5.31.2009

The Real Family Drama


You know a pop culture story is overblown when even I heard about it. Not having much exposure to the tabloids or TV, I have still heard smatterings of information about OctoMom, Jon & Kate, and, most recently, the Bucks County woman who faked her and her daughter's abduction and ended up in Orlando.

Not surprisingly, America is eating all this up. We take perverse delight as we crane our necks to watch these familial car wrecks. Our tsk-tsking indignation feels good like a deep itch just waiting to be scratched. We shake our heads with a wise sadness beyond our years as we remark, "think of the children," or "what has come of our generation."

And yet we judge and condemn on very unsolid ground. We ourselves are guilty, if not in degree or under the same scrutiny than at least of the same substance, of pandering for popularity, entertaining thoughts of infidelity, throwing our loved ones under the bus, not giving our children enough regard, giving them too much regard, and covering it all up under a veneer of commendable competence and breezy happiness.

One of the things any church historian will tell you is that any major revival in religious fervor is necessarily preceded by a wave of repentance, a gripping of awareness of one's own sins and a healthy ownership of the guilt associated with being part of a faithless generation. If we are really honest with ourselves, hearing about the travails of Nadya Suleman, the Gosselins, and Bonnie Sweeten shouldn't make us feel better about ourselves as we revel in the transgressions of someone else. Rather, they should remind us of how pockmarked we would look if the spotlight was on us; and of how far we do in fact fall short in the presence of Almighty God, as people, spouses, and parents.

I do not know if these celebrity moms/couples will find redemption in the eyes of the media or in their marriages. But, despite the very best efforts of the enemy of our souls to tear our marriages and families and spouses and children apart, we can find redemption and relief and repair and revival in this generation through One who made us, made the institution of marriage, made our children, and continues to make a way for us to make it through it all. With God's great plan for us as the magnificent backdrop, we must daily choose to fight the good faith for our own soul's sake and for the sake of our marriages and our kids. To me, that's the real family drama to follow.

Huang Family Newsletter, May 2009


Kids - Jada and Aaron’s first cousin arrives next month, so Amy and Jada attended Aunt Nicol’s shower while Lee and Aaron hung out with Matt and the other men. Lee’s sister, Lee-May, spent a week with us, so we took her to all of our usual haunts and also made a special trip to Longwood Gardens to see family on Lee’s side. Two free Philly events – one at the Carousel House and one at the Mann Music Center – plus a birthday party at Chuck E. Cheese all proved irresistible to us, and we milked them for all the family fun and free stuff that we could. Finally, Amy took the kids on a midweek overnighter to Ocean City to stay with friends of ours from church - a pretty stressful outing for Amy and a little sliver of sanity for Lee.

Adults – Amy aced her final exam and thus her class; her reward was three weeks off before starting up her summer class on physiology. She also managed to coordinate speech and behavioral services for Aaron and Jada, spruce up our front yard garden, and paint Jada’s new bedroom. Lee's work brought him to Harrisburg, New York City, and Trenton, all easy day trips and none requiring a car. They're both gearing up to put their heads together this summer on a flurry of long overdue home improvements and furnishings.

Race Matters


I remain solidly Republican in terms of adhering to social and fiscal conservatism, having a willingness to play the ever-important role of loyal opposition at the neighborhood, local, and national level, and holding out hope for quality candidates in the next elections. But I must say I am disappointed with what much of what my party is saying is getting most of the press.

Take the recent nomination by President Obama of Sonia Sotomayor. Many Republicans are digging in their heels because they feel they have to contest everything. Supreme Court justice openings don't happen very often, so perhaps there's an even more visceral need to come out swinging. Even worse, there seems to be a dread that Ms. Sotomayor is one of "those" types, an activist judge who (gasp!) will interpret the law based on her experience as a Latina, rather than neutrally.

And yet the whole point of diversity is to have a variety of perspectives so that groups can, as a group, come to topics more objectively. To suggest that Ms. Sotomayor is unqualified to be an effective arbiter of legal cases because she represents a particular perspective is to suggest that somehow, white men do not themselves represent a particular perspective. This is the premier privilege among all the privileges of being in the majority: that somehow, everyone else's point of view automatically represents a particular bias, while the majority's can be automatically presumed neutral.

(This point was reinforced for me when, in a leadership class, participants were asked to interview whites about what it was like to be white, or men about what it was like to be male, or heterosexuals about what it was like to be heterosexual. Not surprisingly, it was difficult to ask and answer questions, because we have never had to think about our own bias in such situations. And yet we all have our biases. Even worse, when we are not constantly challenged to think about our own perspective and that of others, we end up being even more biased. Not to say that minorities automatically have more objectivity, but neither to say they automatically have less.)

The demographic fact of the matter is that we are fast becoming a majority-minority nation. And, to the extent that the Republican Party is about social and fiscal conservatism, this is good news for the Party: it is a message that should have just as much if not more resonance with a wide range of people from a wide range of backgrounds. But the more the Republican Party looks like a once-in-power
"good ol' boys" group that wants to freeze status quo privileges and reactionarily vilify challenges to that status quo, the more I lament where it's going and wonder when it'll get back to its basic tenets. For all its "playing to the base," it's missing out on building a real base based on its more fundamental values.

PS Oh, and by the way, Ms. Sotomayor is filling David Souter's spot, so even if she ends up being a "dependable liberal," this doesn't fundamentally change the make-up of the Supreme Court. And, for that matter, Ms. Sotomayor's track record seems to suggest she will be pretty fair-minded and if anything pro-business. So, in case you were wondering about my opinion of her as a potential Supreme Court judge, on non-racial merits alone, I'd be fine with her.

5.28.2009

Good Bodies


This blurb in yesterday's Inquirer caught my eye: "Brooke: Should Have Had Sex Sooner." The most famous virgin of our generation now says it would've been better for her, for health reasons and for the sake of her body image, to lose her virginity sooner.

Dear Brooke: what the heck are you talking about? It's not out of prudishness but out of medical fact that I say that sex outside of monogamous marital forever relationships is a higher health hazard than abstinence. So I fail to see how having sex sooner would've been better for your health.

And as for feeling better about your body, that is precisely why premarital sex is bad. Casual sex is bad because sex is good, and is therefore meant for a committed relationship. And sex in that context is good because our bodies are good, made for all sorts of physical enjoyments, including sexual pleasure.

For the Brooke Shields' of the world who think sex is needed to make their bodies feel good and valuable, this is a tragic denial of the inherent goodness and value of their bodies, and a vast misplacement of where that goodness and value comes from. Even some of the most godless people around can tell you that casually and liberally giving up their bodies does not validate but rather cheapens their bodies.

So Brooke Shields' of the world, if you're really interested in your health, you should know to avoid risky behaviors. And if you really want to feel good about your body, think about who made it, how much care He put into making it, and what wonderful purposes He made it for.

5.25.2009

Green Starting to Smell Funny


While I have written glowingly of the whole "green jobs" movement, I must say the whole movement is starting to smell a little funny. I looked back at my blog to find my earliest post on the subject. This excerpt is telling: "To the extent that this sort of initiative is public works-y, the fiscal conservative in me is queasy; but if it's about linking skills training for the underemployed and downsized with pursuits that are both environmentally and economically feasible, sign me up."

I admit that I've been a little caught up in all the euphoria. But when I'm using my head and not my heart, that quote above summarizes what I want from the green jobs movement: transitioning people who've been left behind by an accelerating economy so that their skills match what's now needed, and preparing for a world in which energy is more dear in terms of price and supply. That's consistent with a worldview that affirms that the free markets are the best way to mobilize labor, capital, and ingenuity for the betterment of all.

Unfortunately, it seems large swaths of the green jobs movement have been co-opted by special interest groups. Obamaniacs think government mandates are the path to desired outcomes. Big government folks see it as the ticket to, well, bigger government. The anti-trade crowd wants everything produced locally. Cities are angling for more federal funding to flow to them. And unions are pushing it because they’re more interested in maximizing labor than maximizing output.

Hey, it’s a free country, and times are tough, so it’s hard to blame each of these groups for doing what they can to push their agendas. But let’s take in turn why each of these pursuits, far from being net good or net neutral, is actually net bad for us all (shamelessly cribbed from a recent paper out of the University of Illinois):

• Government mandates are a lousy and inefficient substitute for the free market in moving us to desired outcomes. Mandates distort the landscape, rewarding technologies and processes that are represented by more the politically connected. The market rewards technologies and processes that result in the maximum gain to consumers. We may all be bashing capitalism now, but last I checked the history books, centrally planned economies didn’t do so hot.

• Government participation can squeeze out private sector participation, rather than stimulate it. There’s been a lot of talk about the stimulative effect of investing in green jobs and green technologies. Remember, though, that any time we move forward, we destroy the old as we bring in the new. At its best, this is what Austrian economist Josef Schumpeter called “creative destruction”: cars replacing horses and buggies, or modern medical advances replacing primitive methods. Free markets reward this sort of creative destruction. But when government expands, it eventually has to take from the private sector, either through taxes now or taxes later; and so when a claim is made that a public investment led to so many thousands of new jobs created, what is invisible but vitally important is that taxpayer dollars were allocated to that effort, which, if not allocated, could’ve created just as many jobs or more if put to use in the private sector.

• We can’t grow if we don’t trade. Local production may seem green because it involves less transportation of goods back and forth. But if that’s the problem, fuels should be priced more accurately (i.e. higher) to account for the environmental costs associated with burning them. But apparently that’s not the problem; trade is. Only trade is how hundreds of millions of people in the developing world get lifted out of crushing poverty, hundreds of millions of people in the developed world get to enjoy a wonderful mix of products and produce, and millions of businesses are able to grow.

• Cities aren’t entitled to federal investment; they have to earn it. Not surprisingly, this is the group I’m most sympathetic with. But for federal funds to flow to such a local level, there must be a national payoff at stake, such as world-renowned research centers being able to conduct the critical basic research needed to make the next breakthrough in energy efficiency. Otherwise, if it’s just about transferring money to the local level, why not lower federal taxes instead of going through the waste of collecting it and then redistributing it?

• Creating jobs for creating jobs’ sake is not a sustainable strategy in a global economy. I like the thought of retooling people with the skills that are needed in our modern, knowledge-based economy; there are far too many inefficiencies in our free market system, as people getting left behind as we progress over time in what we produce and how we produce it. But creating jobs that pay well is the happy by-product of a pursuit of businesses and processes that generate value to the customer; they are not the end product themselves. Ironically, the green jobs movement is all about maximizing the efficiency of natural resource input (the most output out of the least amount of resources) and yet it seems to intentionally wish for the inefficiency of human resource input (the most amount of labor, regardless of how much output it produces). (A recent report happily announced that the net effect of a carbon-constrained economy would be to create five jobs for every job lost and employ about one in four working Americans, apparently missing the fact that having five people tomorrow do the job of one person today is a huge step backwards, and that what we really want is to be able to produce the same amount of energy with fewer people, so that more people can be freed up to do other work that grows the economy, much in the same way that we are a far more prosperous world now that we don’t have to dedicate nearly as many people to things like agriculture and manufacturing as we once used to.)

I could not agree more with the passion and sentiment of the green jobs movement. We are not prepared for a post-petroleum world, we are behind other countries in energy efficiency, and too many of us are ill-prepared to hold down the kind of jobs tomorrow’s economy will demand. So we have some work to do. And I know that not everyone who's on the bandwagon fits into the archetypes or shares the agendas I've described above. So let me temper my comments above by simply saying that I am just trying to offer some healthy skepticism and counter-balance to what has become a tidal wave of enthusiasm and belief.

Nevertheless, I must express my chagrin at what is happening with what was once and still can be a promising trend. We need to go to a new place with our economy and with our environment. But mandating solutions from DC down, expanding government, squelching trade, asking for money to pour down to the local level, and maximizing job creation above all else is not going to get us there, and could in fact move us further away.

Better instead to price energy properly, thus restoring the profit motivation for both consumers and producers to figure out how to better conserve it. And better instead to shrink government, thus restoring the profit motivation for both individuals and businesses to move upstream towards higher value added activities that grow our economy and enrich our communities. In both cases, you’ll almost certainly find that there will many who are properly induced, motivated, and freed to work overtime to discover, bring to market, and profit from the next generation solutions that will improve our quality of life, consign current medical ailments to the history books, and even save our planet from degradation.

The green jobs movement can be part of that kind of worldview and that kind of solution. And so, to the extent that it is not evolving into that, I am concerned.

5.24.2009

The Making of a Leader


I have had the fortune of holding lots of leadership positions in my adult life. Which, if you knew me when I was younger, is surprising. For I was desperately shy and awkward and insecure.

Well, I guess I’m still pretty desperately shy and awkward and insecure. But, as God has done for so many people in the Bible and throughout history, He has cultivated in me a certain leadership style that is inclusive of those and other traits.

In his book, The Making of a Leader, Robert Clinton refers to “sovereign foundations,” the building blocks God uses in our early life, even before we come to faith, to grow us into the people He wants us to be in this world. In that evolution, God tends to use many people and experiences to shape us and mold us. This post is an attempt to document some of those people and experiences, and in doing so to pay homage to them and ultimately to God.

I'll necessarily have to exclude my parents and my wife, who would each deserve their own posts for all the ways I've been influenced through them. And while I've had plenty of friends and peers whose intersection with my life has yielded profound insight, I'd like to limit myself in this post to role models who have represented for me fathers, mothers, and older siblings in terms of spiritual development and leadership formation.

• 1982: my fourth-grade teacher, Ms. Rousseau. I was good at math in grade school, which surprisingly didn’t translate into exalted status in the schoolyard pecking order. In fact, combined with my general awkwardness and shy demeanor, I was often the subject of teasing, which only further conflicted me about my arithmetic skills. In our parent-teacher conference, Ms. Rousseau gently pointed out to my mom that I was getting teased for my numeric smarts, and that it was a shame, because it was good that I was good at math. That subtle affirmation – that intelligence is a good thing – was a useful counterbalance to the prevailing messages I had been receiving at recess.

• 1987: my ninth-grade English teacher, Ms. Weisend. Another kind teacher I was fortunate to cross paths with, Ms. Weisend was very involved in our class, serving as our advisor through our four years of high school. One activity she chaperoned was occasional trips to the local college football games, where we raised money by selling sodas. Having gone to the first such trip, I instinctively sprang forward during our second trip to assist others who were doing this for the first time. Ms. Weisend took the time later that month to pull me aside and express her appreciation for my leadership skills in doing that. She used the word “leadership,” which was really the first time anyone had used it in describing me. Again, another seed of affirmation and confirmation was planted.

• 1988-1991: my FBLA advisor, Mr. Longinetti. I got involved in Future Business Leaders of America during these years, and Mr. Longinetti, one of the teachers in the business department, was an active counselor to our group, which dominated on the local and national scene during my time there. He was a unique mix of hyper-competitiveness and yet good-natured kindness that I find myself sub-consciously trying to imitate. From him I learned how you could simultaneously be the nicest guy around as well as focus yourself on being the very best competitor in the room.

• 1991-1995: my college advisor, Dr. Whitney. I had the good fortune of having Dr. Whitney as my college advisor. His warm encouragement for me to come to Penn when I visited the campus during my senior year in high school was enough to convince this California dude to leave my friends and family and ship off to the rainy East Coast. He was a darn good economics teacher, but was every encouraging us to broaden our horizons and follow through on our passions. I’ll never forget the morning he insisted I do my senior research thesis on the faith aspects of my journey through Wharton. I don’t know how much of what I hold dear from the Bible is shared by him, but he wanted me to explore it, own it, and express it. It was one of the most meaningful assignments I’ve ever been given.

• 1992-1995 my IV supervisors, Dave and Shannon Lamb: My years involved in the on-campus InterVarsity Christian Fellowship were formative to my faith and my leadership, and the Lambs were great role models and instructors in that formation. Dave challenged me to take the Bible and faith more seriously, to not be afraid to be a leader, and to give God room to show me what kind of leader I was to be. And in different but similar ways, Shannon pushed me as well, calling me on the carpet for bad habits and urging me on to a more rigorous and joy-filled walk with God. I owe much of my Christian leadership framework to their instruction and example.

• 1995-2005: my boss, Della Clark. Della, who I worked under for ten years and continue to work for and with, as I am now on the board of the organization where I used to be employed, taught me much about casting a vision and seeing it through. Her commitment to and excitement over what she wanted to accomplish through our organization was an inspiration to me; I could not help but run through a wall to help her make it happen. Importantly, her energy was not just borne of great effort on her part: for our entire time together, we regularly made time to come before God in prayer, remembering that it is He who gives us the direction, the energy, the resources, and the clearance to achieve His purposes.

• 1997-1998: Tom Suddes, fundraising and strategic planning consultant. One of Della’s coaches, Tom Suddes, inspired me to start a youth entrepreneurship program within the organization, and to annually host “business boot camps” in the summer. An entrepreneur himself, he had heard enough about my interest in doing this and basically just said, “Well then, just do it.” Clearer words I have hardly heard again in my life, but I needed to hear them so I could get out of the theoretical and give it a shot in the real world. With Tom’s not so gentle nudging, I left behind the fallacy that I have to figure everything out before I take one step, and began to lunge forward and learn along the way.

• 1997-2001: my associate pastor, George Haugen. George was one of my pastors at Woodland before he left for the mission field. During our overlap, George was an important anchor for me, counseling me through some hard times, presiding over my wedding, and throughout offering an example of God’s gentleness and grace. Sometimes God instructs, sometimes He kicks your butt . . . and sometimes, He comes alongside you and puts His arm around your shoulder and waits it out with you. George was a frequent manifestation of that aspect of my God.

• 1999-present: David Oh, lawyer and civic leader. David Oh was introduced to me through his sister, who had asked me to keynote a dinner meeting. Almost immediately, David took me under his wing, actively seeking opportunities to help me in my career. Himself a Christian, he has been a steady example of how to handle tricky situations, as a lawyer and politician, with commendable integrity. And he is the epitome of a public servant, in a day and age where there are few: wanting to do right by the people and for the people. He has found numerous ways in his busy schedule to do right by and for me.

So there you have it. Nine people God has sent my way to mold me into the person and Christian and leader that I am so far. And I’m sure He will need to send others my way, as I’m far from done, and still very much in need of the same kinds of affirmations, challenges, and examples that have already been provided. Still, it’s good to take a figurative break, look back, and be thankful for all of the people who have taken the time to help me, and for a God who has laid a “sovereign foundation” upon which He is continuing to build me up.

5.23.2009

Fun with Economics


Not only am I nerdy enough to regularly read the econ blog "Marginal Revolution," but when a recent post asked for witty quotes the authors could put on the inside front cover of their new econ textbook, I paged through many of them to pick out the ones I found most apt:

"There are no solutions, there are only trade-offs." -- Thomas Sowell

“There's interesting stuff in the margins.” -- anonymous

“The only way that has ever been discovered to have a lot of people cooperate together voluntarily is through the free market. And that's why it's so essential to preserving individual freedom.” -- Milton Friedman

“We forget at our peril that markets make a good servant, a bad master and a worse religion.” -- Amory Lovins

"I bet you aren't reading this, because the copyright page is not part of your assigned reading for this week."

"[These] are my principles. If you don't like them I have others." -- Groucho Marx

“When you have to make a choice and don't make it, that is in itself a choice.” -- William James

"It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest." -- Adam Smith

Little Homes, Big Impact


I haven't yet gotten around to reading C.K. Prahalad's book, "Fortune at the Bottom of the Pyramid," but I love the premise: by figuring out ways to serve the poorest customers possible, your company will invariably learn how to operate more efficiently and creatively. So it bodes well for Tata that, having conquered the $2,000 Nano car, it's now turning it's attention to "Nano" houses that will sell for $8,000 to $13,000.

When we artificially muck around with prices, people suffer: price caps on gas led to massive shortages and long lines in the 1970's, and exclusionary zoning prevents builders from offering products at the low end of the housing market. Here's hoping Nano houses work, and that even more places can get this sort of stuff built in order to meet the yawning demand for housing that is cheap enough to be affordable even for people who don't make much, but that is safe, well-designed, and strategically located.

5.22.2009

Community in the City


"What Hinders Community" is a recent post on the Desiring God blog by John Piper's son, Abraham. Abraham interviews Paul Tripp from Tenth Presbyterian Church in Philadelphia, who notes how his recent empty-nester move to a loft in Chinatown has resulted in far less gas consumption, far more walking, and a far more enjoyable pace of life.

We all don't need to move to an urban setting to slow down our go-go-go mindsets and/or to find authentic interactions with others. Cities can seduce us towards frenetic living and/or crippling loneliness amidst the hordes; and suburbs can become wonderful oases of both calm and community.

But I would say that being able to walk everywhere, randomly bump into other congregants and friends in public places, and quickly organize impromptu play dates and barbecues is a big plus in terms of fostering Christian community. Whereas the relative isolation and auto-dependence of many of our suburbs can present quite a challenge in being able to pursue relationships without scheduling oneself into a frenzy.

Ultimately, the sin is not in our setting but in our hearts. An avoidance of real relationships, an idolatrous need to keep busy, or a carnal drivenness for more for ourselves or our children: these are all found in our hearts, and don't magically disappear just because we change addresses.

Tripp is right about the core things: simplify, slow down, enjoy. Whether in the city or the burbs, may we, whose value and purpose are derived from fundamentally different places than those of the world around us, live accordingly.

What Good Could Come from Higher Gas Prices


I want to respond to a comment posted on something I had written earlier this week. Anonymous suggests that “higher fuel prices is bad; nobody is advantaged.”

Let me first distinguish from higher fuel prices as a result of supply/demand dynamics like what we saw last summer (which, while they lead to more rational behavior by consumers and producers, mostly provide financial benefit to Saudi Arabia, Venezuela, and Russia) versus as a result of a federal gas tax (which can also lead to more rational behavior by consumers and producers AND be part of broader policies that help our economy and environment). Here I'm talking more about the latter than the former.

To be sure, any time you make a big change, you’re going to have winners and losers, so I am certainly not suggesting that the transition from under-priced gas to more properly priced gas will be universally painless. But I do believe that such a transition will result in a net gain to society at large.

Remember what’s going on when something is “under-priced”: people buy “too much” of it. And why is gas under-priced, and why is people buying too much of it a bad thing? Here I’m not going to cover all things environmental, since the whole climate change debate is too uncertain, and I’m agnostic anyway. But the natural resources needed to produce gas are finite, and our demand for it far more than what we can ourselves produce in the US, which means our appetite enriches other countries and puts us at the mercy of many nations whose thumbs we may not want to be under. To the extent that we become less economically competitive and geopolitically safe, that’s a loss to all of us in the US.

Second, our auto-oriented way of living, enabled by cheap gas, leads to all sorts of other negative and costly externalities that we impose upon society, including congestion, air quality, and accidents/fatalities. Devoting space for free roads and free parking prevents land from being available for other uses. We can’t eliminate these externalities, nor would we want to; some of those things are good, and others would be too expensive to complete eliminate. But artificially low gas prices means we have too much of them to be optimally good for society. Again, we all lose as a result.

Third, you could offset the increased cost to consumers from a gas tax by giving it back through a payroll tax cut, which would put money in working peoples' pockets and help businesses create jobs. Or you could make it revenue-positive for the government (i.e. give none or not all of it back to citizens) and have big slugs of money to spend on crumbling infrastructure and/or transportation alternatives, which we can all benefit from in terms of quality of life and quantity of commerce.

There are more reasons, but I’ll stop there. Of course, we’ve had cheap gas for a long, long time, so this is going to be a hard habit to break. And, given the fact that gas prices are posted in big bright letters and that we pay for it by pumping it into our cars while we watch the dollars and cents turn, is it any wonder it is probably the product whose price increases we have the most visceral reactions to? Plus, it’s easy to see the money leave your pocket when gas prices go up; it’s hard to feel the impact of a little bit more congestion or a little bit more pollution, or a little bit less national security or a little bit less economic competitiveness.

But the fact of the matter is we pay far too little for our gas, and have been doing so for long enough to build up an entire way of living that is based on that fact. So hiking the price is going to create its winners and losers, is going to be vehemently contested, and (if implemented) is going to lead to a net gain for the US and for the planet.

As noted above, you can give it back in the form of a payroll tax cut, but even then you’ll have winners and losers. Or you can say, “Tough noogies, we’ve been doing this for too long, and it’s time to rip off the Band-Aid.” Or you can do something in between. But, for the sake of our planet, our national security, our physical health, our economic competitiveness, and our quality of life, we have to do something.

Pilladelphia


When you think of life sciences, you usually think of Boston, San Francisco, New York, Raleigh-Durham, and San Diego. The Milken Institute just released a report on the industry [warning: large pdf] and ranked metro areas on current impact, innovation pipeline, and small business vitality. Not surprisingly, all of the cities listed above scored well.

But guess who was #2, just behind Boston? Philly. You got a problem wit dat?

Not only that, but Philadelphia ranked #1 in current impact, due to a nice cluster of mature drug makers like Merck, Glaxo, and Wyeth. We fared 3rd in innovation pipeline and a distant 9th in small business vitality, and we don't have nearly as many of the tinier, more nimble shops that are making a big difference in this industry. So there's still work to do to lay the foundation for future dominance and youthful attractiveness. But this is quite a feather in the cap of a metro area that isn't often spoken of among the upper echelon of cutting edge parts of the world.

If anything, the fact that we're not known for these types of industries is a good thing, because it speaks of a diversified economy that may not get all the sexy press but is in better shape to avoid busts. The sciences, IT, financial services, manufacturing, tourism, eds and meds: we have it all in large quantities, so we might not zig as much when one sector's hot, but we won't zag as much when it cools off, either. And, for a fast-moving global economy, that's not a bad trait for a region, in terms of economic growth and employment base.

Who woulda thunk that the place known for cheesesteaks, Rocky, and attytood would also be a key producer of cutting edge pills, therapies, and devices. Glad to be in the middle of it all, when I start needing some of these advances for my own health.

5.20.2009

With Higher Efficiency Standards, Lower Efficiency


It appears I have another bone to pick with Bill Chameides, Dean of Duke's Nicholas School of the Environment, who sang the praises of President Obama's plan to increase fuel efficiency standards for American cars on his Green Grok blog: "Obama Steers American Cars Into the 21st Century." Here is a classic example of government intervention leading to the exact opposite of its noble intention:

* If you want to encourage American manufacturers towards more fuel efficient fleets and American drivers towards more fuel efficient driving, a federal gas tax is vastly more effective, since the problem isn't manufacturers for making gas guzzlers so much as its us drivers for buying them.

* Let me say it again: the problem with emissions isn't that our cars are too inefficient, but that it costs too little for us to drive them, a market failure that a gas tax would help solve.

* Imposing higher standards on car manufacturers will just make cars more expensive, encouraging people to hold on to their cars longer before they buy new ones, thus reducing the efficiency of the total universe of cars being driven (since older cars are less efficient than newer ones).

* Depending on how the legislation is written, manufacturers may be able to exploit loopholes so as to "trade down" their fleet towards categories with lower standards, and/or "get to" make low-efficient models if they have enough offsetting high-efficient models.

As David Brooks notes in his column this week, this is par for the course for the Obama administration: having identified the right ends, and apparently with a mandate to be the means, they have created a tidal wave of support, without a proper vetting of whether the means actually lead us closer to those ends or if in fact they get us further away. In the case of fuel efficiency, government has identified a problem, and it has a role to play in the solution; but this isn't it.

5.19.2009

Couples Helping Couples


I have already spoken glowingly of the small group my wife and I are a part of, but with the conclusion of our 2008-2009 “season,” I wanted to chime in again. Since we joined a couple of years ago, two couples have left the area and the group, one couple has switched churches and left the group, two have switched churches but stayed in the group, one couple from our church has been added to the group, and two other couples from our church are thinking about joining. And we’ve added one baby, with one more on the way later this year. So the faces have changed. But the camaraderie has continued.

This season, it seems we’ve particularly delved richly into relevant topics like marriage, parenting, and conflict. I am heartened, in the midst of so many internal and external challenges surrounding today’s kids, to have such a warm and authentic support group of other parents of young children. And I am reminded that the far greater assault on the institution of marriage is not gays who want their relationships to have equal status but rather far too many couples who either give up and divorce, or perhaps even worse, give up and settle for un-intimate, un-edifying half-marriages.

In the midst of all this, we couples strive to attain to a standard in our marriages and parenting that is rarely found around us. We ourselves groan under the strain and in light of so many of our failures and weaknesses that leave us short of where we ought to be. And yet we continue to press forward: because what is promised is far greater than anything the world can offer, because God’s Word says so, and because we want to be salt and light in the midst of blandness and dusk.

None of us are insulated from the typical standards of the world around us, which can make it easy for us to think that we want for our marriages and kids is old-fashioned and perhaps even passé. But, while times have changed, what God wants for our marriages and kids is the same, simultaneously harder to live by and yet more sought after, in today’s climate. Thankfully, Amy and I have the other couples in our small group, together with whom we can provide the support needed to keep us all going.

Carbon Tax vs. Cap and Trade, Round Three

Carbon tax vs. cap and trade continues to heat up in the economics blogosphere, with Greg Mankiw linking to a New York Times article that calls cap and trade pure politics, and Marginal Revolution responding that a little politics is necessary to get something done. A commenter at Marginal Revolution makes the following assertion:

"During an economic downturn, such as now, energy demand and usage falls, so were we to have set a 2007 Cap, the current imputed energy tax would have already fallen dramatically as the market value of the allowances would have plunged. During boom times when everyone is demanding energy, the allowance prices would rise, encouraging conservation and innovation. That pattern of price changes is economically efficient."

I'm not so sure I agree. This self-correcting mechanism may be useful if the atmosphere can painlessly absorb a certain amount of carbon dioxide each year: when we're in a bust, we can "get away with" polluting more, while when we're in a boom, we need to be careful so as not to over-pollute.

But if in fact all carbon dioxide is bad, and the effects additive, then it shouldn't matter if we haven't had to pollute as much in a given year. Furthermore, it may very well be that the best, most human-serving solution to global warming isn't just to reduce carbon emissions but to help economies grow so they have the resources to deal with global warming's environmental consequences. If that's the case, then it makes sense to allow people during a boom to pay a carbon tax if they think it's better to produce and pollute than to not produce and not pollute.

Hey, there's pros and cons to both sides. But it's interesting, and the New York Times article notes this, that cap and trade was first conceived within a Republican administration and dismissed as a sop to industry by Democrats who argued instead for a straight federal carbon tax. With some Republicans now counter-proposing a carbon tax to the current, Democrat-conceived cap and trade proposal, it appears the tables have turned.

5.17.2009

Carbon Tax vs. Cap and Trade, Round Two


Two addenda to a post earlier this month on carbon tax vs. cap and trade:

* In defense of cap and trade, my co-workers notes that it is possible the scientists have a pretty good sense of what is a tolerable amount of carbon to be emitted each year, above which the atmosphere has trouble absorbing. So setting a ceiling allows you to have more certainty that you won't go over that threshold than if you just implement a tax and hope that the higher cost will get you to that number or lower.

* In defense of a carbon tax, this article reminds us that Europe's system hasn't worked so well because there were too many give-aways on the front end, so the price of credits was driven down and people didn't have enough incentive to change behavior.

On that note, here's a haunting quote from the above-linked article: "The US debate is really US-centered. There is so much focus on buying the 60 (Senate) votes needed, and each senator's vote that is bought comes with something attached, some type of concession for a sector or for trade unions."

In other words, in the spirit of compromise, we will both dilute the bill's environmental impact (cue boos from the Left), ratchet up the cost of energy with no offsetting tax cut (cue boos from the Right), and transfer billions to whichever industry and group is politically connected enough to get themselves written in (cue boos from the Center). Sounds like a winner all around.

Why people don't consider that a straight carbon tax with no give-aways, paired with a payroll tax cut, won't be better in the long-term, both economically and environmentally, is beyond me. Sure, you'll have your winners and your losers, but so what? Think about it this way: those who will win are those who have unfairly borne too much of the current burden, and those who will lose are those who have unfairly borne too little of the current burden. So if you win going forward, that's simply making up for the fact that you were losing before; and if you lose going forward, that's imply making up for the fact that you were winning before. And, ultimately, what we want is for people to change their behavior: if what I have been doing all along is now encouraged, I'll do more of it, and if what I have been doing all along is now discouraged, I'll do less of it.

As this article puts it, cap and trade advocates, knowing they're in for a battle against the status quo, want their proposal to go into the ring untarnished. Here's hoping that a carbon tax plan can give cap and trade at least a little bit of a scuffle first, if not pull the upset. After all, at stake isn't just one bloc of politicians, lobbyists, and special interest groups versus another; rather, it's merely the long-term sustainability of our economy and our planet.

Entrepreneurship on the Rooftop


We at The Enterprise Center have always prided ourselves on the bleeding edge. Apparently, innovation can also be found on our rooftop: "Here Comes the Sun: Solar States Embarks on a New Power Company Model."

I am not as up on either the organization or its plans to use our roof as I should be, but I don't see why there won't be more of these deals in the near future: use a previously unproductive part of your building, leave installation and maintenance to the experts instead of trying to do it yourself, and reduce your utility bill. Glad to see that even our rooftops are being colonized in the name of entrepreneurship.

Christian Placemaking


One of the paradoxes about the Christianity I believe in is this: we are simultaneously called to make our home here on Earth AND consider that our true home is in Heaven. Christianity is one of the earthiest religions around, and faithful saints through the years have practiced radical obedience in the ways they make better and more beautiful the physical places in which they dwell and the people among whom they dwell. And yet Christianity also points the believer to a far better, more permanent home, one so wonderful it sustains the beleaguered saint through otherwise unbearable present suffering.

I fear too many of us, Christian or not, have those two callings backward. We all too often disdain our present places, treating them as temporary necessities, sacrificing long-term sustainability for short-term expediency, and perpetuating a throwaway mentality and a throwaway planet. And yet the promise of heaven grips us so loosely so as to have no discernible effect on how or even if we bear current anguish.

As an urban dweller, I aspire to be committed to my city: to seek in its "shalom" my "shalom"; to make it more beautiful, structurally and relationally and aesthetically; and to treat it as the precious and long-lasting entity that it is. And yet, I also seek to be ever mindful that this place is simply a temporary home; while my more permanent one is being prepared for me, I can endure hardship because something greater and more lasting awaits.

Of course, the two perspectives are not set against each other but rather entwined. How we live now will affect how we will live forever, and what we think of that forever life will affect how we approach the now life. Here's praying for a greater understanding of this paradox, of how the two perspectives intertwine, and of how to live life - in the present and for the future - accordingly.

5.15.2009

A Carbon Tax: That's Right


In response to the current cap and trade legislation on the table, two gutsy Republicans are calling for a carbon tax: "Republican Lawmakers Back Carbon Tax (Yes, That's Right).". Indeed, that's right: triple entendre intended.

We on the Right have become so knee-jerk about our loathing of taxes that we are losing legitimate opportunities to use taxes and tax hikes. And we've become so incensed by apocalyptic warnings about global warming that we've forgotten all the other negative externalities that can be helped solved by a more proper price on carbon. And we're so nervous about associating with a tax in the midst of the worst recession in two generations that we're willing to allow our current and unsustainable way of doing business to continue and given no break to those who have gotten ahead of the curve and retooled themselves for a post-petroleum, environmentally green economy.

So kudos to Representatives Inglis and Flake for sticking their necks on the line. Of course, they will be vilified by both the Left and the Right. Sad, since their stance achieves what the Left wants and is completely true to what the Right is about. Sadly, no good deed, it seems, goes unpunished.

The Ten Most Populous Cities a Hundred Years From Now


For over 100 years, New York City has been our country’s most populous city. After that, all heck breaks loose. Check out these stats from 1910 and 2007:

Top 10 in 1910 (with their 2007 ranking in parentheses)
1. New York City (1)
2. Chicago (3)
3. Philadelphia (6)
4. St. Louis (52)
5. Boston (21)
6. Cleveland (40)
7. Baltimore (20)
8. Pittsburgh (60)
9. Detroit (11)
10. Buffalo (69)

Top 10 in 2007 (with their 1910 ranking in parentheses)
1. New York City (1)
2. Los Angeles (17)
3. Chicago (2)
4. Houston (68)
5. Phoenix (not in the top 100)
6. Philadelphia (3)
7. San Antonio (54)
8. San Diego (not in the top 100)
9. Dallas (58)
10. San Jose (not in the top 100)

To overgeneralize, we’ve largely moved from cities to suburbs, away from industrial hubs, and towards the Sunbelt. There are suburbs of Phoenix that have more people in them than four of the ten most populous cities in the US circa 1910 have in them today. And two of the most popular tourist destinations in the US are in a desert (Las Vegas) and a swamp (Orlando).

A hundred years ago, you couldn’t have predicted land use patterns and human distribution circa 2009. But it’s still fun to guess who’ll plummet from the list in the next hundred years.

One way to go with this is to assume that density will matter, both in terms of energy considerations arguing against far-flung places and knowledge-based economies preferring agglomerations of smart people. We’re starting to see some whispers of this, as two-thirds of houses with mortgages in Las Vegas are underwater, and auto-oriented parts of Arizona, Florida, and California are huge losers in the foreclosure explosion.

Deliciously, just as the 2007 list included three cities that didn’t even crack the Top 100 less than a century ago, the list a century out will almost certainly include cities that don’t even register on our collective radar screens today. But here’s guessing that, wherever they are today, they’re tooling up for a world in which lots of things are close together.

5.14.2009

Rich Oil Sheiks Seek to Ride Public Transit


When the rich oil sheiks are calling for public transportation systems, then you know you have to make the big, hairy, and audacious shifts from a petroleum-based, cheap oil economy to a more environmentally sustainable version: "Making Tracks." Everyone's oohing and aahing about the "green economy," but few, it seems, are willing to make the really painful, "inconvenient" shifts to get us there. Are we really interested in what works for our planet, or have we simply dressed our human interest in profit ("got to get those stimulus dollars!")and/or coolness ("sustainability is all the rage, you know") in bright green?

I hate to bash on Longwood Gardens, as I love going there, but I have to share something I saw there to illustrate my point. There was a placard at one of their treehouses pointing us to look at the irregular patterns on some of the wall boards. Apparently, an old tree trunk had been salvaged after falling, and had been used in the construction of this treehouse.

That's great; except that the tree fell in Washington, on the West Coast. Which means that, in the name of sustainability, this heavy object was transported all the way to the East Coast. One tree saved . . . and hundreds of gallons of gasoline consumed! How is this good for the environment?

Answer: it's not. But by saving this tree and reusing it for such a cool purpose, we can't help but think how wonderful that is and how important conservation and reuse is in our effort to save the planet. Apparently, this is what passes for responding to Al Gore's "inconvenient" truth.

Instead, let's note what the oil sheiks in the Gulf states are realizing: we're heading for a post-oil future, and need to invest resources to shift ourselves accordingly. The irony, of course, is that, in the spirit of wanting to be "cool," we're not responding correctly at all to the specter of global warming. And that, to me, is profoundly uncool.

Grey is the New Green


"Green" is everywhere, it seems: why, I personally have attended eight green economy gatherings in the last 30 days, and that doesn't even include the Greenworks Philadelphia release that I missed but blogged on.

"Green" is often pitted against "grey," i.e. we would rather "green" a street with trees than leave it grey with drab pavement. But one aspect of "grey" is good to the "green" crowd, which is greywater. Which is why I was glad to see Governing Magazine cover the topic in its recent issue: "Shades of Greywater."

This reminds me of how my dad runs the shower water into a bucket while it's getting warm and then uses that water to flush the toilet. Greywater advocates go a step further, and figure out ingenious ways to recycle shower, bathroom sink, and washing machine water to water their plants and wash their cars.

In some places, jerry-rigging your plumbing to facilitate this is not only not encouraged but illegal. But some cities are starting to get out of the way and let the innovators innovate. And I'm eagerly following what our hallowed Philadelphia Water Department is doing in terms of treating water as the precious resource that it is, notably in terms of distributing rain barrels as well as helping developers plan and build in ways that minimize water waste.

"Water, water everywhere, and not a drop to drink"? Hopefully not. But we do need to break ourselves of ways, individually and structurally, that we squander our water. And diverting some of it for positive use instead of letting it literally go down the drain would seem to be something we should want to encourage, not make illegal.

5.13.2009

The X Factor from West Philadelphia


A belated congrats to my friend Simon Hauger and his crew of students at West Philadelphia High School, who recently wowed none other than new EPA Administrator Lisa Jackson: "West Philly Students and the Car of the Future." That's right: inner city high school kids impressing the socks off of President Obama's number one environmental person.

How can you not root for these guys and gals to take home the $10 million purse from the Progressive Automotive X Prize they're gearing up for now? That's right, nestled in between entrants from the US, Australia, Brazil, Canada, Finland, France, Germany, Italy, the Netherlands, Thailand, and the UK is the West Philly Hybrid X Team. Go West Philly!

5.12.2009

Which Tax Hike Hurts Least


So it looks like the people have won: Mayor Nutter will back down on his plan to temporarily raise property taxes for two years, opting instead to defer pension payments and extend his sales tax hike out five years instead of three. Council members, having heard it from their constituencies, pushed back on the mayor's plan, and the mayor has relented, and the people have won.

Or have they? I'm not going to comment on the specifics of the new way forward, simply to discuss the relative merits of, if you have to hike a tax temporarily, which is least painful for the most financially vulnerable among us. Consider the following two families: both are two-income households, but the Pooristans bring in $50K and the Richistans bring in ten times that.

* The richer you are, the more likely you are to itemize your deductions, and therefore take full advantage of the deduction on mortgage interest and on property taxes. In other words, current tax code provides an incentive for the rich to own more house, relative to their income, than the poor. So the Richistans, while they make ten times what the Pooristans make, probably own a house that is worth more than ten times the Pooristans' house. Which means that, between a property tax increase and wage tax increase, the Pooristans should prefer the property tax increase, since the Richistans would bear the heavier load in that case.

* Even accounting for exemptions on food and medicine, the Richistans probably spend the Richistans are probably more likely and able to make more of those purchases outside of Philadelphia, whether via the Internet or a suburban mall. This is particularly important because we're talking about a temporary tax hike, not necessarily a permanent one; the Richistans might not decide to move outside the city because of a temporary hike in property taxes, but they can easily decide to buy more of their big-ticket items outside the city to avoid the higher sales tax. Which means that, between a property tax increase and sales tax increase, the Pooristans should prefer the property tax increase, since the Richistans would bear the heavier load in that case.

In other words, if you want to choose between temporarily hiking property tax, wage tax, or sales tax, property tax is the choice that will involve the most heavy lifting by the Richistans rather than the Pooristans. Of course, one reason people despise the property tax is that the bill comes all at once, right after the holidays; whereas sales and wage taxes are levied in much smaller increments, to the point of being invisible. Only, over time, they are not, especially to the Pooristans of the city.

Of course, the previously translucent and now nakedly visible elephant in the room is the broken property assessment process, recently scooped by the Inquirer in a well-written three-part expose. If you believe that the poor are currently paying too much into the pot, relative to the rich, then levying a temporary hike off of an unfair base certainly does warrant caution. And that, in my mind, is a legitimate reason to push back on any plan to increase property taxes, arguing instead to fix the broken system first lest present inequities get amplified.

But I don't believe it is a correct statement to say that property tax hikes, instead of other tax hikes, are disproportionately borne by the poorest among us. In fact, in an earlier version of the story I linked to above, one commenter scolds Mayor Nutter for not standing up to "the monied interests" that City Council sided with, and not standing up for "the poorer half of town" who will now be hit harder by the sales tax increase relative to a property tax increase.

I'm not sure that's how it went down. But I do know that, when choosing between which tax to increase, each proposal is going to create its winners and its losers. And, relative to the other possible choices, the poorest among us would not be among the losers in a property tax increase scenario.

PS In this philosophical debate between property taxes and sales taxes, let me offer some counterpoint courtesy of some of my co-workers:

1) Including key exemptions available to Philadelphians, particularly on food and medicine, sales taxes may not be so regressive after all. After all, if you're really poor, you're spending on your money on housing, transportation, food, medicine, and little else; while if you're poor, you're spending your money on more of those things, but with money left over for entertainment and other luxuries.

2) Importantly, sales taxes are paid by non-residents, like suburban commuters, visitors, and tourists. So you can spread the pain over more people.

3) Next to the rest of the state and to Delaware, a higher sales tax looks ominous. But among big cities, even the higher and temporary rate is relatively low; Chicago tops the list at a whopping 10.25 percent, for example.

There's more to say on this debate, to say the least. Not to mention its practical manifestation in the current budget discussions. Stay tuned.

5.09.2009

Excellence, No Excuses


As we are well into a decades-long shift from an industrial economy to a knowledge-based one, access to quality, game-changing education will become all the more important as an issue of both equity and competitiveness. And, when it comes to many of our inner-city communities, an issue of life or death.

I am somewhat distanced vocationally from days working directly with inner city kids in the youth entrepreneurship program I founded in 1997. But my heart still hopes for more no-excuses resources for this very precious population.

I am heartened to hear of more and more. Like Frederick Douglass Academy, whose remarkable principal Gregory Hodge I observed more than once greet each child by name as they arrived at school. Or KIPP, who expect rigor from their teachers, and replace them if they can't hang. Or Harlem Children's Zone, which has made an eye-popping difference in the lives of the kids it takes in.

Far too many kids in this country enter grade school age way in debt: financially, medically, socially, and relationally. It is too much to ask of school to save them, and yet sometimes it's the only chance left. May there may be more schools like Frederick Douglass Academy, KIPP, and Harlem Children's Zone that actually can be those game-changers in our kids' lives.

5.08.2009

Climbing the Ladder


As a follow-up to our economic study and press conference on affordable homes in Pennsylvania, I was on the radio with Liz Hersh, Executive Director of the Housing Alliance of Pennsylvania. Since many of the callers wondered aloud why public dollars should be used to help pay for houses for private citizens, I offered analogy that I'd like to fill out a little more in this space.

Having worked for a small business accelerator for ten years, I understand that when it comes to the financing of private firms, there are some gaps that may justify public and non-profit participation to help fill. Entrepreneurs and investors are independent decision-makers that should be otherwise left alone to figure things out in ways that are mutually beneficial. But when it comes to access to capital for certain sizes and kinds of businesses, there are gaps that make it feel like the lowest rung on the ladder to success is twenty feet in the air.

If instead we can put in some lower rungs, we might be able to get some of these entrepreneurs to grow their businesses enough to eventually reach the lowest rungs. From there, it's on them to savvily secure funds, grow their businesses, and pay back debtors or investors and be in a better position to go even higher on the ladder.

Of course, this doesn't mean we willy-nilly extend credit or throw money to any old entrepreneur. They have to demonstrate something to make us feel comfortable providing them with the lift to get up on the ladder. But, absent intentional action by the public or non-profit sectors, they may be stuck below the lowest rung, unable to reach up and therefore unable to get themselves into a virtuous cycle of growth, job creation, and wealth generation.

The housing market is somewhat similar. Buyers and sellers are private actors that can figure out a price that works for both sides. But there are some gaps at the lowest end, which, if filled, can get people up to the lowest rung on the ladder, where they are no longer moving from house to house, uprooting from community to community, pulling their kids out of school and otherwise disrupting their ability to make progress.

Ironically, the two industries in the news over the past two years have been the housing and financial sectors. In both cases, we've seen that, however market-based they are, how they do has an immense spillover effect on the rest of the economy.

As a fiscal conservative, I resonate with callers' concerns about how taxpayer dollars should be spent. Legislators at every level of government have to make tough choices in these constrained times, and not all initiatives, however worthy, can be funded.

All I'm suggesting is that there are public ramifications and public roles when it comes to these industries, which are worthy of discourse and action and in some cases prioritization of financial and other resources. And if a little nudge can get people up a ladder that for them has an otherwise impossibly high first rung, one ought to take a good hard look at thinking about making those nudges possible.

Education


Every six months or so, I try to write to some or all of my elected officials, just to maintain what I believe to be a good habit for all citizens. Here's what I emailed this morning.

***

A belated thanks for enacting the Commonwealth's first true school funding formula in twenty years as part of the 2008-2009 state budget.

As we continue our decades-long transition from an industrial economy to a knowledge economy, investing in education at all levels becomes increasingly important, lest too many people and communities get left behind, clinging to old ways of doing business when the rest of the world has gone "flat" (to borrow a concept from New York Times columnist Thomas Friedman).

The Commonwealth in particular is challenged in this way, with countless towns that have seen better days as major job categories have winnowed due to automation, outsourcing, and decline. Education can help retool people and communities to be more competitive for an increasingly accelerating, frictionless, and globalized economy.

Thanks for your leadership in this regard, and please consider future such decisions in light of our Commonwealth's competitiveness in a global and "flat" economy.

5.07.2009

What the Suburbs Might Learn From Their Urban Neighbors



A nice report by the Brookings Institution on recent demographic trends in metropolitan America entitled "Getting Current" (warning: large pdf). It highlights some of the convergence of suburban trends with what were previously seen as more urban characteristics:

* More racial and ethnic minorities moving from cities to suburbs, or in the case of some immigrants, straight to the suburbs, means suburbs are dealing with unprecedented diversity of tongues and skin colors.

* More and more poverty, particularly in older communities, means suburbs are dealing with fiscal and mechanical challenges in providing social services and affordable housing.

* Suburbs have more of certain populations - yuppies, the elderly, the working poor - whose housing and transportation needs may be mismatched with current inventory and infrastructure.

* The long global transformation to a more knowledge-based economy puts institutions of higher learning at the forefront, but suburbs often lack the density to attract such entities, impairing residents' ability to tap into ongoing educational and training needs.

Of course, some of these trends are just urban issues creeping outward to inner ring suburbs. But there's some pullback from the outer bound as well, as heightened energy considerations and tapped out transportation infrastructure funding sources make far-flung suburban areas less attractive.

In other words, cities and suburbs may not be so different tomorrow as they were yesterday, with implications for residents, employers, and government. Perhaps we ought to learn a little from each other, and help each other out, more so than we're currently doing, rather than trying to distance ourselves from each other.

5.06.2009

Why I Want This Tax


Let me pick up on a post from earlier this week, which I admittedly didn't provide much commentary on: "Price Matters." The reason why price matters, and why a carbon tax is superior to a cap-and-trade system, is that it acknowledges that some carbon emission is socially optimal.

Socially optimal? Whoa! Didn't the EPA just label carbon dioxide a pollutant? Yes, but remember that as with all pollutants, the socially optimal amount is likely not zero.

Think about it this way: at least in the medium term (which even the rosiest forecasts assume means something like a generation or two), and perhaps forever, some of our energy is going to be in the form that leads to carbon emissions. So one way to reduce carbon emissions is for industry to come to a grinding halt.

That can't be a socially optimal solution. Rather, obviously, there's some amount of economic activity that is justifiable, even if it leads to carbon emissions, because the positive consequences of that economic activity are worth more to us as a society, even factoring in the environmental element, than doing nothing.

The problem today is not that we have pollution at all, but rather than we have more pollution than is socially optimal, since the cost of polluting is artificially low. The solution, therefore, is not to eliminate pollution altogether, but to drive it down to a level at which point the economic benefit to all of us is at its greatest, considering that the trade-off of more economic activity is more pollution.

Cap and trade, particularly that which gives away the pollution credits, presumes to know what that socially optimal level of pollution is. But it is highly unlikely that whatever level is determined by the US government will be better than whatever level is determined instead by individual decision-makers making choices about how much activity to undertake and how much pollution that will produce.

In contrast, by instituting a carbon tax, people and businesses will make rational decisions for themselves. Some individuals may become more conserving in their behavior, motivated by saving money; while others will decide that they are willing to pay the extra dough to continue to do what is best for them. Same goes for businesses.

And these billions of decisions by millions of actors will lead to an equilibrium level of economic activity and pollution production: any more or less, and we're worse off. But I have to think that the US government guessing at an appropriate carbon tax amount at which we reach that equilibrium level is a more comforting leap of faith than hoping that they can guess what the equilibrium level is directly.

In other words, I'm highly skeptical that cap and trade can do better than setting a carbon tax and letting individual actors make their own decisions, now properly motivated to conserve if makes sense to. Of course, a carbon tax is currently the least politically palatable and publicly acceptable course of action. (Take a look over the American Enterprise Institute for a nice piece on carbon tax vs. cap and trade, link courtesy of Greg Mankiw's blog.)

So instead, we get the government deciding what is the socially optimal amount of economic activity, mandating to the carmakers what sort of fuel efficiency should be in the cars you and I will buy, and subsidizing all manner of energy efficient products and services that otherwise rational people and businesses would have the freedom and motivation to choose for themselves if only we priced energy correctly. That's a lot of finagling just to hope that people and businesses will make the right decisions, when setting a more correct price on carbon would do the trick much more effectively and directly.

Sorry for all the econo-speak. Just wanted to clarify why I was so excited about Thomas Friedman's column from last week, and why advocating for a carbon tax is completely consistent with being a pro-business, free-market-loving, cold-blooded capitalist Republican.

Affordable Homes in Pennsylvania


As noted in a previous post, I had the honor of participating in Housing Matters Day, organized by the Housing Alliance of Pennsylvania to shed light on the importance and necessity of affordable homes. Here are my written comments from the press conference portion of the festivities.



In addition to the direct benefits enjoyed by new residents, it is important to note that investing in improving the efficiency of our housing stock is an effective form of economic stimulus, which is obviously an important consideration these days.

Specifically, our analysis estimates that each ten million dollars invested in a Pennsylvania Housing Trust Fund would generate 16 to 22 million dollars in total expenditures within the Commonwealth, as well as hundreds of jobs and millions of dollars in wages, in a variety of industries.

Rehabilitating homes is particularly potent, in that it produces more houses per million dollars, and also has a greater statewide multiplier effect.

Combined with the leveraging of other public dollars plus private dollars, this all could have an even more potent effect.

Importantly, the savings associated with both reduced housing payments, as well as lower energy costs as a result of more efficient housing are also stimulative, in that the savings go right into peoples' pockets and can therefore be spent locally.

Finally, the economic literature also suggests there's a huge positive spillover effect associated with reducing foreclosures and the destabilizing effect they can have on communities.

In other words, when you invest in improving the efficiency of our housing stock, new residents win, neighborhoods win, and the Commonwealth wins.

5.04.2009

Price Matters


Tom Friedman's column on the importance of setting a price a carbon is right on: "Moore’s Law and the Law of More." Here's hoping our elected officials, on both sides of the aisle and at the very top, are courageous enough to get us there. Without it, climate change policies are destined to fail, unsustainable behaviors won't change, and we'll all be left with a far bigger tab down the road.

5.03.2009

Philly in the Middle


With many in California and other parts of the country eagerly anticipating the introduction of high-speed rail, I am all the more pleased to be living in the City of Brotherly Love. You see, our firm has, for the past year or so, sought to expand its footprint, and slowly but surely we are moving in that direction, with actual or potential client work in such places as New York City, Baltimore, and Harrisburg. Thankfully for me, given that I have two small children who I like to see in both the morning and the evening, each of these three locations is very doable as a day trip within a normal business day. And all without setting foot in a car.

I used to think that when people said one of Philly's selling points was that it was near so many other big cities, I thought it somewhat of a backhanded insult. But it is a true statement, and a feather in Philly's cap, a huge competitive advantage in a world that seeks to become less auto-reliant even as it needs to become more interconnected.

20,000 Hits and Counting


I've been blogging since February 2003 but only put up the hit counter in February 2005. Four plus years later, we've finally hit the 20,000-hits mark from that point. Thanks to everyone for stopping by, and particularly for those who have mused along with me.

5.02.2009

Immigrants and Workforce Development


As noted in a previous post, I had the honor of participating in a state legislative committee hearing on the topic of immigrants and workforce development. Here is my written testimony.



Good morning. My name is Lee Huang, I am a director at Econsult Corporation here in Philadelphia. I received an undergraduate degree from Wharton with a dual concentration in Accounting and Management, and a Master’s in Government Administration from the Fels Institute of Government at the University of Pennsylvania, with dual certificates in Public Finance and Economic Development. Econsult Corporation is an economic consulting firm founded in 1979. Our work includes high-level economic and statistical analyses for government agencies, non-profit organizations, and private companies. We cover topics from economic development to real estate to transportation. Most recently, we conducted an unprecedented study of Philadelphia’s commercial corridors, reviewing city tax data and shopper survey data that had never been available before.

So in exploring the economic impact of integrating immigrant workers into the state economy, we bring a rigorous, statistical approach, and are careful to deal with facts, not guesswork. Let me start by noting that 74 percent of immigrants in the Commonwealth are of working age, versus only 56 percent of native-born Pennsylvanians. So from the standpoint of our workforce, Pennsylvania needs immigrants. The Commonwealth is old and getting older. Although young people flock to our wonderful colleges and universities, most of them leave the Commonwealth four years later. If our economy is going to thrive, we need workers who will stay.

We also need effective ways of making sure those workers are producing at their highest ability. If we’re not firing on all cylinders, that’s wasted capacity. In this case, that means making sure that qualified workers get connected to the jobs that Pennsylvania employers need to fill.

The Welcoming Center is a key part of making that connection. If I may borrow from a turn of phrase by President Obama, who recently wondered aloud that so much work needed to be done and yet so many people were looking for work; today’s hearing is about wondering aloud that so many skilled immigrants are under-utilizing the very skills and experiences that are most needed within the Commonwealth.

But the Welcoming Center is helping bridge that gap with a variety of outreach, training, orientation, and placement services. To help measure the value of these services, Econsult reviewed an entire year’s worth of data from the Center. We calculated the impact of all of the workers placed in jobs, and we found numerous positive results.

• First, individual workers were able to earn more. When a person earns more money, she can spend more – in other words, they now have greater purchasing power. That spending power ripples through the local economy, creating additional employment and earnings opportunities for other Pennsylvanians. Using standard economic multipliers, we calculated this “ripple effect,” and estimated that from one year’s worth of participants in Welcoming Center programming, the Commonwealth gained over 200 jobs and $4 million in earnings, of which 145 jobs and $2.7 million in earnings was enjoyed within the City of Philadelphia.

• Second, the City of Philadelphia and the Commonwealth of Pennsylvania both received higher tax revenues and will continue to receive higher tax revenues, as a result of individual workers’ actualizing their higher earning potential. Having been trained and supported by the Welcoming Center, participants helped contribute to the City of Philadelphia receiving an additional $103,000 in annual wage tax revenues, while the Commonwealth separately gained an additional $123,000 in annual income tax revenues.

• And that is just the initial year of results; those gains in tax revenues generated will continue into the future, and likely as those workers advance in their respective professions. If I may use a financial analogy: having made an investment, through supporting the Welcoming Center in training and guiding immigrants towards their highest and best use in our state economy, the Commonwealth receives both the “capital gains” (in this case, human capital gains) of the talents and efforts of these immigrant participants, as well as an ongoing “dividend” (in this case, a financial dividend) in the form of their annual contribution to state and local income tax revenues.

You can find more results, statistics, and methodologies in the Shared Prosperity report in the packets you received today. We will also make it available on the Econsult and the Welcoming Center websites.

I want to conclude by stressing the importance of integration to native-born Americans. Clearly, immigrant workers gain directly from their participation with the Welcoming Center, and as I just demonstrated, that gain also benefits the local and state economy as well as local and state governments. It is important to stress that these new Americans are joining communities that already exist. Integration is a two-way street. We called our report Shared Prosperity because it’s clear to us that when the integration process is smooth, our whole region benefits. Specifically:

• Businesses have a bigger and more talented pool of workers

• Entrepreneurs are able to start and grow their businesses, allowing them to create new jobs right here in Pennsylvania

• Commercial corridors benefit from increased energy and investment as merchants open up shop in storefronts that used to be vacant

• And the talented young people who come here to attend college are able to stay here and buy homes, raise families, and participate in our civic life

In short, making sure that legal, work-authorized immigrants are integrated into our workforce is wise policy, not just for immigrants, but for everyone. Again, thank you for the invitation to speak today. I would be pleased to answer any questions you have.


100+ Days In


Shockingly, the world didn't miss my lack of contribution to the rush of 100-day evaluations of the Obama administration. A few days late, here are some of my thoughts.

Overall, quite good. First on style, since when it comes to the role, style is often more important than substance. He has managed to carry himself with a nice mix of gravitas, nuance, and competency. Not bad for someone who allegedly lacked the leadership experience for the world's highest office.

On the issues, I'll note a post of mine from right before Election Day, expressing four hesitancies about an Obama presidency: foreign policy, health care, trade, and government spending. Remarkably, on three of the four, he's warmed to, if not flipped over to, my side of the arguments: while being more cheerful and conciliatory in foreign relations, he's flexed American muscle as well; he's open to McCain's way of fixing health care (which was actually one of Obama's own key advisors' way); and he's thankfully backtracked on anti-NAFTA sorts of sentiments.

Of course, the big swing at the plate that Obama has had so far has been on government spending. And a $3.4 trillion budget, with massive deficits as far as the eye can see, puts us in somewhat unchartered territory: witness this Canadian columnist's glee that liberal Canada can now be considered global investors' free-market choice among North American countries.

But one out of four ain't bad, especially if not messing with business and trade gives us a much better chance our economy recovering and growing. So I give a solid B for Number 44. Not that anyone was asking.