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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