Extraordinary Observations

Tyler Cowen poses a fun question about casino ATMs:

Should the service fee by high or low? It could cut either way. A low service fee encourages withdrawals and thus gambling, which is profitable for the casino. A high service fee takes in money from the desperate and those with high time preference.

My recap and thoughts on the Campus Progress National Conference are up on Newsweek's Generation O blog.

One thing I would like to add... I wish I could have gotten better pictures; but amateur camera equipment and a dark room didn't work out so well. Fortunately, there are some awesome pictures posted here. I hope that some videos get added soon as well. Everyone at Campus Progress did a great job with this event and deserves much praise for putting it all together.

Over the Independence Day weekend a friend and I drove 800+ miles round-trip to visit the city where America was founded, see the places where Thomas Jefferson and Ben Franklin used to hang out, and explore an urban place we hadn't yet been. This was my first road trip in years, and it reminded me how much I appreciate being able to fly when traveling. Nevertheless, as I wrote last week, as far as car commutes go, this was one of the least stressful I could imagine. In the spirit of reporting on my tour of urban places, here are a few more observations about Philadelphia.

Philly Like Bikes (I think)
Yes, we did have a car, but we parked it in a garage on Friday night and didn't retrieve it until it was time to leave on Sunday afternoon. We brought bicycles and found Philly to be a relatively easy city to maneuver, thanks mostly to the simple street grid and some decent bicycling infrastructure. Granted, we only rode around on Saturday and Sunday, and didn't get much of a chance to experience a lot of real traffic, but I imagine it is still very possible to ride around during the busy times. The great thing about having a street grid like Philadelphia's is that you can get to the same places on a bike as in a car, but some of the less trafficked streets that wouldn't be advantageous for cars to use are great for bikes.

Walk Philadelphia
I was surprised by the number of people out walking downtown on the weekend. Saturday foot traffic probably had something to do with the Independence Day events taking place throughout the city, but the number of people out on Sunday was encouraging; especially for me, coming from a place where downtown streets can sometimes be nearly abandoned in the middle of a weekday. I particularly like these signs placed throughout the city. Not only do they help give pedestrians directions to places they might want to go, but they also give an idea of how long it takes to walk there.

(my photo)

Where's the Pride?
On a number of occasions we told locals that we were visiting Philly for the weekend, and the typical response was "why"? The answer "to see the city and check out the holiday festivities" apparently wasn't enough. Locals wanted to know why we chose to visit Philadelphia when New York City and Washington DC and Boston are all nearby. I understand that the City of Brotherly Love probably often gets overlooked being sandwiched powerful cities directly to its north and south, but there certainly isn't nothing to see or do. As far as cities go, Philadelphia is still one of the country's biggest, and given its history, it has enough touristy stuff to keep Clark Griswald's family entertained for a few days. I don't think it's shocking that anyone would want to visit. It's too bad that some locals make visitors feel bad for doing so.

SEPTA Token Mystery
I only used Philly's public transportation system once, so I didn't get to see much of it. I did know that the cash fare was $2, but if I had a SEPTA token it would only cost $1.45. The challenge, I found, was finding a place that actually sold these tokens. When I asked my hotel's concierge, he said on a Saturday I would have to venture pretty far from the hotel to find them. When I made my way underground to the 34th street subway station, the attendant told me she didn't sell tokes at that particular station, I would have to pay cash, but I could buy them at some of the busier stations downtown.

The Ideas issue of the Atlantic that is on newsstands now is pretty interesting. Some ideas are better than others, and I particularly like this one from Felix Salmon:

The housing mess is screaming out for a simple but effective solution... a decree that whenever a bank forecloses on a home, the current occupant has the right to remain in the property indefinitely, simply by paying the fair-market rent. Banks are killing each other by racing to sell their foreclosed houses as quickly as possible, before they fall further in value; this policy would force a cease-fire that would help all of them. It would also put an end to the equally destructive syndrome of soon-to-be-foreclosed-upon homeowners trashing their houses before they’re kicked out. This plan might not single-handedly end the recession. But it would certainly help.

Auto-posted while I am in Washington, DC for the Campus Progress conference.

When most people think of budget travel, images of dirty, run-down hotel rooms and cheap continental breakfasts come to mind. I have stayed in plenty of these "budget hotels" in my life. Thanks to my many years of high school and college policy debate, I stayed at complete dumps, like Red Roof Inn and EconoLodge; typical suburban hotels like Courtyard and Residence Inn. I once stayed at the only hotel in Ann Arbor that had vacancy the weekend of a big Michigan football game. But these places are affordable, so I fully understand why people stay at them. Recently though, I've discovered a new type of "budget hotel" and while it is cheap from a cash perspective, it might not necessarily be like any of the places I just described.

I am a huge fan of the "opaque hotel market" better known as Priceline and Hotwire. At both of these sites, you book hotels without knowing what you're booking. Sound ridiculous? It's actually not so scary.

In the past year or so I've used Priceline to book five hotels and I've never paid more than $100 (plus tax). Where did I stay? There was a Renaissance, Monaco Hotel, Marriot, and a Hilton. In some instances, the rack rate at the Holiday Inn Express across the street was more than what I paid. I used Hotwire once, to book the Wynn Las Vegas for $143 (plus tax), although in fairness, it was a solid 5-diamond hotel and it was on the Saturday night during Memorial Day weekend.

Thanks to websites like BetterBidding (my personal favorite) you can fairly easily determine the going rate for hotels in a given area, strategically calculate your opening bid, and rebid multiple times per day. The website has great guides for everything Priceline and Hotwire, so there's no need for me to discuss them here.

Of course, there are a few caveots. Remember how I said you were blind to where you would be staying? It's true, but you can usually figure out the possible hotels you could be staying using the BetterBidding website. Plus, you select an area where you want to stay, and your hotel will never fall outside of the boundaries marked on the map. The other caveot is that, with Priceline, the rooms are guaranteed for two people, but there isn't always a guarantee you can get a room with two beds. Depending on the city, it is usually worth rolling the dice.

There are also a few disadvantages to staying in nice hotels. Since they typically don't compete with each other on price, you should expect to pay more for everything. Internet access won't be free (in fact, it will often be really expensive) and forget about continental breakfast in the morning. Sometimes this gets on my nerves, but it's ultimately not a huge deal. When I travel, I don't find it very fun to spend time in the hotel anyway.

Auto-posted while I am in Washington, DC for the Campus Progress conference.

Anyone who lives in a city that is part of a much larger state is probably familiar with the city hall vs. statehouse conflicts that often dominate political decisions. Northern Virginia, for instance, a fairly progressive urban/suburban area around Washington DC, often seems to get held hostage by the conservatives who run things down in Richmond (which used to be the capital of the Confederate States of America, I might add). Another example would be New York City, where big-city proposals like Mayor Bloomberg's congestion pricing scheme often get scoffed at by small minds in Albany.

In light of a recent hot topic, the idea of abolishing the United States Senate, I can't help but wonder if a similar unrealistic logic could be applied to state-level politics. What if we carved up states and created state-like entities that look something like existing congressional districts?

Maybe we don't need 435 governments, but they could follow a few basic rules. Primarily, that no state-like government contain more than one Metropolitan Statistical Area (there are currently 363). Also, that these entities retain most of the states rights that currently exist under our system of federalism.

I know this is a very idealist proposal. There are certainly tons of consequences that would come as a result of trying to do this. But at the root of things, is the current system where cities have to compete with each other or with rural dwellers for attention in the state government really the best for all involved?

"That will be $21.25, please".

Pretty expensive charge for merely driving on a road, eh? It's easy to cringe as you hand over a couple of bills and think about how unfair it is that so many roads are "free" but the one you needed to take costs a relative fortune. It's easy to imagine this because comparing a toll road to a "free" road is an apples to oranges comparison, but one that is too often made anyway.

Last weekend ago I drove across Pennsylvania on a high-quality, uncongested highway, and never once slowed below 55mph. The route wasn't very scenic, but it was easy to drive and not particularly stressful. Once we exited the Turnkpike, I drove on a "free" highway into Philadelphia for the next 15 miles. In stark comparison, this highway was congested, slow-moving, and stressful to navigate. Break lights lit up the landscape and I moved a little and stopped; moved a little more and stopped... And this wasn't during rush hour, either. This was at 9:00pm on a Friday night and at 3:00pm on a Sunday afternoon. This "free" highway suffered from what appears to be a simple problem: too many people wanting to use it.

In the discussion on toll policy, it often is portrayed as the drivers who are fighting the war against toll roads, and the non-drivers (the pedestrians, cyclists, and others) who support the policy. I guess because it's compelling political rhetoric to portray the enemy as people who want life for drivers some sort of hell on earth.

Sure, as a driver, it would have been great to have had an identical drive across Pennsylvania and not have had to directly pay cash for it; but it would be counter-factual thinking to imagine what an untolled highway might have been like. For all I know it could have been significantly more crowded, I might have traveled at a much slower average speed, and it might have been a huge waste of time and energy. But I'll never know...

Ultimately, I think the adage that "you get what you pay for" may be very true here. As a driver last weekend, even though it seemed overpriced at first, I think I got what I paid for.

Auto-posted while I am in Philadelphia for Independence Day.

When I was growing up, the suburb where I lived supposedly had the best Fourth of July fireworks around; this year it will not have anything. With the economy putting many municipalities on hard times, it's not surprising that many cities and suburbs are either cutting back their fireworks budgets or canceling shows altogether.

Auto-posted while I am in Philadelphia for Independence Day.

Maybe I'm lucky that I didn't graduate in May like I should have. There are plenty of people from my university who are now two months out of college and still unfortunately unemployed. I think they all understand how tough it is right now. There are a lot of people chasing a few jobs. But it's what happens as they chase those jobs that has caught my attention recently.

Consider this simple question: where do you want to work? Depending on your field, the answers will vary; but if you named a company that does business with customers, it is likely that you are one of their customers.

So when you apply for a job, you might not expect to get hired or even to land an interview. But it seems reasonable to expect a little courtesy and respect. A call or personalized email to let you know that you aren't a fit for the position.. even a few encouraging words might not help. People hate getting blown off. They hate not knowing what is going on and feeling completely out of control in situations. An easy way for a company to piss off some of its best customers is to neglect its job applicants. This seems painfully obvious. And yet, my peers tell me that it is exactly what is happening at many of the places they are applying.

Yes, I know, companies are getting bombarded with applications; recruiters are being overwhelmed and overworked; slowing business is crushing the economy as it is. I'm no expert in human resources, but it seems like now is a particularly bad time to do anything that might turn more customers away from a business. Why don't some get it?

Earlier this year I wrote about the culture of fear; recently there has been more discussion about the idea of letting children roam cities by themselves.

The driving force behind all of this seems to be the obsession that parents have with knowing where their kids are at all times. That's why games of pickup baseball in the park have been replaced with organized soccer leagues. It's why kids get dropped off at school in minivans and SUVs, even if they live within a ten minute walk. And it seems to be the reason why people get emotional and upset when they hear about another parent who lets their kids explore a place beyond the gated walls of the suburban subdivision.

For what it's worth, it seems like the next logical progression in parenting is the application of technology for the purpose of kid-tracking. I imagine that within the next ten years children across the country will carry global tracking devices, and parents can know the whereabouts of these children through any computer or cell phone. These devices might be built into kids' shoes or cell phones. Questions of privacy will probably be raised; courts will set legal precedents, but ultimately I think the technology will win.

I'm confident that this will happen because that's just how quickly technology progresses. Ten years ago kids didn't carry cell phones. Almost no one had one when I was in high school. Yet almost immediately the trend changed. Now it's strange for a high-schooler not to carry a cell phone. I understand the same is also true for middle school and elementary school kids. Ten years ago nobody had a GPS unit in their vehicle, now they're all the rage (even though I still don't like them).

The implications seem less predictable, but I imagine there will be two basic outcomes. Some parents, content with being able to track their kids wherever they go, will actually let them go out to explore. They will start letting kids walk and bike to school again, because instead of watching the child move from the back seat of the SUV to the front door of the school, they can do the same on the screen of their cell phone. On the other hand, some parents might become even more obsessive. They might use the technology to punish kids for anything that looks like suspicious behavior. They will use it as a new excuse to shield their kids from the outside world.

The technology looks inevitable. I only hope it can be used for good.

I recently finished reading Nudge, a decent book but not something I would highly recommend. Nevertheless, there is one idea that authors present that I found pretty interesting.

When it comes to fuel efficiency in cars and trucks, just about everyone measures it by the "miles per gallon" metric, even though it turns out to be one of the worst ways to measure fuel economy. GOOD recently had a nice piece about why "gallons per 100 miles" would be a superior metric, but even so, it still doesn't tell people the most important thing they might want to know: how much it is going to cost?

Consider the case for these four 2009-model GM vehicles: Chevy Aveo, Cadillac CTS, Chevy Suburban 1500, GMC Sierra C15. First, we'll look at the MPG (city/highway) ratings:

Aveo: 25/34
CTS: 18/26
Sierra: 15/20
Suburban: 14/20

We can convert this to gallons per 100 miles, and the numbers look like this:

Aveo: 4.0/2.9
CTS: 5.6/3.8
Sierra: 6.7/5.0
Suburban: 7.1/5.0

In this case, it seems a little more obvious how much more fuel efficient the Aveo is than the Suburban or the Sierra, but it doesn't take the next step to determine how much it will actually cost the driver. Fortunately, the EPA now calculates an estimated annual fuel cost.

Aveo: $1307
CTS: $1742
Sierra: $2152
Suburban: $2288

That's for a single year, but most people own vehicles for many years. If we multiply these values by 5 (to estimate the cost over five years), the difference becomes even more apparent.

Aveo: $6535
CTS: $8710
Sierra: $10760
Suburban: $11440

These estimates are pretty conservative, since they completely ignore inflation. Nevertheless, that variable could easily be factored into the calculation.

Sticker price is powerful for new vehicle buyers. Most probably prefer a more fuel efficient model when one is available, but the traditional MPG metric makes differences in fuel economy look minor. Only if we extrapolate out over a period of time do people become better aware of how much a certain type of vehicle will actually cost and knowing that the cost of a particular model will cost hundreds or thousands of dollars of dollars more over time could be a major game changer at purchase time.

NOW did a feature on student loans recently:



In keeping with typical PBS style, the episode isn't overly shocking or off-the-wall (like say, 20/20 might be), but it gets the point across. I still think the best resource on this topic is Alan Michael Collinge's The Student Loan Scam. I wish NOW would have been able to cover a lot more, but I guess there is only so much that can be said in a 25 minute episode.

2nd Avenue Sagas has a great post about the apathy that some New Yorkers seem to express about their city's subway system.

Nobody likes price inflation on consumable goods and services; so when MTA decided it had to raise fares to avert a financial disaster, some people were understandably ticked off. But what's fascinating are the threatening comments some people have made; saying things like "nobody is going to pay those ridiculous fares" or "I'll start driving instead". Most are surely empty threats, but they demonstrate a fundamental misunderstanding of the tradeoffs between transportation options in a city like New York.

Sure, traditional economic theory suggests that buyers switch freely between complementary goods. If the price of Pepsi goes up, more people buy Coke. If the price of ham goes down, fewer people eat turkey. The difference is that there isn't really a fundamental shortage of soft drinks or lunch meets. There is, on the other hand, a major shortage of drivable pavement and parking spaces in New York City.

The American Community Survey reports that more than 1.9 million New Yorkers commute by public transit and a little more than 1 million commute by car (most drive alone, but some in carpools). Imagine if 10% of New Yorkers, angry about MTA fare hikes, started driving. The result would be about 190,000 additional car commuters. And I hear traffic in New York City is already pretty awful...

These threatening comments illustrate an elementary error that people make in every day game theory: they consider what's in their best interest while ignoring what everyone else might do. See, if a monthly subway pass goes up by $20, then I might personally be better off driving in a car... but only if nobody else comes to that same conclusion.

This is exactly the reason why both drivers and transit commuters in a city like New York should care more about the city's transit infrastructure. Drivers might think they are unaffected by transit cuts or fare hikes, until some former subway riders start jamming up the streets and highways. Transit riders might think that putting their car on the road won't do anything to increase congestion, but it does. In fact, if these tradeoffs were better understood, maybe we could accomplish things like tolling bridges and highways and implementing Michael Bloomberg's congestion pricing scheme. But that's probably still pretty far away.

If you only follow me here at Extraordinary Observations, you may be missing out on some of the other fun stuff I have been up to recently. We're now almost two months into Newsweek's Generation O project. Check out my posts here and subscribe to the RSS feed if you haven't already! Ohio locals may be interested in my first post over at Rust Wire about a new study that shows Ohio's college graduates have little interest in sticking around in the state.

Continuing with my tour of urban places that began last month in Las Vegas, I'm planning to visit Philadelphia, Washington DC, New York City and possibly one more city (any suggestions?) by the end of summer (ie. Labor Day). Of course, I will have trip reports to share upon my return.