Power to energize collective action

There are a lot of well-spoken words in this podcast. The eloquent banter is reason enough to listen. But there’s more. The view into a variety of angles of a group within a group’s past, present, and future accomplishments are illuminated. The light shows fine variations in interpretations and perceptions.

Glenn comes in strong around the 19-minute mark. I like how he frames the issues because the template he presents could be superimposed over other groups. Feminists made claim to be the power players for all women. Some bureaucrats make the claim of saving lives through regulation. The information feedback loops are not coming from the group but from people more interested in harnessing self-aggrandizement.

And the explanation of how a citizen can be an active part of more than one collective action project, without being disloyal to either, is an important observation. One can be observant of history and yet move forward with the work of today. In fact, all the speakers are much more in tune with how to forge new paths for better outcomes than being tied down by a burdensome past.

I tried to capture an excerpt by having my phone transcribe the audio. There are a lot of gaps! But hopefully there is enough to give you a taste of their conversation.

The construction of collective goods in the welfare state or in or on behalf of defending the country against external threat people are called based upon the earth and connection to the country. We are American with meaning black Americans in the 21st-century, the descendants of those who had been enslaved and labored to become fully equal citizens there’s a story there I want my children. Among other stories, I don’t want that to be the final word. I don’t want that to be their defining will close adequate to the task at hand that we wear lightly not that we wear as a shroud that we wear with the ability to take it off and to stand outside but I don’t think yet even now in the year 2022 we can afford to give up the leverage and the power that Robert Woodson has leveraged on more than one occasion of getting people together, work on behalf of collective goals, like raising our children, maintaining order in our communities, and doing honor to the sacrifices of our ancestors.

An attempt at an excerpt using an iPhone recorder

How Labor Hours can add up to Value

Someone once said the value of a product was linked to the number of labor hours that went into its production. But then a whole bunch of people said no, no, no that’s not how it works. Can both views be correct under differing circumstances?

There are circumstances where a certain number of work hours are needed to pull off an event. Years ago the Junior League of Minneapolis opened up a showcase house in a tony area of the city for an annual fundraiser. A friend was involved so she’d recruit a bunch of college friends to help fill the volunteer shifts needed to support the three-day event. Tickets were sold to the public. The public got to traipse through a well-appointed property and imagine what it would be like to live there.

Habitat for Humanity is a non-profit organization that builds homes for people who otherwise couldn’t afford them. It was founded in the mid-70s and brought along by former US President Jimmy Carter and his wife Rosalyn. Volunteers at all levels of the trades donate their labor to the project. A slew of community members also pitch-in and paint or doo site clean-up. The soon-to-be homeowners are also expected to build sweat equity. This contribution isn’t measured by their skill level or their education level but by a set number of hours.

The various branches of the US Armed forces will finance a young person’s college education. There are the academies of course like West Point and Annapolis. But there is also an ROTC program where you matriculate at one of the many colleges across the country where the program is offered. In exchange, the graduate commits to several years of employment with the military. The repayment does not depend on the specific rank or ability of the serviceman. It simply is paid in time.

It seems that in creating value for community endeavors, people simply need to show up. In these circumstances, whether the participants are paid as an attorney or a painter in the private market, the work they do in this sphere is not priced out that way. A positive outcome, or the capacity for a successful project, is based on the reliability of the number of hours that can be filled. So maybe there’s some truth to both philosophies after all.

Round the Wicket?

I was right down to the minute as I sailed into city chambers for our park’s commission meeting. Thinking it was going to be a sleepy November meeting, I was surprised to glide past a crowd seated on the standard upholstered blue chairs in the audience. Our city tends to over-deliver on parks and trails, so there is little controversy to draw a crowd to the assembly.

Present in the audience were activists in action. The representative for the group told us there’s a need for a cricket pitch in our city. And the arguments which followed were all worthy. A growing group of Asian residents was interested in a sport from their home country. It was their passion. Neighboring cities had put the necessary fields, so as a matter of pride it would be nice to play on some home turf. There were fields for baseball, soccer, and football, there’s no good reason to exclude cricket.

Cricket in Minnesota? It had never occured to me before. Our state does indeed have a Minnesota Cricket Association with, according to our presenter, several hunderd members. And as reported here, private individuals have gone to great length and expense to build up the infrastructure for the sport.

It is so easy to forget how many different activities and interests are present in a community, among people who live nearby. Here is an organized and engaged group who have claims to the public field– as do the Little Leaguers and Youth Football Associations. Wouldn’t it be nice though to have a little more information on all these different sets of people? What kind of numbers are we talking about for the people who devote their time, energy, and resources toward soccer, pickleball, or cricket? How many labor hours churn through to support the activities?

It just seems like, for analysis purposes, it would be handy to have a handle on the set of people who desire the use of a good for a certain function.

Changing Intermediaries

There was a time when concerns about the future of communities arose when changing preferences shifted people’s activities. When the lanes were no longer booked on Thursday evenings for leagues and bowling balls were being sold at garage sales, predictions of cultural decline became fodder for those who watch such things.

But about the same time, church basements were seeing a lot less of the ladies who know how to fill the fifty-cup aluminum coffee maker. As new generations come through communities, their preferences change. The inclinations to be supportive of a community or devote time to causes or charitable endeavors do go up in smoke in some sort of generational existential crisis. They simply find new marletplaces.

The volunteer firefighter model is on its way out. Half a century ago perhaps as much as a third of the firefighters were volunteers. Becoming part of the force was a competitive process. It was a position that held prestige. The men would hang out at the station house in shifts waiting for the next deadly blaze. Now most firehouses are staffed by paid employees or transitioning to such an arrangement.

2nd St and 5th Ave Minneapolis

One could speculate that why men don’t want to pile in and hang out in the cramped quarters of an aging firehouse. But I think it is a mistake to assume the men of today lack an impulse for civic duty. They are most probably exerting efforts elsewhere in their family or work structures. Many workplaces now offer opportunities to partner with non-profits. Many non-profits offer opportunities to become involved.

Environmental Initiative is an intermediary which is driven by a desire to improve the environment.

Currently, it is estimated that 25% of passenger vehicles cause 90% of vehicle air pollution. Older cars often have outdated or broken emission controls and exhaust equipment. By partnering with garages to repair broken emissions systems, Environmental Initiative is cleaning up some of the highest polluting cars on the road while reducing barriers to reliable transportation. 

Partner garages provide low- or no-cost repairs to emission control systems. This allows car owners to reduce their car’s emissions and prioritize paying for other repairs necessary for the safety and drivability of their car.

This type of interface between people who have skilled labor, and most probably some idle time, and those who voluntarily support a cause, like pollution control, is an excellent matching game. There is an arbitrage opportunity between the former group which loses little by helping and the latter group which will be vigilant to the appropriate disbursement of reimbursements.

A man behind a beast

Bangladeshi working with oxen

It might be easy for someone from the west to categorize the man in the photo. It might be easy to assume that, despite perhaps a potential for the intellectual heights of a professor, his opportunities in life are limited by his environment. But this view may lack clarity.

To feel sorry for a man in a photo based on presumptions of status and reach is more than likely an imprecise calculation. The man of letters may acknowledge the third world inhabitant has the capbilities of being his peer, yet considers his voice to have 20x’s the impact. But the numbers don’t support this.

The population density in Bangladesh is 1265 people per sq kilometer where as in the US it’s a meer 37. So say an influencer in the US thought they had the ear of 85,000 people. Since the population density in Dhaka is 23,234 per kilometer, the man in the photo would only need to circulate through 3.66 square kilometers to touch a similar audience. This is the spatial equivalent of a handful of city blocks.

In fact, if social capital is defined by the number of people in a network, than this man must be quite well off.

Furthermore, capable people who do the work of city councils or community organizing could very feasibly act in ways that impact and improve the lives of hundreds of thousands of their fellow city dwellers. A small elevation of sanitation standards would provide significant and immediate health impacts. Should the man in the photo have the capabilities, he most certainly could and does do work to ameliorate the circumstances of those in close proximity.

Perhaps the distance between the reality of his economic and social circumstances are more than geographic, it is hard for the westerner to see him in his proper function. But without this insight, it is erroneous to pronouce this man’s life-work a market failure.

What do workers want

There’s a worker shortage.

The city I live in is getting by with less than 50% of the seasonal staff they typically have for the summer months. Once the weather gets nice in Minnesota there are acres of parks to mow and canopies of oaks, elms, and maples to trim. On eighteen year old who applied said he would consider the job if he was given a city car to drive home in the evening.

But the most perplexing trend, for those of us of a certain age, is the no response option. Applicants set up times for interviews and simply don’t show. No call; no attempt to reschedule; no ‘I changed my mind.’ Perhaps for the seasonal part-time workers that is understandable (perhaps). But apparently no shows for interviews even happen for fulltime, full benefits jobs with a major suburban city.

Another manager in a different field said she had fourteen openings to fill so she scheduled an afternoon of interviews. Not one applicant showed. There she sat, spinning a pen between her fingers.

The ‘no communication’ modus operandi started about the same time texting became a popular means of conversing. It’s like a wave of people who might as well have yelled down the corridors of society “we don’t want to talk to you” changed how we make plans. Or like some grouchy teenager proclaiming indignantly, “We don’t want to have to listen to what you have to say.”

Texting is a great way of cutting the personal out of the conversation. No chit-chat. No opportunities to ask a few extra details. The fumbling around of thumbs on tiny screens makes for short replies. Plus you are not on the spot to get back to someone. You can control when and how you choose to respond as you can leverage the uncertainty of whether you’ve received the message.

As these folks age, maybe they’ll notice the benefits of being civil. Maybe they’ll consider the fluidity of the process of general customer service is beneficial to amicable relations. Maybe they’ll notice when you open a dialogue, you might actually learn something else that is useful.

Identifying Circulating Capital

In years gone by, every political season was adorned by a scandal involving the spouse of a candidate charging a bunch of clothing and personal effects to an inappropriate account. The reasoning was the spouse had to maintain a certain status exemplified in their presentation. One could say the the candidates spouse, and family for that matter, required circulating capital in support of the candidate in image and appearance.

Circulating capital is a businessy term which is defined by Webster Marriam as:

capital consumed in the process of production (as fuel, power, and raw materials) —contrasted with fixed capital

In loose language it pays for the maintenance and utilities to keep the lights on, the machines oiled, the pathways shoveled, and so on. Since the business world has replaced this concept with the term working capital, perhaps circulating capital could capture the more socially relevant maintenance items.

One might say that the resistance of workers to go back to a brick-and-mortar workplace is due to the increase in circulating capital required to do so. The reversion to pre-Covid times may involve purchasing some new dockers, reacquainting oneself with the bus routes, and debating the tradeoffs between a bag lunch or Subway. There’s no question that the circulating capital will suck some profits out of the paycheck.

Another reason to bring back the term is that it is all but ignored in many important marketplaces. The circulating capital required to maintain a houseful of kids in their education and recreational programming is significant- ask any parent. The circulating capital required to provide housing to folks on the margin is substantial ask any half-way house provider. The circulating capital required to keep a small theater group performing is substantial, ask their donors.

It would be helpful to know some of these numbers.

The Scottish philosopher is a little harsh on landowners

The interest of the first of those three great orders (…the rent of land…), it appears from what has been just now said, is strictly and inseparably connected with the general interest of the society. Whatever either promotes or obstructs the one, necessarily promotes or obstructs the other. When the public deliberates concerning any regulation of commerce or police, the proprietors of land never can mislead it, with a view to promote the interest of their own particular order; at least, if they have any tolerable knowledge of that interest. They are, indeed, too often defective in this tolerable knowledge. They are the only one of the three orders whose revenue costs them neither labour nor care, but comes to them, as it were, of its own accord, and independent of any plan or project of their own. That indolence, which is the natural effect of the ease and security of their situation, renders them too often, not only ignorant, but incapable of that application of mind which is necessary in order to foresee and understand the consequences of any public regulation.

Wealth of Nations, Rent of Land : Conclusion, page 248

A boy from Bayonne

Frederic Bastiat is known for a set of essays, the most recognized is entitled, What is Seen and What is Not Seen. At time of writing, the french nineteenth-century statesman and philosopher is in the latter part of his life and is inspired to record some economic thoughts in a wry and witty manner. The language is vivid and descriptive and the text takes on many forms including dialogue and LaFontaine-like fables. He playfully names his actors M. Prohibant, M. Jacques Bonhomme, and M Blockhead.

En pays basque

His objective is to open the eyes of his fellow statesmen to take into account of the entire cycle of economic impact in the system; to note what is seen but also what is unseen. Much of his inspiration comes from the waste he sees in a heavily bureaucratic tariff industry which seems to have sprung up at crossovers between countries or every city gate. This gross abuse of skimming a bit off the top of every transaction, and the bloated civil service that supports such things, is easily exposed as inefficient.

The Collected Works of Bastiat is over 500 pages, so, for as much as there is to say about the restraints of free trade, it is only a segment of the entirety. It might be the portion that free traders have used to identify the author as their own. But the boy from the Paye Basque offers so much more. In fact, it is against his professed philosophy to pluck out but one section of the analysis and not look under the cushions for the rest of the loose change.

Bastiat does not deny the core services of government “the army, the navy, law and order, public works, the university, the national debt, etc..”(pg43) He decries all abuses of taking private profits whether through commercial fraud or abuse in the public sphere (pg123) or through the church (pg123). He denounces the fraudulent taking in any sector as “Plunder!” It is not simply across the custom’s desk that he sees waste in the system.

Through the volume and variety of writing he devotes to flushing out various aspects of exchanges, he seems to want to expose much more to the systems he sees than simply the revulsion of protectionism. For instance, he talks about the different natures of work. There is work where the value is determined in the end product, not the hours spent. For that reason ‘make work’ by the government is unproductive and should be replaced by unemployment insurance (pg160). He opposes postal rates which vary by distance, which suggests that he feels postal service is a public good to be provided at a reasonable cost no matter where you are, as told in the story of the Salt, the Mail and the Customs Service.

We could talk more about how he describes the various levels of markets (not ‘your’ market, ‘our’ market he tells the paysanne!) There are markets off the rail stops, there is the vaste city market of Paris, there are the other European markets, and just bursting on the scene is the market in Algiers which is a net loss, as it is pulling taxes out of the system (184).

Bastiat has a lot to say. His text deserves a more thorough read. He is trying to locate the whole elephant and would like everyone to stop advocting for the one angle he or she is clinging to.

Australian woman rediscovers the advocacy of housewives

So I can only imagine their collective horror when a few years ago, in my 30s, I shacked up with a farmer schoolteacher (a male one), had two children in quick succession and sank into a quagmire of domestic drudgery in regional NSW.

There, I joined my local branch of the Country Women’s Association (CWA), arguably the nation’s most powerful and conservative women’s group.

I hesitated to mention my new membership to my staunchly feminist mother.

But it turns out that the CWA may have more in common with women’s lib than I’d imagined.

The whole article can be found here.

News clip about the Country Women’s Association celebrating its centennial.

No worries about commodification

Perhaps one reason we have yet to enumerate the benefits of work done outside the job market, in the name of family or association, is that people fear the commodification of services meant to be done in loving care. A pecuniary take on the expense of raising a child or caring for an elderly parent or time devoted to helping a loved one fight an addiction, feels crass. An overt utilitarian calculation of every moment of every life sucks the soul out of good intentions.

Try to quell those fears with this thought. The impact of an individual is of no import in group dynamics. Value at an institutional level is the sum of the work over the whole group- hence there is no individual slicing and dicing of dollars to devotion.

Let me explain. If only one parental coupling in a school district tries to initiate a PTA there will be little value in it. These types of community investments only occur when a sizeable number of (individually motivated) decide to participate. So it really doesn’t matter if it is so-and-so’s mom or the Jones or the grandparent of Tommy, Johnny, or Sue. The institution of parental support within a school will be generated after a certain number of family members show up and give of their time and expertise.

Sometimes it does not matter who the individual is as no one can predict when the need for a community response will arise. The best way to deter crime is to stop it in the moment. Call the authorities, be a witness, and pull together a watch group. The act of doing any one of these things is not priced out individually, it only matters what the capacity of the group is to voluntarily respond, as needed, to crime prevention.

Watch Clint Eastwood in Grand Torino. He did not commodify himself. His contribution was calculated at the margin, and the return was significant.

Are scents out of style?

It just doesn’t seem like you hear much about fragrance anymore. The TV ad with the latest must-have model glowering into the camera followed by an announcement-style proclamation of the brand is simply not around. Anywhere.

Understandably COVID took a whack out of the market. With everyone covering up their noses what is the sense of emitting a pleasant odor? Plus the closure of beauty shops and the work-from-home model encourages people to be more casual with their appearances.

But I’m not just referring to Eau de Toilet. It seems like writing also fails to reference the wafting of the linden trees when in bloom. Some say the “smell is bright and sunny with hints of honey” while this tree enthusiast says, ” The scent — a blend of honey and lemon peel — is far-reaching.” I found these references because I knew where to look. But if you think about the novel at your bedside table, are there references to scent contained between the covers?

And except for the weather man (or woman) who comments on the humidity, it is difficult to point to any writers out making daily commentary about bouquets or aromas. Noone even attempts to set a stage. No color or frangrance or lyrical language. Just straight jabs to the jaw.

Bring back the scents I say!

Is there a natural market size for club goods?

When people gather and cooperate in the provision of a public good that is available only to their group, it is called a club good. Compared to private goods it is more difficult to track the output of these types of goods. The former can be counted up and traded, which translates into a neat and tidy quantity-vs-price graph. Public goods, like education for example, are made available to everyone. Hence the measure of success depends on the entire team.

Although a group is made up of individuals, for the purposes of tracking achievement, the outcome is a reflection upon everyone. As my son’s baseball coach would say, there is no ‘i’ in team. Or as dictionary.com explains, some nouns are mass nouns like sunshine or water. Even though we have such a strong tendenancy to try to extract the individual as the unit of analysis, we really must account for the group when dealing in club goods.

This leads us to wonder how big the marketplace should be in the collective efforts to, in this case, educate our children. This came to mind today as I was listening to Russ Roberts interview Nassim Nicholas Taleb on a new episode posted at Econ Lib. It sounded like the author of The Black Swan likes to process his ideas for new books by talking them through with Russ on the podcast. The topic today was the optimum size of the State. Here he makes the case for smaller groups.

But, let me make a comment here, why size is central to what we’re discussing. Because people keep using names–state, nation–the size is central.

You do a lot better, I think, meeting a person a thousand times than meeting a thousand persons once. In other words, you’re in a big city like New York City, you walk out, you’re going to see everyday different people. Whereas in a village you’re going to probably encounter the same number of people, assuming you encounter them, it would be the same people. It’s like knowing it’s a friend is a person that you see a thousand times. You see one person a thousand times rather than a thousand strangers once. You see? Things don’t scale properly. There are things that work differently at a lower scale. And, what I’ve discovered while working on volatility models show that why an elephant, for example, is not a large mouse. An elephant is vastly more fragile–

Taleb

The specific details about who runs into whom are less important than the gist of what he is saying with respect to gauging size. It might be a thousand people or all of Manhattan. What I think is being framed here is a way to identify the size of a community suited to accomplish their goals. And the suggestion is that it must be small enough to allow people with common interests to bump into each other and trade the resources necessary to edge toward an outcome.

As long as all the people interested in educating the kids can come across each other, then they can combine their enthusiasm and skills to foster learning. As long as enough of the folks who depend on transportation networks can give feedback and encourage the appropriate repairs and expansions, then roads and bridges infrastucture will stay up to date. As long as all the people best able to monitor the streets for safety are able to provide feedback to law enforcement, then the compact to protect all citizens will raise to expectations. And on through the list it goes.

As long as the size of the community allows for people to easily do the work of community, then the institutions in place to provide public goods will be backstopped with the resources needed to flourish. At this point, as I understand it, you have found the right size for the school district or the precinct, or the State.

Better ways to leverage

Mike Makowsky wrote an interesting post at Economist Writing Every Day. Given his knowledge of the sports labor market, he is able to provide details about the paths young atheletes take on their journey from high school star to mega-buck-NBA-earners. It’s easy to accept his point that kids with sports parents have greater chances of success. Just like kids with acedemic parents leverage their family life to enter acedemia. But it is the subtleties he flushes out, such as tacit knowledge and the various plateaus of success and affiliates careers, which are interesting.

If I’m following him, there are various components that contribute to securing a lucrative NBA job. Simply having a superstar parent doesn’t mean you will be bestowed with benefits. In fact, it could be detrimental- think of the parent that is so self-absorbed that their kids go unheeded. In Mike’s story, the parent not only has connections but activates them. This is component #1. The work a parent is willing to devote to the child.

There are undoubtedly gains from great genetics, but a little tacit knowledge can also go a long way. Dell Curry realized his son would need added a particular shooting strategy to make up for his lack of height. “This lead him to entirely reinvent his son’s shooting form in a manner that rendered him unable to shoot from any distance at all for months, entirely based on his understanding as a former NBA player that his son’s lack of genetic predisposition to play in the NBA required a motion that would catapult shots over much taller players.”  Engaging insights and experience is component #2: Human capital.

The third advantage an experienced parent brings to the child is an understanding of the landscape. In high-profile sports, the funnel is steep, and only a few secure the lofty salaries. High school superstars with no other affiliation to pro sports may never make it.

The irony being that losing first is better than than getting the silver medal. Losing first means rebooting your life early and building up your human capital in something else (hopefully in something more forgiving of merely being very, very good). The silver medalist is, in fact, the biggest loser. The opportunity cost of time and energy they will never get back and never be rewarded for. I don’t worry about players that don’t get NCAA scholarships or drafted for the NBA. I worry about the guys hanging around in the G league until they’re 34 only to get released from their contract over a text message.

As an outsider, I can understand the structure of these components. Yet I have no background or experience to be able to connect a child to those who could help, or develop a winning shooting strategy and most of all understand the benchmarks between making it big and wasting years sitting on the bench for a minimal wage. As an outsider, it would be very difficult for me to know where to allocate work or resources to advance a youth athlete.

Yet this is what public policy experts do all the time. They slice off categories of disadvantaged kids by the income of the parents and throw cash at them and hope for the best. Some of these low-income families may still have very competent and even educated parents. They may not need human capital, they may need connections. Some of these kids may have the smarts but not the emotional and structural support to get them out of the neighborhood. And understanding the neighborhood landscape is most probably best understood from the inside, not the out.

Van Gogh in Minneapolis

Five of Vincent van Gogh’s olive tree paintings are on loan to the Minneapolis Institute of Art. They make up a small exhibit along with several etchings. The viewing space is intimate with lighting picking up the texture of the paint strokes on canvas. Only a handful of people are present at any one time which encourages an inclination to linger rather than to leave.

Everyone knows van Gogh as the genius with mental illness. The man whose brush techniques and color combinations made his work vibrate with energy. I did not realize he started his artistic endeavors late in life nor that he was so prolific.

Largely on the basis of the works of the last three years of his life, van Gogh is generally considered one of the greatest Dutch painters of all time. His work exerted a powerful influence on the development of much modern painting, in particular on the works of the Fauve painters, Chaim Soutine, and the German Expressionists. Yet of the more than 800 oil paintings and 700 drawings that constitute his life’s work, he sold only one in his lifetime. Always desperately poor, he was sustained by his faith in the urgency of what he had to communicate and by the generosity of Theo, who believed in him implicitly. 

Britannica

Insight into his state of mind can be gleaned from the many letters he wrote to his brother Theo. His brother gave him the freedom to pursue his calling. It’s hard to say how a brother can be so devoted to his sibling. Vincent tried to support himself as an art dealer, a language teacher, a bookseller, and a lay preacher. As he stumbled along, fighting with mental illness, his brother chose to support him unequivocally.

Perhaps Theo did this entirely out of family obligation. We all have duties to our blood ties. It sounds more likely that he had some sense about his brother’s brilliance. Fortunately, he lived in a time when he had the freedom and capacity to provide support. In a short run accounting, van Gogh would have been a liability- taking the long view, as perhaps Theo did, Vincent was a rainmaker.

Freedom trumps utility as the latter isn’t always readily apparent. Each couple or group or society must decide where to place their backing. Those on the outside are inadequate at doing the math or evaluating either short-term or long-term returns.

Joyful Blooms

Perhaps, if you are not a gardener, it is hard to understand the level of satisfaction to be gained when your plants come into full bloom. But it is real. After the tulips and rhododendrons and lilacs steal the early show, there is a flurry of new activity come June.

The fushia peony and the yellow false indigo didn’t always stand shoulder to shoulder. A lot of work is done to get the right plant in the right spot- the degree of sunlight and water are the most significant determinants, but other factors influence the plants’ well-being as well.

And there are critters. They feel you have simply made their meals a little easier. My two tea roses went into their spot about fifteen years ago. For the first few summers, they barely grew making me look ridiculous for having allocated them so much space in my front border garden. Then early one morning I spotted the problem. The bunnies would nibble the fresh shoots down to the stems. Once the bushes are large they lose interest- perhaps because of the thorns.

There are old plants like the yellow iris which came from my grandmother’s garden in Iowa. And new experiments like the Sweet Kate Spiderwort which only shows its periwinkle blooms before noon. The purple balloon flower had to be moved from a shadier spot but is now quite happy in the full afternoon sun next to the catmint. And the Siberian iris blooms only last a short while but sure are elegant on their sharp slender stems.

There is a bit of work involved in maintaining a garden- but the blooms make it more than worth the effort.

It’s silly to rob Peter to pay Paul

Kenneth Ahrens recently wrote a paper, Robbing Peter to Pay Paul, The Redistribution of Wealth Caused by Rent Control. He was kind enough to join the Minneapolis Area Association of Realtors in a zoom call to present the material. It’s of particular interest in our market as he uses the effects of a recent ballot measure in the city of St. Paul. The paper is written in clear plain language and starts with a nice historical review of rent control in the US. It’s well worth the read. Here is the abstract.

Abstract

We use the price effects caused by the passage of rent control in St. Paul, Minnesota in 2021, to study the transfer of wealth across income groups. First, we find that rent control caused property values to fall by 6-7%, for an aggregate loss of $1.6 billion. Both owner-occupied and rental properties lost value, but the losses were larger for rental properties, and in neighborhoods with a higher concentration of rentals. Second, leveraging administrative parcel-level data, we find that the tenants who gained the most from rent control had higher incomes and were more likely to be white, while the owners who lost the most had lower incomes and were more likely to be minorities. For properties with high-income owners and low-income tenants, the transfer of wealth was close to zero. Thus, to the extent that rent control is intended to transfer wealth from high-income to low-income households, the realized impact of the law was the opposite of its intention.

Ahrens mentioned that his peers were wondering why he was working on demonstrating the problems with a policy that has been shown to have greater negative impacts than positive ones. Experiments with rent control in the 50s and the 70s are long forgotten. A new generation of problem solvers and activists are reviving old ideas despite their flaws. The focus seems to be on preserving a renter’s ability to stay in their apartment by capping rent increases. This in turn transfers wealth from the landlord to the tenant.

Although the intent might be to have a one-for-one transfer from the pocket of the property owner to the renter, Ahrens points out that it is not that straightforward. “Basic economic theory predicts that rent control causes both transfers of wealth and deadweight losses (DWL) for property owners. These losses can be divided into a direct capitalization loss and an indirect negative externality loss.” A deadweight loss might derive from postponement of maintenance and repairs due to lack of income. “The sum of these effects is observable as a decline in the market value of real estate, as the property can no longer generate a market rate flow of income and fewer repairs to the property mean a lesser quality building.”

Furthermore, the transfers benefit the wealthy and hurt the less wealthy. In their findings, the lower income owners realize the greatest decline in home values- 8.52%- than any other transfer.

Excerpt from Table VII

There have already been meetings in St. Paul to adjust the stringent rent control measures passed last November. But there is no talk of reversal. Constituents seem to feel that renters in some way are not getting a fair shake.

Maybe I can take a run at the reasoning. Renters play a role in the community as do property owners. They are not as vested as they are more mobile, yet they too can be good citizens. Perhaps they go to city hall to petition for a road safety concern, a new playground, or more observance of a problem property. Perhaps they are the bus stop mom or the football coach. Perhaps they help maintain a safe light rail system or advocate for better bike lanes. For all that personal time spent on city infrastructure, they enjoy an improved environment. Yet the homeowners enjoy greater home values. And renters face the possibility of being priced out.

Of course, homeowners do not always enjoy greater home values. I remember a period of three years following the great recession where most sellers brought a check to closing to buy out their remaining mortgage balance. Sellers also feel a pinch in their bottom line when cosmetic updates have not been done, or repairs deferred. Renters find it far less costly simply to move to a newer updated unit. Such are the differences between ownership and rentals.

Maybe there is a new framework to consider. One that takes into consideration the economic issues of civic participation yet still tallies the risks of ownership. What’s clear to me is that if economists do not come up with analytical tools that better express the motivations and incentives constituents are expressing in their political decisions, then we will continue to suffer through cascading unintended consequences of bad policy.

Agnes Callard- Philosopher for the People

This University of Chicago philosophy professor takes her passion for philosophy to a greater stage. On Twitter today she created a helpful guide by simply asking a question:

Read the replies!

Now can she ask the question, “How to craft a fruitful question when managing an expansive topic”? Because, careful questioning leads to productive conversation.

Altruism- San Fransisco Style

Should fulfilling social goals tend more toward the push system or the pull system? Half a century ago less advantaged people were often ashamed of their poverty and were reluctant to ask for help. In a small town community, there was a shuffling of donations so that they would appear discretely at the home of those in need. This momentum of first demonstrating a need and then delivering some supplies to the designated beneficiary was done on the pull system.

Complete definition[edit]

There are several definitions on the distinction between push and pull strategies. Liberopoulos (2013)[5] identifies three such definitions:

1. A pull system initiates production as a reaction to present demand, while a push system initiates production in anticipation of future demand.

2. In a pull system, production is triggered by actual demands for finished products, while in a push system, production is initiated independently of demands.

3. A pull system is one that explicitly limits the amount of WIP that can be in the system, while a push system has no explicit limit on the amount of WIP that can be in the system

Wiki

In today’s world, it is common to hear those who work with the poor deny the necessity for those who come to a food shelf, say, to demonstrate a need. It is thought to be disrespectful. The intermediary agencies, whether the county, the food shelf, or the Department of Ed (school lunch) are responsible for determining demand. This is a bureaucratic push system.

There are advantages and disadvantages to both. The pull system is more efficient, but some families may refuse to come forward and others feel shame. The push system is bound to attract theft. If a push system becomes elaborate over a long periode of time, then it may become its own little economy (we could call it a platter).

Nellie Bowles has an article in the Atlantic, How San Fransisco Became a Failed City, which illustrates such an economy in her hometown of San Fransisco.

On a cold, sunny day not too long ago, I went to see the city’s new Tenderloin Center for drug addicts on Market Street. It’s downtown, an open-air chain-link enclosure in what used to be a public plaza. On the sidewalks all around it, people are lying on the ground, twitching. There’s a free mobile shower, laundry, and bathroom station emblazoned with the words dignity on wheels. A young man is lying next to it, stoned, his shirt riding up, his face puffy and sunburned. Inside the enclosure, services are doled out: food, medical care, clean syringes, referrals for housing. It’s basically a safe space to shoot up. 

Not only are material services provided in abundance to any addict who shows up in this iconic American city- but advice is also spun out free of charge.

She recognized him (a homeless man) as someone who regularly slept outside in the neighborhood, and called 911. Paramedics and police arrived and began treating him, but members of a homeless advocacy group noticed and intervened. They told the man that he didn’t have to get into the ambulance, that he had the right to refuse treatment. So that’s what he did. The paramedics left; the activists left. The man sat on the sidewalk alone, still bleeding. A few months later, he died about a block away.

A whole bouquet of social service agencies has sprung into action. In some sort of warp incentive system, the services attract addicts, which in turn attract services.

Here is a list of some of the organizations that work with the city to fight overdoses and to generally make life more pleasant for the people on the street: Street Crisis Response Team,  EMS-6, Street Overdose Response Team, San Francisco Homeless Outreach Team, Street Medicine and Shelter Health, DPH Mobile Crisis Team, Street Wellness Response Team, and Compassionate Alternative Response Team. The city also funds thousands of shelter beds and many walk-in clinics.

In the 90s there were stories of social workers in Chicago giving the needy bus tickets to Minneapolis as they knew there were services available upon arrival. If there is migration of those in need to an area simply due to the known availability of welfare, then the push is pushing too hard.

Food

What’s for dinner is a daily decision- and thus a daily task to pull ingredients out of the refrigerator and magically present an edible dinner to your family. By far the most time-consuming project in running a family household is the production of three meals a day. How it all comes together, the planning, the shopping, the prep work, the cooking, the meal itself, and then the clean up, is a process.

Perhaps there are reports and papers written on such things but they are not widely circulated. Which is perplexing as a proper diet is instrumental in health outcomes. It also greatly effects the mood within the household- at least ours. Hangry is not to be underestimated.

There are lots of sites and TV shows about making food. Rachel Ray will delight you with all sorts of Italian cooking. The pioneer woman takes you down to the Lone Star State to see what they cook up. If you Google Marry Me Chicken a smattering of choices will populate a collage at the top of the page for you to browse to your satisfaction. (Worth checking out.) But what I lacked for years, until it became second nature, is the business of running the food through the pantry.

Martha Stewart’s magazine Real Simple (it appears to be owned by another organization now) had practical household tips. But a one-off suggestion only goes so far. The whole system of what foods keep in the fridge (cauliflower) needs to be used up quickly (green beans). Knowing meals are basically the products of leftovers (soups). And the timing of everything! No one wants cold french fries or burnt burgers. Knowing some of this translates to savings at the grocery store as you run less for last-minute purchases and store up on things that will keep.

It does seem like many more men are in charge of the food at home now than when I was young. This is a win. The more diversity in people that can share tricks of the trade, the more likely they will be passed more broadly amongst the greater group.

Depp brings home a win against defamation

The court case between Johnny Depp (Pirates of the Caribbean) and his costar in The Rum Diaries, Amanda Heard, has been rolling out over all sorts of screens in the past six weeks. But in case you’ve missed it, here’s a quick summary:

The What’s Eating Gilbert Grape star later sued Amber in 2018 for $50 million in a defamation lawsuit after his ex-wife published an essay for the Washington Post, labeling herself as a “public figure representing domestic abuse.” She then countersued her ex-husband for $100 million. The article did not mention Johnny by name, but his lawyers argued that it aimed to depict him as an abuser and ruined his reputation in the film business. 

Today a jury found mostly in favor of Depp awarding him $15 million in damages. Heard received $2 million for her countersuit. Commentators presenting the news today pointed out that this result signifies a major pivot in what’s been a considerable bias in favor of women claiming sexual misconduct. In January of 2018, Al Franken, a well-liked senator from Minnesota, resigned when one woman in particular and then several others made claims of inappropriate conduct in his presence. There was no investigation or formal inquiry. He resigned due to pressure from his within his political party.

But I’m not interested in these details. I want to draw attention to how many un-paid hours went into this very public, and hence impactful, feedback loop. First, consider the hours contributed by the accused. He could have let it go and bet that in a few years (or less) no one would even remember Amanda Heard. A lot of people turn away from a fight because they realize their personal investment will be considerable. And after dedicating time, energy, and emotion to the cause, things may not go well.

The suit was initiated in 2018- so for the past four years, Johnny Depp has wrangled with lawyers, the media and his employers in support of his defense. He by far has the most unpaid work invested in changing the norm which has favored the female claimant.

The jury consisted of seven Virginians who showed up over the six weeks to perform their civic duty. Some may have been paid by their employers during this stint but undoubtedly some were not. Either way, it comes to a little better than eleven percent of the work year. As they decide the outcome, their unpaid contribution to a norm change is significant.

Some peripheral people also stepped up to make all this work. There are domestic chores that need to be done, and transportation issues to be worked out. Changes in a daily routine don’t just happen. It takes effort on someone’s behalf to supplement work when someone close to you is pulled off for other duties.

Fortunately, we live in a country that has enough surplus labor to oil the wheels that turn the justice system, one of our valued institutions. Some cases will absorb more hours than others. Norms change and morph as the result of work done by ordinary people.

Activism in lieu of Church

A few weeks ago, John McWhorter appeared on a talk hosted by St. Olaf’s Institute for Freedom and Community. It was entitled Antiracism as a Religion. He’s not the only public intellectual drawing lines between the needs of the woke and the services of religious communities. But he did write a book about it, Woke Racism: How a New Religion Has Betrayed Black America.

Edmund Santurri, the moderator, a philosophy professor at the college on the hill, seemed genuinely offended that McWhorter aligned a practice imbued with a holy sacrament with secular activism. And I see his point. Although the faith aspect of religious identity is only a portion of a relationship to a church. Many people attend worship in congregations where they do not agree with the entire catechism. The church going families I know participate in the church for the wide breath of community interactions both between congregants and with the greater public.

In a recent Bloomberg column, Tyler Cowen theorizes that this natural desire to be part of shared interests is what drives many tech workers to the Woke.

Wokeism does. In fact, this semi-religious function of woke ideology may help explain what many people perceive as the preachy or religious undertones to woke discourse.

You might wonder why this shared culture is left-wing rather than right-wing. Well, given educational polarization in the U.S., and that major tech companies are usually located in blue states, it is much easier for a left-leaning common culture to evolve. But the need for common cultural norms reinforces and strengthens what may have initially been a mildly left-leaning set of impulses.

Developing such a common culture is especially important in tech companies, which rely heavily on cooperation. The profitability of a major tech company typically is based not on ownership of unique physical assets, but on the ability of its workers to turn ideas into products. So internal culture will have to be fairly strong — and may tend to strengthen forces that intensify modest ideological proclivities into more extreme belief systems…

Marginal Revolution

All of this goes to support the theory behind this site. In the same way there is a human tendency for greed, there is also a tendency for compassion.

When people are isolated in their daily lives from those who could benefit from their good works– such as in the scenario of a company full of affluent highly educated workers– they are left with services that have no destination. It is plausible to say there can even develop a sense of unease about how much has come their way when well aware of the plight of many others. When denied that weekly outlet of giving that a church could provide, the wealthy workers may seize up with guilt.

And of course, it is all good and well that people should get involved with many of the non-religious associational affiliations like professional associations and company sponsored non-profits. It is recommended! Unfortunately, these can seem mundane. So when activists come along with promises of REAL CHANGE at revolutionary tempos, it’s all very appealing.

Institutional marketplaces

When you think of institutions, you don’t think of the definition of the word as much as examples: marriage, the family, the justice system, or the education system. These are commonly recognized as they exist across all societies. Even criminals have their own justice system. Institutions are loosely defined as the formal and informal rules that organize social, political, and economic relations. But if one wanted to use institutions as a defining element of economic activity, it is worth teasing out a few of their components.

If there are rules, it is implied that there is a group of people who both agree to the rules and maintain them. It is also logical that the rules are put in place to maintain or protect a shared value, a common interest. So, in talking about institutions, it only makes sense to state which group is attached to the rules and what exactly is their objective. Furthermore, if the group must take action to support or defend the rules, then we will call this work.

Consider the institution of marriage. The joining of two people by a vow of devotion to one another varies considerably across society. The impact of this variance can help delineate subgroups of institutional marriage groups. For instance, the swingers who find the swapping of partners at a poolside party are probably not spending a lot of time with couples at Good Shepard Lutheran Church in many a midwestern town. Which is a way of saying that the institution-M for the party people, sub-S, has a different social contract and obligation for W work, then the M sub-C who sing hymns on Sunday morning.

I don’t think anyone would challenge the claim that these two groups live and work on their marriage in different realms. But what can we call these special places where rules are created and enforced, where groups of people meet to work in the effort of securing a value for their social commitments? The word institution has too broad a reach and leaves out the notion of an ongoing exchange.

I like the visual of a platter. All the swingers are out there tipping on a platter, mixing with new members of their loosely held marital vows. While the church people recognize marriage time and again at weddings and baptisms and anniversary potlucks in the church basement. If there is a loss of life, people deliver casseroles. If there are signs of discord, the kids get invited out so the parents can work on the issues of discontent. The contract isn’t only to one another but in support of the institution.

These eco-socio-platters are the marketplaces for institutions. Failing to define them can lead to uncomfortable misunderstandings. According to my new book club book, Are Economists Basically Immoral? (Heyne) Laurence Summers got himself into a bruhaha by mixing platters.

Lawrence Summers, the chief economist of the World Bank, got him. self in serious trouble last December when he sent a memo to some bank colleagues arguing that polluting activities ought to be shifted from developed to less developed countries. He argued that the demand for a clean environment has a very high-income elasticity: which means that people become keener on it as their incomes rise. He said that wealthier people are ordinarily willing to sacrifice more for aesthetically pleasing environments than are poor people. Moreover–and I suspect this is what really got him into trouble- he claimed that the health effects of pollution are less in a poor country than in a rich country because the forgone earnings of people whose health is adversely affected by pollution are so much lower in poor countries, because of both lower incomes and shorter life expectancies. Someone leaked that memorandum to an environmental group and a hail of criticism descended on the World Bank and Lawrence Summers. Summers protested that his statements were designed as a sardonic counterpoint, an effort to sharpen the analysis.”

Making comparisons across vastly different eco-socio-platters will more likely make you look bad than good. By taking a stark look at the economic circumstances of poor people and propping their platter up next to where the rich people live, the audience could only feel outraged. Not because the observations were wrong but because they are empathetic to the plight of the poor more than the truth. Being so bluntly presented with the fact that people of meager circumstances have different life outcomes invokes a sense that all is not right in the world. In the public or institutional realm, this is the fuel that ignites action.

It’s not helpful, however, to have false comparison made which instigate action. And that is the fundamental reason why we need to define our platter. Swingers and Lutherans don’t mix.

Dewey on Method

But while associated behavior is, as we have already noted, a universal law, the fact of association does not of itself make a society. This demands, as we have also seen, perception of the consequences of a joint activity and of the distinctive share of each element in producing it. Such perception creates a common interest; that is concern on the part of each in the joint action and in the contribution of each of its members to it. Then there exists something truly social and not merely associative. But it is absurd to suppose that a society does away with the traits of its own constituents so that it can be set over against them. It can only be set over against the traits which they and their like present in some other combination.

Insights

When I was just joining the workforce, a reputable mentor leaned in and confided that people would really enjoy my insights. That has not been my experience. Not at all.

A couple facts of human nature must be acknowledged. First off, we don’t want to be shown up. For example, some observations of the workplace, even by a lowly employee, may lead one to conclude that the man in charge is dropping the ball. Hence the man in charge does not appreciate insights. A great way to slow down a career is thus by providing them. Lesson one in workplace politics- make others shine and hope they bring you with them.

Many humans are susceptible to jealousy problems. Being insightful and recognized as such, can arouse feelings of envy. This results in two outcomes. Peers downplay the value of the perspicacity. Secondly, the keen observer will be left out of the next social gathering for the arrogance of making others feel diminished. Outrage.

We all like to hide things from ourselves. We can’t help it. And the motivation behind being unsupportive of a stronger peer is one of those things. It’s not convenient for the ego. So that’s the quandary. How to hide talent until it finds its perfect support structure to flourish and become unstoppable.

What is public, Sidewalk clearing edition

When I started writing more extensively about the economics of neighborhoods, I thought a good place to start was by dislodging the concept of public and private from the old school delineation. This version says that certain goods are public by nature, as in the notorious lighthouse whose beams bring all boats to shore safely. And it is right for the government to administer public goods which make up the public sector.

My view is that societies determine what they (they can be the citizens in a democracy or a dictator or an elite group in an autocracy) want to be public and what they desire to remain private. I wrote about it in a little lengthier piece, Our Problem is a Problem of Design.

How people come up with what is private and what is public is interesting from a resource distribution standpoint. But it isn’t money that is usually the driver for what is public. It is personal safety. The Hennepin Avenue Bridge in Minneapolis started out as a private endeavor allowing for crossings across the mighty Mississippi in the early years of the grain mill district. But repairs and safety concerns, in the end, pushed the overpass to transition to the city. Transport, in general, seems to fair better in government hands.

Let me bring you back to the snow removal story. One would think it parallels a consumption model of, say, water delivery. The household uses so much water and is billed for it. This isn’t accurate as there are no other means of obtaining water. The city acts a monopoly supplier of the good. And it is fairly straightforward and uncontriversial to bill by consumption.

Presently many residents do clear the sidewalks fronting the road to their homes. Let’s spitball it at 75%. This is labor provided at no cost to the public out of civic mindedness. If the city chose to take on the removal of snow as a public good, they are walking away from .75 x $20mil (the cost of the program) or $15mil. Plus, it seems with a little leadership, and city council support instead of neglect, there would be a capacity for folks to voluntarily pitch-in and clear more walks.

The thing about public goods is that they must be provided to all. Once a good is publicized, then the cost for the entire community is borne out by the public. In this case, the analysis points to further civic engagement rather than adding to the already full plate of demands on the city’s budget.

The age of infrastructure

Actor Will Smith got a little attention at the Oscars on Sunday. And I’m not talking about the negative attention, but rather the recognition for playing the part of father and coach to Venus and Serena Williams in the movie King Richard. It’s the inspirational story of parents who make things happen for their kids. But what does that entail exactly? The trade of all the family’s extra resources and time to the sole focus of advancing, in this case, the girls’ abilities to achieve greatness on the courts.

I like to think of this as the mom job, the I’m-there-just-in-time-for-whatever-it-is-you-need job. The support worker in a family makes sure everyone gets fed and to their doctor’s appointments. After the priorities of food and health, they follow up on extracurricular interests. And if time permits, they volunteer in those organizations which advance the family’s interests. While some people are making fun of home economics majors, Hollywood is rightly pointing out the power of the position.

Infrastructure jobs are turning out to be a powerful tool in fighting wars. No longer is the tough-guy action figure the primary hero in a foreign war narrative. Now the people greeting refugees at the train station, communicating the number of beds they have available on cardboards signs, are heroes. You can be recognized for giving shelter over the internet too, through a donation to Airbnb. Patrons are booking weeks that they do not intend to use, and the hosts are return notes of gratitude.

It seems that the secret is finally out. You don’t have to be the front man to be valuable. You can be a support worker in a family or in a community and be powerful. So instead of pursuing a politic of tearing down, let’s use social infrastructure to build up. And create some cool new stuff.

The lovely tale of *The Peasant Marey*

We’ve all experienced those moments. Out of the blue, a crease in our brain releases an image or a passage from many years ago. It appears in great detail as if the stage lights are shining on it. While in prison, the great Russian author Dostoevsky tells of such a vision. His short story, The Peasant Marey begins: “It was Easter Monday.”

The setting is grim. His fellow inmates are coarse and fowl and most unpleasantly quarrelsome. Out of sport or ill-temper, a band of six pummel a drunkard. And in the confusion of the prison yard, a passing phrase from a fearful colleague seems to trigger Dostevsky’s memory. “Je hais ces brigands!”

The notion comes to Dostoevsky across time. It is painted out clear to him in impeccable detail. A message his brain has been waiting to send for decades. Waiting for the right moment when a new circumstance will make its truth undeniable. As a young boy, while out near a peasant working a field, he comes to imagine that a wolf is nearby. He is certain he is in danger and runs to the peasant Marey.

The serf is the lowest, humblest in the household. His fingers are coarse, thick, and sopped in mud. The young Fyodor is the refined future, educated and well-groomed. Yet at the moment the fear of his surroundings is all-consuming, the unpresuming Marey is transformed into the rescuer. In a simple turn of circumstance, the meek become powerful.

A voice of doubt might question, “How could that be so, the lowly peasant could have an impact of such magnitude?” The memory shows up to offer the answer. Surrounded by the bleak existence of prison life, Dostoevsky is reminded how the downtrodden become powerful. Such work leaps over time and class. And he sets out to “look at these unhappy creatures with quite different eyes, and that suddenly by some miracle all hatred and anger had vanished from my heart.”

The Christian themes are thickly woven into this story not even seven pages in length. But the impulse to care for the vulnerable, the ability for all to participate in the unity of the whole, the challenge of waiting over elongated time frames for renewal, are universal in nature.

Power players are not just politicians

One afternoon, years ago, when I was going in to pick up my now college-bound daughter from daycare, the girls were seated at a dwarf-sized table. A leader in the group had already emerged sputtering out the rules to the game underway. I was fascinated that the quest for power showed up at such a young age.

But since then, I’ve noticed that as soon as a few folks cluster, a power player emerges from the shadows. Sometimes it is a most unlikely candidate. And it’s a good thing too as many of these jobs are not of the high-profile glamorous types.

When the PTA needs a notes taker-secretary for their meetings. The gala needs a group to go out and hit up the businesses for donations. The youth basketball association needs a tournament director. Lots of work, no pay. What you do get is to have the final say and a little bit of recognition for pulling it off.

Insecure power-seekers (PS) are not so nice. They are often self-appointed directors of social events who like to manipulate who can come and who gets left out. Often casual get-togethers serve the same function as rounds of golf for businessmen: it’s a time where some voice concerns or needs and others step in with solutions or resources.

Often PS’s are not the best at anything specific. They have instincts on how people congregate. They have skills in re-direction. The talented ones are really good at people. The untalented ones are annoying.

What I’m trying to get around to saying is that people who enjoy and work the power levers are at all levels of society. Any model built to represent the infrastructure of cooperative interactions must take this into account.

The capacity for liberty

Merriam Webster’s fifth definition of CAPACITY is as follows:

5: the facility or power to produce, perform, or deploy CAPABILITY

//a plan to double the factory’s capacity

alsomaximum output

//industries running at three-quarter capacity

Let’s do a little thought experiment. Let’s think of all the ways the capacity to support and advance the liberal democratic form of governance was underestimated.

There are all sorts of stories out on Twitter and other media outlets describing means and methods people around the world are assisting the Ukrainians in their time of need. From the business community, we have seen airplanes leases cancelled and major retailers like Ikea close their Russian outlets. As far as person-to-person transactions go there are reports of people booking VRBO’s as a means of cash transfers. Berliners lined up by the hundreds at the train station with signs offering up rooms in their homes to refugees.

To be sure the VOICE that has stirred this grass roots response in that of Ukraine’s leader, Volodymyr Zelenskyy. He surely was underestimated.

Means by which everyday people, no matter their country of origin, may offer time and resources to the cause has been transformed by technology. It can be as straight forward cash transfers. It can be as personal as allowing a young soldier to call home and make the situation more transparent. It can be as sophisticated as Elon Musk activating his commercial internet network.

In addition to technology, it appears that there has simply come a time for people like the Germans to rise to the occasion. They are digging in more than any other country to step up for greater military and social support beyond their borders. But others like Sweeden, Finland and Switzerland have also heard the call to trade in favor of democratic governance systems.

The old school way had to be initiated through heads of state. The modern era allows individuals to participate without borders. One might estimate that this moment has revealed a capacity for the liberal world order not seen in thirty years.

Markets in Competing Interests

Today this appeared on Twitter.

The Lt Governor has been a strong advocate for trans youth since she ran four years ago. The posting indicates a continued dedication of her time and interest and political capital to this sub-group of Minnesota’s youth.

A new candidate for Hennepin Couty Sherrif (the largest county in the state, maybe 20% of total population) Jai Hanson, challenges her, and asks why the other kids don’t deserve to be nurtured to their true and full selves.

A third observer makes the claim that these are not competing issues. Herein lies the practical problem. People who feel versus people who count.

Some folks seem to think that the caring and demanding more is all it takes. I care about our schools so I’m going to ask for more resources for the kids. I care about the loss of life due to drunk driving, so I’m going to push for driver safety programs and prosecution of drunk drivers. There’s no thought given to length of the agenda, or whether their issues take all of the air out of the room. There’s a flat-out denial that resources are finite. If you care, you can make anything happen.

In reality, if you are gearing everyone up for one group of kids, then you are not gearing them up for another group of kids. The efforts of activism, or the labor to promote and voice social issues, has a set capacity. It’s not about caring enough.

Bonus to those who move

Cities around the US are paying people to relocate to their town. Marketplace recently ran a success story out of Bemidji Minnesota. They featured two families who took the city up on the offer of $2500 to cover the move. It seems that is enough money to risk the relocation expenses. Bemidji is getting pretty far north, not to the Canadian border but definitely that direction.

I pulled the demographics just to give you an idea of the landscape and was presently surprised by two things. First- the median age is a lot lower than I would have guessed. (For a generation or more these towns were aging) And furthermore, births are exceeding deaths by almost two to one. This is quite a switch.

Bemidji has a total of 11,917 people and of those residents there are 5,547 males and 6,370 females. The median age of the male population is 25.3 and the female population is 30.8. There are approximately 585 births each year and around 304 deaths.

https://www.movingideas.org/bemidji-mn/

These two families cited the work/life balance, a change of the pace of things, as the reason for moving to a smaller community from Topeka and Phoenix. Of course, the costs across the board are lower, but the lifestyle change is another way of saying they recapture more of their time. They can use their free hours to raise more children, get involved in civic projects, or simply have more fun pursuing hobbies which enrich their lives.

Since many writers and ambitious folks chose to live in the big coastal towns there is often this assumed bias that everyone wants to live in NYC or San Fransisco or LA too, they simply can’t. The reality is that a $2500 bonus will get people to choose a much different way of life.

Veblen, Context, and Claire

Context isn’t something you can see, which makes it hard to put a finger on. To add a layer of opacity, often people have reasons to hide their situations from some while signaling in full regalia to others. One of the first to pick up on the flare some wish to exhibit was Thorstein Veblen, a farmstock Norwegian, an affiliate of one of our finer Minnesota schools Carleton College. It’s not surprising that a-salt-of-the-earth type of guy would be at odds with (what he considered) the wasteful expenditures of the wealthy in The Theory of the Leisure Class. He’s probably best known for coining the phrase conspicuous consumption.

But the purchase of a $20K Rolex watch is as much a ticket to a click as a gang sign. The price tag is only a means of filtering out those of lower economic standing. Within the economic platter of folks who drive Maserati’s or buy jewels at Tiffany’s, the price settles in amongst other choices. Possession of such things delineates the group. Many people judge this, as did Veblen, in a disdainful manner. Though it isn’t all that different or more harmful than other social parameters, set and enforced by others.

Last fall there was fallout when the Art Institute of Chicago let all their docents- long time educated volunteers- go. The group of one hundred or so later-age privileged women were judged to be a closed access group. I have a feeling they weren’t selective. It’s more logical that this collection of unpaid workers with passion for artistic endeavors and creators, is thrilled to shed their knowledge on anyone who will listen. By dismissing these women, the museum lost more than the price of a Rolex, all for fear that their presence would be taken out of context.

There’s the context of expenditure, and the context of appearances and also the context of work. Consider, for example, the dog show folks. Amongst my acquaintances there is a couple who posts more photos about their show puppies than most do of their kids. They live for their dogs. We all had to chip in to buy the local K-9’s bullet proof vests. If you doubt the amount of (unpaid) time people will invest to be part of a superior level of dog obedience, check out the National Dog Show. In 2020 Claire, a Scottish Deerhound, brought home a blue ribbon.

The daily grind of Dinner

The early years of dinner-for-the-family is all about tricking and tom foolery. How to make the key foods, that you know the toddlers will lift off their plates and consume, into some new version of itself by adding a colorful stack of carrot sticks or a half circle of goldfish swimming the edges of the plate. Just keeping them astride their stool for a bit longer with a distraction of some sort might earn you an extra bite of their meal.

Shopping wasn’t too much of a burden as their pallets were limited. The work was definitely at the table and not so much behind the scenes. But that all changes once they meet their first vegetarian. The abrupt assault on the woes of meat products comes at you as fast as a horse running for the barn. Abruptly there is nothing in the pantry that will quench their appetite. A new menu and grocery list is required posthaste.

Fortunately, within a week, most middle schoolers cave to their stomachs rather than pursue the higher moral standing of a vegan diet. At least my meat lovers did (thank the lord). But little did I know, a new foe was about to sabotage my grocery, pantry, prep and serve routine. Ennui. Exactly. The “there’s nothing in this house to eeeaaattttttt.”

I’d patiently list off all that was in the ready: enchiladas, kung pao chicken, hamburgers, wild rice soup, pork chops and rice, and of course tacos or spaghetti, amongst other versions or pasta. No, no, no and no. Nothing was enough. The shelves were bare; their stomachs empty; isn’t there something I could do?

I learned by now from the moms at the baseball fields or basketball courts that they had thrown in the towel. Frozen pizza, Costco dinners, and take out were the options offered up in their households. And it’s not to say that we didn’t see of a few of those through our household at dinner time either. But more than the health aspect of prepped food is the economy that bugged me. Frozen Bertolli’s packaged chicken alfredo and penne costs three times what it would to make at home. And barely saves anytime as long as you have some grilled chicken in the freezer and all the other ingredients.

But that’s the key, isn’t it? Making dinner isn’t just the fifteen to twenty minutes of prep and another half hour to cook. One has to know the family’s interests, have the products on hand, be agile and knowledgeable enough to pull it all together. The work involved in feeding a family is by far the most time-consuming activity in homemaking and it is known to be a significant contributor to health and better living.

I teased them through their late high school years that they thought a multicultural chef lived in the fridge and would jump out like some Suess character to accommodate their every culinary demand. Fortunately, it just took a little separation from home, and half a school year eating food from a university cafeteria, to adjust their point of view. Now our dinner table is a destination for a nice meal and visit.

I don’t regret having put in that time instead of bailing on the whole thing. They will start out with more knowledge on how to run a kitchen then I did. And now my job is a cream puff.

How we talk about the Homeless and the Housed

It was refreshing to see this post from Matt Yglesias regarding the homeless population in Europe. One of the most tiring things I found when I came back to Minnesota to go to college was the erroneous (and all too frequent) comparisons fellow students made between Europe and the US. One exchange program to Sweden and the fountain of suggestions on how we’d all be better off doing it the Scandinavian way was ever flowing.

Another pet peeve of mine is how homelessness is written about in the media. It shows up in articles around the cost of housing, right in there with scandalously high-priced luxury homes and the persistently rising average median price of homes. I question why people do not realize that the chronically homeless do not participate in open market real estate transactions, and hence in no way influence the cost of housing. When costs are escalating some people in financially precarious situations lose their housing, often temporarily. But these aren’t the homeless living in tents alongside the main roadways of our nation’s capital.

Which brings me back to the substack article at SlowBoring. Yglesias takes the time to point out that what market rate mainstream residents care about most is how the homeless are affecting their neighborhood public goods. (And I’m not saying they shouldn’t). Locals want to be able to use their parks without repercussions for their safety and access public transit and use the libraries for that matter. The objections to the lifestyle of the homeless has more to do with their neighborliness than their housing.

But I’m not here to give advice on how to remedy this group of societies issues. I’m here to point out that any shelter for these folks will have to be provided for them. They are not part of the market, and many don’t plan to be, as described by Jeanette Walls in The Glass Castle. Assistance to put the fraction who tumbled into their predicament during rapidly escalating prices back into the stream of self-provision, is common sensical. But there will always be a segment of the population who will need to be subsidized.

It just seems like issues of the homeless need their own articles. Mixing the topic of homelessness in with a hopping real estate market is like bringing up the number of entrepreneurs who fail every time there’s a breakout unicorn to write about. As we all seem to have short memories, I’ll take a moment to remind everyone that during a recession, when real estate prices are in a downwards spiral, folks also find themselves without shelter. Again- the homeless are neither borrowers nor sellers nor renters in real estate. And thus, to feature them in a discussion about pricing seems to be more of a trigger than anything else.

Assumptions and Assurances

Quite a few years ago when I was at the Carlson School getting an MBA at night, I recall a foreign student from Sierra Leon, or thereabouts, and I shaking our heads at the chatter of our fellow classmates. They were all off on a tangent on how easy this or that would be to accomplish. The foreign student and I were ticking off the number of implicit assumptions which held our fellow students’ ideas together.

The structures which support commerce in America are taken for granted by those who have experienced nothing less. We take it for granted that our money will at the bank, for instance. (Or even that the bank will open on time as I recall the Sierra Leonian noting) Most consumers not only anticipate the ability of financial institutions to keep our funds safe, but never bother to balance their accounts, as the bankers do all of that.

When I was a loan officer sitting behind an oversized wooden desk, my clients, from across the high gloss polish, would sign their mortage papers but never read them. They listened politely as I highlighted the terms and obligations for repayment, nodded, and then put pen to paper. In exchange for the blue ink on the promissory note which detailed possible foreclosure action for non-payment, they happily received a check. And so, it goes in America.

The fluidity in the marketplace and lack of concern with lengthy legal documents can be attributed to regular assurances people hear from all those around them. Their parents have bought a home, and it all went OK. Their friends used such and such mortgage broker and despite an inconvenience over some last-minute documentation, the rate and fees were as expected.

Of course, there are situations that lead the consumer dissatisfaction as well. A while back there was that interest free financing for six months at time of purchase of furniture or a large TV. But then the credit card didn’t send the statement with the balance in time, so the consumer was charged retroactively for 180 days of interest. More often than not these gotcha gimmicks get brought to the attention of the attorney general, and even though the duped don’t get repaid, future misleading advertising is curbed.

With the little bit of work and an audience for stories of assurances, the institutions which make for reliable financial services is maintained.

Economic man was lonely

Welfare economics ran into market failures because of economic man. The view that all transactions are performed by an individual actor looking only after his own interest is relevant for the pursuit of private goods, but not public. If the problem isn’t structured from the point of view of a group, then it all falls apart due to freeriding. If the economic analysis isn’t contained within a sphere of voluntary reciprocity, then the desire for each and every to fulfill only their needs tells a story of everyone taking and no-one giving.

But we don’t live as the caveman did defending a little hilltop. We live in families, tribes, cities and countries. We participate in work life and school life and sports life and associational life. When our diplomatic family would show up at a new post halfway around the world, we’d be met at the airport and driven to our housing by a couple from the embassy. Co-workers would be sure we knew where to shop, how to get the kids in school, and other pressing local customs. I was recently reminiscing with a military guy who nodded knowingly when I relayed how, for years, I had missed the strong ties of service personnel when I got out into the work force.

And because these are lifestyles, the assumption of the group and its obligations can be taken for granted. The compacts of who takes care of whom at different stages of life, over decades, makes for messy accounting. But that doesn’t mean it can’t be tracked. It just means we have yet to do so. It’s taken forty years, since a little rebellion in the 70’s, to name a labor wedge. And now there’s credit for sweat labor. And then there are the Wikipedia contributors, and many more cooperative types making cool stuff.

The independent actor, however, is so ingrained in the US psyche that the conceptualization of a group as a consumer and supplier slips easily out of the analysis. To further muck up the landscape, an institution thought to be public, acts as an economic man with regard to anyone outside the group. Take the teachers’ unions actions regarding COVID as an example. The focus is on the public health and well-being of the teachers, and the teachers alone. The initiatives of their efforts do not include the public health of the school children nor their families. There is no consideration of other public objectives or benefits to keeping children in the classroom. The services the unions are negotiating are only public to dues paying members.

Economic man is a lonely notion. Have no fear, he lives in groups! But his behavior traits are accurate and, as it turns out, groups can be selfish too. To keep it all straight, one must declare an anchoring point of view in any analysis.

Finding family more valuable

People in the prime earning years of their work careers are leaving it all behind. Some have no plan at all except to be done with what they used to do and look forward to perhaps consulting options or other opportunities. Others resigned with the intentions of helping with their grandkids as the burden of at home schooling and work and having something of a marriage was taking its toll on their kids. The numbers for the Midwest are clear, with quit rates climbing to all-time highs, as shown here by FRED.

For some the virus has made life too stressful. The uncertainty of whether your kids have a reliable place to be during work hours is a significant concern under any circumstance. The last minute need to take leave from paid employment to look after a quarantined kid creates an entry on the positive side of the on-going debate whether the family would be better off with one worker dedicated to family affairs.

Many people settle into the extended family model where grandparents or aunts and uncles show up for a childcare shift throughout the week. This also alleviates the stress of transport to and from daycare in twenty below weather sliding over ice covered roads. The anxiety of a worker when faced with being late to pick up their infant is palpable.

People are making quality of life choices. It appears that Covid has drawn people up short on past choices about paid employment versus employment which allows greater time spent building equity in family relations, or flexibility to pursue other associational interests. Once people start sharing such ideas with others, a little self-reflection can set off a chain reaction.

Labor, like any commodity, is compensated by a mix of pecuniary and social rewards. Where individuals, couples, or extended families find the balance of enough cash and enough time to keep the family support systems in play so that everyone is safe and fed and healthy. And then there’s the altruistic side of people who feel the sheer reward of adding to the public goods market whether through education or their many other talents.

Accountants are underrated

Numbers people are underrated. You probably have not heard of Amatino Manucci or Luca Pacioli, but they played a key role in the development of commerce though without the glamourous appeal of the adventurer types like Marco Polo or Vasco da Gama. They made contributions to the double accounting system.

Manucci kept the accounts for Giovanni Farolfi & Company, a merchant partnership based in Nîmes, France. Manucci was a partner for the Salon, South of France branch. The writing, entirely in Manucci’s hand, is neat, legible, and mostly well preserved.[3] Financial records from 1299—1300 survive that he kept for the firm’s branch in Salon, Provence.[1] Although these records are incomplete, they show enough detail to be identified as double-entry bookkeeping.[1] These details include the use of debits and credits and duality of entries.[1] “No more is known of Amatino Manucci, than this ledger that he kept.”[3] Amatino Manucci did not invent the double entry system, that was a 100-year process (perhaps a 9,000 year process). 

Wikipedia

This was about the time that the Papal seat was moved to Avignon, just a short distance from Salon. The area, known for hilltop fortified villages, was surrounded by sophistication and learning.

Luca Pacioli, an Italian mathematicianFranciscan friar, collaborator with Leonardo da Vinci (there’s someone we know), came along a couple of centuries later accomplishing the great service of putting the method into a textbook.

The first published work on a double-entry bookkeeping system was the Summa de arithmetica, published in Italy in 1494 by Luca Pacioli (the “Father of Accounting”).[21][22] Accounting began to transition into an organized profession in the nineteenth century,[23][24] with local professional bodies in England merging to form the Institute of Chartered Accountants in England and Wales in 1880.[25]

Wikipedia

The double accounting system improved the accuracy of the bookwork for transactions. Keeping proper records goes a long way to maximizing profits and use of time. Having a running tally of the monetary movement also leads to confidence amongst parties to a trade. There’s a history, a verification of how things were done as a reference.

What is exciting is there are new efforts afoot to better account for intangibles in business such as “the value of business owners’ time and expenses to build customer bases, client lists, and other intangible assets.” Our very own Ellen McGrattan at the Minneapolis Federal Reserve, along with Anmol Bhandari at the U of MN, had a paper published in May 2021 which finds that the accountants have been missing a sizable amount of business assets. From the abstract:

We discipline the theory using data from U.S. national accounts, business censuses, and brokered sales to estimate a value for sweat equity in the private business sector equal to 1.2 times U.S. GDP, which is about the same magnitude as the value of fixed assets in use in these businesses.

Sweat Equity in U.S. Private Business∗

In the concluding paragraph of the authors suggest that there is a problem with how this capital is categorized.

Most of the applied work focuses on one attribute at a time and imposes a strict dichotomy on the nature of the asset: alienable or inalienable, specific or general, tangible or intangible. One of the key messages from our work is that sweat capital does not fit neatly in these dichotomies. Furthermore, the fact that these assets are a substantial part of private business value will likely necessitate a review of some of the classic results concerning the boundary of the firm and its capital structure.

A portion of the efforts and energies a business owner puts into his/her company is not the same as the work an employee is paid for to show up for a job. The labor of the owner has a non-fungible bit which is retained in the business. The later transaction, cash for time worked with no further obligation, is fungible.

It sounds like McGrattan is recommending a new accounting system to keep track of these entries.

A tribute to the Mother Mary

I’ve been a fan of Walter Russell Mead’s writing since I came across his blog entries at the American Interest a bunch of years ago. In addition to his frequent entries about international affairs (he is now a columnist for the Wall Street Journal) I was captivated by his annual Yule Tide Blog. One entry in particular has stayed with me, one about the Mother Mary.

I hope it’s OK that I reproduce some of it here, as we approach Christmas. I had never read such a heartfelt celebration of a woman in a Christian context. Mead is the first to shine a bit of Jesus’s light back toward his mother.

Jesus is nothing if not paradoxical. On the one hand, Christians believe, he is the Second Person of the Trinity. But, say Christians, Jesus is also a human being. How does this work? Like the Trinity itself, the nature of the relationship between the divine and human in Christ is a complicated idea, and over the centuries has been described in very technical ways by theologians much better educated than me. With some notable exceptions, most Christians have held that Jesus has two natures combined in one person. He is fully divine, fully human—and still somehow just one person, one self. This idea was not formalized until the Council of Chalcedon in 451 AD, but the implications for Mary were already clear enough that twenty years earlier she was proclaimed Theotokos at the Council of Ephesus.

Theotokos can be translated into English several ways: the most common is “Mother of God” and a very large majority of Christians around the world considers Mary to be, literally, the Mother of God. Since Jesus’ two natures are combined in one person, she must be considered not only the mother of his “human side”; she is the mother of the whole person. God’s love knows no bounds; his decision to enter history was so unlimited, so unconditional, and so total that God became the son of a human woman.

The Mother of all Meaning

The whole thing is worth reading, but here is another segment.

I like to think that there is something more: from what the Bible tells us about Mary, we know that Jesus was the son of a strong and independent woman. Steeped in the ethical traditions of Judaism, she was passionate about justice and willing to stake everything on her sense of God’s call. She had a soft spot for social outcasts—after all she was once in the position of being an unmarried, pregnant woman in a censorious and traditional society. She was thoughtful and meditative, but capable of swift and decisive action when the time came.

She was unflinching and courageous. She followed God, not social convention. She was ready to be snickered at and pitied by the gossips of Nazareth and to risk her relationship with Joseph to respond to God’s call. She followed Jesus to the cross and watched her son die; her loving presence would have been one of the few comforts he had during that final ordeal.  She was ready to respond to the unexpected, to have her life wrenched out of a comfortable and traditional groove when God showed her that He had something else in mind.

Only someone raised by an equally compassionate and kind woman could have written such a beautiful tribute. It would be nice to thank him one day for putting pen to paper.

Our Lady of Lourdes

PADI- an associational case study

Say one wanted to figure out the impact of participating in affiliations with the professional association of diving instructors or PADI. First off we could identify three groups that are major players with the association: the dive shops, the instructors or dive masters and the divers who show up to be taken down to the ocean floor.

As I’ve attempted to sketch out each of these groups which internalize (listed inside the circle) and externalize benefits and costs in the relationship.

The divers, for instance, are willing to pay more to go on a two tank dive with a PADI shop and may adjust their travel plans or hotel selection to coordinate with the shop. But they do this because they feel they will experience a safer dive and see more sea life.

The dive masters who took us out in Kauai all had worked elsewhere including Honduras, Texas and the Caribbean. They also showed an active interest in the health and quality of the reefs in Hawaii and abroad. Just like so many outdoors men and women, they are important supporters of the environment they so enjoy, externalizing that knowledge and concern in so many ways.

Lastly the dive shops are able to charge more and internalize those profits but also must externalize the support and higher standards observed by the association.

Each of these actors are evaluating trade offs and making consumer choices in both fiscal matters as well as the degree of voluntary work or other concessions made in order to be part of the association.

A two tank dive isn’t simply $150USD. To get a grasp of the complete transaction would necessitate tracking all the components at time of exchange.

The other interesting aspect of this type of analysis is to see how externalize factors can be transferred between the groups of actors which come in touch with each other. For instance the dive masters are passionate about reef environment. As divers come through their work place there may be ways to capture idle assets to further reef preservation.

Why yea to the infrastructure bill and nay to build back better

A couple weeks have gone by since the trillion dollar infrastructure bill was signed by President Biden. The bipartisan consensus for the deal appears to have been truly representative of public opinion as there has been little bickering or negative chatter since the announcement. However, politicians are balking at the Build Back Better plan.

I think the difference between the two forms of public investment is at the crux of why one is a yes and the other a no. The first package supports just about every form of durable infrastructure in the US today: roads, bridges, rail, airports, public transit, water, broadband. It is basically bonus bucks for all the things we have approved and used for decades. All notably in need of refurbishing. The dollars will leave the public sphere, and pay private contractors to pave the roads, install broadband, and beef up the power grid.

The second bill is not about durables. The second proposal is centered around the work that is done to provide public services such as child care, understanding and reducing environmental damage, health and wellness objectives, and the work to supervise who’s paying how much for what. The problem with agreeing to pay for such things is that we have little or no tracking which lends an understanding the return on the requested inputs. Call the American public a good consumer for wishing to be clear on their purchase before laying their cash out on the table.

The other haziness which obscures the ability to picture the second bill’s outcomes is the crude lumping of groups of people together by income. How children are raised in their younger years is accomplished through many different family arrangements and objectives- despite income. I think the fear is that throwing money around without discerning the work in play will at minimum be wasteful. And often when the dynamics of work is not understood, bad actors show up to ride the seams and take advantage of the ignorance.

The work to stay healthy and use health care dollars wisely, or to minimize pollution, or the work necessary to keep businesses on the up and up with tax payments, all of this type of work occurs in systems. There are groups with goals; there are incentives; and there is a dynamics to it. And to propose launching a whole bunch of cash at systems without understanding them makes for uncertain consumers.

The warmth of a fire

Since prehistoric man (and woman) sat around a fire, its flames provided warmth to those huddled around. Teepees made room for a central fire which drafted out through the culminating poles in the ceiling; medieval castles were fitted with mantels at eye level to accommodate large blazes beneath. The nostalgia of a crackling fire reaches back to those instances of communal comfort.

While the world is large and complicated some things will always fare better in collective use, while others will thrive under competitive forces.

The new era we’re entering is one which acknowledges and accounts for both circumstances and how they are blended. We are not returning to a lineage based power system, nor are we going to allow a meritocracy which blatantly ignores communal workers.

It’s time to allow for an accounting of both and an understanding of how they work in unison.

#givingtuesday

Did you know about Giving Tuesday? I didn’t. It’s a bit like Give to the Max Day, featured on this blog here. By creating a philanthropic holiday, a deadline is created to prompt procrastinators to write a check and send it in.

NPR ran an article about it today.

It’s #Giving Tuesday — a holiday marketing tradition inspired by Black Friday, Small Business Saturday and Cyber Monday, but with a twist. Today thousands of charities are asking us to open our wallets. But how can we be sure the group we donate to is effective — that we’re getting the most bang for our charity buck?

That question was vexing Elie Hassenfeld several years ago. He worked at a hedge fund, and he and a colleague wanted to give money to charity. Since they are numbers-oriented finance types, they wanted to maximize the results from their donation by finding groups that could offer the biggest impact per dollar.

“We were shocked by how little useful information was available,” says Hassenfeld.

Sure there were the rating sites that show how much a given charity spends on overhead and point up any red flags suggesting possible mismanagement.

But that’s not what Hassenfeld wanted to know: There was “nothing that said, ‘this is how much a charity can accomplish with the donation that you give.’ “

What’s interesting is that the article is a re-run of an article published five years. It seems there is a lack of momentum behind the idea. Hassenfeld indicates that he needed more information about the returns his philanthropic dollars would generate. So he took matters into his own hands.

And so in 2007, Hassenfeld and his friend, Holden Karnofsky, decided to start a nonprofit called GiveWell. The mission: Come up with an annual short list of charities they can recommend based on hard evidence. But it turns out this data-driven approach has its own set of issues.

It’s not surprising that the charities on their list are mostly located in the third world where cost of living differences create massive upsides for local employment of USD’s.

But perhaps there is something missing from a return on investment analysis. Maybe that is not the key index when it comes to why people donate. In order for a more lively engagement of philanthropic dollars at all levels of donors, maybe there is another sorting in addition to information regarding the scope and reach of the charities’ work.

Grateful for family

Sounds trite, doesn’t it? Of course you are grateful for your family. No more of a surprise than you love your kids, as fiercely as I love these two beach bums:

The term family is often reserved for those with whom we share a household. The people who do the housework for the daily routine of food and lodging. But as we sat around our Thanksgiving meal this evening it was clear that the genesis of our lovely circumstances originated beyond the four sitting at the table.

Being thankful for good health, for example, cannot only be a tribute to our personal efforts. One must reach back and be thankful for all the good genes that have been passed down through the generations. And the habits of selfcare that were taught with quaint proverbs, like an apple a day keeps the doctor away, didn’t just pop into the family routine one day. But saying isn’t doing. Those who came before also showed us they were willing to pay more for fresh fruits and vegetables; they were willing to dedicate resources to better health.

The multigenerational passthrough of profitable habits doesn’t stop there. When parents establish the custom of aiding with advanced education, the gift is meant to tumble on down to the next generation and then onto the one after that. The payment of tuition is done with long views over a whole life, not short returns.

But when these habits of investing across and over people, of participating in a system of beliefs and not of immediate returns, then we are no longer talking about family as a gathering of four people. When choices have been thought through and tradeoffs considered; when families have evaluated outcomes and set norms; when all this circulates through decades worth of relations, then we are talking about something else. We are talking about family as an institution, as an economic force.

That is the sense of family we were grateful for this evening.

Paper commentary- Surfers & the Wave

There’s a lot to like in this paper, The institutional foundations of surf break governance in Atlantic Europe, by Martin Rode. The author looks at how surfers handle the distribution of wave riding opportunities. Behavior can span from excluding outsiders from riding the best waves, to the use of established norms to divvy up the crests enabling the riders to show off their favorite form. Rode points out that who owns the wave is the issue at hand.

Both regimes establish property rights over common pool resources with no state intervention, creating a setting wherein users face the question of cooperation or conflict. 

It might seem obvious that the ocean is a common pool resource, but the locals undoubtedly think the portion of water beyond their local beach is in fact owned by their town. By them. Often we think property rights are clear cut when in practice the tentacles of ownership claims creep in from many arenas of life. Parents might think twice about selling a small business before checking with their kids. A sports team may find community push back at the mention of the team being moved to another city. It has been well established that neighbors believe in their right to control surrounding property development. Most all forms of ownership can be challenged by some other group interest, even if only in small part.

It is also interesting that preferred data is taken from a Wikipedia style contributor website. The voluntary input of surfer enthusiasts is considered more reliable than sites written under the auspices of earning money from the information, such as travel guides. And it is not to imply that the later is totally unreliable, it’s just to say that on a gray scale, one has to filter information depending on whether a fungible transaction is in play.

Information on all surf venues observed herein was obtained from the participatory open-access website www.wannasurf.com. That site provides detailed travel reports for thousands of surf spots around globe, with most of the information coming from local users. Reports are confirmed further by designated area representatives in order to avoid possible bias.

Matrix is more than a movie

The movie Matrix made a big splash in 1999, propelling Keanu Reeves to stardom. He wasn’t the producer’s first pick for the lead, Neo, a programmer who senses something in his environment is not quite right. The matrix refers to a simulated reality, created by intelligent machines. As long as the lives of the actors were contained within this vessel of distraction, their bodies energized the mechanical systems.

The dictionary confers a similar definition for the word matrix:

  1. an environment or material in which something develops; a surrounding medium or structure.”free choices become the matrix of human life”

Once a surrounding medium or structure looses physical form it can be challenging to see, and we can start to question if it is still there. The mimes from my youth, following the lead of the famous Marcel Marceau, would stand on Paris street corners gesturing in such a way that you could visualize the wall their elbow leaned against, or the box that encased them. See for yourself.

In mathematics a matrix is a grid of numbers, like an excel spread sheet. The numbers are arranged in such a way that they represent value descriptions for a variety of features.

Say life was simple and one could devote free time (time away from a job for money) to one of three activities. Time caring for children ‘x’, time for keeping food in the house ‘y’ and time for exercise ‘z’. Collecting hundreds of these sets would generate some baseline numbers. But soon enough sorting subgroups reveal new environments. And further investigation reveals that groups can have a variety of properties when they interact.

What we are looking for are the numbers that go astray, that vault off the charts, that tell us “This is where we need help!” The numbers will spell out an environment that we cannot see, yet we can still be confident it is defined. And as such it can help us solve for situations that leave others behind. We have to let the matrices, like the mimes, form the space for this type of calculation.

Two sided games people play

There are many types of two sided games that people play. Say a politician devotes a large share of his time and energies to a light rail project which in the end is funded. He has a bragging rights to getting a project through, a resume builder. But in his own life he has no interest in using mass transit. It’s inconvenient. It’s time consuming and he’s a busy man.

Or consider the high-priced neighborhood’s reaction to the light rail line plundering down along a low use section of rail, right behind their carefully painted turn-of-the-century homes. No- no rail here when there are so many better routes! Law suits. Delays. The same folks who entertain mega-donors on verandas decked out with overflowing flower planters, raising funds for the morally upright party, have a thing or two to say about transit for the masses skimming exclusive dominium.

Then there are the folks who will use the transit for commuting as it is the best option for them. They will consider the location of the rail in the choice of their housing and their employment. Their lives are not devoted to political activism or moral considerations. Even though the thought of cleaner transport may appeal to them it is a straightforward balancing of accounts and utility which drives their decisions.

There’s a separate accounting for the time and energies and dollars for each of these actors in the development and consumption of light rail.

The illogic of free riding

Free riding, benefiting from a collective good without having incurred the costs of participating in its production.

The problem of free riding was articulated analytically in The Logic of Collective Action: Public Goods and the Theory of Groups (1965) by the American political economist Mancur Olson. Relying on an instrumental conception of rationality, according to which rational individuals make choices that they believe will bring about the outcomes they most prefer, Olson argued that there is little rational incentive for individuals to contribute to the production of a public (or common) good, given the costs they would incur, because they will benefit from the public good whether or not they contribute. 

https://www.britannica.com/topic/free-riding

Mancur Olson makes the case that collective action goes contrary to human impulses, as the desire to look after oneself will induce all parties to free ride. This collapses a system where everyone takes and no one gives. Natural impulses, Olson argues, reduce or dispel the desire for collective action.

Collective activity to advance the economic objectives of a group are abundant, so there is little need to debunk the idea that cooperation amongst all sorts of groups is natural and ongoing. In fact, when you think about it, the system is most efficient when free-riding occurs.

Take the example of our neighborhood fence. Like many suburban clusters, a wooden privacy fence was built along the busier road which abuts the perimeter homes. This both distinguishes the area and lends privacy to those properties. At the turn in off the main road there is a sign and little extra wooden feature. A small association fee is due every year for mowing along the fence, insurance and upkeep of the entrance.

At some point the fence was aging to the extent of needing repair and possible replacement. Of course the interior neighbors didn’t feel they should pay, or perhaps not pay as much, as the perimeter homes as they benefit the most. About the same time a hail storm came through, as they often do, and caused damage to roofs and siding nearby. The association manager was also an attorney and was able to make a claim through the insurance policy for a complete replacement of the fence.

It’s likely that there were several residents who would have thought to have the fence assessed. But the manager, who gave his time voluntarily, was the one who initiated the project and saw it through. The rest of the neighbors were free riding off his time, education and experience. But how would it be efficient if everyone in the neighborhood had the exact qualifications?

The neighborhood is better off if there is a variety of skills available to the group, not only the business paperwork type of skills. The neighborhood doesn’t need an attorney in every house, it is better off having a mix. It’s more advantageous have a handful of home people to see that school bus pick up and drop off goes smoothly (especially when temps are bottoming out at twenty below). Older people can be prone to watching houses to the point of being nosey– but that helps keep crime down. Then there are the lawn perfectionists who lend out turf advice and fertilizer spreaders. Others may have job contacts or buddies in media who promote the local Little League.

You see free riding is what we all do if you look at everything from the individual lens. But as a group, it is best if everyone steps up voluntarily with their own unique skill or service. That’s called weaving a tapestry of community to catch everyone and bring them along.

Today is Labor Day

In the US, the first Monday in September is a day dedicated to the celebration of labor, or the efforts of workers. Initiated in the late nineteenth century in recognition of the labor movement, it continues as a federal holiday even as labor and trade unions have evolved and changed in their missions.

I look forward to the time when it also celebrates the service oriented labor that is given without wages in the interest of the family or the community. At the national level there are formal service organizations like Teach for America or even the National Guard. But total hours put into formalized service structures are peanuts compared with those packed into a neighborhood.

Work as described in this blog (categories) is performed without intended recognition or accounting. And on an individual level, this is exactly the way it should be. But it would be useful to have a group accounting of labor hours necessary, for instance, to field a little league team, or girls scouts group. That way if an adjacent neighborhood would like to initiate such a program they would know what was required of them.

Or lets say the work is the type needed to care for the elderly, within a family. Wouldn’t it be interesting to know over x generations, x person hours of support is needed, in general, for a family member who ends up in need. That way, in a long term planning type of way, siblings and cousins can think ahead to who can play that role, who can take on that type of work, instead of hiring it out.

Our city keeps track of the number of volunteer hours that are used to run the numerous community get togethers throughout the year. That labor is counted on to pull off the events which draw in hundreds of residents and non-residents to events such as Music in Plymouth and Bark in the Park. After a number of years, the city volunteer coordinator can sense how many hours the community has to donate, a sense of what the capacity of the community is to provide these free services.

So for planning purposes, it would be nice if there was further tracking and celebration of service labor as well as paid labor. Instead of simply extending a nod to a certain culture of volunteerism, or institutions of community support, with actual numbers, one could plan with reasonable certainty.

There’s more of it around than one might think.

Negative numbers

Historically, efforts towards social amelioration fall into a category of charity or gift giving. It’s optional. It’s nice. Thus devoting time or resources to such things can only provide positive results.

So if your ambitions are to save a life, there is no possible negative outcome from your action. Whether your efforts are to curb climate change or to shelter the homeless or to raise funds for education, the number system only allows for a net positive social conclusion.

Living with the Corona virus has debunked such primitive thinking. The cautious trepidation at drug approval, intended to save lives, has most probably taken lives. The closing of schools intended to save lives, may have led to the rise in teens carjacking and in turn their tragic deaths when their joy ride collided with a street light.

Perhaps in the time before Covid it was more difficult to think abstractly about the positive as well as the negative outcomes. Perhaps it was too intangible to think that activism towards one cause, say gay rights, in fact squeezed out activism for addressing abuses in the criminal apprehension and persecution for petty drug crimes.

What the virus has done is lay bare at our feet the reality that it is not just in business matters that resources are limited, outcomes are interconnected, and well intended efforts can produce negative outcomes.

Negative numbers were not always accepted by mathematicians.

Thus, “modern” algebra is not so very modern, after all! To what extent is it abstract? Well, abstraction is all relative; one person’s abstraction is another person’s bread and butter. The abstract tendency in mathematics is a little like the situation of changing moral codes, or changing tastes in music: What shocks one generation becomes the norm in the next. This has been true throughout the history of mathematics.

For example, 1000 years ago negative numbers were considered to be an outrageous idea. After all, it was said, numbers are for counting: we may have one orange, or two oranges, or no oranges at all; but how can we have minus an orange? The logisticians, or professional calculators, of those days used negative numbers as an aid in their computations; they considered these numbers to be a useful fiction, for if you believe in them then every linear equation ax + b =0 has a solution (namely x = -b/a, provided a 0). Even the great Diophantus once described the solution of 4x + 6 = 2 as an absurd number. The idea of a system of numeration which included negative numbers was far too abstract for many of the learned heads of the tenth century!

A Book of Abstract Algebra, Charles C. Pinter

Although rationally it is accepted that there are tradeoffs in these choices between social interests, we don’t act like we know there are tradeoffs. We don’t do analysis like there are tradeoffs. We don’t approve funding like there are tradeoffs. There simply doesn’t appear to be an acceptance of the abstract concept that the allocations of time and resources function as an economy and not a charity.

Housing as a system not a product

I’m really looking forward to this paper, “The Effect of New Market-Rate Housing Construction on the Low-Income Housing Market”, by Evan Mast. Here’s the abstract:

I illustrate how new market-rate construction loosens the market for lower-quality housing through a series of moves. First, I use address history data to identify 52,000 residents of new multifamily buildings in large cities, their previous address, the current residents of those addresses, and so on for six rounds. The sequence quickly reaches units in below-median income neighborhoods, which account for nearly 40 percent of the sixth round, and similar patterns appear for neighborhoods in the bottom quintile of income or percent white. Next, I use a simple simulation model to roughly quantify these migratory connections under a range of assumptions. Constructing a new market-rate building that houses 100 people ultimately leads 45 to 70 people to move out of below-median income neighborhoods, with most of the effect occurring within three years. These results suggest that the migration ripple effects of new housing will affect a wide spectrum of neighborhoods and loosen the low-income housing market.

I checked at the Hennepin County Library, my resource for such things, only to notice on the National Affairs posting says that it is forthcoming in the Journal of Urban Affairs.

What is exciting about the author’s approach is that it illuminates the idea of housing, not as a one time purchase product, but as a system through which people cycle over the course of time. You would no longer have any interest in your student housing, for instance, but it was entirely adequate at the time you lived there.

To look at housing as a system acknowledges that people have different housing needs at different stages of life. Migration is a positive activity, to achieve better circumstances. This counteracts the politically popular concept of “building affordable housing” which is an oxymoron as new construction is the most expensive form of housing.

With this understanding of a system, the efforts to improve people’s lives maybe implemented at each stage by matching them to the community which offers the best support for their interests. By viewing housing as a system of placement within a community, more people can become community workers, and traders of services which benefit the group.

There’s no ‘i’ in housework

Aussie household are in turmoil after their census included this simple request.

“In the last week did the person spend time doing unpaid domestic work for their household?” the ABS asked.

Perth Now

I mean seriously, is there a better dog whistle to get couples yapping at each other over the perennial debate about who does what around the house?

“Include all housework, food/drink preparation and clean-up, laundry, gardening, home maintenance and repairs, household shopping and finance management.

The ABS asked Australians to estimate the amount of hours they’d spent on such unpaid work, offering five options ranging from none to more than 30 hours.

Social media was alight with debates on who gets credit for what in the ongoing partnership of domesticity. But I question if sorting by individual is more useful to a national government than sorting by household.

Call me nostalgic but I remember when people used to comment: “The Johnsons, they do so much for the community.” There was a time when couples were considered as a unit. And when you think about such things as unpaid work, a longer time frame, one that would allow each person to perform different duties at different times, makes more sense.

I know of several men, now in the twilight years of life, who were completely preoccupied with work-for-money jobs in their younger years, but are now fulltime caregivers to their spouses. There was a time when they would have been disdained for doing nothing within the household. Now they devote a majority of their time to enabling their household to stay together.

From the government’s point of view I would think this is the interesting unit of analysis: the household. How much time in unpaid labor is required to nourish a household? to educate, to retain good health, to keep in secure mental balance? These household averages could be quite useful.

Instead the census question seems to be provoking some fudging of the numbers.

Since last night, there have been countless reports of family rows over who spends the most time on chores — from who does the bulk of the cooking to whether putting your own dishes away can be used to bump up your “unpaid employment” tally.

But maybe more importantly it reinforces the ‘i’ in an arrangement that is about the ‘we.’

Rain Day

A clap of thunder around 6am this morning was a welcome sound as we have had an incredibly dry summer. The drops on the roof seemed like a foreign sound and when they petered out after only a brief prelude, I was quickly disappointed. But the clouds circled back upon themselves and wrung out a nice soaking. I sat on my front porch under the overhang just to enjoy the clatter.

When the rain let up around noon I made a trip to the nursery, bought a few new plants and went to work. If soil is dry it turns to concrete. No point in tugging on weeds as the stems break leaving the roots in the ground. A moist soil is much more cooperative. So out went the weeds and in went some blue stem prairie grasses and a red leafed spirea shrub. Some variegated hosta were split and some burgundy glow ajuga moved to a high traffic spot.

Miguel- painter extraordinaire

Our 33 year old home needed a complete repaint. We had painters out over the years to paint south and east side. I’d tackled the bits in the front around the brick facia. But a color change and some wood repair were in order.

This wasn’t the first year the birds had hollowed out one of the old knots in the cedar siding to nestle in a hatch of their young. The downy woodpeckers had interrupted my work day last fall and would only fly away to the nearest branches when I leaned out the window and banged on the wood.

This spring brought new visitors. Squirrels leapt from our ash tree to the roof and pried open a bit of the bargeboard to let themselves in. “That’s it!” I declared to my husband, “there are more critters living in our siding than people under this roof.” Finally, I had won the argument.

Diligently I called out three painting contractors, walked the perimeter of the home with them discussing color change, no color change and all that is paint related. The bids came in and, as often is true, there was a fair span in the numbers. The one we chose was the most economical but, perhaps more importantly, they were the only ones who did wood repair in house.

After a bit of a wait (three months- there is a shortage of workers in our fair metropolitan area) Miguel appears as a one man show. He has an extensive collection of aluminum ladders. His supplies and tools are neatly laid out on tarps. And he’s got a little paint splattered radio that belts out classic rock.

Now our house is two story on the street side dropping to two and a half in the back. I’ve been up on a ladder only three quarters of the way up, feeling sway of the rungs as I progress upward, the earie nothingness of being up in the air. Not Miguel. He’s moving up and down those metallic stepper machines. There’s at least three of them leaning against the house at any one time.

It was not always peace and Orlando and Dawn, however. One morning he I could hear the ladder knocking the side of our home as I imagine he was struggling to get the draw cord to extend it upward. “Puta!” he yelled at it more than once. Did I mention he was from Costa Rica?

Much of the time the tunes were drowned out by the pressure washer or the power saw cutting up repair pieces, or the shop vac as he vacuumed up the paint chips from off the landscape rock. The paint sprayer droned away as it coated the whole caulked up, primed over, cedar clapboard encasement. “Twenty-Seven gallons,” he bragged to me, “the wood just kept soaking in the paint!”

The guy was amazing. He was so focused on the task at hand I thought if I interrupted him it might throw his momentum. When he had pretty well wrapped things up he stood back a house away, arms folded, and took in his work from the sidewalk. It did look fantastic.

My brother stopped in from out of town the following week. As he came to the front door, he touched the siding and said, “this is what we need to do, get new siding.” Yes– Miguel had made the whole exterior feel new again.

Standardized Reporting

There’s an internal posting at our company for local non-profits who are looking for volunteers or resources. Here are the first several entries:

This is one way to get the word out, connecting suppliers with those in demand. I just realized where I can take some left over dog food that I’ve had in the house for a while.

But if I had my druthers, I think it would be useful to have a standardized non-profit snapshot. The information I would like to see as an investor would capture a quantification for the number of hours and dollars flowing through their system. Then it would be nice to see a rating for delivery effectiveness. Some sort of measure representing how much of the time and resources donated goes toward the services accomplished. Then there could also be a few other stats like size of paid workforce, total volunteer hours, length of time in business, service area.

A site connected to a data base with this type of information could be useful to donors and public funders alike.

A marketer and a mission

Rodney Smith Jr has appeared in my twitter feed on more than one occasion. His tag line is: Making a difference one lawn at a time. He mows the grass that need to be mowed. A seemingly small thing, to mow a neighbor’s yard. But not only do they benefit, the neighbors benefit too.

I have no way of checking up on Rodney but he has 118K followers and his account reports over 9000 tweets. His posts are similar to the one above. Sometimes there’s a wave from the fortunate homeowner in the vicinity of Huntsville Alabama, his home location.

You might say he is the sales and promotion arm of the institution called neighborliness. There’s a story on every block of the neighbor who shovels the widow’s driveway, or clears the sidewalks before they ice over. Rodney not only has made a name in mowing, he has taken it to a new level. He created a 50 lawn challenge, and his followers are posting up and showing how they are playing along.

Two girls from Kentucky raised enough money for a trailer and advertise as You Mow Girls. A youth from Kansas signed up for the challenge and shows off his new T-Shirt. Another from Mississippi posts a photo of his first lawn. Kids from Oklahoma, South Carolina and Dayton Ohio are also in his feed, and that’s just in the last two days.

This guy is the Starbucks of lawn care. He’s taken a basic necessity and stepped up production across these wonderful United States. He’s connected with workers and their natural inclinations to help out. Rodney is handy enough with social media to show them the recognition that no one asks for, but certainly doesn’t mind getting.

There’s demand out there for more Rodney Smith Jr’s.

Carbon Credits for Me, more work for Thee

The title Minnesota Farmers: Cashing in on the carbon bank, fighting climate change? says a lot about the direction this article takes. Farmers in the Mankato area are taking advantage of a new Biden initiative towards climate change.

President Joe Biden said he wants American farmers to be the first in the world with net-zero greenhouse gas emissions. How they might achieve that goal is still unclear — but one idea getting a lot of attention involves paying farmers to store carbon in the soil.

It’s called carbon banking, and some see it as one way to reduce the level of carbon dioxide in the atmosphere. While the concept has been around for decades, it’s still finding a foothold in ag-heavy states like Minnesota.

The mechanics of this deal goes something like this. When farmers extend the extra effort to bury carbon in the soil, they get paid for their work from corporations. In exchange for the dollars given to the farmers, the corporation receives a credit which allows them to pollute. Net result: the farmers don’t pollute but the corporations do.

Lilliston agrees that the work and money farmers like A.J. Krusemark invest to store carbon will have long-term benefits for the environment. But he argues that all that work won’t do much to help mitigate climate change if big companies are then allowed to buy those carbon credits to offset their own pollution.

This arrangement probably won’t last for long as the farmers are going above and beyond their compensated efforts, while the corporate credit purchasers are not. One group is working toward a mission, one is buying their way out of the mission. The incentive signals are all wrong. Furthermore, the groups are poorly delineated. We all have an interest in global climate change, but voluntary cooperative efforts seem to work better when the players are closer and can see progress.

Skeptics of carbon banking practices say that, in order for it to have real climate impact, the carbon storage must come in tandem with reductions in greenhouse gas emissions — not as a replacement for that pollution.

Advice on bridging group relations, from Sidney

I work with a lot of younger people who I find lazy and self-absorbed. When I try to give them advice, they don’t seem to listen and want to do things their own way. The other day one of them said to me “OK, Boomer”. What am I doing wrong?

I am a Gen X, and I am going to give it to you straight. The fact that you find your younger colleagues lazy and self-absorbed is disrespectful and reveals more about you than them. If you want to feel any respect from your colleagues, you will need to respect them first.

“OK, Boomer” is not a term of endearment and perhaps demonstrates the challenges your colleagues have relating to you. Good working relationships take effort from both sides, so it might be time to try a little harder with them. Should “OK, Boomer” come up again, why not ask your younger colleagues if something is cheugy and see how that conversation goes!

As one of the more experienced employees, you have a responsibility to cultivate a workplace of inclusion. Rather than feeling threatened by younger members of your team – who bring much welcome energy, ideas and diversity to work – I would encourage you to seek to understand them. Consider asking your workplace to set up a reverse mentoring plan where you can get to know some of your younger colleagues on a deeper level so you can learn from them and feel able to work more cooperatively together.

The Sidney Morning Herald might be pointing out the obvious here– but can’t this bit of advice be applied to just about any two groups lacking compatibility? Divide them up by generation, race, occupation, income…we like to hang with our own. Hence it is a sacrifice of time, an expenditure of effort, a potential loss in some way, to ‘see it from their point of view’ and fill in the gap in order to bridge a cultural divide.

The journalist goes onto say that “good working relationships take efforts from both sides.” Too true for a public of two, or an organization, or a city. One side may have to initiate interaction but the other must also be receptive. The exchange requires more effort. This effort is called work.

The interesting measure is the capacity of the organizational group to do the work necessary to bridge the subgroups into one.

Avian Objections

“There’s Wilson’s warbler, and Swainson’s warbler, and Kirtland’s warbler,” lists Kenn Kaufman, author of several birding field guides.

“You’ve got Nuttall’s woodpecker, and Cassin’s vireo, Cassin’s auklet, and then there’s Botteri’s sparrow, and Bachman’s sparrow,” he says.

Monuments and Teams have changed names as America reckons with racism.

Of all the names listed above there is one which is objectional to inclusive activists. Can you pick it out? Can anyone pick it out, regardless of their background? You’ll have to read the article to find out which one symbolizes oppression. In my mind, if no one can select the offender, than no offense has been done.

This whole renaming thing comes across as people on a mission (not the right kind of mission) to create a story where they get to play the knight in shining armour. A search for misdeeds. Uncover and disclose them! Then become the agent who sets the whole thing straight.

Some may say, ‘What’s the harm in it?’ If changing names makes just one person more comfortable than it is a win. Yet, there are only so many hours to devote to things. NPR can only run so many stories. There are only so many resources available to rectifying a wrong. If you gear everyone up to work on the ones which produce little results, than disappointment is all that will follow.

And anger–eventually.

If activists engage people in work that makes no contribution to the mission, than aren’t they involved in some sort of taking? Those hours of work can only be spent once. You can change a bird’s name or perhaps they could be spent being a big brother-big sister, working a job fair, teaching English as a second language classes, finding someone a place to live. Changing the name of the Wilson Warbler to the little warbler with a cap wouldn’t be something I’d tweet about.

Platters of yesteryear

Robert Putnam, a sociologist from Harvard, is probably best known for his seminal book, Bowling Alone: The Collapse and Revival of American Community. From wikipedia:

Putnam surveys the decline of social capital in the United States since 1950. He has described the reduction in all the forms of in-person social intercourse upon which Americans used to found, educate, and enrich the fabric of their social lives. He argues that this undermines the active civil engagement which a strong democracy requires from its citizens.

Putnam outlines at length the waning of voluntary associations.

Putnam noted the aggregate loss in membership and number of volunteers in many existing civic organizations such as religious groups (Knights of ColumbusB’nai Brith, etc.), labor unions, parent–teacher associationsFederation of Women’s ClubsLeague of Women Voters, military veterans’ organizations, volunteers with Boy Scouts and the Red Cross, and fraternal organizations (Lions ClubsBenevolent and Protective Order of ElksUnited States Junior ChamberFreemasonryRotaryKiwanis, etc.).[1] Putnam used bowling as an example to illustrate this; although the number of people who bowled had increased in the last 20 years, the number of people who bowled in leagues had decreased. If people bowled alone, they did not participate in the social interaction and civic discussions that might occur in a league environment.[1]

In my mind what is being tracked here are the platters where exchanges took place, and not the actual amount of work or resources engaged in production of a shared asset. The bowling leagues provided the venue for friends and neighbors to gather, extend a hand, overhear who needed a job, step-up if someone passed. But as the clubs of father’s or grandfather’s became out of date it is just as feasible that younger generations found new places to gather and organize.

But why then are the number of volunteer hours reported in the American Community Survey lower? Perhaps people were engaged in informal volunteer work, unpaid work to help a friend or member of the community, without being associated with a formal organization.

Consider American life from the 70’s up to the writing of this paper in 1995 (followed by the book in 2000).

The observations in the book coincide with two decades of increasing divorce rates in the US, of households being split apart. Moving homes is time consuming enough, then there are the additional logistics of separating both financially and emotionally when the cause is a divorce. This closing out of marital arrangements can easily last a year or more.

Furthermore the schedule of a single person with children is bound to be quite different from a married couple. Whereas there may have been an easy agreement of, ‘you get to golf, I get book club, you handle sports leagues, I’ll manage PTA,’ everything gets a little trickier to plan when you no longer share a household.

There are a variety of reasons why marriages came apart and people preferred to dedicate resources to undoing their marital bonds rather than hanging in for the golden anniversary. There was a reckoning with this institution that may still be in play. But the reality remains that there are only so many out-of-paid-work hours to devote to family and community. If those are being devoted to a reassessment of marriage, then they will not show up on the American Community Survey under volunteer hours.

Steinbeck the economist

When I picked up Steinbeck’s In Dubious Battle it was to ensure a certain caliber of writing. Only good luck would have it that farm workers, activists and landowners struggling over resources was the subject matter. Steinbeck sets up the social and economic dynamics of which I speak. Now I’m only a couple dozen pages into The Winter of our Discontent (1961), and I’m realizing that this is his thing. Take this passage where the protagonist Ethan is trying to describe to the Mr. Baker, the banker, his frame of reference around investing his wife’s money.

Ethan started an angry retort- Course you don’t under stand; you’ve never had it-and then he swept a small circle of gum wrappers and cigarette butts into a pyramid and moved the pyramid toward the gutter. “Men don’t get knocked out, or I mean they can fight back against big things. What kills them is erosion; they get nudged into failure. They get slowly scared. I’m scared. Long Island Lighting Company might turn off the lights. My wife needs clothes. My children-shoes and fun. And suppose they can’t get an education? And the monthly bills and the doctor and teeth and a tonsillectomy, and beyond that suppose I get sick and can’t sweep this goddam sidewalk? Course you don’t understand. It’s slow. It rots out your guts. I can’t think beyond next month’s payment on the refrigerator. I hate my job and I’m scared I’ll lose it. How could you understand that?”

“How about Mary’s mother?”

“I told you. She sits on it. She’ll die sitting on it.”

“I didn’t know. I thought Mary came from a poor family. But I know when you’re sick you need medicine or maybe an operation or maybe a shock. Our people were daring men. You know it. They didn’t let themselves get nibbled to death. And now times are changing. There are opportunities our ancestors never dreamed of. And they’re being picked up by foreigners. Foreigners are taking us over. Wake up Ethan “

The banker is trying to talk Ethan into being a risk taker, an investor. Ethan doesn’t have the stomach for it anymore. He lost ownership of the family grocery store, and it was more than a pecuniary loss. He lost social standing, he lost piece of mind, he lost dreams of his children’s future, and most dear to him, he feels he has lost his wife’s admiration. The slow process of exchanges that led to his financial demise was ‘the erosion’ that killed his spirit.

As history will have it, this played out during the more recent great recession, when everyday people were taken up short by the reality that they were going to loose their house through foreclosure. The evidence was there for anyone showing foreclosed properties to witness.

For the most part bank owned homes are in rough shape. An extended period of tough financial times results in missing cabinet hardware, water stains where a leak was left to drip, flooring worn right through to the subfloor. Foreclosures were a mixed bag in 2010. Frequently the properties were neat as a pin. Vacuum marks still tracked in the carpet. Appliances were clean and left intact. Sellers maintained pride in their home until they had to leave the keys on the counter and lock the door behind them.

But the strain of the situation, the erosion of spirit, kept people out of homeownership well past the three to five year waiting period as required by credit considerations. It’s a pretty safe bet that not only were their ambitions of ownership curtailed but also those of their siblings and people in their close circles. People who supported them emotionally through the process. The homeownership rate for Millennials is only 43%, well below any other cohort. And I don’t believe it is all about student debt.

But back to The Winter of our Discontent. The banker wants an investor and looks first to a man who comes from a family with experience. He makes an assumption that his best candidate comes from the pool of past business buddies. I’ll have to keep reading to find out how it all shakes out for Ethan and Mr. Baker.

But what I think we should take away from all this is that the emotional draw or drawback from participating in transactions whether for a house, or a police force or a business venture is much more dear and lingering than we acknowledge. And it cannot be ignored. The compensating factors to pull people back into those markets are perhaps partly pecuniary, but mostly something else. The need for a new entrepreneurial spirit may be harder to incentivize in the old pool and easier to energize in a new one.

What we need is to be better accountants of all the social implications of our pecuniary endeavors.

Costs of ownership

Summer fun MN style

As spring closes out and June opens up upon the North Star state we prep for summer of fun. Going to the lake is a communal affair. Those priced out of the metro area lakes like Lake Minnetonka, Prior Lake or White Bear, spread out to the thousands of properties in outstate Minnesota. People of all walks of life load up the family vehicle on Fridays and after a weekend up north, drift back in slow traffic Sunday evening.

For some the setting is a rustic cabin under a canopy of old growth trees banked on an environmental lake– one that accommodates canoes and kayaks. If you are into water sports you’re looking for an 800 acres lake, minimum, to have a long enough run for the water skiers and wake boarders. Tubers are pulled behind power boats or even jet skis if the passenger is not too big.

When I was growing up we didn’t have access to a speed boat much to my brother’s dismay. My grandpa was a fisherman who grew up poor so it was an aluminum boat with three bench seats and 15 HP motor which was tied up to our dock. At the time us kids couldn’t figure out why a little bit bigger boat was out of reach.

Of course there was the cost of it, the craft and the engine. But honestly that didn’t seem to be the issue. And it turns out it wasn’t. In order to maintain a speed boat, you need a lift. The lift needs a canopy (unless you want the barn swallows to make a mess of it). The dock and the lift go into the water in the spring and come out of the water in the fall. It’s a day’s job bookending the summer season.

And then there is fuel and maintenance. Five gallon red plastic gas cans need to be filled and emptied. There’s the trailer to transport the boat from the lake’s public access to its winter storage destination. Caring for a boat, and all its entrapments, make it a viable vehicle for fun and fishing– and requires time and work.

People are so quick to point out others who own this or own that, but they never consider the work that ownership demands. A boat might cost 30k, with a lifespan of twenty years that’s $1500/yr. This is less than the other costs associated with it’s ownership.

My grandpa did the math. That’s what made him perfectly happy with his Lund fishing boat.

Tweets about Work

Mike Bird is always providing great information. This time it’s a paper written by Nicholas Crafts, Professor of Economics and Economic History at the University of Warwick.


Quite neat – not just measured relative to 1931 life expectancy either, but to what demographers might reasonably have expected C21st life expectancy to be. So we have the same sort of balance of work/life that a 15hr week would have achieved, it's just very unevenly distributed

Originally tweeted by Mike Bird (@Birdyword) on May 14, 2021.


Craft does something cool. He adjusts the framing of what Keynes was after by taking into consideration how the understanding of the components has changed over time. When Keynes made his prediction about work hours, they were compensation in exchange for labor. There was no consideration for the work we do to maintain or improve our health, for example, which prolongs life expectancies.

By taking a new view on labor and stretching it out over a lifetime, Craft shows how Keynes wasn’t far off in his prediction. There is also an acknowledgement of work outside of paid work. (Although calling it non-market will result in the same confusion as use of irrational for choices made outside the traditional economy.)

Establishing something called ‘non-market’ work means that we can talk about what that is, and how it works. If it is done outside the paid-for work, shouldn’t we know where it lives? In a different sphere perhaps. It is not leisure, but if cash does not change hands where is the value in it? What are the tradeoffs individual make within their own choice matrix to perform such work and how can it be cashed out?

Maybe there are more lessons to learn from the NFT’s whose value only exists within their crypto space.

Mothers, do they Work?

Seems like a silly question, right? Especially on Mother’s Day (one day late as yesterday was an event filled day). We celebrate mom’s and all they do. Whatever that is, love, nurturing, caring, there is an unsaid insistance at not distilling it down to a currency calculation.

Nor should it be. Kind of. As long as it is understood as a public good, one that fulfills the mission of a seventeen year investment in a child– work done to form a member of society who is both able to achieve their inner purposes while contributing in ways to those around them. It is nature’s ultimate public good transacted between the giver of life and her offspring.

But for the sake of practicality, for ease of conversation, wouldn’t it be nice to be able to quantify some of the efforts towards these ends? Researchers such as James S Coleman tied mother’s education level to child’s performance, but as far as I know he did not draw a present value of those future earnings back to the mother and say, voila, her life’s work was worth $xxx.

Perhaps the aversion to equating mother’s work to dollars is that cash is fungible and moms are not. You can hire babysitter to look after a child, but that just buys you care enough to keep the child out of harm’s way. It doesn’t buy all the extra on-demand services, or the supplementary nurturing, or the tradeoff evaluations between off-spring and what would be best for them at that particular point in time.

Even the courts agree that only under dire circumstances should a child be removed from their mother. After forays into such social interventions, it quickly became clear that even if they are of meager means and abilities, moms are still the most likely to serve their child’s interests. You see, because the labor of motherhood is not replaceable with paid work, it is non-fungible.

And similarly, just as the mother is poorly substituted in the paid marketplace, the care and education passed from parent to child is also non-fungible. A child cannot package it up like their Nike shoes or favorite baseball cards an sell them to classmates. The value of the transaction clings tightly to those in the relationship.

These are not straight out gifts in most cases. There is a payment, whether said or unsaid. Mostly the implication is that what a parent does for a child, the child is expected to pay it forward to the next generation. The reciprocity isn’t back to the individual who did the work. Time does not allow for that. The reciprocity is to another in the group who will in due course have a need.

But what about the group: Mothers? Are they an aggregate of individual mothers each making the best decision for their individual child, or are they grouped as mothers, celebrated on Mothers’ Day, altogether going through such metering out a list of jobs? Well, that depends

At the primary level every player is an individual. But there are instances, compelled by a common pursuit, say a Little League Team, that mothers may start behaving as a group. They become known as The Baseball Moms. Although each mom is still keeping their individual commitments to their children, the interest in winning the League championship, persuades them, as a group, to cooperate for all things baseball.

These might be making sure all the kids get to practices, organizing their eligibility paperwork, bringing snacks and water, mending and cleaning uniforms, tag-teaming on sibling care. It doesn’t matter which one of the individual moms do exactly which chores. It only matters how much they do sum total. And in that way their individuality vanishes.

Even though the mom are still making choices and acting individually, the only measure that matters is how the group of moms keep their pitchers, basemen, shortstops, catchers and outfielders in the game. Their work is spontaneous and just-in-time, as well as divided into jobs. To add each individual’s hours or contributions matters little–it’s the sum total or their capacity that matters.

Mom’s are independent contractors who forge alliances with groups in the schools, extra-circular activities and places of worship to advance many missions. Far from a socialistic model of a group performing based on equal allocations of obligation, the individual choice making is done through granular comparisons on where it is best to spend one’s time and energies.

It makes no sense to hand out 1099’s for this type of non-fungible work. Value is accumulated and retained. In the public sphere, choices are made as individuals, but the work is evaluated based on the outcome of the group. So in order to make any sense of measures, it is vital to know how to sort.

How to value Works

This morning I’m sitting in this waiting room while my car gets an oil change. The mechanics here are prefer to work on Audis and Porches but they’ve done other repairs for me, so they let me sneak in for an oil change. The shop is in my suburb, whereas the dealer is eight miles away across town. They charge more here, but I don’t have to drive through traffic.

Which brings up all the extra surcharges we pay for convenience and what that means. Aren’t we really paying to keep our time? Because an hour of our time is worth more to us than the $40 surcharge. Doesn’t that make whatever I substitute in for that hour of my time worth $40/hr?

In the case of a busy mom that might be stopping at the grocery store or being available to run the kids to sports activities. Or someone may have elderly parents that need a lift to a medical appointment. Even if the hour is spent at happy hour with work colleagues, more than likely the time is being used towards a social connection and not the profession at hand.

Since we don’t keep track of this type of work specifically, it’s hard to track how people are making these tradeoffs. But if we started taking the time to calculate the surcharges we pay and then looking into the activities that are substituted in during the recaptured time, we could get a glimpse at what is most important to us.

To write or not to write

“Get it in writing!’ is the advise offered when entering into a contract. Too true. In particular when the parties have no relationship. If you want the law to back up your claim in an agreement, then it is a lot simpler if the terms are written out and both parties have signed in acknowledgement.

However, things aren’t always spelled out in a contract. A while back, in small claims court, I listened to a judge pull the rental agreement between a duplex owner and a tenant, one question at a time. It was clear he had some experience ferreting out these types of arrangements, to help settle who owed what to whom. He didn’t seem aghast that the plan at hand was verbal not written.

And before you judge, how many times have you clicked through the ‘I accept’ box without taking a moment to read what it is you are accepting? Written out yet neglected. We rush around our lives assuming the best.

Sometimes no one is clear what that ‘is’ is in particular. Technology has generated some truly stunning options, options unanticipated. When facebook provided that opportunity to reconnect with childhood friends around the world, it was intoxicating. Did I click right through the user disclosures agreeing to let their algorithms stalk my life and sell the information to advertisers? Yep. (or wait–were their any concerns of data privacy at the start?)

Written or not written. It’s not practical to put every moment of our lives into a written contract. Say you wanted to ride share with another family. You divvy up the chore, one takes the girls to girl scouts, the other to lacrosse practice. Stuff happens. Things get cancelled, rearranged, people have to be flexible.

Maybe one family does bare an larger burden. There’s no official settling of accounts, but for the relationship to sustain further commitments of work towards the children’s on-going experiences, more than likely there is some sort of make-up. Interaction continues. And this pattern can be seen in workplace groups, covering for each other or coordinating on projects. Work, exchange, work.

And when this pattern continues over a long period of time, people trust it. They rely on it. Home buyers, except for rare exceptions, diligently sign the stack of documents as indicated by the manicured finger of their closing agent. There’s no flinching at the part where the bank can foreclose for non-payment. Buyers rely on the knowledge that banks are competitive, consistent and regulated.

Consumers rely on a business climate. That many thorny issues have already been washed through mediation or courts by objectors who took their time to point out injustices. How can that be? It’s certainly not true everywhere in the world. The answer might be something like, “In the US we have institutions which allow consumers to trust the mortgage financing system.”

So in effect, institutions are the culmination of work which goes to enforce unwritten contracts on how to behave in (this case) the mortgage business. We have written contracts too, of course. But the trust in the system, the cart blanche, ‘I don’t need to have an attorney review this’ part is a trust based on social behavior and outcomes. Based on the knowledge that others have gone to bat and secured enforcement or change. That people were consistently able to work toward an outcome secured in the spirit of the transaction.

People often refer to institutions as a set of rules. I see institutions as the structure which allows work to occur and be captured in a non-fungible manner within a community. The greater the repetition, the greater the trust, the stronger the institution. We may even discover the value of unwritten contracts to far exceed the value of ones spelled out in ink on paper.

Jury selection- Chauvin trial con’t

I didn’t know jury trials were an American thing. According to Jury | Britannica 90 percent of jury trials occur in the US. A defendant who faces a penalty in excess of a six month imprisonment has a constitutional right to have their case judged by a jury of their peers.

It seems when their are tough decisions to make, we prefer to defer to a group. A jury is interesting as their deliberations are done privately, no outside judging, no transparency. There’s an anonymity to a group. The group has to come together behind a decision and stand by it in front of the court.

This is a service done without compensation, a civic duty. Granted, many will sabotage their opportunity to sit in the jury box. Reading through this coverage of jury selection in the Derek Chauvin case provides plenty of examples. And then there are those like #52 who is compelled to participate in an historic court case.

It takes all types of people with all types of talents to round out a group.


Reporting from the Hennepin County Court house:

Entire thread

Chauvin’s attorney says the Court should consider: giving the defense extra strikes, delaying the trial, moving the trial outside Hennepin County, bringing back the seated jurors to ask them what they’ve heard, or immediately sequestering all the jurors.

“We’ve got a mayor who is a lawyer by trade, he should know better,” defense says of Jacob Frey. Judge Cahill: “I wish City officials would stop talking about this case.” May bring back seated jurors to inquire, motion to delay trial taken under advisement—nothing decided yet.

The first prospective juror of the day right away discloses she heard about the $27m George Floyd family civil lawsuit settlement on the radio. “When I heard it I almost gasped at the amount,” she says. She doesn’t think she can be impartial, and has been excused.

Prospective juror #52 says he doesn’t think Chauvin intended to harm anyone, but he wonders why the other officers didn’t intervene and stop him. Supports BLM. “This is the most historic case of my lifetime and I would love to be a part of it,” he says. He’s on the jury.

Prospective juror #54 in the #ChauvinTrial is 75 years old and describes being “appalled” by the video. “To exert that kind of force for that long just seemed out of line to me,” he says. After expressing doubt over whether he can be impartial, the judge excuses him.

Originally tweeted by Tony Webster (@webster) on March 15, 2021.

Reframing first jobs

I’ve taken photos since I was a kid. Framing in your subject matter back then was more important. Whatever was captured on the 35 mm negative frame, was what you got back printed on glossy paper. Now you can be as lazy as you want. You can crop a photo on your phone, reposition it, tilt it. Decades ago reframing was a luxury enjoyed by those with access to a darkroom.

Sometimes you can’t see how to frame something until you’ve given it a go. Once you’ve clip out all the surrounding noise, it’s easier to see how the subject at hand can be better positioned. Or redressed, or simplified. Most of you have probably seen before and after framing with portraiture, or with a home remodel. The first shot is flat and cluttered. The second gives the room depth, a room which is now smartened up with clean lines. Reframing makes you see things clearer.


In ninth grade my brother and I attended a boarding school in the Normandy region of France. It was just how you would imagine from portrayals of British schools: strict teachers, old manor homes for dorms, and a short distance from a quaint country village.

The student body, however, was very eclectic. Insurgencies in countries like Lebanon, Iran, Algeria and Nicaragua sent wealthy kids to safer regions of the world. Many had ties to France or relatives who lived in Paris. So a school an hour west of the capital city was a perfect refuge.

There were a few Europeans as well. One classmate was the daughter of a businessman from Milan, call her M. Her typical mode of transit to and from her northern Italian home was by personal chauffer. Where as my brother and I melded in with the general population on a flight into Charles de Gaulle, then bus transit to central Paris–if I remember right to Place des Invalides– where several greyhound style busses waited to drive students out to the country. She went executive class, while we were riding in coach.

One late Saturday afternoon I found myself going through math exercises with M in the salon of the country house that served as our dormitory. What she had in riches she lacked in scholastic aptitude. As I had already been identified by teachers as the student to pair-up with other kids who needed help in the classroom, it seems natural that I was there. The other girls were upstairs giggling and gorging on purchases from a visit to the town that afternoon.

Perhaps she said thank you. Or perhaps she made a self-deprecating remark. In response I said something I had heard throughout my childhood. That when something needs to get done, you dig in and get it done. Everyone has something to bring to the potluck so to speak. I may have listed the treats our roommates were sharing as examples. I may not have. The idea was that there was no need for thanks as tutoring was one thing I could contribute.

She froze momentarily, thinking, and looked at me with a steady gaze as we sat there at the wooden tables where we took our afternoon goute of French bread and chocolate (a most excellent tradition which unfortunately cannot be replicated without crusty baguettes from French ovens). Her first language was Italian and mine English, but it was very clear that whatever it was we were doing that damp rainy afternoon, it had no relation to material things. Nothing I was doing in that space had that type of value.

This was hardly the first time a cultural clash had caught me up short. Cultural clashes were part of my upbringing. I tutored all through high school and college. I taught French University students English during an abroad program in Avignon. But at age fourteen my classmate from Milan reframed my concept of work, clarifying the distinction between cooperative reciprocal work and that done for money.

I Care a Lot – Movie Review

My husband and I finally stumbled onto a movie last night that didn’t have me flicking the exit button after fifteen minutes. Netflix’s I Care a Lot twisted and turned enough to hold our attention.

It’s a battle between a nouveau riche con-woman and an established class con-man. But the story is kept au current by setting it in the middle of the how-to-care-for-aging-boomers dilemma. The portrayal of a nursing home as a lockdown facility is terrifyingly real, especially in times of covid when there has been strict control over who enters and exits through the magnetically locking entrance doors.

The protagonist is a bad ass feminist. She’s driven to out smart and out bully anyone in her path to success. She’s out to demonstrate how the work which usually falls to the domestic in a household, can instead be externalized into a lucrative business. Get the right doctor to assess memory loss and the right judge to legitimise her stewardship, and poof! She builds a portfolio of guardianships. Bend the rules a bit more, and it’s a cash cow bonanza.

The plot riffs off the ever too real issues simmering through many families. As mom and dad age, when do they become too forgetful (because being a little forgetful reaches well down into middle age)? Who gets to decide when an adult, a person of authority for decades, must forego their independence and turn everyday decisions over to another. An error of commission causes unhappy holiday gatherings. An error of omission invites scammers of all sorts to prey on the elderly.

Post Covid, what will be different?

Working from home will be just one of the inevitable changes that springs from the pandemic lockdown of 2020. At home, there will be a better understanding of domestic life. The demands of combining to work for pay with work for children has put in contrast two different types of work. The new perspective should facilitate tackling busy family life. But how about some others? What else will change?

Family formation appears to be on the rise amongst Millennials. Pre-pandemic Pew reports that only three in ten lived with family (a spouse and children), lagging behind other generations. But the recent mortgage application rates indicate an uptick in this cohort financing new home purchases. An extended stay with mom and dad may have hit a limit during the lockdown.

While some households are combining, others are coming apart. The New York Times ran an article in January providing testimonial of such things as the official statistics for divorce rates from last year are still unavailable. Lawyers, counselors, social workers, private judges all report an increase in activity. Perhaps the bright spot here is that 90 percent of the cases settled though mediation as a court time, in times of covid, is in short supply.

While the pandemic may extinguished the last flicker of love light for some couples, I have to think that all age groups are reflecting on the disadvantages of living alone. In Minnesota just under 30% of households are single person occupancy. Perhaps the stoic pride of self-sufficiency will take a back seat to the flat out desire for companionship. Zoom can make connections but nothing replaces the warmth of the human touch.

Human interaction plays into mental health, but I think an overall awareness of self-health will hover in everyone’s consciousness. After experiencing so much loss of life, loss aggravated by health risk factors, it seems like people will place greater value on looking after themselves. The most basic means of achieving this end is through food and diet and exercise.

An abundant use of parks and trails has opened up this avenue to fitness on several fronts. Due to all the walkers out and about, people don’t feel odd to go for a walk. People have discovered all the great trails nearby. People meet up and chat with neighbors on a walk, sometimes even cluster in driveways for that Thank God it’s Friday happy hour. It’s becoming a routine, a part of your day, a way to socialize. As well as exercise and a clearing of one’s head.

I also predict that the authority of science will no longer be given cart blanche in regulatory discussions. Whereas a loss of life used to trump all conversations, policy decisions during covid have forced the issue that there are trade-offs. It is time to unhinge the bolt across the gate which kept regulators in control of the conversations about health and welfare outcomes based on science. Many voices, particularly those in the industry at hand, deserve equal time to make a case in order for the system work properly.

It’s hard to believe we are coming up on the one year anniversary of being secluded from social life. A year, three hundred and sixty-five days, and we’re not done yet.

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.

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.

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.

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.

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.

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.

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.

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?

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!

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.

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.

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.

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.

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.

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.

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.

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.

Money and Power

Consider the life story of Mrs. Czech, featured as the rhetorical centerpiece of an influential article published in The Survey in 1916 by Emma Winslow, home economist at the New York Charity Organization Society. Mrs. Czech was a widow who, for three years after her husband died, “was not obliged to use money in any way.” A charitable society provided her and her six children with food and clothing and paid their rent and insurance. And yet, despite such “theoretically…perfect care,” the Czechs floundered. The mother “apparently…had no interest in the appearance of her home or of her children.” Nor did she care about their food. Soon, the children’s health deteriorated, their faces becoming “sallow and pasty.” At this point, the charity society decided to shift the method of relief into a weekly cash allowance, instructing Mrs. Czech “to do her own buying.” Soon housekeeping “became a delight,” the children’s health flourished, and the formerly indolent widow turned into a “remarkable domestic…economist.” And all because she now had the cash “to buy what she wanted when she wanted it.”

In this vignette, taken from The Social Meaning of Money by Viviana A. Zelizer, a family finds themselves in need of assistance. They have lost their wage earner and hence their source of funds. Instead of replacing the funds, however, the charitable organization replaces the mom’s job by doing all the choosing and purchasing for her. They in effect removed her from the trade necessary to complete her social objective to care for her family.

Even with the best intentions, the desire to release individuals or groups from the work attached to their role in the production of their public objective, causes market failure. And it is by far the most prevalent and damaging market failure in the social sphere.

The work of it

The question of the day is what is the nature of work. Not work for which you receive a salary, but the work necessary for public production. Bill Green, professor of history at Augsburg College ponders this question in an interview with Cathy Wurzer of MPR. Here, the topic at hand is the toppling of a statue of Christopher Columbus. But it is his inquiry into determining whether such activity counts as work or whether there is some other commitment which is required to, in this case, neutralize the negative historical impact on minorities, which is interesting.

Without a definition, the wild west of interpretation has been unleashed. The loudest claimants promote their version: You must march on Washington! You must forego your police force! You must forego your career (as in the case of senator Al Franken). But did any of these three events materially contribute to the advancement of a single minority or woman? Or could we equate them more readily to exposing, hence a marketing of sorts, of the issues.

Why even does it matter whether we give work some shape, outline its boundaries? Let’s take the Women’s march on Washington in early 2017. It is reported that 470,000 people showed up in our nation’s capital. Many more across all the states. But we can assume that say 400,000 in Washington traveled to get there. So let’s say the whole weekend took 48 hours of their lives. Now say the median hourly wage in the US is $18.5/hour. So for two days of work these folks contributed the equivalent of $296 x 400,000=$118.4million. Use your own numbers, but it is a lot of cash.

The women marching in the photos don’t look destitute or oppressed. They are not themselves in need. They are there on behalf of others. And I believe their intentions were sincere. They undoubtedly felt this was work towards their cause. It just seems like they could have better used the $118.4 million to secure housing for a single mom and her elementary school child, for instance. Or part of that $118.4M could have guaranteed vocational training and mentorship for girls coming out of a foster home setting. There are so many gaps in the chain of needs.

It reminds me of the foreign aid packages from years gone by. They were intended to feed the poor, but the poor rarely saw a trace of it. The work done in a public sphere requires the parties to touch, to interact, to engage in a transaction of a public nature. All this cancelling and marching and firing is just drumming up a bunch of grandstanding.

Messing with Time- Disney

Disney has added a warning at the beginning of its classic films (Lady and the Tramp, The Aristocats, Dumbo to mention a few) to pre-empt them from being torn down, ripped up or cancelled in some fashion. The disclosure is basically a reminder that society changes over time.

While these cartoons do not represent today’s society, they are being presented as they were originally created, because to do otherwise would be the same as claiming these prejudices never existed.

Does Disney have the cultural capital to quell the mob? To take away the quills from the Robespierres before they write another dozen orders of destruction?

As groups decide how to proceed with the statues that were gingerly removed after 90 odd years of barely any note, I hope they look to Disney for more than just entertainment. Because remembering the past is vital to understanding the work that needs to be done to step up the stakes for tomorrow.

I’m not sure if Disney’s common sense approach will work. To point out that one might not agree with the actions of decades gone by seems too simple. To remind people that, should they feel embarrassed, disappointed, or enraged with the habits of their forefathers, they can use those sentiments to forge a better future; that the future is in their hands, not the dead guy on the pedestal.

Time will tell.

The Nobel Prize

Today the Nobel Prize in economics was presented to Paul Milgrom and Robert Wilson who developed auction theory and auction design. The Nobel Prize site provides an excellent background for understanding their work. Interestingly, this includes a differentiation between the common value of a good and the private value as a key feature. Where the definition of a private value is defined as one achieved when the bid decision is made independently of any other bidder in the auction.

The 1996 Laureate in Economic Sciences, William Vickrey, established auction theory in the early 1960s. He analysed a special case, in which the bidders only have private values for the good or service being auctioned off. This means that the bidders’ values are entirely independent of each other. For instance, this could be a charity auction for dinner with a celebrity (say a Nobel Laureate). How much you are willing to pay for such a dinner is subjective – your own valuation is not affected by how other bidders value the dinner. So how should you bid in this type of auction? You should not bid more than the dinner is worth to you. But should you bid lower, perhaps getting the dinner at a lower price?

The explanation goes on to describe the theory of common value.

Entirely private values are an extreme case. Most auction objects – such as securities, property and extraction rights – have a considerable common value, meaning that part of the value is equal to all potential bidders. In practice, bidders also have different amounts of private information about the object’s properties.

The portion of the bid that is devoted to the common value is based on a projection of what the bidder feels others will pay. Thus to have better knowledge is advantageous. Here the familiar diamond trader example if used.

Let’s take a concrete example. Imagine that you are a diamond dealer and that you – as well as some other dealers – are contemplating a bid on a raw diamond, so you can produce cut diamonds and sell them on. Your willingness to pay only depends on the resale value of the cut diamonds which, in turn, depends on their number and quality. Different dealers have different opinions about this common value, depending on their expertise, experience and the time they have had to examine the diamond. You could assess the value better if you had access to the estimates of all the other bidders, but each bidder prefers to keep their information secret.

Now if the diamond traders are from a tight knit community, say of the Jewish faith, than all those in the faith are included in the advantageous bidding environment. The information is public information within the group, private to those at the exterior. This type of diamond trader group is used by sociologist James S. Coleman in his famous treatise from 1988, Social Capital in the Creation of Human Capital.

Wholesale diamond markets exhibit a property that to an outsider is
remarkable. In the process of negotiating a sale, a merchant will hand
over to another merchant a bag of stones for the latter to examine in
private at his leisure, with no formal insurance that the latter will not
substitute one or more inferior stones or a paste replica. The merchandise
may be worth thousands, or hundreds of thousands, of dollars. Such free
exchange of stones for inspection is important to the functioning of this
market. In its absence, the market would operate in a much more cumbersome, much less efficient fashion.

Coleman stresses the benefits of assurances. Assurance which can be given due to the greater knowledge of the stones, their quality and source of origin. Coleman says:

Observation of the wholesale diamond market indicates that these close
ties, through family, community, and religious affiliation, provide the
insurance that is necessary to facilitate the transactions in the market. If
any member of this community defected through substituting other stones
or through stealing stones in his temporary possession, he would lose
family, religious, and community ties

Coleman concludes that there is value in this. His view is that value lies in the social ties, or the social network, which parties to the transaction are able to access.

Another more recent use of the Jewish diamond traders appears in a paper by Barack D. Richmond, How Community Institutions Create Economic Advantage: Jewish Diamond Merchants in New York. In this case the value retained by the group are derived from an ability to enforce contracts. Here’s an excerpt from the paper, bolding is mine:

The particularly interesting feature of this system is the economic role
of ultra-Orthodox Jews. The ultra-Orthodox provide critical value-added
How Community Institutions Create Economic Advantage 415
services that add significant efficiency to the system of exchange. They work
as skilled diamond cutters whose polishing increases the sale prices of stones,
and they play the essential role of middlemen brokers who match certain
stones with the buyers who most value them. Their unique credibility provides
the Jewish merchants with a comparative advantage over rival merchant groups
that lack such community foundations, and their role identifies limitations
to public contract enforcement that persist even in developed economies.

When courts fail, community institutions can arise to fill their place.

Here’s what we know from these three uses of the Jewish diamond traders example. All three feel the group has created some type of value—not to anyone individual but a blanket of value across the group. This value has something to do with how the group is connected, how the information flows through its membership. And that there is a commitment to maintain a standard of enforcement.

What is exciting about Milgrom and Wilson’s differentiation of private and common value is that there is a tie-in to price. An auction bring buyers and sellers into a marketplace. And the values that these two new Nobel Laureates observed reflect activity of a private nature and that of a common nature.

As pointed out in previous posts the categorizing of goods as either private or public (or club and common) is inadequate. My first post here introduces the idea that a haircut can have a public (common) component. And I also wrote a post about national defense as there are many examples of how this public good was used to the benefit (privately) of a sub-group. The long and the short of it is that goods are goods. It is how they are employed, by what types of groups, which determines the portion of their price derived from a private sphere and that derived from a public sphere.

Changing Priorities in the Neighborhood

Crime has been on the rise since May of 2020. In Minneapolis more than 400 people have been shot and 64 killed so far this year. It’s common to hear residents say they know more people that have been carjacked in broad daylight than have contracted Covid-19.

One neighborhood is organizing to do something about it. When a building in their neighborhood was slated to become a Salvation Army run women’s shelter, the moms went into high gear. Their priorities had changed and the folks in Near North weren’t going to have bureaucrats telling them what they needed.

Residents were vigorously opposed. A Mother’s Love went door-knocking in a multi-block radius of the Gordon Center and found no one knew about the proposal. The Northside Residents Redevelopment Council—the official neighborhood association—filed an injunction to halt the process.

Council member Ellison showed up. Elected in 2017 on the promise “to imagine a future for the North Side authored by North Siders,” he apologized for poor public engagement and encouraged constituents to lay out their concerns. “I don’t at all take skepticism of this project as, like, an attack on homeless women,” he assured them.

Frustrated residents pulled no punches. There were already three homeless shelters within a mile of the Gordon Center, yet the North Side had been without a sanctuary for at-risk youth since the 1980s, they said. Many community-led proposals for the Gordon Center had been rejected over the years.

The residents, who were organizing on their own time, objected to the shelter not because they weren’t sympathetic to the cause. It’s just that in the ever changing landscape of neighborhood needs, the effect of increased crime was more damaging to the youth than the needs of the women.

“I’ve lived here for 43 years,” said Willard Hay resident Esther Adams. “I’ve seen kids shot on this corner, I’ve seen kids killed on this corner. We’re just trying to help the kids here.”

In addition to the granular differentiation of need, the resources necessary for a youth center is thought to be considerably less than the homeless shelter.

The Gordon Center (homeless shelter) will cost more than $4 million to convert into a shelter, but peace activists like Clemons’ group, A Mother’s Love, believe it would cost considerably less for a youth center because of the way the building is designed. For one, it already has a playground.

In this case the system worked. The neighborhood did the work to voice a preference between services for their group. It was close though. The building permit had already been approved for the homeless shelter. If the moms had been too busy to put in the time, or their council member too distance from his constituents or the county’s ambition too strong, there could have been four shelters and no youth center.

It just seems like there should be some general tracking of these things by neighborhood. A hospital wouldn’t go into an area with three other hospitals. Even a McDonald’s wouldn’t have four franchisees within a mile of each other. Some sort of indexing of the mix of services provided to not only serve residents, but also to be sure that various age groups and household formations are being supported.

Who is NOAH anyway?

It was three to four years ago when the acronym NOAH (naturally occurring affordable housing) started appearing in presentations and in print. The sale of a 698-unit apartment complex in Richfield, a modest first tier suburb adjacent to South Minneapolis, and the subsequent fallout from tenants having to relocate in light of the new owners’ ambitions to rehab the ailing structure, brought this situation into focus. The term emerged from the realization that there can be a time when both landlords and tenants benefit by rents low.

Analysts talk about housing like it is a static product. How many units are for rent, with how many bedrooms, and how many square feet. People talk about housing as if the most interesting thing about it is its physical parameters. But properties change over time. What is brand-new, mechanically up-to-date today, becomes tired and dated in the course of a dozen years. People change over time too. A single adult transitions into married life and a family changing their housing needs.

Housing structures have a cycle. New means no repairs but new also means (relative to comparable used properties) the most expensive. As properties age they can become dated and repairs can start to be overlooked. Usually used properties are supporting some mix of these two: the roof is new but the furnace midcycle; the counters are granite but the appliances from a decade gone-by.

Wear and tear and maintenance can also vary depending on the tenants. A drive around any large University campus will show off some student housing that is a little worse for wear. And some landlords are better than others at keeping up on property demands. It can be that the owners are at a later stage of their investment and are happy enough to keep doing repairs instead of replacements, and ignoring the dated carpet runners in the hallways. As long as their renters are happy with stable rent, all parties allow the property to age.

Keep in mind the economics of the lower rent. The owner, by letting improvements slide and just getting by on minimal repairs, has in effect allowed the building to decrease in value. The lower rent is a transfer of building value to the renters. The decreased building value in the open market attracts an investor who is then motivated to do the renovations. And with this the new investor attracts renters who can pay for them.

This most probably describes the evolution of the large apartment complex in Richfield. Other expenses can also impact an owner’s decision to sell.

Dickens sees NOAH threatened across the region, and said landlords get no choice when property values — and thus taxes — rise. Maintenance costs and upkeep also climb, with costs typically passed to tenants.

Is it not beneficial to the community or the renters for a building to deteriorate to the point of condemnation. So the process of an investor rehabbing an aging building in and of itself is a good thing. The reality is that structures depreciate over time, and repairs can only be ignored for so long. NOAH wasn’t a discovery of something new, it just revealed a situation in the open market where both the provider of the housing and the residents found an agreeable equilibrium. For a time.

The biggest takeaway from the acronym is that there is no secret money tree that will appear and save the most vulnerable from their housing burden. NOAH occurs as a situation where an investor tolerates some devaluing of property which is then reflected in lower rent to tenants. But it cannot be sustained without the building becoming a teardown. In the end, when people can’t afford their housing expense, some other group will have to cover the difference.

Notorious RBG

Like everyone else, I’ve been consuming the articles about the life and work of Ruth Bader Ginsberg who recently passed away after 27 year on the US Supreme court. I’ll admit that I didn’t know much about her until recently. But there are three things I will take away from how she lived her life.

After graduating from Cornell in 1954 she married her husband of 56 years. A few years later she followed him to Harvard Law School.

The law dean reportedly invited the nine female students in the class to dinner and asked, “How do you justify taking a spot from a qualified man?” Ginsburg said she gave “the answer he expected”: “My husband is a second-year law student, and it’s important for a woman to understand her husband’s work.”

She was willing to make the sacrifice of sucking up a personal assault if it’s that what it took to get where she wanted to go. What if she had stormed out and held a protest and rallied a march? Would women be better off today? Instead she bowed to the expectations of her time, in order to forge ahead. She was strategizing a war plan where emotion pull many people into a street fight.

After she graduated with a law degree from Columbia, she had a difficult time landing a job with a law office. It is apparent that claims of a meritocratic system was (and still is) constrained by social norms. But Ruth Bader Ginsberg must have looked at the employer pool as a group where not each and everyone had to want to employ her. She just needed one job, one employer. And that was a courtship with the U.S. District Court.

Once again, instead of being distracted by an individual or a small set of individuals that blocked her path, she had faith in the larger community. She kept looking for where she could trade her skills instead of trying to convert each objector. She was an optimist.

When it came time to converting opinions in the court room, where she had earned stature and prominence, she used perspective. She brought the claims before the male judges in the form of claims made by men, that way they would not be biased by gender. She wrote the story in a way that they could see the work for what it was.

There’s been some really interesting work done by the scholar Cary Franklin about the men Justice Ginsburg represented when she was at the ACLU, and how when she was bringing them before male justices, the male justices had trouble believing that these guys actually wanted to take care of their elderly mothers or their children, because it was so foreign to them. So in some ways what she was doing was quite challenging to them. But at the same time, being a canny strategist – showing that men had skin in the game, and that they too were harmed by gender inequality – enlisted a broader range of allies for her.

Ruth Bader Ginsberg was a women who played the long game. And it has paid off in spades for all women to benefit. She is a true feminist.

Here is a nice photo essay of her life.

Fungible is more Fun

What does it mean for a transaction to be fungible, or non-fungible? Here’s the dictionary’s definition for the word when googled;

fun·gi·ble/ˈfənjəbəl/Learn to pronounce adjective LAW adjective: fungible

(of goods contracted for without an individual specimen being specified) able to replace or be replaced by another identical item; mutually interchangeable.”it is by no means the worlds only fungible commodity”

Wikipedia talks about fungibilty in this way:

In economicsfungibility is the property of a good or a commodity whose individual units are essentially interchangeable, and each of its parts is indistinguishable from another part.[1][2]

For example, gold is fungible since one kilogram of pure gold is equivalent to any other kilogram of pure gold, whether in the form of coins, ingots, or in other states. Other fungible commodities include sweet crude oil, company shares, bonds, other precious metals, and currencies. Fungibility refers only to the equivalence and indistinguishability of each unit of a commodity with other units of the same commodity, and not to the exchange of one commodity for another.

In the sense of a transaction being fungible or non-fungible I offer the following understanding. If you buy your gas at a Holiday station, whether it is on the corner leaving your neighborhood, or the one near your place of work or the one half way to your vacation destination, the transaction is the same. One purchases a indistinguishable commodity which is paid for with some form of currency of consistent value. The transaction starts and ends in a matter of minutes. It is fungible.

Now consider a different type of transaction, one that happens in a neighborhood. Every morning nine to ten kids gather at a bus stop to catch a yellow bus to the local elementary school. School starts at 9am and ends at 3pm. Most kids stay for after school programming so their parents have a chance to get home and pick them up before heading home to pull something together for dinner.

Now say it is mid January in a northern climate, and a mega storm develops predicting twelve inches of snowfall. The schools close at noon before buses full of children slide into the ditch and the roads are gridlocked as the snowplows can’t keep up with the descending flakes. Afterschool programming is cancelled leaving working parents in a bind.

One of the parents, call her Amanda R, works third shift at the hospital, and has the means to contact everyone as the families went through Baby-and-Me classes together at the community center. She lets them know she’ll be at the bus stop to collect the first-through-six-graders and let them hang out at her house. “Drive safe!” emphasises the text.

If the families would have taken personal time from work to the tune of four hours each, that would have amounted to thirty-two work hours. (With an average wage in Minnesota at $58K/yr, that comes to $892). Amanda R doesn’t expect payment for her offer. She knows that over the course of their elementary school experience there will be a track and field day, and the third grade band concert (which only a parent can appreciate) and the fifth grade science fair and the list goes on. There will be plenty of opportunities for parents to stand in for each other.

The work Amanda R did to allow parents to stay at their jobs while keeping their kids safe from harm was a non-fungible transaction. She won’t receive any immediate payment or exchange for her time. She can’t trade those hours with another neighbor down the block. What she’s betting is that she will receive assistance many times throughout her kids’ school experience.

Certainly it might be more fun to work for cash and spend it on concert tickets or new clothes or a trip. But the beauty of non-fungible transactions is that they are held within the group and often engaged when the stakes are high.

The Trick with Triplexes

A little over a year ago Minneapolis was getting a lot of attention for ending single family zoning which secured one family home for one lot in 70 percent of the city. Politco ran a headline with dramatic vivid language of strangleholds, and further reported on how activists were taking victory laps following the City Council’s 12-1 vote to reverse single family zoning across the city. The Atlantic ran an article. And the New York Times gave Minneapolis‘s story first consideration in their article.

Yet in this first part of 2020 their have only been, drum roll please, 3 permit requests to take advantage of this up-zoning. The reason being, according to the Government Affairs Director with the Minneapolis Realtor Association, Eric Meyers, “even though new zoning laws permit triplexes, the underlying code was still written with single-family homes in mind. Height restrictions are the same, as are setback requirements.” A seemingly simple request to increase the height of a garage peak by one foot drew an extensive and heated debate. 

Since demand for housing continues to be strong in Minneapolis –the median sale price has risen 5.5% over the last twelve months– and hence the need for more housing units is unwavering, one would think that the spirit of releasing the stranglehold of the single family home would make the process more forgiving.

Emily Hamilton at Bloomberg explains it best: Want More Housing? Ending Single-Family Zoning Won’t Do It. Regulations that have been built over years won’t be undone with that quickly. Think of this at step one. Now investors are reconvening to put together documentation on the obstacles that stand in the way of the envisioned housing option. They will spend time and resources to go back through the city process and seek approval for building conversions and new builds.

Some investors will call it quits and sit out this process as they fear it is too expensive. But it is in this back and forth between the private and the public that incremental changes are made in order to achieve the goal of more housing units. And in doing so lower the cost of homes.

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