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Yglesias

Mitt Romney’s Smart Growth Period

Alex MacGillis details Mitt Romney’s couple of years as a savvy smart growth advocate before his growing national ambitions caused him to (you guessed it) flip-flop:

Romney’s liberal heresies on health care, gay rights, and abortion are well established. Less well known is that, as governor of Massachusetts, he was a smart-growth acolyte. He hinted at this predilection during the campaign in 2002. “Smart growth, or purposeful planning, is a concept that will be in the governor’s office if I’m elected,” he said. After winning, he created a new “Office for Commonwealth Development” to oversee the transportation, environment, and housing departments—and named as its chief Douglas Foy. It was a brash decision for a business-oriented politician: Foy was the head of the state’s Conservation Law Foundation and an ardent environmentalist who often commuted 20 miles by bike. “He was the bane of the business and development community,” Benjamin Fierro, the lobbyist for the state homebuilders’ association, told me. “My clients were very concerned about that.”

Romney and Foy wasted little time in putting smart-growth policies to work. The state, they declared, would take a “fix-it-first” approach to highway spending—repairing existing roads instead of building new ones. They also pledged to cut the number of SUVs in the state fleet. In addition, the state put out a new highway-design manual intended to make towns more pedestrian-friendly, with narrower streets designed for slower driving speeds. “It was all really woolly, totally green, new-urbanist stuff—and it was state policy,” says Anthony Flint, who covered land-use issues for The Boston Globe and went on to join Foy’s office in 2005. The biggest move came in 2004, when Romney signed legislation, dubbed Chapter 40R, providing funds to towns and cities that agreed to allow more high-density, multi-family housing. “It was fundamentally anti-sprawl. It was saying that the days of having a developer buy a Christmas tree farm and throw up a bunch of single-family homes on half-acre lots were over,” Flint recalls. “It was a real awakening.”

Yglesias

The Antarctic Labor Market Miracle

Harold Meyerson says we should fear the job-killing impact of technological advance as driverless vehicles (for example) might reduce the demand for human labor. From the right, Howard Foster recently argued that rather than worry about robots crowding out human labor, we should worry about human crowding out human labor and deport immigrants to boost demand for domestic labor. Adam Ozimek observed in response to Foster, that by this logic a country can boost domestic prosperity by banning all imports of foreign goods.

A lot of political debate in the United States seems to me to take the form of people not understanding that these three proposals — ban the goods, ban the human production inputs, and ban the capital production inputs — are all basically the same. After all, nobody (I hope) thinks we should do all three of these things simultaneously. It is, however, true that they have full employment in Antarctica:

At any rate, if we could produce all the goods and services we need to sustain prosperous existence without anyone doing market production, then we’d all live in a communist utopia. If we needed a very tiny amount of market production, then there’d be no reason to believe that high taxes are reducing labor supply and we’d have super-high rates and we’d all live in a welfare state utopia.

Yglesias

The A La Carte Mirage

Persistent rumors that Apple will make a more aggressive move into the television market once again seem to have people musing about à la carte television in a way that I doesn’t think makes sense. “I have 400 cable channels available to me right now but I only actually care about 12 of them,” Andy Ihnatko writes, “if Apple worked out how to license those channels independently and allowed me to simply subscribe to them a-la-carte via channel-specific iOS apps, that’d be a huge win.”

But how so?

Think about Starbucks. If Starbucks were a monopoly provider of coffee, they might try to make venti the only available size as a way of maximizing the ratio of revenue to labor costs. But since coffee retailers need to compete with both other vendors and making the coffee yourself, they disaggregate and will sell you a smaller coffee for less money. But the reason they’re willing to charge less for the smaller cup is that it actually costs them less to produce the smaller cup. At the same time, the discount is relatively small compared to the reduction in coffee served because giving you a smaller coffee only reduces their costs slightly. Starbucks faces a lot of fixed and semi-fixed costs associated with just keeping the stores up and running. But each cup ounce of coffee does have a marginal cost associated with it, so discounts are available for drinking less coffee.

Cable’s not like that. Once the cable company has built the infrastructure to deliver cable to your house and given you the box, it doesn’t cost them any more money to give you 100 channels rather than 10. To be sure, building infrastructure capable of delivering more channels costs more money. But once the infrastructure’s built, it can deliver what it can deliver and there are no incremental savings to achieve by not using all the capacity. I think it’s completely true that cable television has become a questionable value proposition—it’s extremely expensive and though the infrastructure to deliver hundreds of channels to the home is impressive, it’s not actually useful since nobody watches that many channels. What we actually need is faster broadband internet. But the infrastructure’s already built. Refusing to use it doesn’t reduce the suppliers’ costs and wouldn’t save customers any money.

Yglesias

Baseline Games

Here’s the thing you should keep in mind about the long-term deficit. Under current law, the Bush tax cuts will expire. They will expire unless a majority of House members and 60 senators and the president of the United States agree to extend them. Consequently, either 41 Democratic senators or else President Obama plus 34 Democratic senators or else President Obama plus 146 Democratic House members can ensure a large increase in federal revenue. There is absolutely no need to get even a single Republican to assent to this plan.

Absolutely everything you’ve heard over the past year or month or week about various “bargains” or deals flows from the fact that Democrats have taken this idea off the table. Instead, President Obama is trying to obtain a bipartisan agreement in which Democrats agree to make taxes lower than current law specifies in exchange for Republicans agreeing to make taxes higher than they are this year. That is to say that left-wing revenue-lovers will be giving up a policy concession — tax revenue — in exchange for Republicans conceding a political point. This creates a crippling bargaining weakness for the Democrats. The Republican negotiating objective is low taxes, but the Democratic negotiating objective is bipartisan agreement. An underlying issue here is something that drives me nuts and that I think progressives need to think much harder about — the toxic impact of the Democrats rallying in 2008 around the cry of absolutely no tax increases of any kind for the non-rich. Pushing for a more progressive tax code is great, but pushing for rich-people-only tax increases has proven to be a good applause line in speeches that’s made actual governance incredibly difficult.

In other words, people should listen to Michael Bloomberg on taxes even while deploring his views on busting up protests.

Yglesias

The Collapse Of Italy’s Money Supply

Tyler Cowen brings us a chart that’s difficult to explain in terms of la dolce vita:

The idea of central banking is that you have a central bank so that things like this don’t happen. And the thing about this death spiral is that there’s potentially no end to it. If people think the ECB won’t rescue a country from panics and bank runs, then Finland and Austria and the Netherlands are just as vulnerable as Spain and Portugal and Italy.

Yglesias

Ozone And The Fundamental Asymmetry Of American Politics

I joked yesterday that left and right reverse positions on the balance of long-term and short-term priorities amidst a recession depending on whether we’re talking about fiscal stimulus or environmental regulation. But John Broder’s account of how Team Obama came to decide to overrule Lisa Jackson and the EPA on smog regulations is a reminder that there’s a fundamental asymmetry in the American political system. A variety of considerations went into the president’s call on this, but they basically boil down to the fact that the business lobby really didn’t want to see the new stricter rule implemented. So even though environmentalists did want it implemented, Obama chose not to implement it.

You simply cannot imagine the reverse scenario playing out in a Republican White House. It’s inconceivable that environmental groups would win an internal debate in a Republican administration. Could environmental groups win a policy fight with a Republican administration by exercising power in congress and the courts? Sure. But there’s no way Andy Card would have ever reversed course on a Bush campaign pledge in response to plaintive phone calls from the Sierra Club.

Jon Chait’s classic article on this dynamic is lost to the sands of the internet, but you can get a taste of his thinking here. A friend of mind in political science explained it to me this way. American democracy is characterized by “interest group pluralism.” But business has a “privileged position” in the pluralist dynamic. It’s perfectly conceivable for corporate managers and business lobbyists to dream of a world in which there are no labor unions or environmental pressure groups. But neither the AFL-CIO nor the Sierra Club nor anyone else to the right of Lenin is actually prepared to wage a root-and-branch war against the existence of large and powerful business enterprises in the United States. In fact, progressives are counting on the existence of such enterprises every bit as much as conservatives are. The upshot is to create an imbalance in the interest group bargaining process. Business always has a seat at the table and even the most left-wing members of congress shill for firms located in their districts. Countervailing forces not only sometimes lose the argument (as they did with Obama and smog) but oftentimes find themselves locked out of the room entirely.

Yglesias

Berlin Forming Grand Coalition To Build Misguided Urban Freeway

A “grand coalition” featuring both the center-right Christian Democrats and the center-left Social Democrats would probably be the best possible German government for the world right now. Currently, the Christian Democrats’ coalition with the liberal-but-nationalistic Free Democrats is to an extent holding Chancellor Angela Merkel back from taking the steps that need to be taken to resolve the European economic situation. So in that sense, it probably augurs well for the world that the Berlin branch of the SPD just formed a collation with the CDU rather than with the Green Party. But my heart sank when I read that Berlin Mayor Klaus Wowerweit “ditched talks with the Greens, fearing they would hamper infrastructure projects such as a city-motorway extension and the opening of a new airport.”

City-motorway extension? Yes sir. As you can see at the right, Berlin was — like many other cities around the world — afflicted with an intra-urban freeway, Autobahn 100, during the 1950s. But Berlin was partially rescued by the Cold War, which prevented the East Berlin half proposed ring road from actually being built. Now the plan is to finally finish the thing which will damage the neighborhoods directly afflicted by construction and, by speeding automobile commutes, encourage commuters to sprawl out into the surrounding suburbs.

Yglesias

NBA Players Are Rich

I think Dave Zirin’s article welcoming NBA players to the 99 percent mostly serves to underscore some of the conceptual weaknesses of the underlying frame. Literally speaking, of course, NBA players are generally part and parcel of the top 1 percent. Joe Johnson, for example, earns about $18,000,000 per year, which is considerably more than your average Wall Street trader. Now you could very fairly argue that this is a bit misleading since NBA players tend to have very short careers. But this highlights a weakness in the tax-the-rich agenda, which is indifferent to this kind of consideration. Indeed if you imagine Johnson trying to be prudent and save a very large share of his income during his prime working years you’ll see that the progressive tax agenda — which would subject him to higher rates on the front end, and then subject his investment income to a second round of higher taxation — is actually quite hostile to Johnson’s interests.

One point you might make about NBA players is that notwithstanding their high wages, they’re still in the structural position of “workers.” They don’t control the means of production. They earn their income through toil rather than by clipping coupons. This is true, but it misunderstands the nature of modern income inequality. CEOs bringing home eight figure paychecks work for a living just like Joe Johnson, they’re not the idle rich of yore. The story of the past 10 years is one in which capital has been immiserated, not one in which owners have gotten rich by sticking it to workers.

None of this changes the fact that the NBA owners are much much richer than the players, and it makes perfect sense for egalitarians everywhere to sympathize more with the players. But much as Dana Goldstein says about K-12 education this is an issue that can’t be shoehorned into the “99 percent” frame without losing all coherence.

Yglesias

States (And Canadian Provinces) Are Not Real Economic Units

Discussing comparisons between living standards in New York and Ontario, Felix Salmon hits upon some of the inherent difficulties in making these kind of comparisons. I might add to his list that though U.S. states and Canadian provinces are important governance units, they’re not real economic units. He writes that “New York’s GDP is artificially raised by Wall Street — something which does little good for poor families upstate.”

That’s in part just because much of New York is so damn far from the financial district. New York’s number two city, Buffalo, is much closer to Ontario’s number one city, Toronto, than it is to NYC. But western portions of Ontario are closer to Minneapolis than they are to Toronto. It’s much more enlightening, I think, to try to look at cities and metropolitan areas than to these weird subnational units. How does the Greater Toronto Area compare to similarly sized American metro areas? I think you’ll see that quality of life comparisons end up depending a lot on what you care about. Toronto is, obviously, very cold compared to the similarly sized Miami. On the other hand, the murder rate is much lower.

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