New American Paradigm

Global Warming Costs Illustrated

If there is one thing I hope to accomplish one day with this blog, it's convincing a few people that their simplest choices can have devastating consequences for someone somewhere else in the world.

For example, the mining practices used in Africa to power our laptops and cell phones probably resulted in someone's death.  Either the minerals are used to fund wars the way West Africa diamonds once did, or the environmental protections are so lax that people are poisoned or simply driven from their homes.  If consumers agreed to pay just a little more, computer makers could pay more for the material and therefore afford more environmentally sound practices.

Why Are Housing Starts Up?

Some pundits are pointing to increased housing starts as a sign the economy is recovering. 

Don't be fooled.

A couple things are happening.  As Paul Krugman, Nobel Laureate economist and liberal conscience, notes, a 17% increase in next to nothing is still next to nothing.

new-home construction has come to a virtual standstill, so even large percentage changes mean only a handful of extra homes started. If we’re building 6 homes a month nationwide, and that goes to 7, it’s a 17 percent rise — but makes almost no difference in real life.

There's another issue at hand as well.  In many markets developed lots are in such oversupply they will take years to absorb.  In most cases that means banks have repossessed them from leveraged developers who cannot unload them in a timely fashion. 

Not wanting vacant land on their books, banks are selling lots at firesale prices which makes selling a new home on them competitive with existing homes.  Builders who have survived the crash but sit twiddling their thumbs have nothing to risk snapping up these cheap lots.

Once those developed lots are absorbed, there won't be any new ones for a long times with snakebitten banks reluctant to lend on such projects.

To put it another way, vultures picking at a corpse laying in the desert sun is no sign of health.

George Will Defends Sprawl

George Will is sad.  It seems he expected the only Republican in Obama's cabinet not in charge of blowing stuff up (shout-out to Secretary Gates) to be more reliably in favor of conservative principles, like the right to build whatever you want, wherever you want ugly strip malls and McMansions.  Unfortunately, Secretary of Transportation Ray Lahood, uses words that Will finds depressing like "transformational" and "Portland."

What the WHAT?  He writes:

LaHood, however, has been transformed. Indeed, about three bites into lunch, the T word lands with a thump: He says he has joined a "transformational" administration: "I think we can change people's behavior." Government "promoted driving" by building the Interstate Highway System—"you talk about changing behavior." He says, "People are getting out of their cars, they are biking to work." High-speed intercity rail, such as the proposed bullet train connecting Los Angeles and San Francisco, is "the wave of the future." And then, predictably, comes the P word: Look, he says, at Portland, Ore.

Psychology of Sunk Costs

Seth Godin provides a fascinating example of how perceptions often overpower economics.  

You have two pieces of land. One you bought for $1,000,000, one for $10,000. On which one should you develop a gas station?