October 29, 2004
A Currency Affair
Industries that are based on extracting natural resources--mining, forestry, fishing, and farming--are particularly vulnerable to booms and busts. Commodity prices, you see, are especially volatile: small oversupplies can lead to huge price drops, while tight supplies can send prices soaring. (See, e.g., petroleum.)
British Columbia's timber industry is a case in point. The price of BC timber--much of which is exported to the U.S. or overseas--gyrates not only with the condition of the global economy, but also with arcane details of trade policy, with the level of government subsidy provided to competing timber producers, and a host of other factors that are beyond the region's control.
Add to that list international currency markets. The Vancouver Sun reports that, for every cent that the Canadian dollar gains with respect to the U.S. dollar, the BC timber industry loses $150 million in annual sales. In the past month, the Canadian dollar has gained five cents on the U.S. dollar. That change alone is projected to cut BC timber sales by six percent.
I'm no currency expert, but lots of analysts are projecting a fall in the U.S. dollar over the coming years -- the trade deficit, they say, is too high to be sustainable. That portends even worse news for the B.C. timber industry.
For me, this is all the more reason to avoid relying on resource extraction as a foundation for a region's economy. There are too many ways for the bottom to drop out.
Update: Click here for a graph of the two-year trend in Canadian vs. U.S. currency, courtesy of Yahoo.
The King of Taxes
The Nov. 2 ballot in King County, Washington, where I live, includes a rather peculiar item that many people have asked me about: an advisory measure on transportation. It's advisory because it's just a poll. It doesn't change any laws, appropriate any money, or put anyone in office.
Here's the Voter Pamphlet description:
This advisory measure asks which tax source the voters in King County would prefer be used to support a transportation plan designed to relieve traffic congestion and increase safety through a mix of road and transit projects in King County. This plan would require voter approval at a future date. Which one of the following tax sources would you prefer be included in a plan to locally fund road and transit projects in King County?
VOTE FOR ONE
- a general sales tax
- an excise tax on the value of motor vehicles
- a flat tax on motor vehicles
- an increase in the local gas tax
- a tax on total annual vehicle miles traveled
Gas taxes are my second choice--a close second--because they also vary with the amount of driving you do. Gas taxes also modestly encourage the use of more efficient vehicles. But they tend to reinforce the notion that gasoline consumption is the only problem created by cars. That's why I mildly prefer the VMT option.
Vehicle taxes--whether excise or flat--have virtually no effect on people's transportation choices, but an excise tax on the value of motor vehicles is better than a flat one. For one thing, it's more fair in terms of ability to pay. For another, more-valuable vehicles are usually driven more miles than less valuable ones.
A general sales tax is my least favorite option. It's viciously regressive in a state that already has a very regressive tax code. And, besides, transportation should pay for itself. Unlike education or defense or imunizing children or basic research, transportation is not a public good that deserves public subsidy.
October 28, 2004
The Christian Science Monitor notes that that the rise in energy prices is starting to make a dent in household budgets -- not just for the middle class and the poor, but even for the wealthy.
Like our cars, our houses are getting larger and larger, particularly at the high end of the market:
The nation's abodes, just like the size of the average car, are getting larger and more complicated. According to the National Association of Home Builders, the average new house was 2,230 square feet in 2003, compared with 1,500 square feet in 1970. And it's not unusual to see something much larger. Last year, the NAHB showcase home in Las Vegas was more than 5,000 square feet. This year's home in Orlando, Fla., is more than 8,000 square feet.Larger homes use a lot more energy than smaller ones. So as energy prices rise, people with the largest homes get stung the worst.
Of course, the wealthy are most able to take the hit. But some people who wouldn't have thought twice about energy costs a couple of years ago may start to feel the bite of rising prices: heating oil is 60% more expensive now than at this time last year; propane, 30% more expensive; and natural gas... well, just look at the graph below (from WTRG Economics).
Along with media coverage of political races, many social and economic indicators are based on survey research: polls. (The Cascadia Scorecard currently employs no original polls, but our economy indicator is derived from government survey research on unemployment, poverty, and household income.)
But the reliability of survey research may be in peril, because ever fewer people are willing to participate, as the Washington Post reports:
In the 1960s, it was common for two-thirds of those contacted to complete a telephone survey. But participation dropped steeply through the 1980s and early 1990s, when it appears to have leveled off. . . . Currently cooperation rates hover at about 38 percent for the big national media surveys conducted over several days, but can dip down into the teens for surveys completed in a single night, says Jon Krosnick, a psychologist at Stanford University who has completed a groundbreaking study of response rates.
Partly, declining participation in surveys is a natural defense mechanism against their proliferation (and their evil twin, telemarketing). But interestingly, it's also a symptom of declining civic engagement or "social capital," according to political scientist Robert Putnam, author of the ground-breaking book Bowling Alone. People who are decreasingly connected to each other through involvement in a variety of local organizations tend to trust strangers (including telephone pollsters) less. They also tend to be less generous with their time.
October 27, 2004
One crude measure of sprawl is the share of new housing that is going into the central city, as compared to surburbs and outlying areas. On this measure, King County excelled in 2000 when the county's Annual Growth Report revealed that fully 45 percent of permits to build new housing had been given for projects inside the city of Seattle. The city has 32 percent of the county's population, so the smart growth principle of concentrating growth in the core of the metropolis seemed to be in practice.
The new county Annual Growth Report, which I mentioned a few days ago, shows how illusory that impression was. By 2003, that figure had dropped to 25 percent, as shown in this chart I assembled from information buried in the report. Seattle isn't even taking its fair share of growth, much less taking a disproportionate share, as required to protect farmland and open space -- and to make the city more walkable, transit-friendly, and vibrant.
The Seattle-based issues-and-advocacy practice of ad giant DDB Bass & Howe has an award-winning public service announcement for energy conservation. The spot won an Emmy!
Some time ago, DDB did two very funny energy efficiency PSA’s for the Alliance to Save Energy. One was about the “static electricity house” (in which the kids rubbed their stockinged feet to power the appliances). Another was about an energy-themed school science fair. Can someone find the links and post them in comments?
UPDATE: You can find the two other spots here.
October 26, 2004
Smart Growth Jackpot
Portland gets all the attention for its growth policies. Its urban growth boundary -- in place since the 1970s -- is widely (and correctly) credited with limiting low-density sprawl on the urban fringe, and promoting compact neighborhoods with a healthy mix of homes, stores, and businesses.
But I keep hearing Portland's critics say that Portland's effort to promote density has gone too far. That the city has grown too dense, too fast. Are those claims right?
In a word: no.
We just released a report that took a look at growth patterns in 15 cities across the U.S. that are comparable to Portland in size or growth rates. And what we found: greater Portland isn't the densest metropolitan area we looked at. It isn't even close.
In average density (that is, number of people per acre in the city's urban and suburban zones) Portland ranked 6th out of 15. In the share of residents living in compact communities (areas with 12 or more residents per acre), Portland was 7th out of 15. Just one greater Portland resident in four lived in a compact neighborhood
The big winners in the density sweepstakes were...wait for it...Las Vegas and Denver. That doesn't mean they're the densest cities in the U.S., just the densest among the cities we looked at. But their success is part of a broader pattern: the most compact cities tended to be in the arid west, where water scarcity acts as a curb on low-density development.
So the bottom line: Portland just isn't all that dense. But it did a pretty darn good job in protecting rural land, given that it's got the abundant rainfall that's so common among the most sprawling cities we studied.
Portland really shines in 2 areas: limiting the loss of rural land to suburban sprawl; and limiting the growth in very low density sprawl (between .5 and 5 residents per acre). The two are linked: Portland saves rural land by limiting very low density development--think houses on 5 acre lots--on the outskirts of town. That kind of development is terrible for agriculture, because it consumes a lot of rural land to accomodate just a few residents. It's relatively uncommon in Portland, but the norm in some eastern cities.
So my advice on scaremongers who decry Portland's inhuman densities: don't believe the hype. Portland's not nearly as dense as the anti-smart growth crowd would have you believe.
October 25, 2004
We just posted a new Cascadia Scorecard report on sprawl trends. Find it here.
The gist is that Oregon has done a good job of protecting rural land around Portland: it's the best of eight similar cities on that score.
It's not as good at channeling growth into compact neighborhoods.
October 22, 2004
Towers and Walls
Vancouver’s soaring downtown construction is now embracing green building practices and multiple use within each tower, says the Sun. Wow.
King County’s legal "wall" against sprawl is working, says the annual Growth Report. (King County, containing Seattle, is the most populous county in Cascadia, with 1.8 million residents.)
October 21, 2004
The U.S. Coast(al Shipping Industry) Guard
A disturbing exchange is buried in a routine update on the Puget Sound oil spill today.
Kathy Fletcher, director of People for Puget Sound (and, full disclosure, a friend) is quoted as saying:
"We need to figure out how we can mount an effective response to oil spills at night. And if not, we need to look at what activities need to be curtailed at night if we can't respond."
Fair enough. Not saying I agree, but it's Kathy's job to advocate for the Sound. That's what her contributors pay her for. The obligatory rejoinder from industry follows, as expected:
"Given the fact that upward of 95 percent of the cargo that is traded with the U.S. with other countries comes by way of the sea, . . . to curtail any cargo operations during the evening or low-light conditions would severely impact the economy. It would not be feasible for our local area to endure any kind of curtailment."
Who said this? The head of a shipping company? A spokesperson for the freighters’ association? No, it was Commander Mark Dix of the US Coast Guard.
Does the Coast Guard consider it “feasible for our local area to endure” more oil spills like the one that just happened? Oil spills undermine our economy, which now depends as much on clean water, beautiful beaches, and productive fisheries as it does on ports and shipping lanes. And oil spills undermine the ecosystems that define us as a people in this part of the planet.
Even more to the point, why is a US Coast Guard officer shilling for the shipping industry?
The mission of the Coast Guard--the job we citizens pay Cmdr. Dix to do--is
“to protect the public, the environment, and U.S. economic interests – in the nation’s ports and waterways, along the coast, . . . “
Maybe he got confused.