Month: September 2009

Arlington vs. Tysons Corner

As I had expected, I could do the whole walk on little more than one street, Clarendon Blvd. (it is called Wilson going the other way), with but a bend at Fairfax Drive.  I never had to cross a major road, run across a road, come near a major highway, or circumnavigate a major shopping center.  The main artery was straight enough to be followed by a single line Metro line throughout.  I was never more than seven or eight minutes from a Metro stop, if that.  And if I had done this walk thirty years ago, while the buildings and shops would have been very different, and many fewer, the physical geography of the walk would have been the same.

In contrast look at Tysons Corner (you have to type in "Tysons Corner" yourself).  The whole area is carved up by major roads, including three significant highways, one of which could be called massive.  Try crossing Rt. 123 at Tysons Corner or try crossing Rt.7.  Even some of the "small" roads on this map are harder to cross than is the main Clarendon/Wilson thruway in Arlington.  It's not just the roads and the overpasses; crossing or circumventing either major shopping center is a daunting experience.  Furthermore very little is laid out in a line and thus the presence of Metro stops (right now there aren't any) would not cover the area nearly as well as they do in central Arlington.  Tysons is more like a large box with distant extremities protruding, all laid on top of some multi-level and impassable thick bones.  Overall there is plenty of this, except it's usually much busier.  There's also plenty of this.  Making Tysons denser in residential terms, whatever its virtues, won't eliminate those barriers and in some ways the current plan will make them worse.

In contrast here's what Google images pulls up on Clarendon Boulevard.

Now let's turn to the debate.  When Ryan Avent writes: "Tyler seems to approve of the fact that a local planning board will dictate the size of buildings which can be built [at Tysons]" I would offer a different narrative of what I believe, also citing my comment on Matt's blog.

"We made past mistakes, we won't institute congestion pricing or other congestion ameliorations, local government is a cesspool of rent-seekers and homeowners, and so we're stuck for the foreseeable future, on top of which the public choice critique means that even apparently sensible deregulatory pro-density plans will in practice be turned into additional subsidies for suburban growth, the latter observation in fact being derived from a broader point frequently offered up by Matt Yglesias in a variety of other contexts.

Believing the above paragraph is not well described as "favoring regulation and subsidy."  I think it is also a deeper understanding than:

"Let us build more densely in the most congested areas and it will work out for the better, even though road policy is terrible and lobbyists will de facto control all plans."

For many years privatizers and deregulators have been criticized for moving too quickly, before the right conditions for reform are in place.  China has been praised over Russia, etc.  Some privatization and deregulations have indeed backfired and maybe this one would too, unless it is done properly and that means done in conjunction with good roads policies.

That all said, I do in fact favor denser development at Tysons, even without road reform, though not without limits.  In the big proposed plan, I'm most of all opposed to broader roads (I'll explain why this is a coherent position some other time but the "average cost equalization" property of transport equilibria can generate such apparently counterintuitive recommendations.)

Random points: Crystal City tried residential density and it didn't work nearly as well as Arlington.  It's a dead zone.  The earlier attempted dense development of Skyline Drive also stalled and was beaten out by Tysons.  Or look at the new (and failing?) complexes on Rt.29 and Gallows Rd. and Strawberry.  In 1989 I moved into a tall apartment building, right at Tysons, which had stores on the ground floor so residents would not have to drive to shop.  I was delighted but within six months all those shops had closed for lack of interest.  At the risk of sounding like Gustav Schmoller, each case really is different, just as Tysons is different from Arlington.

Matt Yglesias wrote:

…why on earth isn’t the libertarian take on this that we should permit high density construction and let the market decide what happens?

When it comes to the current Tysons plan, it is not "the market deciding."  It is a mega-plan with road widening, the bane of progressive pro-environment, pro-urban advocates, and also massive subsidies for growth and not just density of growth.  More generally, when road policy is so politicized, it is never the market deciding in any case. 

Call me odd, but I'm not opposed to urban (or suburban) planning and in fact anyone who recognizes the ongoing existence of public roads has to end up in the same place.  I might add that postwar Germany did a good job of such planning.  Tysons Corner is not, right now, doing a good job of it.  You can believe that whether or not you're a libertarian.

Addendum: In closing, let me toss out a random, radical idea.  How about putting up some high-density housing in the vastly underused, nearby residential section of Pimmit Hills and putting in shops and office buildings and the like as well?  Why obsess over reforming Tysons per se?  Might the answer be to, in some way, work around the Tysons mess and along some margins outcompete it?  After all, that's what they ended up doing with Seven Corners.

I may soon consider a few other of my favorite parts of NoVa.

Addendum: Here is a reply from Ryan Avent.

What do children remember from a museum?

There is a new study and here is the central result:

Gross's team said the results "demonstrated that children learned and
remembered an extraordinary amount of information about a school trip
to a museum" even after a lengthy delay. The findings also showed that
giving the children the opportunity to draw, significantly increased
the amount of accurate information they recalled. This is consistent
with previous, forensically motivated research showing that drawing
facilitates children's verbal reports of their experiences.

These same children do poorly in recollecting information about the museum on a comprehension test designed by adults.  In another words, what children learn from the museum is not in general what the adults are inclined to test them on or what the adults think they should be learning.  The funny thing, I think, is that they consider this a study of children rather than of human beings.

The children were brought to the Royal Albatross Centre in Dunedin, New Zealand.  Here are six (presumably) adult reviews of the Centre.

Facts about Japanese health care, and *The Healing of America*

The Japanese are the world's most prodigious consumers of health care.  The average Japanese visits a doctor about 14.5 times per year — three times as often as the U.S. average, and twice as often as any nation in Europe…The Japanese love medical technology; they get twice as many CAT scans per capita as Americans do and three times as many MRI scans.  Japan has twice as many hospital beds per capita as the United States, and people use them.  The average hospital stay in Japan is thirty-six nights, compared to six nights in the United States…Japan lags, though, in terms of invasive surgery; Japanese patients are much less apt than Americans to have operations such as arthroplasty, transplant, or heart bypass.  This is partly economics — since the fees for surgery are low, doctors don't recommend it as often — and partly cultural.  As a rule, Japanese doctors and patients prefer drugs to cutting the body.  On a per-capita basis, the Japanese take about twice as many prescription drugs as Americans do.

Japan, by the way, has invented a smaller and more basic MRI machine, which costs about one-tenth of the cost of the machines used in the United States.  

That is all from T.R. Reid's The Healing of America: A Global Quest for Better, Cheaper, and Fairer Health Care.  I thought this book was very readable, very interesting, and has very good information about different health care systems around the world.  The author is extremely critical of the U.S. system; the premise of his book is that he takes his shoulder injury to doctors in many different countries.  Since not much can be done for the shoulder, the expensive and complicated U.S. system doesn't come off looking very good.  Not everyone will agree with the author's perspective but overall I recommend this book.

Two Million Books Printable on Demand


Two million out-of-copyright books that have been scanned by Google could come back into limited printed form after the search giant signed a deal with On Demand Books, the company that makes the Espresso Book Machine – a custom book printer able to produce a bound one-off 300-page paperback, with a full-colour cover, in about five minutes.

From the comments, and a bleg for Baucus information

This is from Bill:

I am worried that the insurance companies will dump bad risks in the
public pool. They can do this by designing plans that have no value to
sick people, the way the do for Medicare Advantage programs. Here's how
you do it: have a high sticker price, but offer discounts for the use
of a gym or health club. (Non-ambulatory need not apply). Or, offer
special benefits to new mothers and well baby programs (over 50 persons
need not apply–unless you're pregnant)

I've been worrying about that for a while and of course there are many more dimensions of quality competition beyond what Bill mentions.  It's possible I don't understand the plan well enough and this isn't a real risk.  If so, I'd like someone to explain it all to me.  (Here is a related post by Matt.)  But as it stands I've soaked up all the lessons about how private insurers want to dump the high-risk individuals.  Under the reform, if you can't ever cut them off or "resciss" them (is that the verb?), won't you try much harder to avoid them in the first place?  Is there some provision in the bill which actually prevents this by regulating quality competition in just the right way?  Given that heterogeneous consumers, and employers, choose across plans on the basis of what they want, is such regulation even possible?  Right now I'm still worried.  Oddly, this is perhaps less of a problem in the states with more concentrated insurance markets.

Of course if there is no public plan these people end up somewhere in the private sector, they just are treated very badly in terms of quality of service.  Which makes the mandate an even less good deal for many of them.

Sputum markets in everything

South African saliva:

South Africans in an impoverished township are profiting from an illegal trade in a precious new currency †‘ saliva.

sufferers in Khayelitsha, Cape Town, were found to be selling samples
of their sputum to healthy people to pass off as their own in a scam to
gain medical grants.

An investigation by the West Cape News
identified people with TB charging R50-100 (£4.10-£8.20) for saliva
samples contained in bottles stolen from health clinics.

paper said that buyers of the samples were then able to get a card from
a clinic indicating they have TB and use this to fraudulently obtain a
temporary disability grant of R1,010 per month from the department of
social development.

It seems to be a competitive market:

A 54-year-old man told a reporter that he makes an average of R500 per
month from selling his saliva to people seeking to trick their way on
to the benefits system. But he said business was "not good" because so
many people were infected with TB in the township that he had a lot of

I thank Jonathan Thomas for the pointer.

Assessing the cost of the Baucus bill

I haven't read it, but I've read various people summarizing it.  A few observations:

1. CBO scoring is a very useful institution, for purposes of fiscal discipline, but you shouldn't confuse it with true cost estimates.  Often a negative CBO score isn't as bad as it sounds and a positive CBO score isn't as good as it sounds.  The deadweight cost of taxation matters, and we should fear future government insolvency, but at the margin a revenue transfer is simply that — a revenue transfer and not a social cost per se.

For instance a "cheaper" bill often just means that the insurance mandate carries a higher implicit tax.  For some families — I believe in the range of 60,000 for a family of four — the mandate will consume 13% of income as it currently stands.  That's a big tax increase — yes I will call it that — and it's not on the super-rich. 

2. The main benefit of the bill is greater financial security, vis-a-vis health care expenditures, for many U.S. households.  This doesn't show up as a benefit in standard estimates of gross revenue flows.

3. The bill will, over time, create a economic and political dynamic that turns health insurance companies into regulated public utilities.  You might think this is good or bad, but its one of the most important changes.

4. I fear what else might end up jammed into the required insurance policy.  The political dynamic here has not been thought through very well and this will be important for the long-run fiscal impact.

5. Ezra Klein discusses some harmful employment disincentives in the current bill.

6. The Baucus bill, and some of its cousins, is a bit like cap and trade in the sense that it postpones a lot of the expenditure-cutting pain into the future.  If Obama — a relatively popular President with a Democratic Congress — can't do it now why should we think we will find fiscal discipline in the future?  With revisions this problem is likely to become worseThe proposed pilot programs for cutting costs I view as postponements of tough decisions, not impressive starts on the problem which will be pursued scientifically.

7. How will the mandate evolve if income
inequality increases?  What if, in a distant future, "roughly equal
health care access" means the mandate consumes forty percent of middle
class income and thus proves unworkable?  What here is the "morally
objective" account of the medical needs of the poor and what here is
the "historically and socially conditioned account" of the medical
needs of the poor?  Or do we stick at rough health services equality by squishing, taxing,
or otherwise limiting the gold-plated plans?  Is that move politically sustainable
as a revenue source?

8. Let's say the previously uninsured do start getting more and better care.  Soon we will need to think very hard about increasing the supply elasticity of doctors.  This is an under-reported angle, but once the plan is in full swing the difficulty of getting to see a good doctor will be a story.

9. My best guess is that the Baucus bill will cement a dysfunctional health care system into place at the provider level.  Of course it is reasonable to believe we wouldn't have scrapped our dysfunctional system in any case, but still the case for the bill blends into the case for many aspects of the status quo more than many bill advocates would like.

An alternative view, and a view I do not dismiss, is that the Baucus bill will lead the U.S. to abandon fee-for-service medicine at many margins.  If true (and at the very least this is true probabilistically), this may be the most important long-run effect of the bill, for better or worse.  Also note that we get to these changes, most likely, only by bringing the program to the brink of fiscal collapse.

If you are evaluating the bill, think rigorously about the future scenario for health care as a whole.  Choose your probabilities and match them to an assessment of each outcome (cement in dysfunctional system, overturn dysfunctional system with something possibly better or possibly worse).  Don't in your mind mix and match mutually exclusive outcomes to either a) feel better about the bill or b) villainize the bill.

Leland Yeager on Say’s Law

In a post titled, Friends Don’t Let Friends Mix Say’s Law with Money, David Beckworth of Macro and other Musings quotes the great Leland Yeager:

Say’s law, or a crude version of it, rules out general overproduction: an excess supply of some things in relation to the demand for them necessarily constitutes an excess demand for some other things in relation to their supply…

The catch is this: while an excess supply of some things necessarily mean an excess demand for others, those other things may, unhappily, be money. If so, depression in some industries no longer entails boom in others…

[T]the quantity of money people desire to hold does not always just equal the quantity they possess. Equality of the two is an equilibrium condition, not an identity. Only in… monetary equilibrium are they equal. Only then are the total value of goods and labor supplied and demanded equal, so that a deficient demand for some kinds entails and excess demand for others.

Say’s law overlooks monetary disequilibrium. If people on the whole are trying to add more money to their total cash balances than is being added to the total money stock (or are trying to maintain their cash balances when the money stock is shrinking), they are trying to sell more goods and labor than are being bought. If people on the whole are unwilling to add as much money to their total cash balances as is being added to the total money stock (or are trying to reduce their cash balances when the money stock is not shrinking), they are trying to buy more goods and labor than are being offered.

The most striking characteristic of depression is not overproduction of some things and underproduction of others, but rather, a general “buyers’ market,” in which sellers have special trouble finding people willing to pay more for goods and labor. Even a slight depression shows itself in the price and output statistics of a wide range of consumer-goods and investment-goods industries. Clearly some very general imbalance must exist, involving the one thing–money–traded on all markets. In inflation, an opposite kind of monetary imbalance is even more obvious.

See David’s post if you don’t know the context.  David also has an excellent post on using MV=PY to understand current events.

Markets in everything

Occasionally I get jaded and think there won't be a surprising one of these ever again.  But then Allison Kasic comes along and restores my faith in the creativity of humankind.  Here goes:

Mountain climbers. Livestock guarders. Long-range spitters. And now
llamas have a new distinguishing role to add to their resume: golf
caddy. Yes, for $40 the llamas at Sherwood Forest Country Club
will carry your bags, accompany you on a nine-hole run, and maybe even
channel their peaceful temperament into quiet but unwavering moral

There is also a reason on the cost side:

Because of their soft, padded feet, llamas do not make marks on the
green and actually leave the courses with less damage than golf carts.

There is another reason given in the text, which I don't wish to reproduce here.  And it is possible to train them to do this work, or so it is claimed.  Finally:

“Some people have more fun walking the animals around than playing golf,” says Lautenschlager…

Addendum: Via John de Palma, more on llama markets.

Competition and Concentration in Health Insurance

Many people have bandied about numbers suggesting that the market for health insurance is highly concentrated.  Here is the President:

Consumers do better when there is choice and competition. Unfortunately, in 34 states, 75% of the insurance market is controlled by five or fewer companies. In Alabama, almost 90% is controlled by just one company….

But these statistics only include people insured by "insurance companies" even though nationally just over half of all employees get their health insurance from a firm that self-insures.  In other words, as John Lott points out, over half of the market for insurance is being left out of these concentration statistics.

Since about half of employees are insured by a self-insurer, concentration statistics–as typically presented –should be cut roughly in half (precise numbers vary by state).  Firms that self-insure typically outsource benefits management and claim
administration to highly competitive third party administrators.  A key fact according to this paper (which is outdated although I wouldn't expect the basic finding to have changed) is that the populations served, the benefits paid and the premiums paid are about the same for firms that self-insure and firms that buy insurance from a health insurance company.  Thus, concentration among that part of the market served by health insurance firms appears to be well disciplined by the larger market for self-insurance.

What’s the chance the financial crisis was welfare-improving?

The price of corn, for example, is down 56 percent since July 2008 on the Chicago Board of Trade.

Here is more.  I don't in fact think that the financial crisis has improved global welfare.  But we are trained to think probabilistically.  What is the chance that the gains from lower commodity prices — most of all for poor people who buy food — outweigh the losses from the collapse of world trade and lower overall growth?

Just wondering.

Addendum: Here are some related queries.

Is the plan to rework Tysons Corner collapsing?

Maybe so:

Fairfax County planners on Wednesday will propose rules for builders in Tysons Corner that retreat from the vision
local officials approved last fall, a shift some civic leaders worry
will jeopardize the blueprint to remake the area into a walkable urban

It seems the eight "mini-cities" are on the way out.  Why?  The area's Revolutionary War era roads can't handle too much additional population density:

Zook and his staff have concluded that the density of what the task
force envisions could be built when Tysons is fully redeveloped in
about 40 years would overwhelm traffic. [TC: Forget about 40 years, it's close to that point right now for about four hours each day.]  Planners say that would be
about five times the 44 million square feet of offices, malls, condos
and townhouses there now. Before developers can build high-rises, even
near the Metrorail stations, planners say, the area's already clogged
road network will need to expand to accommodate the extra development
because many of the new residents and office workers will drive. That
would require three new interchanges on the Dulles Toll Road; another
lane on the Beltway between Interstate 66 and Route 7, in addition to
the high-occupancy toll lanes now under construction; and wider lanes
on other local roads.

That is, in a nutshell, why Fairfax County cannot and will not become like central Arlington in the Ballston and Clarendon areas.  Recall that some time ago Tysons Corner was ranked as #4 in office space in the entire U.S., if it were to be counted as a city.  Many Fairfax County residents look upon Arlington as a quaint experiment, a kind of well-laid out duck pond in somebody's backyard, but not a model for the broader suburban area.  The walkable part of Arlington is quite small compared to Tysons Corner (by the way I used to live at Tysons and also have spent time walking it) and density in central Arlington doesn't threaten to crush much of anything.

So the result at Tysons likely will be a bigger edge city with broader roads and more difficult illegal U-Turns.  As one local rent-seeker put it:

"We're not like downtown D.C., where you walk three blocks and there's
another Metro station," said Rob Jackson, president of the McLean
Citizens Association.

Rent-seeker he may be, but he's right to suggest that a much denser Tysons — no matter how well done — will overwhelm the local support roads of Vienna and McLean.  The bottom line is that path dependence is a very strong force in all these comparisons.

Books on duct tape

Duct tape is possibly the most useful single object in the entire
world outside of the wheel and Swiss army knives. Joe Wilson, a modern
design visionary if ever there was one, shows us how to rip, cut and
fold duct tape to make 18 amazing projects, including a wallet, a
barbecue apron, a lunchbox, a tool belt, a cell phone holder, a
baseball cap, rain gear for pets, a toilet roll cover and Halloween

We all need a lunch box constructed from duct tape.
If NASA insists that every Space Shuttle mission carries at least one
roll of duct tape then you need this book to satisfy your creative
urges. Buy Ductigami: The Art of the Tape – make something wonderful and gray.

The link is here and I thank Michelle Dawson for the pointer, which is in turn via this link on weird books.  There you will also find a discussion of Dale Power's controversial Do-it-Yourself Coffins for Pets and People (check out the Amazon reader reviews) and other notable titles.