Category Archives: Politics

With banks and lending institutions owning so many homes, housing values will be lower for several years

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Foreclosures are not just an immediate problem; the New York Times reports that the number of foreclosed homes now owned by banks and mortgage lenders are likely to depress the housing values for years to come:

All told, [banks and mortgage lenders] own more than 872,000 homes as a result of the groundswell in foreclosures, almost twice as many as when the financial crisis began in 2007, according to RealtyTrac, a real estate data provider. In addition, they are in the process of foreclosing on an additional one million homes and are poised to take possession of several million more in the years ahead.

Five years after the housing market started teetering, economists now worry that the rise in lender-owned homes could create another vicious circle, in which the growing inventory of distressed property further depresses home values and leads to even more distressed sales. With the spring home-selling season under way, real estate prices have been declining across the country in recent months…

Over all, economists project that it would take about three years for lenders to sell their backlog of foreclosed homes. As a result, home values nationally could fall 5 percent by the end of 2011, according to Moody’s, and rise only modestly over the following year. Regions that were hardest hit by the housing collapse and recession could take even longer to recover — dealing yet another blow to a still-struggling economy.

Not good news for those who want to sell a home in the near future. It is interesting that we now hear very little about this at a policy level. There are certainly other important pressing issues in the world (jobs, gas prices, military actions, Republican candidates for President?) but housing values affect a lot of people.

At the same time, I have heard and seen new advertisements from the National Association of Realtors. I wonder why they are running these ads now: are they worried that more people will rent rather than buy? Is there an uptick in the number of people who are trying to combat lower housing values by selling the home on their own? Do they feel that there might soon be changes in public policies, perhaps through measures like limiting or getting rid of the mortgage-interest deduction, that would limit the government’s promotion of homeownership? And interestingly, these advertisements have stressed that homeownership helps create jobs.

Lobbynomics v. empirical data

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Ars Technica points to a UK report asserting that “lobbynomics” rather than empirical data drives much of the intellectual property policy debate:

There are three main practical obstacles to using evidence on the economic impacts of IP…[3] Much of the data needed to develop empirical evidence on copyright and designs is privately held. It enters the public domain chiefly in the form of “evidence” supporting the arguments of lobbyists (“lobbynomics”) rather than as independently verified research conclusions.

My own experience in dissecting IP developments supports this view.  It is surprisingly difficult to find “hard data” about copyright piracy, leaving any “debate” to a shouting match between proponents of bald assertions.

We need better data, and we all need to be more circumspect (and humble) before drawing sweeping conclusions from the little that is available.

Ronald Reagan was a sociology and economics major

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I occasionally run into stories about famous people who were sociology majors in college (these are often professional athletes) and found another example yesterday: President Ronald Reagan was a sociology and economics major. And this came from an unlikely source, Newt Gingrich, who was speaking at Reagan’s alma mater, Eureka College:

Gingrich, who announced last week he is seeking the GOP nomination for president in 2012, braved rain and wind to speak to about 140 students at Eureka College in western Illinois.

The former House speaker said the small liberal arts college was one of the most influential institutions of the late 20th century because of its ties with Reagan. The 40th president graduated from the school in 1932.

“The collapse of the Soviet Union began here in 1928,” he said to audience members. “The resurrection of general economics and the development of American economic growth and jobs for 25 years began here when Dutch Reagan took a degree in economics and sociology.”

I had never heard this before so I did a little digging into this:

-The Ronald Reagan Presidential Library and Foundation says Reagan was an economics major: “Ronald Reagan officially majored in Economics at Eureka College, but unofficially minored in extra-curricular activities.”

-The Reagan portal for Eureka College gives a lengthier explanation:

Academically, Reagan’s major area of study was Economics and Sociology in which he received his degree in 1932. Somehow, blinded by the lights of Hollywood, this academic element has been overshadowed in history, yet, as U.S. President, it had a powerful intellectual impact on Reagan. Eureka College taught Economics and Sociology as a joint degree purposefully as a pure reflection of the College’s goals reflecting “the mutual development of intellect and character” or Economic=Money and Sociology=People or How Money Effects People. The servant leadership focus of the College founders still pervaded the culture and curriculum of Eureka College.

Several thoughts quickly come to mind:

1. Would it be bad for Reagan, probably the foremost conservative in the late 20th century, to be known as someone who studied sociology as opposed to economics? (I am thinking of the Presidential Library emphasis on economics while Eureka explains how the two disciplines were combined.)

2. Would it be possible anywhere these days to have a joint major in economics and sociology? These two often seem to be placed at opposite poles of thought.

3. It strikes me that having a former US President as an alum could be a huge boon for a small college. However, it does mean that Newt Gingrich wanted to visit…

Just how many McMansions have actually collapsed like Trump’s polling figures?

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One common critique of the McMansion is that they are poorly built. The story continues that because they are mass-produced, the materials are bottom of the line so builders don’t have to do anything more than necessary  in the search for big profits. This idea was found in a recent story about the decline of Donald Trump’s polling figures:

Public Policy Polling finds Donald Trump’s numbers collapsing like a poorly-built McMansion.

Might some people find this phrase redundant and ask whether McMansions are poorly-built by definition?

Perhaps I am being too literal here but this gets me thinking about how many McMansions have actually collapsed. I would guess that not too many have collapsed on their own so perhaps the more appropriate figures to search for would measure how many McMansions needed major renovations or fixes and then how this data compares to other kinds of homes. Would HGTV, the network always on the search for homes that need help, be a good source for figures? This is probably not the kind of data builders would want to keep and it would be difficult to collate the information from millions of individual homeowners.

And what would be a better metaphor for the collapse of Donald Trump’s polling numbers?

The important step taken toward American interstates on May 7, 1930

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I am a few days behind in celebrating anniversaries in American transportation history but this post from The Infrastructurist highlights an important highway commission that was founded on May 7, 1930:

This past Saturday marked a little-known anniversary in the long-running contest between American highway and train establishments. On May 7, 1930, the U.S. Senate passed legislation to form the United States Motorways Commission, a twelve-person group — two Senators, two Congressmen, and eight presidential appointees — whose job was to consider a proposal for a national road network strikingly similar to the Interstate Highway System that emerged decades later.

The concept of a truly national road system was, at this point in American history, truly novel. The particular idea to be considered by the motorways commission sprang from the mercurial mind of an engineer named Lester Barlow. The Union Highway, as Barlow first called his system, would be a four-track expressway stretching from Boston to San Francisco. It would have fast lanes and slow lanes, access ramps to eliminate grade crossings, a partition between traffic flows to prevent U-turns, special sections devoted to gas stations and food stands — in short, all the definitive markers of expressways as we know them…

All seemed to be going well after the Senate voted to create the motorways commission on May 7, 1930. Then suddenly the legislation ran into problems. The House of Representatives trapped its version of the bill in a committee, and New York lawmakers did the same. Attempts to revive the plan in subsequent sessions, both federal and local, failed again and again, until the idea faded away.

Tilson later revealed to Barlow the real reason for legislative inaction on the proposal for a national highway system: it had been blocked by the mighty railroad lobby, which feared the loss of passengers and freight to road travel. This reason was confirmed to Barlow at a gathering of New Haven Railroad officials in the fall of 1930. As Barlow later recalled, John J. Pelley, then president of the New Haven, told those in attendance that a poor highway system was in the railroad’s best interest, and that it should do whatever it “practically” could to prevent the development of expressways in America.

This is an important story as it sounds like this commission laid the framework for the Federal Interstate system that began in the mid 1950s. As sociologists, historians, and others would tell you, this Federal shift toward highway construction had a profound impact on suburban development after World War II.

It would be interesting to hear more about the gap between this commission and the Federal Interstate Act of 1956. Of course, there was a Depression and a massive war. But during this time period, a number of government agencies started planning and building roads. The Pennsylvania Turnpike was built in this gap and the states of Ohio and Indiana started constructing connections to this Turnpike. In the Chicago region, a number of highways were under construction by the mid 1950s as the State of Illinois and the City of Chicago recognized the need for such roads. Beyond historical circumstances, was it primarily the railroad lobby that held up Federal support of interstate construction prior to 1956? If so, what was the state of the railroad industry in 1956 and was the Federal government actually behind the times in funding the Interstate system?

The architectural legacy of Mayor Daley

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Chicago Tribune architecture critic Blair Kamin considers Mayor Richard M. Daley’s architectural legacy in Chicago. Here is Kamin’s conclusion after going over Daley’s hits, mixed results, and misses:

Daley was a great mayor. He was also a flawed mayor. Power enabled him to reshape Chicago. And the abuse of power undermined him—and the cityscape he did so much to uplift.

As Kamin suggests, this will take some years and historical perspective to sort out. Regardless of the final verdict, it will be interesting to see how subsequent mayors try or don’t try to live up to a long-serving Mayor who generally went for big efforts with mixed results.

Assassination, Gaddafi, and Bin Laden

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Instapundit recently posted about how there has been general support for the assassination of Osama Bin Laden. Being involved in assassinations is a tricky area for the United States, particularly since we were implicated in some nefarious activity back in the 1950s through the 1970s (see the Church Committee report of 1975). Here how this has played out in recent days:

1. The recent attack on Gaddafi was intended to kill the Libyan leader. This is not the first time the US has attempted this with the earlier efforts coming in a bombing attack in 1986. This would seem to fit the classic definition of assassination: the killing of a foreign leader when his actions against the United States were not part of a larger war.

2. The recent killing of Bin Laden is being called an assassination by some but doesn’t seem to be in the same category. Bin Laden was not a political leader and I’m sure he had been named something like an “enemy combatant” by the United States. Because he was killed as part of a war effort (the “war on terror”) and he wasn’t a politician, this isn’t really an assassination. The problem comes in here when the media talks about assassinations as any attack on a prominent person. Not all such attacks are assassinations.

In both of these cases, people have made the argument that killing “the head” of the organization (al Qaeda or Libya) would be better than fighting a more traditional war. Perhaps so – but such actions might be against international law (see a quick discussion of the ambiguities here). And whether the killing of one person actually gets rid of larger, structural problems is another matter (witness the case of Iraq and the death of Saddam Hussein).

I recently thought of an example that illustrates some of the problems with assassinations or “targeted killings”: imagine that a foreign leader called for the killing of President Obama because of US actions around the world. I imagine that we would be fairly outraged: how dare another country threaten our voted-in leader. But is this much different than NATO leaders openly discussing killing Gaddafi?

How to offset the lower gas tax revenues from electric car drivers

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With more electric cars coming to market, more state governments are discussing how to offset the loss of gas tax revenues from electric car drivers:

After years of urging residents to buy fuel-efficient cars and giving them tax breaks to do it, Washington state lawmakers are considering a measure to charge them a $100 annual fee — what would be the nation’s first electric car fee.

State lawmakers grappling with a $5 billion deficit are facing declining gas tax revenue, which means less money to maintain or improve roads.

“Electric vehicles put just as much wear and tear on our roads as gas vehicles,” said Democratic state Sen. Mary Margaret Haugen, the bill’s lead sponsor. “This simply ensures that they contribute their fair share to the upkeep of our roads.”

Other states are trying to find solutions to the same problem, as cars become more fuel-efficient and, now, don’t use any gas at all.

The two main options for this are either to impose an annual fee or to base payment on how far the car travels. But the cost-per-mile approach seems to have several disadvantages (including a good amount of opposition) even though it seems like it would be the closest to the gas tax (the more you drive, the more you pay).

The last paragraphs in the article seem to hold the key: this is another instance when government is trying to catch up to the newest technology. On one hand, governments don’t want to discourage the purchase and use of electric vehicles. On the other hand, roads still need to be built and maintained. Additionally, most states are facing large deficits and can’t be going about taking in less revenue.

Regardless of what route is taken, it seems like it would be better to make decisions like these sooner rather than later so that future electric car drivers know what they are getting into.

Tim Horton’s as “a place where Canadian values are articulated”

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Politicians are well-known for visiting local restaurants and meeting with potential voters. In Canada, this means that politicians head to Tim Horton’s:

As we enter the home stretch of the election, the most dangerous place to be is between a politician and a Tim Hortons photo-op.

In recent weeks, the doughnut chain has become the parties’ preferred shorthand for patriotism, with leaders battling to sell their image as the Everyman with each double-double…

“It’s not just a coffee shop; it’s a place where Canadian values are articulated,” explained Patricia Cormack, associate professor of sociology at St. Francis Xavier University. “Tim Hortons is connected (through marketing) to community and sacrifice and immigration and family — all those themes that politicians want to attach themselves to.”

The restaurant, in a way, has become the Canadian equivalent of what former vice-presidential nominee Sarah Palin called “Main Street USA.” Only in this case, it’s a $2.5-billion multinational personifying the people — an irony not lost on those following the campaign online.

This sociologist makes it sounds like politicians want to ride the coattails of Tim Horton’s effective marketing campaigns. As one might imagine, this close identification with a particular large corporation rubs some people the wrong way. The story cites one citizen that suggests more candidates visit Starbucks. There is only one problem: Tim Horton’s is much more popular than Starbucks in Canada.

A 2009 Harris-Decima survey found Tim Hortons people outnumbered Starbucks people by a ratio of 4-1 in Canada, with the former brand traversing age, class, gender and even political philosophy.

So Starbucks is not the answer, at least not for the politician that wants to connect with the “average Canadian voter.” The American equivalent might be going to McDonald’s or Walmart but I don’t think these companies have the popularity that Tim Horton’s has in Canada.

In thinking about this, are there other countries that have something like a “national corporation”?

(I have had one Tim Horton’s experience: it is the only time I have had a combo meal with an apple and a donut.)

Proposal in Hungary: give extra votes to families with children

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A new right-wing government in Hungary is considering an “unprecedented” proposal: give extra votes to mothers with children.

The conservative Fidesz party has made several controversial decisions since coming to power on a populist rightwing agenda, including a crackdown on the media, but the latest proposal could be prove to be its most contentious.

“Some 20% of society are children,” said József Szájer, a senior Fidesz official and MEP. “This is quite a considerable group that is left out of representation. The interests of these future generations are not represented in decision-making.” He added: “We know at first it seems an unusual idea, but in the 50s it was unusual to give votes to black people; 100 years ago, it was unusual to give votes to women.”…

Szájer said he was inspired by the work of the American demographer Paul Demeny, who developed the concept in 1986. Under Demeny Voting, each parent is given half a vote for each child, permitting a split vote in the event that the parents have differing political loyalties.

However, to counter concerns about the Roma winning more votes, Szájer said in the Hungarian case, the move would have “permitted the passage of a law giving mothers the vote on behalf of a maximum of one child”…

The discourse on Demeny Voting first emerged in Germany and Japan in the 2000s as a solution to concerns that policy development is biased in favour of the elderly rather than young families.

Four things seem noteworthy in this story:

1. One of the reasons for giving out these extra votes is to help give more of a voice to younger generations. Considering differences in opinion in some nations between older and younger generations, this may be a problem to address. But would mothers necessarily be looking out for their children as opposed to themselves when voting?

2. This is also an issue of ethnicity: moving this proposal forward has been influenced by feelings regarding the Roma population. Since this proposal might give too much voting power to the Roma (we can assume they have higher birth rates than the rest of Hungary?), it might be limited to one extra vote per family with children.

3. Although the article doesn’t mention this as a reason, I wonder if some of this is driven by demographics, specifically a low birth rate. Like other industrialized nations, whether Japan or other European nations, Hungary has a low birth rate of 9.60 per 1,000 population (according to the CIA Factbook, #200 out of 222 nations). Perhaps this measure is also an incentive for more families to have children?

4. While an idea like this seem to go against typical democratic procedures of one vote per adult, it reminds me of another voting scheme that was set up to deal with an existing social issue. Could more countries and governments seek different voting structures in order to reach certain ends?