Guess where

Only sporadic violence marred the celebration. Last Wednesday, a stray bullet shattered a hotel window and struck and wounded a tour guide standing inside.

Yep, it's Mardi Gras in New Orleans.

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?

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.

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.

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.

Gas war!

Apparently collusion is difficult to maintain at the pump:

Investigators say the confrontation started when the owner of the BP station on that corner went to the Marathon station to discuss with its owner why he'd dropped the price for a gallon of unleaded gas to $2.93 per gallon, three cents less than BP.

The discussion quickly escalated into a fight with two more people from the BP station brawling with rivals at Marathon. One man was hit with a baseball bat in the melee. And then, police say, the 51-year-old owner of the Marathon station pulled out a gun and shot the owner of the BP, a 45-year-old father of five children.

In a wild post-script, it appears the BP station is taking advantage of the shooting. While police are still swarming the Marathon station, the BP has jacked up its prices. WXYZ's Bill Proctor reports that as soon as the owner's body was taken away, workers at BP changed the price-per-gallon of unleaded from $2.96 to $3.09.

Imagine if we had that kind of competition at Metro.

Engineering Jihad

Tyler Cowen points to a great paper which connects terrorism to my former profession:

We can thus conclude that among violent Islamic radicals engineers are two to four times more likely to be found than the null hypothesis would predict.

Whether American, Canadian or Islamic, and whether due to selection or field socialisation, a disproportionate share of engineers seems to have a mindset that inclines them to entertain the quintessential right-wing features of “monism” – ‘why argue when there is one best solution’ – and of “simplism” – ‘if only people were rational, remedies would be simple’.

... Engineers turn out to be by far the most religious group of all academics – 66.5 per cent, followed again by 61.7 in economics, 49.9 in sciences, 48.8 per cent of social scientists, 46.3 of doctors and 44.1 per cent of lawyers, the most sceptical of the lot.

Further, the paper goes on to argue that engineers get dangerous when there is a lack of engineering opportunities, as is the case in most Muslim countries. Saudi Arabia is supposedly the main exception, i.e. there are plenty of opportunities there for engineers and so Saudi Arabian terrorists are not disproportionately drawn from engineers. But doesn't Saudi Arabia produce as many terrorists per capita as just about any other country? How do we explain that?

Banks v. credit unions

CEI just published an article I wrote on banks, credit unions, and field of membership. It's yet another story about special interests using government to block out the competition.

Don't follow leaders?

Economists don't talk about leadership too much, and sociologists seem to attribute leadership to the mystical magic of charisma. The only economic theory that comes to mind is Hayek's, which basically states that shit bags rise to the top because only shit bags would want to control other people. There's certainly some truth to that, but here I offer a more charitable view.

We choose our leaders based on the confidence they exude, since it's the best signal of expertise. No doubt this signal can be faked fairly easily for many people, but for the most part confidence comes with real expertise. And confidence is readily apparent. No need for credentials. The good news is that more and more people have access to the information necessary to create expertise, e.g. the internets. In other words, the world is moving towards a perfectly competitive market in information, where anyone can compete for expertise, and therefore leadership, in a given field. Thus, we have reason to believe that our leaders are better today than they were yesterday, and they'll continue to get better.

This is almost enough to get me interested in the presidential debates.

War protesters becoming less moonbaty

I was at yesterday's war protest on the Mall, which I feel is the closest thing we have to Carnival. So it's strange to me that there's not more news coverage. Where else can you find a Santa on stilts? Overall, the crowd was surprisingly diverse, politically and otherwise, as compared to the last protest I attended in March. I found myself sympathizing with most of them, like the vet who drove down from Boston, and this woman, who says she hasn't protested anything since Vietnam. But I must give it to the counter protesters for coming up with the funniest signs:

Just say no to New Orleans

Ed Glaeser puts it this way:

President Bush got us on the wrong path of favoring place over people when he declared “this great city will rise again.” The Democrats have echoed this sentiment. Barack Obama promises “to rebuild now, stronger than ever.” Hillary Clinton argues that “rebuilding New Orleans is not a local obligation, it is an American obligation.”

Wrong. Federal policy does not have an obligation to see that cities rise again — not Buffalo, not Detroit, not New Orleans. Federal policy has an obligation to see that the people of America enjoy as much freedom and opportunity as possible. Federal attempts to rebuild declining cities areas are quixotic, inefficient, and unlikely to help the poor. Spending billions on light rail in New Orleans or upstate New York may make for good stump speeches, but the people of these regions would be better off if they were given cash or fully portable housing vouchers rather than boondoggle projects.

I'll be in New Orleans next month for a wedding and of course I'll try not to mention this.

Forgiveness

An atheist friend, worldly wise and well travelled, told me there is no connection between religion and ethics. How else do we explain the Amish of Lancaster County:

Many from Nickel Mines have pointed out that forgiveness is a journey, that you need help from your community of faith and from God ... to make and hold on to a decision not to become a hostage to hostility.

Need investment advice?

It looks as though high school seniors know something about economics, even public choice, and, crucially, the benefits of trade. And they appear to be skeptical of the benefits of education. Have they been reading Bryan Caplan's blog?

If it's Tuesday it must be Belgium

Sorry for the long hiatus but I've been traveling in Europe for the past three weeks, and when I travel I cover some territory, no time for blogging. Here's the list of places, favorites first:

1) Frankfurt
2) Brussels
3) Amsterdam
4) Berlin
5) Cologne
6) Manchester
7) Cambridge
8) London

I was in Cambridge for the Freedom Week conference, which was interesting and I appreciate the opportunity. Here we are punting on the river Cam.

English culture, on the other hand, scores at the bottom for me. It is way too class oriented, with a separating equilibrium created by the two main classes struggling to distance themselves from one another, understandably. At the bottom are Chavs, which stands for council housing and violent. Every city has them. In London it's the cockney, also called hoodies because they dress like American thug-rappers. But hoodies don't make videos, they kill people. At the other end, the top I suppose, are some sort of Monty Python caricature of landed gentry. These people are wise to remain landed, as they would get seriously beaten up anywhere outside of England.

London is prospering primarily because their immigration laws are less restrictive than ours, thanks to the EU. Immigrants generally run the place, and they form the bulk of the middle class. The ones I talked to would jump at the chance to live and work in the US.

Manchester seemed to be a little less class conscious, people are more open and friendly, and the beer is cheaper. So it wins the England category hands down. It's a good place for a 13 hour pub crawl. Thanks Mark!

Next for the Continent where I visited friends in Berlin and Frankfurt, and along the way stopped in places I hadn't seen before, places that I had skipped for a reason. But there were a couple of nice surprises. Particularly, Frankfurt is awesome. The parks are lovely, the women are lovely, the beer gardens and cafes are pleasant, and the tourists are few. It makes me want to work for the European Central Bank.

The second best surprise was Brussels. It's something like a mini-Paris, but with good and cheap Belgian beer. And not too many tourists. Here's Che Habana Cafe, where I imagine the EU regulators hang out.

Amsterdam's Vondel Park was also a nice surprise. But I'll stop here with the photos, the rest are on facebook: Will McBride in the Washington, DC network.

Addendum: I forgot to mention the IG Farben building in Frankfurt, which alone is worth the trip. Besides being an architectural marvel, the excellent exhibit there tells perhaps the most chilling interest group story of all, i.e. how IG Farben financed Hitler's rise to power and in return received lucrative military contracts. Here is one conspiratorial view. Anti-capitalists and capitalists alike should come together on one thing: Capitalism is dangerous only when it becomes tied to the coercive powers of the state.

Amtrashed

In case you were wondering who benefits from nearly $1 billion in annual Amtrak subsidies, it's the rich:

GrandLuxe offers separate cars, with their own private dining and lounge sections, attached to regular Amtrak trains. Tickets for such trips range from $789 per person for a two-day, one night trip on the East Coast to $1,599 or higher for three days and two nights for travel to or from the West Coast.

But now Amtrak has announced a new business plan which ties them to an even narrower interest group, i.e. rich drunks:

Members of Amtrak's guest rewards program - the railroad equivalent of frequent fliers - can get a $100 per person credit for alcohol between November and January.

Did Teddy Kennedy threaten to cut spending?