Thoughts on Uber

Yesterday, my boss came out in favor of a deregulated vehicle-for-hire industry which would allow companies like Uber to operate in San Antonio. The San Antonio Express-News ran a B1 story on his proposal this morning. This is from his post on D8 Dialogues blog on the subject:

Currently, San Antonio lacks the regulatory flexibility needed to unleash innovation in the transportation industry. Even though City Council recently amended Chapter 33 of the City Code, which regulates vehicle-for-hire services, progress and marketplace disruption demand that we revisit its contents.

To open the doors for innovation in the transportation-for-hire industry, the City Council should adopt policies that: 1) level the playing field; 2) encourage competition; 3) ensure public safety and consumer protection; and 4) provide access for all of our residents.

Two years ago, I wrote an op-ed for a political commentary site outlining my views on the subject:

Uber exists as a mechanism to streamline processes, making urban transportation more convenient for every party involved. Uber has even used market forces to protect the public (a novel concept!) because consumers know more about a driver because of information available about each driver on the app.

Critics of Uber are ostensibly attempting to “protect the public,” but are actually just safeguarding their own…oligopolies of urban transportation. 

My time working for Councilman Nirenberg has changed my perspective slightly, but I wholeheartedly support his proposal.

Unintended Consequences of US Housing Policy

In this morning’s Wall Street Journal op-ed page, Michael Milken makes a compelling argument that federal policies designed to increase home buying hurt the middle and lower classes.

The American culture of consumption is exacerbated by policies that encourage home buying:

[E]xtensive tax advantages, no recourse against the borrowers’ nonresidential assets if they walk away, and typically no protection for the lender if the borrower prepays the loan to get a lower rate.

Compare our culture on this front to those of other countries:Im-from-the-government

By contrast, according to CLSA Asia-Pacific Markets, middle-class households in 11 Asian nations spend an average 15% of income on supplemental education for their children—nearly as much as the 16% spent on housing and transportation combined. Americans spend only 2% on supplemental education and 50% on housing and transportation.

Then there is a regulatory apparatus that, despite its best intentions, leads to inconsistent enforcement:

Consumers can sue if the volume of loans to any racial group or aggrieved class differs substantially from loans to other groups. No intent to discriminate is required, and it’s illegal for a mortgage application to ask the borrower’s race. Financial institutions trying to avoid making bad loans by implementing prudent underwriting practices can inadvertently get in trouble. A bank forced to pay a fine one year because it irresponsibly made “predatory” loans to people with bad credit can be fined the next year for not making similar loans.

What’s a better solution?

Rather than hold or securitize mortgages, Fannie and Freddie [should] retain only a limited role as secondary guarantors. With the government as a backstop and private capital risking the first loss, mortgage interest rates would undoubtedly rise. But the taxpayer subsidy would fall. It’s a reasonable trade off to transfer risk from taxpayers to investors and let the market determine rates.

What could we do with that tax revenue? Build an “infrastructure of opportunity” by investing in new roads, better education, and improved health.


Habits and New Year’s Day Links

The gym will be unbearably crowded today. That’s good, though. I hope that some folks make a habit out of their resolution tohabit exercise more. I can personally attest to one of the primary themes of Charles Duhigg’s The Power of Habit, which I started rereading yesterday:

Typically, people who exercise start eating better and becoming more productive at work. They smoke less and show more patience with colleagues and family. They use their credit cards less frequently and say they feel less stressed. It’s not completely clear why. But for many people, exercise is a keystone habit that triggers widespread change.

Some links

Luke O’Neil laments the changing media landscape in Esquire:

This conflation of newsiness with news, share-worthiness with importance, has wreaked havoc on the media’s skepticism immune systems. It didn’t happen out of nowhere, it’s a process that’s been midwifed by the willful blurring of the lines between fact and fiction on the part of a key group of influential sites, that have, unfortunately, established a viable financial model amid the wreckage of traditional media.

Theodore Roosevelt was appointed NYC Police Commissioner at 36.
Theodore Roosevelt was appointed NYC Police Commissioner at 36.

Theodore Roosevelt came up through New York City politics. Roosevelt biographer Edward Kahn gives some advice to Mayor Bill de Blasio:

The new mayor must avoid self-righteousness and be willing to work with political opponents. Liberal or progressive groups in New York…have tended to adopt a shrill tone of moral superiority that played poorly to a wide audience. But Roosevelt was willing to compromise and build alliances beyond his base…Even when he targeted trusts as president, Roosevelt didn’t wage war on American big business. “The captains of industry,” he said in a 1901 address to Congress, “have on the whole done a great good to our people.” Praising your opponents before hauling them before the Supreme Court was classic Roosevelt.

Law professor Glenn Reynolds decries the stupidity of zero-tolerance policies in schools in USA Today:

When your kids attend schools like these, they are under the thumb of Kafkaesque bureaucrats who see no problem blotting your kid’s permanent record for reasons of bureaucratic convenience or political correctness.

But then again, according to Allison Benedikt, you are a bad person if you send your children to private schools:

Whatever you think your children need—deserve—from their school experience, assume that the parents at the nearby public housing complex want the same. No, don’t just assume it. Do something about it. Send your kids to school with their kids.

Ken White’s rebuttal to Benedikt’s limousine liberal manifesto:

I want to minimize the ability of people like Alison Benedikt, who tend to encrust government, to tell me how to raise my family or live my life. I believe in free expression, free worship, free conscience, personal responsibility, the rule of law, strictly limited government (and the strict limitation of people with clipboards and people with guns and badges, thank you very much), and that the best society is one in which free people make free choices, not one in which you allow the Alison Benedikts of the world to make the best interests of your children subservient to the best interests of a collective imagined by a smug self-appointed elite.

There seems to be mass hysteria when it comes to the so-called “student loan bubble.” In the Journal of Economic Perspectives, Christopher Avery and Sarah Turner conclude otherwise:

The claim that student borrowing is “too high” across the board can—with the possible exception of for-profit colleges—clearly be rejected. Indeed, media coverage proclaiming a “student loan bubble” or a “crisis in student borrowing” even runs the risk of inhibiting sound and rational use of credit markets to finance worthwhile investments in collegiate attainment.

The Grinch on Broadway and Links

1526434_353920764750966_1767807648_nWe came across some last-minute tickets to Dr. Seuss’ How The Grinch Stole Christmas! The Musical at The Majestic Theatre last night. I misplaced my Playbill, but the actor who played the Grinch knocked my socks off.

There’s nothing quite like a night at the theatre followed by a self-indulgent Romeo y Julieta with Angel’s Envy on the Hotel Valencia balcony. Some of our fellow patrons thought I was a server, which amused me. A glass with a dab of bourbon in one hand and a half-smoked cigar in the other. If anyone can find a job where that behavior is acceptable or encouraged on the clock, let me know. Here are some links:

Rachel Held Evans examines why many biblical literalists tend to focus on homosexuality rather than other biblically-condemned acts:

Though it affects more of us than we tend to realize, statistically, homosexuality affects far fewer of us than gluttony, materialism, or divorce. And as Jesus pointed out so often in his ministry, we like to focus on the biblical violations (real or perceived) of the minority rather than our own.

Johns Hopkins professor David Lampton examines a shift in China’s governance in Foreign Affairs:

According to the German sociologist Max Weber, governments can derive their authority from three sources: tradition, the qualities and charisma of an individual leader, and constitutional and legal norms.

China…has gone from being ruled by strongmen with personal credibility to leaders who are constrained by collective decision-making, term limits and other norms, public opinion, and their own technocratic characters. As one senior Chinese diplomat put it…”Mao and Deng could decide; Jiang and the current leaders must consult.”

So I’m a huge fan of The Great Gatsby, The Wolf of Wall Street, and Leonard DiCaprio. Rachel Syme compares the two 2013 films in the New Yorker:

In Fitzgerald’s narrative, Gatsby dies for our sins, for the sins of the men and women floating about like moths through his blue gardens who can hit and run in cold blood and live to play polo another day. In Belfort’s, it is Belfort causing the car accidents (and the helicopter accidents, and the yacht accidents), and he walks away without so much as a scratch. Scorsese leaves it up to the audience to be Carraway, to recoil in horror at the debauched behavior of the rich and run away from the theatre with a nauseous feeling and a raging hangover. And, of course, this is where the whole thing runs into trouble.

robin_hoodUniversity of Arizona professor Lane Kenworthy argues in Foreign Affairs that the political future of the United States is inevitably socially democratic:

There is surely a level beyond which public social spending hurts economic growth. But the evidence indicates that the United States has not yet reached that level. In fact, the country is still probably well below it.

[C]lear thinkers on the right will eventually realize that given Americans’ desire for economic security and fairness, the question is not whether the government should intervene but how it should do so. An expansion of social programs would not necessarily mean more government interference in markets and weaker competition.

George Mason economist Don Boudreaux worries about redistribution, but not because he is greedy:

Do you [proponents of ‘redistribution’] not worry that creating government power today to take from Smith and give to Jones — simply because Smith has more material wealth than Jones — might eventually be abused so that tomorrow, government takes from Jones and gives to Smith simply because Smith is more politically influential than Jones?

I once read a passage in my Constitutional Criminal Procedure seminar that satirized the Court’s interpretation of privacy and the Fourth Amendment. I can’t find it for the life of me. But Rebecca Rosen discusses the gist, albeit far more solemnly, in The Atlantic:

We daily convey our information to third parties — Google, our cell-service provider, Facebook. For most people in America today, eschewing disclosures of this kind would leave them unable to go about their daily business. Can it really be that participating in life, the economy, and society require a forking over of one’s claim to a ‘reasonable’ expectation of privacy?

Advice to Graduates

Five years ago, I graduated from Texas Tech. Five years. Unbelievable.

I never much enjoyed the commencement ceremony platitudes: find your passion, shoot for the moon, etc. Great advice and all, but it always felt like something out of a Hallmark card.

college graduation
The day I graduated from Texas Tech University

Mitt Romney said something that I wish I would have heard at 22 in his address to graduates of Southern Virginia University:

When you are living to the fullest, beyond yourself, beyond comfort, life is most full and exhilarating.

NPR Planet Money asked several economists what they would say if tapped to speak at a ceremony.

Russ Roberts, whose podcast I listen to weekly, said:

Don’t take the job that pays the most money. Nothing wrong with money, but it’s the wrong criterion for choosing if you are fortunate to have a choice in this not-so-great job market. People often confuse economics with anything that is related to money as if the goal of economics is to make you rich. But the goal of economics is to help you get the most out of life. Money is part of that of course, but usually there are tradeoffs–the highest paying job has drawbacks. Don’t ignore those. So take the job that is the most rewarding in the fullest sense of the word. Sure, money matters. But so does how much you learn on the job, how much satisfaction it gives you and whether it lets you express your gifts. The ideal is to find a job you love that still lets you put food on the table and a roof over your head. You spend a lot of time at work. Don’t do something you hate or that deadens your soul just because it pays well.

Time is precious. One of the simplest but most important ideas of economics is the idea of opportunity cost–anything you do means not doing something else. Don’t spend all of your leisure on email and twitter and entertainment. Keep your brain growing. Listen to Planet Money. Read a novel. Take a cooking class or keep working at that musical instrument.

Finally remember the question Mary Oliver asks in her poem, The Summer Day:

Doesn’t everything die at last, and too soon? Tell me, what is it you plan to do with your one wild and precious life?

You don’t have to answer that question today. Or even tomorrow. But time is precious. Find a way to use your gifts. If you don’t have any gifts, invest in finding some. If you have some, invest in improving them.