Economics


Growing Cities, Growing Wealth…

It seems pretty straight forward that if you increase the rate of human interaction the opportunity for wealth creation will also increase. Now there has been some additional quantification of this phenomena:

Cities have an almost magical ability, spurred by increased human interaction, to stimulate innovation and increase wealth.

If this is the case it would seem appropriate for state and local governments to focus their energies* on infrastructure elements that will increase human interaction. Instead they seem to spend a massive amount of effort on building more roads (an oft failed commons), on allegedly decreasing the time it takes to get from place to place.
Shouldn’t they, rather, be focusing on eliminating cars from large segments of cities so that barriers to interaction such as autococoons, freeways, ever lengthening trips to the store, and commutes are minimized?

Via Speedmaster.

Update: See this article on commuting in the New Yorker. Via Buzz Anderson.

*To the extent it is appropriate for them to focus on anything beyond public safety and maintaining a judicial system.


Fructan You

Or, how to get medications into your colon when needed.
Oral delivery of drugs to treat colon ailments is made problematic by the normal actions of the stomach and small intestine. There is a promising new approach to solving this problem:

Researchers at the University of Guadalajara, in Mexico, have discovered that fruit compounds taken from the blue-agave plant used to make tequila can be employed as an effective method of delivering drugs to the colon. …
It has been known for many years that the blue-agave plant contains a polysaccharide known as fructan, a polymer of fructose. The compound is not hydrolyzed in acidic environments, such as the upper digestive tract, and it’s therefore able to reach the intestine fully intact.

They do not say whether the new medication delivery systems will work better with or without salt and lime.
Hmmm, and will increased demand for the blue-agave for medical purposes drive up the price of tequila?
You bet!


Card Check Voting and Unions

There are plenty of words being spilt over the Empoyee Free Choice Act and the proposed card check voting system. For instance, yesterday’s Washington Post guest editorial on this legislation. Eric Folley responds:

To be fair, the Post does say that the current system is tilted too far in favor of employers, and they suggest a number of tweaks to the system: shorter elections, greater union access to the workplace, and harsher penalties for intimidation by employers. But this seems to me to be just another way of skirting the main issue, which is: if a majority of workers want a union, they should get one. And since card check is the fairest way to determine the will of the majority, it should be allowed. QED.

He couldn’t be more wrong with respect to his main issue.
If any number of workers, a minority or a majority, want to form a union they must be allowed to do so.

What they can not be allowed to do is force any other workers to join their union or pay dues to it.


maria, Please Protect Us From the Fruit Price Gougers

senator maria cantwell in September 2005:

Sen. Maria Cantwell, D-Wash., is convinced that the oil companies have artificially increased prices and wants President Bush to have the power to cap gas prices if necessary. She likens the conditions to those that caused the Enron fraud of the electricity market in 2000 and 2001.

“My constituents are frustrated. Consumers want to know what we’re going to do about this. Consumers definitely want to know what’s going on.”
Cantwell intends to introduce legislation on Thursday that would give Bush power to investigate price gouging and, if necessary, cap price increases. She discussed her proposal Tuesday at a Senate hearing on the hurricane’s impact on rising energy prices.

From the Sacramento Union, January 17, 2007:

“We may adjust the prices as we discover the full extent of the damage next week, but for now, if you bought an orange at the supermarket for 50 cents, expect to pay a dollar to $1.49 for it,” said Todd Steel, owner of Royal Vista Marketing, which sells California citrus to markets throughout the country.

Ignoring for the moment the ill-conceived idea of giving bush the power to do anything, I wonder just how soon we will hear her complaining about price gouging by orange growers.

Hat tip: The Knowledge Problem


Trains, Planes, Roads and Ships

Kip calls senator lautenberg to task for calling for more subsidies for Amtrak:

How much more remedial can one make it: Amtrak loses money because people don’t use it. People don’t use it because people neither need nor want to use it. People are — gasp! — relying entirely on airplanes and roads.

……

So when Lautenberg says, “We cannot depend entirely on airplanes and roads,” what he really means is “I get a warm fuzzy feeling from the thought of having Amtrak, and that’s more important than any other use that you might have for your tax dollars.”

Amtrak, roads, planes (airports), public transit and shipping are all heavily subsidized at the federal, state and local levels. Non-Amtrak trains have been historically heavily subsidized.

I don’t pretend to know which mode(s) of transport would win out without tax subsidies but it is time to find out. Let’s eliminate all the tax subsidies and put the mechanisms in place to assure that the folks using a particular transportation service are paying the full cost per use.

It will take time but I suspect that we will see dramatically different answers rise up than we have seen with the centralized planning of the last 150 years.

An Amtrak like service may or may not be one of the answers.