“Don’t support Uber just use taxis instead!” was one of my first indications of just how out of touch a lot of the media elite was. In the US at least, taxis were (and remain) a convenient option in exactly one location - Manhattan below 110th street. Sure they existed all over, but almost nowhere else was there the density to support convenient roadside hailing - even in NY that was iffy in big swaths of Brooklyn and Queens. You were reduced to calling, figuring out how to tell them where you were (not always easy if you were out late in a city you don’t know well- a prime use case for Uber today) and half the time or more they never bothered to show up. Oh- and talk to an older Black person about how “convenient” roadside hailing was. My understanding is that Uber and its competitors have also meaningfully reduced drunk driving deaths/ injuries as well. Just massive improvements to many people’s lives but a certain kind of person finds them icky because some Silicon Valley people got rich.
"Oh- and talk to an older Black person about how 'convenient' roadside hailing was."
This was one of the "comments I wanted to immediately make but knew I'd get beaten to while still asleep.". The idea that anti-neoliberals think that the "affluent-but-hardly-billionaires dispatch companies owners" were the *good guys* here was always laughable.
Self driving cars will probably go through the same cycle: "Those evil silicon valley billionaires over at Waymo." Ummm... you mean the people that saved countless lives from car crashes and made roadside car hailing far more cheaper and convenient than it has ever been.
This is true, but worth noting that uber first came onto the scene as an affordable product. When I lived in NYC, ubers were completely unaffordable and I never took them. That, plus the fact that city bikes and the subway were always pretty convenient as well.
True! I will say, DC is just so walkable and my office, gym, house, grocery store, and where most of my friends live are all within 15 min of each other. So I basically only walk and bike here.
For house hunting, I strategically targeted the only part of Boise that's easily bikeable/walkable. The bike infrastructure is actually really good here compared to the rest of the country, but it's the only viable form of alternative transportation here, and an incomplete solution for those who are unable/fearful of doing so. At least the electric micromobility advances help out a lot.
There are many many people in many situations who aren't served by city bikes and the subway. Uber is actually especially good in suburbs, which are sometimes public transportation deserts.
Beat me to it. I grew up in the relatively urban, near-suburbs of Chicago, and the few times I had to call a taxi service as an adult that shit took FOREVER. Usually the wait would be about an hour or so, and it was almost always in situations where I didn't know ahead of time that I'd need it, so I couldn't schedule it. The few times I've needed an Uber out here, the wait has been <10 minutes.
And I'm not even in a public transportation desert! I have a Pace bus route near me, and while it is MUCH cheaper, the route radiates out from a central hub, so you have to take your bus to the hub, and then take another bus out from there to your final destination, which might still be a decent walk. The Uber is much easier compared to basically any other options besides driving oneself.
Personally, I don't think I'm served by the subway. I recall one magical evening two years ago where heading to my destination a woman (!) pulled off #1 at the end of a subway car and on my way back I had to pepper spray a teenager on the platform who wanted to fight.
If they bothered to show up at all! Most cabbies don’t want to drive all that way out to the burbs to pick up a fare. The advantage of the digital ride sharing apps is that they make for a much more efficient market matching riders to drivers, exposing the latent demand in the suburbs and making it more likely that drivers will be able to pick someone up after dropping off. It also helps that Uber holds onto the users credit card ensuring that drivers will be compensated for cancellations. I think there are a lot of things that could be done better but it’s a huge step up from the cab situation in most cities.
Ubers never made as much sense in NYC. I remember that very distinctly. But in Chicago, Detroit, and San Francisco, the other cities I spent significant amounts of time in during that time period, they were an absolute godsend
Uber first came on the scene as a way to arrange a limo from a specially licensed driver more conveniently than you would traditionally do for prom or whatever. Then Lyft introduced the idea that anyone could pick up a “friend” for a small fee without needing a special license, and Uber realized that was the future. But Uber already had the brand name. Then they were both affordable for a while.
Now they’re getting closer to the price of operation.
You're affirming that affordability was a bait and switch built on VC cash that cab companies that actually had to turn a profit couldn't possibly access but you think it's good, actually
The argument against Uber - which I agree is on net a far superior service to taxis, including in Manhattan below 110th (whoever was respnsible for Taxi TV should be locked in a room with it and unable to turn it off for the rest of their life) - is that the congestion issues Matt alludes to *were, in fact priced already* via the medallion system.
There’s only so much road in NYC, so there can only be so many cars on it, so the medallion system was effectively a cap and trade system on cars occupying the road looking for hails. It was at least arguably *better*-designed in some ways than the moribund congestion-pricing proposal because the latter has no marginal incentive to leave the congestion area once you enter it (there was no per-hour price) whereas putting a maximum on cabs in a fixed-capacity road system is matching problem to solution quite effectively.
In practice, cabs weren’t great, were nowhere near as convenient as Uber, the pricing was better with the latter (although screw Uber for adding the scourge of tipping to it), and it turns out there are problems creating a regulatory property right out of restricted supply in terms of political constituencies enriched by that right opposing expansion or amendment of it, but the actual cab medallion system was, I would argue, not conceptually flawed. Instead it appears that the response to Uber was more like “shrug, I guess we don’t actually care about capacity limits in our fixed-size street grids being used up by cars seeking ride hails. Lol.” Which may in fact have resulted in substantial welfare improvements (I would agree it has), but I confess I am constantly scratching my head about the fundamental rationale for rationing — i.e., allocating the fixed good of road capacity using tradable property rights — *never actually went away.*
This is not "goal post shifting." The fact that congestion may be worst in New York doesn't preclude its being a concern, including one that influences medallion adoption, elsewhere - why would that be the case? The adoption of medallion systems in places without a lot of cabs does seem potentially supportive of a more general regulatory motive for the programs, and your initial comment was relevant, but "traffic is terrible even if it isn't quite New York terrible" doesn't seem like an argument for being unconcerned about congestion. I was asking the question because traffic problems seem like a confound as to teasing out motive: any place dense enough to have street hails as a viable industry almost certainly has an incredibly shitty traffic situation -- but IDK, maybe some place like Fargo has not-bad traffic and still regulates street hails or something.
While New York has plenty of congestion (and it's tougher than I thought to find decent metrics on this from primary sources) and appears to be the most congested city in America (most charts seem to say circa 101-108 hours lost each year to congestion), each of Chicago, LA, Boston, DC, and San Francisco appears to have around 83-89 (or up to 96 for Chicago) hours lost per year. Better, but still terrible. And Chicago and Boston appear to have outclassed New York (which had approximate parity with Philadelphia) as recently as 2022.
Sources (most mass market reporting seem to rely on the INRIX survey. Sadly the Bureau of Transportation Statistics was not very helpful here):
So here's the deal. There are going to be taxis. It's a really important means of transportation, for lots of reasons, and their convenience and utility can't be duplicated by other methods.
Plus, the public wants there to be taxis.
Now, if you want to tax the taxi industry (including Uber) to account for traffic externalities, that's a reasonable thing to think about. But there's going to be taxis. You're not going to force everyone who has a lot of stuff they are carrying, or who is afraid of crime and grime on the subway, or who doesn't want to or can't bike or walk, to use other options.
I initially pointed out that most places don't have New York traffic. You shifted the goal posts to any traffic (seriously, despite your false denials, anyone reading this can see that). But OK, yeah, there's traffic in lots of places. But see point (1)-- so what, a lot of people like and need taxis. It's an important service. If you want to tax externalities, tax them!
The bottom line though is that Uber improved the service of something that needed to be improved. And attacking it because you don't like traffic is just saying that the American public can't have a nice thing.
Not necessarily if you want to reserve some fraction of the road (up to and including most of it) for the traditional public noncommercial use that characterizes most public road use in the US. I wasn’t there at the inception of the plan but I have to assume that this was the initial logic of limiting the the number of medallions in the first place.
I think the medallion system had more to do with regulation of the taxi industry at its inception than with congestion. And, since it's NY, I'm sure there was also a lot of rent-seeking involved.
Taxis (including Ubers) that can't respond to hails don't require medallions, so, again I don't think congestion was the primary motivation.
It would be great if the city didn't try to reserve road use for any particular kind of vehicle and just let the market work it out (i.e. congestion pricing or road-use fees for all).
"Taxis (including Ubers) that can't respond to hails don't require medallions, so, again I don't think congestion was the primary motivation."
Without commenting on the remainder of your comments (some of which I agree with, congestion pricing and road-use fees seem like a good idea as long as they're administered well), I do think that this is a bit of a technological/temporal red herring. The past, AIUI so-called "black cars" (dispatch-based taxis hired based on a call rather than a street hail) didn't really troll the streets seeking ride hails (or, if they did, it was illegal, known as 'gypsy cabs'), and there was a lot more friction (and, often, wait time) to use dispatch rather than street hails. It was basically for lawyers and bankers who were working late in the office and wasn't a general-population substitute good for taxis.
Smartphones basically changed all of that, making Uber much closer to a perfect (often more-convenient, cheaper, and more available) substitute good to a ride hail and completely removing the phone-call based friction. As a result, Ubers just kind of ride around waiting to be called (or sit in a queue-like area similar to yellow cabs at the airports, though farther away and less convenient) and pose analogous commercial and congestion-based considerations.
TL;DR: the distinction between dispatch based cabs and street hails has more or less evaporated for all practical purposes *now,* but that wasn't true when the medallion system was adopted.
Lots of people I knew in NYC when I lived there in the mid-noughts had a local cab company's number hanging around. It wasn't useful for getting home after a late night (because it would have been based where you lived), but it was what you used for getting *to* that late night or getting to the airport.
It was enough of a staple of NYC life that the three family businesses that are featured in In The Heights are a bodega, a hair salon, and a cab company.
Also worth pointing out that when Uber first launched in places like SF and Seattle, it was decidedly MORE expensive than taxis, not cheaper. It was just a vastly superior product, for all the reasons you mention, so it grew rapidly anyway.
I was happy to pay $10 more for an uber to the airport because I knew that it would, you know, actually show up and drive me to the airport, whereas if I ordered a cab the night before to schedule a pickup at 5 am, it was a coinflip at best that the cab would show up.
I can say that in Chicago, Uber and its progeny have, in the fullness of time, made urban mobility worse than where we started.
That doesn't necessarily refute Matt's broader point, but I think using Uber as an example of a growth-promoting innovation that has straightforwardly advanced the ball is just incorrect.
That's not been my experience. Chicago public transit just has so many point to point gaps - mostly diagonally. Want to get from Ogilvie to 600 W. Chicago or Watertower? Good luck. Walk. Clybourn to Wrigley? Same thing.
The Lincoln Yards project should have incorporated a bus-only lane connecting Armitage from the Blue Line stop in Wicker Park to the Brown Line stop in Lincoln Park, integrating Clybourn with both.
Armitage is the only major East-West arterial that doesn't currently pass through the highway/river so you're not taking anything away from private car users, just adding a high demand, high frequency shuttle filling that obvious gap in the transit network.
(And when I'm Mayor and we combine the Brown and Pink lines? Then we're cooking with gas folks)
I would only add the Lincoln Yards project should just get built. I don't really care much about the finer details. That Ald. Waguespack can go fuck himself for his continued NIMBY opposition and I loved Mayor Johnson coming over the top to inch it forward.
The 606 bike trail should 100% have been a light rail connecting Metra near Pulaski to Western to Metra again at Clybourn to either Armitage or North/Clybourn.
The 606 basically goes right behind my house and as a bike* and walking path it’s awesome. It being a light rail would be a no from me. I guess that makes me a literal NIMBY.
*It’s actually not great for bikes and I wish they weren’t allowed for adults. But obviously that ship as long since sailed.
That's my take, too. Half the time when my wife and I go down there from up north, we just end up walking (or taking an Uber, if we are dressed nicely), because there are so many gaps and once you figure in the busses and whatnot, it's not worth it, time-wise. The bonus is that Chicago is the best summer and fall walking city, to me.
I worked in Cicero for two-ish years, which, while I understand not technically the city, is close enough to count for this conversation. There was basically no way for me to get to work using public transportation that was sub-3 hours, which is wild because I live within spitting distance of the UP-North Metra line. The door-to-door drive was only 1 hour, 15 minutes.
As a resident of the far north side (Andersonville) who works from home & doesn't need to commute daily, I would agree with David. For trips where biking isn't feasible, I can get around much faster at an affordable price point than I could on the El or CTA bus. Thanks to the rideshare apps, my fiance and I have managed to stay car-free, whereas in the before times we almost certainly would have bought a car.
The fact that CTA ridership is down is because of its post-pandemic decline in service, which in turn is downstream of mismanagement by Dorval Carter and indifference on the part of Mayor Johnson.
Do you refuse to take buses? I mostly just use Divvy in those situations (or, well, in all situations—biking is usually faster, cheaper and more enjoyable for me), but a bus or a little bit of walking put a train makes those things work fairly well.
Nope. It might have been worse for me though since I was living in the West Loop and that areas is more isolated from the CTA but I took the #8 to work for 5 years. And yeah, Divvy a game changer for the shorter commutes. But I don't know that I could take it 2-3 miles in work cloths in anything but the mildest spring and fall weather.
I don't know what you have to wear to work, but I rode year-round except for rain for 8 miles a day last year. Such a great way to start the day, and I rarely arrived feeling inappropriately sweaty. I worried about that, but it generally wasn't a problem. And in the loop (where I wasn't working), you can rent showers/lockers in gyms without bringing your total commute cost up to what CTA or driving would cost.
Give it a trial run on your commute home today—such glorious weather!
Noted and all great points. But just to the point my comment replied too ... Divvy is a genuine improvement to the network and is operated by Lyft (maybe was? IDK) so - I still think Chicago mobility currently is >> than the prior pre-Uber period.
It's essentially a two-step of the initial surge of Uber killing the cab companies and diverting massive resources from the CTA, followed by Uber becoming much more expensive and less available.
Ubers cost more and take longer to acquire than cabs used to (and are just generally worse road users than cabs were), and the CTA is less reliable.
The silver lining (and maybe the redemption of Matt's argument) is that the Curb app which offers Uber-like functionality for proper cabs seems to be becoming more and more popular. Maybe we end up with Uber's ride hailing technology innovation overlaid onto what we previously had.
What did Uber to do CTA and what public resources did they divert? If Uber never came to be is CTA somehow magically better or more reliable? IMO CTAs problems are way more intwined with deep city machine politics, post covid office culture, union negotiations, and the basic inability of any US polity to create any infra project at a reasonable cost and I none of those things are Ubers fault.
It just siphoned away ridership and therefore fare money. Which is the same thing more available and cheaper traditional cab service would have done, it's not like there's some special magic about Uber in that regard, but that is in practice what happened in the early to mid 2010's.
Yea but more fare rev doesn’t make the service better magically, it gets consumed by the city machine that views CTA as a jobs program, not a constituent service. IMO a in universe 2 without Uber CTA has essentially the exact same performance coverage etc. this isn’t a Chicago specific issue either, basically all cities w transit in the US have the same issue
Are there good figures on this, or is it just intuition?
When I lived in Chicago (mid to late nineties), the backbone of CTA ridership was commuters, and I'd be surprised to learn that rideshares ate into that significantly.
If I had to predict how Uber would eat into the CTA's business, I'd expect reduced red/purple line evening and weekend service would be the first victims (where that's standing in for whole class of bus and train services). Is that what happened?
This was the point I wanted to make. The cheap convenience Uber offered in the early years is gone, but public transit was substantially harmed.
Ironically, now that the VC subsidies are gone, when I do need a ride for something, I find cabs are much more reliable (like airport transit). If you arrange for one, it actually arrives when you schedule it.
When I first moved to Los Angeles there were flyers up around downtown saying “new program - hail a cab”. Apparently it was a trial that cabs could pick people up from the street.
But it failed because there wasn’t enough density of users and vehicles.
Then a year or two later Lyft started the idea that anyone could pick up anyone with a car, and suddenly the phone gps made it much easier to make the connection than trying to visually identify someone looking for a ride, who might be a block or two away.
You are genuinely a huge fucking moron and incredibly disingenuous. There's are profound labor-based humanitarian argument against Uber. There's the observation that Uber only accomplished what it did because of the deeply toxic dynamics of VC funding. There's the fact that drivers have terrible working conditions and pay. But, no - the ONLY reason anyone could criticize Uber is because Silicon Valley is icky. You're a joke dude.
I know you've got a big following and I've enjoyed reading some of your pieces in the past. But we have rules in the comment section, and one of which is we don't engage in ad hominem name calling. You're always welcome to substantively disagree, and it's totally welcomed.
That's not always a good argument, though. People will accept shitty paid work if they don't personally have a better alternative, and allowing even shittier paid work can allow for a worse equilibrium (worse for workers). This is an old argument for minimum wage, old enough that Marx made it (or something similar) -- workers don't benefit from the "freedom" to accept bad deals if it means bad deals are what will be offered to them, versus an alternative where they cannot accept the bad deals and employers are compelled to offer something better.
You could study the effects of Uber more accurately if you could find two similar labor markets, but one allows Uber and the other doesn't. Or look at Uber drivers around the time Uber enters or leaves a market -- are the same people better off with Uber around or without it? I don't know the answer, but that kind of natural experiment is much more informative than just saying there are people who will accept money to do something.
Matt writes: "There’s no magic formula of growth-and-redistribution that ensures an endless series of electoral victories"
For all of the Democracy is on the Ballot rhetoric (some of which I agree with), the vision of the anti-neoliberal faction appears to have coalesced around a very anti-democratic approach:
1. Use regulations to accomplish what the legislature will not do. (Trust the Experts™, California banning ICE vehicles)
2. Implement those regulations through the actions of Executive Agencies.
3. Insulate executive agencies from the democratic process as much as possible. (see: CFPB original design)
4. Neuter the judiciary's role in limiting what actions the executive agencies can do. (see: the uproar over Chevron and resulting Biden SCOTUS proposals)
Legislative policy wins require the slow, tedious process of winning elections, compromise, incremental reforms and persuading voters to accept change. But for those who are convinced by the catastrophizing of the moment, incremental changes are too slow, too uneven and too precarious to leave to the democratic process. Trump scares me more than the anti-neoliberal left. But both are threats to our system.
I won’t be because I agree with more of Obama’s policies. But that’s my point, the anti-neoliberal left executive lawmaking is seen as more of a threat because many of us here view the policies to be not very good.
The Bad Person was already POTUS for four years, and it didn't really seem to materially impact people's sentiment regarding executive power. People's views still seem to be "executive power good when I like the executive action, bad when I don't." It's really unfortunate that a lot of people's thinking is stuck in the present moment, seemingly incapable of considering the past or future.
Maybe that would change if Trump wins and a lot of the scary stuff people fear actually happens, but I doubt it.
I think this is underselling the extent to which the structure of our legislature drives people to a favorable view of executive power. There are so many veto points it's hard to legislate - that naturally results in seeking other avenues to accomplish goals. And it's really charge to change the veto points in the legislature. I think the only real way to change this is to make legislating easier.
Agreed that we need to implement reforms to make legislating easier. Part of the reason why the executive and judicial branches exercise so much power is because the legislative branch isn't working as it should.
One would hope that seeing one individual (POTUS) and a handful of unelected judges (Supreme Court) have so much power would drive support for legislative reforms, but that doesn't appear to be the case
This is the key point, I think. The main the downsteam effect of a weak legislature is that it makes the country's laws less responsive to emergent problems for which the broad population demands better policy outcomes. In a situation like that you'll constantly have a ton of slow-burn areas where the US is out of sync with popular opinion for one reason or another, making executive orders intrinsically appealing because they seem like they are the only way to cut through a dysfunctional legislature.
It may just be a lack of faith that if your side holds back, the other side will too. I don't think that Obama using less executive power would've made Trump go "ah, yes, that is a norm that I should not break - instead I should maintain the standard that's been established on the appropriate limits of executive power." On a related note, I fully expect the Republicans to get rid of the filibuster the next time they have 52+ seats in the Senate.
I feel obligated to preserve the argument that GWB and Obama both should have been impeached and removed for signing Bills/Executive Orders that the they publicly professed to believe to be unconstitutional. Obama absolutely violated his oath to the constitution in a way that should be recognized as a disqualifying threat to the republic.
Clearly unconstitutional presidential actions can’t be impeachable. What is or is not unconstitutional changes continuously. What you are proposing is to empower SCOTUS with initiating an impeachment any time they feel like it.
What is impeachable is whatever Congress says is impeachable. It has nothing to do with SCOTUS. GWB and Obama absolutely took actions they themselves explicitly called unconstitutional in violation of their oaths. That's plenty.
I think you are underselling the intransigence and inflexibility of many legislators. We have a lot of veto points that make addressing problems difficult.
It's not! But I also think this has been going on throughout both parties throughout much of the 20th century, the best example being the president completely usurping war making power. The anti-neoliberals did not invent it.
Not really sure how taking away agencies ability to make decisions absent clear direction from Congress and giving said power to (in practice) to Reed O’Connor or Mathew Kaszymark, two judges with political views to the right of 80-90% of the country, is a turn to a more democratic way of doing things.
My disdain for the conservative legal movement is pretty high right now (as evidenced by snark above) but there is an intellectually honest kernel in conservative legal doctrine; there is a lot more Congress could and maybe should be doing and they very deliberately choose not to exercise power. Your beef is with Congress ultimately. There is a lot of reasons why Matt (rightly) rails against things like the Filibuster and a big one is it needlessly hamstrings Congress from exercising the power it should and yes ends up giving way too much power to bureaucrats. This isn’t so much of a power grab as it’s an example of the adage nature abhors a vacuum.
Maybe? There really isn’t a “file here and you win on easy mode” like Republicans have found and exploited in Texas. It is kind of a one way ratchet where Republicans win up to the point even Justice Roberts flinches.
By far the most powerful politically insulated institution in Washington is the Fed and its political insulation is a core proposition of neoliberalism. It's not true as a general proposition that the executive branch is more hostile to neoliberalism than Congress--the opposite is more historically common, which is part of why presidents have taken the lead on trade policy. You can be annoyed at regulators for doing specific unpopular things but this is totally wrong at the system level.
The Fed is politically insulated for very good reasons - nobody wants a politician like President Erdogan of Turkey determining that high interest rates cause inflation and getting their way (and just to point out the obvious that Trump has made the same argument recently). Note that Turkey's inflation rate hit 75% in May, 2024 largely as a result of his policy.
The Fed has its dual mandate - keep inflation under control and keep employment high. Managing that with only monetary tools is pretty much impossible but try to imagine a world where those were under the control of elected officials exclusively - Argentina, anyone?
I'd argue that Congress has got it almost exactly right with the Fed. It gave them two (almost but not quite compatible) objectives and left it up to politicly appointed technocrats to make the policy in detail. [I do wish it had made "real GDP" the objective instead of "employment" or even better, "real GDP maximizing inflation."]
I think that real GDP maximizing inflation is socially problematic. There is real anxiety created by continuously falling purchasing power plus periodic steps in income. There might be a technocratic solution to that problem but I am unconvinced that it’s a simple one.
Agree, but it also requires a legislature comprising people who want to legislate. I was listening yesterday to a sidebar episode of The History of the Americans podcast, which discussed among other things former senators who were masters of procedure (which is *very* complicated). This enabled them to be extremely effective. I even remember people like this (mostly staffers) from my previous working life in policy. Maybe I am not paying close enough attention, but I am not aware of this being much of a thing now.
It was! I'm a little bit hesitant to dip into the Caro books on LBJ because I found The Power Broker to be so repetitive and tendentious. Of course it's a great story, but I felt that Caro didn't want to let readers draw their own conclusions, and just kept bashing them/us over the head with his thesis.
(Yes, Moses was power-hungry, yes a lot of the projects he proposed were bad, especially viewed from today.)
I guess the trouble is, how do you negotiate with people whose ideology is 'nothing getting done is fine with us, we like it this way'? I don't think it's legislators not wanting to legislate, i think it's people just reflecting their voters and doing their best to oppose their enemies by any legal means they can. If i'm voting for a democratic senator, i certainly don't want them trying to take a little of the sting off a bill that the Republicans want, i want them stopping the whole thing if they have the possibility.
Yeah, I hear this all the time--"Congress won't do [x]"--as if it's obvious that Congress should do [x] but some elementary-school-yard squabbling is preventing them from doing it. But the reality is simply that not enough Congressmen agree on it, so it doesn't pass--whether it be a bump stock ban, permitting changes, DACA formalization, what not. This is the legislating process, and that's why slow boring of hard boards, compromise, art-of-the-possible, etc etc.
>If i'm voting for a democratic senator, i certainly don't want them trying to take a little of the sting off a bill that the Republicans want, i want them stopping the whole thing if they have the possibility
Wait, does this describe your priorities or a generalization of voters'? Because it reads as straight-facedly endorsing the exact cognitive/emotional foible that largely caused the situation we're all complaining about. Like, if I could reach into every voter's brain and delete the meme "cost-benefit analysis is compromise and compromise is treason", I would have done it thirty-five minutes ago.
They're representatives. They're supposed to represent what people want, and if you vote for someone, it's because you don't want the other guy's things to happen. It's not some weird viewpoint. If I am a voter, I do not want to vote for someone who wants my opponents' policies to be put into place.
Cost-benefit analysis is always a matter of perspective.
So yes, if i'm voting for a Democratic senator, and the Republicans push through one of their bills, if there are 41 democrats in the chamber i would feel extremely betrayed if they took a bribe to make the Republican policy happen. Fighting for what you believe in means fighting against what you don't.
Politics is fortunately not as zero sum as you think. Most people still agree on the vast majority of things, it’s just that we focus on the disagreements.
I mean, I'll first bite the bullet and affirm that it *is* the preferences and logic of voters that I'm casting aspersions on here. You're right that a representative who decides they know better has less of the virtues of representative democracy (which can eventually corrode popular consent to participate in it), but they have every chance of doing more actual good in the world when voters have completely blown up the idea of commensurability.
>Fighting for what you believe in means fighting against what you don't
This phrase admits magnificent latitude in interpretation, and I probably agree with it in substantial parts, but here it sounds like it leads to a viciously Manichaen view where the most trivial Republican proposal has to be fought tooth and nail, even if it means giving up chances to do Democrat things that matter far more from most outside views. I feel like I would be embarrassed to want that in my heart of hearts - it's a wish for Congress to be a dog-fighting pit rather than a deliberative body.
I agree that there's tons to argue about in any CBA, but I don't see how that impugns the method - if anything it makes clear that choosing *not* to systematize the decision process (or to constrain the system by adding a filter on the end for "also never vote with a Republican") is just letting all of those arguments resolve stochastically and never knowing whether we could have been better off. It's like noticing your compass has a sticky bearing and deciding that instead of figuring out how to reckon with noisy measurements, you're going to pitch it into the woods, turn in a circle until your heart feels the warm glow of home, and march that way until you make it or die.
Coming back to my role as a voter: I don't even get the sticky compass on most issues! I don't have the time or domain knowledge to parse every bill's text, I don't have the legal/institutional knowledge to foresee its interactions, and I don't have the personal/political knowledge of Congress and Congresspeople to game out the negotiation process. I can give it a coarse once-over for "is it a pure culture war salvo for/against my side" and maybe "who does it superficially seem to help/hurt", but I think it would be self-aggrandizing to say I'm therefore certain how my representative ought to vote on every bill. I want them to vote how I would vote on reflection *if I had their time and resources,* not how I would vote drunk from my couch if every bill went to a national SMS poll.
(After substantial writing, I do notice you're talking about the case where a single Dem defector joins 59 Republicans to break a filibuster, and I would also be pretty suspicious of that person because it seems like individual grandstanding and unlikely to buy any concessions. But if my senator joined a group that broke with leadership/polling to pass an R bill or sink a D bill, explained in depth how they came to that conclusion and what they believe are the errors of their colleagues'/constituents' position, and showed awareness that they were taking electoral risk... I would at least need to read the whitepaper before voting them out!)
You ever hear about "small government?" i mean, if their stated ideology is to drown the government in a bathtub, then ensuring it doesn't function is a big win for them.
Take this issue by issue, and of course there are many such people that feel that way--"we prefer the status quo to [Proposal X]", which of course includes both right-wing or left-wing proposals.
Why should we trust in the 'democratic' nature of a Senate that massively favors rural constitutencies, says certain people are worth less than others as humans? It's hardly democratic at all. Legislative policy is impossible to get done as a way to make any progress. Compromise with rural voters means gutting all decent programs to appease them.
That might be a valid argument WRT the original states that ratified the Constitution, but not the next 37, all of which are creations of the federal government.
Sadly, it appears so for the foreseeable future. We only make advances when the SCOTUS is able to peer into the murky crystal ball and discern an ambiguity that allows for a sensible, modern interpretation of ancient words, while staying alert to the probability that the towering geniuses whose handiwork they are supposed to revere did not want us suffering under 18th century rules due to their obvious inability to predict the future of America 250 years hence. But of course as we know, the wrong court can take it in the other direction too.
My take: making the Constitution so hard to amend was one of the framers' biggest mistakes. Since it is not feasible to change the text of the constitution except on the heels of giant social movements like Prohibition, or huge upheavals like the Civil War, constitutional law evolves instead according to SCOTUS' and the President's interpretation of the unchanging text.
If I could write a new Constitution, among other speculative ideas, i would allow amendments by public referendum. For instance, an amendment can be put on the ballot by a majority in Congress or a petition with some large number of signatures. It goes into effect if it gets a 2/3 majority among voters who vote on it, provided this is also no less than half the total number of eligible voters. This differs from the status quo by (1) lowering the threshold to initiate an amendment; (2) offering a second path; (3) making the final decision up to the people rather than the states; (4) having the vote occur on one election, avoiding confusing situations like the Equal Rights Amendment, where some states have ratified and rescinded, while other states have not voted on it.
My thought is that if it's easier to amend the text, it will be harder for judges to read controversial things into the "spirit" of the text, debate original intention, etc. And if they propose an unpopular reading of the Constitution, the public will have a quicker and more decisive way of overturning it, and with fewer side effects, than building up an ideological legal movement over generations, waiting for the current SCOTUS members to die, and fighting over new appointments until you have the court composition you wanted.
I tend to agree on the general outlines of this because it would bring the Constitution in line with our modern understandings about the proper roles of states, federalism, and broad-based democratic participation. Ending the notion of the states as "sovereigns" that are only quasi-contractually bound to the union for limited purposes is just plain stupid. Using that fiction to support the "2 for everybody" Senate structure is absurdly anti-democratic (Madison knew this), as is the electoral college, which has never acted in the manner the founders intended. We can retain the states as "laboratories of democracy" by giving them administrative leeway to do a limited number of things differently, but the constant parsing and re-parsing of this issue is wasteful nonsense.
Executive overreach definitely exists, but isn't the executive branch and all that entails democratically accountable every time a presidential/gubernatorial election rolls around? I imagine unpopular executive actions hurt a president/governor/in-party's chances of getting re-elected.
I'm with you broadly on the regulatory capture concerns. But I support executive orders. As we saw with Trump reversing Obama's and then Biden reversing Trump's -- those can be reversed through the democratic processes. The CA ICE ban was an EO. If Californians don't support it - they can vote him out. I'm also generally sympathetic to Ezra's case to end the filibuster - it would be a more democratic process.
Obama issued a memorandum of enforcement and did not follow the APA to do so. Then Trump revokes that memorandum saying its not constitutional. Roberts says that Trump can't do that without following the APA.
Let's reverse that and say that Trump had issued an enforcement memorandum saying that any person who doesn't immediately surrender to ICE will not be considered to be eligible to for asylum in the US. Then Biden immediately reverses that saying its not a legal order as it violates the law around asylum. Alito writes an opinion saying that Biden can't reverse that memorandum because they didn't follow the APA. Is there anyone here who wouldn't consider that a bad opinion?
Do we read the same Slow Boring? I see regular claims here that Robert is a Republican hack who is slightly better than Alito/Thomas at *seeming* reasonable but actually just wants to deprive black people of their vote.
Except Obama didn't use the APA to formulate the DACA. It was an enforcement memorandum. This would be like saying that to reverse Trump's ICE enforcement policy, Biden had to go through the APA process.
The argument that implementing regulations through executive agencies is "undemocratic" is fundamentally false and exceedingly tedious. The argument that this process (which has been with us since 1789) is an intolerable assault on the prerogatives of judges -- the only actors in the system completely insulated from any form of democratic compromise -- is downright silly.
Executive regulations authorized by Congress that merely fill in details of a statutory scheme are one thing.
Executive regulations that decide major, disputed issues of public policy in a manner that can't get a majority in the current Congress, and that weren't even contemplated let alone authorized by the Congress that originally passed the statute are a different things.
Just because the boundary between the two isn't perfectly black and white doesn't mean they're the same thing. It just means the courts need to generally applicable, workable standard for telling the difference between the two and apply it as best they can.
It takes a real special kind of unimaginative manichean thinking to say that if you want, say, Congress to be able to delegate to EPA the job of specifying in numerical terms pollutant level thresholds by pollutant, therefore you must also agree that Congress also could delegate wholesale all of its legislative power to the President to be used at his discretion.
If you agree there's a difference between those two, then it follows there has to be some standard that can be articulated in advance for telling the difference between them.
The argument above is about which approach is more (or less) "democratic". You seem to assume that having unelected and unaccountable judges drawing the line you describe is better than having the elected Executive branch draw the line or the elected Legislative branch re-draw the line when they disagree with the Executive. I believe this assumption is wrong on the substantive merits of the case, but it is obviously and profoundly wrong on the question of the which approach is more "democratic".
I completely agree. A while ago I was arguing on this board with people who found the idea of a bureaucrat at the EPA doing something wholly undemocratic, but an unelected judge doing so was different because judges "care about popular opinion".
If the will of Congress is expressed by them not doing something, then that applies to their inaction to the choices of the Executive branch and the administrative state.
Yeah. The idea that agencies are just out there pursuing their own crazy agendas without regard for the APA or the Chief Executive's preferences is a deeply held but nutty conviction of some. The idea that the courts -- operating at glacial speed as they bounce things up and down the appellate levels over years -- are needed to protect Congress's prerogative as the Ultimate Lawmakers is equally silly. They know how to legislate when they want and need to.
The history of tariff regulation is interesting in this regard. Congress used to set all tariffs, and that inevitably led to an annual festival of horse-trading and logrolling to protect local industries and companies of every description that it ground all other Congressional activity to standstill. Now do the regulation of chemical pollutants at the Congressional level and see what happens...
I liked but another point is that passing vague laws is a kind of compromise. Congress could specify the value of things that must be traded of in safety or environment protection of drug approvals, or consumer protection, but it would obviously rather duck the responsibility.
I see *some, limited* truth here, but also: if the legislature doesn't like these outcomes, it can strip the executive agencies of rulemaking powers.
Also, point number 4 requires legislative action to implement anyway. You can't jurisdiction strip without Congressional legislation. (And isn't the California point on ICEs accomplished via winning democratic elections in California?)
Why does that seem like an ineffective check? Because the legislature is divided and "can't act." But that's the problem in the first place, not the executive actions.
The California part is more complicated in that the new clean vehicle standards (no new ICEVs sold in the state after 2035) come from the California Air Resources Board, which is mostly appointed by the Governor, but with California Senate approval, and has the unique ability under the Clean Air Act to establish its own air quality standards. (Historical note -- this entity that the right wing constantly assails as an existential threat to apple pie and freedom-loving polluters everywhere was created in 1967 by ... Ronald Reagan.)
But ultimately, yes - the California Legislature could quash this if it wanted to.
Really interesting point. I'm not sure I would call it a threat, after all the politicians instituting those regulations still have to get elected and if they lose the other side can dismantle it. Still, you have a point that it isn't really the way that the system should work.
I would like an article comparing living standards for families in the 25th percentile in France and the US. I’ve heard wildly conflicting things about who has the better living standards. To my shame, I don’t know how much precarity an American family in the 25th percentile experiences, though I suspect it is substantial.
On a related note, I’d love to get a better sense of what life is like in a “middle income” country at a concrete level, in the Mexicos and Turkeys and Indonesias of the world. I can conceptualize America-but-somewhat-poorer (Western Europe or Taiwan), I can conceptualize subsistence farms and shantytowns, but I don’t have a good notion of the vast in between.
Some observations based on spending time in Mexico and Lebanon:
* Vehicle fleets are much older (often made up of used car exports from rich countries) and more polluting
* Housing quality varies a lot more than it does in rich countries, and homes tend to be less well-furnished and have fewer appliances (eg: in Beirut, a lot of apartments just have camp stoves)
* Household sizes are larger and adults are more likely to live with their parents until marriage— and the ones who can’t generally need roommmates
* There’s a significantly bigger population that has to rent its access to communications and computing; Internet cafes are viable businesses
* Traffic law enforcement is bad, and driving is consequently quite dangerous
* People tend to work more hours than their rich country counterparts at similar income levels
* Tradable goods are available and most people have at least some of them, but not as many as their rich country counterparts
* Most places have a recognizably modern built environment and infrastructure (roads, sewers, electricity, internal plumbing, telecommunications), but that infrastructure is often janky in some way (non-potable water, frequent blackouts)
* Public services are often quite good in some areas, but there are usually some major holes that you don’t get in rich countries (eg: Lebanon doesn’t have numbered street addresses, which limits how much of a postal system it can run)
* There’s usually a bigger population of abjectly poor people than in rich countries (shantytown residents in cities, precarious farmers in the countryside)
* the actual way the economy works varies pretty wildly— some countries (like Lebanon and the Philippines) export labor and collect remittances, others like Mexico and Turkey are building industrial bases
I think there's just too much variety between and within countries to say anything that's not very vague. I guess I'll try though, based on what I've seen in places like Peru, Mexico, Indonesia and The Philippines:
Much more crowded living spaces and buses.
Way more traffic congestion in the biggest cities. Way longer working hours in big cities.
A pretty idyllic-seeming country and small-town lifestyle, with hard labor subsistence work mixed side-by-side with people standing or sitting around doing nothing for long stretches.
Local governments that aren't trusted and bureaucracies that are very ineffective at providing services.
But, at least for much of the middle class, a day-to-day lifestyle that isn't too dissimilar from what most of us are used to, just a little more stretched in terms of space, comfort and other conditions. People aren't starving, they aren't dying of malaria left-and-right and they still go out and have fun or play games on their phones. Life is good, mostly.
That said - the pace and impact of rare but bad occurrences is different. Anyone anywhere can get cancer, screwed over by their local government or police, or hit by a natural disaster. But these sorts of things might be more frequent, and tend to be worse when they do happen, in the global middle.
I have no idea how accurate the portrayal is but I recently watched Nightmares and Daydreams on Netflix, which is a horror/sci fi anthology from an Indonesian film maker. All of the stories are set in Jakarta and I found it fascinating to get a little perspective into what life might be like in that sort of place. It held my attention more for that aspect than for the stories themselves.
I spent some time in Medellin, Colombia. I stayed in Envigado, which is an upper middle-class area.
The biggest pros are that it was very walkable and there were gobs of little shops on every block. Need a haircut? There's a tiny place with two chairs the next block over. Groceries? You can go to the bodega for basics or walk 10 minutes to a supermarket. At night a lot of people open up a "restaurant" (grill on the patio) where they sell 3-4 dishes with arepas.
The main pervasive negative is that their emissions standards are lower, so it's a bit hazy and there's a persistent scent of burning diesel. Cars in general are a lot smaller than in the US, and there are tons of people on scooters and motorcycles.
The lack of building regulations makes the area more charming to American eyes. Sidewalks are narrow, there are stairs without bannisters, nothing is ADA accessible etc.
Crime is high there, but also the people were very friendly. (That may be because they knew I was a rich American.)
Oh yeah, I should have mentioned...a lot of workers and servants and laborers. Even servants sometimes have maids or servants. Clearly that can't be true for everyone or the bottom half, but it's way more common to see people paid to do regular stuff like nannying or cleaning up for a moderately well-off family.
Also places like clothing stores or cafes sometimes have an absurd number of staff. I guess that's how it goes when labor is cheap, and it can make certain things easier, although it's horribly inefficient. Speaking of inefficient, it was also somewhat common to see 2, 3 or 12 of the same shop right next to each other. I still don't understand why. But if you manage to find a pharmacy or any kind of shop, there will probably be another one just like it right around the corner or right next store.
I have family in rural Oklahoma. They are poor by coastal standards but they get by because it’s a very low cost of living area. I also spent a few months in Costa Rica and their middle class felt very similar.
I would also like to see this kind of comparison. When stuff like this does pop up, often what tips the scales in America’s favor is our relatively higher material well-being. Our 25th percentile are more likely to have “stuff” - an air conditioner, a car, full-sized refrigerators and stoves - that translates into them being better off than their European counterparts. But is that the right way to look at things? How does having an AC unit in your window compare with having free healthcare?
Our abundance is great and can get greater, but we must go full effective altruist brain and send some of our abundance overseas, where it can make an even bigger impact!
It's two totally different numbers. One is excess deaths from a statistical analysis and the other is reviewing records of cause of death. There will be lots of cases where that produces differences of an order of magnitude or more, e.g. death certificates don't say "smoking" on them. I don't know enough to know how much it matters here but I don't find the comparison persuasive by itself.
Edit: Note in your first article, "And more than two dozen doctors, public health experts, and meteorologists told the AP that last year’s figure was only a fraction of the real death toll."
Are these measuring the same thing? Deaths from heat are very hard to attribute, and one and the same event can easily have estimates that differ in number by much more than that.
There's a (very understandable problem) with this comparison. David is asking about France, a place that is richer than average in the EU (let alone Europe in general). Essentially, his question is "How do parts of the EU that can afford a generous welfare state compare to the US as a whole?". If you're asking about "European counterparts" in general, I'd say that you're more likely to find them in Romania than in France.
Also, don't poor people in the US also get free healthcare through Medicaid? I'm not that familiar with the US system.
Medicaid eligibility rules are determined by individual states. States can choose not to provide Medicaid benefits to certain poor people, for example, working age non-disabled adults.
>Also, don't poor people in the US also get free healthcare through Medicaid? <
Depends on the state. When the program was enacted, the legislation allowed states wide latitude in terms of setting eligibility criteria. In short, it's a lot easier for a poor person to enroll in Medicaid if they live in Massachusetts than in Mississippi. This has also carried over into the Medicaid expansion under Obamacare: a number of states have still not taken the free money, and they collectively are home to about a quarter of the population.
Also, things like a car or a large refrigerator are much more of a necessity when zoning laws prohibit grocery stores within a convenient walk, and air conditioning is more of a necessity if you have hot and humid summers like the southeastern US.
I remember old statistics from the 1990s or 2000s saying that the average American *qualifying for public aid* was more likely to own a car or an air conditioner than the average person in Europe, more likely to live in a detached house, etc. But these are side effects of our urban planning and zoning, and life without these things is less of a loss east of the Atlantic. Also, if you consider "Europe" in the 1990s, this includes not just the richer countries, but also Eastern Europe, which was never as rich as the west and was doing badly in the 1990s, and maybe also Turkey. The US poverty line is indeed compatible with plenty of material consumption, but stats saying that the American poor are better off than the average European (not the average European below their country's poverty line, but the average person on the continent) are misleading even if they get the numbers right.
I don't think the part of urban planning and zoning is true.
I'm inclined to side with you. I've lived exclusively in the EU from birth to getting my Master's degree and deciding to come to the US for a PhD. I find driving for groceries extremely annoying, and trying to get an Uber home after a night out due to alcohol consumption even more annoying. Yet, I think that a lack of car in my (walkable and with public transportation that beats anything outside of NYC in the US) hometown restricts your job opportunities and places you can live too much. This is why anyone who can afford a car and isn't too old to drive basically has a car. I'd take having a car over walkability for sure.
I would even propose that you may have the causality backwards. Because more people in the US can afford cars, it's okay for them to live further from grocery stores, so zoning laws can be restrictive without much protesting.
This is an interesting question, but I would say that such an article must also take into account at least the near future. Poor people in France are most likely better off than poor people in the US *today* in my view, but my whole adult life I remember political problems in different places in Europe because of cuts to the welfare state. (Since you specifically mention France, think about all the protests because of pension cuts. My view is that these cuts are unlikely to be meaningfully reversed, and that it's more likely to actually continue cutting.)
The EU has slower growth than the US and I think the general trajectory is making the welfare state smaller because it's unaffordable. On the other hand, the US has expanded (I think) the welfare state in the same time frame (things like ACA).
tl;dr: I'm more confident about my ability to get money out of my 401k in retirement than I'm about the abilities of my childhood friends who have stayed behind to get a meaningful pension, even though pensions there currently are not bad at all.
I'm a fan of the Bivens analysis -- even if we technically redistribute more of our national income than Europe, we're just so absurdly obviously getting FAR less value than most Euros do for it.
Like, okay, people in Southern Europe probably suffer worse for not having as good of AC penetration in their markets, and probably don't get such good dollar-for-dollar (or euro-for-euro) on their benefits either. But the French and Nordics are probably doing just fine without the AC because of their higher latitudes.
The arguments about social mobility and sheer growth are much more convincing to me than "but they have a different bundle of goods". Like, are our McMansions and enormous fridges filled with CostCo crap really getting us a better lifestyle than some Frenchman who doesn't bother buying a big fridge because he can get world-class sandwiches at his boulangerie every morning? A lot of these analyses basically boil down to "but bigger MUST be better, and America has the biggest stuff, so therefore our living standards MUST be better", but I don't see this as obviously true once one puts the microscope to it.
The AC thing in particular always struck me as odd. Okay, central air is a significant expense, regulatory bullshit probably has some role, there could be chicken-and-egg things with not having an ecosystem of HVAC people to install them, etc. But a window AC costs like $150, can be shipped from China to Madrid just as easily as to Omaha, and even a slightly handy person can install one in an hour. It’s certainly within Southern European budgets. Why don’t they use them, then? Is it just a cultural thing?
I think it’s more about energy prices than unit cost. When I lived in Spain (very hot Sevilla) with a host family they had an in-unit A/C but I never saw it used because it was purportedly very expensive to run.
It's architectural and cultural. The French have weird ideas about the dangers of drafts from A/C. From a 2022 article in Mother Jones:
"When I asked a French friend why her compatriots resist A/C, she explained: “It pollutes, it’s often too cold, the air is fake. It makes you sick, and it gives you a headache. It keeps you inside and it creates nonstop arguments with the team at work. It makes me feel like an old prune.”
"It pollutes"--France has one of the cleanest electric grids in the world thanks to glorious nuclear power
"it's often too cold"--but when it's hot, it can be deadly, as Ken cited downthread
"the air is fake"--lots of "real", "natural" stuff is bad and harmful for us
"it makes you sick"--I'll cede the infectious disease point if in exchange I get a cession on how there are advanced ventilation technologies that can be implemented to mitigate that
"it gives you a headache"--need to be more specific than the most classic vague discomfort out there
"It keeps you inside"--you have agency, if you want to be outside, you can do so
"and it creates nonstop arguments with the team at work"--as opposed to everyone equally suffering in the heat?
"It makes me feel like an old prune"--Uh...that's a "feeling" I've never heard about before
I mean, no one credits the Frenchies for being all that reasonable on this kinda stuff, but I also think this one anecdote is kinda silly to focus on vs. the more digestible structural factors.
I'm guessing the prune reference means feeling "dried out," which is certainly a complaint I see from a lot of people about air conditioning, although I've never had a problem with it myself.
AIUI, most of the houses that CAN have a window unit, do.
BUT, a lot of houses can't mount them -- the windows are often non-standard historical installs, and can't be replaced easily.
And the buildings are often not designed with AC in mind, but designed with their own kind of airflow. It's not perfect, but it's what people made do with for the several millennia before AC was invented.
So, sometimes, they just settle for a bit worse of an internal climate than they'd get with AC, because it's still bearable for various legacy reasons.
"some Frenchman who doesn't bother buying a big fridge because he can get world-class sandwiches at his boulangerie every morning"
I had a weeklong vacation in Paris in 2018, and this was definitely not my experience. It could be that as a non-French-speaking American, I just wasn't able to find the great boulangeries, but the sandwiches that my wife and I got all over Paris were dry, boring, and uninspired. The rest of the food in Paris was fantastic, but I was so happy to get back to America for a great sandwich.
There are apparently 38 Subways in Paris. I doubt they are all just for American tourists. If enough French people are willing to go to a Subway to sustain 38 of them, their alternatives must be pretty bleak.
Yes! That was what I was saying down below. The sit down restaurants in Europe are often fantastic but I finding a decent lunch or breakfast can be damned near impossible. I think most Europeans can’t afford to eat out at every meal and tend not to splurge on lunches, leading to a pretty limited restaurant scene with a lot of reheated dishes.
Except people could choose to do without the "bigger" stuff and have more of the other, but they don't. And as they get richer in Europe, Asia, etc., they tend to like the bigger stuff there too. So revealed preference is that people like bigger stuff.
"As people get richer, they prefer bigger stuff" does NOT equal "bigger stuff makes us richer".
As we've seen with the housing crisis, the entry level of homeownership has basically been regulated away in most places, and where what was previously entry-level stock still exists, it's been insanely bid-up by the few who can afford it. Literally no one is the richer for it, it's just that only the rich can afford it anymore.
In order to get to the bigger stuff, there needs to be a ladder. Otherwise, I'm just paying my landlord's mortgage until I die, and HE gets rich while I don't. If Hayek were alive today, he'd recognize THAT as the modern "road to serfdom".
There were a surprising number of big cars in Norway, not to mention motor powered pleasure boats. Give Europeans enough money and they’ll buy motorized toys, even when gas is $8 a gallon.
Not all of us! But the premium I would have to pay either way is absurd! Either:
(A) I shell out for some semblance of walkable urbanism where I can have "loose ties" and "third places" and don't have to freak out because I didn't have time to get my breakfasts from Costco this week...
or
(B) I shell out so that I can "drive till I qualify" in some subdivision an hour or more from my office, where the nearest grocery store is miles away, and I never talk to my neighbors, all because some asshole on the internet tells me I should be happy to live in suburbia where I can actually afford a house and all my preferences for lawns and white picket fences will supposedly be revealed -- even though I'm still only just barely affording it and have sacrificed enormous chunks of my personal happiness to do so.
Either way, I have to shell out. So, if I'm overpaying, I actually DO prefer the "less big" version, because at least I can have reasonably nice sourdough in walking distance, and I don't have to risk a DUI any time I want to watch the hockey playoffs.
And with that, I'm going to go have the artisan golfetta-on-ciabatta sandwich I made myself for lunch today.
I feel like the food in Europe is maybe a bit overrated, sure there are lots of really great restaurants but if you just want a cheap lunch the little corner places are often pretty mediocre. I feel like walking into a random restaurant in San Francisco or New York is more likely to get you a good meal as Madrid or Florence (okay Paris is special).
As a dirty social democrat, my basic view is this -
0-33% - Better to be in France because of the welfare state, etc.
34-66% - Depends on your profession, where you're at in the country, and so on. A nurse and contractor in the 45% in Wisconsin might be better off than the 45% percentile in France, but being in the 56% in Los Angeles might be better off in France, etc.
This is good intuition, but to Abbott's point, it would be good to see a quantification of this.
There's also a subjective angle of whether it's fine to trade off some living standards in exchange for working less. I can sometimes end up on either end of the tradeoff.
I admit it's tough, but the problem in straight comparisons is it's basically sort of impossible, even if you account for the kind of America F Yeah stuff like bigger houses or air conditioning, to have the kind of life a middle-class person who works 80% of the hours in the suburbs of Nice compared to the the same middle-class person in the suburbs of Chattanooga.
I'm sure there would be a decent chunk of Americans who would take the downgrade even in pure economic standards sort of ways, but there's not really a widescale option for a middle class job with European working conditions, and most jobs that pay say $35,000 instead of $50,000 (or whatever specific difference in compensation you want to claim) are also worse on the sort of fringe benefits that exist for somebody who makes that lesser amount in Europe, which makes even the somewhat reasonable 'just get a lower paying job' retort not as much of a lateral comparison as you'd think.
Like, I know, revealed preferences and all, but there's not really an option for "make European wages, but also live like a European does" in America, even if you kind of get that by paying too much for rent in large urban areas, which leaves you with less disposable income, but a more European urban environment.
How many Europeans would take the American economic standards in exchange for the American working conditions? It's not like anyone has a system where you actually get to choose between one or the other. The vast majority of people over there haven't chosen to trade less money in exchange for less work and more job security. It's literally their only option.
> But with regard to intra-party factional politics, the “neoliberals” think you should try to address individual issues on the merits and deal with distributional concerns separately through tax policy and the welfare state.
While I personally prefer this technocratic, neoliberal-ish approach of expanding the welfare state to address distributional issues and to smooth out the economic pain of job losses from technological progress, I think many people find this underwhelming due to an emotional attachment to their jobs, particularly if it involves novel skills. A licensed taxi driver with a decade of experience is still psychologically devastated to have to restart their career in a junior role at an advanced age, even if we can minimize the economic pain. There’s just something of a loss in dignity or status associated with such vocational transitions, doubly so when welfare provides fewer material resources than one previously earned. Hence, people are emotionally drawn towards job-protecting policies over material assistance in repurposing labor resources.
Psychologically and sociologically, a lot of people just find welfare underwhelming relative to the pride and dignity they find in having a “good” job, particularly a socially recognized job that gives them more status than someone who’s just “on the dole.” Hence, I think there’s a limit to how far we can address technological (and trade)-driven economic disruption and job loss with welfare state expansion.
Politically, people don’t want to accept that job losses are necessary, if not unavoidable, in a dynamic economy. The upshot is that raising the salience of these concerns leads voters towards job-protecting measures. I, therefore, think it’s better that we avoid these discussions in our politics so that we can preserve economic dynamism and growth.
Also while technology tends to lead to net positive labor market gains, any individual worker who gets their job disrupted out from under them has no guarantee whatsoever that they'll get one of those new jobs
I think your lead and body of today's post are related but not as tight a fit with each other. It is true that there are political consequences when industries are quickly disrupted by things like new technologies (Uber) or shifts in global trade (China shock). It's also true that a piece of that political impact is discussion of redistributive policy and whether "just right" redistribution can mitigate the economic and political impact of those disruptions. It's also true that the US is more distributive than progressives give it credit for.
For this to be a fuller framing of "neoloberalism" I want a deeper analysis of concentrated impact vs diffuse benefits. You get there by suggesting we conduct economic analysis of policies and prioritize the most egalitarian ones, but if I had to define as succinctly as possible what makes one a "big bad neolib" it's the person who would gladly make a tradeoff that decimates a small industry concentrated in a small geography to save every American 10 cents. How do we beat that rap?
Great question and one I would like to have an answer to, particularly if the JD Vance / Oren Cass wing of the Republican Party continues its ascendance post-Trump.
This has been the smarter critique of neoliberal thinking from the rational Bernie supporters for quite a while: the "creative destruction" of the market is too destructive to a minority of the people in exchange for a too small increase in diffuse benefits. It's not obvious to me how to counter this argument.
Presumably the point would be that what’s at issue isn’t the single 10-cent increase, it’s the five dollar increase once every one of fifty favored constituencies gets their beak wet.
I think the biggest issue is the psychology of money and trade-offs which is the idea of negativity bias. Essentially in economics terms it’s worse to lose 20 dollars than it is better to gain 20 dollars. So when industries are decimated but it saves a few dollars it is not a real gain. There’s a reason the statement “Two steps forward, one step back” is not a statement describing something positive and it is still a net gain. This is where standard economic analysis misses the mark. It is not a neutral trade-off. Suffering is more painful than Joy is pleasurable. There’s a line from a psychologist I heard once that after you have a fight with your wife, you need to have a ratio of anywhere between 5 to 10 positive interactions for every 1 negative interactions. I think this is true in Economics as well. You can’t make markets more efficient if the gains are small for a lot but devastating for a smaller group. The losses will overwhelm any gain.
I think you're right about the psychology of this, but I'm curious about the English usage part: I've always understood "two steps forward, one step back" as a pragmatic, sometimes-reassuring truism about the nature of incremental progress (in any endeavor). Something like, "yes the setback feels bad [because of the psychological asymmetry], but [in real terms] you're still up one and that's how you get to the finish line, so get up and take two more steps forward whether or not it feels good". If you see incremental progress as an exploitative mirage, then sure it's pejorative, but I *think* that's a modern subversion of the original sense.
On the other hand, it's genuinely possible I constructed that understanding to rationalize the phrase or that the dominant usage has changed in the ~25 years since I first thought about it, so I'm curious how it lands on other people.
(For a second I though this meaning better fit the parallel "one step forward, two steps back", but that's more thoroughly inverted: the situation is *actually* net negative, so perseverance *is* a losing play.)
To be fair that's usually how language works, in the sense that a definitional meaning is subverted by the culture. It's why theory and reality don't always align neatly. Connotation and emotional salience of a word or phrase usually ends up more impactful than the actual definition.
That's true, but I think it used to almost exclusively connote the perseverance thing, and I'm unclear on a factual level whether the sarcastic/negative meaning is at like, 20%, 50%, or 80% of utterances today. My prior was that it's significant but <50% (so an unqualified usage is more likely to be neutral or encouraging), but it sounds like yours might be that it's a hefty majority!
Yep, for the negative/sarcastic or ironically the exact opposite meaning of phrase becomes the street meaning vs the original definition when used in a political/cultural context. It almost always inverts itself. I tend to think of the phrase "lift yourself up by your own bootstraps" as something that is literally impossible to do and not something you should tell poor people but it became in the Horatio Alger "Rags to Riches" era advice rich people gave to poor people.
I mean, it just straightforwardly seems to be false? If 1000 middle class people lose $20k but 330 million of all classes save 10 cents, you have $20M in costs against $33M in gains.
Now, if the gains largely accrue to the very rich, then since money has decreasing marginal utility, you may be making society worse off in utils even if GDP goes up. But for the classic “neoliberal” example of globalization, this just isn’t empirically what’s happening : cheaper material goods benefit everyone, and to the extent that poorer people spend a higher proportion of their income on material goods than the better off (which they do), they will benefit even more. And this is before considering the possibility of redistribution, which Matt certainly favors.
The other set of arguments tend to be about vague non-measurable things like the dignity of (certain fetishized kinds of) work. But I don’t think you can seriously found an economic system on this kind of thing. At a certain point, you’re just going to be subsidizing buggy whip manufacturers and sinecures, while making the vast majority of people much worse off.
"I mean, it just straightforwardly seems to be false? If 1000 middle class people lose $20k but 330 million of all classes save 10 cents, you have $20M in costs against $33M in gains."
I thought John's point was - nobody is going change their vote for the 10 cent bonus, but those 1000 people and their family members are really going to hate the 20k loss.
Yes, if you did 330,000 of those proposals and hit a different 1000 each time obviously we're better off, but people might not see the aggregate effect, only the individual grievances?
I think the post I was responding to wasn’t just saying that the changes would lead to aggrieved voters voting for bad policies , but that they would actually be bad in a first-order way. Most obviously good policies will cause at least some blowback due to status quo bias if nothing else, but that doesn’t mean we shouldn’t enact them.
I certainly agree that you need to consider the effects of policy on voters, that’s basically Matt’s whole popularism thing. But I think hardcore protectionism / anti-growth is uniquely harmful relative to the short-term electoral benefit.
This view of the distributional consequences seems insufficiently granular.
Assuming the losers start at the same wealth as the average gainer, yes taking one dollar from the losers to give $1.50 to the gainers is a good trade. But you don’t stop at one dollar, you take $20k, and I’m less sure that the last dollar is still a good trade.
And with risk and loss aversion, even a positive sum reverse lottery might not prove utility enhancing.
Right, trade is the best example where the neoliberal shills were most obviously shilling. There is a reason "Learn to Code" is a tagline these days. There was a view that if your community was being ripped apart by state subsidized national champions, a welfare check and a bus ticket to somewhere with more fashionable restaurants was good enough.
We could implement tariffs on all imported goods to account for differences in regulations and exchange rates, go back to making a bunch of things at home, and the vast majority of Americans would be poorer, worse off, and unhappier. If you want to strawman neoliberalism as uncaring for not preemptively solving every consequence of its agenda, I’m curious what your consequence-free plan would have been?
By far my favorite thing about Uber, as a customer, is that it aligns the incentives of the driver with mine. Uber drivers have an incentive to get you where you are going as fast as possible. Taxi drivers often have an inventive to keep the meter running as a long as possible. I have been overcharged so many times by taxi drivers, especially when visiting a new city.
I am not sure this is really that big a deal in terms of the overall economics, but I much prefer services where I don’t have to constantly interrogate whether the more-informed person sitting in front of me is trying to screw me.
Yes. Regarding interrogating incentives: the most eye opening thing for me was considering real estate agents.
The buyer's agent and the seller's agents are the two parties in the transaction that have exactly aligned goals. They both want the transaction to occur at the maximum possible price. Failing that, they just want to get the transaction over with.
While even $50,000 is a lot of money to the buyer or the seller, to the real estate agents involved, that represents maybe a few thousand dollars each ($50k * 0.03). So, as a real estate agent, do you really want your client to put their foot down over $50,000 when you could sew things up and just take the $20-50K plus commission that's coming your way depending on the transaction price, stop having to put time into moving the property, and move onto another listing where you can make another $20-$50k?
Yeah, I'll never forget the first time I bought a condo my agent trying to inch me upward just to get the transaction over when I clearly had the leverage and was going to get it at the current price anyway. Infuriating.
"And economic growth is very important. Europe is more egalitarian than the United States, but middle class living standards are higher on our side of the Atlantic because the United States is richer."
I really wish we could put most of the hand-wringing about inequality to rest. What's important is how well the people at the lower and middle rungs of our society are doing in an absolute sense, in my opinion, not whether Elon Musk can fund missions to Mars out of his pocket. Even Rawls would agree.
I recall being a young man, and the fact that my boss had more money and power and freedom than me really upset me.
A big problem with America, and with inherited wealth in general, is wealth pools in the oldest generation and is in the hands of stodgy people unable to enjoy it.
I remember my grandfather spending $720/day to pay hot young Dominicans to change his diapers while my half brother couldn’t air condition his apartment. It’s not like my grand dad was happy either, he was in diapers and virility was a distant memory.
I don’t care much about the billionaires, but I do think inequality is bad in itself. People care a lot about relative position. I think people who aren’t great at school and don’t end up in high paying jobs shouldn’t necessarily end up in a radically low relative position.
In It’s a Wonderful Life, in the good version of Bedford Falls, Ernie the taxicab driver owns his own $5,000 house that he lives in with his wife and child. Real wages for taxicab drivers now are remarkably similar to what Ernie would have been making back then, but $5,000 adjusted for inflation is just $90,000 today.
You can in fact buy a $90,000 house today, and I’m sure there are some ways that modern (probably manufactured) house would be, in absolute terms, better than what Ernie had. But Ernie’s house was an average house back then. (Average house sale price in 1946 was $5,150). A $90k house today is like a bottom 10% house. I think a world where taxi drivers can live in average houses has some advantages over a world where they live in <10% houses.
> A $90k house today is like a bottom 10% house. I think a world where taxi drivers can live in average houses has some advantages over a world where they live in <10% houses.
Why should being a taxicab driver give one an average lifestyle *for all time*? As society progresses, the relative remunerations to unskilled (or less-skilled) labor is bound to decrease. Of course there should be a floor, but trying to lock in a certain relative ordering leads to stagnation, in complete opposition to the point of today's article.
Besides, the problem you state, that housing is too expensive, has everything to do with building restrictions and almost nothing to do with the salaries of taxicab drivers.
I don’t know if it’s true that we should naively expect technological advancement to necessarily reduce returns for less skilled work.
For example, automated looms put skilled weavers out of business, right? But they’re good for the loom builders and maintainers (higher skilled) but also shepherds and mill workers (lower skilled).
Going to the econ literature, I don't think there's consensus that skill biased technological change is a good explanation for the changes we've seen in wage inequality in recent decades.
Fair enough! It could be the case. But it's still not an argument for protecting the livelihoods of taxi drivers (or skilled weavers or ...) if the economy doesn't value them as much as it once did. As Matt basically says, save people, not jobs.
Taxi drivers are a particularly bad example in that we can now clearly see how that job will be eliminated by automation and that the "replacement" jobs will likely not be accessible to the displaced workers in a similar way. There are doubtless some number of cab drivers who could transition to the manufacturing, maintenance and programming of robotaxis, but it will be a small percentage.
Oh, I don't know, and I wish we could get over that kind of thinking. Of course, it's true that a world in which taxi drivers live in average houses has *some* advantages (I mean, there were *some* advantages to living in the USSR), but on balance I think it's better (for the taxi drivers) to live in a world in which they live in *better* houses than they otherwise would (regardless of what others' houses are like).
It's been many years since I read him, but I believe Rawls addressed and dismissed this sort of envy (which is basically what it is).
Sure, people have been condemning envy for a long time, but I think you probably should accept that people aren't likely to fundamentally change anytime soon. Given that people do in fact care about relative position and relative distance, I think a more egalitarian society will be a happier and healthier one.
Even a stronger one. Remember that Ernie volunteers to serve as a paratrooper in WWII, a particularly dangerous assignment. I think people who feel that their society is looking out for them and respects them are more likely bear burdens and take risks to support that society in time of need.
I genuinely have no idea how you would banish this sentiment because I think comparing ourselves to peers is generally more compatible with people than really strict needs monitoring
I disagree. If distributing resources such that Elon Musk can fund a mission to Mars results in raising everyone's standard of living (or at least not lowering it), Rawls would be down with that.
That's a huge "if" on the Mars example, and it does not cover the proximate case of buying twitter on a lark, for example, or many of the other things billionaires do with their unequal accumulation of primary social goods. "Not lowering it" is not a thing under the difference principle. Institutional (basic) structures that produce inequalities must satisfy multiple conditions to be justifiable, including producing the greatest benefit for the least advantaged.
Personally, I don't understand why Musk and others are so obsessed with trying to live on Mars when we haven't even yet mastered how to live at scale under all the harsh conditions of our own planet -- hot dry desert, under the sea, deep down in the ground near geothermal energy sources, and so in. Learn to walk before trying to run....
It’s apirational techno-optimism that isn’t overwhelmed by its own externality footprint and is unifying in the same way that “to boldly go where no one has gone before” is.
Admittedly, Mars will never, ever, ever be as hospitable as Earth is. Which is a good reason to care about Earth’s habitability!
The other side of Musk’s argument isn’t about how hospitable Earth is but how inhospitable future Earth might be, for instance after a large meteor impact, or wars using salted nukes or engineered biological weapons.
My arm-chair diagnosis is Musk got caught up with his Ketamine use and that explains the shift from Tesla / SpaceX awesomeness to his current behavior.
Mars is cool and Elon has huge blind spots. I think going to Mars is a very cool goal (and he should do that over all his culture war BS) but it’s clearly not a backup for earth, except under very limited scenarios.
The expense of the US medical system distorts the value of the redistribution. So total amount of redistribution is same or more because the cost of medical care is greater. Value to consumers is therefore less. Discussion of reasons for that are beyond scope of a comment here. As far as limiting medical providers go, see the recent excellent article in Bloomberg about poor quality of many APRN training programs. https://www.bloomberg.com/news/features/2024-07-24/is-the-nurse-practitioner-job-boom-putting-us-health-care-at-risk. And AMA does not limit number of MD slots at either medical school or residency level.
I think Matt is indeed very much in favor of supply expansion (although medical cost allocations get weird quickly and I can’t even tell if this is a personnel or an opaque insurance market / admin burden issue), however I will note that his claim that “more rapid growth would make it easier to expand the safety net.” is conceivably false for low-productivity-growth labor-limited sectors like healthcare where economic growth Baumol’s cost disease just means you end up bidding the cost of the inputs in a similar way to subsidizing demand in a supply-restriced context.
I can imagine ways of imitating Europe that sound like they would get prices lower.
Doctors' salaries in Germany are much lower than the US, but they also train more doctors per capita, and their medical schools don't charge tuition, so new doctors don't have student loans driving them to prioritize high income over other considerations. I don't know much about nurse practitioners in Germany, but I would guess there is less demand for them, because MDs are cheaper and more abundant.
It may be possible to establish a similar equilibrium in the US someday, though I'm not sure what the transitional period would look like. Incumbent doctors don't want to get a pay cut, or to lose their ability to get a new job because the job market is flooded with entrants. So there would be a lot of resistance to reforms, except maybe if you could phase them in very gradually, and I'm not sure what that would look like.
We might also get lower prices for medications by imitating other countries -- eg the UK or Canada explicitly assess cost-effectiveness of new medications (money spent per QALY gained, compared to the previous standard) when deciding what to cover, while Germany has a consortium of nationwide health insurance companies negotiate a single price for the German market, with an agency that can set the price or block market access if insurers and manufacturers fail to come to an agreement. It's not entirely without downsides -- some medications never enter these markets, to preserve the sellers' bargaining power. And I've heard the UK in particular is suffering from widespread drug shortages now, partly because they insist on exceptionally low prices (their willingness-to-pay per QALY is much lower than Canada, IIRC). The logistical complications of Brexit don't help either.
There are arguments for high prices too -- the prospect of huge profits is what motivates companies to engage in the risky and very expensive idea of developing new drugs and doing human trials, even though most drug candidates never make it to market; and paying higher prices than other customers ensures that you will be prioritized if they have difficulty meeting everyone's demand. But the latter part can be achieved by negotiating only modestly higher prices than Canada or Germany, and the former could be achieved by directly subsidizing clinical trials or offering prizes for meeting certain targets, which might be more cost-effective than giving pharma companies free rein over prices.
I imagine that imitating some of these practices could bring healthcare costs down. So could letting Medicaid import medications from other countries with lower prices -- for instance, Florida already imports medications from Canada -- but this is not as good as directly negotiating a lower price.
We might also save costs by making private health insurance more standardized -- insurers spend a lot of money, and waste a lot of time for healthcare providers, by having complicated rules about what is reimbursed and making it difficult to get reimbursement. I am under the impression that there is much less of this overhead in Germany, where despite being quasi-private, the insurance companies have fairly uniform standards for what is covered and under what circumstances, and where they also cannot keep their profits. I don't know, though, and would appreciate input from someone who knows that system -- I've also heard that German and French health insurance puts the burden of making claims on the patient rather than the healthcare provider.
Well somebody’s putting a cap on the number of residency slots and making it impossible to convert foreign medical licenses and it sure as hell isn’t patients or hospitals
As I understand it the number of hospitals that are actually appropriate & useable as teaching hospitals for residents is quite limited. They have to be a certified teaching one, they have to be large enough to have multiple specialties that the residents can practice on, etc. So this actually rules a lot of hospitals out. I think Matt's explanation is rather hand-wavey
I think with Uber it's important to remember that there were two reasons it was cheaper than a guy with a cab, when (if you think about it for a minute) it shouldn't be cheaper
1. Much lower wages for drivers, which is inevitable, when being a cabbie was one of very few jobs that recent immigrants with no connections and limited language skills could use to join the middle income class
2. All of your rides were subsidized by a giant pile of VC cash, which of course cabbies couldn't compete with - they actually had to run sustainable and profitable businesses
The former is bad for humanitarian reasons, especially when you realize that the money that was siphoned off of the drivers was transferred to a giant corporation and eventually its share price. The latter is bad because it was totally unsustainable if the company wanted to be profitable, so they were inevitably going to raise prices, and inevitably they did. And suddenly Uber wasn't really consistently cheaper than a cab, and the drivers were making like $4 an hour after you subtract the depreciation of their cars, but the cab fleets have been largely dismantled and Uber's network effects keep everybody locked in, which is the core of the Silicon Valley machine - predator network effects. And because of those network effects they're going to become less and less affordable.
For the record if you're flying into either NYC airport getting a yellow cab from the taxi stand is almost always going to be less of a hassle and cheaper than getting an Uber.
Taxi medallions cost almost a million dollars in 2014, so part of the early price difference was the ability for an individual driver to enter the business without taking out a $1M loan.
I also think Freddie is overlooking the real travesty, there is no direct subway line to either JFK or LaGuardia. NIMBY’s killed the Brooklyn-Queens line even though the city owns the right of way.
LaGuardia has a pretty good express bus to uptown. JFK is harder.
But major airports are almost always better targets for taxis than for subways - you’re very often going with luggage, and it’s the kind of trip that most people take only once or twice a year (though it’s true there is a pool of employees who work there every day - still not as big a job center as many others, and usually farther from other origins/destinations because of the need for a mile or more of flat pavement for runways).
The medallions are actually where I have the most sympathy for the cabbies and cab owners, they bought into a market they didn't create. Obviously, that's not enough to lock in an inefficient cartel system, but their feling of being duped was understandable.
I described another factor in the price difference, which was in Direct Response to your contention that the price difference was due to VC money and lower wages.
I remember early on when the anti-neoliberal rhetoric starting gearing up around 2015, there was this specific blind spot on the Left on the taxi medallion system. When they would start complaining that NYC taxi drivers were hurting economically, they completely zeroed in on rideshare apps and ignored the fact that the NYT was coming out with pieces on growing problems with the medallion system.
Agree with much of this, but it's also true that the old taxi system was stagnant, consumer-unfriendly, and in need of disruption.
The political economy aspect of this is that disruption paving the way to an overall more optimal equilibrium for ride-hailing couldn't have happened without the patient VC money and disruptive companies like Uber willing to break some omelettes.
That doesn't mean we should trust Uber to strike the right new equilibrium on their own now that the old system is a thing of the past - they're not in it for that; they're in it to maximize their investment --but without their disruption we'd still be stuck in the old, much less optimal equilibrium.
Yeah, there were entire sections of DC where I wasn't able to get a cab within 2-4 hours before Uber/Lyft. Taxi drivers would also pull a lot of BS, like not actually dropping you off at your location so that the meter would go up. I had taxi drivers fall asleep while driving with me in the car. My parents almost got attacked by a taxi driver who picked them up at the airport. The taxi industry put a huge bullseye on its back that someone was going to hit, whether or not that was going to be tech bros.
Dude tell me about it. Before Uber and Lyft you could reliably get a cab at the airport, the downtown to Capitol Hill axis, and, on weekends, at a couple of night life spots. That was it. You'd then have cabbies driving you bizarre routes so that they could technically hit as many 'zones' as possible and jack up the price. And that's not getting into the issues with many of the drivers themselves. If you wanted a ride from outer parts of the city or a close in burb you could just forget about it.
Compare that to now where if I want to visit friends in the city from MoCo I have a car here in 5 minutes, a quick ride in at a reasonable price, and no concerns about getting one home later. It's way better.
The Las Vegas taxi drivers used to deliberately take the long way when driving a tourist from the airport, to jack up the fare. Uber always goes straight to the strip.
And if an Uber driver does tries to do the same thing, your route is saved to your profile and you can report it and actually get money back from Uber. Back when you paid a cab in cash and maybe got a receipt, you had no real recourse to deal with a problem.
I got hit by three taxis and one car avoiding a taxi when I lived in NYC because they would drive on sidewalks. I’m so fortunate I only have minor longterm injuries. Taxis deserved competition.
That's the thing, though. When you let Uber disrupt things, it's on Uber's terms. The policy advocated by Matt her says, let Uber do whatever it pleases, even if it's totally unsustainable, and then pick up the scraps afterward in the name of economic growth.
But we never pick up the scraps afterward and make everyone whole again. It's just never happened.
At the end of the day, that disruption happened because consumers wanted it. If people felt Uber wasn't meeting their needs, they wouldn't have used Uber.
Right..And you can always come in and impose new regulations on Uber, as many places have.
I think this is a lot like ballot initiatives legalizing marijuana, which politicians were never going to do before. Path dependence is enormous in politics. That's why you need disruption.
If you mean “pick up the scraps” via macro redistribution, Matt discusses at length how we do in fact do this.
If you mean specifically compensating the taxi dispatchers and whatnot, this is a fully general argument against innovation. Gutenberg didn’t compensate the scribes put out of work by his printing press, but the world is certainly better off for his having invented it.
All of that's fair but NY where in my (very limited) experience hailing a cab has always been easy is far from the norm. In the DC area getting a cab was only possible in a handful of locations, charged based on a bizarro zoning system, and good luck getting one even in a close in suburb. Half the time if you called one nobody ever showed up. They deserved to get their asses kicked around here because their service was terrible.
So because there is this one place in America where Uber is worse than a cab, all the Black people in America should lose their Ubers and go back to being unserved by the taxi industry?
Uber is GREAT. The Left ended up defending a system of racial discrimination, rent seeking, bad service, and service deserts, all because they don't like Silicon Valley VC.
That is not what I meant. In SOME places it is worse; in others it is not worse or better, because there was never a taxi monopoly to disrupt. It created a brand new way for people to get around. I think that is great! But in a lot of cities, it is no longer a more affordable option vs. taxis, because the price of an Uber now matches (and at certain times, exceeds) that of a taxi. When I am traveling, it is usually for work and someone else is paying, so whether I pay $70 for a taxi vs. an Uber is not a consideration. If Uber created value by providing a $10 option for the same ride, that is great, but that is not what is happening in a lot of markets, so the low-cost rides for poor people have mostly gone away, and we are right back where we started, for the most part. Uber is still more convenient, at roughly the same price, than a taxi. The low-cost benefit was an unsustainable effect of how Uber was capitalized, to some degree. To be profitable, and keep drivers happy with their reimbursement, those $6 cross-city rides simply do not add up.
I agree with both of those statements, but your point about minorities being able to hail a ride only applies to those that can afford it. I am not anti-growth myself, but if I look at this from the perspective that Uber makes my already relatively easy life even easier, to the detriment of some group fo drivers while also increasing traffic congestion, I can see why someone might view that as an out-of-whack cost-benefit ratio. Uber doesn't have any control over some of the downsides created in its wake, but those downsides fall into sharper relief because nobody seems to be doing anything useful re: other topics Matt has written about -- land use, congestion, public transportation, etc. In that case, the growth-at-all-cost so-called neoliberal mindset is only a problem because the institutions that would otherwise mitigate the negative results of these endeavors aren't working or have been deliberately left to rot.
Taxis were middle class and upper middle class transportation. Poor people took the bus; rich people hire sedans and limos.
They always were middle and upper middle class transportation. So when we were talking about the numerous Black people who couldn't get cabs, it was mostly middle class people and professionals. That's the nature of what taxis are. You don't really take them if you are poor.
Now what you could do is ban the taxi, on the grounds that all these people should be taking public transportation and taxis are terrible because they cause traffic jams. But (1) good luck with that and (2) inconveniencing a bunch of people because you don't like their life choices is actually an evil, anti-social, sociopathic way of looking at the world and is one of the reasons why a lot of people have an aversion to the Left.
If you really think taxis have awful externalities, what you could do is tax them. And you could tax Uber as well. And that would have the effect of reducing taxi and Uber usage. I'm open to that if you can make the case.
But if we aren't banning them, then it is really, really, super-important that they don't discriminate against Black people. And further, it's pretty important that they serve neighborhoods such as suburbs that DON'T have the traffic problems AND have weak public transportation. And traditional taxis didn't do that-- the drivers were bigots and they all crowded into the urban core to get fares.
So bottom line, Uber is good, and if what you really want is for people to just not take taxis, well, we're a democracy and you're not going to get that (and shouldn't get that anyway) so you should probably start thinking about tax policy instead.
Agree with 99% of this, but I wouldn’t say that the “rich” don’t take taxis. Maybe literal billionaires have chauffeurs waiting for them at all times, but (speaking as a Manhattanite), you can be quite wealthy indeed and still take taxis/Ubers all the time.
I can't remember if that was part of the pitch for Uber early on -- as a low-cost solution for low-income people who were poorly served by existing public transport in cities. That IS how it worked out, though, until costs rose. Now that I think about it, there were and are a lot of companies (ebikes, car sharing, e-scooters, ride sharing, etc.) that targeted the basic idea that is a huge pain to get around in many cities because of congestion, parking costs, the cost to own and store a vehicle, etc. But the root cause is that cars are expensive, and a lot of public transportation was poorly thought out, or couldn't keep up with growth. Uber sort of became an answer to insufficient public transportation, but providing expensive, complicated services to lower-income people is never going to be profitable. So the answer to poor public transportation should probably be better public transportation, but that ship has sailed in a lot of cities, so here we are. A bunch of shift workers downtown who don't own cars aren't going to pay $50 to $100 for an Uber to take them home five days a week. When Uber was cheap, they may have been taking Uber instead of the bus, not instead of a taxi. The bus service may need fixed or replaced with something better, but that "something better" is probably not flooding downtown with hundreds of individual Uber drivers; that kind of solves one problem while creating another. If there was some way to pool riders who were all heading in roughly the same direction at the same time that was as responsive as Uber, but still low cost, that might be a solution, but I think I just described some kind of privatized busing system.
This played out differently in different sized towns, too. My hometown is a rural town/city of around 40,000 people. There never seem to be more than a handful of Uber drivers operating there, even at what in a larger city would be peak times. There are probably a lot of reasons for that (one of them is probably that outside of cities, the idea of getting into a car with a stranger was pretty alien to a lot of folks), but regulatory hurdles or taxi monopolies were not holding them back. Parking there is plentiful and cheap, but there is still a case for ride hailing for drunks and people who can't drive (elderly, etc.).
Getting back to the point of the original article, I guess, Uber introduced more competition to the taxi market, gave riders of a certain income level a better experience, made it harder for drivers in some markets to earn a decent living, and gave lower-income people access to a service that made their lives better, and then priced many of them out of being able to use it -- that may drive some of the anti-growth, anti-neoliberal sentiment, in that the benefits always seem to kind of flow up, and then leave some segment of people worse off, and a bigger chunk of people not necessarily worse off, but not really receiving any benefit, either, and maybe even suffering some collateral negative effects (in the case of Uber, maybe that is traffic congestion?). A rising tide may lift all boats, but it may also flood someone's basement or kill some swimmers because nobody wanted to pay for lifeguards.
Stupid question: if you object to $$$ being siphoned off to a huge capitalist corporation, how hard would it be for a bunch of drivers to form a coop and write their own ride-hailing app? Does such a coop exist? Is there a reason (regulatory, practical ) why it can’t?
Co-ops almost definitionally cannot work in any industry that requires significant upfront capital investment.
I guess they can, if the individuals who assumed the initial capital risk retained more ownership if the business succeeded...but that would just make the thing another corporation, not an actual co-op.
Ok, but... couldn't the coop get started with, say, a bunch of small-time donors funding the ride-sharing app with $25 donations via GoFundMe? The pitch could be:
"Hi, we are a bunch of drivers tired of existing under oppressive capitalism. We want to start a ride-sharing coop that won't siphon off our hard-earned money to a giant faceless corporation run by fat-cat billionaires. Please donate to us so that we can develop a ride-hailing app, and someday, once we're up and going, we'll provide a great ride-sharing service to you!"
Yes, the coop would then get kickstarted through an act of charity, but then, once they had the app, it would be self-sustaining. Is this so unrealistic? Freddie is reasonably affluent; would he not throw $100 or so at such as GoFundMe? And I'm sure there are lots of people like him.
So the way that ridesharing apps work is that they're two-sided marketplaces- they have a critical mass of drivers, and also a critical mass of riders. You need to have both, otherwise it's a chicken and egg problem to get started. Uber and Lyft spent a decade and billions of investor dollars on signing up all of the drivers.
Your co-op app wouldn't start with enough riders (so drivers wouldn't sign up, or at least would ignore the app), and then without enough riders there'd be no drivers on it. So a rider opens the app, sees 'your closest driver is 45 minutes away', switches to Uber and never uses the co-op app again.
Chicken and egg problem- you need a critical mass of riders to sign up the drivers, you need a critical mass of drivers to sign up the riders. That's why no new entrants can break in. Several niche ridesharing apps have been tried and all fail spectacularly due to this
Co-ops have scaling and coordination issues, this is why they are uncommon. King Arthur Flour is the only national co-op I can really ever identify (those lots of milk producers are run via co-ops.)
Grocery stores are often co-ops or quasi-co-ops because the vast majority of the cost is in inventory, but Publix is pretty huge in the south and is something like >80% employee owned.
But yeah co-ops don't exist because if hiring someone meant giving them equity, then the cost of hiring becomes ridiculously high.
Equity allocation isn't the problem. There are seven or eight hundred different ways to manage that: gradual buy-in, point-systems, profit-sharing, tiered membership, etc..
The real barrier is that co-ops require employees motivated to participate in management and governance, which is complicated, thankless, and boring to most people, who would prefer to focus on different parts of the business.
I wonder if there’s a middle possibility - have a startup make some white-label ride hailing app for taxi co-ops to license, and take a much smaller cut than Uber does. I feel like you could make a solution 80% as good as Uber’s app for like $10M.
Though, given that I came up with this idea in thirty seconds with no industry knowledge, probably the response is either “this exists but no one uses it, you idiot or “actually this would take a $billion+ to be usable, you idiot “
This already exists. It’s called Curb and operates in most large American cities. It just hasn’t gotten very much traction. I live in Chicago and the only people I know who use it are left leaning people ideologically opposed to Uber for various reasons.
Regardless of how much money it takes I think the incentives are just all wrong when the system sets up small localized cartels. It's hard for me to imagine that kind of entrepreneurial spirit coming out of those that are happily juiced in.
Pre-Uber taxi companies were cartels to the extent that they benefitted from regulatory capture via a finite pool of medallions, etc. But if you remove that aspect, I don’t see why they’re worse than any other small business. A local barbershop may not have quite as much Schumpetrine vitality as a Y-Combinator-backed startup, but it’s still a perfectly respectable business
The low cost was never really going to be the value Uber added, and that was apparent to me as soon as I took my first Uber -- it was like $6 to go all the way across Cleveland, and I could see that was never going to be sustainable. The value Uber added was convenience in both getting a car to your location (generally), and getting a car to locations where cabs were generally not ever going to be found. Uber could have just as easily marketed their software to existing cab companies to make dispatch more efficient, but that would not have solved the other half of the value proposition, which was increasing the number of available cars to call (there was a natural limit on the number of taxis, as others have pointed out). In smaller towns where there are effectively no taxis, nobody was really displaced when Uber showed up.
But what Uber did -- gut the taxi industry on some level, and replace it with a system that was ultimately just as expensive and probably worse for drivers, while also increasing traffic congestion -- is similar to what we see in private equity/VC scenarios like housing. There is nothing inherently wrong with private equity buying up housing stock and becoming landlords, but in practice it drives up prices, reduces availability, and makes the renting experience worse, even for people who can afford it. PE firms are buying up HVAC service companies right now, as another example, and there are positive outcomes (HVAC company owners get cash, there are efficiencies created with consolidation), but also negative outcomes in quality for both employees and consumers, in some cases, because the incentives for just cutting costs are roughly equal to those for creating value or gaining market share through improved service, and cutting costs is the easy route if you are only going to hold an asset for a few years.
Some of the anti-growth animus may just be driven by the fact that, in the real world, there has been a growth for me, but not for thee, approach taken that creates wealth for a few entities, is highly disruptive, and drains value (both materially and experientially) from markets/industries.
From a more vibes-ish perspective, it kind of feels like technology made a lot of things noticeably better for a while, but a lot of the areas of life that were disrupted by new entrants and technologies have started to really suck in new ways. Even getting an Uber is starting to be just as frustrating as getting a cab used to be in some places.
How does private equity buying up housing reduce availability and make the experience worse? In my experience, corporate landlords are less prone to awful failures than mom and pop landlords, even if there are minor annoyances always. And they certainly don’t impede construction.
It probably depends on the geographic area, but corporate landlords can be just as neglectful of their properties as individuals, particularly if they are located across the country or in another country, but their neglect is on a much larger scale and may be be situated in a way that makes it harder to impose consequences on them. If a few entities gain control of the majority of available rental stock, they could raise rents without concern about being undercut by competitors. People who want to buy a house may have a harder time if a bunch of the available single family homes have been bought up and flipped into rentals. They could also distort the market in ways that a bunch of individual buyers, sellers, and renters would not. And while they do not impede construction, construction is still often impeded anyway, and that can either amplify the things I just listed above. Here in Cleveland, a bunch of out of country investors have bought up a lot of commercial property and single family homes, and sometimes they just sit empty. It seems to be really difficult for some cities to deal with absentee landlords (individual or corporate). That is a failure of governance, not economics, but it is one that real estate investors seem happy to exploit. I think Matt has written at length about why building more houses is the right solution to all of this, but one that can be very difficult to implement depending on where you are. Again, though, I do not think PE buying up anything is inherently bad, but if they are just holding and dumping investments without adding a lot of value, it CAN be bad.
Honestly, it kinda reminds me of how much worse the internet got once people realized banner ads don't make anything and then the VC money for crazy ideas dried up. The internet of just money flying around everywhere was in a lot of ways a mirage, compared to the internet of ruthless efficiency, and the previous internet killed a lot of real things that we probably need more than ever, that don't seem to be coming back, now that we're back to more ruthless efficiency.
Due to New York's hyper-regulation, an Uber in New York basically is a taxi. NY Ubers need taxi license plates, and NY Uber drivers need taxi-driver licenses. It's not ride sharing as it is almost everywhere else.
“Redistribution is impossible” -> I don’t know how much you have to pay a guy to make him as happy on the dole as he was with an honorable social role, but I bet it’s more than you’re willing to pay.
I think there’s a lot of people who’s gut instincts are basically from ability to his need even if they’re not Marxists and believe everyone should have a stable job forever with a career progression that tracks with age.
I think that explains a lot of the frustration with redistribution because it’s not insurance against market collapse so that cab drivers and other industries displaced by tech or trade will be fine.
"That’s good because it will boost equality and because it will boost growth."
These two goals, boosting equality and boosting growth are both important, but sometimes work at cross-purposes, because growth is lumpy and tends to be disruptive to a lot of people's lives, creating new haves and halve-nots. Conversely, it's pretty easy to quickly get to economic equality, but at the cost of growing aggregate wealth.
If the overall purpose of economic regulation is, over the longer term, to create a wealthier society that serves the preferences and comfort of the largest number of people, there probably needs to be more open discussion of the tradeoffs involved in prioritizing one over the other. I don't know if any "correct" way to strike that balance in a democracy except by trying to give people what they want.
If people prioritize having more leisure time and job security, and structuring certain industries, such as agricultural or healthcare in ways that prioritize social goals other than over maximizing growth, that's a legitimate end goal it seems -- who better knows what the people want than the people themselves, and if the answer is an economy structured to prioritize the comfort of regular people over maximum aggregate wealth, well, that's what people want, so give it to them, as long as the tradeoffs are clearly considered. To think otherwise seems to be putting the cart before the horse.
> who better knows what the people want than the people themselves, and if the answer is an economy structured to prioritize the comfort of regular people over maximum aggregate wealth, well, that's what people want,
I'm not sure anyone would realize that was the tradeoff until it's too late. As Tired PhD student points out below, Europe is having to cut welfare benefits, a trend that is likely to continue. Will they be able to turn "growth" back on when it becomes imperative?
All economic growth always raises inequality, because there are always at least a few people who can't or won't engage with the economy in a productive way.
"Conversely, it's pretty easy to quickly get to economic equality, but at the cost of growing aggregate wealth."
It's not immediately obvious why this has to be true, depending on how you achieve economic equality. Mathematically, it's entirely possible to share the costs of investments needed for growth (including the inevitable costs of "destroying" existing jobs or the value of stranded assets in the near term) as well as the aggregate increases in wealth caused by that growth, equally. Embedded in the statement you made is the assumption that the costs of the destruction must be externalized in order to achieve net aggregate increases in wealth, but it's not clear that would be required if both costs and benefits were fully distributed / redistributed.
Matt didn't really mention it but I feel this is at the core of the problem with social security (retirement not disability). It's an entire massive, quasi-regressive distribution of cash to relatively well off retirees largely in the name of politically insulating a much smaller commitment to keeping some portion of the elderly poor from becoming destitute. It's a budgetary disaster dressed up as a sacred cow. It should be example A number one of how not to design a safety net program and should be at the top of this list of things to cut for better ideas.
I would question if any redistribution program that is designed to have a multi-decade individual effect span - paying in while you are 20 and still getting stuff when you are 90 - is possible. The demographics that the program was designed against vs 50 years later vs today would cause any system to fail but the lack of political will to adjust it is legend. As I take care of the finances of a 80+ year old person who has no need for Social Security but gets it, you could view much of the Social Security as free money to be spent on political campaigns, especially supporting keeping that gravy train going.
Its there because SS was created to mimic a pension plan with similar inputs and outputs. If we want to convert it to be a standard government transfer program, we can do that, but we should expect it to change the public's perception of it as well.
More simply, that's a large tax increase for higher earners. If you make 200k, your marginal tax rate for each additional dollar earned if single is 35%. If you remove the cap, that jumps 15.3% to over 50%.
FICA taxes pay for SS and Medicare. The employee pays 6.2% in SS, 1.45% in Medicare tax. The employer matches those contributions. For SS, the tax is capped on income up to $168,600. There is no cap on the medicare part, and in fact there is a medicare surcharge for income over 200k of .9%
So the increase in taxes for someone over 200k wouldn't be the full 15.3%, but would actually be 12.4% as they are already paying the 2.9% in medicare taxes.
You might say that taxes paid by the employer for paying you over 200k don't count, but they definitely do as there is strong evidence companies reduce the salaries they offer to compensate for the taxes they pay on salaries.
The other side of the coin is universal benefits. Everyone pays in and everyone gets something out of it. That seems like a perfectly fine and workable system that doesn’t punish the prudent and successful.
Spending tax dollars to invest in people whose productive years are ahead of them makes lots of sense. Subsidizing middle class retirement consumption not so much.
But public education isn't something we do because it benefits the students. It never has been. Public educations is half day care and half investment in human capital.
Excellent. One overlooked aspect of Uber or AirBnB or DraftKings or any other "technological advance" in industry is that they only appear to be tidal wave moments because government regulation blocks traditional leaders in this industry (medallion owners, hotel owners, casinos) from having evolved into versions of AirBnB or Uber far earlier. These tech entrepreneurs are really just finding paths around laws.
And it's a lot easier to further their racism when they have rent seeking laws in their favor entrenched in the code. Very much also an important aspect of Jim Crow.
Yeah the thing that makes Uber such an interesting and tricky case is that it was maybe 20% "real" innovation and 80% regulatory arbitrage. But the regulations they were arbitraging were mostly very bad supply restrictions and obsolete rules for how to run a taxi service (and also some more defensible labor regulations).
Agree. The only real enabling innovation was the precise location awareness of the iPhone, which Apple implemented and made accessible to app developers.
I think it's worth highlighting that these carveouts are not necessarily even redistributional. In California the lobby representing builder's unions opposes the use of modular housing in all public contracts. The effect of this is that a single unit of supportive housing in SF is one million dollars as opposed to five hundred thousand dollars. I really struggle to see how they justify this to themselves--basically they're arguing that their jobs are more important than the lives of people living on the street. But this is how politics works. Interests groups are created to look out for the interests of their members and for nobody else. In some cases the carveouts that we make for them only come at the expense of "the rich", but not always, and caving to these interests on every occasion leads to the sort of "everything bagel" progressivism that people now decry.
I'm disappointed this series hasn't addressed the growth of the FIRE sector, which now comprises more than 20% of the GDP, and is disproportionately responsible for growing the wealth of the super-rich. Why has this become a bigger chunk of the GDP, and does it improve consumer utility commensurate with the amount of resources that are dedicated to that sector? Why have asset values, mainly stocks and land, appreciated so much faster than the GDP has grown? I think any analysis of neoliberalism that isn't focused around finance and asset values is really missing the ways our economy has transformed.
“Don’t support Uber just use taxis instead!” was one of my first indications of just how out of touch a lot of the media elite was. In the US at least, taxis were (and remain) a convenient option in exactly one location - Manhattan below 110th street. Sure they existed all over, but almost nowhere else was there the density to support convenient roadside hailing - even in NY that was iffy in big swaths of Brooklyn and Queens. You were reduced to calling, figuring out how to tell them where you were (not always easy if you were out late in a city you don’t know well- a prime use case for Uber today) and half the time or more they never bothered to show up. Oh- and talk to an older Black person about how “convenient” roadside hailing was. My understanding is that Uber and its competitors have also meaningfully reduced drunk driving deaths/ injuries as well. Just massive improvements to many people’s lives but a certain kind of person finds them icky because some Silicon Valley people got rich.
"Oh- and talk to an older Black person about how 'convenient' roadside hailing was."
This was one of the "comments I wanted to immediately make but knew I'd get beaten to while still asleep.". The idea that anti-neoliberals think that the "affluent-but-hardly-billionaires dispatch companies owners" were the *good guys* here was always laughable.
Self driving cars will probably go through the same cycle: "Those evil silicon valley billionaires over at Waymo." Ummm... you mean the people that saved countless lives from car crashes and made roadside car hailing far more cheaper and convenient than it has ever been.
"But last year a Waymo car crashed, so they are still dangerous as long as you don't compare that number to anything else!"
This is true, but worth noting that uber first came onto the scene as an affordable product. When I lived in NYC, ubers were completely unaffordable and I never took them. That, plus the fact that city bikes and the subway were always pretty convenient as well.
New Yorkers have that advantage of abundant alternate transportation options that most other places don't.
True! I will say, DC is just so walkable and my office, gym, house, grocery store, and where most of my friends live are all within 15 min of each other. So I basically only walk and bike here.
For house hunting, I strategically targeted the only part of Boise that's easily bikeable/walkable. The bike infrastructure is actually really good here compared to the rest of the country, but it's the only viable form of alternative transportation here, and an incomplete solution for those who are unable/fearful of doing so. At least the electric micromobility advances help out a lot.
Is the weather in Boise mild enough for biking in the winter?
Most of the time, yes. Just treat your outer clothing like you would if you were skiing.
There are many many people in many situations who aren't served by city bikes and the subway. Uber is actually especially good in suburbs, which are sometimes public transportation deserts.
Beat me to it. I grew up in the relatively urban, near-suburbs of Chicago, and the few times I had to call a taxi service as an adult that shit took FOREVER. Usually the wait would be about an hour or so, and it was almost always in situations where I didn't know ahead of time that I'd need it, so I couldn't schedule it. The few times I've needed an Uber out here, the wait has been <10 minutes.
And I'm not even in a public transportation desert! I have a Pace bus route near me, and while it is MUCH cheaper, the route radiates out from a central hub, so you have to take your bus to the hub, and then take another bus out from there to your final destination, which might still be a decent walk. The Uber is much easier compared to basically any other options besides driving oneself.
Personally, I don't think I'm served by the subway. I recall one magical evening two years ago where heading to my destination a woman (!) pulled off #1 at the end of a subway car and on my way back I had to pepper spray a teenager on the platform who wanted to fight.
You do often have to wait 15-20 minutes for a car to come though.
I usually experience waits of less than 10 minutes, sometimes less than 5.
Back before Uber, you'd wait an hour for a taxi.
If they bothered to show up at all! Most cabbies don’t want to drive all that way out to the burbs to pick up a fare. The advantage of the digital ride sharing apps is that they make for a much more efficient market matching riders to drivers, exposing the latent demand in the suburbs and making it more likely that drivers will be able to pick someone up after dropping off. It also helps that Uber holds onto the users credit card ensuring that drivers will be compensated for cancellations. I think there are a lot of things that could be done better but it’s a huge step up from the cab situation in most cities.
Ubers never made as much sense in NYC. I remember that very distinctly. But in Chicago, Detroit, and San Francisco, the other cities I spent significant amounts of time in during that time period, they were an absolute godsend
Uber first came on the scene as a way to arrange a limo from a specially licensed driver more conveniently than you would traditionally do for prom or whatever. Then Lyft introduced the idea that anyone could pick up a “friend” for a small fee without needing a special license, and Uber realized that was the future. But Uber already had the brand name. Then they were both affordable for a while.
Now they’re getting closer to the price of operation.
You're affirming that affordability was a bait and switch built on VC cash that cab companies that actually had to turn a profit couldn't possibly access but you think it's good, actually
The argument against Uber - which I agree is on net a far superior service to taxis, including in Manhattan below 110th (whoever was respnsible for Taxi TV should be locked in a room with it and unable to turn it off for the rest of their life) - is that the congestion issues Matt alludes to *were, in fact priced already* via the medallion system.
There’s only so much road in NYC, so there can only be so many cars on it, so the medallion system was effectively a cap and trade system on cars occupying the road looking for hails. It was at least arguably *better*-designed in some ways than the moribund congestion-pricing proposal because the latter has no marginal incentive to leave the congestion area once you enter it (there was no per-hour price) whereas putting a maximum on cabs in a fixed-capacity road system is matching problem to solution quite effectively.
In practice, cabs weren’t great, were nowhere near as convenient as Uber, the pricing was better with the latter (although screw Uber for adding the scourge of tipping to it), and it turns out there are problems creating a regulatory property right out of restricted supply in terms of political constituencies enriched by that right opposing expansion or amendment of it, but the actual cab medallion system was, I would argue, not conceptually flawed. Instead it appears that the response to Uber was more like “shrug, I guess we don’t actually care about capacity limits in our fixed-size street grids being used up by cars seeking ride hails. Lol.” Which may in fact have resulted in substantial welfare improvements (I would agree it has), but I confess I am constantly scratching my head about the fundamental rationale for rationing — i.e., allocating the fixed good of road capacity using tradable property rights — *never actually went away.*
Bear in mind they had taxi medallions in cities that didn't have NYC's traffic problems or plethoras of cabs.
Interesting. What cities support a hail-cab industry without also having NYC’s traffic problems? Urban traffic congestion seems like a universal.
That's goal post shifting. Every place has some traffic, but few places have New York traffic.
This is not "goal post shifting." The fact that congestion may be worst in New York doesn't preclude its being a concern, including one that influences medallion adoption, elsewhere - why would that be the case? The adoption of medallion systems in places without a lot of cabs does seem potentially supportive of a more general regulatory motive for the programs, and your initial comment was relevant, but "traffic is terrible even if it isn't quite New York terrible" doesn't seem like an argument for being unconcerned about congestion. I was asking the question because traffic problems seem like a confound as to teasing out motive: any place dense enough to have street hails as a viable industry almost certainly has an incredibly shitty traffic situation -- but IDK, maybe some place like Fargo has not-bad traffic and still regulates street hails or something.
While New York has plenty of congestion (and it's tougher than I thought to find decent metrics on this from primary sources) and appears to be the most congested city in America (most charts seem to say circa 101-108 hours lost each year to congestion), each of Chicago, LA, Boston, DC, and San Francisco appears to have around 83-89 (or up to 96 for Chicago) hours lost per year. Better, but still terrible. And Chicago and Boston appear to have outclassed New York (which had approximate parity with Philadelphia) as recently as 2022.
Sources (most mass market reporting seem to rely on the INRIX survey. Sadly the Bureau of Transportation Statistics was not very helpful here):
https://inrix.com/scorecard/#city-ranking-list
https://www.tomtom.com/traffic-index/ranking/?country=US
[Summarizing 2022 INRIX data with Boston and Chicago ahead of NYC - https://www.usnews.com/news/cities/articles/10-cities-with-the-worst-traffic-in-the-us ]
So here's the deal. There are going to be taxis. It's a really important means of transportation, for lots of reasons, and their convenience and utility can't be duplicated by other methods.
Plus, the public wants there to be taxis.
Now, if you want to tax the taxi industry (including Uber) to account for traffic externalities, that's a reasonable thing to think about. But there's going to be taxis. You're not going to force everyone who has a lot of stuff they are carrying, or who is afraid of crime and grime on the subway, or who doesn't want to or can't bike or walk, to use other options.
I initially pointed out that most places don't have New York traffic. You shifted the goal posts to any traffic (seriously, despite your false denials, anyone reading this can see that). But OK, yeah, there's traffic in lots of places. But see point (1)-- so what, a lot of people like and need taxis. It's an important service. If you want to tax externalities, tax them!
The bottom line though is that Uber improved the service of something that needed to be improved. And attacking it because you don't like traffic is just saying that the American public can't have a nice thing.
What fraction of road congestion were taxis responsible for? It seems to me that this analysis only makes sense if it was most of it.
Not necessarily if you want to reserve some fraction of the road (up to and including most of it) for the traditional public noncommercial use that characterizes most public road use in the US. I wasn’t there at the inception of the plan but I have to assume that this was the initial logic of limiting the the number of medallions in the first place.
I think the medallion system had more to do with regulation of the taxi industry at its inception than with congestion. And, since it's NY, I'm sure there was also a lot of rent-seeking involved.
Taxis (including Ubers) that can't respond to hails don't require medallions, so, again I don't think congestion was the primary motivation.
It would be great if the city didn't try to reserve road use for any particular kind of vehicle and just let the market work it out (i.e. congestion pricing or road-use fees for all).
"Taxis (including Ubers) that can't respond to hails don't require medallions, so, again I don't think congestion was the primary motivation."
Without commenting on the remainder of your comments (some of which I agree with, congestion pricing and road-use fees seem like a good idea as long as they're administered well), I do think that this is a bit of a technological/temporal red herring. The past, AIUI so-called "black cars" (dispatch-based taxis hired based on a call rather than a street hail) didn't really troll the streets seeking ride hails (or, if they did, it was illegal, known as 'gypsy cabs'), and there was a lot more friction (and, often, wait time) to use dispatch rather than street hails. It was basically for lawyers and bankers who were working late in the office and wasn't a general-population substitute good for taxis.
Smartphones basically changed all of that, making Uber much closer to a perfect (often more-convenient, cheaper, and more available) substitute good to a ride hail and completely removing the phone-call based friction. As a result, Ubers just kind of ride around waiting to be called (or sit in a queue-like area similar to yellow cabs at the airports, though farther away and less convenient) and pose analogous commercial and congestion-based considerations.
TL;DR: the distinction between dispatch based cabs and street hails has more or less evaporated for all practical purposes *now,* but that wasn't true when the medallion system was adopted.
Lots of people I knew in NYC when I lived there in the mid-noughts had a local cab company's number hanging around. It wasn't useful for getting home after a late night (because it would have been based where you lived), but it was what you used for getting *to* that late night or getting to the airport.
It was enough of a staple of NYC life that the three family businesses that are featured in In The Heights are a bodega, a hair salon, and a cab company.
Also worth pointing out that when Uber first launched in places like SF and Seattle, it was decidedly MORE expensive than taxis, not cheaper. It was just a vastly superior product, for all the reasons you mention, so it grew rapidly anyway.
I was happy to pay $10 more for an uber to the airport because I knew that it would, you know, actually show up and drive me to the airport, whereas if I ordered a cab the night before to schedule a pickup at 5 am, it was a coinflip at best that the cab would show up.
I can say that in Chicago, Uber and its progeny have, in the fullness of time, made urban mobility worse than where we started.
That doesn't necessarily refute Matt's broader point, but I think using Uber as an example of a growth-promoting innovation that has straightforwardly advanced the ball is just incorrect.
That's not been my experience. Chicago public transit just has so many point to point gaps - mostly diagonally. Want to get from Ogilvie to 600 W. Chicago or Watertower? Good luck. Walk. Clybourn to Wrigley? Same thing.
The Lincoln Yards project should have incorporated a bus-only lane connecting Armitage from the Blue Line stop in Wicker Park to the Brown Line stop in Lincoln Park, integrating Clybourn with both.
Armitage is the only major East-West arterial that doesn't currently pass through the highway/river so you're not taking anything away from private car users, just adding a high demand, high frequency shuttle filling that obvious gap in the transit network.
(And when I'm Mayor and we combine the Brown and Pink lines? Then we're cooking with gas folks)
I would only add the Lincoln Yards project should just get built. I don't really care much about the finer details. That Ald. Waguespack can go fuck himself for his continued NIMBY opposition and I loved Mayor Johnson coming over the top to inch it forward.
https://www.chicagotribune.com/2024/06/20/sterling-bay-lincoln-park-housing-project-advances-despite-aldermans-opposition/
The 606 bike trail should 100% have been a light rail connecting Metra near Pulaski to Western to Metra again at Clybourn to either Armitage or North/Clybourn.
It actually used to be a railroad back when Biden was a young man.
The 606 basically goes right behind my house and as a bike* and walking path it’s awesome. It being a light rail would be a no from me. I guess that makes me a literal NIMBY.
*It’s actually not great for bikes and I wish they weren’t allowed for adults. But obviously that ship as long since sailed.
That's my take, too. Half the time when my wife and I go down there from up north, we just end up walking (or taking an Uber, if we are dressed nicely), because there are so many gaps and once you figure in the busses and whatnot, it's not worth it, time-wise. The bonus is that Chicago is the best summer and fall walking city, to me.
I worked in Cicero for two-ish years, which, while I understand not technically the city, is close enough to count for this conversation. There was basically no way for me to get to work using public transportation that was sub-3 hours, which is wild because I live within spitting distance of the UP-North Metra line. The door-to-door drive was only 1 hour, 15 minutes.
As a resident of the far north side (Andersonville) who works from home & doesn't need to commute daily, I would agree with David. For trips where biking isn't feasible, I can get around much faster at an affordable price point than I could on the El or CTA bus. Thanks to the rideshare apps, my fiance and I have managed to stay car-free, whereas in the before times we almost certainly would have bought a car.
The fact that CTA ridership is down is because of its post-pandemic decline in service, which in turn is downstream of mismanagement by Dorval Carter and indifference on the part of Mayor Johnson.
Do you refuse to take buses? I mostly just use Divvy in those situations (or, well, in all situations—biking is usually faster, cheaper and more enjoyable for me), but a bus or a little bit of walking put a train makes those things work fairly well.
Nope. It might have been worse for me though since I was living in the West Loop and that areas is more isolated from the CTA but I took the #8 to work for 5 years. And yeah, Divvy a game changer for the shorter commutes. But I don't know that I could take it 2-3 miles in work cloths in anything but the mildest spring and fall weather.
I don't know what you have to wear to work, but I rode year-round except for rain for 8 miles a day last year. Such a great way to start the day, and I rarely arrived feeling inappropriately sweaty. I worried about that, but it generally wasn't a problem. And in the loop (where I wasn't working), you can rent showers/lockers in gyms without bringing your total commute cost up to what CTA or driving would cost.
Give it a trial run on your commute home today—such glorious weather!
Noted and all great points. But just to the point my comment replied too ... Divvy is a genuine improvement to the network and is operated by Lyft (maybe was? IDK) so - I still think Chicago mobility currently is >> than the prior pre-Uber period.
Interesting conjecture, how do you define and measure “worse”
It's essentially a two-step of the initial surge of Uber killing the cab companies and diverting massive resources from the CTA, followed by Uber becoming much more expensive and less available.
Ubers cost more and take longer to acquire than cabs used to (and are just generally worse road users than cabs were), and the CTA is less reliable.
The silver lining (and maybe the redemption of Matt's argument) is that the Curb app which offers Uber-like functionality for proper cabs seems to be becoming more and more popular. Maybe we end up with Uber's ride hailing technology innovation overlaid onto what we previously had.
What did Uber to do CTA and what public resources did they divert? If Uber never came to be is CTA somehow magically better or more reliable? IMO CTAs problems are way more intwined with deep city machine politics, post covid office culture, union negotiations, and the basic inability of any US polity to create any infra project at a reasonable cost and I none of those things are Ubers fault.
It just siphoned away ridership and therefore fare money. Which is the same thing more available and cheaper traditional cab service would have done, it's not like there's some special magic about Uber in that regard, but that is in practice what happened in the early to mid 2010's.
Yea but more fare rev doesn’t make the service better magically, it gets consumed by the city machine that views CTA as a jobs program, not a constituent service. IMO a in universe 2 without Uber CTA has essentially the exact same performance coverage etc. this isn’t a Chicago specific issue either, basically all cities w transit in the US have the same issue
Are there good figures on this, or is it just intuition?
When I lived in Chicago (mid to late nineties), the backbone of CTA ridership was commuters, and I'd be surprised to learn that rideshares ate into that significantly.
If I had to predict how Uber would eat into the CTA's business, I'd expect reduced red/purple line evening and weekend service would be the first victims (where that's standing in for whole class of bus and train services). Is that what happened?
This was the point I wanted to make. The cheap convenience Uber offered in the early years is gone, but public transit was substantially harmed.
Ironically, now that the VC subsidies are gone, when I do need a ride for something, I find cabs are much more reliable (like airport transit). If you arrange for one, it actually arrives when you schedule it.
When I first moved to Los Angeles there were flyers up around downtown saying “new program - hail a cab”. Apparently it was a trial that cabs could pick people up from the street.
But it failed because there wasn’t enough density of users and vehicles.
Then a year or two later Lyft started the idea that anyone could pick up anyone with a car, and suddenly the phone gps made it much easier to make the connection than trying to visually identify someone looking for a ride, who might be a block or two away.
Well, they have also make taxis more easily callable from fixed locations. :) [Like charter and non-charter public schools.]
You are genuinely a huge fucking moron and incredibly disingenuous. There's are profound labor-based humanitarian argument against Uber. There's the observation that Uber only accomplished what it did because of the deeply toxic dynamics of VC funding. There's the fact that drivers have terrible working conditions and pay. But, no - the ONLY reason anyone could criticize Uber is because Silicon Valley is icky. You're a joke dude.
I know you've got a big following and I've enjoyed reading some of your pieces in the past. But we have rules in the comment section, and one of which is we don't engage in ad hominem name calling. You're always welcome to substantively disagree, and it's totally welcomed.
But dropping a warning here!
Just a fucking warning - really?
Now that I know the rules, I'll definitely save my one free "huge fucking moron" for an opportune time.
Yep! Per the rules I posted months ago, first infraction is a warning.
I would think it best to treat people equally, even if they should have much. If you would ban an ordinary commenter for it, then ban him for it.
Why not leave out the first and last sentences, and stick around to engage in a conversation?
"There's the fact that drivers have terrible working conditions and pay"
They do it voluntarily.
That's not always a good argument, though. People will accept shitty paid work if they don't personally have a better alternative, and allowing even shittier paid work can allow for a worse equilibrium (worse for workers). This is an old argument for minimum wage, old enough that Marx made it (or something similar) -- workers don't benefit from the "freedom" to accept bad deals if it means bad deals are what will be offered to them, versus an alternative where they cannot accept the bad deals and employers are compelled to offer something better.
You could study the effects of Uber more accurately if you could find two similar labor markets, but one allows Uber and the other doesn't. Or look at Uber drivers around the time Uber enters or leaves a market -- are the same people better off with Uber around or without it? I don't know the answer, but that kind of natural experiment is much more informative than just saying there are people who will accept money to do something.
Do you think there’s some magical job people are doing in the places without Uber that Uber is somehow displacing?
How much do you think Uber drivers make?
Right back at you Freddie.
If only there was a way to implement a pigouvian tax specifically on being a douchebag/bro like Travis Kalanick, then I'd be happy to just let it rip.
Uber>>>car services in outer boroughs
Matt writes: "There’s no magic formula of growth-and-redistribution that ensures an endless series of electoral victories"
For all of the Democracy is on the Ballot rhetoric (some of which I agree with), the vision of the anti-neoliberal faction appears to have coalesced around a very anti-democratic approach:
1. Use regulations to accomplish what the legislature will not do. (Trust the Experts™, California banning ICE vehicles)
2. Implement those regulations through the actions of Executive Agencies.
3. Insulate executive agencies from the democratic process as much as possible. (see: CFPB original design)
4. Neuter the judiciary's role in limiting what actions the executive agencies can do. (see: the uproar over Chevron and resulting Biden SCOTUS proposals)
Legislative policy wins require the slow, tedious process of winning elections, compromise, incremental reforms and persuading voters to accept change. But for those who are convinced by the catastrophizing of the moment, incremental changes are too slow, too uneven and too precarious to leave to the democratic process. Trump scares me more than the anti-neoliberal left. But both are threats to our system.
Obama did a lot of policy making through executive order, but we clearly view him as not as much of a threat to the democratic process.
If the Bad Person becomes President, I doubt if you will be sanguine about executive order overreach.
I won’t be because I agree with more of Obama’s policies. But that’s my point, the anti-neoliberal left executive lawmaking is seen as more of a threat because many of us here view the policies to be not very good.
The Bad Person was already POTUS for four years, and it didn't really seem to materially impact people's sentiment regarding executive power. People's views still seem to be "executive power good when I like the executive action, bad when I don't." It's really unfortunate that a lot of people's thinking is stuck in the present moment, seemingly incapable of considering the past or future.
Maybe that would change if Trump wins and a lot of the scary stuff people fear actually happens, but I doubt it.
I think this is underselling the extent to which the structure of our legislature drives people to a favorable view of executive power. There are so many veto points it's hard to legislate - that naturally results in seeking other avenues to accomplish goals. And it's really charge to change the veto points in the legislature. I think the only real way to change this is to make legislating easier.
Agreed that we need to implement reforms to make legislating easier. Part of the reason why the executive and judicial branches exercise so much power is because the legislative branch isn't working as it should.
One would hope that seeing one individual (POTUS) and a handful of unelected judges (Supreme Court) have so much power would drive support for legislative reforms, but that doesn't appear to be the case
This is the key point, I think. The main the downsteam effect of a weak legislature is that it makes the country's laws less responsive to emergent problems for which the broad population demands better policy outcomes. In a situation like that you'll constantly have a ton of slow-burn areas where the US is out of sync with popular opinion for one reason or another, making executive orders intrinsically appealing because they seem like they are the only way to cut through a dysfunctional legislature.
It may just be a lack of faith that if your side holds back, the other side will too. I don't think that Obama using less executive power would've made Trump go "ah, yes, that is a norm that I should not break - instead I should maintain the standard that's been established on the appropriate limits of executive power." On a related note, I fully expect the Republicans to get rid of the filibuster the next time they have 52+ seats in the Senate.
I feel obligated to preserve the argument that GWB and Obama both should have been impeached and removed for signing Bills/Executive Orders that the they publicly professed to believe to be unconstitutional. Obama absolutely violated his oath to the constitution in a way that should be recognized as a disqualifying threat to the republic.
Ah, Zivotofsky v. Powell->Rice->Clinton->Kerry...and then once Tillerson got in the Zivotofskys finally got their way.
Clearly unconstitutional presidential actions can’t be impeachable. What is or is not unconstitutional changes continuously. What you are proposing is to empower SCOTUS with initiating an impeachment any time they feel like it.
What is impeachable is whatever Congress says is impeachable. It has nothing to do with SCOTUS. GWB and Obama absolutely took actions they themselves explicitly called unconstitutional in violation of their oaths. That's plenty.
SCOTUS doesn't initiate an impeachment process. That is the House of Representatives.
These links might help:
https://en.wikipedia.org/wiki/Schoolhouse_Rock!
https://www.archives.gov/founding-docs/constitution
Obviously. However, if any unconstitutional presidential action was impeachable then they could by redefining constitutionality (as they so often do).
I tolerated the results of his executive orders but I was not happy he was using them instead of going through Congress.
I think you are underselling the intransigence and inflexibility of many legislators. We have a lot of veto points that make addressing problems difficult.
I agree, John’s comment makes the most sense if the US had a parliamentarian system.
So your solution to that is encouraging the President to exercise extra-constitutional unilateral lawmaking power? Seriously?
It's not! But I also think this has been going on throughout both parties throughout much of the 20th century, the best example being the president completely usurping war making power. The anti-neoliberals did not invent it.
More feasible than adopting a parliamentary system.
I think those are not the only two choices....
We can always dream of a new constitution. I certainly have my own unworkable ideas.
Not really sure how taking away agencies ability to make decisions absent clear direction from Congress and giving said power to (in practice) to Reed O’Connor or Mathew Kaszymark, two judges with political views to the right of 80-90% of the country, is a turn to a more democratic way of doing things.
My disdain for the conservative legal movement is pretty high right now (as evidenced by snark above) but there is an intellectually honest kernel in conservative legal doctrine; there is a lot more Congress could and maybe should be doing and they very deliberately choose not to exercise power. Your beef is with Congress ultimately. There is a lot of reasons why Matt (rightly) rails against things like the Filibuster and a big one is it needlessly hamstrings Congress from exercising the power it should and yes ends up giving way too much power to bureaucrats. This isn’t so much of a power grab as it’s an example of the adage nature abhors a vacuum.
We will all be happy the judiciary exists to check Executive overreach if Trump is reelected. Or when the next generation of Vance-types ascend.
I seriously doubt we will be happy or that there will be any meaningful checks.
Maybe? There really isn’t a “file here and you win on easy mode” like Republicans have found and exploited in Texas. It is kind of a one way ratchet where Republicans win up to the point even Justice Roberts flinches.
By far the most powerful politically insulated institution in Washington is the Fed and its political insulation is a core proposition of neoliberalism. It's not true as a general proposition that the executive branch is more hostile to neoliberalism than Congress--the opposite is more historically common, which is part of why presidents have taken the lead on trade policy. You can be annoyed at regulators for doing specific unpopular things but this is totally wrong at the system level.
The Fed is politically insulated for very good reasons - nobody wants a politician like President Erdogan of Turkey determining that high interest rates cause inflation and getting their way (and just to point out the obvious that Trump has made the same argument recently). Note that Turkey's inflation rate hit 75% in May, 2024 largely as a result of his policy.
The Fed has its dual mandate - keep inflation under control and keep employment high. Managing that with only monetary tools is pretty much impossible but try to imagine a world where those were under the control of elected officials exclusively - Argentina, anyone?
To be clear, I think the Fed's political insulation is great.
I'd argue that Congress has got it almost exactly right with the Fed. It gave them two (almost but not quite compatible) objectives and left it up to politicly appointed technocrats to make the policy in detail. [I do wish it had made "real GDP" the objective instead of "employment" or even better, "real GDP maximizing inflation."]
I think that real GDP maximizing inflation is socially problematic. There is real anxiety created by continuously falling purchasing power plus periodic steps in income. There might be a technocratic solution to that problem but I am unconvinced that it’s a simple one.
Agree, but it also requires a legislature comprising people who want to legislate. I was listening yesterday to a sidebar episode of The History of the Americans podcast, which discussed among other things former senators who were masters of procedure (which is *very* complicated). This enabled them to be extremely effective. I even remember people like this (mostly staffers) from my previous working life in policy. Maybe I am not paying close enough attention, but I am not aware of this being much of a thing now.
That was a great episode and it inspired me to buy "Master of the Senate" about LBJ.
Link here: https://thehistoryoftheamericans.com/sidebar-the-master-of-the-senate/
It was! I'm a little bit hesitant to dip into the Caro books on LBJ because I found The Power Broker to be so repetitive and tendentious. Of course it's a great story, but I felt that Caro didn't want to let readers draw their own conclusions, and just kept bashing them/us over the head with his thesis.
(Yes, Moses was power-hungry, yes a lot of the projects he proposed were bad, especially viewed from today.)
I guess the trouble is, how do you negotiate with people whose ideology is 'nothing getting done is fine with us, we like it this way'? I don't think it's legislators not wanting to legislate, i think it's people just reflecting their voters and doing their best to oppose their enemies by any legal means they can. If i'm voting for a democratic senator, i certainly don't want them trying to take a little of the sting off a bill that the Republicans want, i want them stopping the whole thing if they have the possibility.
Yeah, I hear this all the time--"Congress won't do [x]"--as if it's obvious that Congress should do [x] but some elementary-school-yard squabbling is preventing them from doing it. But the reality is simply that not enough Congressmen agree on it, so it doesn't pass--whether it be a bump stock ban, permitting changes, DACA formalization, what not. This is the legislating process, and that's why slow boring of hard boards, compromise, art-of-the-possible, etc etc.
>If i'm voting for a democratic senator, i certainly don't want them trying to take a little of the sting off a bill that the Republicans want, i want them stopping the whole thing if they have the possibility
Wait, does this describe your priorities or a generalization of voters'? Because it reads as straight-facedly endorsing the exact cognitive/emotional foible that largely caused the situation we're all complaining about. Like, if I could reach into every voter's brain and delete the meme "cost-benefit analysis is compromise and compromise is treason", I would have done it thirty-five minutes ago.
They're representatives. They're supposed to represent what people want, and if you vote for someone, it's because you don't want the other guy's things to happen. It's not some weird viewpoint. If I am a voter, I do not want to vote for someone who wants my opponents' policies to be put into place.
Cost-benefit analysis is always a matter of perspective.
So yes, if i'm voting for a Democratic senator, and the Republicans push through one of their bills, if there are 41 democrats in the chamber i would feel extremely betrayed if they took a bribe to make the Republican policy happen. Fighting for what you believe in means fighting against what you don't.
Politics is fortunately not as zero sum as you think. Most people still agree on the vast majority of things, it’s just that we focus on the disagreements.
I mean, I'll first bite the bullet and affirm that it *is* the preferences and logic of voters that I'm casting aspersions on here. You're right that a representative who decides they know better has less of the virtues of representative democracy (which can eventually corrode popular consent to participate in it), but they have every chance of doing more actual good in the world when voters have completely blown up the idea of commensurability.
>Fighting for what you believe in means fighting against what you don't
This phrase admits magnificent latitude in interpretation, and I probably agree with it in substantial parts, but here it sounds like it leads to a viciously Manichaen view where the most trivial Republican proposal has to be fought tooth and nail, even if it means giving up chances to do Democrat things that matter far more from most outside views. I feel like I would be embarrassed to want that in my heart of hearts - it's a wish for Congress to be a dog-fighting pit rather than a deliberative body.
I agree that there's tons to argue about in any CBA, but I don't see how that impugns the method - if anything it makes clear that choosing *not* to systematize the decision process (or to constrain the system by adding a filter on the end for "also never vote with a Republican") is just letting all of those arguments resolve stochastically and never knowing whether we could have been better off. It's like noticing your compass has a sticky bearing and deciding that instead of figuring out how to reckon with noisy measurements, you're going to pitch it into the woods, turn in a circle until your heart feels the warm glow of home, and march that way until you make it or die.
Coming back to my role as a voter: I don't even get the sticky compass on most issues! I don't have the time or domain knowledge to parse every bill's text, I don't have the legal/institutional knowledge to foresee its interactions, and I don't have the personal/political knowledge of Congress and Congresspeople to game out the negotiation process. I can give it a coarse once-over for "is it a pure culture war salvo for/against my side" and maybe "who does it superficially seem to help/hurt", but I think it would be self-aggrandizing to say I'm therefore certain how my representative ought to vote on every bill. I want them to vote how I would vote on reflection *if I had their time and resources,* not how I would vote drunk from my couch if every bill went to a national SMS poll.
(After substantial writing, I do notice you're talking about the case where a single Dem defector joins 59 Republicans to break a filibuster, and I would also be pretty suspicious of that person because it seems like individual grandstanding and unlikely to buy any concessions. But if my senator joined a group that broke with leadership/polling to pass an R bill or sink a D bill, explained in depth how they came to that conclusion and what they believe are the errors of their colleagues'/constituents' position, and showed awareness that they were taking electoral risk... I would at least need to read the whitepaper before voting them out!)
In that case it would seem like you need to win more elections. You either horse trade and compromise or you win at the ballot box.
Republicans are NOT "fine" with the way things are. They want less revenue collected from their pets.
“…'nothing getting done is fine with us, we like it this way'?”
I doubt there are many such people.
You ever hear about "small government?" i mean, if their stated ideology is to drown the government in a bathtub, then ensuring it doesn't function is a big win for them.
If you can’t get the federal government to do something you want, why not have your state or local government do it?
Because state or local governments lack the resources to do it?
Take this issue by issue, and of course there are many such people that feel that way--"we prefer the status quo to [Proposal X]", which of course includes both right-wing or left-wing proposals.
Why should we trust in the 'democratic' nature of a Senate that massively favors rural constitutencies, says certain people are worth less than others as humans? It's hardly democratic at all. Legislative policy is impossible to get done as a way to make any progress. Compromise with rural voters means gutting all decent programs to appease them.
The Constitution was written by hacks.
That might be a valid argument WRT the original states that ratified the Constitution, but not the next 37, all of which are creations of the federal government.
And we are forever doomed then, because of this negotiated agreement, to give up on actually having good governance.
Doomed to live in the richest industrialized country in the history of the world - sad.
Sadly, it appears so for the foreseeable future. We only make advances when the SCOTUS is able to peer into the murky crystal ball and discern an ambiguity that allows for a sensible, modern interpretation of ancient words, while staying alert to the probability that the towering geniuses whose handiwork they are supposed to revere did not want us suffering under 18th century rules due to their obvious inability to predict the future of America 250 years hence. But of course as we know, the wrong court can take it in the other direction too.
My take: making the Constitution so hard to amend was one of the framers' biggest mistakes. Since it is not feasible to change the text of the constitution except on the heels of giant social movements like Prohibition, or huge upheavals like the Civil War, constitutional law evolves instead according to SCOTUS' and the President's interpretation of the unchanging text.
If I could write a new Constitution, among other speculative ideas, i would allow amendments by public referendum. For instance, an amendment can be put on the ballot by a majority in Congress or a petition with some large number of signatures. It goes into effect if it gets a 2/3 majority among voters who vote on it, provided this is also no less than half the total number of eligible voters. This differs from the status quo by (1) lowering the threshold to initiate an amendment; (2) offering a second path; (3) making the final decision up to the people rather than the states; (4) having the vote occur on one election, avoiding confusing situations like the Equal Rights Amendment, where some states have ratified and rescinded, while other states have not voted on it.
My thought is that if it's easier to amend the text, it will be harder for judges to read controversial things into the "spirit" of the text, debate original intention, etc. And if they propose an unpopular reading of the Constitution, the public will have a quicker and more decisive way of overturning it, and with fewer side effects, than building up an ideological legal movement over generations, waiting for the current SCOTUS members to die, and fighting over new appointments until you have the court composition you wanted.
I tend to agree on the general outlines of this because it would bring the Constitution in line with our modern understandings about the proper roles of states, federalism, and broad-based democratic participation. Ending the notion of the states as "sovereigns" that are only quasi-contractually bound to the union for limited purposes is just plain stupid. Using that fiction to support the "2 for everybody" Senate structure is absurdly anti-democratic (Madison knew this), as is the electoral college, which has never acted in the manner the founders intended. We can retain the states as "laboratories of democracy" by giving them administrative leeway to do a limited number of things differently, but the constant parsing and re-parsing of this issue is wasteful nonsense.
I mean ... define "doomed" then because the US is awesome.
The Democratic Party doesn't have the slightest clue as to what to replace the EC with.
The NPVIC has been what their plan is.
Executive overreach definitely exists, but isn't the executive branch and all that entails democratically accountable every time a presidential/gubernatorial election rolls around? I imagine unpopular executive actions hurt a president/governor/in-party's chances of getting re-elected.
I'm with you broadly on the regulatory capture concerns. But I support executive orders. As we saw with Trump reversing Obama's and then Biden reversing Trump's -- those can be reversed through the democratic processes. The CA ICE ban was an EO. If Californians don't support it - they can vote him out. I'm also generally sympathetic to Ezra's case to end the filibuster - it would be a more democratic process.
https://www.gov.ca.gov/wp-content/uploads/2020/09/9.23.20-EO-N-79-20-Climate.pdf
https://www.vox.com/21424582/filibuster-joe-biden-2020-senate-democrats-abolish-trump
Except the court said the executive order Obama did with DACA couldn't be reversed, so...
But wasn't that just because of how poorly Trump's team executed it? Roberts said it was a very narrow ruling.
https://www.npr.org/2020/06/18/829858289/supreme-court-upholds-daca-in-blow-to-trump-administration
Obama issued a memorandum of enforcement and did not follow the APA to do so. Then Trump revokes that memorandum saying its not constitutional. Roberts says that Trump can't do that without following the APA.
Let's reverse that and say that Trump had issued an enforcement memorandum saying that any person who doesn't immediately surrender to ICE will not be considered to be eligible to for asylum in the US. Then Biden immediately reverses that saying its not a legal order as it violates the law around asylum. Alito writes an opinion saying that Biden can't reverse that memorandum because they didn't follow the APA. Is there anyone here who wouldn't consider that a bad opinion?
Probably not but because Alito wrote it. I think Robert's just has that much more trust.
Do we read the same Slow Boring? I see regular claims here that Robert is a Republican hack who is slightly better than Alito/Thomas at *seeming* reasonable but actually just wants to deprive black people of their vote.
It didn’t say it couldn’t be reversed, only that the agency must adhere to the Administrative Procedures Act.
Except Obama didn't use the APA to formulate the DACA. It was an enforcement memorandum. This would be like saying that to reverse Trump's ICE enforcement policy, Biden had to go through the APA process.
APA law is indeed stupid. Congress should fix that.
The argument that implementing regulations through executive agencies is "undemocratic" is fundamentally false and exceedingly tedious. The argument that this process (which has been with us since 1789) is an intolerable assault on the prerogatives of judges -- the only actors in the system completely insulated from any form of democratic compromise -- is downright silly.
Executive regulations authorized by Congress that merely fill in details of a statutory scheme are one thing.
Executive regulations that decide major, disputed issues of public policy in a manner that can't get a majority in the current Congress, and that weren't even contemplated let alone authorized by the Congress that originally passed the statute are a different things.
Just because the boundary between the two isn't perfectly black and white doesn't mean they're the same thing. It just means the courts need to generally applicable, workable standard for telling the difference between the two and apply it as best they can.
It takes a real special kind of unimaginative manichean thinking to say that if you want, say, Congress to be able to delegate to EPA the job of specifying in numerical terms pollutant level thresholds by pollutant, therefore you must also agree that Congress also could delegate wholesale all of its legislative power to the President to be used at his discretion.
If you agree there's a difference between those two, then it follows there has to be some standard that can be articulated in advance for telling the difference between them.
The argument above is about which approach is more (or less) "democratic". You seem to assume that having unelected and unaccountable judges drawing the line you describe is better than having the elected Executive branch draw the line or the elected Legislative branch re-draw the line when they disagree with the Executive. I believe this assumption is wrong on the substantive merits of the case, but it is obviously and profoundly wrong on the question of the which approach is more "democratic".
I completely agree. A while ago I was arguing on this board with people who found the idea of a bureaucrat at the EPA doing something wholly undemocratic, but an unelected judge doing so was different because judges "care about popular opinion".
If the will of Congress is expressed by them not doing something, then that applies to their inaction to the choices of the Executive branch and the administrative state.
Yeah. The idea that agencies are just out there pursuing their own crazy agendas without regard for the APA or the Chief Executive's preferences is a deeply held but nutty conviction of some. The idea that the courts -- operating at glacial speed as they bounce things up and down the appellate levels over years -- are needed to protect Congress's prerogative as the Ultimate Lawmakers is equally silly. They know how to legislate when they want and need to.
What stops Congress from saying that the "major, disputed issues of public policy" shouldn't be solved the way Executive branch decides?
The history of tariff regulation is interesting in this regard. Congress used to set all tariffs, and that inevitably led to an annual festival of horse-trading and logrolling to protect local industries and companies of every description that it ground all other Congressional activity to standstill. Now do the regulation of chemical pollutants at the Congressional level and see what happens...
I liked but another point is that passing vague laws is a kind of compromise. Congress could specify the value of things that must be traded of in safety or environment protection of drug approvals, or consumer protection, but it would obviously rather duck the responsibility.
I see *some, limited* truth here, but also: if the legislature doesn't like these outcomes, it can strip the executive agencies of rulemaking powers.
Also, point number 4 requires legislative action to implement anyway. You can't jurisdiction strip without Congressional legislation. (And isn't the California point on ICEs accomplished via winning democratic elections in California?)
Why does that seem like an ineffective check? Because the legislature is divided and "can't act." But that's the problem in the first place, not the executive actions.
The California part is more complicated in that the new clean vehicle standards (no new ICEVs sold in the state after 2035) come from the California Air Resources Board, which is mostly appointed by the Governor, but with California Senate approval, and has the unique ability under the Clean Air Act to establish its own air quality standards. (Historical note -- this entity that the right wing constantly assails as an existential threat to apple pie and freedom-loving polluters everywhere was created in 1967 by ... Ronald Reagan.)
But ultimately, yes - the California Legislature could quash this if it wanted to.
Really interesting point. I'm not sure I would call it a threat, after all the politicians instituting those regulations still have to get elected and if they lose the other side can dismantle it. Still, you have a point that it isn't really the way that the system should work.
I would like an article comparing living standards for families in the 25th percentile in France and the US. I’ve heard wildly conflicting things about who has the better living standards. To my shame, I don’t know how much precarity an American family in the 25th percentile experiences, though I suspect it is substantial.
On a related note, I’d love to get a better sense of what life is like in a “middle income” country at a concrete level, in the Mexicos and Turkeys and Indonesias of the world. I can conceptualize America-but-somewhat-poorer (Western Europe or Taiwan), I can conceptualize subsistence farms and shantytowns, but I don’t have a good notion of the vast in between.
Some observations based on spending time in Mexico and Lebanon:
* Vehicle fleets are much older (often made up of used car exports from rich countries) and more polluting
* Housing quality varies a lot more than it does in rich countries, and homes tend to be less well-furnished and have fewer appliances (eg: in Beirut, a lot of apartments just have camp stoves)
* Household sizes are larger and adults are more likely to live with their parents until marriage— and the ones who can’t generally need roommmates
* There’s a significantly bigger population that has to rent its access to communications and computing; Internet cafes are viable businesses
* Traffic law enforcement is bad, and driving is consequently quite dangerous
* People tend to work more hours than their rich country counterparts at similar income levels
* Tradable goods are available and most people have at least some of them, but not as many as their rich country counterparts
* Most places have a recognizably modern built environment and infrastructure (roads, sewers, electricity, internal plumbing, telecommunications), but that infrastructure is often janky in some way (non-potable water, frequent blackouts)
* Public services are often quite good in some areas, but there are usually some major holes that you don’t get in rich countries (eg: Lebanon doesn’t have numbered street addresses, which limits how much of a postal system it can run)
* There’s usually a bigger population of abjectly poor people than in rich countries (shantytown residents in cities, precarious farmers in the countryside)
* the actual way the economy works varies pretty wildly— some countries (like Lebanon and the Philippines) export labor and collect remittances, others like Mexico and Turkey are building industrial bases
I'm imagining Lebanese Matthew Yglesias writing an article proposing we assign numbers to homes so we can deliver mail to them.
Here's some computer nerds discussing pros and cons of various approaches
https://arxiv.org/abs/1801.06540
https://www.youtube.com/watch?v=nQeKriCzd_k
There's a great book by the Peruvian economist Hernando de Soto,
The Mystery of Capital, that proposes exactly this sort of thing.
I think there's just too much variety between and within countries to say anything that's not very vague. I guess I'll try though, based on what I've seen in places like Peru, Mexico, Indonesia and The Philippines:
Much more crowded living spaces and buses.
Way more traffic congestion in the biggest cities. Way longer working hours in big cities.
A pretty idyllic-seeming country and small-town lifestyle, with hard labor subsistence work mixed side-by-side with people standing or sitting around doing nothing for long stretches.
Local governments that aren't trusted and bureaucracies that are very ineffective at providing services.
But, at least for much of the middle class, a day-to-day lifestyle that isn't too dissimilar from what most of us are used to, just a little more stretched in terms of space, comfort and other conditions. People aren't starving, they aren't dying of malaria left-and-right and they still go out and have fun or play games on their phones. Life is good, mostly.
That said - the pace and impact of rare but bad occurrences is different. Anyone anywhere can get cancer, screwed over by their local government or police, or hit by a natural disaster. But these sorts of things might be more frequent, and tend to be worse when they do happen, in the global middle.
I have no idea how accurate the portrayal is but I recently watched Nightmares and Daydreams on Netflix, which is a horror/sci fi anthology from an Indonesian film maker. All of the stories are set in Jakarta and I found it fascinating to get a little perspective into what life might be like in that sort of place. It held my attention more for that aspect than for the stories themselves.
I stayed in Jakarta for a month. Traffic was truly unbelievable. I should check the show out.
I spent some time in Medellin, Colombia. I stayed in Envigado, which is an upper middle-class area.
The biggest pros are that it was very walkable and there were gobs of little shops on every block. Need a haircut? There's a tiny place with two chairs the next block over. Groceries? You can go to the bodega for basics or walk 10 minutes to a supermarket. At night a lot of people open up a "restaurant" (grill on the patio) where they sell 3-4 dishes with arepas.
The main pervasive negative is that their emissions standards are lower, so it's a bit hazy and there's a persistent scent of burning diesel. Cars in general are a lot smaller than in the US, and there are tons of people on scooters and motorcycles.
The lack of building regulations makes the area more charming to American eyes. Sidewalks are narrow, there are stairs without bannisters, nothing is ADA accessible etc.
Crime is high there, but also the people were very friendly. (That may be because they knew I was a rich American.)
What are the gondolas like there?
I liked the gondola when I visited! But most of the transit system isn't gondola-based, just in some areas.
Oh yeah, I should have mentioned...a lot of workers and servants and laborers. Even servants sometimes have maids or servants. Clearly that can't be true for everyone or the bottom half, but it's way more common to see people paid to do regular stuff like nannying or cleaning up for a moderately well-off family.
Also places like clothing stores or cafes sometimes have an absurd number of staff. I guess that's how it goes when labor is cheap, and it can make certain things easier, although it's horribly inefficient. Speaking of inefficient, it was also somewhat common to see 2, 3 or 12 of the same shop right next to each other. I still don't understand why. But if you manage to find a pharmacy or any kind of shop, there will probably be another one just like it right around the corner or right next store.
I have family in rural Oklahoma. They are poor by coastal standards but they get by because it’s a very low cost of living area. I also spent a few months in Costa Rica and their middle class felt very similar.
I would also like to see this kind of comparison. When stuff like this does pop up, often what tips the scales in America’s favor is our relatively higher material well-being. Our 25th percentile are more likely to have “stuff” - an air conditioner, a car, full-sized refrigerators and stoves - that translates into them being better off than their European counterparts. But is that the right way to look at things? How does having an AC unit in your window compare with having free healthcare?
“How does having an AC unit in your window compare with having free healthcare?”
How’s the weather?
2,300: https://www.pbs.org/newshour/nation/2023-set-a-record-for-u-s-heat-deaths-why-2024-could-be-even-deadlier
70,000: https://e360.yale.edu/digest/severe-heat-deaths-europe-2022#:~:text=Severe%20heat%20killed%20upwards%20of,deaths%20due%20to%20severe%20heat.
So so true. And I think we should unleash even more AC abundance in this country.
Our abundance is great and can get greater, but we must go full effective altruist brain and send some of our abundance overseas, where it can make an even bigger impact!
The general proposition may be right but the methodologies of these studies don't match.
It’s an order of magnitude of difference.
It's two totally different numbers. One is excess deaths from a statistical analysis and the other is reviewing records of cause of death. There will be lots of cases where that produces differences of an order of magnitude or more, e.g. death certificates don't say "smoking" on them. I don't know enough to know how much it matters here but I don't find the comparison persuasive by itself.
Edit: Note in your first article, "And more than two dozen doctors, public health experts, and meteorologists told the AP that last year’s figure was only a fraction of the real death toll."
I'd be happy to review your evidence that air conditioning makes no difference in hot weather deaths.
Once again, someone beats me to it...
Are these measuring the same thing? Deaths from heat are very hard to attribute, and one and the same event can easily have estimates that differ in number by much more than that.
There's a (very understandable problem) with this comparison. David is asking about France, a place that is richer than average in the EU (let alone Europe in general). Essentially, his question is "How do parts of the EU that can afford a generous welfare state compare to the US as a whole?". If you're asking about "European counterparts" in general, I'd say that you're more likely to find them in Romania than in France.
Also, don't poor people in the US also get free healthcare through Medicaid? I'm not that familiar with the US system.
About 19% of the population is on Medicaid or CHIPS (Medicaid for kids.)
That’s why I chose France.
Medicaid eligibility rules are determined by individual states. States can choose not to provide Medicaid benefits to certain poor people, for example, working age non-disabled adults.
>Also, don't poor people in the US also get free healthcare through Medicaid? <
Depends on the state. When the program was enacted, the legislation allowed states wide latitude in terms of setting eligibility criteria. In short, it's a lot easier for a poor person to enroll in Medicaid if they live in Massachusetts than in Mississippi. This has also carried over into the Medicaid expansion under Obamacare: a number of states have still not taken the free money, and they collectively are home to about a quarter of the population.
Also, things like a car or a large refrigerator are much more of a necessity when zoning laws prohibit grocery stores within a convenient walk, and air conditioning is more of a necessity if you have hot and humid summers like the southeastern US.
I remember old statistics from the 1990s or 2000s saying that the average American *qualifying for public aid* was more likely to own a car or an air conditioner than the average person in Europe, more likely to live in a detached house, etc. But these are side effects of our urban planning and zoning, and life without these things is less of a loss east of the Atlantic. Also, if you consider "Europe" in the 1990s, this includes not just the richer countries, but also Eastern Europe, which was never as rich as the west and was doing badly in the 1990s, and maybe also Turkey. The US poverty line is indeed compatible with plenty of material consumption, but stats saying that the American poor are better off than the average European (not the average European below their country's poverty line, but the average person on the continent) are misleading even if they get the numbers right.
I don't think the part of urban planning and zoning is true.
I'm inclined to side with you. I've lived exclusively in the EU from birth to getting my Master's degree and deciding to come to the US for a PhD. I find driving for groceries extremely annoying, and trying to get an Uber home after a night out due to alcohol consumption even more annoying. Yet, I think that a lack of car in my (walkable and with public transportation that beats anything outside of NYC in the US) hometown restricts your job opportunities and places you can live too much. This is why anyone who can afford a car and isn't too old to drive basically has a car. I'd take having a car over walkability for sure.
I would even propose that you may have the causality backwards. Because more people in the US can afford cars, it's okay for them to live further from grocery stores, so zoning laws can be restrictive without much protesting.
There's a lot of economic upside to America's car-culture, too:
https://www.economist.com/finance-and-economics/2023/11/09/in-praise-of-americas-car-addiction
Lack of walkability is much more an annoyance than an actual economic problem.
This is an interesting question, but I would say that such an article must also take into account at least the near future. Poor people in France are most likely better off than poor people in the US *today* in my view, but my whole adult life I remember political problems in different places in Europe because of cuts to the welfare state. (Since you specifically mention France, think about all the protests because of pension cuts. My view is that these cuts are unlikely to be meaningfully reversed, and that it's more likely to actually continue cutting.)
The EU has slower growth than the US and I think the general trajectory is making the welfare state smaller because it's unaffordable. On the other hand, the US has expanded (I think) the welfare state in the same time frame (things like ACA).
tl;dr: I'm more confident about my ability to get money out of my 401k in retirement than I'm about the abilities of my childhood friends who have stayed behind to get a meaningful pension, even though pensions there currently are not bad at all.
I'm a fan of the Bivens analysis -- even if we technically redistribute more of our national income than Europe, we're just so absurdly obviously getting FAR less value than most Euros do for it.
Like, okay, people in Southern Europe probably suffer worse for not having as good of AC penetration in their markets, and probably don't get such good dollar-for-dollar (or euro-for-euro) on their benefits either. But the French and Nordics are probably doing just fine without the AC because of their higher latitudes.
The arguments about social mobility and sheer growth are much more convincing to me than "but they have a different bundle of goods". Like, are our McMansions and enormous fridges filled with CostCo crap really getting us a better lifestyle than some Frenchman who doesn't bother buying a big fridge because he can get world-class sandwiches at his boulangerie every morning? A lot of these analyses basically boil down to "but bigger MUST be better, and America has the biggest stuff, so therefore our living standards MUST be better", but I don't see this as obviously true once one puts the microscope to it.
The AC thing in particular always struck me as odd. Okay, central air is a significant expense, regulatory bullshit probably has some role, there could be chicken-and-egg things with not having an ecosystem of HVAC people to install them, etc. But a window AC costs like $150, can be shipped from China to Madrid just as easily as to Omaha, and even a slightly handy person can install one in an hour. It’s certainly within Southern European budgets. Why don’t they use them, then? Is it just a cultural thing?
I think it’s more about energy prices than unit cost. When I lived in Spain (very hot Sevilla) with a host family they had an in-unit A/C but I never saw it used because it was purportedly very expensive to run.
"purportedly very expensive to run."
The solution to that is not to drink whatever the Spanish equivalent of "eight-euro aperol spritzes" are that are mentioned in this video: https://x.com/SwiftOnSecurity/status/1814875898337701911
This video is going to get shared on Slow Boring regularly from here on out.
It *is* like a snarky Matt tweet somehow took human form as a 20-something year-old woman.
Tbh, from NYC 8 euros sounds like an extremely good deal for a restaurant Aperol Spritz.
It's architectural and cultural. The French have weird ideas about the dangers of drafts from A/C. From a 2022 article in Mother Jones:
"When I asked a French friend why her compatriots resist A/C, she explained: “It pollutes, it’s often too cold, the air is fake. It makes you sick, and it gives you a headache. It keeps you inside and it creates nonstop arguments with the team at work. It makes me feel like an old prune.”
Germans are the same. Everyone is convinced that AC gives you a cold.
"It pollutes"--France has one of the cleanest electric grids in the world thanks to glorious nuclear power
"it's often too cold"--but when it's hot, it can be deadly, as Ken cited downthread
"the air is fake"--lots of "real", "natural" stuff is bad and harmful for us
"it makes you sick"--I'll cede the infectious disease point if in exchange I get a cession on how there are advanced ventilation technologies that can be implemented to mitigate that
"it gives you a headache"--need to be more specific than the most classic vague discomfort out there
"It keeps you inside"--you have agency, if you want to be outside, you can do so
"and it creates nonstop arguments with the team at work"--as opposed to everyone equally suffering in the heat?
"It makes me feel like an old prune"--Uh...that's a "feeling" I've never heard about before
Air conditioning being too cold is as solvable as soup being too hot.
I mean, no one credits the Frenchies for being all that reasonable on this kinda stuff, but I also think this one anecdote is kinda silly to focus on vs. the more digestible structural factors.
That's why I gave it a pretty silly response.
I'm guessing the prune reference means feeling "dried out," which is certainly a complaint I see from a lot of people about air conditioning, although I've never had a problem with it myself.
An air conditioner and a de-humidifier are basically the same device.
You've never experienced sensation d'être un pruneau? C'est bizarre...
As I posted earlier, this crafty American made it work!
https://x.com/SwiftOnSecurity/status/1814875898337701911
AIUI, most of the houses that CAN have a window unit, do.
BUT, a lot of houses can't mount them -- the windows are often non-standard historical installs, and can't be replaced easily.
And the buildings are often not designed with AC in mind, but designed with their own kind of airflow. It's not perfect, but it's what people made do with for the several millennia before AC was invented.
So, sometimes, they just settle for a bit worse of an internal climate than they'd get with AC, because it's still bearable for various legacy reasons.
Electricity is very expensive in Europe
"some Frenchman who doesn't bother buying a big fridge because he can get world-class sandwiches at his boulangerie every morning"
I had a weeklong vacation in Paris in 2018, and this was definitely not my experience. It could be that as a non-French-speaking American, I just wasn't able to find the great boulangeries, but the sandwiches that my wife and I got all over Paris were dry, boring, and uninspired. The rest of the food in Paris was fantastic, but I was so happy to get back to America for a great sandwich.
There are apparently 38 Subways in Paris. I doubt they are all just for American tourists. If enough French people are willing to go to a Subway to sustain 38 of them, their alternatives must be pretty bleak.
https://restaurants.subway.com/france/paris
Yes! That was what I was saying down below. The sit down restaurants in Europe are often fantastic but I finding a decent lunch or breakfast can be damned near impossible. I think most Europeans can’t afford to eat out at every meal and tend not to splurge on lunches, leading to a pretty limited restaurant scene with a lot of reheated dishes.
A lot of French workplaces have staff canteens, too, maybe?
Except people could choose to do without the "bigger" stuff and have more of the other, but they don't. And as they get richer in Europe, Asia, etc., they tend to like the bigger stuff there too. So revealed preference is that people like bigger stuff.
"As people get richer, they prefer bigger stuff" does NOT equal "bigger stuff makes us richer".
As we've seen with the housing crisis, the entry level of homeownership has basically been regulated away in most places, and where what was previously entry-level stock still exists, it's been insanely bid-up by the few who can afford it. Literally no one is the richer for it, it's just that only the rich can afford it anymore.
In order to get to the bigger stuff, there needs to be a ladder. Otherwise, I'm just paying my landlord's mortgage until I die, and HE gets rich while I don't. If Hayek were alive today, he'd recognize THAT as the modern "road to serfdom".
There were a surprising number of big cars in Norway, not to mention motor powered pleasure boats. Give Europeans enough money and they’ll buy motorized toys, even when gas is $8 a gallon.
Car sizes have definitely been going up in the last decades as both The Economist and my dad have been telling me.
It's true - we are endlessly over-compensating for our inferior charcuterie and coffee.
Not all of us! But the premium I would have to pay either way is absurd! Either:
(A) I shell out for some semblance of walkable urbanism where I can have "loose ties" and "third places" and don't have to freak out because I didn't have time to get my breakfasts from Costco this week...
or
(B) I shell out so that I can "drive till I qualify" in some subdivision an hour or more from my office, where the nearest grocery store is miles away, and I never talk to my neighbors, all because some asshole on the internet tells me I should be happy to live in suburbia where I can actually afford a house and all my preferences for lawns and white picket fences will supposedly be revealed -- even though I'm still only just barely affording it and have sacrificed enormous chunks of my personal happiness to do so.
Either way, I have to shell out. So, if I'm overpaying, I actually DO prefer the "less big" version, because at least I can have reasonably nice sourdough in walking distance, and I don't have to risk a DUI any time I want to watch the hockey playoffs.
And with that, I'm going to go have the artisan golfetta-on-ciabatta sandwich I made myself for lunch today.
preach it
I feel like the food in Europe is maybe a bit overrated, sure there are lots of really great restaurants but if you just want a cheap lunch the little corner places are often pretty mediocre. I feel like walking into a random restaurant in San Francisco or New York is more likely to get you a good meal as Madrid or Florence (okay Paris is special).
As a dirty social democrat, my basic view is this -
0-33% - Better to be in France because of the welfare state, etc.
34-66% - Depends on your profession, where you're at in the country, and so on. A nurse and contractor in the 45% in Wisconsin might be better off than the 45% percentile in France, but being in the 56% in Los Angeles might be better off in France, etc.
67%+ - Better to be American.
This is good intuition, but to Abbott's point, it would be good to see a quantification of this.
There's also a subjective angle of whether it's fine to trade off some living standards in exchange for working less. I can sometimes end up on either end of the tradeoff.
I admit it's tough, but the problem in straight comparisons is it's basically sort of impossible, even if you account for the kind of America F Yeah stuff like bigger houses or air conditioning, to have the kind of life a middle-class person who works 80% of the hours in the suburbs of Nice compared to the the same middle-class person in the suburbs of Chattanooga.
I'm sure there would be a decent chunk of Americans who would take the downgrade even in pure economic standards sort of ways, but there's not really a widescale option for a middle class job with European working conditions, and most jobs that pay say $35,000 instead of $50,000 (or whatever specific difference in compensation you want to claim) are also worse on the sort of fringe benefits that exist for somebody who makes that lesser amount in Europe, which makes even the somewhat reasonable 'just get a lower paying job' retort not as much of a lateral comparison as you'd think.
Like, I know, revealed preferences and all, but there's not really an option for "make European wages, but also live like a European does" in America, even if you kind of get that by paying too much for rent in large urban areas, which leaves you with less disposable income, but a more European urban environment.
How many Europeans would take the American economic standards in exchange for the American working conditions? It's not like anyone has a system where you actually get to choose between one or the other. The vast majority of people over there haven't chosen to trade less money in exchange for less work and more job security. It's literally their only option.
An RN with an equal income husband is way above the median, but an LN or health care aid would be lower
> But with regard to intra-party factional politics, the “neoliberals” think you should try to address individual issues on the merits and deal with distributional concerns separately through tax policy and the welfare state.
While I personally prefer this technocratic, neoliberal-ish approach of expanding the welfare state to address distributional issues and to smooth out the economic pain of job losses from technological progress, I think many people find this underwhelming due to an emotional attachment to their jobs, particularly if it involves novel skills. A licensed taxi driver with a decade of experience is still psychologically devastated to have to restart their career in a junior role at an advanced age, even if we can minimize the economic pain. There’s just something of a loss in dignity or status associated with such vocational transitions, doubly so when welfare provides fewer material resources than one previously earned. Hence, people are emotionally drawn towards job-protecting policies over material assistance in repurposing labor resources.
Psychologically and sociologically, a lot of people just find welfare underwhelming relative to the pride and dignity they find in having a “good” job, particularly a socially recognized job that gives them more status than someone who’s just “on the dole.” Hence, I think there’s a limit to how far we can address technological (and trade)-driven economic disruption and job loss with welfare state expansion.
Politically, people don’t want to accept that job losses are necessary, if not unavoidable, in a dynamic economy. The upshot is that raising the salience of these concerns leads voters towards job-protecting measures. I, therefore, think it’s better that we avoid these discussions in our politics so that we can preserve economic dynamism and growth.
(Reposted comment, with revisions, from related early discussion, https://www.slowboring.com/p/lots-of-people-lose-jobs-even-in/comment/49523667)
Also while technology tends to lead to net positive labor market gains, any individual worker who gets their job disrupted out from under them has no guarantee whatsoever that they'll get one of those new jobs
I think your lead and body of today's post are related but not as tight a fit with each other. It is true that there are political consequences when industries are quickly disrupted by things like new technologies (Uber) or shifts in global trade (China shock). It's also true that a piece of that political impact is discussion of redistributive policy and whether "just right" redistribution can mitigate the economic and political impact of those disruptions. It's also true that the US is more distributive than progressives give it credit for.
For this to be a fuller framing of "neoloberalism" I want a deeper analysis of concentrated impact vs diffuse benefits. You get there by suggesting we conduct economic analysis of policies and prioritize the most egalitarian ones, but if I had to define as succinctly as possible what makes one a "big bad neolib" it's the person who would gladly make a tradeoff that decimates a small industry concentrated in a small geography to save every American 10 cents. How do we beat that rap?
Great question and one I would like to have an answer to, particularly if the JD Vance / Oren Cass wing of the Republican Party continues its ascendance post-Trump.
This has been the smarter critique of neoliberal thinking from the rational Bernie supporters for quite a while: the "creative destruction" of the market is too destructive to a minority of the people in exchange for a too small increase in diffuse benefits. It's not obvious to me how to counter this argument.
Presumably the point would be that what’s at issue isn’t the single 10-cent increase, it’s the five dollar increase once every one of fifty favored constituencies gets their beak wet.
I think the biggest issue is the psychology of money and trade-offs which is the idea of negativity bias. Essentially in economics terms it’s worse to lose 20 dollars than it is better to gain 20 dollars. So when industries are decimated but it saves a few dollars it is not a real gain. There’s a reason the statement “Two steps forward, one step back” is not a statement describing something positive and it is still a net gain. This is where standard economic analysis misses the mark. It is not a neutral trade-off. Suffering is more painful than Joy is pleasurable. There’s a line from a psychologist I heard once that after you have a fight with your wife, you need to have a ratio of anywhere between 5 to 10 positive interactions for every 1 negative interactions. I think this is true in Economics as well. You can’t make markets more efficient if the gains are small for a lot but devastating for a smaller group. The losses will overwhelm any gain.
I think you're right about the psychology of this, but I'm curious about the English usage part: I've always understood "two steps forward, one step back" as a pragmatic, sometimes-reassuring truism about the nature of incremental progress (in any endeavor). Something like, "yes the setback feels bad [because of the psychological asymmetry], but [in real terms] you're still up one and that's how you get to the finish line, so get up and take two more steps forward whether or not it feels good". If you see incremental progress as an exploitative mirage, then sure it's pejorative, but I *think* that's a modern subversion of the original sense.
On the other hand, it's genuinely possible I constructed that understanding to rationalize the phrase or that the dominant usage has changed in the ~25 years since I first thought about it, so I'm curious how it lands on other people.
(For a second I though this meaning better fit the parallel "one step forward, two steps back", but that's more thoroughly inverted: the situation is *actually* net negative, so perseverance *is* a losing play.)
To be fair that's usually how language works, in the sense that a definitional meaning is subverted by the culture. It's why theory and reality don't always align neatly. Connotation and emotional salience of a word or phrase usually ends up more impactful than the actual definition.
That's true, but I think it used to almost exclusively connote the perseverance thing, and I'm unclear on a factual level whether the sarcastic/negative meaning is at like, 20%, 50%, or 80% of utterances today. My prior was that it's significant but <50% (so an unqualified usage is more likely to be neutral or encouraging), but it sounds like yours might be that it's a hefty majority!
Yep, for the negative/sarcastic or ironically the exact opposite meaning of phrase becomes the street meaning vs the original definition when used in a political/cultural context. It almost always inverts itself. I tend to think of the phrase "lift yourself up by your own bootstraps" as something that is literally impossible to do and not something you should tell poor people but it became in the Horatio Alger "Rags to Riches" era advice rich people gave to poor people.
I mean, it just straightforwardly seems to be false? If 1000 middle class people lose $20k but 330 million of all classes save 10 cents, you have $20M in costs against $33M in gains.
Now, if the gains largely accrue to the very rich, then since money has decreasing marginal utility, you may be making society worse off in utils even if GDP goes up. But for the classic “neoliberal” example of globalization, this just isn’t empirically what’s happening : cheaper material goods benefit everyone, and to the extent that poorer people spend a higher proportion of their income on material goods than the better off (which they do), they will benefit even more. And this is before considering the possibility of redistribution, which Matt certainly favors.
The other set of arguments tend to be about vague non-measurable things like the dignity of (certain fetishized kinds of) work. But I don’t think you can seriously found an economic system on this kind of thing. At a certain point, you’re just going to be subsidizing buggy whip manufacturers and sinecures, while making the vast majority of people much worse off.
"I mean, it just straightforwardly seems to be false? If 1000 middle class people lose $20k but 330 million of all classes save 10 cents, you have $20M in costs against $33M in gains."
I thought John's point was - nobody is going change their vote for the 10 cent bonus, but those 1000 people and their family members are really going to hate the 20k loss.
Yes, if you did 330,000 of those proposals and hit a different 1000 each time obviously we're better off, but people might not see the aggregate effect, only the individual grievances?
I think the post I was responding to wasn’t just saying that the changes would lead to aggrieved voters voting for bad policies , but that they would actually be bad in a first-order way. Most obviously good policies will cause at least some blowback due to status quo bias if nothing else, but that doesn’t mean we shouldn’t enact them.
I certainly agree that you need to consider the effects of policy on voters, that’s basically Matt’s whole popularism thing. But I think hardcore protectionism / anti-growth is uniquely harmful relative to the short-term electoral benefit.
This view of the distributional consequences seems insufficiently granular.
Assuming the losers start at the same wealth as the average gainer, yes taking one dollar from the losers to give $1.50 to the gainers is a good trade. But you don’t stop at one dollar, you take $20k, and I’m less sure that the last dollar is still a good trade.
And with risk and loss aversion, even a positive sum reverse lottery might not prove utility enhancing.
I really want Matt to drill into this too.
Right, trade is the best example where the neoliberal shills were most obviously shilling. There is a reason "Learn to Code" is a tagline these days. There was a view that if your community was being ripped apart by state subsidized national champions, a welfare check and a bus ticket to somewhere with more fashionable restaurants was good enough.
We could implement tariffs on all imported goods to account for differences in regulations and exchange rates, go back to making a bunch of things at home, and the vast majority of Americans would be poorer, worse off, and unhappier. If you want to strawman neoliberalism as uncaring for not preemptively solving every consequence of its agenda, I’m curious what your consequence-free plan would have been?
By far my favorite thing about Uber, as a customer, is that it aligns the incentives of the driver with mine. Uber drivers have an incentive to get you where you are going as fast as possible. Taxi drivers often have an inventive to keep the meter running as a long as possible. I have been overcharged so many times by taxi drivers, especially when visiting a new city.
I am not sure this is really that big a deal in terms of the overall economics, but I much prefer services where I don’t have to constantly interrogate whether the more-informed person sitting in front of me is trying to screw me.
Yes. Regarding interrogating incentives: the most eye opening thing for me was considering real estate agents.
The buyer's agent and the seller's agents are the two parties in the transaction that have exactly aligned goals. They both want the transaction to occur at the maximum possible price. Failing that, they just want to get the transaction over with.
While even $50,000 is a lot of money to the buyer or the seller, to the real estate agents involved, that represents maybe a few thousand dollars each ($50k * 0.03). So, as a real estate agent, do you really want your client to put their foot down over $50,000 when you could sew things up and just take the $20-50K plus commission that's coming your way depending on the transaction price, stop having to put time into moving the property, and move onto another listing where you can make another $20-$50k?
Yeah, I'll never forget the first time I bought a condo my agent trying to inch me upward just to get the transaction over when I clearly had the leverage and was going to get it at the current price anyway. Infuriating.
I don't know how things have shaken out yet, but maybe after that big court case buyer's agents will change their pricing model. https://www.cnn.com/2024/03/15/economy/nar-realtor-commissions-settlement/index.html
"And economic growth is very important. Europe is more egalitarian than the United States, but middle class living standards are higher on our side of the Atlantic because the United States is richer."
I really wish we could put most of the hand-wringing about inequality to rest. What's important is how well the people at the lower and middle rungs of our society are doing in an absolute sense, in my opinion, not whether Elon Musk can fund missions to Mars out of his pocket. Even Rawls would agree.
I recall being a young man, and the fact that my boss had more money and power and freedom than me really upset me.
A big problem with America, and with inherited wealth in general, is wealth pools in the oldest generation and is in the hands of stodgy people unable to enjoy it.
I remember my grandfather spending $720/day to pay hot young Dominicans to change his diapers while my half brother couldn’t air condition his apartment. It’s not like my grand dad was happy either, he was in diapers and virility was a distant memory.
That's a vivid, Shakespearean picture of tragic irony and futility, but the story is as old as literature.
The human condition: a policy problem.
A wealth tax: a policy solution.
Every human is a policy failure...
“…in the hands of stodgy people unable to enjoy it”
https://www.theonion.com/youth-is-wasted-on-the-young-vs-medication-is-wasted-o-1819594275
I don’t care much about the billionaires, but I do think inequality is bad in itself. People care a lot about relative position. I think people who aren’t great at school and don’t end up in high paying jobs shouldn’t necessarily end up in a radically low relative position.
In It’s a Wonderful Life, in the good version of Bedford Falls, Ernie the taxicab driver owns his own $5,000 house that he lives in with his wife and child. Real wages for taxicab drivers now are remarkably similar to what Ernie would have been making back then, but $5,000 adjusted for inflation is just $90,000 today.
You can in fact buy a $90,000 house today, and I’m sure there are some ways that modern (probably manufactured) house would be, in absolute terms, better than what Ernie had. But Ernie’s house was an average house back then. (Average house sale price in 1946 was $5,150). A $90k house today is like a bottom 10% house. I think a world where taxi drivers can live in average houses has some advantages over a world where they live in <10% houses.
> A $90k house today is like a bottom 10% house. I think a world where taxi drivers can live in average houses has some advantages over a world where they live in <10% houses.
Why should being a taxicab driver give one an average lifestyle *for all time*? As society progresses, the relative remunerations to unskilled (or less-skilled) labor is bound to decrease. Of course there should be a floor, but trying to lock in a certain relative ordering leads to stagnation, in complete opposition to the point of today's article.
Besides, the problem you state, that housing is too expensive, has everything to do with building restrictions and almost nothing to do with the salaries of taxicab drivers.
I don’t know if it’s true that we should naively expect technological advancement to necessarily reduce returns for less skilled work.
For example, automated looms put skilled weavers out of business, right? But they’re good for the loom builders and maintainers (higher skilled) but also shepherds and mill workers (lower skilled).
Going to the econ literature, I don't think there's consensus that skill biased technological change is a good explanation for the changes we've seen in wage inequality in recent decades.
Fair enough! It could be the case. But it's still not an argument for protecting the livelihoods of taxi drivers (or skilled weavers or ...) if the economy doesn't value them as much as it once did. As Matt basically says, save people, not jobs.
Taxi drivers are a particularly bad example in that we can now clearly see how that job will be eliminated by automation and that the "replacement" jobs will likely not be accessible to the displaced workers in a similar way. There are doubtless some number of cab drivers who could transition to the manufacturing, maintenance and programming of robotaxis, but it will be a small percentage.
Oh, I don't know, and I wish we could get over that kind of thinking. Of course, it's true that a world in which taxi drivers live in average houses has *some* advantages (I mean, there were *some* advantages to living in the USSR), but on balance I think it's better (for the taxi drivers) to live in a world in which they live in *better* houses than they otherwise would (regardless of what others' houses are like).
It's been many years since I read him, but I believe Rawls addressed and dismissed this sort of envy (which is basically what it is).
Sure, people have been condemning envy for a long time, but I think you probably should accept that people aren't likely to fundamentally change anytime soon. Given that people do in fact care about relative position and relative distance, I think a more egalitarian society will be a happier and healthier one.
Even a stronger one. Remember that Ernie volunteers to serve as a paratrooper in WWII, a particularly dangerous assignment. I think people who feel that their society is looking out for them and respects them are more likely bear burdens and take risks to support that society in time of need.
I genuinely have no idea how you would banish this sentiment because I think comparing ourselves to peers is generally more compatible with people than really strict needs monitoring
There would be so much more peace in the discourse if we could get consensus on this.
Don't think Rawls would agree that missions to Mars provide the greatest benefit to the worst-off in society.
I disagree. If distributing resources such that Elon Musk can fund a mission to Mars results in raising everyone's standard of living (or at least not lowering it), Rawls would be down with that.
That's a huge "if" on the Mars example, and it does not cover the proximate case of buying twitter on a lark, for example, or many of the other things billionaires do with their unequal accumulation of primary social goods. "Not lowering it" is not a thing under the difference principle. Institutional (basic) structures that produce inequalities must satisfy multiple conditions to be justifiable, including producing the greatest benefit for the least advantaged.
I stand corrected on the "not lowering it" part. It's been a while.
I think even Rawls would see Musk taking a one way trip to Mars as a social good.
Personally, I don't understand why Musk and others are so obsessed with trying to live on Mars when we haven't even yet mastered how to live at scale under all the harsh conditions of our own planet -- hot dry desert, under the sea, deep down in the ground near geothermal energy sources, and so in. Learn to walk before trying to run....
It’s apirational techno-optimism that isn’t overwhelmed by its own externality footprint and is unifying in the same way that “to boldly go where no one has gone before” is.
Admittedly, Mars will never, ever, ever be as hospitable as Earth is. Which is a good reason to care about Earth’s habitability!
The other side of Musk’s argument isn’t about how hospitable Earth is but how inhospitable future Earth might be, for instance after a large meteor impact, or wars using salted nukes or engineered biological weapons.
And SpaceX is like the one area where I'm still really happy with what Musk has accomplished.
Bootstrapping the American EV industry was also good.
My arm-chair diagnosis is Musk got caught up with his Ketamine use and that explains the shift from Tesla / SpaceX awesomeness to his current behavior.
Agreed, didn't want to just say "Tesla" though because it's been... less socially good recently.
But the initial bootstrapping was great.
Mars is cool and Elon has huge blind spots. I think going to Mars is a very cool goal (and he should do that over all his culture war BS) but it’s clearly not a backup for earth, except under very limited scenarios.
The long-stated justification is to make humans a multi-planetary species as a hedge against the destruction of Earth.
Robert Zubrin is probably to blame.
Yes - I think he would even have been willing to make that concession on purely utilitarian grounds!
The expense of the US medical system distorts the value of the redistribution. So total amount of redistribution is same or more because the cost of medical care is greater. Value to consumers is therefore less. Discussion of reasons for that are beyond scope of a comment here. As far as limiting medical providers go, see the recent excellent article in Bloomberg about poor quality of many APRN training programs. https://www.bloomberg.com/news/features/2024-07-24/is-the-nurse-practitioner-job-boom-putting-us-health-care-at-risk. And AMA does not limit number of MD slots at either medical school or residency level.
Yeah, and I’d go so far as to say that Matt’s commentary on that point seemed almost willfully obtuse.
I think Matt is indeed very much in favor of supply expansion (although medical cost allocations get weird quickly and I can’t even tell if this is a personnel or an opaque insurance market / admin burden issue), however I will note that his claim that “more rapid growth would make it easier to expand the safety net.” is conceivably false for low-productivity-growth labor-limited sectors like healthcare where economic growth Baumol’s cost disease just means you end up bidding the cost of the inputs in a similar way to subsidizing demand in a supply-restriced context.
I can imagine ways of imitating Europe that sound like they would get prices lower.
Doctors' salaries in Germany are much lower than the US, but they also train more doctors per capita, and their medical schools don't charge tuition, so new doctors don't have student loans driving them to prioritize high income over other considerations. I don't know much about nurse practitioners in Germany, but I would guess there is less demand for them, because MDs are cheaper and more abundant.
It may be possible to establish a similar equilibrium in the US someday, though I'm not sure what the transitional period would look like. Incumbent doctors don't want to get a pay cut, or to lose their ability to get a new job because the job market is flooded with entrants. So there would be a lot of resistance to reforms, except maybe if you could phase them in very gradually, and I'm not sure what that would look like.
We might also get lower prices for medications by imitating other countries -- eg the UK or Canada explicitly assess cost-effectiveness of new medications (money spent per QALY gained, compared to the previous standard) when deciding what to cover, while Germany has a consortium of nationwide health insurance companies negotiate a single price for the German market, with an agency that can set the price or block market access if insurers and manufacturers fail to come to an agreement. It's not entirely without downsides -- some medications never enter these markets, to preserve the sellers' bargaining power. And I've heard the UK in particular is suffering from widespread drug shortages now, partly because they insist on exceptionally low prices (their willingness-to-pay per QALY is much lower than Canada, IIRC). The logistical complications of Brexit don't help either.
There are arguments for high prices too -- the prospect of huge profits is what motivates companies to engage in the risky and very expensive idea of developing new drugs and doing human trials, even though most drug candidates never make it to market; and paying higher prices than other customers ensures that you will be prioritized if they have difficulty meeting everyone's demand. But the latter part can be achieved by negotiating only modestly higher prices than Canada or Germany, and the former could be achieved by directly subsidizing clinical trials or offering prizes for meeting certain targets, which might be more cost-effective than giving pharma companies free rein over prices.
I imagine that imitating some of these practices could bring healthcare costs down. So could letting Medicaid import medications from other countries with lower prices -- for instance, Florida already imports medications from Canada -- but this is not as good as directly negotiating a lower price.
We might also save costs by making private health insurance more standardized -- insurers spend a lot of money, and waste a lot of time for healthcare providers, by having complicated rules about what is reimbursed and making it difficult to get reimbursement. I am under the impression that there is much less of this overhead in Germany, where despite being quasi-private, the insurance companies have fairly uniform standards for what is covered and under what circumstances, and where they also cannot keep their profits. I don't know, though, and would appreciate input from someone who knows that system -- I've also heard that German and French health insurance puts the burden of making claims on the patient rather than the healthcare provider.
Are physician wages a meaningful component of healthcare costs or cost growth? My understanding was not really.
We pay university adjuncts peanuts & make vastly more of them than there are job opportunities. Education hasn't gotten cheaper.
Well somebody’s putting a cap on the number of residency slots and making it impossible to convert foreign medical licenses and it sure as hell isn’t patients or hospitals
As I understand it the number of hospitals that are actually appropriate & useable as teaching hospitals for residents is quite limited. They have to be a certified teaching one, they have to be large enough to have multiple specialties that the residents can practice on, etc. So this actually rules a lot of hospitals out. I think Matt's explanation is rather hand-wavey
(MD salary is a small part of total US health care cost FWIW. But this gets complicated very quickly).
I think with Uber it's important to remember that there were two reasons it was cheaper than a guy with a cab, when (if you think about it for a minute) it shouldn't be cheaper
1. Much lower wages for drivers, which is inevitable, when being a cabbie was one of very few jobs that recent immigrants with no connections and limited language skills could use to join the middle income class
2. All of your rides were subsidized by a giant pile of VC cash, which of course cabbies couldn't compete with - they actually had to run sustainable and profitable businesses
The former is bad for humanitarian reasons, especially when you realize that the money that was siphoned off of the drivers was transferred to a giant corporation and eventually its share price. The latter is bad because it was totally unsustainable if the company wanted to be profitable, so they were inevitably going to raise prices, and inevitably they did. And suddenly Uber wasn't really consistently cheaper than a cab, and the drivers were making like $4 an hour after you subtract the depreciation of their cars, but the cab fleets have been largely dismantled and Uber's network effects keep everybody locked in, which is the core of the Silicon Valley machine - predator network effects. And because of those network effects they're going to become less and less affordable.
For the record if you're flying into either NYC airport getting a yellow cab from the taxi stand is almost always going to be less of a hassle and cheaper than getting an Uber.
Taxi medallions cost almost a million dollars in 2014, so part of the early price difference was the ability for an individual driver to enter the business without taking out a $1M loan.
I also think Freddie is overlooking the real travesty, there is no direct subway line to either JFK or LaGuardia. NIMBY’s killed the Brooklyn-Queens line even though the city owns the right of way.
There are also more cities in the country (the world even!) than New York.
I mean, technically...
The hell you say.
If you think that line would have taken less than 30 years or a billion dollars you're out of your mind
LaGuardia has a pretty good express bus to uptown. JFK is harder.
But major airports are almost always better targets for taxis than for subways - you’re very often going with luggage, and it’s the kind of trip that most people take only once or twice a year (though it’s true there is a pool of employees who work there every day - still not as big a job center as many others, and usually farther from other origins/destinations because of the need for a mile or more of flat pavement for runways).
The medallions are actually where I have the most sympathy for the cabbies and cab owners, they bought into a market they didn't create. Obviously, that's not enough to lock in an inefficient cartel system, but their feling of being duped was understandable.
And yet tens of thousands of poor immigrants accomplished that, which means that you're not remotely responding to what I said
I described another factor in the price difference, which was in Direct Response to your contention that the price difference was due to VC money and lower wages.
It wouldn’t be Freddie if he didn’t distract from his good points with needless pugnaciousness.
I remember early on when the anti-neoliberal rhetoric starting gearing up around 2015, there was this specific blind spot on the Left on the taxi medallion system. When they would start complaining that NYC taxi drivers were hurting economically, they completely zeroed in on rideshare apps and ignored the fact that the NYT was coming out with pieces on growing problems with the medallion system.
Agree with much of this, but it's also true that the old taxi system was stagnant, consumer-unfriendly, and in need of disruption.
The political economy aspect of this is that disruption paving the way to an overall more optimal equilibrium for ride-hailing couldn't have happened without the patient VC money and disruptive companies like Uber willing to break some omelettes.
That doesn't mean we should trust Uber to strike the right new equilibrium on their own now that the old system is a thing of the past - they're not in it for that; they're in it to maximize their investment --but without their disruption we'd still be stuck in the old, much less optimal equilibrium.
Yeah, there were entire sections of DC where I wasn't able to get a cab within 2-4 hours before Uber/Lyft. Taxi drivers would also pull a lot of BS, like not actually dropping you off at your location so that the meter would go up. I had taxi drivers fall asleep while driving with me in the car. My parents almost got attacked by a taxi driver who picked them up at the airport. The taxi industry put a huge bullseye on its back that someone was going to hit, whether or not that was going to be tech bros.
Dude tell me about it. Before Uber and Lyft you could reliably get a cab at the airport, the downtown to Capitol Hill axis, and, on weekends, at a couple of night life spots. That was it. You'd then have cabbies driving you bizarre routes so that they could technically hit as many 'zones' as possible and jack up the price. And that's not getting into the issues with many of the drivers themselves. If you wanted a ride from outer parts of the city or a close in burb you could just forget about it.
Compare that to now where if I want to visit friends in the city from MoCo I have a car here in 5 minutes, a quick ride in at a reasonable price, and no concerns about getting one home later. It's way better.
The Las Vegas taxi drivers used to deliberately take the long way when driving a tourist from the airport, to jack up the fare. Uber always goes straight to the strip.
And if an Uber driver does tries to do the same thing, your route is saved to your profile and you can report it and actually get money back from Uber. Back when you paid a cab in cash and maybe got a receipt, you had no real recourse to deal with a problem.
I got hit by three taxis and one car avoiding a taxi when I lived in NYC because they would drive on sidewalks. I’m so fortunate I only have minor longterm injuries. Taxis deserved competition.
That's the thing, though. When you let Uber disrupt things, it's on Uber's terms. The policy advocated by Matt her says, let Uber do whatever it pleases, even if it's totally unsustainable, and then pick up the scraps afterward in the name of economic growth.
But we never pick up the scraps afterward and make everyone whole again. It's just never happened.
At the end of the day, that disruption happened because consumers wanted it. If people felt Uber wasn't meeting their needs, they wouldn't have used Uber.
Right..And you can always come in and impose new regulations on Uber, as many places have.
I think this is a lot like ballot initiatives legalizing marijuana, which politicians were never going to do before. Path dependence is enormous in politics. That's why you need disruption.
If you mean “pick up the scraps” via macro redistribution, Matt discusses at length how we do in fact do this.
If you mean specifically compensating the taxi dispatchers and whatnot, this is a fully general argument against innovation. Gutenberg didn’t compensate the scribes put out of work by his printing press, but the world is certainly better off for his having invented it.
The issue is a bunch of people don't think the redistribution we do is equal to the chaos neoliberalism causes.
So how do you propose disrupting things instead? Is there a better way than letting Uber do it and then picking up the scraps?
I guess it's eggs that get broken not omelettes....
All of that's fair but NY where in my (very limited) experience hailing a cab has always been easy is far from the norm. In the DC area getting a cab was only possible in a handful of locations, charged based on a bizarro zoning system, and good luck getting one even in a close in suburb. Half the time if you called one nobody ever showed up. They deserved to get their asses kicked around here because their service was terrible.
So because there is this one place in America where Uber is worse than a cab, all the Black people in America should lose their Ubers and go back to being unserved by the taxi industry?
Uber is GREAT. The Left ended up defending a system of racial discrimination, rent seeking, bad service, and service deserts, all because they don't like Silicon Valley VC.
Seeing Prop 22 pass with flying colors in California in 2020 was definitive proof that people weren't going to be fooled by this.
That is not what I meant. In SOME places it is worse; in others it is not worse or better, because there was never a taxi monopoly to disrupt. It created a brand new way for people to get around. I think that is great! But in a lot of cities, it is no longer a more affordable option vs. taxis, because the price of an Uber now matches (and at certain times, exceeds) that of a taxi. When I am traveling, it is usually for work and someone else is paying, so whether I pay $70 for a taxi vs. an Uber is not a consideration. If Uber created value by providing a $10 option for the same ride, that is great, but that is not what is happening in a lot of markets, so the low-cost rides for poor people have mostly gone away, and we are right back where we started, for the most part. Uber is still more convenient, at roughly the same price, than a taxi. The low-cost benefit was an unsustainable effect of how Uber was capitalized, to some degree. To be profitable, and keep drivers happy with their reimbursement, those $6 cross-city rides simply do not add up.
It's better 98% of the time.
And the fact it is now priced correctly is a good thing!
I agree with both of those statements, but your point about minorities being able to hail a ride only applies to those that can afford it. I am not anti-growth myself, but if I look at this from the perspective that Uber makes my already relatively easy life even easier, to the detriment of some group fo drivers while also increasing traffic congestion, I can see why someone might view that as an out-of-whack cost-benefit ratio. Uber doesn't have any control over some of the downsides created in its wake, but those downsides fall into sharper relief because nobody seems to be doing anything useful re: other topics Matt has written about -- land use, congestion, public transportation, etc. In that case, the growth-at-all-cost so-called neoliberal mindset is only a problem because the institutions that would otherwise mitigate the negative results of these endeavors aren't working or have been deliberately left to rot.
Taxis were middle class and upper middle class transportation. Poor people took the bus; rich people hire sedans and limos.
They always were middle and upper middle class transportation. So when we were talking about the numerous Black people who couldn't get cabs, it was mostly middle class people and professionals. That's the nature of what taxis are. You don't really take them if you are poor.
Now what you could do is ban the taxi, on the grounds that all these people should be taking public transportation and taxis are terrible because they cause traffic jams. But (1) good luck with that and (2) inconveniencing a bunch of people because you don't like their life choices is actually an evil, anti-social, sociopathic way of looking at the world and is one of the reasons why a lot of people have an aversion to the Left.
If you really think taxis have awful externalities, what you could do is tax them. And you could tax Uber as well. And that would have the effect of reducing taxi and Uber usage. I'm open to that if you can make the case.
But if we aren't banning them, then it is really, really, super-important that they don't discriminate against Black people. And further, it's pretty important that they serve neighborhoods such as suburbs that DON'T have the traffic problems AND have weak public transportation. And traditional taxis didn't do that-- the drivers were bigots and they all crowded into the urban core to get fares.
So bottom line, Uber is good, and if what you really want is for people to just not take taxis, well, we're a democracy and you're not going to get that (and shouldn't get that anyway) so you should probably start thinking about tax policy instead.
Agree with 99% of this, but I wouldn’t say that the “rich” don’t take taxis. Maybe literal billionaires have chauffeurs waiting for them at all times, but (speaking as a Manhattanite), you can be quite wealthy indeed and still take taxis/Ubers all the time.
I can't remember if that was part of the pitch for Uber early on -- as a low-cost solution for low-income people who were poorly served by existing public transport in cities. That IS how it worked out, though, until costs rose. Now that I think about it, there were and are a lot of companies (ebikes, car sharing, e-scooters, ride sharing, etc.) that targeted the basic idea that is a huge pain to get around in many cities because of congestion, parking costs, the cost to own and store a vehicle, etc. But the root cause is that cars are expensive, and a lot of public transportation was poorly thought out, or couldn't keep up with growth. Uber sort of became an answer to insufficient public transportation, but providing expensive, complicated services to lower-income people is never going to be profitable. So the answer to poor public transportation should probably be better public transportation, but that ship has sailed in a lot of cities, so here we are. A bunch of shift workers downtown who don't own cars aren't going to pay $50 to $100 for an Uber to take them home five days a week. When Uber was cheap, they may have been taking Uber instead of the bus, not instead of a taxi. The bus service may need fixed or replaced with something better, but that "something better" is probably not flooding downtown with hundreds of individual Uber drivers; that kind of solves one problem while creating another. If there was some way to pool riders who were all heading in roughly the same direction at the same time that was as responsive as Uber, but still low cost, that might be a solution, but I think I just described some kind of privatized busing system.
This played out differently in different sized towns, too. My hometown is a rural town/city of around 40,000 people. There never seem to be more than a handful of Uber drivers operating there, even at what in a larger city would be peak times. There are probably a lot of reasons for that (one of them is probably that outside of cities, the idea of getting into a car with a stranger was pretty alien to a lot of folks), but regulatory hurdles or taxi monopolies were not holding them back. Parking there is plentiful and cheap, but there is still a case for ride hailing for drunks and people who can't drive (elderly, etc.).
Getting back to the point of the original article, I guess, Uber introduced more competition to the taxi market, gave riders of a certain income level a better experience, made it harder for drivers in some markets to earn a decent living, and gave lower-income people access to a service that made their lives better, and then priced many of them out of being able to use it -- that may drive some of the anti-growth, anti-neoliberal sentiment, in that the benefits always seem to kind of flow up, and then leave some segment of people worse off, and a bigger chunk of people not necessarily worse off, but not really receiving any benefit, either, and maybe even suffering some collateral negative effects (in the case of Uber, maybe that is traffic congestion?). A rising tide may lift all boats, but it may also flood someone's basement or kill some swimmers because nobody wanted to pay for lifeguards.
Stupid question: if you object to $$$ being siphoned off to a huge capitalist corporation, how hard would it be for a bunch of drivers to form a coop and write their own ride-hailing app? Does such a coop exist? Is there a reason (regulatory, practical ) why it can’t?
Co-ops almost definitionally cannot work in any industry that requires significant upfront capital investment.
I guess they can, if the individuals who assumed the initial capital risk retained more ownership if the business succeeded...but that would just make the thing another corporation, not an actual co-op.
Ok, but... couldn't the coop get started with, say, a bunch of small-time donors funding the ride-sharing app with $25 donations via GoFundMe? The pitch could be:
"Hi, we are a bunch of drivers tired of existing under oppressive capitalism. We want to start a ride-sharing coop that won't siphon off our hard-earned money to a giant faceless corporation run by fat-cat billionaires. Please donate to us so that we can develop a ride-hailing app, and someday, once we're up and going, we'll provide a great ride-sharing service to you!"
Yes, the coop would then get kickstarted through an act of charity, but then, once they had the app, it would be self-sustaining. Is this so unrealistic? Freddie is reasonably affluent; would he not throw $100 or so at such as GoFundMe? And I'm sure there are lots of people like him.
So the way that ridesharing apps work is that they're two-sided marketplaces- they have a critical mass of drivers, and also a critical mass of riders. You need to have both, otherwise it's a chicken and egg problem to get started. Uber and Lyft spent a decade and billions of investor dollars on signing up all of the drivers.
Your co-op app wouldn't start with enough riders (so drivers wouldn't sign up, or at least would ignore the app), and then without enough riders there'd be no drivers on it. So a rider opens the app, sees 'your closest driver is 45 minutes away', switches to Uber and never uses the co-op app again.
Chicken and egg problem- you need a critical mass of riders to sign up the drivers, you need a critical mass of drivers to sign up the riders. That's why no new entrants can break in. Several niche ridesharing apps have been tried and all fail spectacularly due to this
Co-ops have scaling and coordination issues, this is why they are uncommon. King Arthur Flour is the only national co-op I can really ever identify (those lots of milk producers are run via co-ops.)
Isn’t REI a coop?
Ace Hardware is a co-op, there are multiple multi-billion dollar grocery co-ops in the US...
CHS, a farm co-op in the Midwest had $38B in revenue in 2021.
Grocery stores are often co-ops or quasi-co-ops because the vast majority of the cost is in inventory, but Publix is pretty huge in the south and is something like >80% employee owned.
But yeah co-ops don't exist because if hiring someone meant giving them equity, then the cost of hiring becomes ridiculously high.
Equity allocation isn't the problem. There are seven or eight hundred different ways to manage that: gradual buy-in, point-systems, profit-sharing, tiered membership, etc..
The real barrier is that co-ops require employees motivated to participate in management and governance, which is complicated, thankless, and boring to most people, who would prefer to focus on different parts of the business.
File this under You Can’t Have It Both Ways, episode 5896:
“Those fat-cat capitalists do no useful work, they just suction off money from the hardworking Uber drivers!”
“Well then, why don’t you start a coop so nobody suctions off your money?”
“Oh no, then we’d have to deal with management and governance, which is thankless and boring!”
“🤔”
WinCo, founded here in Boise, is the version of this here out West.
I wonder if there’s a middle possibility - have a startup make some white-label ride hailing app for taxi co-ops to license, and take a much smaller cut than Uber does. I feel like you could make a solution 80% as good as Uber’s app for like $10M.
Though, given that I came up with this idea in thirty seconds with no industry knowledge, probably the response is either “this exists but no one uses it, you idiot or “actually this would take a $billion+ to be usable, you idiot “
This already exists. It’s called Curb and operates in most large American cities. It just hasn’t gotten very much traction. I live in Chicago and the only people I know who use it are left leaning people ideologically opposed to Uber for various reasons.
I've seen people using Curb in manhattan I think because they're already taking taxis regularly and it makes paying a bit easier.
Regardless of how much money it takes I think the incentives are just all wrong when the system sets up small localized cartels. It's hard for me to imagine that kind of entrepreneurial spirit coming out of those that are happily juiced in.
Pre-Uber taxi companies were cartels to the extent that they benefitted from regulatory capture via a finite pool of medallions, etc. But if you remove that aspect, I don’t see why they’re worse than any other small business. A local barbershop may not have quite as much Schumpetrine vitality as a Y-Combinator-backed startup, but it’s still a perfectly respectable business
Done. https://onde.app/ondelight
I’ve seen attempts at this in Austin and in Palm Springs. I don’t know how well they have worked.
The low cost was never really going to be the value Uber added, and that was apparent to me as soon as I took my first Uber -- it was like $6 to go all the way across Cleveland, and I could see that was never going to be sustainable. The value Uber added was convenience in both getting a car to your location (generally), and getting a car to locations where cabs were generally not ever going to be found. Uber could have just as easily marketed their software to existing cab companies to make dispatch more efficient, but that would not have solved the other half of the value proposition, which was increasing the number of available cars to call (there was a natural limit on the number of taxis, as others have pointed out). In smaller towns where there are effectively no taxis, nobody was really displaced when Uber showed up.
But what Uber did -- gut the taxi industry on some level, and replace it with a system that was ultimately just as expensive and probably worse for drivers, while also increasing traffic congestion -- is similar to what we see in private equity/VC scenarios like housing. There is nothing inherently wrong with private equity buying up housing stock and becoming landlords, but in practice it drives up prices, reduces availability, and makes the renting experience worse, even for people who can afford it. PE firms are buying up HVAC service companies right now, as another example, and there are positive outcomes (HVAC company owners get cash, there are efficiencies created with consolidation), but also negative outcomes in quality for both employees and consumers, in some cases, because the incentives for just cutting costs are roughly equal to those for creating value or gaining market share through improved service, and cutting costs is the easy route if you are only going to hold an asset for a few years.
Some of the anti-growth animus may just be driven by the fact that, in the real world, there has been a growth for me, but not for thee, approach taken that creates wealth for a few entities, is highly disruptive, and drains value (both materially and experientially) from markets/industries.
From a more vibes-ish perspective, it kind of feels like technology made a lot of things noticeably better for a while, but a lot of the areas of life that were disrupted by new entrants and technologies have started to really suck in new ways. Even getting an Uber is starting to be just as frustrating as getting a cab used to be in some places.
How does private equity buying up housing reduce availability and make the experience worse? In my experience, corporate landlords are less prone to awful failures than mom and pop landlords, even if there are minor annoyances always. And they certainly don’t impede construction.
"In my experience, corporate landlords are less prone to awful failures than mom and pop landlords"
I'm pretty sure Matt has posted links to studies in the past showing this is objectively correct.
It probably depends on the geographic area, but corporate landlords can be just as neglectful of their properties as individuals, particularly if they are located across the country or in another country, but their neglect is on a much larger scale and may be be situated in a way that makes it harder to impose consequences on them. If a few entities gain control of the majority of available rental stock, they could raise rents without concern about being undercut by competitors. People who want to buy a house may have a harder time if a bunch of the available single family homes have been bought up and flipped into rentals. They could also distort the market in ways that a bunch of individual buyers, sellers, and renters would not. And while they do not impede construction, construction is still often impeded anyway, and that can either amplify the things I just listed above. Here in Cleveland, a bunch of out of country investors have bought up a lot of commercial property and single family homes, and sometimes they just sit empty. It seems to be really difficult for some cities to deal with absentee landlords (individual or corporate). That is a failure of governance, not economics, but it is one that real estate investors seem happy to exploit. I think Matt has written at length about why building more houses is the right solution to all of this, but one that can be very difficult to implement depending on where you are. Again, though, I do not think PE buying up anything is inherently bad, but if they are just holding and dumping investments without adding a lot of value, it CAN be bad.
Honestly, it kinda reminds me of how much worse the internet got once people realized banner ads don't make anything and then the VC money for crazy ideas dried up. The internet of just money flying around everywhere was in a lot of ways a mirage, compared to the internet of ruthless efficiency, and the previous internet killed a lot of real things that we probably need more than ever, that don't seem to be coming back, now that we're back to more ruthless efficiency.
Due to New York's hyper-regulation, an Uber in New York basically is a taxi. NY Ubers need taxi license plates, and NY Uber drivers need taxi-driver licenses. It's not ride sharing as it is almost everywhere else.
We went to Ireland last year, and ride hailing apps there are essentially just better ways to hail a taxi.
“Redistribution is impossible” -> I don’t know how much you have to pay a guy to make him as happy on the dole as he was with an honorable social role, but I bet it’s more than you’re willing to pay.
Frankly, the 'we'll have a generous dole' part feels like the 'community mental health' part of de-institutionalization.
I think there’s a lot of people who’s gut instincts are basically from ability to his need even if they’re not Marxists and believe everyone should have a stable job forever with a career progression that tracks with age.
I think that explains a lot of the frustration with redistribution because it’s not insurance against market collapse so that cab drivers and other industries displaced by tech or trade will be fine.
"That’s good because it will boost equality and because it will boost growth."
These two goals, boosting equality and boosting growth are both important, but sometimes work at cross-purposes, because growth is lumpy and tends to be disruptive to a lot of people's lives, creating new haves and halve-nots. Conversely, it's pretty easy to quickly get to economic equality, but at the cost of growing aggregate wealth.
If the overall purpose of economic regulation is, over the longer term, to create a wealthier society that serves the preferences and comfort of the largest number of people, there probably needs to be more open discussion of the tradeoffs involved in prioritizing one over the other. I don't know if any "correct" way to strike that balance in a democracy except by trying to give people what they want.
If people prioritize having more leisure time and job security, and structuring certain industries, such as agricultural or healthcare in ways that prioritize social goals other than over maximizing growth, that's a legitimate end goal it seems -- who better knows what the people want than the people themselves, and if the answer is an economy structured to prioritize the comfort of regular people over maximum aggregate wealth, well, that's what people want, so give it to them, as long as the tradeoffs are clearly considered. To think otherwise seems to be putting the cart before the horse.
> who better knows what the people want than the people themselves, and if the answer is an economy structured to prioritize the comfort of regular people over maximum aggregate wealth, well, that's what people want,
I'm not sure anyone would realize that was the tradeoff until it's too late. As Tired PhD student points out below, Europe is having to cut welfare benefits, a trend that is likely to continue. Will they be able to turn "growth" back on when it becomes imperative?
https://www.slowboring.com/p/neoliberalism-and-its-enemies-part/comment/64669761
All economic growth always raises inequality, because there are always at least a few people who can't or won't engage with the economy in a productive way.
"Conversely, it's pretty easy to quickly get to economic equality, but at the cost of growing aggregate wealth."
It's not immediately obvious why this has to be true, depending on how you achieve economic equality. Mathematically, it's entirely possible to share the costs of investments needed for growth (including the inevitable costs of "destroying" existing jobs or the value of stranded assets in the near term) as well as the aggregate increases in wealth caused by that growth, equally. Embedded in the statement you made is the assumption that the costs of the destruction must be externalized in order to achieve net aggregate increases in wealth, but it's not clear that would be required if both costs and benefits were fully distributed / redistributed.
Matt didn't really mention it but I feel this is at the core of the problem with social security (retirement not disability). It's an entire massive, quasi-regressive distribution of cash to relatively well off retirees largely in the name of politically insulating a much smaller commitment to keeping some portion of the elderly poor from becoming destitute. It's a budgetary disaster dressed up as a sacred cow. It should be example A number one of how not to design a safety net program and should be at the top of this list of things to cut for better ideas.
I would question if any redistribution program that is designed to have a multi-decade individual effect span - paying in while you are 20 and still getting stuff when you are 90 - is possible. The demographics that the program was designed against vs 50 years later vs today would cause any system to fail but the lack of political will to adjust it is legend. As I take care of the finances of a 80+ year old person who has no need for Social Security but gets it, you could view much of the Social Security as free money to be spent on political campaigns, especially supporting keeping that gravy train going.
SS isn’t a budgetary disaster - raise FICA by 2 percentage points and it’s fixed. What’s the big deal?
Isn't the required amount closer to 3.7-4%? Unless you are planning on raising the cap pretty significantly as well.
Its there because SS was created to mimic a pension plan with similar inputs and outputs. If we want to convert it to be a standard government transfer program, we can do that, but we should expect it to change the public's perception of it as well.
More simply, that's a large tax increase for higher earners. If you make 200k, your marginal tax rate for each additional dollar earned if single is 35%. If you remove the cap, that jumps 15.3% to over 50%.
How do you get to that number? The Social Security tax is 6.2%.
https://www.nerdwallet.com/article/taxes/fica-tax-withholding
FICA taxes pay for SS and Medicare. The employee pays 6.2% in SS, 1.45% in Medicare tax. The employer matches those contributions. For SS, the tax is capped on income up to $168,600. There is no cap on the medicare part, and in fact there is a medicare surcharge for income over 200k of .9%
So the increase in taxes for someone over 200k wouldn't be the full 15.3%, but would actually be 12.4% as they are already paying the 2.9% in medicare taxes.
You might say that taxes paid by the employer for paying you over 200k don't count, but they definitely do as there is strong evidence companies reduce the salaries they offer to compensate for the taxes they pay on salaries.
The massive opportunity cost of throwing gigantic amounts of cash at wealthy retirees.
The other side of the coin is universal benefits. Everyone pays in and everyone gets something out of it. That seems like a perfectly fine and workable system that doesn’t punish the prudent and successful.
I’m not sure how old you are, or whether I (mid-20s) will get nearly as much out of social security as I put in
Which allows to throw even more gigantic amounts of cash at the far bigger number of not-wealthy retirees.
You know what else we throw gigantic amounts of taxpayer cash at? Public schools in rich areas.
Spending tax dollars to invest in people whose productive years are ahead of them makes lots of sense. Subsidizing middle class retirement consumption not so much.
But public education isn't something we do because it benefits the students. It never has been. Public educations is half day care and half investment in human capital.
Excellent. One overlooked aspect of Uber or AirBnB or DraftKings or any other "technological advance" in industry is that they only appear to be tidal wave moments because government regulation blocks traditional leaders in this industry (medallion owners, hotel owners, casinos) from having evolved into versions of AirBnB or Uber far earlier. These tech entrepreneurs are really just finding paths around laws.
It wasn't just government. For instance, the taxi drivers were racist. The government didn't tell them to be racist- they did it on their own.
It happens only a big national company like Uber has the power to tell its drivers not to be racist and make it stick.
And it's a lot easier to further their racism when they have rent seeking laws in their favor entrenched in the code. Very much also an important aspect of Jim Crow.
“…the taxi drivers were racist”
How do you know that?
It's probably one of the most well documented forms of race discrimination, through both anecdote and academic study, in American history.
What was the evidence?
Why don't you do some googling on the topic, and discover the extensive reporting on this issue?
And why pretend you don't know how to do that and try to make you do your research for you?
Google like 'taxi racism academic journal'. It's actually incredibly well studied with a mountain of evidence. You are barking up a strange tree
Yeah the thing that makes Uber such an interesting and tricky case is that it was maybe 20% "real" innovation and 80% regulatory arbitrage. But the regulations they were arbitraging were mostly very bad supply restrictions and obsolete rules for how to run a taxi service (and also some more defensible labor regulations).
There was absolutely nothing stopping the medallion owners from building an app. Absolutely nothing.
The monopolistic protections offered to their business meant they needn't have.
Entrenched rent seeking does make people more liable to rest on their laurels and not innovate, though. No excuse, of course!
Agree. The only real enabling innovation was the precise location awareness of the iPhone, which Apple implemented and made accessible to app developers.
I think it's worth highlighting that these carveouts are not necessarily even redistributional. In California the lobby representing builder's unions opposes the use of modular housing in all public contracts. The effect of this is that a single unit of supportive housing in SF is one million dollars as opposed to five hundred thousand dollars. I really struggle to see how they justify this to themselves--basically they're arguing that their jobs are more important than the lives of people living on the street. But this is how politics works. Interests groups are created to look out for the interests of their members and for nobody else. In some cases the carveouts that we make for them only come at the expense of "the rich", but not always, and caving to these interests on every occasion leads to the sort of "everything bagel" progressivism that people now decry.
I'm disappointed this series hasn't addressed the growth of the FIRE sector, which now comprises more than 20% of the GDP, and is disproportionately responsible for growing the wealth of the super-rich. Why has this become a bigger chunk of the GDP, and does it improve consumer utility commensurate with the amount of resources that are dedicated to that sector? Why have asset values, mainly stocks and land, appreciated so much faster than the GDP has grown? I think any analysis of neoliberalism that isn't focused around finance and asset values is really missing the ways our economy has transformed.
Very good point, and I wish Matt would address this. Maybe invite Noah Smith for an interview?
Not doubting you I just don’t know what you mean when you say FIRE comprises more than 20% of GDP. Is there a source I can read about that?
Well he did talk about the RE part, but I am interested in the FI part too.