Wedding Cakes and Prisoner’s Dilemmas

Liberals and libertarians both support gay marriage, but tend to divide on the question of whether a baker in Indiana should be required to make a cake for a gay wedding. “A homophobic baker shouldn’t stop a same-sex couple from getting married,” argues John Stossel. “Likewise, a gay couple shouldn’t force a baker to make them a wedding cake.”

Stossel reasons that, “Lots of other bakers would love the business,” while “the free market will punish” businesses that are racist or anti-gay. Of course, “there are a few exceptions,” he admits. “In the South, people banned from a lunch counter had few other choices. The Civil Rights Act’s intrusion into private behavior was probably necessary to counter the damage done by Jim Crow laws.”

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TODs and Subsidies

Transit-oriented developments (TODs) are supposed to promote economic growth because the demand for it is so high. But if so many people want to live in dense, mixed-use developments, why do they so often need subsidies?

The latest proposal to subsidize TODs comes from Senator Cory Booker (D-NJ). He wants to expand use of the Railroad Rehabilitation and Improvement Financing (RRIF) program to allow the funds to be used for TODs. RRIF was created mainly to provide low-interest loans to smaller freight railroads improve their facilities and restructure debt so shippers along those rail lines would not be stranded (or have to resort to trucks) if the rail lines failed.

However, some of the money has been used for passenger rail, including $663 million for Amtrak and $72.5 million for the Virginia Railway Express commuter trains. Considering that these are perpetual loss-making enterprises that have no hope of repaying the loans except out of other tax dollars, expanding this fund for money-losing TODs may seem a natural next step to Booker. But Booker’s fundamental assumption, like that of many Democrats, is that the federal government has an infinite capacity to give away funds, which is what these “loans” are if they can’t be repaid.

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The Downward Spiral Continues

The Washington Metropolitan Area Transit Authority (WMATA) is increasingly dysfunctional. DC’s subway system is designed to run eight-car trains but due to lack of equipment two-thirds of the trains operating during rush hour have only six cars even though they are packed full of people. WMATA has asked Virginia, Maryland, and DC for nearly $1.5 billion so it can purchase new equipment and upgrade its system to allow a return to eight-car trains.

The Maryland secretary of transportation, Pete Rahn, says the state is reluctant to give hundreds of millions of dollars to an agency as poorly run as WMATA. As an example of poor management, Rahn pointed to a dispute among the agency’s board over what kind of person should replace the agency’s general manager, Richard Sarles, who retired from his $366,000 a year job in January.

Some on the board wanted to hire a “turnaround expert” who could restore the agency’s fortunes. Others wanted to hire someone with more experience in the transit industry. The dispute became so serious that the mayor of Washington proposed to dismiss board member (and last year’s board chair) Tom Downs, who favored hiring someone with more transit expertise, because he disagreed with the mayor’s desire for a turnaround expert. In response, three candidates who were being considered for the job withdrew their applications.

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Self-Driving Cars Coming Sooner Than You Think

Auto manufacturers revealed plans for cars with self-driving capabilities at the New York Auto Show last week. These include cars that will be on the market within a year or two.

Volvo, for example, plans to introduce a car this Spring that can “take over both the steering and throttle to follow the car in front of it at speeds up to about 35 miles per hour.” Audi plans to offer cars with a similar feature (up to 40 mph) as soon as January, 2016. The manufacturers use some variation of the term “traffic jam assist” to describe this feature. While the drive won’t actually be steering the car, for liability reasons the cars will require that the drivers keep their hands on the steering wheel or at least put them there every 10 seconds or so.

Late next year Cadillac will offer its top-of-the-line CT6 model with a “super cruise” feature that will combine self-steering and adaptive cruise control at highways speeds: “hands-off-the-wheel, feet-off-the-pedals highway driving.” Cadillac publicity has at least implied that drivers will be able to take their hands off the steering wheel for extended periods without having to touch the wheel every 15 seconds or so like other brands. GM had announced this feature last year, but gave more particulars at the New York show.

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About That Trillion-Dollar Cost of Sprawl

The Antiplanner’s loyal opponent, Todd Litman, has come out with a new report claiming that urban sprawl costs Americans more than a trillion dollars a year. While it is rather quaint that people are still worried about the costs of sprawl, the Antiplanner has to point out that there are several problems with Litman’s analysis.

Many of Litman’s Numbers Are Hypothetical

First, many of Litman’s numbers are hypothetical. He casually presents data describing such things as “optimal regional densities” and “optimal vehicle ownership rates” without ever defining “optimal” or proving that his numbers are, indeed, optimal. In fact, any actual optima change from day to day and to claim that one “knows” what the optima are is to claim an omnipotence that simply does not exist. Such claims are what leads people to think they can engage in central planning which almost invariably leads to more harm than good.

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Housing and Wealth Inequality

American Nightmare hasn’t sold as well as the Antiplanner’s other books, which is too bad because in some ways it is the most profound of them all. It covers a wide range of issues, including a detailed explanation of the 2008 financial crisis. But the overarching theme is that urban planning and zoning are best viewed as a form of economic warfare by the upper and middle classes against the working and lower classes. While that might not have been the original intent, to judge by the smug attitudes of the beneficiaries of such planning and zoning, they are perfectly happy with the results.

The book, therefore, was really about inequality, an issue recently made popular (and controversial) by Thomas Piketty’s book Capital in the Twenty-First Century. Piketty’s thesis is that income inequality is necessarily rising because the returns to capital wealth are greater than overall economic growth, thus giving people one more reason to hate capitalists.

Last month, a paper by an MIT graduate student in economics named Matthew Rognlie, examined Piketty’s thesis in detail. Rognlie found that the return on most kinds of wealth and capital has not been greater than overall economic growth, and therefore hasn’t been contributing to income inequality. The one exception, Rognlie found, was housing.

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Buying the Tesla of Buses

The Antiplanner was in Spokane yesterday where the local transit agency is asking voters for a 50 percent increase in the sales tax that funds most of the agency’s operations. Much of the new money will go for various capital projects that will do little to increase ridership.


$1.2 million will buy you a bus that can go 170 miles on a single charge of batteries. The bus has 60 seats, which is just what is needed in Spokane, where the average bus carries just 9 people.

Spokane Transit previously persuaded voters to double the sales tax in 2004. The improvements made with that money led to a small increase in per capita transit ridership from about 25 trips per person per year to 27. Based on this, it doesn’t seem likely that another 50 percent increase in funding will do much to boost ridership.

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Autos, Cement, and Greenhouse Gases

America’s environmentalists place undue emphasis on the role of automobiles in greenhouse gas emissions. Their goal of trying to reduce emissions by getting people out of their cars is expensive, self-defeating, and probably unnecessary.

According to the EPA, cars and light trucks emit less than 17 percent of the human-caused greenhouse gases produced in America. Moreover, both the percentage and the absolute level of auto emissions are steadily declining.

Meanwhile, the United States produces only about one seventh of the human-caused greenhouse gases produced in the world–about 6 out of 42 gigatons–and that too is declining (though the worldwide total is increasing). While one seventh is a lot for a country that has only about 4 percent of the world’s population, emissions in other parts of the world are growing rapidly.

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Where Will the Money Come From?

During the Antiplanner’s visit to Washington DC last week, I tried to encourage people to think about the incentives created by federal transportation funding. But the first question on the minds of most of the people I talked with was, “How will we pay for highways and transit?

From outside the Beltway, this question almost seems like nonsense. In fact, no one would have ever asked this question before 2008. When Congress set up the Highway Trust Fund in 1956, it decided to spend the money strictly on a pay-as-you-go basis, meaning it wouldn’t spend any more than was collected in gas taxes and other highway revenues (mainly excise taxes on cars, trucks, and tires, most of which have since been repealed).

Pay-as-you-go had a disadvantage: when inflation hit, it seriously slowed the pace of construction because the gas tax wasn’t indexed to inflation. But the policy also had an advantage: since no one was borrowing money against anticipated future revenues, nearly all of the revenues could go for construction rather than a significant chunk going for interest and other finance charges.

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Federal Transit Inequities, Part 2

A few weeks ago, the Antiplanner presented data showing that the distribution of federal transit dollars to urban areas was highly uneven, ranging from 26 cents per transit rider to $2.17 per transit rider. The main factor that appeared to make a difference was whether the urban area was building expensive new rail transit lines.

A close look at the data reveals another difference: whether the urban area is in a state that has a representative on the House Transportation & Infrastructure Committee. Over the past six years, states with a Democrat on the committee received an average of $120 million to $160 million more than they would have received if funds were distributed according to the number of transit riders carried in the area. States with a Republican on the committee didn’t fare as well, actually losing money in the 111th Congress (when Democrats held both houses) and making only about a third as much as Democrats in the 112th and 113th congresses.

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