Creative Class

The Freakonomics blog in the New York Times has a brief article (and a spirited discussion section) considering how people’s spending patterns might adapt to changes in income. While the conjecture about which products and services might be more or less income-elastic is certainly interesting, the first two paragraphs contain two very curious words which add up to a pretty big unchallenged assumption: “presumably,” as in “a (presumably) temporary decline in income during the recession; and “the short run.”

In the short run, Daniel Hamermesh is probably right: lots of things get short shrift when income shrinks, including his list of “postponable luxuries” like plastic surgery, participation in the Austin Marathon, and pediatric visits (not my idea of a postponable luxury, but to each his own). But I am not convinced that we’re in a short run situation at all, and that we are witnessing the presumptive temporary decline in personal income.

This may not be a recession. We may be in Act I of The Great Reset. If we are in a recession, the standard economist playbook holds. If we are in uncharted waters, all bets are off.

So, what do you think? Is this a permanent or temporary setback? What are you you postponing, or planning to forego entirely?

UCLA’s Eric Morris, writing over at Freakonomics makes the case for pricing our roads.

For decades, economists and other transportation thinkers have advocated imposing tolls that vary with congestion levels on roadways. Simply put, the more congestion, the higher the toll, until the congestion goes away.

To many people, this sounds like a scheme by mustache-twirling bureaucrats and their academic apologists to fleece drivers out of their hard-earned cash. Why should drivers have to pay to use roads their tax dollars have already paid for? Won’t the remaining free roads be swamped as drivers are forced off the tolled roads? Won’t the working-class and poor be the victims here, as the tolled routes turn into “Lexus lanes”? …

Ultimately, there’s no free lunch; instead of paying with money, you pay with the effort and time needed to acquire the good … [D]elay is an externality imposed by drivers on their peers … In the end, of course, everybody pays, because as we impose congestion on others, others impose it on us …

Markets work best when externalities are internalized: i.e., you pay for the hassle you inflict on others … Using tolls to help internalize the congestion externality would somewhat reduce the number of trips made on the most congested roads at the peak usage periods; some trips would be moved to less congested times and routes, and others would be foregone entirely. This way we would cut down on the congestion costs we impose on each other.

He’s absolutely right. It’s a big win-win really - better for individuals who can get from point A to point B faster (also, recall being stuck in traffic is one of life’s least enjoyable activities) and generate higher overall productivity by increasing mobility and connectivity, and replacing wasted (stuck-in-traffic) time with more productive endeavor. What better time to start than with the new stimulus package.

As I mentioned in a previous post here, I was asked to do a Q&A on the Freakonomics blog in the New York Times. Readers posed their questions about “Best Places” studies, and now I’ve posted my responses.

We had more than 60 questions, and they were all interesting and thoughtful. They covered the quality of life in Scandinavia, the effect of our Best Places studies on cities, Wasilla, boring Dallas, and whether I get offered bribes to influence our rankings. In my responses, I addressed the effect of the creative class and how Richard’s work impacts our research in finding the Best Places to live, work, and play.

People asked if I’m holding a bowling bag in the photo which they used. And the answer is yes - and here’s the full picture. I’m including it because this is my homage to Bob Putnam’s “Bowling Alone.” I saw they were going to remodel this local building with these very cool old bowling illustrations, and I had to capture them in case they were gone forever. And sure enough, weeks later they were just a memory.

The Freakonomics guys (Steven Levitt and Stephen Dubner) have invited me to answer reader questions on their blog in the New York Times.

My work is all about finding “Best Places,” and studying differences between the cities, metros, and communities of the U.S. and Canada. So it dovetails nicely with Richard’s work in Who’s Your City?

I hope you’ll check it out and ask some questions of your own. We’ll take questions for about three days, and then answer them in another post.

“Best” always,

Bert