EconTalk with Russ Roberts on *Average is Over*

You will find the podcast and text here, and Russ is as always an excellent interviewer.  Excerpt:

TC: And I think 50 years from now we’ll look back on that and be shocked at the notion that so many poor people got to live in Manhattan, Los Angeles, wherever we are talking about. Because in the future they will be in other places with lower rents.

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'Because in the future they will be in other places with lower rents.'

And to think, in the past of our own lifetimes, those were places with lower rents.

'In the 1940s through the 1970s, the Bowery was New York City's "Skid Row," notable for "Bowery Bums" (disaffiliated alcoholics and homeless persons).[19] Among those who wrote about Bowery personalities was New Yorker staff member Joseph Mitchell (writer) (1908–1996). Aside from cheap clothing stores that catered to the derelict and down-and-out population of men, commercial activity along the Bowery became specialized in used restaurant supplies and lighting fixtures.' http://en.wikipedia.org/wiki/Bowery#Slide_from_respectability

Of course, LA still has Skid Row, the West's version of the Bowery, which was the East's version of Skid Row.

If this is supposed to be a bet on gentrification, then the places to look for future higher rents are those places which have low rents right now (and possibly used to have much higher rents a couple of generations or so in the past). Of course, it is far too late to make a DC real estate killing in North Capitol or Mt. Pleasant. And the place to look for the poor will live? Where the recently well off are right living now - Clarendon and Virginia Square come to mind as places to bet on in a generation or two.

Kann's was a pretty dilapidated department store surrounded by a lot of fairly vacant space and car dealers when I was a kid, and I don't believe that Landmark Mall is actually all that much better these days. ( 'Plans were announced in 2008 to revitalize the mall by converting it to an open-air "town center" shopping center by the owner, General Growth Properties. [4] Those plans were put on hold with General Growth's bankruptcy filing in April 2009; the mall itself filed for bankruptcy at the same time.[5]

Lord & Taylor announced on May 29, 2009, that it would be closing its store at the mall.[6]

As of early 2013, whole wings of the mall stand largely unoccupied and only two anchors remain (Sears and Macy's). The old Lord & Taylor spot also remains unoccupied as does its parking garage.' http://en.wikipedia.org/wiki/Landmark_Mall )

By this logic Detroit is ripe for land speculation. Was once rich a few generations ago, is now poor.

It is currently undergoing this sort of speculation. It's just a lot slower because of the "Michigan is not in the sunbelt" problem.

"Of course, it is far too late to make a DC real estate killing in North Capitol or Mt. Pleasant. And the place to look for the poor will live? Where the recently well off are right living now – Clarendon and Virginia Square come to mind as places to bet on in a generation or two."

Indeed a lot of poor people previously living in DC proper are now living in the close-in Maryland suburbs. The upper middle class has moved from the close-in suburbs to the exurbs, with the exception of the few urbanized close-in suburbs (gentrified Silver Spring and Bethesda). It should be noted that DC gentrification has not made it to the center of NorthEast DC, but I suspect it will return to there in the next economic good times. And of course many of the poor live in Anacostia, but I suspect that geographic limitations of the Anacostia river and the beltway will limit gentrification there.

That presumes a future with a star trek transporter providing free daily service between rural Kentucky hills to NYC for the low wage office cleaners, gardeners, garbage collectors, food preps, wait staff, drug dealers and street walkers.

More likely that future would have all the poor massed in NYC while the billionaires would own 99% of Kentucky, 70% of Hawaii, 99% of Utah, Colorado, the coast of Maine, etc and commute daily at $5000 a trip several times a day between their mansions and NYC for working breakfast, power meeting, charity event, TV interview, and a broadway or London show.

You can not wave just one hand when trying to define what drives the economy. Two hands are required to define the pace, production and consumption. You can not have an NYC capitalist consuming low wage services provided by low wage workers living in Alabama. The NYC capitalist needs to pay high wages to service workers in NYC if he is charging high rents to those service workers he depends on.

On the other hand, if the wealthy are spread out all over, they can't expect to find easy access to a variety of the arts or a variety of the sciences and engineering services.

And if the Internet eliminates the need for meeting people face to face in groups of 2 to 100, then why do the richest people keep showing up at big gatherings of rich people being waited on by low wage workers? Why aren't 50 of the richest 100 people who never leave their own properties, doing all deals over the Internet from their vacation homes in Hawaii, yacht out of Maine, Spain, ....

What are you babbling on about? We're already seeing poors getting pushed out of urban centers. Obviously if somebody's going to have to spend substantial time commuting every day, it's going to be the person whose time is less valuable - i.e. the low wage janitor types. Half of your post appears to be unwittingly arguing against the other half, but mostly it just seems like inchoate rage.

Not really. What you really have is the poor being replaced by the poor. Namely poor blacks being replaced by poor Hispanic service workers and poor young whites who have little personal income and wealth and struggle or consume their parents' savings and wealth to afford to live in urban centers.

Not really. What you really have is the poor being replaced by the poor. Namely, poor blacks being replaced by poor Hispanic service workers and poor young whites who have little personal income and wealth and struggle or consume their parents' savings and wealth to afford to live in urban centers.

Holy cow, I agree with mike here!

Also note that the well-educated service workers, the attractive people with liberal arts degrees pulling lattes at Starbucks, live in roommate situations and couch-surf. The not-yet-in knowledge workers press the limits of micro studios.

Its the less visible people, the janitors and burger king workers, who have to ride in three buses.

Perhaps we will see a return to company-provided housing for janitors and other service workers to live in dormitory-style housing.

This is where the favelas come in. The rich are certainly clustering and gentrifying close-in neighborhoods while selected Suburbs decay.

It fits.

"You will find the podcast and text here, and Russ is as always an excellent interviewer. " -right; NOT. I recall Roberts is terrible as an interviewer, due to his delivery. He may have taken a voice coach. Let me download the podcast and listen (the transcripts read fine, but they may have been edited). Hold on please.... OK, I concede. R. Roberts is really much better in his talking cadence than before. He also does not interrupt his guests like before. LOL TC interrupts Roberts more than Roberts interrupts TC. Roberts sounds more mellow, like he's on necessary meds. So TC is right about Roberts.

What you call interrupting I think I call interjecting which is important with academics and absolutely crucial with politicians.

It feels like our host totally missed the "Matrix" reference that Roberts gave him.

Manhattan has about half the population in 1/20 the land. One hell of a lot harder to push the poor out of LA

And I think 50 years from now we’ll look back on that and be shocked at the notion that so many poor people got to live in Manhattan, Los Angeles, wherever we are talking about

As it should be. You can not-work from anywhere.

But you can't access social services from anywhere. The very poor need to be concentrated to access "soup kitchens", shelters and the like.

And positive externalities. It would be interesting to know what scales with population density.

in Australia, it is already taken for granted that the poor can't afford the inner suburbs (which is where the poor lived a generation ago).

the process seems to be slower in the US, i think for demographic and administrative reasons

I wish we had mobile micro homes and people's cars but for dome reason those things don't take off like payday loan joints.

The basic trend at present is for wealthy liberal cities to push African-American U.S. citizens out. For example, Mayor Bloomberg's stop-and-frisk wasn't just about fighting crime, it was about harassing black and brown men into leaving New York City. Similar strategies are in place in D.C. and Chicago.

Isn't "liberal cities" redundant? With the exception of Salt Lake City, what big city in the US isn't liberal?

Will they stay that way?

Yes. It is easy to be liberal and concerned about the poor when you don't have to actually live with poor people. Gentrification accomplishes that nicely.

This is relevant. http://www.paloaltoonline.com/news/show_story.php?id=30521#.Uga4BbyErCY.twitter

What explains why they aren't in other places with lower rents now?

And where are all those nannies and servants and cooks going to live?

Various reactions to AIO.

How does complementarity with a computer make u non-average? Lots of laid off folks worked entirely with a computer.

Couldn't figure out the difference between the model loving physicists and the data loving economists. Unless one is not "science", it seems like two should be converging.

I think you pick your youbot through trial and error. You'd let a bunch of boys interview you to form a composite you. Then you'd have them interview other bots and have them pick the one that was most like you. It's what the bots think about you that matters.

The same conscientiousness that makes you a good worker also makes you likely to live longer according to recent research. If you're going to die young maybe you don't need to work as long to build up your retirement svings/pension.

Why is science not like chess, where learning can be accelerated by the proper play-based instruction? Where is Rhybka-math?

Why won't automation crack healthcare and Ed? Isn't it already starting to happen, lately including robo-anesthesiologists and cheap real time blood testing?

Tyler,

Great podcast, very enjoyable.

This 15/85 world you envision...

I'm just wondering what a Martian who came down 50 years ago would see on a global scale. 10/90? 5/95?

It seems like we put too much weight on a fleeting period of time within a handful of countries based on policies that were not long-term sustainable in a world of predominantly desperately poor people.

Based on this, would you think investing in residential real estate in major urban areas would be a smart move?

Games' advantage in teaching has very little to do with the fact that they are competitive, but because they provide large amounts of practical context that makes the information a whole lot easier to remember. For instance, I had a terrible time learning geography in school: Just tons and tons of data was thrown at kids, with nothing to really use it for, and no context. It becomes meaningless trivia, and only the people that are very good at meaningless trivia retained much at all. Many years later, I found a game called Hearts of Iron 3: a grand strategy game about world war ii. It's not going to teach anyone how to become a general, but success at the game relies, among other things, on knowledge of geography. Geography dictates why the historical French defense fails. It shows the difficulty of invading Russia. Setting up defenses just requires study and familiarity with European Geography. Anyone that plays a game like that for enough hours will not just be forced to learn European Geography in the short term, but will make it much easier to retain said knowledge, because the memory networks that a player builds are drastically more intricate than those of a kid just asked to memorize for a midterm.

It's all about making the knowledge valuable. You will learn about the stock market when you play Railroad Tycoon, and about the Caribbean and sailboats by playing Sid Meier's Pirates. But a kid playing pokemon will instead learn hundreds of creatures and thousands of abilities that have no practical purposes. So to teach economics, we'd need an engrossing simulation where actual knowledge of economics is practically useful.

For a good, simple example of this, you can just get the free gerrymandering game, easy to find on google. It uses actual practice to teach how much or how little one could manipulate election results by redistricting, and how different laws to regulate redistricting change the difficulty of any manipulation effort.

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