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Showing posts from April, 2012

Assets and Debts

The big headline this week is that aggregate student debt in the U.S. surpassed a trillion dollars and to no surprise, it's hitting grads hard. It's now greater than credit card and auto debt. It's also something that, as a researcher of urban issues, I wish we had a better handle on.

(from HeatherMG on Flickr)
People say that student debt is "good debt", because you used it to buy something of value. People with college degrees make more money than people without them - that's not really up for debate here. Mortgage debt could also be considered "good debt" in this regard. Every month you're paying a chunk of money to eventually own a really big asset - a house.

There's one huge difference between owning a house and having a college degree though. A house is an "asset" from an accountant's perspective. It's a physical thing that sits on top of a piece of land. Both the sticks and bricks and the land are worth something (exc…

Church, Kids and the Obsession with Parking

I overheard a conversation earlier in the month by someone who felt frustrated with Easter mass because so many people go and there's not enough parking spaces, so she had to get there extra early for a choice space. A lot of urbanists write about their distaste for laws requiring minimum parking spaces, often arguing that stores, apartment buildings and restaurants have more spaces than they need and would build fewer if the law didn't require them to. Churches are one institution that get a lot less attention.

I went to a Catholic school from Kindergarten through 8th grade. The school was part of a parish that also had a sizable church. It also had a huge surface parking lot (probably 50-60% of the parish's land was set aside for this parking lot).

During recess, the teachers would take the kids outside and we would run around in the parking lot . There were balls and such, so you could play touch football or kickball or foursquare. But there was no playground and no ba…

Tax Time

In honor of tax day (which is not officially for two more days), I thought I'd make a brief comment on the complexity of the U.S. tax system. Since I've earned enough money to receive a W-2, I've always done my own taxes. At first I used the IRS's 1040-EZ form, but I've since graduated to the standard 1040 form and I do my taxes online. I'm still amazed how many people, even folks with financial situations no more complex than my own, that spend a non-negligible amount of money to have someone else prepare their taxes.

(from kenteegardin on Flickr)

This is what makes the idea of tax reform is so compelling, in theory anyway. Instead of having to go through pages and pages of questions asking really detailed and personal questions about your life situation, or paying someone your hard earned money to do the paperwork, why can't there just be a single form where you type in my income, withholdings, and be done with it?

Alan D. Viard says tax reform won't hap…


Amanda Erickson has a really great article over at the Atlantic Cities about Washington DC's efforts to get visitors to branch out from the typical tourist traps and explore the rest of the city.

(from C.M. Keiner on Flickr)

On paper, this sounds great. There's a compelling economic case to be made too - since tourists typically frequent the same attractions and restaurants, there are businesses who don't directly benefit from tourists at all. So while the Hard Rock Cafe downtown probably does 90%+ of its business from out-of-towners, there are some watering holes in DC's neighborhoods who get almost none of their business from visitors. Talk about an untapped market...

Still, tourists often go to unfamiliar cities and they feel intimidated. They want to stick to the tourist traps because that's where they feel safe. So maybe marketing cities and neighborhoods directly to them isn't the best idea. Erickson writes...
But maybe selling neighborhoods straight to touri…

Monopolistic Competition

Caitlin Kenney has an interesting video story over at Planet Money about why her wedding dress cost so much money. As someone who will soon be married, I can appreciate this. It's not just clothes, it seems like everything associated with a wedding is wickedly expensive.

According to her research, the cost of producing the dress was about $500 in materials and $200 in labor. She doesn't explicitly mention other indirect costs, like shipping from China, overhead of the retail company that sold it, and other G&A. But let's round that off to an even $300 for argument's sake. Even if the total cost for the dress was $1,000, it was still marked up over 173%!

It seems like a terrible deal, and it would truly be a rip-off if the market for wedding dresses were perfectly competitive. But it's not... The market is monopolistically competitive. In other words, you don't walk into a store, find the first wedding dress in your size and walk out the door with it. Each on…