Yikes! No homes to sell

Northstar MLS

As you can see from the graph, the inventory of homes for sale in the Twin Cities had been fairly consistent until people emerged from the Covid lockdown and started buying last June. Now we are down 31.4% over last year. Buyers are buying but not enough sellers are bringing their homes to the market.

I speculate that some sellers are waiting until herd immunity as they are not comfortable interacting with the public. Some are being sold off market to Millennial children who are just now starting family formation. And some are being protected by stays which keep people in homes until after the crisis.

A hike, a lake, a monastery.

A hike up to the crater lake at Mount Zuqualla is a day trip from Addis Ababa. The drive out of the capital city and off the Ethiopian high plateau, down through the valley to the base of the extinct volcano can be done in less than a couple of hours. It is a bit of a climb up to the lake, and the road is rough. The verdure is thick right after the rainy season, and yellow flowers, similar to our tickseed, bloom throughout the countryside. Silhouetted on the ridge of the hill are oversized eucalyptus trees. They grow everywhere in the highlands and their fragrance is unmistakable.

The crater lake is not much to look at but the views back over the valley are spectacular. A 14th century monastery is visible off to the west, but we did not venture in its direction. I came across this post on twitter telling the story about how it was settled.

Taken from the Asian African studies blog at the British Museum

The British Museum has an extensive collection of Ethiopian manuscripts which are beautifully inscribed and illustrated. If you ever hear people complain that Christian art does not depict the stories of the bible in their image, send them to this resource. Ethiopians trace their Christian heritage back to King Solomon and the Queen of Sheba.

Choose your work location

Yesterday was the day for work-from-home articles, as Bloomberg also posted this excellent article by Sarah Holder, The True Costs of Working From Home. It’s full of great information and statistics. This, for example:

Between 2013 and 2017, households with at least one adult who worked from home spent more money on housing, on average, than ones that all worked outside of the house, the study found: Remote renters spent between 6.5 % and 7.4% more of their income a month, and homeowners who worked remotely had mortgage and property taxes that were 8.4% to 9.8% greater than non-remote households.

I didn’t appreciate that, pre-pandemic, remote workers were already spending almost ten percent more on housing. That’s quite a bit. On the other hand I’m surprised the percentage of people working from home in times of Covid isn’t higher.

The study is a snapshot of the pre-coronavirus world, when only about 3% of U.S. employees did their jobs from home. By February 2020, that number had swelled by some estimates to 8%. And by May, that share had exploded, with about 35% of U.S. workers who once commuted going remote. 

Still– that is about a third of the workforce. And it appears that staying in the neighborhood is popular amongst employees.

According to a Pew Research Center survey, more than half of workers who can do their jobs remotely say they will want to continue doing so after the pandemic ends. A December survey from Upwork predicted that 27% of workers in the U.S. would still be largely remote by the end of 2021.

The freedom of WFH allows people to move to new communities if they so choose. Perhaps drawn by less expensive housing, or a host of other possible benefits. A U-Haul study shows that coastal people tend to move to other states near the coasts. This article offers another view.

But sticking closer to home may be the favored path for many, especially if companies ask for some face-time each month. A San Francisco Chronicle analysis of USPS moving data showed that the majority of San Franciscans who left the city during the pandemic moved not to Florida or Texas, but to another Northern California county; a Zumper report that analyzed national rent shifts found a similar story, with “cheaper, neighboring cities” appearing to be the 2020 destinations. 

I think it’s too soon to tell how household priorities will all shake out. There are options out there that people have yet to consider. If moving half way across the country is possible, why not another continent? Croatia is just one country trying to leverage the remote work concept by offering a Digital Nomad Visa.

There are many costs and benefits to living in various communities, and the reshuffling of tradeoffs will be different for each household. Businesses also may find the transition to remote work a cost savings at first, but then an expense as it is more difficult to recruit and train a corporate culture from afar. Though as a general rule, more choices for both employers and employees are a good thing.

Work in the neighborhood

The pandemic will reshape our lives for years to come. One lesson learned is that company centric office space is not essential to many forms of employment. This creates inroads to the reality of paid work from home. And the benefits for families to staying in the neighborhood, close to daycare and schools and extra-curricular activities, will make it a convenient option for many employees.

When people started to re-emerge from their homes last spring, at the beginning of what ended as a boom year in real estate, we heard a lot of buyers expressing the desire for home offices. Once children return to a traditional schedule in daycare or school, the home environment will be even more ideal.

There are other options for remote work. WeWork, a US real estate company, has provided office space with shared amenities since 2010. It’s success has been muddied by an outrageous leader and a lack of market confidence in its business model. Recently its co-founder has been embroiled in a law suit with SoftBank. Sensing blood in the water, an international competitor, IWG (International Workplace Group), has made moves on WeWork’s holdings in Hong Kong.

For the third time in less than a year, IWG has opened flexible offices under the Signature brand in a Hong Kong space formerly occupied by embattled rival WeWork.

IWG is based out of Switzerland and provides space in 120 countries. Their focus is on catering to a particular environment with supportive services, access to networks while connecting companies to locations at close proximity to their clients.

Perhaps this flexible model office space is an even better fit in densely populated cities like Hong Kong. Here the average home is 484 sqft limiting space for home offices. The average American lives in a 2164 sqft. dwelling which, in comparison, sounds generous with ample room for work. Yet everything is relative. City dwellers will settle for a 1800 sqft craftsman bungalow while suburban buyers desire a full two story with double the footage and a three car garage.

Whether through a work-from-home setup, or a flexible workspace nearby, households with children will benefit by having at least one adult in the neighborhood. Being available on-demand for children is part of the deal: when daycare calls to pick-up a toddler running a fever, or there’s the school science fair to attend, or little league practice starts at 4pm. Since juggling those demands around commute times is stressful, being close to home is a social benefit employers can provide at no pecuniary cost.

Standards

I recently listened in on a presentation which was given by a respected academic to a political body. The topic is one that I know well and over decades have heard many arguments hugging all sides of the issue. I was dumbstruck by how fluidly the professor’s language navigated between academically supported information and his own opinions. Isn’t there a standard of disclosure for such things?

For instance, he would start with results from a study but then list projections which his team conjectured– as if lives could be lived twice and records kept accordingly. One politician asked specially about these projections, and there was an apology for the omission of the model, yet his dialogue kept flowing as if these figures were generated with the same standards as the peer reviewed papers.

For the average listener, including the folks who will make policy for tens of thousands of people, the distinction between actual data and estimates was muted if not eliminated. The professor’s tone, consistency, and manner of referring to the material did not distinguish between research and conjecture.

The inference of receiving information from an academic, particularly those who have cultivated a long CRV and a number of titles, is that they are communicating academically supported material. Anyone with limited knowledge of the topic will not be able to detect when the information is in fact a subjective opinion. Instead of aiding the pubic conversation around a topic professors become arms dealers for divisive public discourse.

Lessons from airports

To say I grew up in airports is a bit of an exaggeration, but only slightly. International travel in the 60’s was still rather new and exotic and susceptible to schedule changes. Long layovers to coordinate connections were common, and delays due to weather or mechanical issues were even more common. My parents were adventuresome and thought nothing of towing three young children around with them. In the photo, my brothers and I are cooperating dutifully on the luggage cart at the Colombo airport having arrived from Dhaka for a little R&R.

The vintage “where in the world” posts are from trips we took while stationed overseas with the US Diplomatic Corps. Even by foreign service standards we moved a lot, fulfilling only one DC assignment which lasted less than three years. The school years spent on Chesapeake Street between Reno Road and Connecticut were idyllic, only blocks from Murch Elementary.

On the weekends we would go for hikes off the scenic Skyline Drive or ride our Shetland ponies on an acreage in West Virginia. But this tame American experience couldn’t match hiking the terraced tea gardens of Malaysia or climbing up to the crater lake at Mount Zuqualla or even the rather urban stroll up to Victoria Peak in Hong Kong. The whole family was eager to take back to the skies. I didn’t return to live in the US until college.

With so much time on our hands at Heathrow or Narita or Charles de Gaulle my brothers and I would play games eavesdropping and then betting on the nationalities of our chosen observation subjects. Of course there was language to give us some guidance, but also mannerisms and apparel. If we were lucky they would pull out their passports to allow us to settle our bets.

Fifty years ago, as pre-covid, airports were busy places with passengers rushing anxiously to catch flights. Perhaps forgotten now, is that by 1972 a total of 150 US planes had been hijacked. Commandeering aircraft was in a golden age. Airport security was considerable. I remember the Rome airport in particular crawling with camo clad soldiers, each carrying an assault rifle. The true power, however, was held by the typically slender uniform behind the passport control counter. He (usually, but sometimes she) could question or detain you. Have your luggage searched.

The approach was straightforward. Only answer the questions when asked. Don’t offer additional information. Do nothing that could antagonize the one person who could delay your travel. I still think of these very prompts when I travel abroad.

Chauvin Trial Update

The Derek Chauvin trial starts two weeks from today, and from all the prep that is going on, it appears that folks are nervous. Concrete dividers, fencing and barb wire have joined plywood at the entrance doors of the Hennepin County Government Center building in downtown Minneapolis.

For those readers who were busy in a blow pipe making class in PNG last summer, Derek Chauvin is the former Minneapolis police officer who held his knee on George Floyd’s neck for eight minutes. With his face inches from the pavement, Floyd expressed concerns about not being able to breath before he died in police custody. This happened on a Tuesday. Protests were in full gear by Wednesday evening. Riots led to the burning of a police precinct Thursday. It wasn’t until Saturday evening that the National Guard, in full combat gear, patrolled the streets with pellets guns to keep them clear for the curfew. Black smoke from Batteries Plus and other commercial spaces hung over the Lake Street section of South Minneapolis through Sunday morning. Protestors burned or damaged upwards of 700 buildings, housing many minority owned businesses as well as national chains.

Estimates are that the Minneapolis Police Department has lost 200 of its 600 police officers to disability claims and early retirements since last year. The city council continues to hammer on the department, denying funding requests while attempting to shift responsibilities from the police department to social workers. This strategy is not garnering a lot of support outside the city limits.

In an unusual move, the speaker of the Minnesota house, Melissa Hortman (D-Brooklyn Park), brought a bill to the floor of the (DFL majority) house which, apparently, had not been vetted for votes. The governor’s proposal to create a statewide fund intended to pay for security during the trial failed as a handful of democrats voted with the GOP. It appears there is a shuffling up of groups, as who do or do not support Minneapolis’ move to reimagine public safety, and they are not all falling along party lines.

The Minnesota House rejected a bill Thursday that seeks to create a state fund to reimburse police departments from outside Minneapolis if they’re called in to help prevent civil unrest around the upcoming trial of Derek Chauvin.

Security funding plan for Chauvin trial fails in Minnesota House | MPR News

One comment that was made was that outstate Minnesotans aren’t necessarily as supportive of the MPD, as they are appalled at how the police have been treated. There is a difference. The media, however, is cradling protestors sympathetically, as in this recent headline in the Minneapolis Star and Tribune. (Hollywood ready little girl in his arms et all)

The trial will be televised, but it seems like the drama already has its verdict. Just in case, there will be a lot of manpower on the ground to keep the peace.

Suburban sprawl in the time of Jesus of Nazareth

The majority of the Greek Jews lived in the new section of the city which had sprung up on Mount Scopus outside the ancient walls, opposite the Sheep Gate. Accustomed to spacious houses, with gardens and colonnades, they could not find room in the old, crowded sections. The house of Miriam, sister of bar Naba, built in the Cypriot style, resembled a Greek temple; behind it was a garden, enclosed in a peristyle, and here she arranged frequent banquets for the leaders of the Greek-Jewish community of Jerusalem.

The Apostle by Sholem Asch

Try something new

The drum beating earlier in the week about cancelling student loan debt was abruptly muffled by the president. In response to Chuck Schumer (D-N.Y.) and Elizabeth Warren’s (D-Mass) proposal to forgive up to $50,000 in student loans:

“I will not make that happen,” Biden said when asked at a Milwaukee town hall hosted by CNN Tuesday night if he would take executive action on loan forgiveness beyond the $10,000 his administration has already proposed.

Biden Balks At $50,000 Student Loan Debt Forgiveness Proposal | HuffPost

Some people think student loan forgiveness falls into a moral category. Society has an obligation to advance citizens through education; that college is an extension of the k-12 necessity to set a youth up for a productive life. The debt should be waived on principle. Of course this gets a little messy post grade twelve, as vocational choices, and the education they require, vary tremendously. And for this reason I think free college will always be a non-starter.

But why waste good numbers when they are out there for consumption? The debt figures can be, and should be, put to good use. When aggregated up to the federal level they loose some nuance. But at the local level it maybe possible pull some levers and leverage a few social objectives at a time. The results maybe more interesting than a simple money transfer.

Case 1. Say there were two objectives on the table: student loan debt and career advancement. One would look for organizations at this intersection. There are hundreds of business associations in Minnesota. Local Chambers of Commerce might be first to mind, but there is the Iron Mining Association or the Minnesota’s Corn Growers Association or even local PTA’s. Say an association was given access to a pool of federal funds marked for student debt relief, with a catch. There is a trade involved. Once the Mining association, or corn growers, show proof of employment of a new-to-the-profession worker (for at least x-amount of time), then they can allocate relief to the student they deem eligible.

It’s a community grant (given to an individual) in exchange for making an effort to lift a worker up and into a new stage of professional development. Many of these associations have a history of giving out scholarships, and a process in place for evaluation. They are well regarded in their communities and have a reputation to protect in the administration of debt forgiveness.

The relief recipient advances economically from the removal of the debt. The business community can justify the extra work or training necessary to bring an inexperienced employee into their field. The new employee hopefully evolves to see the rewards of elevated employment and not just feel the demands of the additional expectations in a challenging position. All those who step outside their norms to make this happen find comradery with others not like themselves.

Case 2. Here’s another example. Say an elementary school attendance area is experiencing a sharp downward trend in enrollment–and the demographics confirm the trend to be long term. The risk of school closure is high. Closing a building is not only expensive for a school district, but the loss to a neighborhood can be devastating. Short term it brings angst to the families who now send their young children to a building out of the neighborhood. Long-term it can be difficult to reverse the negative impact from the closure.

Say the federal government allocated a pool of student debt relief money to the elementary school’s attendance area. Now imagine that there is a household with young children who would qualify to purchase a home in the area if a portion of student loan debt was forgiven. The local PTA in conjunction with a local mortgage bankers’ association could be in charge of distribution. This scenario leverages three objectives: debt relief, school support and housing.

Local control over distribution of funds could refine distribution in a way which engages incentives to accomplish other objectives within communities.

NFT’s at Christie’s

The NFT’s (non-fungible tokens) are making news in the art world as auction house “Christie’s Will Become the First Auction House to Offer Non-Fungible Token Art.”

Last December, an artist who goes by the name “Beeple” made headlines when he set a new record for the most valuable artwork auctioned off Nifty Gateway, a marketplace for limited-edition digital items. Beeple sold 20 artworks for a total of over $3.5 million, catching the attention of those who might not previously have known about the existence of NFTs, or Non-Fungible Tokens. While just a few years ago blockchain-based art might have been considered niche, a recent development proves this is no longer the case: on Tuesday, Christie’s announced an upcoming auction featuring thousands of images created by Beeple that have been compiled into a single composition.

The actual art looks very much like regular art. And are trading amongst buyers and sellers at a nice clip. Bitcoin.com reports that in a week last August there were 14,654 sales and $1.2 million in weekly trade volume. This piece by Trevor Jones commanded a nice price.

So what about the NFT- or the non-fungible token notation.

Crypto art relies on non-fungible tokens, or NFTs, which are usually issued with an Ethereum token, ERC-721. This ensures verifiable digital scarcity; each artwork is a uniquely distinguishable digital asset—no two are the same. 

Crypto Art Sales on Ethereum Reach a Record $80 Million – Decrypt

At first glance it seems to be a certification of sorts, a blockchain version of an identifier to keep track of the art work’s provenance. An authentication certificate more than anything else. In the artworld the story of where a piece was produced and who has owned it since, is an integral part of preserving its authenticity. The token is attached to the piece and hence is non-fungible.

But something is missing from this conceptualization. Fungible has the quality of being able to be exchanged with other goods. The auction activity indicates a product that is very tradeable. Since these NFT’s are bought and sold freely, there seems to be a contradiction. Zoup at non-fungible.com tackles some of the issues.

zoup: I had several passionate debates during Meetups around the definition of non-fungibility. And I must confess… most of these debates turned out to be sterile but, they helped me understand something important: the definition of non-fungibility is everything but obvious.

Zoup explains that bitcoins are fungible in the same way that nickels, dimes, quarters are easily exchanged. A precious coin, however, is something different. To a collector a nickel that was mistruck during production can have significant value. To a collector the deformed nickel is non-fungible. And it is in this way the non-fungible tokens make digit art unique. Hence zoup comes to this conclusion:

It is therefore the use value that defines the fungible or non-fungible character of the asset. And not its technical characteristics. The main use of an asset and the perception that one can have of it define fundamentally if the asset is fungible or not.

Why most definitions of “non-fungible” are incorrect. – NonFungible.com

It is here that I propose a clarification needs to be made. The quality of being fungible, by definition, indicates an attachment to a group, as it is the group which determines its use.

Let’s try to disprove the idea and see what happens. The mistruck nickel is non-fungible when held within the collector group, it is precious, it has a unique story. To a kid who wants a coke on a hot day, the nickel is simply five pennies towards his purchase. He pops the coins into the slot on the side of the machine without another thought. He is using the coin as a fungible asset.

The quality of non-fungibility is attached to transactions that exist within groups. NFT’s find value in the crypt-investors sphere, but I doubt you would find much interest at the local VFW. Outside of this very specific group of people who understand the crypto space, the value goes to zero. I’ve written about fungible versus non-fungible transactions. I claim that when non-fungible assets are held within a group, they are a public good. All investors share equally in the assurance that the tokens represent a unique asset.

When a group assigns a use to an object- a park bench, for example, is open to the public in a park- then the bench is a non-fungible asset (it can’t be rented out or traded by any one individual) that is held by the group. When the crypto people decide to use tokens as identifiers, they’ve created a certification process that legitimizes an artwork by the community. And that is non-fungible.

I’ve said it before. It’s all about the group.

Numbers, pictures, and what they tell you.

I’m a sucker for images, and these new graphic representations at the intersection of maps and data are lovely.

A consulting firm out of North Carolina, Urban3, has a new measure for assessing the productivity of land in an urban environment. It’s an interesting new twist.

Urban3 makes maps that show the value of city buildings on a per-acre basis. That last detail is the kicker.

“We make the models to provide information equity,” explained Joe Minicozzi when I asked him about his approach. “We show a financial picture of what’s going on with the cash flow. You see where the holes are, what’s doing well, what’s not doing well. You can’t see where you’re leaking your money if you don’t know what’s going on.”

Per-acre analysis: a unique way of looking at urban economics | MinnPost

The general process is to take the tax revenue on the section of land and divide it by a spatial measure. Under this calculation, downtown buildings are more ‘efficient’ than suburban malls with lots of surrounding acreage of asphalt parking spaces. And in this way the analysis has flaws. Consumer (pre-covid) enjoyed the ease of mall access. Downtowns discourage shopping traffic. So if the objective is to encourage downtown visits, an understanding of transit and traffic and parking would be more valuable.

Reframing a means of analysis is exciting, but there are many more features of the built environment than simply tax collection and land space.

Aesthetics and Solar Roofs

Elon Musk has stated that 2021 will be a key year for the Solar Roof, with the CEO noting that its potential would be evident this year. Considering the company’s ongoing rollout of the integrated PV system and the development of better Solar Roof designs, it may only be a matter of time before more customers of Tesla’s flagship residential solar product would have more design options available. 

https://www.teslarati.com/tesla-solar-roof-colored-textured-tiles-patent/

Aesthetics is one stumbling block in consumers’ embrace of solar energy. A look that blends into the standard architectural asphalt shingles, or clay roof tiles, would be more consumer friendly than panels.

NorthStar MLS

Attractive shingles will undoubtedly command greater appeal than shiny 24 x 24 inch panels set into a large framework.

Tesla’s Solarglass Roof tiles are already among the most aesthetically-pleasing PV systems in the market. A Solar Roof installation involves the setup of both PV and non-PV roof tiles, and according to Tesla, this could present some issues. Since some tiles do not have solar cells in them, there will be some angles or times when it is possible to distinguish which tiles have solar cells and which do not. 

credit: Patentscope

Tesla also produces a lithium home battery, called a powerwall, which can store energy from the panels to be used after dark, during peak pricing hours.

The Tesla Powerwall pairs well with solar panel systems, especially if your utility has reduced or removed net metering, introduced time-of-use rates, or instituted demand charges. Installing a storage solution like the Tesla Powerwall with a solar energy system allows you to maintain a sustained power supply during the day or night, as long as you store enough power from your panels when the sun is shining.

https://news.energysage.com/tesla-powerwall-battery-complete-review/

With cost for the battery alone running around $8-9K, installation of an entire solar system is upwards of $20K. For comparison, a forest air furnace runs around $4-5K. That said, people pay extra for all sorts of social reasons. They use their son-in-law for their mortgage despite higher fees, they buy Girl Scout Cookies (OK, they are delicious too) and bid triple the value of a vacation package at a charity auction. There is an additional expense in buying organic vegetables and sometimes loyalty to one’s barber requires a drive across town. There are many circumstances where one pays above the going rate so that a portion of the price supports a social objective. Still- the premium has its limits. And solar power isn’t quite affordable enough to reach the mainstream concerned, yet.

In the end it is all about the payback and reliability, especially in a harsh climate. Natural gas is very affordable, but its infrastructure is not available throughout the state. Homes that rely on electric baseboard heat will most likely be the first to tackle the significant upfront investment and convert to solar.

State capacity MN style: Stay off the roads!

Around 4pm this afternoon the temp in the Twin Cities creeped above zero ending a 95 hour streak of negative highs and lows. As far as I know there have been no deaths during this polar vortex. But down I35 W, past Iowa, Missouri, Kansas and Oklahoma, a tragic 133 vehicle pile up left 65 hospitalized and 6 dead in Texas. The winter weather conditions coated the interstate with glare ice jackknifing semis across the thoroughfare. Approaching cars helplessly collided into each other as they skated into the metal mangled mess.

Around the same time last week, in Minnesota, a “bridge appeared to be ice-covered when the driver crashed and nearly went over the edge…”Take a look at the video where bystanders stopped a pickup from teetering over a bridge rail into the Minnesota River. When it comes to winter weather, Minnesotans have high state capacity. As a group we have the extra skills and initiative to respond to unexpected winter weather challenges.

It’s not that the people down in the Lone Star State are hick, uneducated or inept. It’s not that they’re too poor to be responsible nor too rich so as think they’re above it all. It’s not that they are too stupid or too smart. Capacity is a combination of knowing what to do, and being able to engage when the need arises. It’s an identification process, a communication process and a step-up-if-you-are-there-and-available process.

The group has to have the expertise to distinguish the glean on the pavement as black ice, and not innocent damp asphalt. A network has strength to communicate the concern when it is reliable and trusted. Parents put in the extra ‘no’ with persistent teenagers who want to go meet their friends, errands are put off. Stories of cars sliding into holding ponds and drivers waiting through the night, half submerged, until someone comes to the rescue, are retold to confirm the nature of the situation. All these activities enforce behavioral sacrifices which lead to successful outcomes.

Our cities are well rehearsed to handle the weather, whereas the Texas Department of Transportation lacks the physical equipment to plow off the half a foot of snow from the roadways. Formal government and its preparedness are just one feature of the ability of a community to identify, communicate and respond to the challenges, or ambitions, at hand. But it’s really the coordination abilities of the whole group which delineates its capacity.

Valentine, Will you be true?

Despite all the shortfalls in American culture in the 50’s, one grossly overlooked foundational strength was community support for marital bounds. Sure– a lot of the outrage in the 60’s stemmed from strength of the marriage contract. Women were disproportionately dependent on their partners, due to male control of traditional economics within the family structure and the workplace. Cross-gender issues were squelched and hidden, leading to psychological detriments.

But as is still true today, activists needed to inflate the issues in order to have them recognized, filling the 60’s 70’s and 80’s with fervor for the dissollution of marriage.

Marriage and divorce in the US: What do the numbers say? (sas.com)

It’s wonderful to see the rates inch down in more recent decades. But I think there is a lot more work to do. The celebration of Valentine’s Day is about new love. A celebration of anniversaries and dedication to sharing the stages of family life with one partner is not only romantic, but provides vision to navigate family life with all its stresses and demands. Here’s to the Valentiniversary!

Ice Fishing

We’re hitting a record cold spell as a polar vortex nestles in over the bold north state. So what do people do when the temps don’t climb above zero and hit lows in the -30 range? Go fishing on the ice of course! (see Grumpy Old Men for the Walter Matthau, Jack Lemmon and Ann-Margaret portrayal) For those of you who never get to experience cold climate living– this is for you.

Folks with false intentions

Ezra Klein: San Francisco is about 48 percent white, but that falls to 15 percent for children enrolled in its public schools. For all the city’s vaunted progressivism, it has some of the highest private school enrollment numbers in the country — and many of those private schools have remained open. It looks, finally, like a deal with the teachers’ union is near that could bring kids back to the classroom, contingent on coronavirus cases continuing to fall citywide, but much damage has been done. 

Eighty percent of my motivation to write commentary was due to folks like the ones described above. There was one in particular, who loved to call everyone a racist. But where did he send his kids to school?

So I guess I’m indebted to them.

Growing in place

I remember posting my first public comment. I was nervous. I must have read through it a dozen times, and felt so exposed once I pressed enter–no edit back then. The article, Met Council: More focus on growing in place, was an opinion piece by local journalist and urban design consultant Steve Berg, writing here in MinnPost

Ten years have gone by, but the gist of what I was saying remains the same. People trade with an understanding of both a collective benefit, as well as one of self interest. At least that it what I am here to convince you of.

I loved commenting on Steve Berg’s articles because there was so much substance to target. Things have changed a bit since then. He was a classic anti-car guy, which has been toned down since Elon Musk came along. And you don’t hear people harping on sprawl as you once did. Nor market failure for that matter.

Maybe people are listening.

Trades work is non-internet

I think most people would agree that the agility with which high paid workers were able to transition to remote work with the aid of the internet was nothing short of astounding. Had it been tried without Covid, I’m sure it would have been as difficult as getting teachers back in the classrooms.

Tradespeople have also been able to keep working as their work is most often socially distanced and out of doors. Road crews, roofers, delivery workers are all busy. None of these jobs rely on a quiet space with a lap top.

It seems a natural fit to connect the low wage workers into this workforce.

Can it be more than just about coin?

Biden’s 1.9 trillion relief plan is a little too enormous for me to get my head around. The magnitude of federal numbers just makes my eyes blur over the page. There is no anchoring the size of these things to my everyday life.

But if I can’t talk about magnitude, I can talk about structure. The goal of the bill is to engage the US economy as well as shore up people’s unexpected and uncontrolled loss of income; to keep their lives right side instead of upside down (which subsequently causes an economic drag on their greater groups). And then to get them back to employment where income can be feathered back in to the economic apparatus.

I’m all in favor of transfers for the first part. They work efficiently.

But I think there is a missed opportunity in the second part. Engaging idle labor from folks who are not destitute nor in need of transfers is low hanging fruit. As explained in this post about The Crafter The Contributor and The Covid Tracker, there are high skilled individuals available to donate labor if they are enticed by the objective at hand.

There are successful national service programs like AmeriCorps and the National Guard. Would it be so hard to have a property repair civil service? Ask any builder about the shortage of construction workers. What about a write-off for plumbers and sheet-rockers and electricians who’d be willing to have an apprentice tag along to fix a faucet at the local homeless shelter, sheetrock in a storage room at the food shelf, or replace all the gym lights with LED fixtures at the community gym?

A money transfer won’t teach a trade, nor will it make a connection between a potential employer and up-coming employee.

Below surface

Pioneer Press North Dakota had adopted a law, proposed by the state’s Industrial Commission that oversees oil, gas and mineral removal, that gave energy companies broad power to continue injecting salt water, an unwanted byproduct of their drilling, and added rights to pump carbon dioxide deep underground and leave it there for eternity. This is becoming important as the cheapest method of “carbon sequestration,” which is deemed vital to reducing greenhouse gas emissions.

The law was very favorable to companies wanting to inject. It stiffed owners of land overlying the areas that might be filled. This created strong opposition, and a landowners association challenged it.

North Dakota had made an environmental claim on the subterranean space, but the landowners, who felt shafted by the fracking boom, said not so fast. They wanted in on the deal that seemed to pad everyone else’s pockets. So who owns the ‘pore space’ and who gets to benefit from it economically?

In mid-January, a state judge amped up the controversy in a broad decision favoring the landowners. He struck down the whole law as violating both the North Dakota and U.S. constitutions. He ruled it was a “taking” of private property as banned by our Fifth Amendment.

One can speculate on the line of thinking the legislators in North Dakota may have been following. Since everyone would benefit from the purging of by-products into the depths of the earth, than the assignment of the use of pore space to the energy companies is fulfilling a traditional public good.

As I’ve said here many times before, I do not believe in natural public goods. And this is just another example. Although the act of burying the carbon dioxide has a positive environmental outcome for the citizens of North Dakota, it is the land and the rights attached to the land that are under discussion. The land is privately owned by the landowners.

My view is that what is pubic and what is private comes about through tradition and legislation and cultural norms. In this case the courts decided. As the author says, there will be more to follow regarding “pore space.”

Legal scholars will write scholarly papers and economists will construct mathematical models. There are precedents in water and oil laws going back decades, but compressed gases that should stay there for millenia differ enough to open new controversy and give topics to hundreds of grad students who need thesis topics. And the outcomes will affect all of us.

Yesterday, a birdwatcher saved a life

A little after two, yesterday afternoon, my phone made that intentionally obnoxious noise to signal an Amber Alert in our area. A grandma of nine had also gotten the notice. She happened to be watching a Jeep, through her front picture window, idling across the street. Grabbing her birding binoculars, she verified that the license plate number matched the one on her Amber Alert notice. She then called her daughter to confer, then the police.

Only 35 minutes elapsed between the alert going out and the one year old being found in an abandoned vehicle on a brutally cold day. Here’s a timeline of the events. A local journalist was in the area and was able to catch this senior on the move for an impromptu interview. (so sweet)

One might label this a one-off call to action, being in the right place at the right time sort of activity. Shrug it off as happenstance instead of recognizing it as work. But you’d be wrong.

A community, a group of people who share a public safety interest, need these types of eyes-on-the-street workers. Not everyone. Just enough to have capacity around to engage as needed. As annoying as they can be to those young first-time homeowners, the older retired types, just like our grandma here, make excellent neighborhood watchers.

Note that this work didn’t require a valedictorian or a particular muscular prowess or any technical expertise; this work is done by being present and caring enough to act. There can be misunderstandings and errors in interpretations, hence it is good to check with your direct sphere, which she did when calling her daughter.

Note that the motivation here is not political or monetary or for glory. Often it is done because we would want someone to do the same for us. And we become part of groups for this reciprocal reinsurance.

The Amber Alert counts on it. Sending a message out to everyone who owns a device spreads the word, looks to reach the ears of those who are in the right place and circumstance to engage these sentiments. The system doesn’t expect any one person, just someone in the group.

If the Amber Alert hadn’t gone out with the vehicle’s description. If the birdwatcher hadn’t grabbed her field glasses to verify the license plates. If her advisor hadn’t reinforced the proper course of action in calling the police. What would have happened to a twelve month old child in the back of a white Jeep in weather where exposed skin freezes in a matter of minutes?

It just takes one out of the group. But you can only help if you are close enough to touch. This isn’t a federal public good, nor a state public good, it telescopes in further than that. But this public good, the provision of public safety, relies on eyes-on-the-street workers.

More measures that don’t add up

Cost burdened is the catchphrase of the day in housing. Over the last couple of years it has popped up everywhere. Articles posted on all sorts of sites use the phrase without specifics on how they came up with all their charts and graphs. Smart Asset was good enough to describe its methodology.

Data and Methodology

SmartAsset used Census Bureau data to determine the most and least severely housing cost-burdened cities. This data, which we found for 126 cities, breaks down residents into the following brackets based on the percentage of the total household income they are spending on housing: less than 20%, 20% to 24.9%, 25% to 29.9%, 30% to 34.9%, 35% to 39.9%, 40% to 49.9% and 50%. The data also lists the total number of households.

We took the number of households in each city paying more than 50% of their income on housing and divided it by the total number of households in that city in order to come up with the percentage of households that are severely housing cost-burdened. We then ranked each city based on this percentage. We also calculated the percentage of households in each city paying between 30% and 50% of their income on housing, but this did not impact the ranking.

Data comes from the U.S. Census Bureau 2017 1-year American Community Survey

Most and Least Severely Housing Cost-Burdened Cities (smartasset.com)

You can find more about the American Community Survey here. But I’m pretty sure the information about housing expenses is self-reported by the three and half million who receive the request.

As you do with ranking lists, I checked out my own community (childhood home of Senator Klobuchar no less) to see how we stacked up in the cost burdened arena. According to an extremely well regarded source of data and information to politicians and local officials, half of all residents of Plymouth, Minnesota are cost burdened. Seriously?

I’m not sure how this could be true for one of the more affluent parts of the western suburban Minneapolis-St. Paul metro area. So I checked another affluent area on the St. Paul side, Mendota Heights. Here it is reported that 75.4% of homeowners are cost burdened. Clearly there is an implementation problem with use of the data meant to determine those in need. More alarmingly, there it sits in bold bar graphs given to lawmakers and policy people.

But even if folks choose to pay thirty or even forty percent of their monthly cashflow for housing, who is the Census Bureau or the American Survey or HUD to say that it is too much? Consider these three scenarios.

  1. I choose to live within blocks of my parents, even though their neighborhood is a little expensive. My parents are able to provide fulltime daycare for my toddler as well as before and after school care for my two elementary school children. Living in their neighborhood saves our family upwards of $2500/month.
  2. I choose to live in the city which is noticeably more expensive than some first ring suburbs. This location allows me to take mass transit to work, shop and recreate. It’s easy and cheap and I don’t need a car. Between insurance, a loan payment and gas, I save $400-$500 a month.
  3. I chose to live near my congregation despite the monthly rent being high in relation to my fixed retirement income. My apartment, however, is near my church and the fellowship is such a big part of my life. I am able to share transit to and from my doctor’s office which is close-by. Plus I feel safe.

(For some back of the napkin, points of reference, average rent in Plymouth is $1300. An income that is considered non-burdened (28%) is 4643$/mo. An individual is considered cost burdened (30%) at 4333/mo in income. A difference of $310. )

Evaluating housing based solely on monetary income and rent is grossly insufficient. Consumer housing choices are influenced -think back to your own choices- by all the services found in various neighborhoods. Each of these scenarios show how access to family help, transit infrastructure, and religious communities contribute people’s home economics.

Not only is the present methodology, (which is being projected in stereo as if on a national housing agenda of some sort) yielding reports declaring the poor rich as burdened, I argue the use of pecuniary measures, as the sole means of evaluating quality of housing, is starkly erroneous. If a ratio of rent to income is used (as it has been) as the primary driver in decision making, than less advantaged people will always be pushed into the least expensive rental markets. Surprising to no one is the market reality that these neighborhoods are lacking in support structures.

Flyways in spring

It’s a frosty negative one degree Fahrenheit in the north country with a flag snapping wind. A lovely four mile walk from earlier this week, captured above, is a distant memory. It appears we’re in for a week or so of highs around zero.

There are people out walking still, mostly walking their dogs. A few are bundled from head to toe, buffering their skin from the bitter bite of the cold air. The Dutch have a word for it. Uitwaaien is the practice of jogging or walking into the wind, especially in the winter. It is invigorating, and I’m all for clearing one’s head. But if your eyelashes start to frost up into some avant-guard model look, it might be time to stay in doors.

Instead I let my thoughts flock to the bird migrations coming up next month in March. The Mississippi flyway brings a steady flow of avian creatures up from the Gulf of Mexico as they venture up to Canada and past the Hudson Bay. They seem to like our state with all our water features, including the headwaters of the famous flowing river.

Perhaps you think the whole binoculars and birdwatching thing is a little silly, but you are wrong. It’s delightful. While on a walk in the spring slush with tree branches bare of foliage, you learn the orange flash is an oriole, and a fleeting bright blue is usually a tanager. A brighter yellow-green with a bandits mask and pompous crest is a cedar waxwing, one of my favorites.

Perhaps you think that it would be frustrating to spot some small brown poof of feathers only to be bewildered in finding its identification. By the time you pulled out the green covered field guide from your back pocket, turned to the sparrow section, the details of what you saw become fuzzy. And you can’t choose from the oh so similar options.

Well there’s a new technology for that. It’s called Google Lens. Quickly capture a cell phone photo of the titmouse, chickadee or vireo, use the lens image at the base of the photo, and presto! The app identifies the bird and tells you all sorts of information about it.

Eventually you learn the difference from a yellow warbler and a goldfinch even if they both hop around in the grass looking for dinner. And you no longer confuse the black headed grosbeak with a robin as the beak (name implied) is thicker and its build a bit buffer. A swan and a Canadian goose are more than large waterfowl honking as they skim the lake’s surface.

But I digress. There’s a 20 below wind chill just outside my window, and the thought of a spring thaw luring wildlife back north is a pleasant distraction.

Peace

Years ago I called my stock broker all in a flutter as I had noticed one stock in my portfolio had taken a tumble. In a steady and calm voice he asked me to hold on, so he could bring up my account. Then he proceeded to run through the statistics which verified that, although the recent downturn in value was a setback, overall my purchase was fairing quite well.

The uniformity in his voice, one acquired from handling calls like mine a hundred of times before, undoubtedly contributed to bringing me around. But the numbers took a moment-in-time piece of information and stretched it over a larger framework. They provided some concrete reference points to mollify an emotional response.

A plunge in the value of an investment can raise one’s blood pressure, but does not compare in anyway to the response following the loss of a human life. Still– looking at loss of life as a statistic spread out over other scenarios and situations is a worthwhile endeavor when trying to subjectively evaluate a variety of circumstances.

The department of Labor and Statistics keeps track of how many workers suffer a loss of life while on the job.

Frobes: In 2018, 5,250 people sustained fatal injuries at work. To put that into perspective, an estimated 609,640 Americans died of cancer in 2018, 116 times as many as who died as a result of a workplace accident. Of those 5,250, 40% were killed as the result of a transportation accident, most of which involved roadway collisions. The second-largest category of fatal injury in 2018 was “Violence and other injuries by persons or animals” with 828 deaths, displacing 2017’s No. 2, “Fall, slip, trip.” The increase in workplace violence was driven by workplace suicides rising from 275 in 2017 to 304 in 2018. In 2011, there were 250 workplace suicides.

People also die when receiving services. The statistics for how many patients die while being treated by the medical profession are all over the place. A study by a John’s Hopkins’ team from 2016 claims the number is a quarter of a million a year, but other estimates put the number closer to ninety thousand. Given the cost and concern around malpractice insurance, the number of fatalities in the public health sector must be significant.

Now lets look at fatalities in the public safety sector. According to the Washington Post, 41 unarmed people died at the hands of the police in 2020. Not 250,000 in the care of physicians. Not 5,250 in work related accidents. 41. And let’s keep that in mind in the coming months when evaluating the service the police provide to our communities everyday.

Noah is building an ark

A handful of years ago a new term showed up in housing forums and real estate continuing ed classes. NOAH. The acronym stands for naturally occurring affordable housing. The Greater Minnesota Housing Fund explains:

The majority of affordable rental housing in the United States can be found in modest apartment buildings in every city and suburb.

These units are home to every stripe of renter and receive no federal or state subsidy at all. These Class B and Class C rental units comprise the bulk of affordable housing in the country today, but there is nothing to guarantee that they will stay that way.

Nationwide, this affordable rental housing is at risk. In prime real estate markets, this “naturally occurring affordable housing’ (NOAH) is often operated under poor management or in disrepair. Speculators are eager to snap up these developments, upgrade a few amenities, and convert these once-affordable homes to higher-market rents. This loss of affordability threatens the stability of individuals and families who are displaced, and even entire communities.

It was like a frosty burst of January air through an open front door. A much needed break from endless harping on ‘building’ more affordable housing. New construction is the most expensive form of housing and how it is in a community’s best interest pay top dollar for very few units is anxiety rising for any spendthrift.

It is equally refreshing to read that a real estate investor in Charlotte, Mark Ethridge, is building on the concept of NOAH. Here’s how he got started:

Ethridge had watched for years as properties like this were snatched up by big money investors who’d quickly renovate them, jack up the rents and then sell them off for a quick profit. With an estimated 120 people moving to the city every day and an economy on the rise, growth in Charlotte had put these kinds of apartment complexes in the sights of housing investors who saw them not as affordably priced homes for lower income residents but as undervalued assets.

Ethridge has attracted a bunch of like minded people to run up a $58 million fund for the purpose of providing housing at below market rates. The difference here is that his investors will receive annual returns on their investments, just at a reduced rate.

Bowles insists this is not philanthropy, and giving the fund a for-profit structure was a way to bring the discipline needed to ensure it would work for the long run. “We are capitalists,” he says. “We believe in capitalism. But if it’s going to survive, we have to make it work for more people. A lot more people.”

The city is still involved with help on the financing end of things and in return there is a twenty year deed restriction placed on the title of the property to ensure 80-100 percent of the units are rented to residents at the low end of the income scale.

Ethridge calls the effort “social impact capital,” and he says the Housing Impact Fund’s investors recognize that their investment can be both beneficial to society and profitable. “The nice thing about buying existing properties, unlike new construction, they cash flow the day you buy them,” Ethridge says. “So we will pay quarterly returns to our investors and we expect that cash flow to be relatively consistent.”

Labor Wedge

Some words or phrases latch onto you like thistles while walking through blooming prairie grasses. They tag onto your pant leg until you notice them and pluck them off for a closer look. Labor wedge has such a nice visual, a separation between what a model is predicting and the empirical data, I think that’s how it wedged its way into my thoughts.

It seems to be a fairly new macroeconomic term, defined at the start of a paper by Loukas Karabarbounis, University of Chicago, as:

Do fluctuations of the labor wedge, defined as the gap between the firm’s marginal product of labor (MPN) and the household’s marginal rate of substitution (MRS), reflect fluctuations of the gap between the MPN and the real wage or fluctuations of the gap between the real wage and the MRS? For many countries and most forcefully for the United States, fluctuations of the labor wedge predominantly reflect fluctuations of the gap between the real wage and the MRS.

https://www.nber.org/system/files/working_papers/w19015/w19015.pdf

At different time periods, American households have found it advantageous to substitute out paid work for something else. They preferred to spend their time, perhaps at home, performing valued activities for their families. Or perhaps the value was found in associational life of another nature. De Tocqueville said years ago that Americans are apt at associational life.

More interesting are the measuring questions. How do we categorize where people have the opportunity to perform duties which build capital for themselves and, most probably, their communities? Where are they exerting energies in lieu of showing up for a paycheck?

Sorting by their economic benefit seems sensible. If the ambitions fall under health related activities (staying out of the workforce to care for an aging parent) then the credit goes to pubic health. If education (during these Covid times people are staying out the workforce to supervise their children’s education) is the goal then shuffle those hours to the public education column of the ledger. If governance (people are choosing to spend their time on park boards or citizen commissions instead of working) is where the hours are spent, then register the tally under civics, and so on.

A better understanding of these motives and ventures will smooth out the prickly problem of labor wedges.

Arguments about work

“And what did you do all day?” He would ask as he came through the front door at about 6 o’clock. An inquiring look searched out his wife, while the follow-up phrase, “while I was out earning a paycheck to pay for this house, the food we are about to eat and the clothing for the kids,” was left hanging in the air, unsaid. Having returned to his home, he had not yet transitioned from the private nature of the workplace.

Through the 70’s and 80’s the notion of unpaid labor in the home was adjudicated many times over as marriages came apart. Terms like like spousal support, child support, alimony, pension obligations, all forced the issue that what she did all day could not be classified as leisure time. And carved out what we all knew: a worker in a home environment is a valuable component to the economic outcomes of the family.

By 1989 a formal accounting was given to the work done by homemakers, caregivers to the elderly and to children, and all those who exist in the realm of domesticity. Dale W. Jorgenson of Harvard and Barbara W Fraumeni wrote a paper that led to a measure of unpaid labor in the form of human capital, where it took up a spot in the national income accounting system. Jorgenson explains.

Barbara Fraumeni and I (1989) have proposed a measure of the output of education and training, namely, the increment to lifetime labor incomes. This accrues as current income to individuals who receive the education and training. Our approach has the important advantage of providing separate measures of output and input. The value of input into investment in education is equal to expenditures on education and the incomes of students in school. The value of output is equal to additions to lifetime labor incomes.

Human Capital and the National Accounts (bea.gov)

(Hang on, I’m getting to the good part)

In more current times Michael Christian has maintained the accounting of human capital in the US. Our very own Ellen McGrattan, with the Federal Reserve Bank of Minneapolis, collected her comments on Michael Christian’s 2010 paper on human capital accounting. From the abstract:

Michael Christian’s paper presents a human capital account for the United States for the period 1994 to 2006. The main findings are twofold. First, the total human capital stock is about three-quarters of a quadrillion dollars in 2006. This estimate is roughly 55 times gross domestic product (GDP) and 16 times the net stock of fixed assets plus consumer durables. His second finding is that the measures of gross investment in human capital are sensitive to alternative assumptions about enrollment patterns. In my comments, I emphasize the need for greater interaction between human capital accountants and applied economists. To date, there remains a disconnect between those measuring human wealth and those investigating its economic impact.

McGrattan isn’t satisfied with summing up a present value for the life-time work that could be performed by ‘non-market’ individuals, she would like more specifics on what actual economic outcomes will evolve from their work performance.

Perhaps what is needed is more focus on economic questions and less focus on the magnitudes of the human capital wealth estimates. Whether these estimates are based on current costs or on lifetime earnings, economists can construct the same statistics in their model economies as satellite accountants construct for actual data. Unfortunately, there still remains a great divide between those measuring human wealth and those investigating its economic impact.

I don’t want to put words in her mouth, but it seems like she would like the evaluation of this type of work to be centered around an economic objective. She goes onto reference a paper that she co-author with Edward Preston, Unmeasured Investment and the Puzzling US Boom in the 1990s. Although reading such a thing is more than a little intimidating, I was able to pickup that they measured a decrease in household labor and an increase in unpaid business labor which then lined up nicely to justify the business boom of the 90’s.

What are the common threads between business people who dig in and amp up their unpaid work into R&D which results in a business boom, and a homemaker who stays home to care for children? Both are doing work for a long term return, they are building capital for themselves, but also a larger group. Both are only able to perform because they are in a situation of opportunity. If they were to offer those work hours to someone else, it would be work for pay, and not at all the same thing.

I believe this is the type of framing Ellen McGrattan is requesting. She would like to see the study of unpaid work categorized, as we do here at home-economic.com by objective, and measured in that way. Rather than assume a measure based on a summation of remaining years of work life in concert with educational attainment.

Lean into the slope

Matthew Yglesias writes in his newsletter yesterday:

Defunding the police is a bad idea that, wisely, the voters and political system have rejected.

But it was so thoroughly successful as a slogan that a situation has emerged online in which a willingness to embrace it is widely seen as the key sign of one’s commitment to taking complaints about police misconduct seriously.

The reality is just the opposite.

True statement: the reality is just the opposite. As crime has increased this year, the need for resources devoted to public safety has increased, not decreased. The Minneapolis City Council didn’t get the memo. They are working off another economic model as they continue to entertain agendas which weaken the ability of the mayor, the police chief (who is now on a short list for a job in California) as well as the police force to do their job. MPR reports on January 15th.

The Minneapolis City Council on Friday took steps — again — toward trying to get a proposal on the ballot this year that would allow the city to replace its Police Department with a new public safety agency.

Their model appears to motivated by the need to subdue an ever present and ever impounding anger. The anger at the memory of, for example, the sound of thick soled heavily polished black shoes across the high gloss middle school floors, the glint off the handcuffs, the roughness of the shove as the uniform twists a best friend’s arm around and behind his back, before the jangle down the halls as the officer and youth depart through the heavy wood doors, to the back seat of the squad car.

Anger still simmering some three decades on. Like a clip on auto replay. A disturbing removal of a 12-13-14 year old from their place of learning. I have no doubt that every activist who seeks to dismantle the police, relives (and perhaps fosters) a simmering wrath against an established societal structure or symbol thereof.

Regardless of whether the activist’s personal case-by-case experience has merit, the model they pursue and the action it initiates will not result in productive outcomes. It is a model that seeks to break apart established norms, as opposed to working with them.


Yglesias seems confident that the greater group (it’s all about the group) does not follow the logic of diverting police funding to social workers, despite the catchy slogan. And as the cost of not being able to travel freely around the city without concern of being car jacked, or jumped to make a Venmo transfer, the public’s sympathy for those wronged by past interactions with the police appears to be waning.

Yet there is still a concern about errant police, as there should be. The inability of police chiefs to dismiss the truly bad apples, as Ygelsias calls them, the acceptance by the profession to let them back in, to reinstate them, has outsiders thinking outside intervention is necessary. We are right to step in when the police can’t police themselves!

Perhaps it’s time to step back, (further back) to take in a new view, to change-up the framing. Let’s start with some basics. 1. Police officers are no more good, or bad, than the general population. 2. Nor are they any more good or bad at evaluating themselves and their performance. Good. We’ve established that we are dealing with basically a decent group of people who show up for work with the intentions of doing their jobs. Since the pay isn’t great, we have to assume there is also some sort of personal sense of honor in the position.

The dicey work police officers do is risky not only because the threat of physical violence is undoubtedly present, but also because they are stepping into some social interaction gone awry. When they are called to a domestic dispute, they have to assess the conditions which led to an escalation in a marriage. When they are called to a corner drug deal, their survival can depend on assessing the players on the street. The police are called into restore safety to a highly charged marketplace of social interaction.

So is it surprising that this basically decent group of people will always choose the perspective of one of their own in that assessment? Or that they band in support of each other to the bitter end? They endure criticism and penalties at the hands of their black sheep members, yet on the whole they hold fast. That is how untrusting they are of an outside world assessment of their workplace situations.

And I wouldn’t assume a lack of methods to get the bad apples out of the barrel. Sometimes opportunities present themselves, and as a group, they find a way. Certainly that is true in other groups. Could more opportunities be made available for the black sheep of the group to be pushed out? Most probably. But that is an internal matter.

To be honest, I’ve read a lot of lists of horrible things the police have done, but you rarely hear of these as a percentage over the whole group. Or as a percentage of all the work tasks they perform. The only way to gauge the group is to take their numbers in that identity. Pulling out the one completely unacceptable incident as a representation of the profession is measuring oranges to apples.

When you start with the assumption that the group as a whole is as decent as the rest of us, it’s hard to get to “they are all inhumane idiots who are abusive beyond control.”

Years ago someone gave me some advice when I was learning to downhill ski. “Fear,” he said, “makes you want to sit back on your heals. But this is exactly what you don’t want to do. Lean down the hill, keeping your weight centered over your feet. That’s the way to tackle the slope.” The police need to lean into policing where most of the violent crime has been occurring. Despite resistance and lack of cooperation, they need to get those cases solved. To make believers and reliable partners out of a population who needs their support.

Common Currency

Humans have been sorting, measuring and trading for over 5000 years.

Standardized by shape and weight: 5,000 years ago, people used rings, bangles and axe blades as an early form of money.

The concept of fair or equal trade shows up 2500 years before ancient Greeks lean-in to put words to the consistencies of human existence. It was important enough for folks to hone skills to gauge the weight of a trading token.

The Dutch researchers examined more than 5,000 bars, axe blades, and rings from the period of 2150-1700 BC. The examined objects came from different archaeological sites, including in what is today South Germany, Austria, the Czech Republic, as well as North Germany and southern Scandinavia. They found not only single objects, but whole collections (hoards) of several hundred pieces.

It appears that in addition to having found the benefits of doux commerce, man of the Bronze Age was familiar with greed and hoarding. There are some constants in the world.

More on Moving

It’s old news that folks having been abandoning New York and San Francisco. Not surprisingly many of these coastal creatures are staying in the east or the west.

LEAVING NEW YORK CITY

Top destination cities for U-Haul customers leaving New York City during the pandemic include Bridgeport, Poughkeepsie and New Haven. Outside the Northeast, the top destination is Chicago in the Midwest and Atlanta in the South.

The top 10 states DIY movers from New York City are migrating to are: New York (outside NYC); New Jersey; Pennsylvania; Connecticut; Massachusetts; Virginia; Maryland; Florida; Rhode Island; and North Carolina.

LEAVING THE BAY AREA

Top destination cities for U-Haul customers leaving the Bay Area during the pandemic include the Sacramento/Roseville corridor, San Diego and Stockton. Outside of California, the top destinations are Reno, Las Vegas, Portland, Phoenix and Seattle.

The top 10 states DIY movers from the Bay Area customers are migrating to are: California (outside the Bay Area); Nevada; Arizona; Oregon; Washington; Colorado; Texas; Utah; Idaho; and New Mexico.

What’s nice to see is the middle of the country states filling out many of the spots in the top 20. A bunch have also moved up significantly in their standings.

4.Ohio (7)
7.Missouri (13)
11.Arkansas (23)
12.Indiana (9)
13.Wisconsin (41)
14.Oklahoma (14)
18.Kentucky (37)
20.Minnesota (15)
https://www.uhaul.com/Articles/About/22746/2020-Migration-Trends-U-Haul-Ranks-50-States-By-Migration-Growth/

First jobs

I wonder sometimes if the people who want to raise the minimum wage actually go on site and meet some of these workers and employers. They might be surprised to find situations other than the poor and the destitute. They might find new to the workforce people, and people who need a lot of flexibility, and people that drift in and out of jobs because that’s what they want to do. They might find people who are accepting the wage because they get something for it.

In each of these situations the employer is giving something in return. If you are new to the trade, you will need a lot of extra coaching and assistance. Your boss is ‘working’ extra hours in training or staying late or forgoing other responsibilities. A new to the workforce employees may need more understanding and leeway on other issues like sticking to a schedule and what to do when your car doesn’t start and how to handle notice for time away.

Flexible and short-term employment also causes a churn for employers who have the responsibility of maintaining all the HR administrative work. Yet many people I’ve know over the years, that do not qualify as destitute, have been willing to work those jobs because they are a temporary distraction, jobs they don’t have to think about, that can be ditched in a heartbeat.

I was hired for one of my first jobs due to family connections. Some might object to that, but a connection is a control string on the employee. Anything the dependent does reflects on the career officer, which puts in play strong incentives for adequate performance. When a connection is not available for that first job, employers may have to work a little harder at supervising until they are confident of the reliability of their new worker.

I could go on with examples, even if some are now taboo to talk about. I’m sure someone would frown if I pointed out that the language barriers create more work for employers. And certainly I’d be accused of the ‘r’ word if I pointed out that getting to know other folks’ culture whether about language, or sick time, or parental leave, would certainly be an adjustment versus hiring the neighbor’s kid whose father works for you.

We have to admit that this type of ‘social’ work exists, call it something, give it value, so we can enumerate it, and use it in fruitful discussions. But since there is a lack of accounting, there is no science to the discussion around minimum wage–there are just opinions. Predictions.

Until we call it out, and give a name to the work that must be done to shore up cultural and social issues; until we count the number of hours of work that goes into it, we won’t have the sophistication to deal with getting low wage workers up the economic ladder.

Pardon me, Yes? or No?

Have you ever noticed that there are yes jobs and no jobs? Attorneys are likely to say, “No, that’s too risky.” What would we do if all entrepreneurs listened to their accountants when they called up to say, “No, we can’t afford that!” Then there are processing types of jobs who like to say, “No, that’s not included in your policy.” Luckily there are visionaries that say, “Yes, let’s build a skyscraper!” And keep saying yes to all the naysayers as they wade through setbacks and plan approvals. And there are journalists that say, “Yes, we can meet the deadline for that story!” Then there are the killjoys, “No, no, no drag racing is not allowed, even if everyone is home on Covid lockdown.” But seriously, do you think Elon Musk says yes or no?

When you read something like this:

Online registration launched at noon but was disrupted within an hour as the website was overwhelmed with a peak of 10,000 hits per second. The site closed to new registrants at 2 p.m. in order to serve people stuck in a waiting queue, but in the end connected more than 5,000 people with vaccine appointments this Thursday through Saturday.

Seniors surge to Minnesota site to register for COVID vaccine – StarTribune.com

It feels like the vaccine distribution got assigned to the risk monitor, process types instead of the we-can-meet-that-deadline types. Give the right job to the right people.

Efficient to the X degree

In a Bloomberg article yesterday, Laura Millan Lombrana encouraged governments attending the United Nations climate talks to push oil and gas companies to fix methane leaks. Due to new satellite technology, which helps identify the location of the seepage, there is an economic efficiency argument to such action.

Methane emissions need to fall 70% over the next decade, a decline equivalent to eliminating CO₂ emissions from all cars and trucks across Asia, according to the report. Fixing methane leaks would be cost-effective for energy companies because the captured methane can be sold as natural gas. The cost of repairs and maintenance needed to capture methane can often be paid for by the value of the additional gas brought to the market. 

The new information (as to where the pipes are leaking) is one driver for action, but there is also the notion that the low emissions benchmark, set in the Covid year, offers up a new goal. This combination of information and technology coupled with motivation, made me think of Harvey Lieberman’s concept of “X”-Efficiency. He was a professor at Harvard and is best known for coining this concept. Here’s how he describes it in Allocative Efficiency vs. “X”-Efficiency.

Our primary concern is with the broader issue of allocative efficiency versus an initially undefined type of efficiency that we shall refer to as “X-efficiency.” The magnitude and nature of this type of efficiency is examined in Sections II and III. Although a major element of “X- efficiency” is motivation, it is not the only element, and hence the terms “motivation efficiency” or “incentive efficiency” have not been employed.

He identifies the possibility of meeting a higher efficiency with new motivations, usually in combination with other factors. In the Bloomberg article, the sense of urgency around climate change motivates the fixing of methane leaks.

The level of unit cost depends in some measure on the degree of X-efficiency, which in turn depends on the degree of competitive pressure, as well as on other motivational factors. The responses to such pressures, whether in the nature of effort, search, the utilization of new information, is a significant part of the residual in economic growth.

It’s hard to know for sure, but it sure seems like Leibenstein’s “X”-Efficiency refers to the efficiency attained in the blending of the public and private spheres.

In Dubious Battle- Steinbeck (1936)

After the first of the year, I wrapped up the novels I was reading and made a promiss to myself to be a little more selective. To only read high caliber writing. That’s how I came upon In Dubious Battle. I wasn’t aware of the buildup to an apple pickers’ strike until I was bending back the binding so the pages eased open in my hands. And strikes are turning out to be very good scenarios for expressions of the social economic side of the economy.

Take what Mac says here to Dr. Burton, who has been brought in to be on hand to mend any of the strikers who get caught up in a tussle. Mac’s trying to figure out why Burton keeps showing up when he doesn’t get paid, nor does he seem interested in the cause. In other words Mac can’t figure out the ambitions for what he refers to as ‘work’ when it falls neither in the private or public sphere.

“Yes, you. You’re not a Party man, but you work with all the time; you never get anything for it. I don’t know whether you believe in what we’re doing or not, you never say, you just work. I’ve been out with you be fore, and I’m not sure you believe in the cause at all.”

Dr. Burton laughed softly. “It would be hard to say. I could tell you some of the things I think; you might not like them. I’m pretty sure you wouldn’t like them.”

“Well, let’s hear them, anyway.”

“Well, you say I don’t believe in the cause. That’s like not believing in the moon. There ‘ve been communes be fore, and there will be again. But you people have an idea that if you can establish the thing, the job’ll be done. Nothing stops, Mac. If you were able to put an idea into effect tomorrow, it would start changing right away. Establish a commune, and the same gradual flux will continue.”

“Then you don’t think the cause is good?”

Burton sighed. “You see? We’re going to pile up on that old rock again. That’s why I don’t like to talk very often. Listen to me, Mac. My senses aren’t above reproach, but they’re all I have. I want to see the whole picture as nearly as I can. I don’t want to put on the blinders of ‘good’ and ‘bad,’ and limit my vision. If I used the term ‘good’ on a thing I’d lose my license to inspect it, because there might be bad in it. Don’t you see? I want to be able to look at the whole thing.”

Burton turns out to be a bit of a philosopher. He’s there putting in the work so he can understand the why of it all. He and I agree the flux will continue. That the whole pricing mechanism is always in motion, and for that reason time must be understood. He also is indifferent to the ‘good’ of it. He isn’t going to shuffle through the risks versus the rewards, he is there trying to understand the beams that turn the wheel and the flow of the water that pushes on the buckets.

In the following few pages Dr. Burton talks about group-men. “I watch these group-men, for they seem to me to be a new individual, not at all like a single man. A man in a group isn’t himself at all: he’s a cell in an organism that isn’t like him any more than the cells in your body are like you. I want to watch the group, and see what it’s like.”

I’m looking forward to reading what else Burton observes.

Home is your castle

A home is consider a private good–one that owned for one’s use and enjoyment. Its says so in the county recorders after all. It would follow that one could do whatever one wants with their home. Well almost.

That sidewalk, that runs along the street, you can’t block it. You have to let the neighbors walk their dogs and the kids to ride their bikes along it. And don’t be digging near any of the utilities that have easements across your lot to bring water, electric power and natural gas onto you property. If you wake up one morning (as in the photo) and there is a huge hole in your front yard, the city can do that too. The workers can dig down and see if your water connection to the street is leaking.

Ok- fine. The front yard has restrictions placed on it, but the backyard is all privately owed, to dig up and do what you wish with it. Not so fast. If you unearth an artifact from a native American tribe, it is not yours to keep. Despite being on your soil you maybe obliged to relinquish it for the public to enjoy and appreciate as part of their heritage.

But inside the house is all mine. Well, kind of. If you live in the state of MN than your spouse has rights to the home no matter if their name in on the title or not. Which isn’t a conflict, usually, as most couples jointly enjoy the fixtures attached to the land. It’s not like there is a penny slot to fill every time you toast a slice of bread, or the washer dryer is coin operated to divvy up the cost of its use. Couples and families use the features of a home in a public fashion, for all to enjoy.

So yes the home is primarily private to the person on the title. But there are all sorts of public interests that take a little nip out of ownership.

Some, like the utility companies, provide valuable, essential services. In fact the reliability of services, like high speed internet, can make an area more desirable. The reliability of a city to be responsive to snow removal and road maintenance can create increased interest in the neighborhoods they serve. Public utilities and city services are daily necessities, hence exhibit high impact. Whereas the likelihood of a pre-historic relic being dug up on a property is rare, and so, although the public has an interest, any practical impact is low.

These are just a few of the public interests in the very private investment of a home. There are many more besides the utility commissions, and the city utilities. There are a bunch of other public entities that make an appearance on your property tax bill. There are fees for police and firefighters, fees for school districts, fees for county services.

Your home is your castle. But your castle shares many commonplace interests with lots of other castles.

Inciting Violence?

MINNEAPOLIS (AP) — Some Minneapolis City Council members are preparing a new plan that seeks to replace the city’s police department in the wake of George Floyd’s death.

Phillipe Cunningham, Steve Fletcher and Jeremy Schroeder are working on a proposal to create a new public safety department that removes the police department as a standalone department from the city charter.

The three are still working on their plan and expect to release it by the end of January, the Star Tribune reported. It would require voter approval.

Cunningham told the newspaper that the proposal might place oversight of the new department on par with many other city departments, giving the council legislative authority while the mayor would retain executive authority.

Minneapolis council to try again with plan to replace police (apnews.com)

Quilting

My great-grandma stitched this quilt before I was born. My grandma said they would save up old coats, then cut them into squares, piece them, back them with flannel and pull the yarn ties through.

This all took place through long winters out on a farm in southwestern Minnesota, not far from St. James. One house to every 80 acres or so. There was more time than money (more cold and snow back then too) so this was how people passed the time.

What explains the continued popularity of quilting is harder to figure out. This site will connect you with 49 quilter guilds in the area, and I’m sure that accounts for only a fraction of the women (mostly women) who gather in homes or church basements to sew up their creations.

The financial incentives were shipped off to Asia long ago. So it makes you wonder whether some folks simply have to tinker and make stuff. If they don’t do it for money, they’ll do it for distraction as it brings them joy.

You have to have space for such things like workshops and studios. And if your tinkering is on metal and wood you’ll require a garage with a heater mounted from the ceiling in the corner. Did all those spaces where people bend metal and pound on things get shipped off too, eliminating a creative environment? Have we stop creating new better things for lack of workshops?

Radon Be Gone

The EPA has designated January as National Radon Awareness Month. “Test. Fix. Save a life.” is their tag line.

Those of us in the business of helping folks buy and sell homes, have been hearing about the health concerns emanating from radon seeping into homes for the past twenty years. In the first part of the 2000’s, health department officials encouraged buyers to test for radon at time of purchase. Radon was listed alongside a variety of other environmental concerns on the state of Minnesota mandatory seller’s disclosure.

Consumer response to radon did not match the government’s concern, and in 2014 the MN Radon Awareness Act went into effect. The variation in apprehension is best represented by the amount of space now dedicated to the topic in the seller’s disclosure. Lines 279-309 (2020 version) of the body of the disclosure speaks to radon alone–more lines than wells, septics, or any other topic. And two pages of information regarding the detection and harm of radon gas were tacked onto the end. Out of a twelve page disclosure virtually three pages, or one quarter of the document, is now devoted to radon (as opposed to foundations, or water penetration, or roofs).

The new disclosure established an industry standard which dictates the seller is obligated to mitigate a home which tests above the 4 cPi/L established by the EPA. It’s unclear if buyers request the install due to fear for their health, or because they don’t want to be the sucker-who-got-stuck-with-the-bill at a later date, when they go to sell.

Over the course of implementing tests and installations there have been some inconsistencies which have resulted in the need for a final arbitrator. For instance, a few years ago an inspector turned off the air exchange system that a seller had installed in his 1920’s home to enhance the heating and cooling functions. The EPA guidelines state that HVAC systems should be running as normal during the test. However, since this air exchanger was located in the attic (not in the basement) the inspector felt it was an extraneous appliance and turned it off.

The reading came in slightly over the benchmark of 4 cPi/L. As it had already been a contentious negotiation the seller refused any additional compensation. The buyer choose to use $1200 (compensation negotiated for a cracked clay chimney flu) on a radon mitigation system that would not be necessary had the exchanger been left running. They chose between fire safety and radon safety.

By early 2019 licensing of inspectors who perform radon testing was implemented to handle the inevitable variations in the use of the testing apparatus, including decisions regarding air exchangers. Since the MN Radon Awareness Act went into effect, a whole industry of inspectors (tests range from $180-$240) and mitigation installers (system installation ranging from $1000-$1800) as well as a bureaucracy to monitor and deal with complaints, has been established.

Background

The story the Minnesota Health Department has been stressing is that cancer is the leading cause of death in the state. But the leader is all cancers. Mortality rates for cancer vary within demographic groups, but generally, lung cancer makes up around 25% of cancer fatalities. Radon is called out as the second leading cause of lung cancer after cigarette smoking. What they don’t say is that radon is lumped in with second hand smoke and accounts for just 12% of the cases of lung cancer.

MN Leading Causes of Death, 2017DeathsRate***State Rank*U.S. Rate**
1. Cancer9,896146.836th152.5
2. Heart Disease8,230119.150th165.0
3. Accidents2,78844.638th49.4
4.  Alzheimer’s disease2,47434.923rd31.0
5. Chronic Lower Respiratory Disease2,46436.339th40.9
6. Stroke2,25032.640th37.6
7. Diabetes1,31219.336th (tie)21.5
8. Suicide78313.838th14.0
9. Flu/Pneumonia6979.948th14.3
10. Parkinson’s Disease67510.23rd8.4
Taken from the CDC’s website

Feel free to chime in if I’m doing my math wrong, but a quarter of all cancer cases is around 2500 (lung). Then twelve percent of that number is 2500 x .12 = 300. In other words, death due to radon isn’t even on this top ten chart. It accounts 38% of the souls that commit suicide.

From the keys on my calculator, I have death from radon registering in at no more than 5 per 100,000. Below this grouping of accidental deaths which make up 6% of all deaths (from MN Department of Health):

  • Falls (2.7%): 21.1 per 100,000 population
  • Accidental poisoning: (1.6%) 12.8 per 100,000 population
  • Motor vehicle (1.0%): 8.1 per 100,000 population

The average Minnesotan is four times more likely to die from a fall, twice as likely to be accidentally poisoned and slightly more likely to die in a car crash. The claim that more than 40% of homes in Minnesota are contaminating people’s lungs with radon gas and killing them is not jiving with consumers’ personal experiences.

Nationwide Agenda from the EPA

One has to assume that the MN Health Department is following a directive for radon procedures from the EPA’s national agenda. However the EPA offers not one article newer than 2003 on its website to validate research tying lung cancer to levels of radon in homes.

A paper from Korea, which looks at the topic using measures of radon in homes, was published in March of 2016 and is the most recent academic paper I could find. It too references almost exclusively research papers written prior to 2000. Ji Young Yoon et all (Department of Humanities and Social Medicine, Ajou University School of Medicine, Suwon, Korea) wrote “Indoor radon exposure and lung cancer: a review of ecological studies” which was published in The Annals of Occupation and Environmental Medicine. There had been no studies to date in their country. They found:

For Korea, we observed tremendous differences in indoor radon concentrations according to region and year of study, even within the same region. In correlation analysis, lung cancer incidence was not found to be higher in areas with high indoor radon concentrations in Korea.

Scanning the bio’s of the faculty at the College of Design at the UMN, not one cites an interest or expertise in radon. There seems to be a lack of interest in funding or pursuing this topic.

How can we be following guidance that doesn’t appear to have been updated or even reviewed in the last ten years?

That was then this is now

Furthermore there has been a dramatic decrease in lung cancer’s claim on lives.

The death rate from cancer in the US declined by 29% from 1991 to 2017, including a 2.2% drop from 2016 to 2017, the largest single-year drop ever recorded, according to annual statistics reporting from the American Cancer Society. The decline in deaths from lung cancer drove the record drop. Deaths fell from about 3% per year from 2008 – 2013 to 5% from 2013 – 2017 in men and from 2% to almost 4% in women. However, lung cancer is still the leading cause of cancer death.

American Cancer Society

The American Cancer Society estimates deaths from all lung cancer in MN in 2021 will come in at 1950. Twelve percent of this is 234.

Time has changed the circumstances but there has been no release, or at least, re-evaluation, of the protocol. It’s like everyone moved-on and no one told the bureaucrats. So they keep RADON at the top of their checklist of ‘to-do’s. Meanwhile a whole industry of inspectors, installers and licensing and compliance people are settling into a new market.

It’s that mindset that if, ‘We can save one life!’ Then it is all justified. Yet–if 2020 has taught any lessons it is, that even in lives, there are trade-offs.

Costs

In 2019 closed home sales in the 16 county greater metro area (Minneapolis Area Association of Realtors) came to just shy of 60,000 transactions. Take out new construction (10%) and townhomes (25%), and take out a few for opting out of radon testing assuming 36,000 test were performed. A radon test performed by a now licensed inspector averages $200. The (conservative) amount spent on radon testing in 2019 totals $7,200,000.

The MN Department of Health estimates that 40% of homes in MN will test over the benchmark set by the EPA as hazardous to one’s health, or 4 pCi/L. That would lead us to expect that 40% of the homes tested high and negotiated the installation of a radon mitigation system into their purchase. At an approximate average cost of $1200, that comes to a total expenditure for the state of MN to (36000 sales x .4 x $1200) $17,280,000.

Based on these numbers, Minnesotans spent nearly $24,480,000 on mitigating radon in 2019. The tag line from the ‘EPA Test. Fix. Save a life’ promotes an image of each install resulting in fewer deaths to cancer. But is that true?

The amount of money our metro community spent on radon is a flash in the pan compared to a state budget or even a (metro) county budget. But $24,480,000 for community associational groups, who are on the ground interfacing with those struggling with mental health and substance abuse, it is a pot of gold. And that’s where the money should be going. When a 70+ year old passes, it folds into the course of life. The impact of a father OD’ing, leaving young children behind, or the death if a youth, high on the latest street drug, will galvanize community effects that reverberate, even to the point of burning down a mile stretch of buildings.

Wouldn’t our communities be better off by spending that $24,480,000 on mental health to deter suicide? Wouldn’t this, for instance, help with community policing? I say yes.

Motivations and Spheres

The difficulty, of course, is that we can’t transfer the $24 mil from the radon pocket to the mental health pocket. Government used their ability to pressure a commercial endeavor to set up the radon industry. In fact, with the death rate for lung cancer dropping, it almost feels like the health officials are spurred onto be more aggressive. “We’re doing so well making widgets, lets make more!”

Unfortunately this is a business mindset, for work in the private sphere, one that seeks to expand and grow. The public good mindset is quite the opposite. Since the work in the public sphere is often performed to prevent something from happening–as in this case, to prevent lung cancer. Once that is accomplished, activities should cease, and resources reallocated to other demands of the public that now climb up to a higher priority.

In the meantime, the industry standard for radon testing, at time of a house purchase, has created paying jobs for inspectors and bureaucrats. Quite naturally, their motivation will be to support this new structure from a private point of view. It is not part of their employment to evaluate whether this the best use of societal funds. The inspectors and installers and continuing ed teachers and state licensures and public health workers will support the process because it pays the bills that support their families.

What happened to the feedback loop? Where in the system should there be a check to see if programs are on the right track? Feedback has been stifled because to criticize the noble cause of saving life has not tolerated.

What I am and what I’m not saying

I am not saying I have the expertise to validate or deny the tie of radon in homes to lung cancer.

I am pointing out that public health officials have struggled to get this issue to take traction in the public mind. I am saying that no research in the last fifteen years has validated our present path to safety (and one study has countered it). I am saying that an industry, in the private sphere, has sprung from these government actions, draining over $24,480,000/year from community funds for this issue. I am saying death rates from lung cancer have plummeted in the last ten years. I am saying there is no feedback loop to public officials to demand a review. I am saying it is no longer good enough to make one agenda and then push it through for a decade without any consideration that time alters all things.

For a generation there has been the activist approach in government. Select a cause; implement it nationwide; get the talking points out to all the communication outlets so it is heard in stereo; then never relent. I am saying that this is no longer good enough.

Back to tenements for the poor?

While the government will need to employ short-term measures to avoid a wave of displaced households, one major step toward resolving the underlying problems in the housing market would be repealing an obscure 22-year-old addition to the Housing Act of 1937, the Faircloth Amendment. Passed in an era when the reputation of housing projects was at a low, the amendment prohibits any net increase in public-housing units.

Opinion | Alexandria Ocasio-Cortez Knows How to Fix Housing – The New York Times (nytimes.com)

Ugh. When politicians are too young to remember the mistakes of the past.

MN comes in at #2 to raise a family

According to research by Wallet Hub, here are the top five states in order:

RankStateScore ‘Family Fun’ ‘Health & Safety’‘Education & Child Care’ ‘Affordability’ 
1Massachusetts60.889103621
2Minnesota60.571458115
3North Dakota60.103372141
4New York59.802216547
5Vermont59.164015274

Raising a healthy, stable family sometimes requires moving to a new state. And the reasons for moving are often similar: career transitions, better schools, financial challenges or a general desire to change settings. Wants and needs don’t always align in a particular state, though. For instance, a state might offer a low income-tax rate but have a subpar education system. However, families do not need to make these kinds of tradeoffs. They can avoid such problems by knowing which states offer the best combination of qualities that matter most to parents and their kids.

The column on the far right is title ‘Social Economics.’ The full report is here.

The Iron Lady- movie review

I’ve been a big fan of Meryl Streep ever since Sophie’s Choice (1982), but for some reason hadn’t gotten around to watching her portrayal of Prime Minister Margaret Thatcher in The Iron Lady (2012, directed by Phyllida Lloyd, a British film director and producer). It seemed like the perfect match-up for a Saturday night: the story of the first women to rise to the highest political office in the UK brought to life by a favorite actress.

Yet-I found this movie perplexing. The film opens with a batty old lady stumbling around a shop, buying a pint of milk. I could barely make out Meryl and was confused how this could be Thatcher, who putters anonymously along the streets of London. Getting wise to the technique of starting a story at the end of a life, and then filling in the important stuff in a retrospective, I sit back and wait.

And wait. Nearly half the film is about an elderly lady hallucinating about her kind and beloved husband. It’s a touching story, but not exactly what the most powerful woman of the western world in the twentieth century is known for. The message seemed to be that this woman had a supportive father as well as a devoted husband- lucky girl! That’s how she managed to enter the halls of power.

Even when the film gets around to her accomplishments, they leave out interesting details, like that she was a chemistry major. No information or encounters in her subsequent academic pursuits, or early years. We do discover her husband was a businessman and also a family man, but isn’t the story about her?

More often than not the portrayal of her career lands on the tragic- such as the scene where she is writing letters to the families of the servicemen who died in the Falklands War. No mention that the conflict was provoked by an Argentinian invasion on April 2nd, 1982, and was wrapped up with a decisive victory by June 17th. What does a girl have to do to get a little recognition?

An overt concentration on the loosing side of her political career continues through the whole film, from the riots following her proposal of a “community charge,” to the waning of political judgement after so many years in office, to the tears that spring to her eyes when she resigns. Yet the voice of her husband pipes in, “Chin up old girl.” There’s Denis with his unfaltering support.

This representation of Prime Minister Maggie Thatcher, the longest serving prime minister of her generation, blessed as a dementia patient so she doesn’t have to relive a faltering political career, is more than a little odd. Any female who started in a grocery store and rose to lead men, not listen to them, must have been– spellbinding.

It’s not even difficult to find her admirers. Check out the level of reverence in William F Buckley Jr’s voice as he introduces her in this clip from Firing Line. Meanwhile, she sits in her chair composed and alert, neither aloof nor nervous. Just present. This was 1977. Two years into being the leader of her party, and two years away from being elected to the top job.

It would have been far more interesting to tell the tale of how she discovered and cultivated her ability to captivate her male (and female) counterparts. Instead of showing how two men coach her into a new hair do and enhance her elocution skills (ho hum), how about the moments she went from awkward to confident, from nervous to calm, from hesitant to determined? How did she come to realize her je-ne-sais-quoi?

Meryl Streep took home the best actress Oscar for her performance. I just don’t think she was playing Maggie Thatcher.

Can we see some numbers, please?

Say an individual, Bob, is concerned about a public good, like the environment. He decides to make a new year’s resolution to do something about it. Over a two to three year period, he activates others in his industry to legislate a testing requirement that costs the consumers, say, $200 on average per transaction. Note that this organizing and petitioning and writing communications and attending meetings was all done outside of the pay-check sphere of life.

One of the objectors to the added commission-for-the-public-good points out that, other than providing information, the testing will not give rise to any tangible reductions in green house emissions. Bob and his cohorts respond that doing something is better than doing nothing. Is he right?

Now let’s say that instead of doing the testing one could give the $200 to the client to not use their personal vehicle for a month, or to not take an airplane trip. In both scenarios there would be a measurable and immediate impact on green house emissions. Given these choices, it’s fair to say that there are other ways to spend $200 which would result in a greater impact on the goal to reduce global warming.

Numbers must be run so the public has a means of comparison. While everyone is working on (lobbying for, debating in favor of) one idea, other more valuable ideas are neglected, omitted from the realm of public consideration. Even though no one received payment for their time, the capacity of a community to engage and respond was tapped. So despite Bob’s sincere interest in climate change, doing nothing is, in fact, better than advocating for an unsubstantiated claim.

Now let’s say Bob was particularly talented at organizing and galvanizing folks around a cause. And due to this success he continued to seek approval and status through this type of work. The impetus for action transforms to status seeking, increasing Bob’s private persona, versus the stated tangible impact to any group concern. Now, in an error of commission, a form of corruption, starts to germinate.

The answer is not to stop the Bobs of the world. Hardly. The intent of this blog is to encourage the meaningful enumeration of choices; to clarify the resources used as inputs and record the increases in public capacity and capital; the intent is to provide the information necessary to steer Bob’s ambitions to the most productive choices.

Dual Sphere Commerce

For as long as I can remember, my mom tackled an extensive Christmas mailing with mimeographed updates of our family’s progress printed on colored paper. My job was to fold and insert these single-spaced typed communications into elegant cards purchased from UNICEF.

The greeting cards provided a means for people to support the United Nations International Children’s Emergency Fund while purchasing a commodity. Girl Scout cookies blend this genre of multi-function purchase. And some large retailers, like Target, will donate a percent of the purchases to the school of the customers’ choice, distributing funds to public good providers in much the same way.

When a UNICEF ad appeared as I scrolled through my Facebook feed, I clicked to see what they were up to. Holiday cards are still a mainstay with 18 categories to filter through and hundreds of choices from there. But that’s not all. The site has an extensive offering gifts, jewelry, and so on.

They’ve stepped up their offerings but also their accounting of how much the purchaser will contribute towards the benefit of desperate children. For just shy of a hundred dollars the buyer receives a hand crafted ring, and prevents 54 children from contracting measles. In addition to laying out the the tally of how many lives will receive a health benefit, the site allows the buyer to meet the artist. These brief bio’s can further connect buyer and seller through other shared interests.

UNICEF is creating an Amazon of dual sphere commerce.

The Art of Mianzi

Americans might benefit from a greater understanding of the Chinese custom of saving face, or Mianzi.

The Chinese concept of “face” (aka 面子 or miànzi) refers to a cultural understanding of respect, honor and social standing. Actions or words that are disrespectful may cause somebody to “lose face” while gifts, awards and other respect-giving actions may “give face”.

For good or for bad, Americans’ preoccupation with being right and transparency, seems to have folks battling-it-out on every single issue. Calling people out in public. Pursuing them until they are fired. Demanding video to confirm or deny what did, or did not, happen.

There is more at risk than your own embarrassment when you act to loose face, those near you are affected as well. So they act accordingly.

Raising your voice with someone in public is strictly frowned upon. Causing a scene makes bystanders lose face through embarrassment suffered on your behalf. They may actually scurry away from the scene to save face! Even if you win whatever argument, you’ll lose as a whole.

Don’t misunderstand my allegiance to the individualism and pursuit of the truth facilitated by our democratic system. It’s just with a public health crisis impacting our economic activity, I’m wondering if there is something to learn from those who start all solutions from the communal vantage point. If, by allowing some people, or groups of people, a little slack in making the wrong decisions, we will move more quickly to plan B, C or D? By letting people save face we skip that time delay of digging-in to hold onto poorly conceived territory.

I sure don’t grasp the fine tuned logistics of Manzi. But the Chinese have a whole social capital structure in Guanxi-based corporate social capital tied into their business dealings. There is an understanding and acceptance that social transactions are a component of economic outcomes.

Allowing people to be wrong at times without a public airing seems to be a way to keep the whole machine purring gently. Can’t we just let some arguments die without an investigation? After all that’s how we live our lives. You’ll strike out as a parent if you berate your kid when he’s up to bat, and your marriage will be stinkier than the garbage that your husband forgot to pull to the curb if you make a scene out in front of the neighbors. We evaluate which battles to fight all the time.

Maybe saving face has a place on this side of the Pacific.

Probability title deed

In South Africa a start-up called Bitprop is helping with affordable housing by building and securing tenants for backyard rental units (in return for a percentage of the income stream from the rentals for a set number of years).

Our duties include locating investors, drawing up professional building plans, sourcing reliable local builders, and enforcing good environmental practices. Furthermore, we work with the homeowner to develop landlord, financial and entrepreneurial skills. 

How micro property development could transform townships in a big way | OUR FUTURE CITIES

It is estimated that 30 million people in South Africa do not have formal property titles to their homes. So a significant outcome of the process is securing a recordable claim to the property for the owner.

Bitprop works to “Enable micro property development at a macro scale”. We want to prove that previously ‘invisible’ property assets, which are not recognised by normative legal or financial institutions, can be developed into valuable investment opportunities. We do this by taking each homeowner that we work with through the process of securing their title deed.

How micro property development could transform townships in a big way | OUR FUTURE CITIES

The focus is on generating income from the renters. But property ownership does more for homeowners including incentivizing repairs and improvements. Perhaps, more importantly, the titling process enables people to buy and sell their property more freely should their circumstances warrant a change. If Bitprop is as successful as they wish to be, they will create a valuable public good.

Our dream is that we do this so well—because we have the commercial incentives to do it well because if we do, the risk in our property investment goes down—that we, on a voluntary, private basis, start mapping land, step by step, and then we get the council to acknowledge this as a low-cost, digital- and- technology-based title deed.

20 Minutes With: Carl Sammeli, C0-Founder of Bitprop | Barron’s

This is a story to follow.

WWF, Neocolonial?

The World Wildlife Fund is the largest conservation organization in the world. Born of the passions of the 60’s, it established a foothold in Kenya when the organization purchased 37,000 acres adjacent to Lake Nakuru in 1973.

Eco-tourism is a big player in Kenya’s GDP, coming in at close to 10%. Despite this economic success, decades of outside influence on the care and preservation of wildlife has some expressing tension around land use.

The conservancy, portrayed in this BBC clip, celebrates the initiatives of local ownership.

Nashulai Maasai Conservancy , is the first ever community led and managed Conservancy which has been created to on the borders of the Maasai Mara National Reserve . The conservancy has been established for wildlife conservation but the local community would also live within the area and share it with both wildlife and livestock . It is a mixed model Conservancy the first of its kind in Mara

The point to be made here is that what was an agreeable arrangement 47 years ago, two generations or so, may no longer have the same feel to it. At that time perhaps there was insufficient home-grown ability to manage the parks, and as the shared objective of wildlife preservation still appealed to all, it was advantageous to have outsiders come in and put everything in place.

What was appealing and profitable in a social, ecological and financial sense, a half a century ago, is showing some wear. Now that the outsiders are no longer needed, they are pirates. They are taking instead of giving. Time has changed the circumstances.

Hospitality

I have been a fan of Walter Russell Mead’s Yule Tide Blog since back when he wrote at The American Interest (now the American Purpose). His annual recap of the Christmas Story has something to offer both steadfast Christians as well as those simply curious about the faith and what it entails. Today’s entry starts:

The Christmas story suggests that we can somehow try to be loyal members of our nations, our families, our tribes—and to reach out to the broader human community of which we are also a part.

Just because we all belong to groups, doesn’t preclude us from reaching out to others. In fact there is a desire to do so. Yet a tension arises.

It’s a puzzle. Human beings need roots in a particular culture and family, and those roots shape them; at the same time, human beings have values (like freedom and democracy) and ideas (like the Pythagorean theorem and the laws of thermodynamics) that demand to be recognized as universal. We seem perpetually torn between “cosmopolitan” and “local” values: universal ideas and the customs of the country.

Importantly, within the faith there an obligation to welcome and help strangers.

We think of the trade-off between local identities and universal values as a modern problem, but it is deeply rooted in human experience. In the ancient world, where tribal and family affiliations were very strong, many cultures shared a strong belief in the moral duty of hospitality to strangers, whatever their tribe. Day-to-day life revolved around your own group of close associates, but the duty of hospitality required a willingness to look beyond these limits to recognize the common humanity and worth of all people.

And this is hardly unique to Christianity. The tradition of hospitality runs throughout Islam. Read adventurer Dervla Murphy‘s account of her solo bicycle trip from Ireland to India in 1963, as detailed in Full Tilt.

Her dedication reads: “To the peoples of Afghanistan and Pakistan with gratitude for their hospitality for their principles and with affection for those who befriended me.”

You can be true to your tribe, true to your group within your group, and still reach outside that structure for all sorts of interactions. Not only can this be true, it is the best form of social commerce. And not everyone has to play. This show-stopper-outrage that has controlled our dialogue, the one that holds up the one offending example, sidesteps the reality that a few bad apples (racists, sexists or otherwise horrible people) don’t monopolize the ability for the rest of us to extend a hand where they won’t.

One doesn’t have to practice in a faith community to believe in the goodness of human nature.

2020 is a Wrap!

This afternoon, as a lingering glow alights the World Trade Center and the lights go on at the Empire State Building, as the glimmers extinguish off the Hudson River, and the sun’s rays slide down New Jersey, Pennsylvania, Ohio, across the prairies, and silhouette the mountains of the West until finally slipping off the coast of California, Oregon and Washington, as the rays sink past Hawaii and into the Pacific, we say goodbye to 2020 with a wave. And a wish that we could give it a good kick in the petuti.

But this year allowed me to start this blog and I am very thankful for that. Readers have shown up in the hundreds, well over my expectations. I have relished every like and comment. Thanks so much for visiting.

The most popular article hands down was Is it so simple? A response to Nathaniel Rachman’s article in Persuasion allowed me to unabashedly promote the view that drives me to write this blog. These last three months have been devoted to laying some ground rules to how things work. There’s really no point to continue, if folks don’t see the definitions clearly of the economic nature of public and private transactions.

Since this is an economic philosophy I need to get around to tying it to material values, and I will get to such an accounting in due course. I could bring in the numbers, and show how they are assigned to forms of capital. But should people not accept the actors and the types of activity they do, all will be explained away, talked over. There will be references to cloaking and embedding and behavior.

For people to see the hard cash, they will have to see that private individuals employ time and resources to public endeavors everyday throughout; that governments are riddled with private transactions everyday throughout; that businesses develop goodwill on their balance sheets and accommodate labor demands everyday throughout; that associations are motivated by private ambitions while supporting the group’s goals everyday throughout. Until there is an acknowledgment of this type of dual structure–there is no point to assigning slices of material wealth to each and every activity.

Economics is not just represented with dollars. There are two natures to transactions. The value does show up in capital and dollars, most obviously when being externalized or internalize. Although-that moment is but a snapshot in time, a frozen price point, that could be simultaneously the result of the in-hand trade as well as the tapped capacity accumulated over generations. Hence the necessity to understand time.

For a generation, those who control the public purse have developed a party line, with nationwide control of talking points. They’ve developed an activist type of one issue dominance, with the devastating inability to see subtle trade-offs. They’ve basically obliterated the concept of varying degrees of importance. Covid has made this glaringly obvious.

So happily ring in the New Year! And ring out the old ways, while keeping an open mind to the new.

Cool gadgets for the home

There were a handful of gadgets clients talked about this year that are worth mentioning. (note: I don’t mean to endorse any one model–there are several choices in all cases.)

Garage Door Sensors: Ever leave on a road trip and worry that you left your garage door gapping ajar? Now your smart garage door opener will notify you, and allow you to close it en route.

Control, secure and monitor your garage door from anywhere and receive real-time notifications when your garage door is opening or closing.

You can also have it on a timer to always close by a certain hour of the evening. Super handy especially if you can’t see your garage door from a window view in your home.

Security Cameras: Little nubby camera heads have been around for a number of years but either the price point has dropped or folks are more comfortable with the technology, as they’ve become much more prevalent. They sit inconspicuously on the fireplace mantle with the thick candles or amongst the books on the wall of bookcases. Many have both audio and video capabilities.

Thermostats: Most homeowners don’t replace their thermostat until their furnace dies, which on average is every 15-17 years, so you might not know of the progress made in their construction. Wi-fi enabled thermostats allow you to track your homes temperature from afar, warming it back up as you arrive at the airport, for instance, after a long trip to the beach. One agent told me that when her in-laws visit they always crank up the heat. With her new thermostat, she just hops on her phone and resets the temp (so much for being nice to the baby sitters!). The monthly reports of energy tracking and usage are also very popular.

Lighting: You no longer have to stumble around in that back storage room or wish you had undermount lights in your kitchen. There are many LED lighting options which are bright and convenient to install. No more florescent glass tubes, no more undermount lights heating up your cabinets. One variety comes on a rope with an adhesive backing for easy installation. Ceiling mount LED’s are flat as there is no additional casing. You can light up your place or tone it down.

Keeping your garage door closed and lights on is the best way to promote safety in your neighborhood. Maintaining low temperatures in your home when you are away will save energy. Each of these gadgets are small steps towards better use of natural resources, and a more safe and secure home.

Primer Podcast for Affordable Housing

Lots of great topics covered in this Econ Talk podcast with Katherine Levine Einstein. Russ Roberts and the assistant professor of Political Science at Boston University tackle the obstacles developers face in building higher density homes, as well as affordable housing units.

Katherine explains that the title of her new book, Neighborhood Defenders, comes from the notion that people who show up at city council meetings feel they are speaking on behalf of their neighborhood; they view themselves as representatives of that public.

So, first on the motivation side, the term NIMBY implies sort of a selfish motivation. It implies, Not In My Backyard, a very individually motivated view. And, in our research, we actually find that the folks who show up to oppose the construction of new housing often view themselves as representing their community’s interests and are motivated by protecting their neighborhood, their surroundings. Right? So, their motivations are not so individualistic.

The conversation flushes out the reality that people who have time to devote to the work of public affairs do not necessarily reflect the width and breath of the constituency. In fact there are noticeable groups missing from these planning and approval meetings. As Russ says:

So, talk about that tension between the idea behind saying ‘a public hearing.’ Wouldn’t you want a public–I mean: Let the public be heard. And yet it’s not really the public.

Groups are further delineated in the failure of the California legislature to approve SB 50 which would have streamlined the approval process for developers. It seems that the environmental folks found common ground with NIMBY’s.

So, one set of interests, which doesn’t surprise anyone, would be opposed to something like this is communities like Beverly Hills. Like, very privileged places with lots of white homeowners who are strongly opposed to the construction of new housing. So, those folks were like, ‘No, we do not want to have fourplexes all over the place here.’ So, they were a natural oppositional constituency.

But, other groups also came out in opposition. So, Sierra Club and a few other environmental groups were strongly opposed because they thought this would lead to the degredation of sort of existing green spaces.

And, that I think, and this is the oppositional group that was to me most interesting, is sort of left-leaning tenants’ rights organizations and some of the socialists organizations in California that are quite powerful, especially in Los Angeles and San Francisco.

Those groups worried that this up-zoning would actually lead to gentrification. If we think about areas in Los Angeles that are near transit stops, that many of those are less -privileged areas with larger Latin X or black populations. And, that those were places that might face development pressures, and, you know, the construction of new luxury housing, should zoning codes be relaxed.

And, so those really diverse constituencies all came together. Both times they killed SB-27 and they essentially killed SB-50 as well.

As they pull apart the thorny issues around community support for affordable housing, they not only talk groups, interests and work, but also how the public’s impact on timeframes have economic consequences.

Usually it would take like three to six months, I assume, to build a grocery store–I don’t know, maybe. But, for some reason it takes forever. And, of course the answer is, ‘They didn’t get the permit yet. They’re working on it.’ But, talk about–these things, some of them are ten years. And, after the 10 years, they get a building of four units down to three. But these are often 90 units of affordable housing were planned and they end up with, like, 40, ten years later.

In addition to these public sphere definitions and mechanics, they talk externalities and corruption. Well worth a listen!

Ski Trip-Park City-Review

The overall rating for our Christmas trip to Park City was five out of five stars.

Travel and logistics: There are multiple daily flights from MSP to SLC, accommodating early risers or those who want to tick out the very last minutes of the day. The front desk at the Marriot recommended Four Seasons Concierge Service (approx $75/person round trip including stop time at Wal-Mart) to haul the four of us, and all the equipment, the 40 min drive up to Park City. We no longer have any desire to drive on icy, unfamiliar roads and use whatever bus or car service is available. This one was excellent.

Lodging and Food: Marriott Mountainside offers villas which are two bedroom suites with a kitchen and living area. So we cooked-in most all meals. Our driver pulled into Walmart parking (conveniently right on the way), where an employee loaded a week’s worth of groceries into the back of the suburban. By ordering on-line the day before departure, our groceries were ready to be picked up, all confirmed by text message. Definitely a Covid lesson I will repeat. There was only one additional stop for groceries the whole week.

Marriott Mountainside is right on the hill. You walk past the pool and hot tub with your gear, pop into your skis and slide down into the lift line. This frees up the time normally spent stomping out to an early morning bus ride up to the ski area. Park City Mountain is the largest resort in the US, but more importantly for us were the number and quality of blue runs. Skiing on a 4-out-of-5-day pass ($415/adult) we had plenty of terrain to keep us busy. Lift lines were a little long, but thanks to Covid, a reservation system kept the numbers in check.

Since we had such easy access to the room, we took a break for lunch every day. We did go into town for a nice steak dinner one evening. Prime Steak and Piano Bar lived up to its on-line accolades both for food and ambiance. You wouldn’t be able to get out of there without spending $300 (us more) for four. We felt it was well worth the money. The live vocals and piano music were particularly welcome this year.

The Town: Silver mines brought people and wealth to the area starting as early as 1868. So there are a fair number of preserved historic buildings. Main street is filled with what you would expect in a resort town: restaurants (said to have over 200), galleries, merch shops, snow wear and gear.


Weather: Average temps in December and January are between 13-32 degrees. This year the snow cover was sparse–for guaranteed depth it is best to arrive mid-January. The climate is dry which allows the snow to remain powdery despite the warmer temps. It was sunny four out of the six days.

Gifts and Gratitude

Credit due to an unknown source

There are a lot of exhausted moms out there on Christmas day. What accounts for the value they find in gift giving? To bring joy and a little material well being to your kids is within the realm of comprehension. But what about all those other gifts?

Business people see something in the cards with lots of scrolls that go out to clients, thanking them this time of year. Showing gratitude is over and above any monetary payment, even if there is a business angle to the effort to nurture their contacts.

Figuring out who makes the list is an accounting of sorts. Your very best customers may get a holiday wreath along with the message of good cheer. Teachers may receive gift cards to Caribou Coffee, whereas uncles and aunts step up to Pendleton socks and scented candles, but your secret santa pick warrants an outright custom purchase.

A gift is, by definition, something that is given with no expectation of return. Yet thankfulness is often a notion in the gift giving tradition. It’s a recognition that there is somebody out there thinking about you. Being thankful affords you a moment of recognition for all those loose and untimed interactions that structure a more pleasant life, including perhaps the $15-and-under gift put before you.

Instead of rolling your eyes when you pull back the tissue paper hiding the token of appreciation in the little gift bag, consider what type of gratitude is wrapped up in it. The gesture asks you to take the time to think and remember when that cousin picked you up after hours from the bars, or Aunt Bee was at home on that below zero day when you were locked out of your home, or how the mailman put your package in a shelter spot on the front porch.

Appreciation allows you to gauge different levels of merit. A fine tuning of need, something that seems to be sorely lacking in some of our large institutions. Gratitude is an important player in the ballgame of human interactions, right up there with empathy or greed. It is one to cultivate.

For Christians today is a day of thankfulness for the birth of Christ, the Savior. The lessons of gratitude and thankfulness are carried out through gift giving. All the others who are simply setting up a tree with presents all around are still listing out their sets of priorities. In this way they benefit from this lesson, believer or non-believer. That’s something to be thankful for.

To all of you–Merry Christmas and good night!

Book Club

One of the benefits of raising a child is that you get to follow them through their interests and endeavors. My college sophomore was required to tackle two novels for his class on colonialism: The Poor Man’s Son and God’s Bits of Wood. Feraoun is the product of French Algeria and Ousame is from Senegal, part of Afrique Occidental Francaise (AOF) until 1958. Both tell stories of the struggles of their countrymen and women during the era of New Imperialism.

Unlike the conversation of today, both authors describe many more groups than the simple division of colonial power and the colonized, of oppressor and oppressed, or of those who take what is not theirs and those who are left without. How exactly the goods, services and resources are shared and divided between all the players is a preoccupation for both men.

Details such as, 180 francs– the amount of Feraoun’s scholarship to Ecole Primere Superieure, and 100 francs–the amount he turns around and sends back to his family in Kabylia. Then there is 25 francs and a container of barley–the amount that shows his family’s extreme financial distress. And 600 francs–the amount the headmaster hands over to allow him to continue his education.

Both authors detail workplace struggles. Feraoun’s father leaves for a time to be a laborer in Paris. When a workplace accident lands him in the hospital he is able, after two attempts, to secure a settlement of $3000 francs along with a quarterly stipend. Ousame describes the 1947 railroad worker strike with specifics on pensions and wage scales and family benefits.

There is a counting amongst the women as well in the home life of the railroad workers. There is the rice that the local grocer is forbidden to sell them, and a fight with the french soldiers over a leg of mutton. Feraoun finds his financial obligations to his northern Algerian family growing as his sisters’ husbands leave them for greener pastures. He counts thirteen dependents on his teacher’s salary.

There are many groupings in these stories; there are the workers, and the women, and the missionary, and the soldiers, and the french educators, and the French who show up to help with the strike, and the elders who feel disregarded–all pulling in many different directions for people’s time, talent, and assets.

It’s as if these authors are trying to sort through two spheres of economic activity, particularly set in contrast by private affairs and public affairs, by looking after the individual and being obliged to the family, as well as by outsiders and insiders. And the good and the bad make an appearance in every cluster.

Without a doubt, the richness of these detailed accounts of choices is far more interesting than the conversations of today.

Book danger!

Some think Little House on the Prairie should be off school shelves. Yes, the toothy girl in braids bounding across the prairie and runny amuck with Nellie is surreptitiously misguiding your child’s thoughts about life in the Midwest 150 years go. Thoughts of self-reliance and hard work will only have a negative influence on your child. Although fiction, the books are used as education–and they are not accurate!!!

Seriously TPT?

Doing Laundry–Real Estate Edition

The November 2020 tally of Realtor members of the National Association of Realtors totaled 1,460,397, making it the largest trade association in the U.S. There are just shy of 21,500 Realtors in Minnesota alone. The group is nonpartisan with a stated “mission … to empower REALTORS® as they preserve, protect and advance the right to real property for all.”

Maintaining property rights, so that their clients can buy and sell homes and investments, is an unwavering shared value amongst this group. Not only because it facilitates their clients’ and in turn their own private interests, but also because stagnant unproductive real estate becomes a drain on public interests in the form of crime, blight, and inefficient use of public infrastructure.

The good and the bad of it is that once you build an open and reliable system, everyone wants to use it–including the criminals.

Globally, real estate is one of the “laundromats” of choice for criminals seeking to legitimize their ill-gotten funds. Using shell companies and other shady venues, they annually funnel more than $1.6 trillion into real estate investments around the world. Despite federal efforts to crack down on the illegal transactions in the United States, money launderers continue paying top-dollar for purchases, driving up real estate prices in many cities. 

NAR and other housing groups are urging Congress to stem the tide of dirty money by passing effective anti-money-laundering legislation. The organization is also launching an education campaign to help Realtors® identify the risks to their businesses and use best practices to protect themselves against liability.

MN Realtor

More dollars chasing real estate means higher prices. Since a pricing system is dynamic and interdependent throughout an entire network, it means higher prices across the market, not just in apartment buildings or the venue of choice for foreign or domestic racketeers. So we could say that money launders are externalizing unaffordability to lower income homeowners, while internalizing the benefits of our property rights institution–including the work done by NAR and its members.

Wouldn’t it be interesting to know the tranche of the value that illegal activity adds to the price of a home, apartment or investment property? Even if it were only an estimate. Across a metropolitan area this maybe a small amount say half a percent, or around $1500 on the Twin Cities’ median priced home. Barely perceptible with all the other costs and expenses involved in a home.

But if the criminals did their business primarily in one neighborhood, (a neighborhood where people don’t have time to wonder why a property is left vacant, nor know where to file a complaint for snow covered sidewalks) their stake could have an outsized impact. It is in these locations that a large number of REIT’s and creatively named groups tend to appear, especially since the recession of 2009. If a large sell-off of their position swung pricing, say ten percent, it would have a destabilizing effect, especially if that neighborhood was already experiencing a variety of negative externalities.

Note the groups. There is the overall housing group of buyers and sellers (personal or investors) who are buying real estate to be used as places to live. The pricing system is a reflection of the value property commands as places of residence. The criminals are not participating in that market. They bring money into the market because it is reliable environment to launder their funds. While the criminals internalize this as profits, first time buyers in the large group can no longer afford to buy a home.

The presence of washermen (and women) in the marketplace also necessitates an increase in the stream of funding used to subsidize those of the larger group who are unable to provide for their own housing. It would be useful to know some of these numbers. Knowing the financial drain of the money launderers on our real estate market tells us how much the Justice Department can spend to pursue and capture these ne’re-do-wells. This is the housing justice we need to see happen.

Photo of the day: Minneapolis City Hall

Home to the Minneapolis City Council

The building, located at 350 South Fifth Street, is an example of Richardsonian Romanesque architecture. The design is based upon Henry Hobson Richardson‘s Allegheny County Courthouse in Pittsburgh, Pennsylvania. Washington School, the first schoolhouse in Minneapolis west of the Mississippi River, was demolished to make way for the new building. Groundbreaking took place in 1889, and the cornerstone was laid (a story off the ground) in 1891. Construction did not officially end until 1906, although the structural exterior was essentially complete by the end of 1895. The county began moving in to its side (4th Ave.) in November 1895, while the city (3rd Ave.) side was not occupied until December 1902. Cost was about $3,554,000, which works out to 28¢ per cubic foot ($10/m³).

Minneapolis City Hall – Wikipedia

Home after Covid

Lots of folks are speculating about what the world will look like once people emerge from the Covid induced hibernation. Zoom, Teams and other internet mediums have shown how it is possible to run companies and services remotely. But will people use this flexible employment opportunity and choose to live elsewhere?

One way to consider this is to look at why people moved before Covid-19. Porch.com is a home remodeling site and tracks this information. On average people relocate every seven years, and people don’t take it lightly. As Porch explains:

Moving is a hassle. From boxing up one home to finding another, facing a move can feel like scaling Mount Everest. It’s no wonder Americans have been moving at decreasing rates since the 1980s. In fact, the moving rate in America reached its lowest in 2018 since 1948, when the U.S. Census Bureau began tracking moving rates.

Buyers diligently write out a list of wants and needs when they start their home search. Some of these criteria change of the course of evaluating all the amenities that different areas have to offer. One in four (on Porch’s sample of 1000) said that more space was the greatest driver for a move. Realtor Magazine broke the other reasons down by percentages:

  • Desire for a larger home: 26%
  • Desire to own, not rent: 19%
  • Downsizing: 12%
  • New job or job transfer: 11%
  • Desire for a better neighborhood: 9%
  • Separating from a significant other: 6%
  • Establishing own household (e.g. moved out of parents’ house): 6%
  • Desire to be closer to family: 5%
  • Desire for a shorter commute: 5%

Only 5 percent (said) they made a decision based on commute times. A job relocation prompts a greater response. Still–few buyers consider distance from employment as a significant determinant. Perhaps we should consider how many types of jobs are really affected by the ability to dial-in from a home office?

Anyone involved in the construction or maintenance of built structures (plumbers, sheet-rocker, bull doze drivers, HVAC contractors) will always drive to job sites. Then you have all the service providers who interact face-to-face and hence are tied to location such as k-12 school teachers and administrators, nurses and hospital staff, lab workers. People who build stuff like workers in a production plant are also anchored by their workplace location.

That leaves white collar jobs such as attorneys, accountants, mortgage underwriters, IT workers, architects, engineers and actuaries. Many of these jobs have already provided opportunities for their workers to work remotely. And as some of these jobs grow to include management and partnership opportunities, it is less clear that the full-time remote option would be available. A transition to more of a business ownership role would require better proximity to clients and/or employees.

I speculate that remote work won’t send homeowners off to new locations as much as their home’s floor plan. With more time spent at home, the functionality of their living space comes sharply into focus. Many will decide they need more space. Or it maybe the issue of how the space is distributed. An accountant might be fine with spending one day a week wedged in a cinder block space in the basement laundry room of a 50’s rambler, but becoming a full-time home office worker will demand a more comfortable office with appropriate buffers from family life.

This should make We Work types of built-place solutions more popular, especially in neighborhoods with smaller homes which are more difficult to expand due to limited lot sizes. Suburban neighborhoods may have more elbow room, but residents here may feel overwhelmed with the increased together-time. Whereas suburbanites used to enjoy their anonymity, perhaps this will diminish when a bunch of them no longer depart to their other lives across town. Those who seek the old sense of distance and privacy may shift out to the third tier suburbs and beyond.

Maybe the post-Covid environment won’t be about people moving away from their present communities as much as employers reaching across the country into a larger pool of talent. There will be community upsides to more folks working from home as well. Keeping people out of cars and airplanes will give back more time for family work, free up roads from congestion, and reduce pollution. Overall the great work-from-home experiment of 2020 will contribute to increased productivity in both the private and public spheres.

Graffiti and Barricade Building

In a recent paper, Balancing Purse and Peace:Tax Collection, Public Goods and Protests, Benjamin Krause from UC Berkley evaluates state capacity in Haiti. From the abstract:

Strengthening state capacity in low income countries requires raising tax revenue
while maintaining political stability. The risk of inciting political unrest when attempting to increase taxes may trap governments in a low-tax equilibrium, but public goods
provision may improve both tax compliance and political stability.

The author predictions are very intuitive: 1. decreasing pubic goods (in this case garbage collection) and fines decreases tax collection. 2. increasing public goods increases tax collection. What is interesting to me are the variables he chooses as benchmarks. The research measures the public willingness to pay taxes while tracking their voice as expressed in graffiti and the amount of time some members may spend on barricade building.

… I introduce two novel metrics for independently measuring political
unrest. First, to measure political speech, I conduct a census of and geo-tag the graffiti
across the city. I then use the presence, prevalence, and tone of political graffiti specifically
as outcomes of interest. Second, to measure the most violent or destructive political unrest,
I track the construction of barricades in neighborhoods which are built, and often lit on fire,
as a form of protest in this setting. Tracking both where these are constructed and which
areas are affected provide additional outcomes of interest. As a result, I am able to provide
novel experimental evidence of the effects of both tax collection and public goods on political
unrest – and on violent or destructive unrest in particular.

In my model I propose that in the public sphere, goods are provided when the voice of the group expresses a need and people are willing to do work on behalf of the objective.

In this paper the author measures voice by tracking graffiti. Lack of graffiti speaks to an endorsement of the state or a sign of favorable response to provision of garbage collection. And he measures work as the number of hours spent building barricades to protest against the state. Where lack of work is an endorsement of the state.

Exciting to see something similar appearing in an academic paper.

The purpose of public art

A bright blue rooster showed up on the Minneapolis skyline a few years back. Minnesota Public Radio ran a piece on the installation.

The rooster stands atop a brushed stainless steel plinth for a total height of almost 25 feet. An earlier edition of the sculpture stood in Trafalgar Square in London for several months. Fritsch is known for presenting everyday objects in a new and provocative light.

In 2017 the Minneapolis Sculpture Garden, home to the adult male chicken, got a complete overhaul. The garden sits between Parade Stadium and the SW side of downtown, lining up like an elaborate front yard to the Walker Art Center. You can get a glimpse of the blue bird through the garden.

Before the avian monument’s appearance, The Spoonbridge and Cherry was the iconic Minneapolis placemaker. Since 1986 this whimsical piece was a prominent feature on all the brochures meant to lure tourists to our largest city. Which makes the argument, that at least one objective for public art, is to create a photogenic avatar.

As it turns out, Minneapolis is full of public art–69 installation is all. If you visit Minneapolis you’ll have to check out the self guided tours listed on the Minneapolis Parks and Recreation site. To facilitate planning your tour, there are time estimates for walking, biking or driving. No bike? No worries, Nice Ride has all sorts of stations with bright green bikes you can rent. Here is a screenshot of just the ones in downtown.

How did the city feather a nest so full of art? By getting the public involved, of course. Here’s how it works.

Community Organizations and Private Entities

There are more than 60 artworks in the Minneapolis park system, but only half are owned by MPRB, and they are mostly historic works. The rest are owned and maintained by the City of Minneapolis, community organizations, or private entities who sponsor and care for the artwork while it is hosted on public park land. Thanks to the generous support of these partners, dozens of creative and inspiring artworks are available throughout the park system for all visitors to enjoy. If you or your organization are interested, please see the “Sponsoring Art in Minneapolis Parks” tab.

The purpose and value of public art is more than just placemaking. It signals that residents care about their story, about their environment, about putting an effort to more than just the nuts and bolts of life.

Gentrification-a swear

Not by dictionary.com’s definition: [ˌjentrəfəˈkāSH(ə)n] NOUN the process of renovating and improving a house or district so that it conforms to middle-class taste.

That doesn’t sound too controversial. People go in and clean up an area, make it more livable. There must be more to it to explain how the word gets heated up and shot out like a bullet. This popped up on the CDC site under Health Effects of Gentrification:

Definition:

Gentrification is often defined as the transformation of neighborhoods from low value to high value. This change has the potential to cause displacement of long-time residents and businesses. Displacement happens when long-time or original neighborhood residents move from a gentrified area because of higher rents, mortgages, and property taxes.

Gentrification is a housing, economic, and health issue that affects a community’s history and culture and reduces social capital. It often shifts a neighborhood’s characteristics (e.g., racial/ethnic composition and household income) by adding new stores and resources in previously run-down neighborhoods.

I’m truly not sure how the Center for Disease Control underwrote a housing topic. Gentrification= Disease? (to be fair, they do start the page with this disclosure: “This website is archived for historical purposes and is no longer being maintained or updated.”) However this definition does a great job of setting up the issues which incite a passionate response. And setting up the issues is all this first post will do for this complex scenario.

Straight off, in the first line, is the accurate observation that the process of replacing roofs, tightening wobblily rails and putting in new windows increases property values in a neighborhood. This should not be controversial–ideally owners at all levels of housing can keep up on maintenance (and if you own a home you know that this is a dependable demand). The controversy arises when the change in the value of property, and hence rents, makes it unaffordable to the current residents.

Be sure to understand that this is about value, and who ends up with it. The motivation to build equity drives, in part, the purchase and renovations of a home. A home to do with as you choose and to make your own. Property owners increase their net worth when more buyers want to move in. So gentrification is a good thing, not bad for those whose names are on the deeds.

The passionate objection to gentrification lies in the garbled mess of the second paragraph. Let’s try to pull it apart–but first understand the scenario. An investor, or a homeowner, has to receive some compensating factors to dive in and do the work to repair a home which is begging for all the big ticket items: new heating systems, siding, windows, roof. And that’s before you even get to all the interior stuff like new kitchens, bath, maybe even rewiring the old knob and tube wiring which is known to cause house fires. The compensation is a higher valued home.

To turn a whole neighborhood, where the majority of houses find themselves in a similar state of deferred maintenance, would take a while. We’re not just talking one spring sales season following a year of living with contractors coming and going. Elevating a neighborhood to a new standard is pushing a decade’s worth of work.

Gentrification is described with a sense of immediate turnover, which simply isn’t how it happens.

What is upsetting to people is that a sweeping renovation to an area produces a negative externality for the folks who were benefiting from the low cost of substandard housing. Furthermore, if these renters leave the area, they may leave behind favors accumulated through other social groups with geographic anchors. They take a loss for the chits left on the table for non-fungible work.

At the core of much of the renter’s rights activism you will find this concept of value and who gets it. There is a sense that despite contributing to their neighborhoods of their time and activity, renters fail to earn value. Only property owners do. So the policy is to divert equity from property owners to renters through initiatives like TOPA.

We can do better. But first we have to understand how to calculate value.

TOPA – Links

TOPA (Tenant Opportunity to Purchase Act), a proposal to offer renters the first right of refusal when their landlord wants to sell the property, is back on the front burner at Minneapolis City Hall. Some politicians see giving tenants part of a landlord’s property rights as a way to mitigate the expense of housing. The only perspective where this is at all rational, is from the view that property owners are simply sitting on a sack of gold coins which they refuse to share.

A story which is meant to support the tenant’s first right of refusal as a valid policy is told here: Tenants of Five Minneapolis Buildings Now Own Their Homes. Yet this suite of buildings was owned by a truly poor landlord. And because the guy was a fraud, the tenants acquired the buildings without TOPA. It will be interesting to watch the unfolding of this tale as more than likely these properties are run down and will have expensive repairs in the coming years. I’m expecting buyer’s remorse.

To understand the process and in turn the length of time a property could be tied up before sale, here are TOPA process charts from Washington DC. The financial power behind owning an asset is the ability to sell it and obtain your investment. When that ability is in question, markets do not respond well, hence value is affected. The TOPA process is considerably uncertain.

I attended this TOPA forum at the UMN presented by CURA. The presenters were Dominic T. Moulden is a longtime resource organizer at Organizing Neighborhood Equity and Michael Diamond, Professor of Law at the Georgetown University Law Center, teaches corporations, contracts, and a seminar in affordable housing. The non-profit housing community in attendance seemed skeptical.

NBC news covered how TOPA rules tie up the sale while parties arbitraged the TOPA rights to the highest bidder. (video) Although in effect since the 1980’s, it was more or less forgotten until Andrew McGuire Esq started a business ‘getting renters maximum dollar’ for their TOPA rights. He estimates it’s a 100 million a year market.

In San Francisco they call it COPA. And it is not the tenants who make the purchase but a pre-selected non-profit. Also from 2019:

If approved, the COPA would give the first right to purchase (this includes a first right to offer to purchase and a first right of refusal to match an existing offer) vacant lots or residential rental buildings with three or more units to nonprofit housing organizations.  This means that when an owner of a multi-unit building puts it up for sale or has received an offer to purchase, nonprofit housing organizations that are pre-selected by the City would have a chance to bid on the building first or to match an existing offer.

Oakland is considering something similar- January 2020.

Time and Transactions

This picture may remind you of the children’s book by Virginia Lee Burton, The Little House. A home starts out on a country road and is gradually engulfed by the big city, before it is moved back out to a quiet hill in the country. Over time the land use around the home had changed, so the story puts the house back where it belongs.

Some folks decided Burton’s book was a critique of urban sprawl, despite her objections. She countered that the book, which won a Caldecott Medal in 1943, was designed to illustrate the passage of time. Over time things change. It doesn’t have to be good or bad that change happens at difference tempos. It simply is.

Here’s the satellite view of the 50’s built shoe repair shop, encircled by apartments built in early 2000’s.

Over time the land use around this shoe repair shop had changed as well. The whole city block was ready for something new, but not the shoe repairman. His transaction time table did not match with the everyone else’s. He must have been a hold out as the builder/developer I’m sure would have preferred to bulldoze the whole section and not have to build around the storefront.

The inside of the shop shows all the signs of a long time resident: layers of leather chaps tacked to the walls, boots stacked up on shelving, a bit of dust everywhere. Here’s a small business owner approaching the tail end of his career. Selling his shop would have been retiring, and he clearly he wasn’t ready to retire. The rest of the block might have been working on a commerce time frame, but the cobbler was working on a career time frame.

The parties must have worked out a compromise as the shop still sits on what looks to someday be parking. Someday– when the time is right.

The Crafter, The Contributor and The Covid Tracker

The Crafter

This week’s local neighborhood newspaper reported on a mom type volunteer doing the homey thing and stitching up masks for anyone who needs a buffer from the virus. She puts a plastic bin of them on the sidewalk in front of her home, and only asks that you donate an extra cotton shirt if you have one to spare.

On Wednesdays, Moira Knutson sets out two big plastic storage totes on the concrete walkway of her home. One is empty, for donations of 100% cotton shirts, and the second is full of patterned masks. Anyone who happens to be walking by is welcome to take a mask from the bin, free of charge.

Like many people, Knutson was first motivated to sew masks for health care workers when the pandemic began but is perhaps unique in that she never stopped. By her “guesstimate,” she’s made about 2,000 masks since March.

The Collaborator

Wikipedia was founded almost twenty years ago and has thrived on a volunteer-contributor model. A paper written by Benjamin Mako Hill while at MIT evaluates this form of collective action. His analysis studies why Wikipedia succeeded whereas seven previous attempts, which involved the general public giving of their time to build an online encyclopedia of knowledge, did not. The paper is called Almost Wikipedia: Eight Early Encyclopedia Projects and the Mechanisms of Collective Action.

Abstract: Before Wikipedia was created in January 2001, there were seven attempts to create
English-language online collaborative encyclopedia projects. Several of these attempts built sustainable communities of volunteer contributors but none achieved anything near Wikipedia’s
success. Why did Wikipedia, superficially similar and a relatively late entrant, attract a community of millions and build the largest and most comprehensive compendium of human knowledge in history? Using data from interviews of these Wikipedia-like projects’ initiators and
extensive archival data, I suggest three propositions for why Wikipedia succeeded in mobilizing
volunteers where these other projects failed. I also present disconfirming evidence for two important alternative explanations. Synthesizing these results, I suggest that Wikipedia succeeded
because its stated goal hewed closely to a widely shared concept of “encyclopedia” familiar to
many potential contributors, while innovating around the process and the social organization
of production.

Note that last line: “…because its stated goal hewed closely to a widely shared concept of “encyclopedia” familiar to many potential contributors.” The shared objective was clear.

The Covid Tracker

Bloomberg reports on the Covid tracking project which has been run mostly by volunteers -or- Data Heroes.

Since then, the Covid Tracking Project—run by a small army of data-gatherers, most of them volunteers—has become perhaps the most trusted source on how the pandemic is unfolding in the U.S. The website has been referenced by epidemiologists and other scientists, news organizations, state health officials, the White House Coronavirus Task Force, and the Biden transition team. There are other reliable sources for pandemic statistics, but the project stands out for its blend of rich, almost real-time data presented in a comprehensible way. “I think they’ve done extraordinary work and have met an important need,” says Jennifer Nuzzo, a senior scholar at the Johns Hopkins Center for Health Security, which publishes its own set of pandemic data (and draws some information from the Covid Tracking Project). “They’re tracking things that aren’t being tracked.”

And this:

The project is a demonstration of citizen know-how and civic dedication at a time when the country feels like it’s being pulled apart. Yet it’s confounding that, almost a year into the pandemic, the Covid Tracking Project is doing what might be expected of the U.S. government. “It’s kind of mind-boggling that it’s fallen to a group of volunteers to do this,” says Kara Schechtman, one of the project’s early volunteers, who’s since become the paid co-lead for data quality.

Work–Not for a salary, but for the public

The crafter, the contributor and the Covid tracker all have something in common. They engaged their services once they found a worthy goal. This, in combination with extra time on their hands, as well as a skill that could clearly be leveraged toward a windfall result, motivates the workers to step up. Notice that the goals fall into public benefits such as (pubic) health, (public) education and (pubic) governance. And this just-in-time response, especially when the need is great, out performs the established bureaucratic system.

These are all examples or work in the public sphere.

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Elite-speak

I don’t remember exactly when I heard a local politician say “a budget is a moral document” but it didn’t sit right. The idea that this numerical tabulation of where funds will be spent is weighing out society’s good and evil in an oversized mechanical balance, seems a little dramatic. Sure, I understand the innuendo. If we spend on fossil fuels we’re buying environmental destruction, if we spend on the military we are just short of killing people, if we fail to spend on public health, lives are still on our hands.

And it’s not that I disagree with the concept that a portion of every price of every good or service spells out an allotment to a whole host of social goals.

As I was driving to the grocery store, my mind exploring the idea of how our family budget was a moral document, I questioned to what degree I was obligated to investigate each product we consume. At every purchase do I question the employment practices, the energy consumption, the sourcing of their suppliers; do I backtrack each and every effort that went into my consumer goods?

It seems a little impractical. More importantly, I have enough faith in the people (the butcher, the baker, the cabinet maker ) as to their choices, or rather the statistical probability that their actions fall within a range of our communal norms.

What’s off about the “budget is a moral document” phrase is that it is elite-speak. There’s a whole mount Everest of activity that is represented in a Federal Budget (or even a municipal budget). Yet the people who control this one document are considered to hold our morality in their grasp. I say have a little more faith in the rest of us.

The role of the audience

Covid has kept audiences at bay this year. There have been substitutes. The New York Mets had 5000 fan cutouts at their opening game just to the right of home plate. Talent shows are running laugh tracks that only kids who grew up in the 70’s can appreciate. Jumbotrons with a checkerboard of fans applauding just isn’t quite the same as the noise of human hands clapping.

Audiences have been taken for granted. They aren’t considered part of the game, a player in the production, but now that they’re tucked away at home, they are missed. Maybe there’s more to the group of folks that show up, past their ticket buying, and pretzel eating and merch consuming.

Zoom offers a setting for an audience versus an on-line gathering. Today I took a class via Zoom and all I was allowed to do was post in chat, raise a hand or ask a question. The moderator was a gatekeeper saying yay or nay to who got an open mike.

Agnes Callard is a philosopher at the University of Chicago and is on a mission to bring the public back into her field of study. She wants your attention, she wants your engagement, and she wants you to listen. In this recent article run in the NYT, she talks to you –the reader– directly. She challenges her audience not to pre-screen her, not be that moderator who keeps her mike muted when they don’t quite get her and what she is all about.

You are so busy trying to answer this question — trying to serve as judge in the pain/suffering/disadvantage Olympics — that you cannot hear anything I am trying to tell you. And that means I can’t talk to you. No one can sincerely assert words whose meaning she knows will be garbled by the lexicon of her interlocutor. I don’t want privacy, but you’ve forced it onto me.

She counts on you to be her interlocutor, to provide her with a venue to continue her discovery of the truth and the fulfilment of her life.

Isn’t that what the audience at a high school graduation is meant to do? While they listen to pomp and circumstance as the graduates make their way to the podium to receive their diplomas– isn’t the audience saying, “Hey, you did great! You made it this far, we’ll be there with you as you continue this journey.”? It seems like there used to be more of such events, more baptisms, confirmations, more 50th wedding anniversaries. More opportunities to stand behind a couple and as a community say we are behind you; we are here to remind you of the good times so you can endure the hard times; we are here to cook for you when you cannot do for yourself; we are here to be your neighbor.

The audience taking in the Thai boxers sometimes in the ’60’s knows what to do. They watch, they cheer, they make signs of encouragement or reproach towards the refs. You see, the audience is very much a player in all we do. They observe and filter in mitigating ways, they support or fail to show, they filter through all those social cues so we can gradually moderate our behavior. So we can continue to process where and how to spend our time without everything escalating into a protest.

Audiences need a refresher course on how to do their job, and Zoom doesn’t offer it.

It’s not A Field of Dreams

According to NorthStar MLS, of the 699 duplexes or triplexes sold in the last year in Minneapolis only 14 of them were built after 1970. For fifty years this simple multi-family form of housing has more or less been ignored. They are few and far between in suburbs, undoubtedly for the same reason.

The numbers work in favor of affordability. Here is a developer’s breakdown:

So significant were the feelings against this type of housing that, despite having lifted single family zoning in Minneapolis earlier in the year, additional obstacles are preventing their creation. Restrictions such as building heights and parking throw enough of a question mark into the approval process, that developers are bailing on the idea before even approaching the planning commission.

Over the years I’ve heard of individuals using duplexes as their first steps to becoming real estate investors; then there was a story of elderly sisters going in together on a building so they could live out the remainder of their lives as neighbors. Small multi-family buildings fit right in with single family homes unobtrusively. It would be nice to see more of them.

The externality of overdoses

Externalities can be difficult to calculate. What is the cost per person to a community exposed to smog, or the damages from water laced with lead in Flint? Often times these figures are settled in court. But management consulting companies can also be in on the game. Take this story about Purdue Pharma as reported in the New York Times.

When Purdue Pharma agreed last month to plead guilty to criminal charges involving OxyContin, the Justice Department noted the role an unidentified consulting company had played in driving sales of the addictive painkiller even as public outrage grew over widespread overdoses.

Documents released last week in a federal bankruptcy court in New York show that the adviser was McKinsey & Company, the world’s most prestigious consulting firm. The 160 pages include emails and slides revealing new details about McKinsey’s advice to the Sackler family, Purdue’s billionaire owners, and the firm’s now notorious plan to “turbocharge” OxyContin sales at a time when opioid abuse had already killed hundreds of thousands of Americans.

Later in the article they tally those deaths up to 450,000 since 1999. Those, of course, are just the fatalities. There are no numbers offered for the hours that went into counseling the addicts before they OD’ed, or all the lost productivity an addict can bear on their support group. Neither of these costs were the costs concerning the McKinsey accountants. The number crunchers were concerned with the amount necessary to buy Purdue Pharma’s distributers, the local pharmacies like CVs or Walgreens, out of the discomfort of grieving mothers.

The presentation estimated how many customers of companies including CVS and Anthem might overdose. It projected that in 2019, for example, 2,484 CVS customers would either have an overdose or develop an opioid use disorder. A rebate of $14,810 per “event” meant that Purdue would pay CVS $36.8 million that year.

I’m not sure how one of the most prestigious consulting company in the world came up with $14,810. I’d truly be curious to know what went into the formula to calculate this externality. What dollar transfers were tracked between the group of heartbroken survivors and their pharmacies following an overdose that added up to $14,810? How did the rebate get summed up and presented to Pharma’s management as a viable expenditure in the form of a rebate?

Maybe the point is that an accounting of this nature is already in play. If a market price was calculated for a social cost buyout in this scenario, most probably it is a frequent calculation. So what is the McKinsey method? Inquiring minds want to know.

Systemic

The word systemic keeps getting worked into the conversation these days. Like when kale was in fashion. Some healthy new food that all of a sudden is made part of every dish but you’re not really sure what you think about it. Systemic–it’s put out there in a more or less free standing sort of way without any follow-up examples or stories to prop-up exactly what the speaker means by it. What we are dished up is a description of a (negative) social outcome, one that occurred due to systemic issues.

Dictionary.com offers this: [səˈstemik] ADJECTIVE. 1. relating to a system, especially as opposed to a particular part. It seems we need to understand more about systems. A system is not the sum of its parts. Here is what Lebanese born author Nassim Taleb offers from his book Skin in the Game:

The main idea behind complex systems is that the ensemble behaves in way not predicted by the components. The interactions matter more than the nature of the units. Studying individual ants will never (one can safely say never for most such situations), never give us an idea on how the ant colony operates. For that, one needs to understand an ant colony as an ant colony, no less, no more, not a collection of ants. This is called an “emergent” property of the whole, by which parts and whole differ because what matters is the interactions between such parts.

from Skin in the Game

So this Thing, that is socially detrimental, happens across a system. But what exactly? What happens that lies beyond the responsibility of one individual, and that echoes within a larger group of activity, that culminates into whatever it is being voiced as systemic? The gist is the Thing is a series of inter-related activities erupting into the highly objectional scenario at hand.

But why settle for gists and innuendo? Why not name this Thing? Why not fully flush out what it is that stair steps its way through households and into communities, through vendors and corporations, through bureaucracies and governments?

Take the Enron Corporation story for example.

At the end of 2001, it was revealed that Enron’s reported financial condition was sustained by an institutionalized, systemic and creatively planned accounting fraud, known since as the Enron scandal. Enron has since become a well-known example of willful corporate fraud and corruption. The scandal also brought into question the accounting practices and activities of many corporations in the United States and was a factor in the enactment of the Sarbanes–Oxley Act of 2002. The scandal also affected the greater business world by causing the dissolution of the Arthur Andersen accounting firm, which had been Enron’s main auditor for years.[2]

There’s that word systemic again. At this (formally) worldwide energy company, accountants at all levels could have called out questionable practices but did not. Through failure to act the organization was complicit at all levels of covering up fraudulent accounting practices.

A contrarian might say, is that really fair? The employee’s contract is to fulfill their job description for a bi-weekly check. Today, in the bright of day, the deceit is clear. But in the rush of the workday was it muddled? When did the private contract between employer and employee take on a public obligation? If an employee calls out their supervisor, the writing is on the wall and the pink slip is in their in-box.

The systemic promoters are talking about failure within an entire organization. They’re saying that a weighting of choices throughout an energy company, or a government agency, or a group of neighbors, have social implications. That the cascading of choices of each ant in the system can allow for a horrific result. That each actor has a varying degree of control, of an ability to say no, of the choice to turn on the group and change its course.

So let’s name that little portion of something that could be done to stop a social ill, let’s call it work. The employee enters into a private contract for employment but carries a public obligation to disrupt actions which are contrary to established social compacts. The portion of obligation is tied to the level of ability to have an impact (you can’t really do much as a first year junior accountant). This is also work–it is work in the pubic sphere.

These systemic issues not only occur within private work life, but also the time we devote to our families and communities. When insufficient attention is paid to the elderly, we hear of abuses in nursing homes. When insufficient resources are paid to depression, there are suicides. These too are due to a piece-by-piece failure within the entirety to respond. These too are systemic.

The Thing is work, or housework if you prefer. Not the type of inflammatory action that the cancel culture takes to achieve their thoughts on their social need du jour. The work of stopping over and taking your depression prone niece out for a daily bout of fresh air; the work of maintaining the ballfields for the little leaguers; the work of staying late one day to scrutinize the accounting that seemed awry but you had to really take a few minutes to double check for inconsistencies. It’s the small bits of work by hundreds (of millions) of employees and community members to maintain a certain standard of established norms.

It’s fine to start the conversation with, “All these xyz bad things happened and it’s Systemic!” But we can’t exactly tackle the correcting measures without understanding where and how in the system work can be done to achieve a better future.

Arthur Rimbaud-French Poet

I jumped on Wikipedia to look up information on Arthur Rimbaud after reading a reference to Rimbaudian savagery. I’m somewhat of a Francophile and know a lot of things French and was a little surprised the name didn’t ring a bell. Happily I read through the entry filling a gaping hole of knowledge about a premier poet. But when I came to this section of the article the photo put my brain into a bell tower at high noon.

I visited Harar as a child so I went digging, and sure enough.

There it was there amongst the shots of winding streets, colorfully scarves vendors in the marketplace and city gates that lead into this ancient walled city on the eastern edge of Ethiopia.

The mind is an awesome and perplexing thing. More often than not it won’t recall a name at a gathering, leaving me, once again, socially awkward. But then–out of the blue, it will recognize an image from deep in the past.

Hillbilly Elegy

Like many Americans on Thanksgiving, we laid a rollicking fire in the hearth and watched a movie on an absurdly large TV. The feature film was Hillbilly Elegy, a Ron Howard film based on a true story. There is so much material here that is relevant to this blog: groups, public and private transactions, the externalities and the weighing of choices. The threads run fast and thick in this tale strung through several generations. I could fill a month of posts dissecting it all, but instead I’ll stick to just one scene.

JD Vance, the story’s author and lead character, has a tumultuous relationship with his mother played by Amy Adams (who did an excellent job as usual). The middle schooler asks to live with his widowed grandmother, Mamaw. The matriarch quickly starts to clip away at his juvenile delinquent friends and his poor school performance. But it isn’t the yelling nor the screaming nor the fist throwing that changes JD Vance’s perspective on his life and his future. It isn’t a hoo-ha in a shop over an expensive calculator or a potential run-in with the law.

The turning point for this youth, who eventually works his way to Yale Law School, occurs when he overhears a quite negotiation between his Mamah and the Meals-on-Wheels volunteer. JD listens as Mamaw makes a case to the volunteer for extra help in the care of her grandson. This plying of goodwill results in a handful of grapes, a pear and a snack size bag of chips. She brings the bounty back to their dinner table, slices a small chicken breast in two and tosses the chips his direction.

If you know anything at all about teenage boys, you know their stomachs are always begging for a refill. When the calculation of their predicament was tallied up in terms he understood, terms that made common and physical sense to him, the youth engaged. JD’s subsequent actions worked toward the goals that had been laid out for him, but only now he intrinsically understood.

The point is that everyone has to come to terms with their own trade offs and choices. No matter how much others (out of genuine concern or some protectorate fantasies) want to step-in and speak for another person, or another group; to make claims about what people need and all the should’s in the world that they should have; they simply can’t. To make productive choices, people have to understand the alternatives on their own terms.

Apparently the film is getting negative reviews (here and here) by many substantial outlets. I like what Amy Adams has to say in response:

Everybody has a voice and can use it how they choose to use it.

Maybe the open minded need to listen a little more closely.

The battle for the kids

Parochial schools are doing well, from what I hear, in the battle to attract and maintain a student body. They opened on time in September with increased enrollment, and have stayed open through this Thanksgiving holiday. There will be a break in in-person learning now (like all other schools and universities in the area) until January. My sources report no sizeable outbreaks or health concerns for either the learners or learned.

The 91 Catholic schools in Minnesota compose the 4th largest district in the state. This unexpected swelling in enrollment is a benefit to their bottom line. As they do not receive the per pupil funding which finances the public schools, they are on their own to market within their faith community as well as to those who value smaller class sizes. In some cases, sports families are attracted to an increased probability that their athlete will make the varsity team.

The use of direct mailings to reach families throughout the area seems like a good fit. However, when a large public school district, where attendance is dictated by place of residence, pummels direct mail right over school boundary lines, it feels objectional. Why is that? Both the schools are in the business of delivering education, both require funds to operate. Attracting students is the same as attracting customers–no?

Customers use private funds to purchase a good or service. The parochial schools are offering a service, one that complies with the standards set by the state, but has been customized to the requirements of a specific community. The funding that follows a child to the public school district they attend is not private, it is taken from a pool of funds which is collected under mandate to educate all Minnesota kids.

Plus– it isn’t just the funding allocated per child that is lost when a family sends their offspring out of their district. Since busing is only offered within the school boundaries, it is a given that one parent is available to drive them to and from school—or will once the whole virus thing wraps up. By self-selection these parents often donate their time to school activities, fund raisers, and all those extras efforts that make an educational community stronger.

So when a school district pumps a bunch of dollars into a direct mail piece with messaging along the lines of, ‘Hey, we’re better, come on over,’ they are drawing students as well as high-social-capacity families to their district. Which means they are draining adjacent districts in an equal amount. On net, the dollars spent on this type of private business marketing is not fulfilling the state mandate to educate all students. But rather is congregating the haves and leaving behind the have-less’s.

The parochial schools are working in a private sphere even though they are fulfilling a public obligation. So it is fitting for them to use private strategies. Public schools are working in the public sphere so using private methods sets up externalities.

Coming together

Politically outstate Minnesotans and Twin Cities urbanites maybe diverging, but demographically there are converging trends. Here’s #4 from MN Compass:

One theory offered to explain the tight housing market is that Covid has made it more precarious for this age group to complete a move; boomers who may have relocated to a new stage-of-life housing have stayed put. If true, then there should be a wave of availability coming up here in a few years in Roseville, Edina, Golden Valley and Mendota Heights.

Real estate in times of Covid

All things considered, it has been an incredibly strong market for residential real estate sales in 2020. The spring started strong but was shut down along with everything else in March when the virus leapt the oceans and appeared in great numbers on the US coasts. Home sales were considered an essential service, but the apprehension of allowing strangers into sellers’ homes for showings slowed down the process.

This data from Northstar MLS shows the dip in April and then the take off of activity starting in June.

Issues that seemed to be on buyers minds when they came through open houses were 1. room for home offices 2. new flexibility in distance to job location 3. downsizing out of larger homes to avoid maintenance concerns. This broad range of interests led to almost all types of properties being snatched up, often in competitive bidding. Which has led to a sharp decline in properties available for sale.

In almost all markets, except the downtown Minneapolis condo market which is up 21.3%.

I think there is little dispute that Covid has dampened the amenities which a downtown offers. The lack of night life and restaurants, the lack of need to be blocks from work or near light rail for a quick trip to the airport. By displacing the relative value that residents place on these features versus a whole host of other variables that go into a home purchase decision (including square footage, proximity to family and so on), more owners are exiting the downtown community than joining it.

Nailing down the market prices on each of these amenities one-by-one would take data that is not readily available. Data sets for the performance of public sector goods would have to be statistically spun out to reveal levels of significance. An analysis of prices of these and other amenities which overlap through a variety locations would provide an opportunity for index setting. Due to the extraordinary living conditions in 2020, there is an opportunity to obtain counter factual data for many core neighborhood utilities. It is a unique opportunity.

No Voice? Exit

From the Pioneer Press:

Two longtime state senators from Minnesota’s Iron Range broke with Democratic-Farmer-Labor ranks on Wednesday to form an independent caucus in the narrowly divided chamber.

Sens. Tom Bakk, of Cook, and David Tomassoni, of Chisholm, said in a statement they would venture out on their own after finding both political parties to be too polarizing. The lawmakers had frequently broken with DFL party lines to vote what they felt best represented their districts.

A walk a day..

According to the Mayo Clinic: regular brisk walking can help you:

  • Maintain a healthy weight
  • Prevent or manage various conditions, including heart disease, high blood pressure and type 2 diabetes
  • Strengthen your bones and muscles
  • Improve your mood
  • Improve your balance and coordination

The faster, farther and more frequently you walk, the greater the benefits.

After a section about technique and goals and progress, Mayo says, ‘Starting a walking program takes initiative. Sticking with it takes commitment.’ You see this costless effort toward your health takes work. Work because if you don’t do it you will lose out.

Scenery and wildlife keep me motivated.

Brass and Tin Pots

My son is an engineering student, but for his liberal arts requirement he is taking a course on Imperialism. The course work tells the tale of western European economies growing so that they ventured past their countries boundaries to extract resources from Africa and Indo China and the Caribbean. The model describes a dominant group taking hold of a subservient group to help themselves to resources for commercial gains. Extraction isn’t just for the history books. Consider this fictitious story.

Let’s say there is a fairly large association for a trade group. It has a sizable staff and a fair number of members volunteers. There is also a multi-decade volunteer–let’s call him/her Jo Johnson– who through time and understanding has proven agile in eliminating dissenting voices and bullying staff. There are also dues, and committees, and boards, and political action.

The associational group has clout in a community due to its size and ability to organize. It also has some resources to pledge toward those seeking local office. Jo Johnson’s influence at the association serves to direct funds to candidates who, in turn, respond with business referrals. This action of using a group resource and trading for a private commercial gain describes a process of internalizing a public asset into a private, fungible transaction.

Now some may say–this shouldn’t be so! There are ethics to think about.

But– this judgement, this evaluation of the trades in play, is best evaluated by members of the group–not outsiders. Some members maybe thrilled that Jo Johnson is able to devote countless hours wage-free to the association, and thus, any extracting done is small compensation. The members of the group may feel the clout of the group is maximized in this very fashion, giving each member the best possible slice of the overall pie.

It is really all about transparency. If members knowingly make the decision to defer to Jo, then all is right in the world. If decisions have been made for them because Jo Johnson has become so skilled at shaking loose the opposition by throwing up all sorts of meeting delays and rescheduling (it is a volunteer activity after all), and has the power to develop allegiances by promising titles like a board position (a dusty old king of sorts selling titles), then the peasants should revolt.

The process of extracting value from a group and in doing so moving a resource from a public sphere to a private transaction occurs all the time, in many different scenarios. It is a trade. Whether a trade is in equilibrium requires, not moral judgement, but transparency and an ability to evaluate the options at hand.

Judging tin pots from afar is a risky business.

A model to consider

Given this is my 55th post I’d like recap the home-economics model. As explained on the About page, this site addresses the mechanics of value creation in the pursuit of pubic goods. In order to show these features, I must persuade you to shrug off a few established notions. The first is that the nature of goods is not public, nor club, common, or private (the purpose of the What is Public-What is Private posts). All goods can be employed in either the public or the private sphere. The second is that there is no such thing as market failure.

To start at the beginning, all of economic life is restricted by the resources this crusty old orb offers us along with what we can make of them with our time and talents. Limited resources applies both to goods employed in a private environment as well as those contributed toward community needs. Within these confines there are two types of activity creating a public sphere and a private sphere. One looks inward, behaving with a public (non-exclusionary) nature and the other activity looks beyond the group behaving in predatory fashion. This private sphere is well studied.

Let’s work backwards on some posts. Yesterday’s topic–Money and Safety— centered around the city’s approval process to fund more police force hours. Consider the groups. The defunders would argue that city money for police has resulted in providing safety for the racial majority (Gr 1) of the citizens (Gr 3) yet is failing to do the same for the minority groups (Gr 2). In light of this objection these city council members refuse to fund the police.

As an aside, this claim does not hold true. For the past five months the political climate in the city has severely limited the police’s capacity to maintain peace. The result has been a tragic loss of life primarily in Gr 2. This a new set of data contained in Gr 3 shows that it is group Gr2 which reaps greater (despite severe flaws) benefits than Gr 1. In addition to loss of life, Gr 2 has also disproportionately experienced a loss to businesses, where it is estimated 200 businesses burned or were damaged during the riots. The businesses suffered an externality from (lack of) services from the public sphere.

Consider the post A table set for adversaries. The outdoors women and men (Gr 1) are often at odds with urban arts people (Gr 2) over issues like gun control which increases the cost to own firearms without a clear benefit in reduction in crime, and funding for cultural events which requires subsidies to be viable, and outstate regulation of the environment which cuts jobs. Although Gr 1 and Gr 2 are often competing for resources they hold together in conjunction with all Minnesotans (Gr 3), by showing where Gr 1 and Gr 2 had a common interest, a funding stream was extracted from two very different associational groups.

Fire Station 2 speaks to the structure of firefighters (Gr 1) who devote their time and expertise at a reduced rate to protect the lives of property of their community (Gr 2). They get paid a below average hourly rate, which is a private transaction. The firefighters’ extra wage potential is community (Gr 2) work. Their services are made available to everyone (Gr 2) which makes this a public service.

Having established the need to look for groups, and identify whether the groups are engaging public or private economic activity, I’ll be posting more on externalities and internalizing. Both of these terms describe the appearance of positive or negative effects which show up in one sphere from a transaction in the other (Ex. private corporation pollutes the water causing a negative expense to a public good owned by the surrounding community). Then we can get to the fall of market failure.

Money & Safety

On Friday the Minneapolis City council voted 7-6 to fund hiring outside police from the Hennepin County Sheriff’s department to assist with the crippling crime increases within the city. This pecuniary decision to support the MPD is the first since the defund announcement in June. The discussion between the council members and Chief Medaria Arradondo was tense. You can find a recording of the full meeting here.

Fortunately, reporter Mark Vancleave with the Star Tribune, reduce the two hour meeting down to a 9min video clip of highlights:

The council members come at the discussion for approving the funds from a variety of viewpoints. The strongest defund voices place all the work of street safety at the policeman’s door. Money is raised through taxes, salaries are paid to cops, crime statistics measures their performance. The deterioration in safety is all on the police so there is no economic reason to purchase more of a failing service.

The mid-road view is best expressed by Lisa Goodman. She provides several examples of her constituents being assaulted and carjacked and being afraid to leave their homes. She mentions some of the extenuating circumstances following George Floyd’s death including the riots and the retirement of a large segment of the force. In her view, they are purchasing more police power for better response times and general police work.

The wholistic view of policing is voiced by Andrea Jenkins (8min). She maintains that the community must engage with the police force. That the community is also involved in the work to maintain order and safe streets. She is probably the only one who could have voiced this view when put at odds with the defunders.

This view isn’t new. Back in the 1960’s Jane Jacob’s spoke to eyes on the street. Although it is accepted informally that community participation makes a difference, there is no accounting for this type of work. National night out, block watch groups and such are one of those ‘oh isn’t that neighborly’ things that people do. Not a hard cash-in-your-hand transaction.

If public safety was accounted for not only by city budgets to pay officers, precincts, detectives and administrators, as well as by public participation, prevalence of criminal elements, then we would have a universal accounting of the forces that contribute to safety. We would not only want to considered the time people put into surveillance but also the losses people incur when they go back on their group and turn in a criminal.

Instead, some council members are accused of being disingenuous for trying to deny this very real system. They deny it in order to advance another objective which lays beyond their power. But whilst they hijack one economic process in order to engender a social outcome elsewhere, Minneapolitans are getting shot.

A table set for adversaries

Today is the last day of Minnesota’s gun deer season. My husband texted me an update from his deer stand a week or so ago. The warm weather has made the pre-dawn wake-up calls tolerable and allowed for an extended time hunkered down in camo gear. He reported seeing over fifty deer, almost all does and fawns.

Folks who never leave the urban centers and only experience gun ownership through violence and crime, view hunters as an odd breed. They are a blaze orange part-of-their-problem, an obstacle in tamping down the waywardness of youth. Hunting, however, barely contributes to MN mortality rates. The numbers show that fatalities from car collisions with deer are several times higher than death by fire arm while hunting. In 2019 there were 3 deaths on the roads, yet no deaths amongst the 841,063 individuals who bought deer hunting licenses.

The sport is safe enough to be conducted on a limited bases amongst the old growth oaks and quaking aspen in the 136,900 acres of parkland in the greater Minneapolis/St. Paul metropolitan area. Most of the deer hunts in the urban parks are for archery hunters (including crossbow if you are old enough, seniors get the priveledge of extra power). It is noted that the parks and trails remain open except during the few opportunities to rifle hunt, in which case the entire park closes.

It is the fortieth anniversary of the Minnesota Deer Hunters Association which attracts 20,000 members throughout the state. They “ensure that the culture of deer hunting in Minnesota is being upheld by improving opportunities through: Habitat, Education, Legislation/Advocacy.” Their on-line calendar is full of meetings, 7-gun raffles and holidays parties across the 400 chapters with names like Snake River, Crow River, Sturgeon River and Smokey Hills.

You wouldn’t think these gun toting outstaters would find themselves politically aligned with folks who wish to fund the MN Opera, Walker Art Center or Guthrie Theater. You wouldn’t think that they would sit at a table with earnest faced, clipboard toting environmentalists. But politically these two groups aligned on the matter of the health and welfare of our lakes and streams.

Minnesota voters approved the Clean Water, Land and Legacy Amendment to the state constitution in 2008. Beginning in 2009 and continuing through 2034, the Amendment increases the sales and use tax rate by three-eighths of one percent. Amendment dollars are dedicated to four separate funds, one of which is the Clean Water Fund.

The amendment was passed with 56% of the vote. The hunters weren’t going to let the deer herd drink from contaminated ditches, even if they think regulations on other commercial concerns are a bridge too far. And the urban activists simply had to put their resist impulses away for awhile and ignore their other objections to their fellow Minnesotans.

In the first year following the approval, the cash infusion was a little over $213 million, and to date the Minnesota Legacy has appropriated $2.9 billion. Basically there have been very few controversies with the implementation of the fund which allocates money into four pools: Arts and Cultural Heritage, Clean Water, Outdoor Heritage and Parks and Trails. All of the projects are listed for the public to see by the legislature.

So how do you find the adversaries to invite to your next dinner party? Look to where your guests spend their time and efforts. Don’t only invite the vocal ones, the emphatic chirpers. Look for the quiet ones too, doing the work of community. When the cause at hand intersects their activities, a stream of resources can be engaged, even among long standing rivals.

New city, new energy

From the BBC:

On the edge of the Saudi Arabian desert beside the Red Sea, a futuristic city called Neom is due to be built. The $500bn (£380bn) city – complete with flying taxis and robotic domestic help – is planned to become home to a million people. And what energy product will be used both to power this city and sell to the world? Not oil. Instead, Saudi Arabia is banking on a different fuel – green hydrogen. 

The Judge vs. Embrace

Alex Tabarrok recognized the passing of WV Judge Richard Neely on his blog site today. He credits the judge’s candor with getting his first paper published in 2003 in a good journal. His paper, written with Eric Helland, argued:

We argue that partisan elected judges have an incentive to redistribute wealth from out‐of‐state defendants (nonvoters) to in‐state plaintiffs (voters). We first test the hypothesis by using cross‐state data. We find a significant partisan effect after controlling for differences in injuries, state incomes, poverty levels, selection effects, and other factors. One difference that appears difficult to control for is that each state has its own tort law. In cases involving citizens of different states, federal judges decide disputes by using state law. Using these diversity‐of‐citizenship cases, we conclude that differences in awards are caused by differences in electoral systems, not by differences in state law.

But it is the judge’s very own words that confirm his economic motivation in his rulings.

As long as I am allowed to redistribute wealth from out-of-state companies to injured in-state plaintiffs, I shall continue to do so. Not only is my sleep enhanced when I give someone’s else money away, but so is my job security, because the in-state plaintiffs, their families, and their friends will reelect me. (Neely 1988, p. 4).

So what does this have to do with a post I recently wrote about Embrace, a women’s shelter in Wisconsin? The shelter’s director set up a GoFundMe page after she alienated local police by prominently advertising BLM signs around the facility. The goal was to replace $25K in funding that was pulled by the county. As of this morning the kitty is over $100K with a stated goal of $112K. I’m not sure how she picked that number, if there has been some sort of marketing strategy, to keep ratcheting up the goal as long as donors respond.

What I want people to see is the structure of the groups and the motivations for the economic activity between them. (It’s all about the group) In both cases there is a greater federal group. In both cases there is a smaller group; for judge Neely it was comprised of the citizens of WV, for the shelter it is the community which is within their service area. Both the judge and the director are extracting money from the larger group. One is unabashedly leveraging the law for the benefit of his constituents.

I question whether the other is providing full disclosure about the economic transaction that is still underway. Is there an assumption on the part of the greater public that their dollars are supporting an organization which serves a public effected by the concerns of BLM (whereas only a fifteenth of one percent of the population in this county is African American)? Or does the greater group understand they are funding a director who simply shares a similar ideology but has no power to actively contribute to the welfare of BLM?

In order to detect deceit or inefficiencies one must delineate the groups. One must also acknowledge the public nature of the motivations which drives the activity within the group–that anyone within the group receives access to the benefit. The judge, for example, rules in this way for all his constituents who found themselves in a similar conflict. That the services of the shelter are open to anyone within its service area.

Neither the judge nor the director evaluate whether the taking of resources from the greater group harm or diminishes services in some way to other members of the greater group. Their pursuit for funds is fulfilled under the nature of a private transaction, no different than how a corporation pursues funds for their services. This mode of competitive behavior happened recently when states bid against each other for PPE’s in the early days of the covid-19 crisis. Although they work as agents for a public, their obligation for such is only to the inner group.

Judge Neely was one of those confident individuals who scoffed at the traditional method of holding group norms behind a cloak of anonymity. For this we can be thankful, as his words confirm this social economic group structure and the motivation that drives its behavior.

Is it Public or is it Private-Corporate Addition

I’ve been working my way through a list which claims that economic goods fall into four categories– private, club, common and purely public– in order to debunk a misconception on how we sort economic activity. Web oriented services such as Wikipedia, NetFlix and website design hold a variety of placements in the groupings. I think it is safe to say that all three of these goods are private, since, according to a UN report more than half the world’s population is without internet service. Any good provided via the web is private to only the wealthy half of the world.

A resorting mindset is needed in order to tackle vision centered around corporate responsibilities to stakeholders, such as those described in a recent article on the American Purpose by Robert Madsen and Curtis J. Milhaupt:  The Expansion of Corporate Responsibility.

Increasingly, advocates of reform argue that businesses should be concerned about their “stakeholders”—not just shareholders but also workers, suppliers, customers, and society at large. The new movement, which is often termed “ESG” (Environmental, Social and Governance issues), is not limited to progressives and liberals, but has made substantial inroads in the commercial and financial community as well. After decades of espousing shareholder capitalism, for instance, in 2019 the Business Roundtable declared a “fundamental commitment to all of our stakeholders” in order to better reflect the way corporations can and should operate today.”

Stakeholders capitalism, “ESG” or benefit corporations are all a grappling to give this movement a name. What is it that corporations, which are intentionally private organizations, accomplish towards larger societal goals? Madsen and Milhaupt point out that corporate America has a history of such ventures, though most of us do not need convincing that capitalism works favorably upon social concerns. Even the most fervently socially-minded agree.

Yet the authors go onto express trepidation over who sets the agenda and whether expectations can be met.

Although hopes are high for what corporations and institutional investors can achieve through greater emphasis on stakeholder needs as opposed to narrower shareholder benefit, few of the ESG reformists have bothered to define what the movement’s precise goals should be. This matters because in the absence of a concrete agenda people tend to assume more than is possible, and the inexorable failure to meet those expectations generates dissatisfaction and the possibility of political backlash.

Here’s the thing– there is an entire marketplace of social concerns out there to choose from. No matter what the corporate entity decides to take on, the important step is to collect the data and account for it.

*Decide to devote its social ambitions to rectify labor inequity? Account for the extra training and support and follow the employees long-term gains.

*Decide to devote their legal staff to ironing out the thorny wrinkles in cross-country trade and all the implications of contract defaults? Account for time logged while on the company dollar, and the losses taken when the contracts fall through. Track how establishing standards allowed smaller firms to enter the market with confidence.

*Decide to use the idle time of their tradespeople and send them to a financially strapped public schools to tighten up all those leaky faucets? Account for the hours spent and estimate the savings in city water running down the drain.

The opportunities are everywhere and the beauty of the system is not to be hampered by a particular agenda, but to attack the issues which are most readily facilitated by the business and the people who make it up. To find the passion which galvanizes the employees to give of their time and expertise.

But-this is important- we can’t know how it all shakes out until it shows up in a tabulation somewhere. The trick is that the mechanics are different for social activities versus the mechanics of for profit transactions. That doesn’t mean they can’t be held to account. Already things like ‘good will’ show up on balance sheets. Think of the possibility of two colors of ink on the net income statement; one for profit and one public profit. The former total is by far the lion’s share, as by definition corporations exist to produce financial gain. Yet knowing the later, being able to track, tally, and compare it, will be empowering.

Tracking will also play into Milton Friedman’s emphasis on transparency. Through open disclosure, reports identify the social goals tackled and the benefits of eventual outcomes. It also provides signals where possible excesses, corruptions and silly virtue signaling are occurring, if not out and out fraud.

The task at hand is to identify what counts as work towards a public objective. And see how assets are used, stored and accounted for. To identify this concept of capacity and give it a number. Where do the tradeoffs get revealed so individuals will make choices with their time and energy? How could they be engaged by benefiting from a personal social objective while participating with fellow employees? The angles are multifold.

So I say– do not hold expectations in check. Run with them, write them down and see how they all add up.

This would never happen in MN

I’m not tuned-in to how new construction is done in China, but I can say why this would never happen in Minnesota. Clients are on a time-line. They would not proceed with a purchase agreement until a somewhat (within 30 days or less) firm closing and occupancy date was clearly possible. The project would have to be far enough through the city approval process to be assured of no delays. With the hint of a builder’s lack of ability to retain tradespeople, buyers will shift to a builder that has deep enough pockets to hang onto good workers.

In a very hot market, buyers will put down money to hold lots or condo units pre-construction. This dollar amount is a small fraction of the total cost of the unit. If the developer went bust, those funds could be at risk. Only in the relatively small number of custom built single-family homes do clients risk a construction loan, where the builder receives disbursements from the bank over the six month period it takes to build a home. But the timing would never put the buyer on the hook for the full amount of the mortgage.

Fire Station 2

Our fire station, Fire Station 2, is getting a brand new building next year. The thirty-five year old building is being razed, so new beefed-up accommodations can better respond to calls and better house the firefighters. There’s been a shift change, from shorter 3-6 hour ones to overnighters which necessitates a dormitory.

Firefighting is an entirely voluntary service in some cities. We have a paid-on-call system where active time (training, call response, equipment maintenance…) is paid at an hourly rate. We’re not talking a lot of money, the present range is from $12-15/hour–about half of the per capita income.

So what’s that called, that missing $12/hour? What accounts for the difference in what the firefighter could earn and their paid-on-call wage? Here’s how Ron Roy, the division chief for Douglas County Fire District #2 in East Wenatchee, Washington, put it:

So why do we do what we do? It is about our communities and the hometowns in which we have elected to live and raise our families. We should care about all of those around us and recognize their needs. When they are having health issues, mow their lawn, shovel their snow, or take out their trash. We are the lifeblood that makes it a community. We all need to step up and provide some of our time and talents to help make our community a better place. Sometime, somewhere, you or a loved one will need the services provided by community members.

What he is describing is a just-in-time system of providing services to neighbors who unexpectedly find themselves in need. There is no chit system, there is no direct tit-for-tat. It’s an all-on-your-honor type of deal. This is work in the public sphere.

But back to the missing $12/hr. It doesn’t just vanish. It is a measure of the city’s capacity to respond, in this case, to extinguishing fires, and in doing so saving lives and property. City capacity measures the on-call storehouse of the residents’ ability to step up and provide some of their time and talent in order to advance a public objective.

Buildings that walk and roll

In Shanghai a five story primary school building walked to its new location some 200 meters away.

Back in 1985 the Fairmount Hotel was moved in San Antonio. The clip is 17:47 minutes in length but contains lots of details including a two week halt to dig up artifacts from the Battle of the Alamo, maps, bridge crossing, groups involved ( and great 80’s theme music!). Take a look at the renovated Fairmont Hotel.

I remember when the Schubert Theater was relocated, lifted and rolled, in downtown Minneapolis in 1999. It took twelve days to move the 5.8 million pound structure, originally built in 1910. But it took a decade more and upwards of 38 million dollars (not all public), to transform it into the Cowles Center for Dance and the Performing Arts. How a city comes to terms with spending that kind of money involves achieving multiple objectives. The Star Tribune explains:

Meanwhile, restoration of the Shubert will create 150-plus construction and permanent jobs, bring tens of thousands of dance patrons downtown, complete the performing-arts vision for the successful Hennepin theater district and alleviate a loitering and crime problem that has moved from busy Block E to the lonely stretch of the avenue on which sit the Shubert and the Hennepin Center for the Performing Arts. At least that’s the official pitch. The cops and the new urbanists say having people on the street trumps crime. The arts crowds frequent local bistros and they don’t make trouble.

In 1995 Minneapolis was nicknamed Murderapolis after the New York Times wrote a story pointing out that the city had a higher murder rate per capita than New York. This particular spot in downtown struggled with crime. The jobs were also successfully filled by minority tradespeople.

CEO Louis King of Summit Academy OIC on the North Side, which trains dozens of young minority folks for good-paying jobs in the construction trades, is near agreement with McGough Construction and the city. Up to one-third of the workers on the Shubert project will be women, minority apprentices and skilled minority craftsmen. The jobs will pay $18.50 to $40 an hour for months. That’s a good thing.

Wouldn’t it be interesting to see some sort data estimate and geographic tie-in to how the public investment performed? What proportion of the presence of a renovated and vibrant building on that section of the block helped with crime reduction? Did the minorities and women who worked the jobs progress in their profession? Is there an index to say x- proportion of the investment was preservation, and x-amount inflated into other community value?

7 Billion for a Transportation Revolution

That’s the election news from Austin, Texas. A pretty hefty purchase for a metro of 2.2 million people. More on the deets from the local Patch:

The project came in two separate parts for voters, Proposition A and Proposition B — both of which gained support from the majority of registered voters. The former, which passed with 59 percent of the vote, calls for an 8.75-cent increase per $100 valuation to the city’s property tax rate, resulting in around a 4 percent increase to the total bill, toward a high-capacity transit system known as Project Connect. Prop B, which passed with 68 percent of the vote, provides for $460 million in debt issuance toward transportation improvements —sidewalks, bikeways, urban trails, safety projects and the like.

This wasn’t the first run at a rail transportation package in the capital of Texas. It wasn’t for lack of need. The urban’s center’s population growth for the decade ending in 2018 was 37%. Yet two prior funding attempts had failed. This time things were different.

“There were three main arguments that were made,” says Austin mayor Steve Adler. “One was congestion. One was climate change. One was mobility equity in our city.”

This time the city was all in. The focus was not only on light rail to improve commute times and to connect various parts of the city, goals which appeal to those who could better use the hour from a daily commute, and to those who prioritize emission reduction. But the plan also provides for “transportation infrastructure including sidewalks, transportation-related bikeways, urban trails, transportation safety projects (Vision Zero), safe routes to school and substandard streets.”

Let’s count the public objectives: transit, health, environment, access to jobs, recreation, safety. And lest you think they forgot about housing:

The plan, funded by an increase in property taxes, also includes $300 million to help make sure that as transportation improves in some neighborhoods and housing values rise, residents aren’t displaced from their homes due to gentrification. They’ll do this by offering rent subsidies, building more affordable housing, and giving financial assistance to home buyers. 

Austin’s business success and hence population boom has put it in the enviable position of having a need for all these public projects as well as the financial ability to fund them, which they have tied directly to the assessed values of real estate.

But what about cities that just need one of those amenities, or even just a leg of light rail, or upgrades to a suite of bridges, or replacement of a water treatment facility? What are the standard pricing mechanisms and what are they tied back to in such a way that is financially acceptable to all those who support the improvement? What are the combinations that upsell a project and close the deal, such as this one in Austin?

Minnesota passed a 1.87 billion bonding at the fifth special session held in 2020. Two years of touring and evaluating worthy projects, and still the delays and posturing and addon’s. The beauty of a standardized pricing mechanism is that the crazy haggling is reduced to more amenable swings. And more importantly people don’t feel the hazy disbelief that I did when I walked away from a souk off the central square in Marrakesh after paying $20 for two sad sticks of incense.

In other election news

The presidential race gets the lion’s share of election attention, but communities all over the US are taking care of business. Barber Township sits down on the Iowa border and needed to establish who was responsible for the ditches on the town roads.

Straight north to the Canadian border, International Falls said yeah to chicken coops out back.

Drop down past Black Duck and Leech Lake Reservation to Rogers Township where they pulled a draw on whether or not to appoint a treasurer. Four votes, split 50-50.

All ballot questions are here, at Minnpost

Rain drops

‘At least the weather has been nice’ has been a passing phrase in 2020; a Minnesota nice way of putting a positive spin on a dreadful year. The stretch of sunny 60 degree days in our forecast has me deciding which outdoor tasks I can still accomplish. Some readers may not appreciate these temps, but just a few weeks ago an early storm wrapped the landscape in a four inch blanket of white, catching the Autumn Blaze Maples startled with all their leaves yet to drop.

The proper order of things is for the leaves to turn their brilliant oranges and golds and reds, then drop, then get raked up before the snow flies. It’s not the end of the world if the leaves don’t get raked up but blow around in the back yard until snow covers the landscape for a good chunk of the calendar. Come spring, however, when the thaw comes out of the ground, you’ll contend with a soggy mess. There’s the possibility that south winds will dry them out over the course of March, April and May. But the grass will emerge yellow and thin.

Having a patchy pelouse doesn’t make your home inhabitable. It doesn’t come under the must-respond-immediately-and-fix like a furnace when twenty below temps are testing your weather stripping. Heat is essential in a Minnesota winter. Water drips are up there with heat. As water on the loose tends to leave unsightly stains and make things moldy. There are things that you can’t do without and there are things that do damage if you pay them no mind.

A whole host of chores nag at you even though only a few are desperate. Take cleaning the gutters, for example. With an Indian Summer rolling in I get a second chance to get out the ladder and use rubber gloved hands to dig out the leafy debris. Otherwise a stream of snow melt off the roof will overflow, dripping persistently right next to the foundation. A few years of neglect does little damage, but eventually water digs its passage, and seeps through the foundation. Decades go by and the whole foundation wall starts to bow due to the water drops hitting like bullets into the soil and down against the walls. Something as simple as not cleaning the gutters can cause the foundation to collapse.

Community work shares this housework feature, that there are different levels of need that pull one into service. There are those tasks that need immediate attention and receive it. You can’t very well drive by an abandoned crying child at the side of the road. That’s a pull over no-matter-where-you-are-supposed-to-be and help moment.

Then there are those itty bitty items that get pushed aside like the intersections that really need a stop sign. Busy people have yet to get down to city hall and insist on better measures. When a tragedy rustles neighbors into action, there’s a lot of head shaking as to how that risk hadn’t been better assessed.

Assessing long term risks and drawing them all the way back to the present day, into the everyday lives of busy moms and dads, takes the memories of grandmas and grandpas. A shared knowledge of what eventually could happen if you put off the small maintenance items is vital. Only tackling the immediate emergencies, and burning all other time on cosmetics will pull you up short. At the worst time (inevitably) you discover that all the mechanics in your house need replacing, and the foundation is about to blow. Communities are like houses.

It takes decades to run down a house to the point of it being a tear-down. At any juncture, owners can jump in with enough willpower and enough resources to set it straight again. The better path is for people to evaluate all the long term risks, and use this knowledge to divvy up the present day work. Estimating the relative value and effort necessary to maintain and build-on what is already in place. It’s better when several generations supervise and assess the risks and rewards of the work which needs attention.

Links to Textiles

Cute Scott in a beret shows how to make linen fabric from flax seed. Join 1.3 million viewers of this video.

Acrylic on Textile, by Novikov, $25,000.

The Weavers Guild of Minnesota is the largest of its kind in the US.

Barkcloth is a textured woven, usually printed cotton fabric that was popular in the 1930s-40s and 50s as an interiors fabric. It is great for upholstery and drapery.

Remote real estate

Saint Helena hangs in the Atlantic between the eastern reaches of South America and the west shores of Africa.

It is one of the most isolated islands in the world and was uninhabited when discovered by the Portuguese in 1502. It was an important stopover for ships sailing to Europe from Asia and Southern Africa for centuries.

A five day ferry ride from Cape Town takes Napoleon buffs to his final resting place on the island. See more great photos from The Atlantic.

Redlining’s Reappearance

The Milwaukee Journal Sentinel reports:

A popular online real estate brokerage service has engaged in racially discriminatory practices akin to modern-day redlining in Milwaukee and other cities across the country, according to a new federal lawsuit.

Redfin is a Seattle based company which entices, sellers in particular, with discounted fees.

In Milwaukee, Redfin was about eight times more likely to offer no service at all in extremely non-white ZIP codes and did not offer its “best available service” for homes in extremely non-white ZIP codes, an investigation by the local fair housing council found.

And concluding with this:

“This is a practice of racial segregation which diminishes access to wealth, access to quality of life opportunities for African Americans,” said William Tisdale, president and chief executive of the Milwaukee Fair Housing Council.

Put me in title

In the is-it-private-or-is-it-public game, I agree that a home is a private good. The event which makes you a home owner is a closing, which in Minnesota, is usually held at a title company. On the chosen day the buyers and sellers sit down (pre-Covid) and the buyers sign up for a mortgage to finance the purchase while the sellers sign over a warranty deed. Done deal. No take-backs. The fees include a little state tax and filing fees so the documents are filed publicly in the county recorders office.

The process almost seems trivial but it so powerful. This singing over of a title and its public recording in a government office is the most significant feature of private wealth in the US system.

Interestingly, there are a whole assortment of local norms and customs revolving around closings across the United States. Most states either close at the table or over an escrow period. In Wyoming, however, real estate agents conduct the closings. Also specified and unique to almost every state is a foreclosure process. Most weigh heavily on consumer protection. And here is an interesting table breaking down all the nit picky processes and fees.

Owning a home is a staple of the American dream. Owning a home ties you to a community where you participate in measure of all public venues: public safety, pubic schools, public transportation, parks trails and the environment, governance and civic pride.