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Showing posts from July, 2008

Less Driving Is Killing Public Transit

I've been using public transit in Cleveland for years. Until this summer, it was generally pretty busy, but never outright packed. Nowadays you need to board near the beginning of the line, or expect to stand on a full to capacity bus. Some of the regulars are getting frustrated; obviously demand for public transit services are up and numbers support the anecdotes, so basic economics would dictate that more buses should get put on the road to meet the increased demand, right? Unfortunately, that isn't how it works, and ironically, less driving is actually killing public transit across the country.

First, it is important to understand that transit agencies are not profit maximizing corporations and, therefore, are not governed by traditional economics. Plus, even if transit agencies were privately owned companies, they would probably be failing for the very same reasons that airlines are failing: the operating costs are too high and the demand for service is too elastic. Ameri…

America's News IQ

I, along with 3% of the American public, scored 12 out of 12 on the Pew Research Center's News IQ Quiz. According to Pew, the average American's score is a 50% and the average score for 18 - 29 year olds is 30%. Should I be proud of my knowledge of seemingly obvious world news events? Or should I be depressed that America knows so little about the world we live in? I've never taken a single class where a 50% was good enough to pass. Pew has done numerous studies which show common American ignorance and I blogged about them last April and last July. Nevertheless, every time Pew (or anyone else) confirms these findings, it always manages to disappoint me.

No We Can't!

About two weeks ago, T. Boone Pickens unveiled a bold energy plan, a new website (, and hired an online marketing company to help make it go viral. Frankly, I'm impressed. The plan isn't perfect, but it is really the first comprehensive plan put forth by someone with the authority and resources to get it done. In a nutshell, this video shows what Pickens wants to do:

Over the past two weeks, I've read a lot of criticisms and backlash to the Pickens Plan. I don't think the arguments are particularly good, but their existance demonstrates something important: even though almost everyone agrees that we need an alternative to the status quo, finding the plan that we can all agree on is going to be painfully difficult. We have adopted a "no we can't" attitude - rather than showing excitement about possible solutions to our energy problem, we have become pessimistic about anything less than the miracle solution. The criticisms of the Pickens …

Election Market 2008

Last week, Newsweek made a big stink about their newest presidential election poll. According to their results, Obama had dropped from a 15 point lead over McCain to only a 3 point lead. More importantly, Obama's approval among independents dropped from 48% to 34% - ouch. Given those results, we might expect the election markets to reflect more money moving into the McCain contract and more money moving out of the Obama contract. Has it happened?

It looks like Obama's contract is still near its high...

And McCain's contract has really been hurting...

The Newsweek poll shows Obama ahead of McCain at a 44-41 margin; the Intrade market has Obama ahead of McCain at a 65-31 margin; that is quite a discrepancy. Granted, we're comparing apples to oranges, as the Intrade market follows who the money things will win the election and the Newsweek poll simply asks who a "likely voter" would vote for. Nevertheless, the Intrade numbers might indicate that the el…

Economics of Restaurant Tipping

Restaurant tipping... it's a topic everybody has an opinion about; it's a strange cultural phenomenon in the United States; and it's one that I feel is misunderstood economically. I realize that this is a highly emotional issue, and many with disagree wholeheartedly on some of the questions surrounding tipping, I just hope to present my case from as purely an economic standpoint as possible.

What You Are Paying For
Profit margins in the restaurant industry (excluding bar sales) are generally razor thin. The price on the menu is barely enough for the restaurant owner to cover the cost of the food, rent, labor, and other overhead. Speaking of labor, most employees in restaurants make close to the legal minimum wage. Servers make well below minimum wage, $2-4 per hour, depending on the state in question; therefore, they rely on tips to make up the difference. Even then, some of that tip money goes to bussers, hosts, and other employees; if you tip on a credit or debit card, som…

Conservatives In Disguise

In the past few months there have been two instances of seemingly progressive proposals, which, at their core, are nothing more than right-wing agendas in disguise. Both of these cases occurred in places I know well - the first in Dallas, Texas, and the second in Washington DC. With conservatism in the United States becoming increasingly unpopular, it is interesting to see how the right is framing issues to generate support for them.

Welcome to Highland Park, Texas - the ultra-rich suburb of Dallas. If you can't afford a million dollar home, an expensive car for your kid to park in the public high school's parking garage, or membership to one (or more) of the local country clubs, Highland Park probably isn't for you. The city is 95% white and has an average median income 300% higher than Dallas, its neighbor on three sides (the fourth border is shared with University Park; the two cities, referred to as the 'park cities' are bordered on all four sides by Dallas). Th…

Still Obsessed with Hummers

Here is something that makes me sad... I came across the Associated Press produced graph today, which shows that Hummer sales were stronger this year than they were at the turn of the century (the fact that sales are down significantly from their peak should be consoling, but it really isn't).

In other "whats wrong with America" news, some Hummer drivers seem to be under the impression that Iran attacks would force down energy prices. It turns out that they are dead wrong. Researchers are saying that Iran strikes could lead to destabilization in the region (specifically Qatar) and push oil prices to approximately $300 per barrel. As absurd as that might seem now, consider this: oil has increased about 475% since the beginning of the Iraq war; at this point, the idea that a second war could push prices up an additional 110% really doesn't seem too crazy at all.

I Love TED!

No, TED is not a person... TED is an annual conference held in California, who defines its mission as "ideas worth spreading". Basically, TED is a gathering of the smartest people in the world to discuss ideas about the world. Until about two years ago, the conference was only open to those who were lucky enough to be on the invite list and who had several thousand dollars to pay in membership fees. The fact that it took TED as long as it did to make its talks available to the public is somewhat mind boggling to me, as these are the talks that can truly change the world.

Nevertheless, now hundreds of talks are available on, with new ones added weekly; they cover just about every topic in the book, from poverty to music to business. My video iPod is loaded with dozens of TED talks, and so far I have to say there hasn't been a single one that has disappointed. With as much ignorance as there is in the world; with corporate media making it more difficult than ever to…