Assorted links

by on April 9, 2010 at 7:35 am in Web/Tech | Permalink

1. The words that NYT readers look up most often.

2. Robin Hanson's earlier post on movie manipulation.

3. Bob Litan on derivatives reform; one idea in this piece is that clearing works easiest under highly capitalized monopoly yet monopoly brings other problems, such as stifled innovation and less favorable terms of trade.

4. Buy real estate in Panama?

5. The size of the called strike zone varies with the count.

6. Races.

7. Why did Texas escape the housing bubble?

1 Bock April 9, 2010 at 7:47 am

7. Not a mystery. Underpriced in the first place.

2 Steve C. April 9, 2010 at 8:54 am

#7. We’ve avoided this disaster because Texas communities do not restrict growth. (Austin being the exception)
We are fortunate in our geography. Texas cities can expand in nearly every direction. Most avoid mindless restrictions that limit development. Because of these and other factors there was no constraint that drove up home prices to stratospheric levels. Cheap money allowed more Texans to buy homes which led to an expansion in supply and an amelioration of price increases. Californians were forced to accept long commutes from expensive homes in distant areas. Texans were forced to choose between lower prices in the exurbs or higher prices to be close to downtown.
We also learned a valuable lesson from our real estate crash in the late 80s. Prosecute fraudulent appraisers and mortgage brokers. Amazing how that provides an incentive for good behavior. What stands out as being odd is that until 8 years ago, Texans could not take out home equity loans. Maybe we are just slow on using them?
Did I mention that we don’t have a state income tax?

3 Barkley Rosser April 9, 2010 at 10:16 am

So sui generis of Tyler to link to that story on NY Times weird words. I would not have expected it given his tendencies to louche solipsism, but then I remembered that his saturnine fecklessness outweighed those tendencies.

Ed Glaeser was running all over the place a few years ago declaring to one and all that the Texas story was all about their loose land use restrictions. However, it does seem that there is more to it than just that. It should also be kept in mind that the collapse of a primarily Texas-based commercial real estate bubble in 1986 when the price of oil plunged is what set off the infamous S&L debacle.

4 Marty April 9, 2010 at 10:55 am

Could be a combination of all the little things are disincentives to the worst predators. They migrate to where it is perceptively easier to operate so the result is different.

5 John Thacker April 9, 2010 at 12:02 pm

The lack of restrictions on growth encourage construction, correct? So shouldn’t that lead to more malinvestment?

No, because the permitting process is also shorter. Where the permitting process takes years, that means you have to apply for a permit when the market is booming but you might not get to build until the crash. That makes for more malinvestment than when there’s a short turnaround time.

The papers of Ed Glaeser are useful on this topic, of course.

6 libert April 9, 2010 at 1:25 pm

John Thacker said, “No, because the permitting process is also shorter. Where the permitting process takes years, that means you have to apply for a permit when the market is booming but you might not get to build until the crash. That makes for more malinvestment than when there’s a short turnaround time.”

But when the permitting process takes years, then you are likely to finish the process after the bubble bursts. At that point, you will cancel the project because it is no longer economically viable (I’ve seen many instances of this), preventing malinvestment from taking place. Similarly, shorter turn-around times mean that you’re more likely to get your investment in quickly, before the market becomes sane again and prices reveal that it’s actually a bad idea.

On the contrary, I think the shorter turn around times actually exacerbate the problem of malinvestment.

7 Grant April 9, 2010 at 4:42 pm
8 jorod April 9, 2010 at 9:26 pm

How many banks are in Texas?? What is the average size of a Texas bank? Didn’t a lot of banks close in Texas in the 1980s? The more banks there are, the less market share each one has. The harder it is to make a profit. More banks reaching for income may not be able to attract enough good borrowers to achieve profitability. Therefore, they make more speculative loans and take on more risk to “earn” more income.

9 threshold April 10, 2010 at 2:04 pm

See, this is why Americans are leaving California and moving to Texas.

10 Sal Paradise April 11, 2010 at 7:27 pm

Much better than the actual study of the count changing is the discussion about why:
http://www.insidethebook.com/ee/index.php/site/article/the_umpires_strike_zone_by_count/

You would probably enjoy that more (is it fair? is it unfair? how should umpires be calling the close ones?)

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