NB
- Posted by ryan on June 25th, 2008 filed in Links
I have four Firefox windows open, each with multiple tags’ worth of stories waiting to be blogged. Time for a link dump.
I’ve been ruminating on Barack Obama’s metropolitan policy speech for days now, trying to think of something to say about it that hasn’t already been said. I can’t. It’s just really good.
Peter Orszag explains how to offset distributional effects from a cap-and-trade program.
I found this story on the Houston economy fascinating. The city is booming on the back of high oil prices, as you might expect. The interesting question is, how sustainable is this? In a planning sense, obviously–the city is building massive amounts of exurban housing (though it also deserves credit for its ambitious transit program). But economically, as well. A boom in one sector of the economy vacuums up resources from other sectors. If the petroleum economy sucks all the air out of the labor and investment pool, then what happens when the boom ends? In Gulf nations, growth in oil services has led to lagging productivity in other sectors. If this oil boom is predicated, in part, on the long-term decline of the oil business, then what does the future hold for Houston?
Someone should write a play about James Hansen. Here’s a guy who put his finger on the problem of global warming 20 years ago. He’s patiently argued his view for two decades, during which time the world has grudgingly come to accept his position only to fail to take action, even as the act of delaying has made policy responses more expensive and less likely to prevent significant damage. And now even the folks on his side are asking him to pipe down, as his colorful and aggressive policy recommendations are sure to offend the shrinking violets of the “serious” policy establishment. Why the guy doesn’t start yelling that we’re all too fucking stupid to live is beyond me.
Germany has been named the world’s greenest country in a report by BP (?). The Germans cut energy consumption by 5.6 percent between 2006 and 2007, all while racking up impressive growth relative to the rest of the developed world. This, by the way, is how things are going to go if the American Scenesters get their way. While they argue that climate legislation will be too expensive or ineffective, other nations around the world will continue to enjoy economic growth even as they cut energy consumption. The triumph of conservatism!
And Ian Dew-Becker and Robert Gordon quite effectively make a point at which I’ve been hammering away since this blog’s inception–that growth in inequality has multiple roots.
June 25th, 2008 at 8:03 pm
Dude, Buckminster Fuller was talking about “peak oil” back in the 1950s. They practically had is ass committed for heresy. You need to check out “Nine Chains to the Moon” RIGHT NOW. It’s called “ephemeralization,” doing more with less.
June 25th, 2008 at 9:30 pm
RE: Houston
I could be totally wrong about this but wouldn’t Gulf nations have had their non-oil sector productivity problems exacerbated by issues with exchange rates, monetary policy, and labor mobility? I’m not saying the boom-and-bust cycle is good for Houston but surely they’re a bit more buffered than your average Gulf nation.
Having said that the most depressing place I’ve ever been was Pampa, TX, which had been through far too many trips on the roller coaster of oil.
June 25th, 2008 at 10:46 pm
I found that article on Houston interesting. There were a couple statements from Houston’s boosters about how diversified Houston’s economy was. One was laughable, the other was quite eye opening. The laughable comment was that, and I paraphrase here, that only 50% of the Houston economy was based on energy, which still seems an awful lot. But I suppose not very different from Detroit or Los Angeles or San Francisco in some ways. But these are all classic boom and bust cities. SF tends to move from one big thing to the next. Still very cyclical.
The other comment was that Houston has more engineers than any other metro area. And these aren’t just oil engineers, but people who know and understand the entire field of energy — from sustainable production methods to hydro to fossil fuels. That the energy economy in Houston is not just oil. Add on to that the marketmakers — the bankers and energy traders that have wide-ranging knowledge of the financial side of energy and you begin to see a culture in Houston as being the worldwide leader in all facets of the Energy industry. That’s a very different picture than the 1980s.
Houston’s downtown is allegedly booming as well. With newer and denser homes in the central city. And a new transit system. Sure it’s no New York, but it is a changing place. Add to that a very low cost to build (in part because of nearly zero zoning) and you have an average house price of $175K (!)
June 26th, 2008 at 8:55 am
Houston doesn’t have to deal with terms of trade or monetary issues, it’s true. And its human capital base should keep it from utter collapse, a la Detroit, when the bread and butter industry goes away.
But this will still be troublesome for the city. The oil business takes up all the best office space, hires the best people, bids up the cost of business services, bids up the cost of living (either by pushing up housing prices or, in Houston, increasing congestion and commute times). To grow other sectors, there has to be room to develop agglomeration economies.
You see this in the District, as well. Downtown Washington just isn’t very diversified, because firms connected with the primary business of the town are willing to pay exorbitant rents, and it makes no sense for other businesses to pay for access they don’t necessarily need. The thing about that is, we’re probably not approaching peak government.
June 26th, 2008 at 9:53 am
Houstonian here. A few thoughts:
1. We really aren’t building tons of exurban housing. Like elsewhere, the downturn (and our downturn has been mitigated by super-fast job growth) is worse in the exurbs, so we have excess inventory there and hence not a lot of new building. Actually, we are building a ton of both mixed-use and urban high-rises, not to mention a lot of urban apartments.
Examples:
http://www.regentsq.com/index.swf
http://www.chron.com/disp/story.mpl/business/sarnoff/5448931.html
http://www.chron.com/disp/story.mpl/business/sarnoff/5137314.html
http://www.2727kirby.com/?keywords=%7Bkeyword%7D&z5=3162&keywords=2727%20kirby&creative=1450849485&gclid=CPKW06yfkpQCFRGHQAod6xIJtQ
2. I don’t think the bread-and-butter industry is going to “go away.” Certainly, at the margin the world will shift away from fossil fuels, but they’ve got to shift into something, and a lot of that is here too (especially wind). But of course, cars didn’t have to go away for Detroit to suck…but I do think Houston is better prepared (much bigger, at least somewhat more diverse, and as you say, much more white-collar).
3. As for inflation, it is a big, big deal for labor costs here, no question. Petroleum engineers are making $80k starting out, and the situation is really bad for energy specialists (lawyers, accountants, etc.) too. But I haven’t really seen any pass-through to other services (maybe due to immigrant labor?). Baseball games, traveling Broadway shows, concerts, restaurants (you can get a really nice meal in any cuisine for $30), etc. remain really cheap here compared to other cities (even Detroit, where my folks live, which really should have seen more deflation than it has). And even total housing+transportation costs are low given that we have a few distinct job centers (downtown, Galleria, Greenway, Airport, Energy Corridor, etc.) rather than everybody needing to get downtown all at once.
4. You’re right that traffic is bad, but honestly, it’s better than in New York, Chicago, LA, and probably DC (haven’t been there to know).
5. Obviously this growth rate is not sustainable (and indeed has ebbed somewhat over the past year), but in the meantime, it’s kind of crazy to see. The Galleria (really high-end mall) is always a zoo, to the extent that traffic there is so bad that I don’t go. But on some level, traffic is a good problem to have. Whenever my parents visit from Detroit, they are blown away by the number of people, well, out and about. There is a real vibrance right now that makes Houston a very fun place to be.
June 26th, 2008 at 10:19 am
“obviously–the city is building massive amounts of exurban housing (though it also deserves credit for its ambitious transit program)”
These are not being done by the same governments or municipalities. You would never say that DC was building housing in exurban Virginia, or give credit to PW County for Metro’s Silver Line.
It annoys me to no end when people on the coasts blame the liberal urban governments of Sunbelt cities for the bad decisions being made by communities outside of their jurisdiction.
June 26th, 2008 at 10:25 am
It’s just short-hand. I should make it clear that there are lots of governments in play, but that gets a bit cumbersome in a one paragraph blurb.
June 26th, 2008 at 1:33 pm
you can’t say ‘area’?