Adam Serwer writes about racial polarization returning to Washington DC local politics after a brief truce:

Yet the city polarized along racial lines in numbers not seen since the last time Barry was on the ballot, with 80 percent of the black vote going to Gray while Fenty drew the same numbers among white voters. The post-Barry truce between the black middle class and the city’s white residents dissolved, increasing the probability that the city’s class divide will morph into a racial one. White voters’ initial impression of Gray has stuck despite his efforts to alleviate anxieties west of Rock Creek Park through a series of pre-general election town halls. A survey released by the Clarus Research Group last week showed Gray with a 17 percent approval rating among white residents. Yes, the mayor managed to short-circuit his honeymoon with a series of disastrous appointments that have driven down his approval ratings even among the black residents who voted for him. But it’s hard to say his low approval among whites is so easily explained. After all, that 17 percent resembles his share of the white vote in the primary anyway. If anything, he’s just confirmed what they already thought about him in the first place. What makes this baffling is that Gray ran largely as an alternative to Fenty in style rather than substance, and the policy differences between them were virtually nonexistent. Gray went as far as appointing Kaya Henderson as Rhee’s replacement, signaling continuity with Fenty on education—the one issue in this city over which there’s something approaching genuine ideological conflict, and the one most white voters flagged as the most important.

To back Serwer up on this, the education issue is even odder than that because Mary Cheh, who represents super-white Ward 3, was a huge opponent of the Fenty/Rhee/Henderson education agenda. All of which suggests that education policy and race got caught up in Fenty vs Gray in a completely arbitrary way. My personal obsession in the Fenty/Gray race was, however, Fenty’s status as an opponent of the taxi driver special interest and Gray’s tendency to kowtow to them.

That said, not only are the racial politics ugly and unfortunate on their own terms, they seem to really stand in the way of any kind of rational policy assessment in a way that’s bad for the city. Not that DC is unique in this regard. Big city politics in America have always had a hefty ethnic/racial element. Washington just poses this in a black vs white way that’s starker than the more complicated ethnic coalition politics of a New York or a Los Angeles.

As Karl Smith points out, there’s certainly a huge consumer surplus associated with the Internet that goes beyond its financial “worth.” But I think people are sometimes too quick to point to this sort of thing as undercutting bleak narratives about income trends. After all, consumer surplus is not a new phenomenon.

Think about your standard refrigerator/freezer. It’s sort of a miraculously useful device. Instead of your food turning stinky and rotten, it sits nicely in my fridge. The direct financial value of being able to store leftovers or freeze excess raw ingredients is significant, over and above the convenience value. You can spend a lot on one of these miraculous devices if you’re so inclined, but you can also get one for a few hundred bucks. That’s because the market for fridges is quite competitive—lots of different manufacturers, lots of different vendors—so at the less stylish end of the market, the sale price approximates the construction costs. And the construction costs are low, crazy low relative to what you’d be willing to pay to a refrigerator monopolist. If the cheapest fridge out there cost $5,000 I’d still want one and I bet you would too.

That wedge between what you actually pay and what you hypothetically would pay is the consumer surplus and it’s giant. That’s why establishing competitive markets is important. But this isn’t a new Internet-era phenomenon. And actually I think there’s a specific problem here with the Internet, namely that while competition between websites is incredibly robust, competition between Internet service providers is a joke. People sometimes look at the difficulty of charging people to read online news outlets and say that people “don’t want to pay for news.” But of course I do pay for my ability to read things on the Internet—I pay Comcast and I pay AT&T. After all, the consumer surplus of the home appliance revolution (fridges, toasters, radios, etc) was all built on the back of the giant consumer surplus associated with home electrification. But that surplus wasn’t brought to us by competitive markets, it was brought to us largely by public investment and a regulated utility model of dealing with “natural monopoly.” Absent effective regulation, a much larger share of the refrigerator surplus would have ended up in the pockets of the utilities.

On some level, I think everyone kinda knows this (certainly everyone hates AT&T) but Americans tend to be too parochial to recognize quite how badly we have it in this regard. Read, for example, Horace Dedieu on the American wireless Galapagos syndrome.

From Alexander Hart at TNR’s nifty new “The Study” blog:

According to research by UC Davis’s Jonathan Hughes, Christopher Knittel and Daniel Sperling, Americans are now less responsive to increases in gas prices. In the late 1970s, a ten percent rise in the cost of gas would lead to about a three percent decline in the amount of gas consumed. In the early 2000s, on the other hand, gas prices would have to rise about 60 percent to provoke a similar decline in gas consumption. The researchers theorized that this might be because spending on gas is now a smaller fraction of total monthly income or because cars get better mileage now, meaning that cutting back on driving saves less gas than it would have in the 1970s. But either way, their research suggests that even if gas prices go higher, we’re unlikely to see Americans buying less gas.

To be precise, it doesn’t say people won’t buy less gas even if prices rise, it says that the impact on driving will be relatively small. And since households are income constrained, that means the impact on spending on everything that’s not gasoline will be relatively large. I would flag as a causal factor here the fact that residential patterns have shifted in favor of a larger share of the population living in places where there are fewer good alternatives to car commuting. You might respond to higher prices by driving to the commuter rail station instead of driving all the way to the office, but you can only do that if you live in a metro area with a commuter rail network.