Welcome back to Sunday reading. This is my first edition of the year. As I’ve been tramping over the holidays, it’s mainly composed of things I started reading back in December.
The best thing I’ve read in January – after striking a few days of wet weather on the track – is Tramping New Zealand’s guide to what to wear tramping:
The theory is to have one set of clothes that is going to get wet during the day, either through precipitation, or perspiration, and one set that stays dry, to keep you cosy at night.
You travel in and out with your dry set, change to the wet for walking, change back out when you have your accommodation sorted to stay warm, clad yourself in the wet in the morning, you were saying how tough you were, etc.
There’s no great benefit in taking two wet, or two dry sets. Just take what you are going to use.
And, maybe, a spare pair of dry socks.
Oh, don’t forget underwear, that doesn’t weigh excessively.
Sounds about right to me. My current theory is that “breathable”, as applied to wet weather gear, is code for “you will get wet before long”. Consequently, you’re probably better off in a wool bush shirt and a plastic poncho than a $500 Gore-Tex jacket.
Melbourne shows that giving transit priority doesn't need a big investment – just plastic curbs bolted into asphalt pic.twitter.com/orPiI9zRoy
— Laurence Lui (@larrylarry) January 1, 2017
While we’re on the subject of the great outdoors, Toby Manhire’s interview with Laura Wallace from GNS Science (in The Spinoff) provided an illuminating perspective on a geological detective story:
The Kaikoura earthquake wreaked destruction, tragedy and misery, but it also generated much scientific fascination. Including: what was going on in the Hikurangi Subduction Zone and those mysterious slow-slip events? […]
These slow slip events, they’ve been called “silent earthquakes”?
They’re similar to earthquakes, as slow slip events accommodate more rapid than normal movement on the plate boundary fault, in this case the Hikurangi subduction zone. Unlike earthquakes (which involve slip along faults in a matter of seconds), slow slip events can take weeks or months to occur. Because slow slip events are slow and don’t occur suddenly enough to release seismic energy, we have to use GPS to detect them. Basically, we look for mm-level changes in the position of the land above the slow slip events. East coast North Island slow slip events typically show up as 2-3 cm eastward shifts of the land on the GPS.
The slow slip event we are observing off the North Island’s east coast right now appears to have been triggered by the 7.8 earthquake, probably due to very small stress changes induced by the passing seismic waves from the M7.8 earthquake. We’ve seen slow slip events triggered by earthquakes in New Zealand before. The Te Araroa Earthquake that happened in early September triggered a slow slip event off East Cape. There was also an earthquake near Gisborne in late 2007, that triggered a slow slip event near Gisborne. In this case the M7.8 earthquake appears to have triggered slow slip over a larger part of the Hikurangi plate boundary, going from about southern Hawkes Bay up to East Cape. We haven’t seen this happen simultaneously over such a large area before, and this makes it a really interesting event.
Slow-slip events at tectonic plate boundaries were first discovered in North America’s Pacific Northwest – and it’s a good thing they’re happening there, as pressure would otherwise build up faster for a massively destructive earthquake. As it is, Seattle is in the midst of another tectonic shift in housing development. Mike Rosenberg reports on the building boom in the Seattle Times:
The apartment boom in Seattle has already reached historic heights — more units opened in each of the past four years than ever before.
Now, the real boom is about to begin.
Seattle is set to see almost 10,000 new market-rate apartments open in 2017, nearly twice as many as in any other year in the city’s history.
With the construction surge set to continue through the rest of the decade, rent increases that have hit Seattle about as hard as any city in the country are forecast to be cut in half during 2017.
[…] Other cities have already seen this scenario play out. New York had a record number of apartments open in 2015, and rents there finally stopped climbing in 2016. Rents have also slowed recently in Boston; Washington, D.C.; Denver; and Houston following a rise in apartment construction in those cities.
“It is a pattern that’s registering in a lot of other places,” said Greg Willett, chief economist for the rental firm RealPage.
On the opposite end, Sacramento, Calif., stopped building apartments in the last decade and has now seen its normally tepid rental market surge to become one of the hottest in the nation. Ditto for Oakland.
The Seattle metropolitan area is a bit over twice as large as Auckland, so if we were trying to match their performance it would mean building around 5000 apartments next year.
"Let's have a moment of silence for all those stuck
in traffic on their way to the gym to ride a stationary bicycle."
—Earl Blumenauer pic.twitter.com/NFybq7aSRm
— Taras Grescoe (@grescoe) December 22, 2016
A lot of the economic commentary from the US in November and December focused on what (if anything) can be done about the regional disparities that are (in part) driving dissatisfaction with the political and economic status quo. More specifically, how do you revive the fortunes of declining manufacturing areas in the Rust Belt?
Paul Krugman, who earned his Nobel for work on trade policy and regional economics, is quite skeptical that any of the likely policies are likely to succeed:
So maybe the answer is regional policies, to promote employment in declining regions? There is certainly a case in principle for doing this, since the costs of uprooting workers and families are larger than economists like to imagine. I would say, however, that the track record of regional support policies in other countries, which spend far more on such things than we are likely to, is pretty poor. For example, massive aid to the former East Germany hasn’t prevented a large decline in population, much bigger than the population decline in Appalachia over the same period.
And I have to admit to a strong suspicion that proposals for regional policies that aim to induce service industries to relocate to the Rust Belt would not be well received, would in fact be attacked as elitist. People want those manufacturing jobs back, not something different. And it’s snooty and disrespectful to say that this can’t be done, even though it’s the truth.
In a subsequent post on his New York Times blog, Krugman also argued that an attempt to use protectionism to break down global value chains and bring manufacturing back to the US would be dangerously disruptive.
On the other hand, Bloomberg View columnist (and economist) Noah Smith takes a more optimistic view. He outlines “four ways to help the Midwest“:
No. 1 Infrastructure
Sick economies and shrinking population have left Rust Belt states and cities unable to pay for infrastructure improvements. As a result, many cities look like disaster areas. The federal government should allocate funds to repair and improve the Midwest’s roads, bridges and trains, and to upgrade its broadband. Sen’s pension bailout idea could also be instrumental in helping states buff up their infrastructure. Better transportation makes it easier for people and goods to flow between cities in a region, and for the region to export products to other places. Infrastructure is doubly important in a region like the Midwest, where winter weather can quickly make travel difficult.
No. 2 Universities
Universities are helpful for regional economic growth. The Midwest has a number of good schools (I went to one of them for my Ph.D.), but more could be built, and existing universities could be expanded. Perhaps even more importantly, local and state governments in the Midwest could work with universities and local companies to create more academic-private partnerships and to boost knowledge industries in places like Ann Arbor, Michigan, and Columbus, Ohio. As things stand, Midwesterners tend to move away as soon as they graduate from college. Creating more industries specifically for these graduates would keep talent in the region.
No. 3 Business Development
Some cities in Colorado have embraced a development policy it calls economic gardening. The program helps provide resources for locals to start their own businesses. It furnishes them with market research and connects them with needed resources. Small businesses provide more employment than large ones, and offer a ticket to the middle class. They also have a chance of growing into large businesses. The Midwest should consider emulating Colorado’s plan, which seems to be getting results.
No. 4 Urbanism
Tech hubs like San Francisco and Austin, Texas, are using development restrictions to keep their population densities in check. That gives Midwestern cities an opening to attract refugees from the high-rent metropolises of the two coasts. Cities like Detroit and Cleveland can work on creating neighborhoods that are attractive to the creative class, while allowing housing development to keep rents cheap. College towns like Ann Arbor can reduce their own development restrictions and allow themselves to become industrial hubs. And cities can copy the crime-fighting techniques of cities like New York and Los Angeles that have become much safer during the past few decades.
By the way, we will probably be facing similar questions in New Zealand. Economist Shamubeel Eaqub has been quite forthright about the problems caused by regional disparities. In Stuff, he writes about the “plight of regions: hope v futility“:
Our regions are growing further apart. Incomes after adjusting for living costs have risen significantly in Auckland and Wellington.
The commercial and political capitals are pulling away from other regions.
Astonishingly, of the remaining 14 regions, only six have experienced real income gains over the last three decades. That is, eight regions have seen declines in real incomes over a three-decade period.
The regional divergences we see today are not new, nor unique to New Zealand. We see similar patterns in other advanced economies around the world too.
While incomes are growing much faster in Auckland and Wellington, there is a large gap between high and low income earners. In contrast, incomes are more equal in the provinces, but more equally low incomes.
The income divergence across our regions is rooted in deeper economic and demographic changes.
Changes in the economy, towards more services sector jobs, is favouring urban sectors.
Globalisation and technological change are offshoring or mechanising manual work – which is affecting provincial economies harder.
Our thinking in local government and economic policy is based on an expectation of continuing growth. Stagnation and decline are seen negatively.
Yet, that is reality of ageing populations and young people leaving the provinces for economic and other reasons for urban centres.
Eaqub’s analysis of the potential policy solutions is (I think) extremely realistic:
The international evidence from the United Kingdom, United States and France for growth fostering measures is troublingly mixed.
While regional interventions often work for the specific region, it comes at the cost of neighbouring comparable regions.
There is often no net gain for the country as a whole. Worse, once the programmes finish, the benefits also tend to fade in most cases.
Where the growth fostering policies have worked, they had some inherent strength in their location or economic potential, for example natural resources and weather amenable to year round tourism.
Regional development is a topic that needs much further research and attention. There is no recipe that will work in every occasion.
This is a debate that will definitely be worth following closely in the coming year, especially if any new policies get put to the test. For what it’s worth, I agree with Krugman that trade protectionism and industrial subsidies are likely to be ineffective at best, destructive at worst. Smith’s ideas are likely to be useful at the margin, but I doubt that they will succeed in reversing longstanding trends. Similarly, a one-size-fits-all approach to trying to revitalise regions that have had technological, economic, and social trends turn against them is unlikely to work.
One thing that is worth reading if you’re interested in solutions is a paper by Paul Conway, the Productivity Commission’s head of research, entitled Achieving New Zealand’s Productivity Potential. I had a chance to skim it a few weeks back and am planning on writing a full post on it sometime in January.
OK. I've invented the highest visibility cycling jersey ever.
I guarantee all drivers will see you in this. pic.twitter.com/wxo6wa5QrK
— Jon (@samuriinbred) December 8, 2015
To close out the week, two more bits on apartments and housing development. First, Jennifer Wolch and Dana Cuff interview Mike Davis, the “chronicler of the California dark side and LA’s underbelly, proclaiming a troubling, menacing reality beneath the bright and sunny facade” (in Boom California). I’ve long been a fan of Davis’s work on cities and the history of Los Angeles. While he’s got a larger, more radical critique of contemporary development, I’m often most struck by his talent for observing small details of urban life. For instance:
The only form of housing that was generally popular, where the tenants had been there for a long time—everybody else was in and out—was the one courtyard apartment complex, with its little gardens and a fountain. The most despised were not the older 1920s tenement fire traps but the dingbats—low-rise six- to twelve-unit apartment buildings with tuck-under parking, built in the fifties and sixties on single family lots. They were designed to become blight in a few decades and constitute a major problem everywhere in Southern California. The other multi-unit types were still durable but it was hard to imagine any alternative for the stucco rubble other than to tear it down—which in fact developers have done, only to replace the dingbats with four- and five-story “super-cubes” that are just larger versions of the same problems.
Finally, Charlie Sorrell (FastCoexist) points towards a great bit of data on outcomes following the development of low-income housing:
What happens to nearby property values when low-income housing is built in a neighborhood? They drop, right? Because claiming those non-rich individuals and families bring down housing prices is, apparently, a more palatable argument to make than saying poor people shouldn’t be in the neighborhood. The truth is that low-income housing does basically nothing to the prices of neighboring properties. They keep on rising, just like they did before.
Trulia, the real-estate listings service, dug deep into its data to track home values in areas where low-income housing was built. Author Cheryl Young looked at 3,083 low-income housing projects built from 1996 to 2006 (prior to the price-distorting housing bubble beginning in 2007), in “the nation’s 20 least affordable markets.” With just a few exceptions, the low-income housing had no effect on house prices.
That’s all; enjoy the rest of the weekend!