wilke said he has seen the plan.
“That kind of visionary thinking is fun to engage in, but I don’t think it’s market-based,” he said. Another developer might see that as possible, he said, and Bourn Partners likes to do that kind of high-density, mixed-use development, but the company doesn’t see this part of the Omaha market as ready for that yet.
“We think the suburban scale is still what the market wants in that area,” Wilke said. (p. 2D)

DEBORAH SHANAHAN. Market drives projects around 72nd and Dodge.” Omaha World-Herald (Tuesday, August 9, 2005): 1D-2D.

Business at the city-owned Hilton Omaha is expected next year to fall $2 million short of generating the cash needed to cover its costs.
…
When the city built the hotel, predictions assumed that hotel revenues – not tax dollars – would be sufficient to pay it off.

C. DAVID KOTOK. City expects its Hilton to come up shy. Omaha World-Herald (Tuesday, August 9, 2005) online edition.

Stealing Indian Land

These lands once belonged to the Kiowas and the Crows, but we whipped these nations out of them, and in this we did what the white men do when they want the lands of the Indians. We met the Kiowas and the Crows and whipped them at the Kiowa Creek, just below where we now are. We met them and whipped them again, and the last time at Crow Creek.

Oglala Lakota Leader Black Hawk, 1851; as quoted in a display at the Western Historic Trails Center in Council Bluffs, Iowa, designed and built by the National Park Service, and observed on 8/13/05.

Downside of Air Conditioning

It is hard to come up with a case against air conditioning in August. But Burt Folsom managed to do so at a Young America’s Foundation gathering on 8/1/05 (broadcast on CSPAN-2 on 8/2) He pointed out that before air conditioning, the stifling heat of a D.C. summer drove Congress out of town. After air conditioning, Congress stayed in session longer, passing more laws.

Debreu on Danger of Over-Mathematization of Economics

From Debreu’s Presidential Address before the American Economic Association:

In the past two decades, economic theory has been carried away further by a seemingly irresistible current that can be explained only partly by the intellectual successes of its mathematization.
Essential to an attempt at a fuller explanation are the values imprinted on an economist by his study of mathematics. When a theorist who has been so typed judges his scholarly work, those values do not play a silent role; they may play a decisive role. The very choice of the questions to which he tries to find answers is influenced by his mathematical background. Thus, the danger is ever present that the part of economics will become secondary, if not marginal, in that judgment. (p. 5)

Debreu, Gerard. “The Mathematization of Economic Theory.” American Economic Review 81, no. 1 (1991): 1-7.

Tenure and the Market as Protectors of Free Thought

Mark Blaug as a young tutor at Queens College in New York, endorsed a student petition protesting the firing of a left-wing tenured professor for having refused to co-operate with the Un-American Activities Committee. Less than a day later, Blaug received a note from the President of Queens College, telling Blaug that his choice was either to resign or be fired. He resigned.
Fortunately, he received a grant from the Social Science Research Council to complete his dissertation, after which, again seeking employment, he obtained a job interview at Yale:

(p. 77) In the course of the interview, I felt impelled to explain how I had lost my previous teaching position at Queens College. I always remember how Fellner cut me off, saying: ‘We don’t want to hear about that. This is a private college and what transpired at a public university a few years ago is of no concern to us.’ I never had a better demonstration of Milton Friedman’s thesis that a free market, by multiplying the number of probable employers, is more likely to secure liberty for the individual than a socialist system in which the state is a monopsonist.

Source:
Blaug, Mark. “Not Only an Economist: Autobiographical Reflections of a Historian of Economic Thought.” In Reflections of Eminent Economists, edited by Michael Szenberg and Lall Ramrattan, 71-94. Cheltenham, UK: Edward Elgar, 2004.

Enterprise and Government in Harry Potter

A long time ago (30 or 35 years) I attended some sessions on film and ideology at a week summer conference sponsored by the Intercollegiate Studies Institute. At one session they screened Frank Capra’s Mr. Smith Goes to Washington, and then the faculty panelists, with help from the audience, proceeded to thoroughly trash Capra for left-wing, anti-capitalist, populist bias. I sat and frowned and fumed, but the session ended without me having the courage to defend Capra. What I wish I had said was that Capra may have been a left-leaning populist; his economics may have been all wrong; but if that’s all you say, you miss the main point. The main point of Capra is loyalty, and persistence, and courage and good-humor. One can reject Capra’s implied economics and still love his movies.
Well on the night of Friday, July 15, 2005, with my wife and daughter, I hung out at the local Border’s book store with a huge crowd of other fans, waiting until the stroke of midnight to be allowed to purchase Harry Potter and the Half-Blood Prince. Similar scenes played out all over the country, and in other countries as well. Apparently the book, like its predecessor, is setting all kinds of sales records.
And analyses have begun to appear about Harry Potter’s economics and politics. (The July 15, 2005 Wall Street Journal ran a piece suggesting that Dumbledore is Winston Churchill and Voldemort is Adolph Hitler.) They too miss the main point.
The main point is that the leading heroes of the Potter books display loyalty, and persistence, and courage, and good-humor. And the characters are constructed as real people who we come to care about. And the books are well-written. And plot matters too–you need to find out what’s going to happen next.
Still, if you want to play the socio-political-economic interpretation game with the Potter books, I suggest the following facts might be relevant. Two of the minor heroes of the books, Fred and George Weasley, are successful entrepreneurs. The heads of the governmental Ministry of Magic are at best ineffectual, dishonest, pompous buffoons. And the seed money for Fred and George’s successful enterprise is provided by that most famous of venture capitalists: Harry Potter.
[Details on WSJ article: Jonathan V. Last. “History According to Harry: Appeasement Fails with Warlocks Too.” Wall Street Journal (Friday, July 15, 2005)]

Economics and Physics

Economists have sometimes been accused of physics-envy, but that is an utterly misleading accusation. Anyone who knows modern physics will testify that physicists care about experimental evidence, about bringing their theories into conformity with the experimental evidence, and very little about rigorous theorems and analytical lemmas. What economists really suffer from is mathematics-envy.

Blaug, Mark. “Not Only an Economist: Autobiographical Reflections of a Historian of Economic Thought.” In Reflections of Eminent Economists, edited by Michael Szenberg and Lall Ramrattan, 71-94. Cheltenham, UK: Edward Elgar, 2004, p. 90.

We economists like to think of our science as akin to physics in its mathematical rigor. Quite by accident, while pursuing some research on stochastic processes, I obtained in 1995 a detailed description of the research being done by tenured and tenure-track members of the Harvard University physics department, ranked that same year in a National Research Council survey as the top physics department in the United States. Analysis of the research

Continue reading “Economics and Physics”

A Case For School Vouchers in Nebraska

Create a marketplace
The solution to the impasse between Omaha Public Schools and the coalition of suburban school districts is to dissolve all school districts and declare each school an independent entity. Then issue vouchers to students and let them and their parents pick the schools of their choice.
There would be another round of consolidation, just as there was with the Baby Bell telephone companies. But it would be market-driven instead of being dictated by political boundaries.
The beneficiaries would be students and parents who would be free to pick schools offering the best educational value with no restrictions due to place of residence.
That’s real school choice.
Robert Ranney, Omaha

Source: Omaha-World Herald Public Pulse section, July 17, 2005.

Protecting Sugar Industry Doubles Consumer Price for Sugar

RUSSELL ROBERTS: “The bottom line is the price of sugar in the United States is about double what it would be outside the United States in a freer market. That means higher profits for sugar farmers and it means higher prices for U.S. consumers.”
“And it’s not just, of course, for the sugar you sprinkle on your grapefruit. It’s for anything you consume that uses sugar: ketchup, all kinds of processed foods, candy that has higher prices that we don’t see the higher price of sugar hidden in those higher prices.”
Russell Roberts on PBS News Hour, “FARMERS DIFFER OVER CAFTA” July 20, 2005.