Tag: Derek Thompson

Must-read: Derek Thompson: “How American Cities Can Make America Great Again”

Posted on by Brad DeLong

Must-Read: Derek Thompson: How American Cities Can Make America Great Again: “Even if the federal government were a monarchy…

…some of the most significant policy decisions happen at the local and state level, where federal power holds little sway. The president cannot force richer cities to raise their minimum wages above the national minimum, nor can the executive branch alone force states to spend more money on poor neighborhoods’ public schools. But perhaps the best example is America’s housing policy. As much as tax policy or defense spending can shape the economic fortunes of families and generations, people are not just products of the District’s mandates. They are also products of local geography—which is determined city by city, and block by block….

Several major cities have missed out almost entirely from the recovery. In Detroit, Memphis, and Toledo, the number of businesses declined between 2010 and 2013. In Cleveland and Cincinnati, total employment shrunk as well. In other cities… the recovery has been so frothy that the housing market is back to its pre-crash highs…. Austin, Buffalo, Denver, Honolulu, Nashville, Pittsburgh, [and] San Francisco. In three other metros, prices are within 5 percent of their all-time highs: Durham-Chapel Hill, Houston, [and] San Jose…. The return of record-high home prices in metros rich with new college grads is both an achievement and a warning. It’s an achievement, because there is a strong relationship between long-term growth and cities that assemble smart people…. But it’s a warning, too, because long-term growth requires that those people can afford to stay in the city….

There are some good reasons why expensive cities tend to be on the water. It’s hard to builds apartments on the ocean. But restrictive housing policies—for example, height restrictions and rules prohibiting the construction of new homes or multifamily housing— are a man-made tax on agglomeration, pricing smart people out of places they want to live and the places where they could best work. This, in turn, deprives some cities of the very job multiplier that Moretti hailed…. This isn’t a concern on the level of a city, but of the nation as a whole…

Afternoon Must-Read: Derek Thompson: Reads Annie Lowrey on Why America’s Essentials Are Getting More Expensive While Its Toys Are Getting Cheap

Posted on by Brad DeLong
Why America s Essentials Are Getting More Expensive While Its Toys Are Getting Cheap Derek Thompson The Atlantic

Derek Thompson: Why America’s Essentials Are Getting More Expensive While Its Toys Are Getting Cheap: “Here’s a fascinating snapshot….

You occasionally hear conservatives say that poor people aren’t really poor because, you know, they have refrigerators and TVs, don’t they? Yes, they do…. But the power to alter the temperature of your food and watch FOX is not quite the same as being rich…. Why does it seem like the least important things in life—TVs, toys, and DVD players—are getting cheap while the most important parts of the economy are getting more expensive?….

  1. On poverty: Jordan Weissmann nails it: “Prices are rising on the very things that are essential for climbing out of poverty”… college… sick[ness]… daycare…. Just as the benefits of wealth create a virtuous cycle of behavior, the challenges of poverty start a vicious circle that continues to spin down through multiple generations.
  2. On productivity: When you look at the items in red with falling prices, they largely reflect industries whose jobs are easily off-shored and automated…. Now consider education, health, and childcare, the blue sectors above where prices are rising considerably faster than average. These are service industries that employ local workers. They are not, to use the economic term, “tradable”… are mostly gaining jobs, not shedding them…. Health care, education, and childcare have entirely different products than a television or iPod. Their product is people: healthy people, educated people, and safe baby-people…