Suppose Northern Illinois University, all its students, staff, and buildings disappeared

NIU campus scene. Credit: EarlRShumaker via flickr (cc)

NIU campus scene. Credit: EarlRShumaker via flickr (cc)

Well, then, that would reduce economic activity in the region.  On that basis, the University estimates the impact would be $900 million annually.  That’s figured by counting staff salaries, student expenditures, capital improvements, and the multiplier effect of each.

But of course this is a phony argument, intended to maintain the flows of tax dollars to the state’s “higher education” system. Let’s just suppose that all government funding of the University stopped. Quite possibly it could remain in operation, as lots of nongovernment schools do. But suppose otherwise.  Tomorrow morning we wake up and find that Northern Illinois University is going out of business.  And, just to keep the exercise meaningful, suppose none of the other Illinois government schools are able to pick up the slack; maybe they went out of business too, or maybe they just won’t expand.

So now there’s a big campus for sale. Would a nongovernment school want to buy it?  Or maybe one or more other organizations, such as a mental hospital, retirement community, corporate think-tank, drug rehabilitation center, penal facility, religious group, will want to buy the space?  The campus won’t remain empty.  It will be re-used or redeveloped, and that will involve an unknown (but positive) number of jobs and investments.

What about the students? It seems the economic return on college credentials is decreasing,  but surely it has some value for some people.  There are lots of colleges, public and private, looking for students.  Some students will decide to put full-time formal education aside for a time, look for jobs or start businesses.  And starting a business might be a good idea, with a labor force suddenly available.

And the faculty? Surely they’re employable, as consultants or teachers elsewhere, or doing something else.  If they really can’t do anything but teach at a government school, what necessary skills do they lack?

Meanwhile, we also need to consider the benefit to taxpayers of no longer funding the University.  How much would they save?  Or, more  likely, taxpayers would “save” nothing, but more funds would be available to cover other existing obligations, which does seem to result in some public benefit.

One more thing.  This topic was raised by a link in an email I received, labeled “What’s a state university worth to the region in which it’s located?”  That’s kind of meaningless; do we mean “to the people living in the region,” or “to the taxpayers of the region,” or “to the owners of land in the region,” or something else? And necessarily, the analysis needs to imagine what would happen in the absence of the university.  Do there exist any examples of a significant state university shutting down?  I know of none.  Perhaps a test is needed. Maybe I shouldn’t be surprised that Cold Spring Shops hasn’t commented on this.

 

Armistice Day

Perry Willis has a relevant post over at Zero Aggression Project noting that what is now designated as “Veterans Day” originated as commemoration of the end of the “Great War” (subsequently known as World War I).  It was intended not to honor those who did time in the military, but rather to remember how wars are usually started by the political class to further their own interests. Wikipedia reminds us that the word “veteran” means “a person who has had long service or experience in a particular occupation or field,” which of course includes a lot of us who never participated in the military.  He has a suggestion for renaming the holiday again, too, which I doubt will ever be enacted by any governmental bodies.

Willis notes that “Yes, Veterans Day also includes a solemn remembrance of all the young lives lost in past wars…” but he doesn’t mention that the U S already has another holiday for that.

Billionaires controlling land and other natural resources

The Resnicks who, according to Forbes, own 70,000 acres of pistachio and almond trees in California’s central valley, and entitlements to “at least 120 billion gallons of water per year” (enough to supply nearly 2 million households, by my estimate), and additional privileges.  Their assets total $4.3 billion, estimates Forbes, including not only California properties but also Fiji Water. At least the government of Fiji manages to collect some tax on the water exported.  In the U S, they’re well-connected with major politicians, and how much tax they pay is not reported.

Just another example of how fortunes are accumulated by control of natural resources, facilitated and supplemented by political favors (and, yes, a lot of hard work).

UPDATE December 27 2015: Not for the first time, the Resnicks have shared a tiny bit of their fortune with the Aspen Institute, which is thus funded by water taken from Fiji and California.  Silly me, I always assumed the Aspen Institute was in Colorado, but of course for optimal influence and convenient participation by the influential it is in Washington, DC. And, yes, among the Institute’s concerns is water supply.

People are willing to pay more than fares for transit

This is really nothing new, except that it is a new data about an old truth:

from the Econsult report

from the Econsult report

Analysis of Philadelphia suburban data shows that people are willing to pay more than fares for rail transit, as indicated by house prices in areas near the stations. These are really land prices since characteristics of the houses are already filtered out. Interesting to see that people living more than a half-mile from the station seem willing to pay more for frequent service than for extensive parking, but I wouldn’t want to conclude too much from this limited analysis.  The study considers only parking and frequency of service, nothing about travel time, availability of feeder bus, or anything else, but the main point remains.  See the full report here.

I don’t understand GovCare Part 2

image credit: Paul Narvaez via flickr (cc)

image credit: Paul Narvaez via flickr (cc)

Over at New City, Tony Fitzpatrick tells us how he survived a heart attack.  The good news, of course, is that he did, and it seems to have been due to an aware spouse, responsive ambulance, and nearby hospital with skilled and dedicated staff.  Except for the first, those are advantages of living in a more-or-less functional and prosperous city, with pretty decent emergency services, all of which is reflected in the cost of land.

But somehow, because before “ObamaCare” Tony’s pre-existing condition prevented him from getting insurance for medical expenses, he credits O’Care with his survival.  As if, five years ago, there were no ambulances, no hospitals, or no medical staff. In 2010 an ambulance still would have come, he still would have been taken to the closest available hospital, and the staff still would have done their best for him.  The only difference is that, afterwards, he would have gotten a big bill, even bigger than the bill he probably did (or will) get.  He might have paid the bill, or worked out some payment plan, or had to sign up for some kind of public assistance.  And very possibly the hospital would have written off part of the bill.  (Either way, before or after O’Care, the hospital would have a considerable staff who spent their time negotiating payments, filling out forms, etc.)

It wasn’t Obamacare, Tony.  It was living in a city with helpful people and pretty good medical services. Either way, we’re all paying for it.

And, yeah, somebody ought to make this comment on Tony’s article, but I can’t seem to get thru New City’s spam protection.  Maybe someone else can.

CTA Continues Investment in Employee Comfort

click for full article (from CTA's employee newsletter)

click above for full article (from cta’s employee newsletter) as a 1 mb pdf

Yes, transit facilities should be comfortable. Investments to improve comfort can be a smart use of limited transit funds, attracting ridership and …  oh, employee comfort.  Well, sure, it’s good that we’re past the days when ‘L’ conductors had perch precariously between cars.  And providing employees with comfortable facilities can be a cost-effective alternative to treating them with respect or paying them well — last I heard, some full-time journeyman CTA employees are paid less than $65,000 per year.  But somebody forgot about the passengers.

Observant passengers already know that CTA has hundreds of public washrooms — owned by the public, tho not accessible to them.   But in the short run [between elections] and for the most part, we are captive riders, and fares don’t provide the majority of CTA revenue anyway.

How you can get the story right about TIF’s

TIP-logoCivic Lab has a Crowdfunding project to create a series of videos explaining Tax Increment Financing in Chicago.  I’m confident they’ll do a good job of describing what’s wrong and why TIF’s, in anything like their current form, are detrimental to sound economic development.  I’m a bit concerned about their proposed fifth video: Alternatives to TIFs.  Do they understand that the way to prosperity starts by looking at what the proper function of government is, and the proper way to fund government?.

Once we recognize that government should be funded by collection of economic rent, which in a well-run city is largely land rent, we can see that elimination of taxes on productive activity will make all kinds of enterprises viable, quite likely causing a labor shortage which is they key to prosperity for working people.  I don’t know that this message will get thru in the video, but the project offers a way to do it.

According to the web site, for $1,000 you’ll get a chance to express your own idea in their video.  You could simply say that proper role of government in economic development is to collect the rent, protect the environment, build the infrastructure, operate the natural monopolies, and stay out of the way.  Just a thought for prosperous Georgists.

Storytelling can be patented

typewriter

credit: mpclemens via flickr(cc)

We already knew that computers, equipped with proper algorithms, could write stories pretty much indistinguishable from the work of professional journalists working under deadline pressure. And had I been paying attention, I’d know that the company behind this, a “spinout” from Northwestern University, is also moving into other “turn data into a story” tasks, which from the examples here seem to mainly focus on financial reporting, tho it also appears that buyers of used cars can be exposed to “automated and individualized vehicle stories” (pdf) about their cars, which presumably helps sales. And it’s no secret that In Q Tel, an affiliate of your Central Intelligence Agency, is one of several investors behind the company.

So, it’s technology, it’s government, it’s marketing– why am I surprised that it’s protected by a bunch of patents on different variations on “automatic generation of a story?” Here I am, using a computer with many automatic functions to generate a sort of story about this company, and I really haven’t time to read and try to understand all their patents. I guess I better stop before I get in more trouble.

h/t Crain’s.

Book Extract: The Pale King

image credit: Martin Heigan (cc) via flickr

Pale King (credit: Martin Heigan (cc) via flickr)

I am in no way qualified to review works of acknowledged fiction, as I read very few.  But I have been intrigued by David Foster Wallace since a Radio National commentator observed that Wallace had, in his 1996 novel Infinite Jest, anticipated the effect of the Internet. When later I learned that his final, unfinished work, which had been assembled by his longtime editor, was about the administration of the U S Federal income tax, I couldn’t resist taking a look at it.   I thought it might give some insight into how the IRS staff manage to actually patch together the mess of U S tax law and regulations to maintain something which provides the rulers with pretty good control as well as huge revenue, without causing any effective revolt by taxpayers.

No success there, I’m afraid, which is all the more disappointing because, in Chapter 9 Wallace breaks into whatever narrative structure the book has to say that, hey, here I am, a real person, and this book portrays real people and events modified only slightly.  Then he points out that on the copyright page is the statement that “The characters and events in this book are fictitious.  Any similarity to real persons, living or dead, is coincidental and not intended by the author,” which assertion necessarily applies to his statement that the book is not fiction.

Beyond that, the work is set in the 1980s, when the tax rules were simpler, with documentation and computerization far less than today. Which meant that a lot of people spent their days manually comparing  sets of figures, on return after return, hour after hour, day after day.  I suspect that in today’s IRS much of this work has been computerized, with the human staff devoting their time to other things perhaps too horrible to contemplate.

CTA railcar image by Menace of Privilege

CTA railcar image by Menace of Privilege

Too, a lot of the book is just contrary to fact.  The description of the Chicago public transportation system, to take one aspect of interest, is simply wrong.  CTA do not operate any high-speed commuter trains, nor did they ever have a station named “Washington Square.”  And it would be virtually impossible today for a passenger, with his arm stuck in the door of a crowded train, to be dragged along the platform to his death, because every railcar has long had a red handle, at every door, which any passenger could pull to open the door and stop the train (here’s why).

That said, there are some helpful insights about how the regime makes use of dullness:

[T]he whole subject of tax policy and administration is dull.  Massively, spectacularly dull.  It is impossible to overstate the importance of this feature.  Consider, from the [Internal Revenue] Service’s perspective, the advantages of the dull, the arcane, the mind-numbingly complex.  The IRS was one of the first government agencies to learn that such qualities help insulate them against public protest and political opposition, and that abstruse dullness is actually a much more effective shield than is secrecy.  For the great disadvantage of secrecy is that it’s interesting (from page 83 in chapter 9)

And the key to success in a bureaucracy:

The underlying bureaucratic key is the ability to deal with boredom.  To function effectively in an environment that precludes everything vital and human. To breathe, so to speak, without air.

The key is the ability, whether innate or conditioned, to find the other side of the rote, the picayune, the meaningless, the repetitive, the pointlessly complex.  To be, in a word, unborable…

It is the key to modern life.  If you are immune to boredom, there is literally nothing you cannot accomplish. (pp 437-438 in chapter 44)

Words, including a new one, about money

bitcoin

Image of a tangible bitcoin by Steve Jurvetson (cc) via flickr

Having heard two tremendously amusing interviews with John Lanchester (I think one was on Bloomberg and one on the BBC, tho maybe it was ABC and somebody else; in any case there seem to be lots of interviews with him floating around.) I was looking forward to reading his new How to Speak Money. I’ve long agreed with his basic point, that people talking about financial issues use a shorthand which can confuse civilians, and it would be helpful to have a glossary handy.  What he has written gets part of the way there.

The first part of the book is an introductory, making the important point that economics isn’t a science, really can’t be in the way that physical or biological sciences are.  For one thing, chemists don’t have to worry that the molecules they’re studying will read the results of prior research and decide that behaving differently would be to their advantage.  He also notes that most of the main questions of economics remain open, but at least if we are going to discuss them we need to understand what we’re talking about.  He brings up the concept of “reversification,” whereby things come to mean the opposite of the word used to describe them.”Securitization” doesn’t mean making things more secure, but more likely less so. The “Chinese wall,” which is supposed to divide functions within financial firms to prevent conflicts of interest, is in fact neither a physical wall nor an impenetrable barrier.  And it’s reversification when the “credit” is defined as the amount of debt. Read the rest of this entry »

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