Economics

"How asinine, job-killing regulations are holding Detroit back"

Needless to say, this should be fixed.

However, even if states successfully reform their licensing laws, cities like Detroit will stand in the way. Detroit licenses about 60 occupations, imposing extra fees and requirements on top of existing Michigan licenses for about half of these occupations. The other half of the occupations that Detroit licenses are not licensed by the state at all.


"Reforming land use regulations"

Edward Glaeser summarizes his research on zoning regulations and recommends reforms.

Arguably, land use controls have a more widespread impact on the lives of ordinary Americans than any other regulation. . . .

But most productive parts of America are unaffordable. The National Association of Realtors data shows median sales prices over $1,000,000 in the San Jose metropolitan area and over $500,000 in Los Angeles. One tenth of American homes in 2013 were valued at more than double Minimum Profitable Production Costs, and assuredly the share is much higher today. In 2005, at the height of the boom, almost 30 percent of American homes were valued at more than twice production costs.  Our painful housing bust eliminated some of the affordability problem in our most expensive areas, but that problem has returned.


"'Blame United,' 'Blame Deregulation,' and Other Fallacies"

Yet another very nice piece by Megan McArdle.

Oh, come on, isn’t this just that old right-wing cliché that markets always produce the best outcome? People acting in their own personal self-interest can often make everyone worse off, including themselves.

Collective action problems certainly exist, and that’s one reason we have government. But a collective action problem is not just “something that makes a minority unhappy”; no system makes every single person better off. A true collective action problem is one in which collectively restraining destructive individual instincts can make everyone -- or at least, a substantial majority of people -- better off.

In the airline market, I see no evidence that there is even a large minority of customers who are willing to bear substantially higher costs for the sake of substantially better service.


"The Economics of Aliquippa, PA, and the Evolution of S.L. Price"

John Tamny reviews a recent book on the rise and fall of Aliquippa, PA and the Jones & Laughlin steel mill that was a vital part of the town. In this time of laments from some quarters about the "loss of manufacturing jobs" I was glad to see this bit as it is something I've long thought:

As Price writes toward book’s end about the Jones & Laughlin Steel Company’s (J&L Steel) Aliquippa-based mills that used to employ thousands, “Nobody grew up with the dream to work such jobs.  They were filthy, boring, exhausting grinds, a drain on health, a daily assault on the senses.” Getting right to the point, parents worked in the mills so that their children wouldn’t have to


"The reason government spending is a disaster"

Short piece by John Crudele illustrates why it is so difficult to control government spending. If you try to micromanage--don't spend money on X--the bureaucrats will tend, as here, to redefine X

If, on the other hand, you just take a meat ax to the overall budget of an agency, the agency will respond by cutting the one or two most popular activities it undertakes, sometimes known as the "Washington Monument" strategy. (If you cut money going to the national parks, the Park Service threatens to close the Monument.)

Lesson #1: don't spend the money in the first place.

Lesson #2: if you did, you have to have a lot of guts, guile, and patience to cut.


"California high court sets stage for major pension ruling"

Nice piece to catch you up to date on the potential changes to government pensions in California.

Battle lines are drawn. The unions claim that state and local agencies may not reduce any pension benefits. Pension reformers – and the courts, in recent decisions – say that while a reasonable pension remains a right, that doesn’t stop localities from reducing some things. These cases deal with pension-spiking enhancements and the purchase of airtime – controversial and somewhat limited practices. But the future of pension reform is on the line.