Review: Laws of the Landscape

Laws of the Landscape: How Politics Shape Cities in Europe and America by Pietro S. Nivola (1999)

I was initially suspicious because this book comes out of the Brookings Metro series, which tends to be dominated by "smart growth" anti-sprawlers, and I thought this might be a typical tome about how Europe's far-sighted planning laws should be implemented in the US. Thankfully, the book is balanced and informative, and it manages to cover its broad topic succinctly and cogently.

The author begins by pointing out the many non-political reasons that the US is more "sprawling" than Europe. One simple explanation is population growth: from 1950 to 1996 the US added 115 million people, which amounted to a 74% increase. European countries like the UK only grew by 15 or so percent over the same period. New households everywhere tended to be accommodated in the purlieus, the US just had a heck of a lot more of them, hence more sprawl. The United States' consistently higher birthrate means we also have significantly more families with young children (about 22% of families versus 15% in European countries, and those American families with children tend to be larger). These families tend to prefer larger suburban homes, and again more sprawl.

Nivola also mentions an important though understudied phenomena that helps explain American suburban growth. Although both sides of the Atlantic received many external immigrants (still, in 2000 the US had more immigrants than all of Western Europe and Japan combined), the US had a lot more internal migration inside the country than Europe as a while. In the 1980s 380,000 US citizens a year moved to the South, and 130,000 moved to West. Migration across the EU, with its social and language barriers, just can't compare. And just like new families in old cities, these migrant families tended to have their new houses built in greenfields, thus further amplifying population growth sprawl.

Perhaps most importantly, Americans have long had more cars than Europeans, and thus more suburbs, for the simple reason that they were much richer. Even back in the 1920s, 30 years before the Interstate Highway Act or other purported "government-subsidized" auto programs, 56% American families already owned a car. Many European countries wouldn't reach that level of auto ownership until the 1960s or even 70s.

There are also simple environmental explanations for our scattered metropolises. For most of the twentieth century we had cheaper, home-grown energy than Europe, which had to import most of its oil and gas (Nivola doesn't mention it but in the 1950s the United States produced 60% of the world's oil, over 5 times Saudi Arabia's proportionate production today). We also had much more land, and less concerns about crowding and concentration. Given all these facts, it would be shocking indeed if America wasn't much less dense than Europe (for example, our cities are about 1/4 the density of Germany's).

Still, Nivola examines the usual political bugaboos, like the highway trust fund and gas taxes, that purportedly make the US even less dense, but he is mainly agnostic as to whether or not these are a "bad" things. He seems to view sprawl itself as something of an inherent social bad, but he also seems to recognize that most of it comes out of free market choices, and that many European anti-sprawl regulations may do more harm than good. For instance, the European farm subsidy per hectacre is over 10x that of the US's (the Japanese level is 183x the US's!), and no economist defends that, but that subsidy certainly has a tangential effect of depressing residential housing growth. Another unfortunate reason for European compactness is their seriously anti-competitive retail regulations, which punish larger stores with bigger workforces by requiring them to have limited operating hours and more labor regulations. The result is small, local stores, but with shorter hours and higher prices.

The author's solutions for some of America's sprawl problems are eminently reasonable and would probably garner the consent of almost every economist, focusing as they do mainly on the problems that bedevil the inner city and drive out residents, rather than the qualities that attract families into the suburbs. He demands the real reform of the unfunded federal mandates that burden large local governments (the 1995 Unfunded Mandate Reform Act did no such thing), a program to improve schools in the inner city by limiting the power of teachers' unions, a reform to the US litigation bonanza that burdens smaller businesses that are less able to defend themselves, and better policing to fight inner city crime. One of his proposals, equalizing the tax deduction of employer-provided parking and transit (he cites a maximum of $170 a month for parking and $65 for transit) has actually been gradually implemented over the years until the 2008 Stimulus bill finally equalized them at $230 a month. Charter schools and Quality-of-Life policing are also helping to further some of his other reform proposals as we speak.

So overall this is a solid discussion of a topic that tends to engender more passionate screeds than empirical reflections. For that we should be grateful.

An Obama Settlement that Destroys Black Opportunity

It was well-intentioned no doubt, but the recent consent order the Department of Justice entered against two mortgage lenders, AIG Federal Savings Bank and Wilmington Finance, will hurt poor and black homebuyers and help no one except a few government lawyers.

Under the settlement these two companies (both, importantly, subsidiaries of AIG) will have to pay $6.1 million to 2,500 African-American borrowers who the DOJ claims suffered from discriminatory high prices and fees for their mortgages (they will also have to pay $1 million towards general financial education. First lesson: don't piss off the government). The real rub here is that these companies did not originate these discriminatory mortgages, but only bought them from local brokers who themselves were putatively discriminating. The settlement is the first to argue that national mortgage lenders are liable for the policies of these entirely independent brokers. DOJ claims that the lenders should have monitored these brokers and used "statistical analyses" to make sure they were not unwittingly discriminating against minorities.

The whole case suffers from false and anachronistic reasoning.

Before branch banking deregulation (implemented gradually by states in the 1980s, and across state lines with the 1994 Riegle-Neal Interstate Banking Act) many areas did have only one or two small community banks. These banks had short hours, conservative lending policies, and almost no competition. State and national rules against establishing branch banks meant they had a kind of de facto monopoly for their target area, and the profit cushion that arose from that monopoly meant they could comfortably ignore loans in poor and minority areas and focus mainly on high-quality white mortgages. This was the era of what was called 3-6-3 banking. Namely, borrow at 3 percent, loan out at 6 percent, and be on the golf course by 3 o'clock. Today, as evidenced by these subsidiaries of an international conglomerate, mortgage brokering is a worldwide affair, and everybody must compete to originate mortgage loans. The open market means that if one bank tries to discriminate against blacks by offering too high prices, then another can jump in and make the profit on a lower-priced loan. If all lenders in a market are discriminating, someone else can start making loans to minority borrowers. This is a classic example of how, as Nobel Prize winner Gary Becker has shown, competition decreases racial discrimination, because it makes discriminating both more expensive and less enforceable.

So what about DOJ claims that blacks suffered higher mortgage rates and fees despite having similar incomes? Unfortunately, years of scholarship have shown that blacks tend to default at significantly higher rates than whites with similar incomes. A September 1999 study by Freddie Mac showed that blacks with approximately $70,000 a year in income have worse credit histories than whites with around $25,000 a year income. Gary Becker himself showed that if banks were discriminating in mortgage lending, one should see lower default rates and higher profitability among loans to blacks, because banks would pick only the most credit-worthy minority applicants. Instead you see the reverse, high default rates and lower or equal profitability among loans to blacks.

The reasons for high black default-rate are legion. Less saved wealth, more variable job histories, and the relative absence of two-earner (and two parent) families all contribute. And all of this is, in some way at least, certainly the end result of years of racial discrimination and segregation. But it definitely does not show that mortgage bankers today are actively discriminating against minorities. Interestingly, nobody in the DOJ or elsewhere seems to argue that these well-educated bankers and mortgage brokers bear a particular animus against blacks that somehow manifests itself through charging them slightly higher fees on loans. Most people today would rightly say that that is ridiculous (yet this kind of assumption lies behind the endless press reports on mortgage discrimination and the housing crisis). Instead, the contemporary enforcers of racial housing laws claim that "cultural affinity problems," or some other unstated mechanism, cause bankers to underestimate black credit-worthiness and therefore overcharge for loans. Of course this doesn't explain why Asians have lower default rates or why black-owned banks appear to practice similar "discrimination" against black borrowers as white-owned banks, but no government lawyer appears interested in explaining this, and of course they don't have to because these cases never make it in front of jury. It almost always makes sense for accused companies to just settle and make nice with the government which regulates them and can cause them even more trouble in the future if the want to get fiesty. In this case it makes particular sense because these two companies are directly owned by AIG, and are therefore directly owned by the government that is supposedly suing them. Settlement in this case was a foregone conclusion.

This brings to mind the arm-twisting that accompanied the auto bailout, where then TARP-controlled banks caved into Obama's demands that they write off billions of dollars in secured loans on the GM and Chrysler debt so that the Democratic-friendly unions could get a bigger cut of the pie that emerged from bankruptcy (UAW illegally got 17.5% of GM and 55% of Chrysler). It also brings to mind Obama's consent decree with Westchester county, where the administration explicitly used the threat of removing HUD funds to force them to sign a decree that now forces counties across the country to allocate affordable-housing funding based on race. The administration knows that its discretionary power over federal funds allows them to force new policies sub rosa without enacting new laws. Of course, this is exactly why untrammeled political discretion over the economy is dangerous: it forces citizens and companies to bow to demands which help political friends but hurt the broader public and the rule of law. Unfortunately in the mortgage discrimination case, the effect may be even more destructive in the long-run than any of these others, because this forced settlement (with a government-owned bank subsidiary) will allow the DOJ to browbeat the rest of the private-sector with a nice signed and certified consent order in its hands. All mortgage lenders using independent brokers now exist under the Sword of Damocles.

I of course agree with these DOJ lawyers that banks should not be allowed to explicitly use race as a factor in making loans, but the problem is today almost any metric that can somehow be correlated with race ends up being a potential liability for the companies that use it. If zip-codes or job histories or credit scores correlate with race, the racial discrimination squad can use a couple easy regressions and show how a mortgage lender is secretly out to destroy black homeowners. The end result is that almost any measurement used to calculate loan rates is subject to lawsuit, and now this is true even if an independent broker makes a non-discriminatory loan without any broader statistical background. Just the gathering of such loans together in a company is dangerous, trying to rate them by chance of default is even more so. In this way this settlement works much like the recent credit-card bill, which also operated under the assumption that most borrowers were equal and banks should use fewer measurements to determine credit risk. Of course, in both cases this will lead the banks to raise rates for everyone and cut off credit to the poor. This is also the exact same logic that caused our nation's housing crash. Despite all the platitudes about learning from history, the administration is now forcing more bad, under-priced loans on banks, telling them its all for the best in the long run. But intentionally making banks dumber about the loans they make is not a path to credit stability.

In my mind though, the greatest tragedy of this settlement will be inflicted on the black homeowners it was designed to help. The increasing dangers of liability will cause more and more lenders to retreat from making loans in minority areas, ironically causing exactly the sort of redlining these laws were originally designed to prevent.

It's the same old law of unintended consequences.

(PS For those few people following this blog, I apologize for the long absence. I should return to making more regular posts during the next few months).

The Dangers of the Commuter Tax

Today, Washington Post editorial writer Colbert King offered an interesting eulogy to his former boss, Senator Charles McCurdy Mathias, a Republican from Maryland. Mathias was truly a non-partisan in the old mold, a Republican who helped pass both the 1971 Federal Election Campaign reform law and the 1973 War Powers Resolution. But King also mentions a little known political tactic Mathias employed along with former Washington DC mayor Walter Washington...

Washington and Mathias had a routine based on their mutual needs that they would employ from time to time. Both men told the story of how Washington would ask, "Now, Mac?" And Mathias would reply, "Not now, Walter, I'll tell you when."

When political troubles seem to be stirring in the Maryland suburbs, Washington would publicly call for a commuter tax (which would have been impossible to pass) - allowing Mathias to "defend" his constituents by denoucing the idea.

This would be followed by a call from the Senate: "What can I do for you up here on the Hill, Walter?" Mac would ask. And the city's budget would sail through.

Of course the commuter tax is like catnip to DC residents and kryptonite to DC suburbanites. Since only one of those two groups gets to elect members to Congress, a DC commuter tax will not happen as long as DC can't decide how to turn Eleanor Holmes Norton into a full-fledged representative. In fact, a commuter tax for DC has been explictly barred ever since the 1973 District of Columbia Home Rule Act (which Mathias also helped pass).

Even if the political situation were different, however, a commuter tax wouldn't make sense for DC. As I've discussed earlier, commuters actually pay more than their share of local taxes almost everywhere in the nation, mainly through the high property taxes paid by their employers. Most importantly, commuters don't use local schools or social services, which in major urban cities like New York constitute over 50% of all spending.

In fact, New York City was forced to drop its commuter tax back in 1999, and in the following eight years, despite the apocalyptic screeds of the tax's proponents, the city increased its population by 4.4% and its employment by over 10%. And this while the city almost doubled its revenue to over $50 billion dollars a year (although much of this went towards projects, and pensions, few today would consider wise). Clearly the end of the commuter tax didn't end revenue flexibility for the city government. Still, the New York Times never stops trying to get that old commuter tax magic back.

Those cities which have heeded the call of the Times and other downtown papers and maintained a commuter tax (such as Philadelphia, Newark, Detroit), continually number among the worst performing and most consistently bankrupt urban areas in the nation. Philadelphia was in fact the first city in the country to impose a commuter tax, back in 1939, and it has not been a notable success there. Haughwort (2000) estimates that the city lost over 127,000 jobs just since 1970, almost 1/4 of its entire employment base, simply from the rise in the wage tax rate during those years, which at one point constituted almost half of the city's revenue. The tax now takes almost 4% of non-residents income, and that on top of state and federal income taxes. No city in the nation even comes close to that burden, or manages to offer such poor urban services in return for the vast sums it receives. Still, according to advocates of the commuter tax, those tens of thousands of lost jobs should mean that tens of thousands of commuters are no longer a burden on the municipal fisc, and Philadelphia should be booming, but of course it continues to lose population while it lurches from one fiscal crisis to the next.

Mathias's and Washington's old routine dramatizes the sempiternal conflict between suburbs and cities, but both sides should now understand that when it comes to commuter taxes, they're all on the same side.

The FTA to America: Cost-Benefit Analysis is Dead

Yesterday the Federal Transit Administration (FTA) announced what it called a "dramatic change" in the way it grants money to local mass transit systems. Dozens of multi-million dollar rail and bus projects across the country will be affected. Now the most wasteful of those projects will get a new leg-up when competing for grants.

To understand the change, however, you have to go back to June 2004, when Congress made clear in a report attached to its annual Transportation appropriations bill that FTA's New Starts grant program (from whence comes the vast majority of the $10 billion in gas taxes that goes to transit) needed to be reformed. Congress said that the criteria the FTA used to evaluate which projects got funded were abstruse and impenetrable, and that grants were obviously going to whatever eye-grabbing system politically pushed itself to the front of the line. The GAO also reported (more than once) that the FTA needed to refine the way it evaluated projects, and the Department of Transportation's Inspector General also chimed in with the growing chorus for reform. So, on March 9, 2005, the FTA released a "Dear Colleague" letter to mass transit systems across the country, stating that from then on out the administration would focus on the "cost effectiveness" of transit programs and that only projects rated "medium" or "high" in cost effectiveness would get funds. This meant that every project had to provide at least $24 of consumer benefit per hour of transit system riding.

The change may seem abstruse and inconsequential, a mere switch in the bureaucratic lexicon, but it fundamentally reshaped the way transit was funded in America. While before almost every major project that was submitted to the FTA was "recommended" for funding, after the 2005 "Dear Colleague" letter, the number recommended dropped by more than half (from an annual 27 recommended projects to 10). There was of course no change in funding, and both before and after about 5 or 6 major projects got grants every year, but now those projects that got grants had to actually show some benefits to commuters. They had to demonstrate with some real numbers how these projects would not just be "light rails to nowhere," but would carry real riders who could actually help pay the way. (Of course the riders wouldn't actually sustain the entire line themselves, otherwise they wouldn't need the grants. These lines would ultimately just be less un-cost effective than the other projects.) The 2005 Transportation Bill (SAFETEA-LU) further clarified that real specifics had to be used in evaluation.

The major effect of this was that light-rail projects got the shaft. Almost regardless of the planners or the politicians involved, no sensible report could mangle the numbers enough to make light-rail look cost-effective. While for years FTA had funded larger and larger rail-based projects (under the theory that they were more "transformational"), now the FTA looked towards Bus Rapid Transit (BRT) and small scale improvements. A 2003 transportation bill amendment that was created by Congressman Earl Blumanauer (D-OR), although originally intended to fund Portland streetcars, actually encouraged BRT by creating the "Small Starts" program for projects under $250 million dollars that allowed "non-fixed guideway" (i.e. bus projects) to be funded for the first time.

Of course the light-rail lobby has been pushing to destroy these changes, and especially cost-effectiveness accounting, ever since, arguing that vague, indefinable terms like "livability" needed to receive more weight in FTA evaluations.

With the Democrats in charge they began to see results. In 2009, the transportation bill encouraged (but did not require) more consideration of non-cost factors in FTA evaluations. And on January 13th, the Obama administration handed the light-rail lobby the final coup de grace they had been craving. The system will now drop cost effectiveness as a necessary criteria and go back to giving equal weight to the old inscrutable "six statutory project justification criteria."

It is worthwhile to note that all of these (environmental impacts, mobility improvements, "other factors," etc.) have continued to be considered since 2005, but since then those funded projects also had to be cost-effective as well. No longer. In the announcement Ray LaHood also promises to revise the criteria further to give even more emphasis to "livability." Such a change will insert even more discretion and politics into the grant-making process. Light-rail (as I've discussed before, one of the great boondoggles in modern government), unconstrained by proof of effectiveness, will further extend its march across the American landscape, drawing down not just more resources from the federal government, but also from those local governments foolish enough to build them without a thought for the long-term funding. More white elephants systems will drag down transportation budgets and snarl traffic in major American cities.

Which is a shame because Bus Rapid Transit has been showing real promise. As early as 2001 the GAO showed that BRT was much cheaper and just as effective as light-rail. And now, despite complaints that "no one ever built a building because of a bus stop," there is real evidence that BRT can spur development. Cleveland's Euclid Avenue line has surprisingly kick-started a real-estate boom along its corridor, against even the expectations of most of its planners. Also, while light-rail continuously over-estimates its ridership numbers (see the incredible Seattle Links numbers), a study of 21 BRT lines show that they consistently underestimated their ridership by 20 to 70%.

This consistent underestimation of buses and overestimation of light-rail ridership should reveal to any sensible reader that planners have a real systematic bias against buses and for rails. The underestimation of buses comes from the old saw that buses simply have a "bad image," and planners take this to mean that no matter the cost and the convenience, people simply won't ride them. Buses may indeed have a bad image, but most researchers have found that Americans have a shockingly rational relationship to transportation, and that a mere bad image won't deter them for long. Just look at the continual success of the inter-city Chinatown buses, which, against all the predictions of Amtrak, prove that millions of people prefer cheap, run-down buses to heavily subsidized rail service. The truth is that you provide anyone with a short and easy commute or trip, and they'll take it, no matter the mode. So despite all the talk of America's "addiction to the automobile" or their "romance with the rails," romance will not cause someone to cram into a subway car 2 hours a day for 260 days a year if its not a good way to get to work, and addiction will not cause someone to climb into a car if they have to pay $40 for parking for the day and they can't afford it. Americans travel a lot, and not surprisingly they are very particular about cost and convenience, and less particular about image, on their morning slog. The only place then where buses have a truly unassailable burden about "image" is in the planning community itself, which is why they manage to keep being surprised when people flock to cheap and efficient BRTs.

And if cost-effectiveness was used to evaluate these BRT projects, their benefits would continue to be obvious. The Obama administration, however, has decided to turn its back on the evidence and find new means for justifying its romance with the rails.

Blog Roll: Greater Greater Washington, of course, is totally loving this announcement, ditto The Transport Politic, ditto Streetsblog. Numerous local papers also report that this change could "help our local transit projects." See Dallas, Washington D.C.

There have to be some other cons out there, right?

The TSA and Airline Security

While blame for the recent terrorism snafu on Northwest flight 253 to Detroit has been spread fairly broadly, one government agency has become a particular target of concern and complaint, the Transportation Security Administration (TSA).

And perhaps unfairly in this case. The bomber, Umar Farouk Abdulmutallab, boarded a flight first from Lagos to Amesterdam and from thence to Detroit. Of course in Amsterdam the TSA's eternally-wearied screeners never got a chance to ruffle through his bags looking for 6 ounces of shampoo or to question him regarding his choice of footwear, so they had no feasible chance to prevent him and his underwear incendiaries from boarding that plane. The TSA does have some control over the foreign airport screening procedures for flights entering the U.S., but understandable concerns about techniques like "full body imaging" have prevented more intrusive screening procedures until now.

And one of the most scrutinized aspects of the incident, the failure to put Abdulmutallab on the so-called "No Fly List," is also probably not the TSA's fault. Although under the suzerainty of the TSA, most of the info for the list comes from intelligence agencies who were not ready to recommend that Abdulmutallab was a serious flight risk.

Other agencies perhaps had a chance to stop this, but the TSA was simply out of the loop.

Still, the sempiternal government urge to do something, anything, in the face of crisis remains, so the TSA is using the attack to further expand its already ridiculously convoluted and often counterproductive screening regimen at domestic and foreign airports and to institute a bevy of useless rules on the behavior of airlines passengers themselves. Many commentators are right to call this mere "security theater."

As usual it is the government's response to crisis, as opposed to its handling of the crisis itself, that is most disturbing here. The TSA's responses to multiple crises over the last eight years, many self-inflicted, are almost all perfect examples of poor diagnosis and misdirected effort. Although the TSA should not bear the burden of fault in this particular case, the agency has become an ever larger and more unmanageable part of the national security bureaucracy that is making us all less, not more, safe.

The History of the TSA

The TSA was created on November 19, 2001, after George W. Bush signed the Aviation and Transportation Security Act, which passed with little debate barely two months after the September 11 attacks. Here again there was the desire to do something, anything, that appeared to be "proactive" against the terrorist threat. The act created the new agency and gave them the authority to hire federal airport screeners and to direct airport security procedures.

The problem was that individual airports already performed their own security and screening prior to 2001, so the TSA didn't create any new layer of security, it merely displaced the old security workers. Previously airports contracted out security to firms like ITS and Wackenhut, and in general they did a good job of it, because, for obvious reasons, airlines and airports have a serious incentive to prevent their planes from getting hijacked or exploded.

September 11th changed this impression of general competence, however, and some blamed private security screeners for missing the terrorists. It is important to note though that the 9/11 terrorists did not get through security because of lax enforcement, they got through because box-cutters weren't supposed to set off any security bells, and up until then almost no one claimed that they should.

Still, many argued that only government civil servants, famous everywhere for their dedication, resourcefulness, and efficiency, could correctly manage the complex task of airport security.

Surprisingly to some, numerous indications show that these civil servants have not lived up to expectations.

As required by the 2001 act, the TSA allows a few airports to opt-out of the federal screeners system through their Screening Partnership Program (SPP). Those seventeen airports that have chosen to opt-out, such as Kansas City and San Francisco International airports, have been shown to be significantly more effective at detecting bomb material coming onto airlines in TSA's own tests. These private screeners missed around 20% of hidden bomb materials surreptiously snuck on the plane by TSA agents, which sounds fairly damning until you compare it to the 60% missed at TSA-run airports like Chicago's O'Hara. Another recent study by the TSA seems to confirm the same pattern.

In earlier tests from the 1990s, before the TSA took over airport security, only about 40% of the hidden bomb material made it through. This means the TSA has somehow succeeded in making airport screeners worse at their jobs after spending over 40 billion dollars during a decade of almost paralyzing fear about terrorism on airlines. Truly astounding.

One might then expect all TSA airports to escape the agency's grasp and jump on the privatization bandwagon, but expansion of the private program has been hampered due to concern that both the airports and the companies they hire might be liable for any mishaps even while the TSA is shielded by sovereign immunity. Another problem is that the 2001 act, in a clear handout to federal employee unions, requires any private contractors hired to have at least the same pay and benefits package as the TSA's federal employees. And they aren't cheap.

So instead of leading to institutional reform, the continual horror stories about bomb material, guns, and terrorists slipping past TSA workers leads politicians to fall back on the default solution: throwing more money at the failing agency. Obama, desperate to show the world that he can be just as wasteful as Bush when it comes to national security, has increased the TSA's budget by another 11% just last year, mainly with the goal of purchasing expensive explosive detection devices from a few major companies such as L-3 and GE. These would further scrutinize checked and carry-on baggage with high-tech scanning equipment, even though no major terrorist has tried to sneak a bomb on a bag for years. The 9/11 hijackers didn't, Richard Reid didn't, and Umar Abdulmuttallab certainly didn't. Still, a big budget solution has the benefit of looking "proactive."

All told, the TSA now spends over seven billion dollars a year, and it has very little to show for it. It is perhaps worthwhile to chronicle some of their more egregious failings.

This December, the same month as the Christmas bomber, the TSA inadvertently releasedits screening manual to the general public, detailing all of its screening procedures to any potential terrorist who might be curious. It also recently lost a hard drive containing over 100,000 of its employees social security numbers and bank codes. Its agents have regularly (very regularly) been accused of stealing flyers' personal items, and some have already been convicted.

Although the TSA doesn't handle all aspects of the infamous "No Fly List," its management of the list has come in for a justified amount of ribbing over the years. The list has admittedly stopped several dangerous persons from boarding American airplanes, including several Senators and Congresspersons, some children under five, marines returning from war, my own mother (a Smithsonian employee on government travel), Nelson Mandela, and, perhaps most impressively, federal air marshals sent to protect flights. One of the main problem seems to be that the List only classifies people by their names, and a similar name is enough to elicit a "match" and to refuse someone the right to travel. Of course in the grand tradition of government programs this long list of names doesn't come cheap. Merely maintaining the names-only list in its current condition, meaning listing heads of state and missing known terrorists, has cost the government at least $500 million dollars over the last 8 years.

Of course the TSA has celebrated all of these much heralded accomplishments. As early as 2004 it threw a half a million dollar party where $81,000 in plaques were awarded to its employees for their success thus far.

Errol Southers and Collective Barganing

Any and all of these problems have been exacerbated recently because the TSA has been functioning without an appointed administrator since Obama took office, almost 12 long months ago.

Of course some will place the blame for the lack of an administrator on the Republicans, more specifically on Senator Jim DeMint (R-SC), who has placed a senatorial hold on the president's nominee to head the agency, Errol Southers.

DeMint is certainly the proximate cause of the empty position, but this is merely an unfortunate side effect of having a politicized agency. Lack of consensus among elected officials can easily lead to "policy paralysis," and this can prevent an agency from either evolving or acting at all. It is not just Republican obstructionism, it is the very nature of politics running an agency such as the TSA. There is no way to prevent it.

And Jim DeMint's fear about the president's nominee pushing for the unionization of the TSA workers is certainly legitimate. Erroll Southers has refused to say whether he will demand collective bargaining for TSA employees (as DeMint says, "It seems that the only person who pays any attention to TSA who hasn't formed an opinion is Erroll Southers, the man who wants to run the agency"), but since Obama has explicitly endorsed collective bargaining it seems likely his nominee will too, in which case holding up the nomination can only be good for national security. (There is also of course the little matter of Southersmisleading Congress about using a police database to spy on his ex-wife's boyfriend, but I'll leave that to others).

As James Sherk has shown, collective bargaining has already hampered other government security agencies and it would hamper the TSA too. For one, the Treasury Employees union recently brought the Customs and Border Protection Agency to an arbitration hearing for changing security procedures without first consulting the union. Any attempt by the TSA to change security procedures in the face of a threat would bring the same result.

And the TSA's labor contracts are restrictive enough. Already airports are complaining that the TSA's work rules require year round employees, which means there are hundreds of underemployed workers whiling away the slow winter months even though the summer-time travel rush is met with understaffed lines. Collective bargaining would exacerbate these labor issues.

And the CBO has already estimated that a proposed bill which would bring TSA employees into the federal pay schedule and require collective bargaining would cost the governmentabout $700 million over five years, and that is without factoring any potential pay or benefit increases from the bargaining itself. Merely hiring the labor specialists to conduct the bargaining negotiations would cost about $61 million.

In what is perhaps a foretaste of things to come, a screener labor union's dispute with a private security company at the Toronto airport in 2006 caused the union's workers to pass almost 250,000 passengers and their luggage through the security gates with little or no screening while thousands of other individuals and their bags were extensively checked, leading to delays. AFGE blandishments to the contrary, unionization and collective bargaining would bring the same contentious relationship to the TSA.

Solutions

Ultimately, America has to give up the resource-heavy, time-wasting TSA model and try other methods of security. There is an interesting case to be made for the "Israeli model" used at Ben Gurion airport, where screeners focus on personal inspection of flyers as opposed to their luggage, but I agree there is certainly a question of "scalability" in this United States of 300 million people.

Perhaps ultimately we have to acknowledge that some terrorists will get through, and some planes will be lost. Although that may be difficult for some politicians to admit, it is a simple and unimpeachable truth. Just like we cannot protect every transit rider, ever driver, or every pedestrian, we cannot protect every plane.

And even with the current terrorist threat flying remains safer than absolutely any mode of travel.

Of course everyone knows that flying is safer than driving, but I think few people know exactly how much safer. Flying today is astoundingly safe. If one uses the most common measure, deaths per passenger kilometer traveled, airplane travelers suffer only 0.05 deaths per billion passenger kilometers traveled. That number may be hard to conceptualize, but it means that only a single passenger fatality occurs for every 450,000 trips taken by a passenger around the entire globe. If somebody took a flight around the planet every day for a 1000 years on typical commercial airliner they would still be more likely to survive than not. And flying has continually and constantly gotten safer for the past 100 years, and safety will most likely continue to improve in the future. The continual underestimation of flying safety has dangerous consequences. One Michigan study showed that fear of flying in the three months after September 11th probably led to about 1,000 deaths in car crashes due to increased auto travel. Relative to an airplane traveler, an auto driver today is about 70 times more likely to die on a trip of a similar distance.

So perhaps the best thing we as a nation can do in the wake of this incident is to remain calm and remember, despite the endless hassles on the TSA's security line, that flying is still an incredibly safe and efficient way to travel.

Film of worldwide airline traffic over 24-hours

Thomas Hoving and New York City Parks

Thomas Hoving died last Thursday, December 10th.

Most obituaries focused on his successful decade-long tenure as the director of the Metropolitan Museum of Art, where he enlivened the museum world by treating art exhibitions like movie extravaganzas. His 1969 "Harlem on my Mind" exhibit brought both multimedia pieces and political controversy to the Met unlike any previous exhibit in its history, while the 1975 King Tut tour he organized is still remembered today. How many museum exhibitors can say that 30 years later?

But the New York Times has also been heaping praise on his short reign as New York City park commissioner under Mayor John Lindsay. One Op-Ed even recommends a revival of his "Vest Pocket Park" program.

He was certainly an innovative commissioner. Replacing the dictatorial Robert Moses, Hoving claimed he wanted to take the "No" out of park signs. He created "Hoving Happenings" such as a massive game of capture the flag in Central Park, and a blank 105-foot canvas provided along with free paint for the open expression of children and adults. He lamented the then ubiquitous playgrounds, "the black-topped, link fenced asphalt prison, that standard architecture that has made the W.P.A style the longest art style of the 20th century," and demanded innovative design instead of the typical "swing, slide and sandbox stereotype."

Many of his innovations, however, have not stood the test of time.

Although the Times traced the vest pocket parks back to Jacob Riis, Hoving himself said the program was really an anti-riot and anti-crime measure, created to "keep their [black kids'] fucking minds off getting drugs and shooting each other." Instead of lowering crime, however, there is evidence the vest pocket parks exacerbated it.

It is widely acknowledged today that the money Hoving spent on vest pocket parks and Happenings redirected funds from basic upkeep and led to a rapid deteroration of New York's park system. The hundreds of vest pocket parks he created were too dispersed for supervision or regular maintenence, and within months they began to collect refuse and criminal activities. Alexander Garvin's book American City states that due to his sudden departure to the Met "Hoving never had to face the sad results of his program," which left the city with a dozens of scattered 20 by 100 sized parks that only collected garbage along with a dangerous maintenence backlog.

Yet Hoving's policies were continued and even amplified by his successor, a limousine liberal in the classic mold named August Heckscher. Heckscher actively celebrated the chaos in the park system created by Hoving's lax disciplinary policies and unconcern for upkeep. To the middle class complaining about deteriorating parks he said "If a citizen's priority goes to clean sidewalks, safe streets and polite salesclerks, he should move to a[nother] place that is content to be safe, clean, and polite." He celebrated New York City for having "the most flamboyant street gangs, the most brazen graffiti, and the most sophisticated pimps of any large city." He shockingly claimed that vandalism "was simply a way in which certain elements of my constituency used the parks. It was a form of recreation. Some people liked to sit on benches; other like to tear them up. As commissioner, I would have to accommodate myself to both types." He also said most vandals were merely attempting "to rectify an error in design or conception."

Not surprisingly, with a park commissioner who actively condoned graffiti, crime, filth, and destruction, New York's parks hit a new and terrifying nadir.

In 1971 a New York Times op-ed lamented the suddenly sordid condition of Central Park as it had evolved under Hoving and Heckscher: "In the last few years, vast areas of trodden earth havse spread like mange across the hills and hollows of listless grass...Litter overflows the baskets near the foodstands. Broken glass glints in the rocks where mica once glittered." One writer described the aftermath of a "Hoving Happening" as looking like the bathroom of a commuter train.

The vest pocket park program so celebrated under Hoving and Heckscher was suspended in 1979 after Mayor Koch came to power, and his administration sold many of the now weed-strewn lots to neighboring homeowners for mere pittances. Under Operation Green Thumb about 700 vest pocket parks were leased to become neighborhood gardens. Koch's administration also finally funded much-needed park maintenance and began to put some of those old-fashioned "Nos" back into park signs. Perhaps most importantly, Koch began the gradual transfer of Central Park's upkeep to the non-profit Central Park Conservancy, which now maintains and operates the entire park. It is today a widely admired model of privatization that has kept the park in near sterling condition for almost two decades.

Although Hoving did open up the parks to the public and accelerated some original design policies, it has taken over 20 years to undue most of the damage his short-sighted policies created. It is well to remember that along with all the eulogies.

Highways, Transit, and User Fees

Perhaps the most contentious and long-lasting debate in the world of urban planning is the debate pitting highways against transit as an urban investment, and the related debate about whether highways and/or transit "pay for themselves."

Even after I began to look more towards free-market solutions to current problems, I was a fervid believer that highways were the grandest giveaway in the federal government, that they represented a hand-out to cars paid for by the general taxpayer, and that they would sooner or later bankrupt the nation. These truisms are repeated endlessly in books like Suburban Nation by Andres Duany and Elizabeth Plater-Zyberk, and The Geography of Nowhere by James Howard Kunstler, and a host of new media sites. I thought free-market principles should demand an end to the hand-out.

It was only gradually, after I saw the numbers and read the papers, that it became clear to me that highways more than paid for themselves through user fees (gas tax, diesel tax, sales tax on wheels and trucks). There really shouldn't be any debate anymore. The U.S. Department of Transportation simply keeps the numbers on this.

Their stats show that federal and state "user fees" pay for 72.5% of the 171 billion dollars spent annually on road work in the United States, including highway policing and safety and including local roads and cul-de-sacs. If you take out the locally administered roads that comprise 30% of all spending (and which are accessible by bikes and any other vehicle and which tend to be paid for through property taxes or impact fees on the builders) and just leave highways, they more than pay for themselves through user fees.

Transit on the other hand tends to pay less than 25% of its total costs through user fees, mainly fares, but parking and ad revenue too. (See the 2008 Data Tables, sections on Operating and Capital expenses (Tables 1 and 7)).

Transit costs about 36 billion annually in operating expenses along with about 16 billion in capital expenses (but most transit agencies inexplicably include maintenance as a capital expense). Only about 13 billion of those dollars, though, are raised through fares.

A good chunk of the rest of transit's costs are born by federal and state gas taxes and highway user revenue redirected to transit. There is just no truth that transit is bled to subsidize roads. In fact it's the exact opposite. On a federal level 20% of all gas tax revenue goes to transit, and even if this didn't come directly from cars it is massively disproportionate to the 1% of total annual passenger miles that are traveled by transit users. The past 30 years have shown a continually larger percentage of total revenue directed at transit while transit has required ever larger subsidies per rider and has become an ever smaller percentage of total travel. All the trends are bad for transit and getting worse. From about 3% of all passenger miles traveled (PMT) in 1970, transit dropped to 1.5% in 1980 and to lower than 1% today. That's while the "fare-box recovery ratio" of transit has dropped, steadily, from almost par in 1970 to about 25%. And while cars have gotten significantly more environmentally friendly, expelling almost 95% less noxious fumes and using less gas per mile than 40 years ago, transit fuel use has increased on a PMT basis over those same 40 years, to the point where buses now use more fuel per PMT (measured by BTUs) than the average passenger car, and subways use almost as much. Even with the massively disproportionate subsidies these trends will undoubtedly continue.

After all the ballyhoo in the papers (which, as some have noted, are almost always based in the transit-dependent downtowns of old central cities) with the increase in transit ridership in 2008, they hardly mentioned the significant decrease in transit ridership in 2009. There was more than one paper that prematurely declared 2008 the end of the auto-era, and the next slight blip up in transit ridership will certainly occasion more of the same. The number of papers that only report the upswing (not the downswing) in transit ridership is so great that if you type in "decreased transit riders" in Google, you receive numerous article which explain how higher fares and lower subsidies decrease the number of riders, while typing "increased transit riders" gives you dozens of news reports on the 2008 increase, and none on the 2009 decrease.

Now some will say that transit is a public good and that therefore the government should subsidize it. But a highway is a public good too, and in fact a whole host of things can be considered "public goods" that need to be subsidized if one starts being creative. A restaurant can bring more retail traffic to an area and thus benefit other shops and the public, internet connections can increase the size of a network and thus increase returns, etc. etc.

And this is where the Public Choice approach is helpful. If a liberal is able to identify a "public good" or a "market failure" their assumption is simply "OK, just let the government do it and correct the market failure." But there is no reason to believe that publicly elected officials have the incentives to match benefits with costs or that they are able to magically "correct" failures through their exceptional foresight which alludes private actors. In fact, there is reams of evidence that their attempts to "fix" market failure lead to worse economic solutions because they are dominated by interest-group politics and political considerations, not, of course, cost-benefit analysis. In most cases there is no good way to measure the amorphous "public good" that arises from any subsidies, so the political debate revolves around which group can donate the most to which politician and which group can grab the most subsidies or the most headlines. It's just a horribly mis-placed way to direct resources. The result is all these terribly designed subways and light rail lines (see LA's purple line, or DC's Anacostia streetcar, or Charlotte light rail or just about any federally subsidized line) that go to the middle of nowhere because that's where landowners have the most clout and that's where construction companies wanted to build and that's where some politically connected community development corporation had offices, etc. etc.

But if one still thinks transit needs subsidies, and one still thinks politicians are somehow able to vote for the "correct" amount of transit subsidies, what is the correct amount of subsidies? Is 75% of the cost too high, or too low? Is it 35%, 50%, 90%? Once you start talking about vague public goods, there's no good way to decide. I've come to realize that most of these transportation issues are fundamentally boring accounting questions that politicians and politics simply aren't good at answering. Some liberals talk glibly about "market failure," but then always assume just throwing it into Congress or the state legislature will somehow correct the situation without realizing that political economy has its own rules too, and that no one seriously thinks they are conducive to good economic outcomes.

In the case of transit, almost any public good redounds to local landowners along the path. They receive an un-earned increase in land-value, and the only way therefore to see if transit may be a worthwhile investment in areas where it needs a subsidy is to allow landowners along the path to pay for it. If transit has positive externalities to local landowners, then they can create a Special Assessment District to fork over the costs. The closer a government is to the costs, as in SADs, the better it is able to evaluate the value of an investment and the less likely it is to be lobbyist-dominated.

A private business, of course, is the most sensitive to costs and benefits and the least susceptible to outside pressure, because they have their own money on the line. After all, highways that are privately built, operated, and funded tend to be more heavily used because the operator is looking at recovering costs, not pleasing different constituencies based on their political heft. Just look at SR 91 in Orange County. Privately run roads provide more innovations and more customer satisfaction than government-run ones. If transit was also privately operated, or at least unsubsidized (as it was not so long ago), I have no doubt there would be substantially less transit in this country, but those transit systems which were left would be more efficient and better designed to benefit the general welfare.

Transit advocates are fond of talking about the "unsustainability" of the American highway system, but after looking at the numbers, it is clear that it is the ever-growing subsidies towards transit which are unsustainable, returning as they do less and less bang for their government-funded buck, with ever more expensive and ever more empty subways, trains, and buses. It's time to start looking for different solutions.