Category: Economics

From the Los Angeles Times, “Councilmen weigh legal action, saying other cities are pushing homeless into L.A.”:

Councilmen Mike Bonin and Joe Buscaino called Wednesday for City Atty. Mike Feuer to explore “legal steps” that L.A. could use to compel those cities to comply with a federal court decision on homelessness and sidewalk camping in Boise, Idaho. The proposal, they said, would stop nearby cities from pushing homeless people into L.A. city boundaries.

The U.S. 9th Circuit Court of Appeals ruled last year that homeless individuals may not be held criminally responsible for sleeping on government property when no alternative shelter is available.

Bonin, whose council district touches Santa Monica, Culver City and El Segundo, said he believes many cities in the region are not complying with that decision.

“Instead of allowing people to sleep on their sidewalks, they are encouraging people, or compelling people, to move to the city of Los Angeles to do that,” he said.

I’ve occasionally wondered in these pages why people who are homeless in a place with a cold and/or wet climate, e.g., Seattle, do not relocate to Santa Monica. Readers have put forward various theories about the challenges faced by the homeless. The LA Times article shows that at least some cities are eager to see homeless residents move to other places (but they also want to provide sanctuary to undocumented low-skill immigrants?).

Would it make sense for cities to hire concierges for their homeless populations? The concierge El Segundo, for example, would organize luxury bus tours of nearby California cities, would know the best places to camp out and receive services in each of those places, etc. Instead of an arms race of hostility, seeing which city can make life miserable for the homeless, try to facilitate their moves.

[The article also contains a comparison of homeless to trash that, had Donald Trump made it, would have been newsworthy:

Councilman Jose Huizar and several colleagues called for increased enforcement, fines and rewards, along with the expansion of a program that allows homeless and formerly homeless individuals to work on cleanup crews.

“I have long said that downtown Los Angeles needs an emergency, triage-like response when it comes to addressing homelessness,” Huizar said in a statement. “But that is also true for the amount of trash that is illegally dumped on our streets.”

]

Readers: What do you think? Cities already provide a lot of services to the homeless. Why not a concierge to help with moving?

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A recent Sunday afternoon trip to Boston’s Logan Airport:

There was plenty of time to chat with the Uber driver:

He was a 24-year-old U Mass Lowell graduate with a business degree and he’d figured out that revenue was $20-25 per hour before car expenses. He had a day job. Why also drive Uber?

Everyone my age that I know is living for the weekend. They’re on autopilot Monday through Friday and miserable. Even the computer science graduates who did everything right and are working for Raytheon are living paycheck to paycheck.

He volunteered that most of these folks should not be broke. They were spending on Starbucks and other unnecessary luxuries in his opinion. He subsists primarily on Soylent and says a week’s nutrition costs less than one meal out in a city restaurant. The Uber project was partly insurance against an uncertain W-2 market: “Being a white male in corporate America is career suicide.”

The next opportunity to learn from a young person came at the Intercontinental Hotel at the Minneapolis Airport (to make a long story short, I now know that it takes Americans 2.4 hours to perform a Chinese fire drill from a broken Airbus to a working one and this is incompatible with making one’s connection to San Diego). A ripped tatooed guy at the gym offered the workout tip of immediately switching to progressively lighter weights after doing max reps on heavier. Repeat until down to 5 lbs. dumbbells. He volunteered that he was a former meth head. Why the gym passion? “I’m a loser so I have to look good.”

All but two of the Uber drivers whom I met in San Diego were immigrants, but not from Mexico as one might expect given the proximity of the border. Drivers were from Afghanistan, Brazil, Eritrea, Ethiopia, etc. The native-born drivers believed that their hourly earnings would be approximately double if not for the inexhaustible supply of immigrants.

A San Diego weekday afternoon, described by the driver as featuring lighter-than-usual traffic:

And they can do this with gasoline that costs less than $5 per gallon:

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The NYT did an interesting analysis of the declining fortunes of government cronies (holders of NYC taxi medallions).

But the methods stripped immigrant families of their life savings, crushed drivers under debt they could not repay and engulfed an industry that has long defined New York. More than 950 medallion owners have filed for bankruptcy, according to a Times analysis of court records. Thousands more are barely hanging on.

It turns out that as soon as the assets had been sold to recent immigrants, politicians decided that the profits of the cronies did not need to be carefully protected (in this case against Uber and Lyft, though even without them it would have been tough to keep the medallion price bubble inflating).

Of course Donald Trump is at least partly to blame, according to the NYT! No article on malfeasance would be complete without his name appearing.

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In https://philip.greenspun.com/blog/2019/04/03/malthus-was-right-but-it-is-real-estate-not-food-that-is-limiting/ we looked at data from cities around the world. “Housing’s hidden crisis: Rural Americans struggle to pay rent” (CBS) says that a lot of Americans can’t afford housing even in thinly populated areas of the U.S.

Since there is plenty of land in rural areas, I’m wondering if high costs can be partly explained by high materials prices due to demand from a growing economy worldwide. The 25th percentile American worker can’t afford cement for a home foundation because a 75th percentile worker in China or Mexico has purchased the cement instead.

Related:

• “Bay Area Housing Struggles Extend To Farm-Rich Salinas”: “Salinas families earn a median income of $69,000, while the region’s 90,000 farmworkers bring in far less. They face a median home price of nearly $550,000 and two-bedroom apartments costing roughly $1,800 a month, according to Zillow.”

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An Economic History of the World since 1400 by Donald J. Harreld takes the conventional view that the reparations Germany was obligated to pay following World War I were so large that they forced the company into an economic death spiral. The professor says that Germany was to pay $30 billion over a 70-year period that this was roughly 2X the German national income (a book that I reviewed in 2011 puts the number at 83 percent of GDP) at the time. Germany could “never hope to pay” this amount and the debt made World War II more likely.

The lectures also say that Germany made things worse by printing money to meet government expenses. [Though the Germany government stopped making reparations payments in 1933 after Hitler was elected.]

What are Americans’ best ideas in the econ department lately? Pushing government debt from its current 106 percent of GDP (already more than the Germans owed, according to the 2011 book) up and over 200 percent so that we can pay for things we want such as the Green New Deal. At the same time we will apply Modern Monetary Theory so that we can simply print more dollars whenever we need to buy something. (I like this idea, but I think it would work even better if we ask Zimbabwe to print Zim Dollars to pay for the stuff that we need/want. They’re already doing a lot of printing so if we send them some paper and ink they shouldn’t mind printing more.)

The professor himself seems unaware of this apparent contradiction. He is a Big Government, Keynesian Spending, and Welfare State enthusiast. He does point out the Keynes said that governments should spend less during boom times and that modern governments never implement this part of the theory. But he never explains why it is obvious that Germany could never pay an amount comparable to its GDP while it is simultaneously obvious that modern Welfare States can meet their debt and entitlement obligations (closer to 500 percent of GDP for the U.S. when you add in Medicare and Social Security; see this 2010 chart in the New York Times in which Greece owed 875 percent total while the U.S. was at 500 percent (i.e., the U.S. owes 5 years of GDP)).

Separately, the professor notes that the U.S. and Germany had the longest and deepest economic depressions during the 1930s and pursued similar economic policies:

The two countries hardest hit by the Great Depression were the United States and Germany—countries that hadn’t left the gold standard. And both Germany and the United States adopted several practices to stabilize their domestic economies in the 1930s that were amazingly similar. … Both countries used similar strategies to combat unemployment and poverty in their populations, including poor relief and public works programs. Both governments also set up work camps for young men from rural areas, primarily to keep them from migrating to the industrial workforce.

Countries such as England that relied on market economics came out of the Depression much faster, according to the class.

Related:

• Wikipedia on World War I Reparations

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