A free mailbag

Tiny homes, GMOs, clothing, and what's right with America

Hey, folks — there’s been a mini-surge in free subscribers over the past couple of weeks thanks to the launch of Substack Notes. So I wanted to take the opportunity to run a rare non-paywalled mailbag column, in part to give unpaid folks a chance to read and consider whether they might want to become paid members.

Paid members get full access to all articles, which includes plenty of normal columns but also the weekly mailbag. As a paid member, you also have access to the comments section and daily discussion threads, which means you have the opportunity to suggest questions for the weekly mailbag. Paid members also get invites to book clubs and other virtual events, plus the pride of knowing that you are supporting what you hopefully believe to be a worthy enterprise.

Discounted memberships are available for students and educators with a .edu email address and for government workers and military personnel with .gov or .mil addresses. Something that very few people take advantage of but that I want to flag is that discounts are available for small groups if your organization might be interested in something like that.

At the top of each mailbag, I like to flag some positive developments or news stories or things worth praising or that just elevate general good vibes. One of the major pathologies of media is that negativity performs better in terms of clicks, shares, and engagement, which generates a negativity-inflected climate. If you have a different business model, you should do something different, and so we try to inject some regular positivity into the discourse. This was originally suggested by a commenter, and though we’ve lost track of who it was, feel free to take a victory lap in the comments if it was you!

On to the week’s good news: we have a huge new housing reform proposal from San Francisco’s mayor, growing labor union support for statewide housing reform in California, quality improvements in McDonald’s burgers, a cool idea for improving the federal Child Tax Credit while retaining a work requirement, a cool proposal in Maine to use state funds to plug the gap in the federal CTC, and huge improvements in the IRS’ customer service thanks to the Inflation Reduction Act.

And now the mailbag.

Lost Future: Why is the US economic model so successful? Just returns to scale? The US has had the fastest growth rate of any developed country over the past few decades, no matter how you slice it- 21st century, post-2008, and now again post-Covid. When the EU became a thing during the Dubya administration, it was larger than the US- but we've overtaken the EU + Britain after the GFR (no I'm not sandbagging by excluding the UK). I'm not sure our growth rate is always higher during booms, but we seem to recover from crises (GFR, Covid) unusually fast- or maybe Europe is just unusually bad at recovery.

According to a recent Economist article on this topic, the US has the same proportion of global wealth as we did in 1990 (25%), 58% of the G7 wealth (it was 40% in 1990), and 54% more GDP per capita than Japan (it was 17% in 90). We've had a less dramatic per capita increase over Europe in that time period too.

There’s a lot one could say on this topic, starting with the observation that part of the gap is demographics (we have fewer old people) and part is hours worked (we take less vacation), but those don’t fully account for the difference. And it’s an interesting question.

Back 15 to 20 years ago, I was quite bullish on Europe. For one thing, I just generically would expect a peaceful continent with the rule of law to display convergence to American levels of productivity and income. But secondarily, European countries seemed to be taking big steps toward addressing their main handicaps by both deepening and broadening European integration. So what happened? I think there are four big reasons, listed here in order from most to least attributable to “Angela Merkel is bad.”

1. Better macroeconomic stabilization policy: Ben Bernanke and the 110th Congress left the United States with an understimulated economy in the wake of the Global Financial Crisis, but it was much, much less understimulated than what the European Central Bank and policymakers in key EU countries (mostly Germany) foisted on their continent. Germans, in particular, were weirdly insistent on viewing everything as a zero-sum contest between their interests and those of southern Europe. But if Germany had done a VAT cut, invested in some infrastructure projects, and built up its military reserves, Germany would be better off today. This would have also had spillover benefits for Italy, Spain, Portugal, etc. And if Germany had coordinated similar actions with other fiscally strong states (Netherlands, Finland, Austria, etc.), the benefits would have been even larger. This doesn’t have a lot of direct policy relevance today since you can’t go back in time and fix it, but it contributes to the income gap, and we see poor European military readiness is a big problem that’s come to the fore with the war in Ukraine.

2. Better energy policy: The American energy revolution that played out during this time period is perennially underrated because Republicans like to pretend Democrats have strangled fossil fuel production and Democrats seem embarrassed to admit that they haven’t. But back in the mid-Bush years when America was importing all its oil and when rapid economic growth in China was pushing commodity prices high, Europe’s big bet on energy efficiency seemed like a huge advantage. But then in the shadow of the Great Recession, fracking became a big thing and started transforming the global economy during the Obama years. The United States is now the world’s biggest producer of oil, we are a net energy exporter, and our CO2 emissions fell because gas + renewables are an economically potent combination that’s much cleaner than coal. None of this is to say that the European bet on efficiency is bad; America would be better off today if we were more efficient. But Europeans totally missed the boat on fracking, banning it in Germany and several other countries even while they began importing more Russian natural gas. If Europe had embraced fracking, its economy would be in better shape and its emissions would be lower. And if Germany hadn’t done its nuclear phase-out, things would be better still.

3. Silicon Valley: America was the world leader in personal computing devices and software in 2013, 2003, 1993, and 1983, just as we are today in 2023. But this has become a much bigger deal over time. Unlike on (1) and (2), I don’t think there’s some obvious European policy error here, because the American advantage in this industry is longstanding. But today, Apple, Microsoft, Alphabet, and Amazon are four of the world’s five biggest companies (Saudi Aramco is the other one) by market capitalization, while the biggest European company, LVMH, is smaller than Meta. The actual roots of American dominance here go back even further than 1983 to before personal computers existed — the deep history of Silicon Valley goes back to Federal Telegraph Corporation setting up in Palo Alto and scoring a Navy contract to create a global radio communications network way back in 1912. You obviously don’t want to say that everything since then was baked into the cake 110 years ago, but Silicon Valley is very hard to dislodge because it’s a global talent center. Elon Musk and Sundar Pichai and Satya Nadella and Patrick Collison and many other important technology industry figures were not born in the United States, but they came here in large part because so many other people have come here. I’m sure there are EU policy choices that could have been better, but fundamentally, the key thing is that we (so far) haven’t screwed this up with dopey nativist and populist sentiment (see Josh Hawley whining about Amazon).

4. Big chains: In the service sector, which constitutes the bulk of a modern economy, the primary way for productivity to improve is that one company that is slightly better than other similar companies puts some of them out of business by opening new branches. It is extremely common in the United States to hear people complaining about the toll this takes on mom-and-pop enterprises (see Josh Hawley whining about Walmart), but undercutting mom-and-pop is the only way to make progress in these kinds of industries. It’s not that small businesses are bad per se. But what’s good about them is that a new business is likely to be relatively small, and we want an economy where a new small business that’s superior to other existing small businesses can put them out of business and grow large. And while America does feature a lot of whining about this and a lot of unreasonably balkanized industries, European policymakers have been more responsive to this whining and it shows.

None of this is to deny that Europe has some considerable countervailing virtues. The chain aversion, for example, makes for towns that are more interesting to visit on vacation. It’s also the case in the United States that the most charming towns to visit on vacation have few big chains — it’s pretty boring to visit a whole new city and then find yourself shopping at Target and eating at Chipotle.

The United States has also done a terrible job of translating our greater wealth into population-level health outcomes. If you’re assigned to be the European Union’s lawyer and defend them against the case prosecuted in that Economist story, I think you should lean pretty heavily on the life expectancy stuff. There’s a cliché that’s like “you Americans live to work, we work to live,”¹ and having a big house and a nice car doesn’t help you very much if you’re dead. But at the end of the day, I think if you look at the four major factors I cited above, none of them feature a tradeoff with life expectancy. The fentanyl overdose problem in the United States is a huge deal, but it’s not like Germans would all be hooked on opioids if they fracked their own gas instead of importing from Russia.

Andres Horcajo: Any thoughts on how tipping has gone out of control? Is there any way American prices will at some point include taxes and tips/fees like everywhere else in the world?

I dunno, like a lot of people, I find the spread of POS tip prompts to be a little weird/annoying, but I’m not sure there’s a big problem here. This strikes me as good fodder for standup comedy or Twitter jokes, but it’s not actually a policy issue.

The good news is that if you don’t like tipping, these days you can add “I’m concerned it’s only fueling inflation” to your list of reasons not to tip.

Just some guy: Going off of my comment on the main article today, what do you think police departments SHOULD do about riots? In 2020 there was lots of condemning of bad actions by police departments attempting riot control (some of the criticism justified), but not much discussion of what an appropriate response WOULD look like. The next time there's a riot in a major American city (and there will be eventually), what should the police do?

Everything’s relative, right?

If you look at the events of 2020, it seems to me that there’s no city that had riots as bad as what we saw in Los Angeles after Rodney King or what exploded in multiple cities in 1968. Part of the issue here is that American society is, in fact, marked by much less racism than in the past. The LA riots broke out when the officers caught on tape beating King were acquitted by a jury; Derek Chauvin is in prison. But it also seems like police departments have perhaps gotten better at the objectively difficult task of riot control.

Looking across jurisdictions in 2020, I think you can pretty clearly see that Portland tried to take an unusually “hands-off” approach and that was a mistake. It is probably not a coincidence that the most riot-afflicted major American city is also the whitest major American city; typical 21st-century American cities have a substantial “Black establishment” of middle-class homeowners, church leaders, and politicians who have normal, non-edgy views on the merits of looting. So I think “don’t copy what Portland did” is good advice for mayors everywhere. What’s conceptually tougher is that Kenosha also had a really big problem. Kenosha is just an awfully small place — it’s the fourth largest city in Wisconsin — and I think smaller police departments understandably don’t have as many specialized units or as much training for how to deal with unusual scenarios.

I think it mostly points to a bigger-picture question about whether the extreme local fragmentation of policing in the United States is a bad idea.

Jon Saxton: Wondering if you have anything to say about the increasing involvement of the betting industry with pro sports. Right now, I find that I can’t watch baseball with ad after ad for betting. It’s both annoying and disconcerting. ANd not just ads but also in-studio interviews with gam personalities and flacks.

I feel like it’s polluting the experience and likely corrupting the game. Thoughts?

Gambling regulation strikes me as a rare case of a true slippery slope. There was nothing wrong with the status quo of my youth where small-time gambling was tolerated, states ran lotteries to drive the mob out of the numbers racket, and you could go to Vegas or Atlantic City if you wanted to have fun in a casino.

But under that status quo, every jurisdiction had an incentive to allow a bit more gambling to minimize the diversion of gambling-related revenue to other places. At first, gambling spread slowly because this was a relatively minor factor. But the more places that opened up to some gambling, the more people worried about diversion. So now, even though I think the spread of legal gambling is probably bad, I also think D.C. should probably open a casino instead of having people go to Maryland. Sports also got pulled into this logic.

There’s nothing wrong with a little gambling every now and then, but as with many things in life, the guy who gambles very occasionally with money he can easily afford to lose is not the profitable customer. A large, legal gambling industry makes its money by marketing to problem gamblers. And it’s especially unfortunate because it’s not like if you go back in time to 1993 we were dealing with some huge downside of anti-gambling laws — prisons weren’t teeming with blackjack dealers and we didn’t have rival poker crews gunning each other down over territory. I recommend Milan’s good piece about this from last year.

HoosierKen: Did partisanship cause the failure of Bush's phonics based reading initiative? Why do most children in the US still not receive literacy education aligned with best practices?

There’s been a surge of media interest in phonics, thanks largely to Emily Hanford’s hard work. I think she’s basically right and deserves enormous credit for driving attention to this neglected subject.

I do think the actual history of the Bush-era “Reading First” initiative underscores that it’s a bit harder to move from the basic “we should teach kids phonics” insight to actually teaching kids phonics. There was absolutely partisanship afoot in the criticism of the program, but the critics also had the goods in terms of a negative GAO evaluation and various conflicts of interest. More broadly, there are plenty of examples of phonics initiatives that don’t work because implementation is hard. That’s not to defend the anti-phonics side of this argument, which pushes strategies that as best I can tell never work. The point is just that designing and implementing programs at scale is very challenging, and I don’t think Bush really got it done. But Democrats should have pushed for a better program; instead they killed it and set us on a 10 to 15 year pause before returning to the basic conclusion that we need a phonics-based literacy curriculum. Though in the interest of balance, I’ll note that the conservative backlash to the Common Core has now made it hard to accomplish this.

Kevin Heller: What do you think about using tiny homes to help provide shelter for the homeless.

Housing people in small dwellings rather than tents is a no-brainer.

Housing them in “tiny homes,” which is usually taken to mean single-family detached houses that happen to be unusually small, doesn’t strike me as the best solution, just because it’s an inefficient use of land. But I don’t think we need a big conversation about what kinds of homes people should live in. On a policy level, what we need is to legalize more housing, and to address homelessness, we especially need to legalize more low-end housing. That includes micro-apartments, tiny homes, rooming houses, windowless bedrooms, single staircase buildings, and manufactured housing.

It’s also become clear to me over the course of arguing on the internet that a lot of people say “homelessness” when they mean “drug addicts and crazy people acting out on the street.”

To me, these are somewhat distinct issues. I saw a guy walking down the street the other day screaming obscenities at passers-by. I guess the odds that he’s homeless are pretty high, but it’s entirely possible that he has a place to live. The problem, either way, is that he was roaming the streets screaming obscenities at every woman he passed. Conversely, right as I’m typing this, I see out the window of the coffee shop a clearly homeless man who’s just sitting by a tree not bothering anyone. I’m glad he’s not bothering anyone, but it seems really bad that this guy doesn’t have a place to live.

DS: Thoughts on GMOs? To me, this strikes as a topic similar to nuclear where folks have far overreacted on risks to our collective detriment and particularly the detriment of the developing world. By restricting spending and investment towards GMOs by obsessing over non GMO products, first world countries are hampering progress that has demonstrated huge amounts of social benefit (golden rice, increased yield crops, blight resistant crops, etc) and has a lot of further potential, all to prevent abstract risks. But I’ve heard others make the argument that the GMO risk is more akin to AI risks where the tail end risk is like an end the world scenario.

I think the GMO situation is even more clear-cut than the nuclear situation.

With nuclear, I think there is a widespread misconception about the scale of the risks involved in both operating reactors and dealing with nuclear waste. But the basic perceptions that a nuclear reactor is a dangerous facility and that nuclear waste is a problem are both correct. The misperception is about the relative risk of these activities versus setting fossil fuels on fire versus dealing with the downsides of expensive electricity. But you clearly do need strict safety rules around nuclear reactors and nuclear fuel — radiation is a real thing. With GMOs, by contrast, the risk just seems to be totally fake.

What is not fake is that some of the underlying technologies you can use to genetically engineer plants can also be used to genetically engineer viruses, which is potentially very dangerous. I think that we need to have much more investment in preparing for a world in which pandemics are likely to be more frequent and more severe due to bad actors with genetic engineering capabilities, and also to regulate this space much more stringently. But that’s a fairly distinct space from the one in which people try to grow better corn.

Jason S: You’re not big on Rawls but wouldn’t you say that the veil of ignorance is an under-appreciated mental stance from which to assess policy and how one’s society is structured?

This is actually part of what I find frustrating about Rawls.

If you’re doing intellectual history of the 20th century, then a big part of Rawls’ achievement is that by framing political theory as something you can generate by considering problems in formal decision theory, he kind of revived its respectability after logical positivism and linguistic philosophy had turned it into a no-go zone. Except whenever anyone tries to dispute his principles of justice as a matter of decision theory — John Harsanyi being the big famous example here — Rawls says that’s not what he meant. So even though over the past 50 years, many different people have either agreed with Harsanyi or independently converged on the same argument that the “correct” choice behind the veil of ignorance is to maximize average welfare, the hardcore Rawlsians say that’s all a big misunderstanding. And, indeed, if you read Rawls’ later writings, he’s really at pains to frame his point that way — he’s not saying that maximin is a rational decision procedure under conditions of ignorance. At that point, it’s really not clear to me what role the veil of ignorance is actually playing in the argument.²

Karl Lehmann: What underrated subject or subjects ought to be taught more in schools? Which overrated subject should be replaced?

Two unorthodox classes would be in the core curriculum at Yglesias University.

One is just like “how to read an article about some studies.” A thing that happens all the time is some research gets written up — either one paper or a series of papers — and then just kind of plopped out in the world. I think a person should be able to read a media article like that and then be able to tell whether the article has given them a clear sense of the study’s methodology. And if it hasn’t, they should know how to find the study and figure out what the methodology was. They should also have a firm enough grasp of methodology to understand why a true RCT provides the strongest kind of evidence, without insisting that it is the only kind of valid evidence.³ Unfortunately, one reason you need a class like this is that lots of academics don't seem to understand how to do a good study, so I'm skeptical that the education system is ever going to deliver clarity on how to sift through this work.

The other thing is that we are exposed to a lot of video content in our lives, but most people know basically nothing about the formal aspects of shooting and editing video. I think something that helps people understand what they are seeing would be very informative and useful — it doesn’t need to be a super-artsy film theory class or a super-technical optics class, but something in a kind of middle ground where people would learn about lenses and cuts and effects.

Jeffrey Mihalik: What do you think about Honolulu spending $10 billion on a 10 mile elevated, grade separated, fully automated driverless metro that will only operate from 5 a.m. to 7 p.m.?

I don’t have any particular insights beyond the fact that it’s dumb, but it sure is dumb!

This is why I think a total reboot of the transit funding system is needed, with an unequivocal focus on funding projects that do the best in terms of cost per rider. There are lots and lots of technical aspects of organizing a high-quality cost-effective project, but it’s pretty clear from looking at what gets built that most agencies are not sincerely trying to make high-quality cost-effective projects. Not surprisingly, we don’t end up with many that way. But while there is definitely a sense in which mass transit has a multitude of benefits, fundamentally those benefits are downstream of ridership.

Craig W: After spending some time in Chicago, is the weather really that much worse than New York or Boston? Is the weather really the main difference between Chicago and those markets? Or do Boston and New York have other advantages that allow them to overcome similar not great weather?

In January, the coldest month, the average high temperature in New York is 39 degrees while in Chicago it’s 31 degrees (it’s 36 in February and 37 in December). So while on any given day there’s a decent chance of weather overlap, fundamentally there is a three-month span in Chicago that is colder than the coldest month in New York. Boston is colder than New York, but even so, February in Chicago is colder than January in Boston.

My point in emphasizing the weather, though, isn’t that a city can’t overcome cold winters — Boston clearly has — but that if you look across the whole set of Midwestern and Sunbelt cities, it’s clear that cold weather is a significant headwind in a way that hot summers aren’t. If you don’t believe that, then you need to believe that by some crazy coincidence, every cold inland city adopted bad policies while every hot one adopted good policies, which I think is silly. Once air conditioning was invented, people decided they’d rather live in hot places than in cold ones.

David_in_Chicago: How would you have edited Brandon Johnson's statement?

“In no way do I condone the destructive activity we saw in the Loop and lakefront this weekend. It is unacceptable and has no place in our city. However, it is not constructive to demonize youth who have otherwise been starved of opportunities in their own communities. Our city must work together to create spaces for youth to gather safely and responsibly, under adult guidance and supervision, to ensure that every part of our city remains welcome for both residents and visitors. This is one aspect of my comprehensive approach to improve public safety and make Chicago livable for everyone.”

A lot of success in electoral politics stems from playing against type.

If Paul Vallas had won the election and then this kind of chaos happened during the transition and someone on his team floated this exact draft statement to me, I would have told them it’s a great statement. Nobody who matters in Chicago was afraid that Vallas was too soft on crime, but plenty of people in Chicago were afraid that Vallas lacked genuine empathy for Black residents of the South Side neighborhoods that are most afflicted by violence and disorder. If he’d made a few more statements like this over the course of the campaign — and in particular, if he’d said fewer things in the years prior to the campaign that seemed to be playing to white-flight suburbanites who don’t like the city — he might have won the election.

But he didn’t win, Brandon Johnson won. And for all the reasons that this would have been a good statement from mayor-elect Vallas, it’s a bad one from mayor-elect Johnson.

If he doesn’t in any way condone looting and violence, he should say that and not qualify it — after calling it unacceptable he should pivot to talking more broadly about how he needs all his progressive allies to understand that none of their progressive dreams are going to come true if tourists, businesses, and commuters start fleeing the central business district and the cornerstone of any plan to spread prosperity and opportunity to underprivileged neighborhoods is to preserve the existing centers of prosperity. That would speak to doubts that people have about Johnson, like whether he understands that his vision requires an economically viable city.

I think this is an unfortunately common failing of politicians, who start saying stuff that attracts certain supporters. Then those supporters say nice things about them, and they naturally like people who say nice things. At that point they start over-indexing on “are these nice people who praise me going to feel I just dropped another banger?” when what they ought to be focused on is “are the cross-pressured people who weren’t so sure about their choices going to feel better or worse about me after this?” That’s not just a question of what the cross-pressured people agree with, it’s about understanding the cross-pressured people’s doubts. Vallas failed to assuage the concerns of people who voted for Lightfoot or Garcia in the first round but worried that he’s a crypto-Republican. Johnson, with this statement, failed to assuage the concerns of people who had serious doubts about Brandon Johnson but who agreed with Johnson’s argument that Vallas is a crypto-Republican. His team knows they made that argument, and they know they were successful with it. That bought them a chance to govern. But they should be aware at all times that their margin of victory was provided by people who weren’t necessarily bought in on the vision of the teacher-turned-organizer-turned-insurgent but who found Vallas unacceptable.

It reminds me in another way of Ron DeSantis’ fumbling primary campaign where he hasn’t seemed to have a theory of who he needs to persuade. But if the high-level pitch for RDS is “Trumpism without Trump,” he needs to worry about the people who genuinely liked some of Trump’s moves away from welfare state rollback. Instead, he spent a long time seemingly reassuring mega-donors behind closed doors that he agrees with them about this stuff. But people who don’t like Trump aren’t the people he needs to convince!

Aaron Abelman: I’m curious about your thoughts about the link below. Lexington, MA is where I grew up, and I’m honestly surprised to see it as a poster child for a town trying to follow (and go beyond) the new state law on zoning for more housing. Do you have any idea why Lexington is behaving so differently from other wealthy suburbs of Boston?

Some things I sincerely believe have more to do with happenstance than anything else. In California, for example, San Diego elects lots of YIMBY elected officials, while Los Angeles elects only NIMBYs, and my understanding is this is basically contingent.

But if there is a reason, it’s probably linked to Lexington’s very large Asian American population. In the Bay Area, Asian Americans are important pillars of the pro-housing political faction. The standard understanding is that this is because the pro-housing faction is also the law and order faction, and Asian Americans are more worried about public safety issues. That might be right, but it also might be that there is underlying agreement on the housing issue as well. Why? I tend to think there’s a kind of deep resonance between NIMBY politics and anti-immigrant politics — MAGA is essentially “community character” for non-college people — that is probably off-putting to educated Asian Americans.

1. Technically, Roman Polanski said this to me once, but if I mention him that tends to derail the conversation.

2. This is a point I’m borrowing from my former professor T.M. Scanlon, whose work you may know from “The Good Place.”

3. See the funny joke about where are the clinical trials demonstrating that parachutes prevent death while jumping out of a plane.