Thursday, January 31, 2008

Nation's Bachelors Demand Health-Care Coverage For All Their Buddies

That's today's Onion Radio News. Which of the candidate's would find this funny? When are we going to see an Onion debate?

Wednesday, January 30, 2008

Help is on the way in DC?

From the Examiner:

Columbia Heights is getting a new Target store, a Staples, new condos, a Starbucks, sit down restaurants, parking and other services. The new commerce is made possible because the local government provided initial funding (Tax Increment Funding TIF) for the projects. Mayor Adrian Fenty and several councilmembers unveiled a new $95 million TIF Tuesday to bring new development to other blighted neighborhood corridors. These include a total of $35 million for Georgia Avenue in Northwest, $10 million for Martin Luther King and South Capitol in Southeast.The H street Corridor in Northeast will see 25 million. Minnesota-Benning in Northeast will get $15 million and Pennsylvania Avenue in Southeast will receive $10 million.

What's not reported here is that Columbia Heights residents waited for these businesses for a decade or more. Columbia Heights has a tragic history going back to the 1968 riots. I've only observed it since early 2000 when I moved there. For seven years, the commercial center of the neighborhood, around the metro, looked like a moonscape - literally several acres of dirt. Until a Giant opened in the neighborhood in 2005 you'd have been hard pressed to find a place to buy milk. It remains to be seen if the sudden big box development will really produce a viable, organic neighborhood.

So why did this happen in Columbia Heights while surrounding neighborhoods, such as Adams Morgan and U street, and the city as a whole experienced a historic rebirth? The answer is that city bureaucrats essentially owned Columbia Heights, treated it as an urban planning experiment, and doled out the development rights to a single monopolist, unaccountable to the taxpayer. Columbia Heights never suffered from a lack of access to capital. It suffered from central planning.

A much simpler, more straightforward, and less discriminatory approach to revitalizing DC's neighborhoods would be to make them more attractive to business by reducing DC's notoriously high taxes and regulation.

Wednesday, January 23, 2008

Lower taxes lead to population growth

Wendell Cox, Peter Gordon, and Christian Redfearn have an interesting article in the new issue of Econ Journal Watch in which they refute Baum-Snow's conclusion that highways caused suburbanization. From Baum-Snow's abstract:

Between 1950 and 1990, the aggregate population of central cities in the United States declined by 17 percent despite population growth of 72 percent in metropolitan areas as a whole. This paper assesses the extent to which the construction of new limited access highways has contributed to central city population decline. Using planned portions of the interstate highway system as a source of exogenous variation, empirical estimates indicate that one new highway passing through a central city reduces its population by about 18 percent. Estimates imply that aggregate central city population would have grown by about 8 percent had the interstate highway system not been built.

As far as I can tell, Baum-Snow did not correct for local taxes, which is likely be a more important driver of population growth. For instance, Suitably Flip looks at state tax rankings from the Tax Foundation and population growth from the Census Bureau. He finds that lower taxes (especially on property) lead to population growth:

The trend is obvious even though this represents only one year of data (July 1 2006 -July 1 2007). I imagine the relationship is even stronger and more significant when looking at longer time periods.

Thursday, January 10, 2008

Proposed macroeconomics syllabus

1) Watch Cinderella Man.

2) Read Anthony Evan's post on the causes of the Depression.

3) Read Snowden and Vane's Modern Macro.

4) Keep up with the various presidential candidates and their proposals to "fix" the slumping economy.