TSMC Arizona back on track, drawing arrows on graphs, the downsides of inclusionary zoning, why people hate inflation, and interesting ideas about market power
You write that "well-meaning regulations can end up accidentally stacking the economic deck in favor of megacorporations" but this idea has been around for a long time, so why continue to assume that the effect is accidental. A more reasonable assumption might be that the motivating force behind most new regulation is precisely to stack the economic deck.
There’s something else going on with inflation. Loss aversion. Since retreated gains and losses differently, a 10% increase in your wages is nice, a 10% increase in the grocery bill is disastrous.
On point three, if inclusionary zoning was applied with consistently and certainty, one would expect the impact on developer returns to be reflected in lower land values. There is some evidence that is the impact of what we call S106 affordable housing contributions in England, which deliver approx 50 per cent of all affordable units at a level which can be as high as 35per cent of a development in high value locations, such as London.
Quit a lot of potential problems in using means tested assistance to take the strain. In an American context, what is there to stop a landlord refusing to let to assisted tenants on the ground they are more of a rent risk or their existence in a development may reduce its attractiveness to higher income renters?
Important issue that deserves more debate and a wider evidence base.
On the arrows on graphs piece, you are correct to question the implied trend at the end of the series. Another way to look at it is the rate of change implied by those arrows, which is only seen once during the data set, from 80 to 84. And it took 60 years to see the overall change implied by those arrows.
On why people hate inflation, I've discovered that what I've thought since the 1980s inflation is called the 'sawtooth wages model of inflation'. Basically, with annually determined wages and inflation, people's experience for all the time except the annual pay review month is falling purchasing power of wages. Where there is intended annual indexation, but also a lag in implementation, this produces falls in real earnings over time.
“ First, it forces the developers/landlords raise rents for the rest of the units”
Developers and landlords don’t control prices they charge what the market will bear. I know you know this but it’s a huge issue with anti-development folks. They think landlords control prices.
It came out during the pandemic when rents in NYC and SF plunged. You’d ask someone who thought landlords controlled prices and they had no explanation for why prices plunged when demand plunged. And don’t get me started on demand staying the same while supply rises.
On #5, I work in data and having to deal with GDPR has made me realise what libertarians have been complaining about this whole time. Definitely raises costs (not even including the millions of years people have spent clicking stupid cookie banners) and for minimal benefit to users.
An analysis of the supposed cost of regulation is pretty meaningless absent a calculation of the cost of not regulating, which itself often fails to capture the harms that regulation tries to mitigate or avoid. These are externalities for the most part, which is why corporations rarely undertake the modifications mandated via regulation voluntarily. Auto manufacturers vehemently opposed the imposition of rules mandating seatbelts and airbags but the benefits from requiring them are manifest yet nowhere reflected in the cost of regulation calculation.
RE:IZ, I think the case we have to make is that it should always be a “yes, AND, but” thing.
Advocates feel too strongly about this one to let it go. And the idea just makes too much sense to normies - even if they’re mistaken about it - for us to win a campaign to inform the normies about it.
So, the first answer has to be “yes”. Sure. Any zoning reform will do in a housing crisis. It’s not all going to be solved today.
The next answer has to be “AND”. We need to make the case to normies that IZ alone is not enough to get the job done. The crisis is simply too deep. IZ is only at best going to protect a few people at the bottom from the worst of the crisis while the rest of us dig our society out of the massive hole.
ONCE we’ve done that, THEN we can get to the “but”. We explain to anyone who will listen that IZ is counterproductive. In the long term, we shift what normies consider “common sense” so that we can get to a point where IZ is considered a dumb distraction in 100 years when we have the next major housing crisis.
Re #2, a tangent on "non-white vote share" is that the composition of "non-white" has changed substantially over the decades... So it's a little misleading - especially for the slow growth in GOP share shown up to 2020.
Another negative feature of rent control is that landlords tend to spend less on upkeep to maintain profit level. After 10 years or so, the effect can become quite obvious.
Concerning Below Market Rent requirements: this seems like the 10000th example of where the Left is strong when it comes to caring about how the unfortunate fare, and weak when it comes to grasping the importance of incentives.
In general this whole blog is an example of the ups and downs of government interference in markets. An example of the damage bad policy for “good” ends up harming the very people government seeks to nurture.
There is a vast difference to requiring safety regulations for vehicles and roads to subsidizing markets. When passing legislation with some industrial policy in mind but then adding DEI, minority, and social requirements it doesn’t make the actual goal easier. It makes it harder. First of all industrial policy which lately is killing off the internal combustion engine while not having a replacement market completed is leading to issues with consumers. Joe Biden and his climate activists have set in motion the death of the Big Three automakers. They’ll survive if they can sell EV SU’v’s and Trucks for $60k plus but if they have to build a profitable $25,000 EV, they’ll die. They simply don’t have the ability to make those smaller vehicles at a profit. China does, not the US. Most Americans will not have the funds to put fast chargers in their homes, Apartment dwellers won’t have them nor will every workplace have the. The land requirements for charging stations will cause havoc in cities that gas stations don’t. Roadwarriors having to stop for 30 min for a 80% will cause havoc with their appointments. Adding charging in to equation of factoring in traffic and drives times may well be a hill to high to climb.
Government rather than make private investment in markets more difficult should instead streamline approvals and add in less social justice goals that cannot be easily integrated. We have so tied up construction in their country many companies can no longer make predictable judgment on costs.
Inflation is not a scalar; Inflation is an n-dimensional vector that also includes assets such as housing prices.
People want to buy things such as a house.
When the currency gets devalued because of printing money --> Asset prices go up --> This is a tax on people without assets; redistributing towards people with assets.
CPI only looks at non-assets. Therefore, the 'inflation' scalar massively understates the real inflation in, for example, buying a house. Unless your CPI corrects for asset inflation, housing prices go up faster than wages go up!
The reason people hate inflation is because we aren't measuring it correctly, and it actually makes them poorer.
“In the US, a single fab, Intel’s 700-acre campus in Ocotillo, Arizona, produced nearly 15,000 tons of waste in the first three months of this year, about 60% of it hazardous. It also consumed 927m gallons of fresh water, enough to fill about 1,400 Olympic swimming pools, and used 561m kilowatt-hours of energy.
Chip manufacturing, rather than energy consumption or hardware use, “accounts for most of the carbon output” from electronics devices, the Harvard researcher Udit Gupta and co-authors wrote in a 2020 paper.”
-- The Guardian
Building chip fabs in Arizona is horrible fresh-water policy. U.S. chip fab policy funding should be contingent on building all new chip fabs in the Great Lakes corridor, the largest inland sources of fresh water, existing industrial infrastructure, and an area (Rust Belt) ripe and overdue for new job training/creation. Also, U.S. chip fabrication policy should create incentives for more trailing-edge chips to counter China’s effort to corner this very important segment of chip fabrication (autos, appliances, light industrial equipment, military, etc.
1. Has the report of the change at tsmc been confirmed? Specifically when one news story is saying another news story is wrong, I would want to be extra sure that the new one is right before concluding too much from it.
2. On the arrows on charts thing, the one about US traffic fatalities is definitely misleading in suggesting such a high rate of increase. But it’s also true that there has been an upward trend in US traffic fatalities for over a decade, even if the last few years are characterized by a spike in 2020 and then a return to trend.
You write that "well-meaning regulations can end up accidentally stacking the economic deck in favor of megacorporations" but this idea has been around for a long time, so why continue to assume that the effect is accidental. A more reasonable assumption might be that the motivating force behind most new regulation is precisely to stack the economic deck.
There’s something else going on with inflation. Loss aversion. Since retreated gains and losses differently, a 10% increase in your wages is nice, a 10% increase in the grocery bill is disastrous.
On point three, if inclusionary zoning was applied with consistently and certainty, one would expect the impact on developer returns to be reflected in lower land values. There is some evidence that is the impact of what we call S106 affordable housing contributions in England, which deliver approx 50 per cent of all affordable units at a level which can be as high as 35per cent of a development in high value locations, such as London.
Quit a lot of potential problems in using means tested assistance to take the strain. In an American context, what is there to stop a landlord refusing to let to assisted tenants on the ground they are more of a rent risk or their existence in a development may reduce its attractiveness to higher income renters?
Important issue that deserves more debate and a wider evidence base.
On the arrows on graphs piece, you are correct to question the implied trend at the end of the series. Another way to look at it is the rate of change implied by those arrows, which is only seen once during the data set, from 80 to 84. And it took 60 years to see the overall change implied by those arrows.
On why people hate inflation, I've discovered that what I've thought since the 1980s inflation is called the 'sawtooth wages model of inflation'. Basically, with annually determined wages and inflation, people's experience for all the time except the annual pay review month is falling purchasing power of wages. Where there is intended annual indexation, but also a lag in implementation, this produces falls in real earnings over time.
“ First, it forces the developers/landlords raise rents for the rest of the units”
Developers and landlords don’t control prices they charge what the market will bear. I know you know this but it’s a huge issue with anti-development folks. They think landlords control prices.
It came out during the pandemic when rents in NYC and SF plunged. You’d ask someone who thought landlords controlled prices and they had no explanation for why prices plunged when demand plunged. And don’t get me started on demand staying the same while supply rises.
On #5, I work in data and having to deal with GDPR has made me realise what libertarians have been complaining about this whole time. Definitely raises costs (not even including the millions of years people have spent clicking stupid cookie banners) and for minimal benefit to users.
An analysis of the supposed cost of regulation is pretty meaningless absent a calculation of the cost of not regulating, which itself often fails to capture the harms that regulation tries to mitigate or avoid. These are externalities for the most part, which is why corporations rarely undertake the modifications mandated via regulation voluntarily. Auto manufacturers vehemently opposed the imposition of rules mandating seatbelts and airbags but the benefits from requiring them are manifest yet nowhere reflected in the cost of regulation calculation.
RE:IZ, I think the case we have to make is that it should always be a “yes, AND, but” thing.
Advocates feel too strongly about this one to let it go. And the idea just makes too much sense to normies - even if they’re mistaken about it - for us to win a campaign to inform the normies about it.
So, the first answer has to be “yes”. Sure. Any zoning reform will do in a housing crisis. It’s not all going to be solved today.
The next answer has to be “AND”. We need to make the case to normies that IZ alone is not enough to get the job done. The crisis is simply too deep. IZ is only at best going to protect a few people at the bottom from the worst of the crisis while the rest of us dig our society out of the massive hole.
ONCE we’ve done that, THEN we can get to the “but”. We explain to anyone who will listen that IZ is counterproductive. In the long term, we shift what normies consider “common sense” so that we can get to a point where IZ is considered a dumb distraction in 100 years when we have the next major housing crisis.
Re #2, a tangent on "non-white vote share" is that the composition of "non-white" has changed substantially over the decades... So it's a little misleading - especially for the slow growth in GOP share shown up to 2020.
Another negative feature of rent control is that landlords tend to spend less on upkeep to maintain profit level. After 10 years or so, the effect can become quite obvious.
Concerning Below Market Rent requirements: this seems like the 10000th example of where the Left is strong when it comes to caring about how the unfortunate fare, and weak when it comes to grasping the importance of incentives.
In general this whole blog is an example of the ups and downs of government interference in markets. An example of the damage bad policy for “good” ends up harming the very people government seeks to nurture.
There is a vast difference to requiring safety regulations for vehicles and roads to subsidizing markets. When passing legislation with some industrial policy in mind but then adding DEI, minority, and social requirements it doesn’t make the actual goal easier. It makes it harder. First of all industrial policy which lately is killing off the internal combustion engine while not having a replacement market completed is leading to issues with consumers. Joe Biden and his climate activists have set in motion the death of the Big Three automakers. They’ll survive if they can sell EV SU’v’s and Trucks for $60k plus but if they have to build a profitable $25,000 EV, they’ll die. They simply don’t have the ability to make those smaller vehicles at a profit. China does, not the US. Most Americans will not have the funds to put fast chargers in their homes, Apartment dwellers won’t have them nor will every workplace have the. The land requirements for charging stations will cause havoc in cities that gas stations don’t. Roadwarriors having to stop for 30 min for a 80% will cause havoc with their appointments. Adding charging in to equation of factoring in traffic and drives times may well be a hill to high to climb.
Government rather than make private investment in markets more difficult should instead streamline approvals and add in less social justice goals that cannot be easily integrated. We have so tied up construction in their country many companies can no longer make predictable judgment on costs.
Inflation is not a scalar; Inflation is an n-dimensional vector that also includes assets such as housing prices.
People want to buy things such as a house.
When the currency gets devalued because of printing money --> Asset prices go up --> This is a tax on people without assets; redistributing towards people with assets.
CPI only looks at non-assets. Therefore, the 'inflation' scalar massively understates the real inflation in, for example, buying a house. Unless your CPI corrects for asset inflation, housing prices go up faster than wages go up!
The reason people hate inflation is because we aren't measuring it correctly, and it actually makes them poorer.
“In the US, a single fab, Intel’s 700-acre campus in Ocotillo, Arizona, produced nearly 15,000 tons of waste in the first three months of this year, about 60% of it hazardous. It also consumed 927m gallons of fresh water, enough to fill about 1,400 Olympic swimming pools, and used 561m kilowatt-hours of energy.
Chip manufacturing, rather than energy consumption or hardware use, “accounts for most of the carbon output” from electronics devices, the Harvard researcher Udit Gupta and co-authors wrote in a 2020 paper.”
-- The Guardian
Building chip fabs in Arizona is horrible fresh-water policy. U.S. chip fab policy funding should be contingent on building all new chip fabs in the Great Lakes corridor, the largest inland sources of fresh water, existing industrial infrastructure, and an area (Rust Belt) ripe and overdue for new job training/creation. Also, U.S. chip fabrication policy should create incentives for more trailing-edge chips to counter China’s effort to corner this very important segment of chip fabrication (autos, appliances, light industrial equipment, military, etc.
1. Has the report of the change at tsmc been confirmed? Specifically when one news story is saying another news story is wrong, I would want to be extra sure that the new one is right before concluding too much from it.
2. On the arrows on charts thing, the one about US traffic fatalities is definitely misleading in suggesting such a high rate of increase. But it’s also true that there has been an upward trend in US traffic fatalities for over a decade, even if the last few years are characterized by a spike in 2020 and then a return to trend.