and on top of everything else you get a sticker, everyone loves stickers

The other day I tweeted that “‘voting is irrational’ is the worst argument smart and reasonable people routinely make” after seeing smart and reasonable Matt Dickinson reference it as an aside when making what I think is a different-but-also-bad argument about why people in certain positions should abstain from voting, and got at least one request to flesh out why I think the argument is in fact so bad. Rather than cite to all the people who make the argument (though also not to single out Matt per se, his was just the reference that led to the tweet that led to this post), since I think it’s fairly well-established both in terms of its contours (that the odds of any individual vote affecting the outcome of an election is tiny) and that it’s widely made, but here in only some order is a laundry list of all the reasons this argument is bad and I hate it.

Derek Parfit’s “Harmless Torturers” argument – In “Reasons and Persons” Parfit creates a thought experiment summarized as succinctly as possible as so – if you have 1,000 people each controlling a single machine that each tortures a single person (say with electric shocks), it is clear that electing to activate the machine is wrong. But if each of those persons controls 1/1000th of a single machine that distributes 1/1000th of that torturous shock to each of 1,000 people connected to the single machine, would we still consider the choice of each to flip their switch wrong even if the marginal torture being distributed is at most barely perceptible? The intuitive, and also correct, answer, is “yes” and this is a very potent argument in the context of many cultural problems as well as climate change. It is similarly potent here as well; so long as we accept that collectively high participation in voting is good, it follows that each individual decision to vote is good; and in the absence of substantial countervailing forces, doing good is generally rational.

Anthropology and sociology hugely militate against the narrow economic view of adjudicating individual actions on a narrow benefit-cost of marginal action – Human societies are vastly complex networks bound together as much as or more by norms and custom than formal rules, and rather than seeing collective action as the sum of individual action it often makes more sense to see individual action as a note in a multidimensional matrix of complex social, economic, familial, and communal networks. This, BTW, is why the whole quest to “microfound” macroeconomics is fundamentally dumb but that’s another blog post.

There’s no reason not to vote – the costs to voting are extremely small, and declining as time in transit or in queue can be spent in communication with others or playing Hoplite which I just discovered and is super fun. It can obviously be irrational to do the ethical thing in a context where that leaves one likely to be harmed or exploited; this is related, in some ways, to the theoretical finding that won George Akerlof a Nobel Prize, as well as just being obvious. If nobody’s paying taxes don’t pay taxes, etc. But in a general equilibrium that is either positive or near a tipping point, especially given the prior point, if the costs of doing the socially beneficial and ethically sound thing are low or negligible, it is absolutely rational to do it. Plus, the time-money equivalence isn’t purely scalar on the margins, most people distribute their time in lumpy ways that don’t make marginal time-use decisions, especially on the scale of “an hour every two years” costly in a way that can be easily quantified.

Voting is fun – I like voting! It is rational to do things one likes to do!

Voting is empowering on an individual and communal level – making one’s voice heard in the formal political process has a two-way legitimation effect, legitimizing one’s own equal right to be a part of the civic process as well as legitimating that civic process as the correct channel for making one’s voice heard. It is rational to pursue this, which also leads into the next argument…

This argument mitigates against all public and civic participation – if voting is irrational, so is signing a petition, joining a protest, donating to a candidate, or even voicing one’s opinion. Unless one takes actions so drastic that purely in isolation they affect political outcomes – and, without getting too much into it, one can clearly extrapolate that most such actions are violent or otherwise bad – this argument mitigates in favor of total non-participation in anything civic or even communal.

This argument is particular to first-past-the-post elections on a very large scale – in a proportional voting system, or in elections for mayor, city council, or even Congress it can be clear that much smaller numbers of votes can affect substantial political outcomes. A ~36,000-28,000 vote in suburban Virginia deposed the second-most-powerful House Republican. But if you’re going to vote for everything, the marginal cost of voting for everything on the ballot is so vanishingly small that even the narrow, economic argument against voting is thin as straw.

Making this argument is immoral from a consequentialist standpoint – even if you think individual voting decisions are irrational, so long as you think high participation in voting generally is good then by making this argument you are helping to damage that. Maybe you think that making the argument is damaging it so slightly it barely matters, but then why are you bothering to make the argument at all? It is clearly irrational to do so since it’s not having any impact.

Making this argument is immoral from an anthropological standpoint – of course, I do think it has an impact, especially as more people make it, and I think it corrodes the necessary normative construct of individual obligation to the collective and civic well-being that makes our society and similar societies function well. Promoting cynicism and non-participating is bad.

Making this argument makes you look like a smug, dislikeable cynic – this is self-explanatory. Seriously, doing this just makes you look like a narrow-minded pedant who wants to prove their intellectual superiority by making an obnoxious debator’s point at the expense of, like, you know, democracy, and people will dislike you for doing it.

And all that without referencing Florida c. 2000, and without referencing the many counter-arguments for voting that play somewhat more on the turf of the original argument for irrationality; for those see Andrew Gelman who is good on this issue (paper here, posts here here and here).

All that being said we should vote less, for less, and on the weekend, and maybe it should even be mandatory, but that’s a different story.

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Since none of you seem to be on Ello, and since why should BI get all the fun, I’m reposting this here.

The Economy In 1000* Emoji

The Key Facts

Each emoji represents one one-thousandth (0.1%) of GDP. All data from 2013 BEA NIPA tables, with the exception of estimates of federal non-defense and state & local consumption expenditure breakdowns, derived from CBPP, Mercatus, and Tax Policy Center estimates.

*Gross emojis actually total 1,334 because of imports and net foreign travel; net emoji equal 1,003 due to rounding.

Without further ado, here’s your economy:

PRIVATE CONSUMPTION:

:red_car::red_car::red_car::red_car::red_car::red_car::red_car::red_car::red_car::red_car::red_car::red_car::red_car::red_car::red_car::blue_car::blue_car::blue_car::blue_car::blue_car::blue_car::nut_and_bolt::nut_and_bolt::nut_and_bolt::nut_and_bolt::door::door::door::door::door::door::door::door::door::door::tv::tv::tv::fork_and_knife::fork_and_knife::fork_and_knife::hammer::computer::computer::computer::computer::computer::computer::computer::computer::computer::computer::computer::computer::computer::computer::computer::computer::computer::computer::computer::computer::football::football::football::football::golf::golf::golf::books::books::watch::watch::watch::watch::watch::wheelchair::wheelchair::wheelchair::wheelchair::book::briefcase::briefcase::phone::corn::corn::corn::corn::corn::corn::corn::corn::corn::corn::corn::corn::corn::corn::corn::corn::corn::corn::corn::corn::corn::corn::corn::corn::corn::corn::corn::corn::corn::corn::corn::corn::corn::corn::corn::corn::corn::corn::corn::corn::corn::corn::corn::corn::corn::beer::beer::beer::beer::beer::beer::beer::dress::dress::dress::dress::dress::dress::dress::dress::dress::dress::necktie::necktie::necktie::necktie::necktie::necktie::baby_bottle::tshirt::tshirt::tshirt::tshirt::fuelpump::fuelpump::fuelpump::fuelpump::fuelpump::fuelpump::fuelpump::fuelpump::fuelpump::fuelpump::fuelpump::fuelpump::fuelpump::fuelpump::fuelpump::fuelpump::fuelpump::fuelpump::fuelpump::fuelpump::fuelpump::fuelpump::fuelpump::fuelpump::fuelpump::pill::pill::pill::pill::pill::pill::pill::pill::pill::pill::pill::pill::pill::pill::pill::pill::pill::pill::pill::pill::pill::pill::pill::game_die::game_die::game_die::game_die::game_die::game_die::game_die::game_die::game_die::package::package::package::package::package::package::package::eyeglasses::eyeglasses::eyeglasses::eyeglasses::eyeglasses::eyeglasses::eyeglasses::smoking::smoking::smoking::smoking::smoking::smoking::newspaper::newspaper::newspaper::newspaper::newspaper::house::house::house::house::house::house::house::house::house::house::house::house::house::house::house::house::house::house::house::house::house::house::house::house::house::house::house::house_with_garden::house_with_garden::house_with_garden::house_with_garden::house_with_garden::house_with_garden::house_with_garden::house_with_garden::house_with_garden::house_with_garden::house_with_garden::house_with_garden::house_with_garden::house_with_garden::house_with_garden::house_with_garden::house_with_garden::house_with_garden::house_with_garden::house_with_garden::house_with_garden::house_with_garden::house_with_garden::house_with_garden::house_with_garden::house_with_garden::house_with_garden::house_with_garden::house_with_garden::house_with_garden::house_with_garden::house_with_garden::house_with_garden::house_with_garden::house_with_garden::house_with_garden::house_with_garden::house_with_garden::house_with_garden::house_with_garden::house_with_garden::house_with_garden::house_with_garden::house_with_garden::house_with_garden::house_with_garden::house_with_garden::house_with_garden::house_with_garden::house_with_garden::house_with_garden::house_with_garden::house_with_garden::house_with_garden::house_with_garden::house_with_garden::house_with_garden::house_with_garden::house_with_garden::house_with_garden::house_with_garden::house_with_garden::house_with_garden::house_with_garden::house_with_garden::house_with_garden::house_with_garden::house_with_garden::house_with_garden::house_with_garden::house_with_garden::house_with_garden::house_with_garden::house_with_garden::house_with_garden::house_with_garden::house_with_garden::house_with_garden::potable_water::potable_water::potable_water::potable_water::potable_water::electric_plug::electric_plug::electric_plug::electric_plug::electric_plug::electric_plug::electric_plug::electric_plug::electric_plug::electric_plug::electric_plug::electric_plug::electric_plug::ambulance::ambulance::ambulance::ambulance::ambulance::ambulance::ambulance::ambulance::ambulance::ambulance::ambulance::ambulance::ambulance::ambulance::ambulance::ambulance::ambulance::ambulance::ambulance::ambulance::ambulance::ambulance::ambulance::ambulance::ambulance::ambulance::ambulance::ambulance::ambulance::ambulance::ambulance::ambulance::ambulance::ambulance::ambulance::ambulance::ambulance::ambulance::ambulance::ambulance::ambulance::ambulance::ambulance::ambulance::ambulance::ambulance::ambulance::ambulance::ambulance::ambulance::ambulance::ambulance::hospital::hospital::hospital::hospital::hospital::hospital::hospital::hospital::hospital::hospital::hospital::hospital::hospital::hospital::hospital::hospital::hospital::hospital::hospital::hospital::hospital::hospital::hospital::hospital::hospital::hospital::hospital::hospital::hospital::hospital::hospital::hospital::hospital::hospital::hospital::hospital::hospital::hospital::hospital::hospital::hospital::hospital::hospital::hospital::hospital::hospital::hospital::hospital::hospital::hospital::hospital::hospital::hospital::hospital::hospital::hospital::hospital::hospital::hospital::hospital::hospital::hospital::hospital::taxi::taxi::taxi::taxi::taxi::taxi::taxi::taxi::taxi::taxi::taxi::taxi::taxi::taxi::bullettrain_side::bullettrain_side::bullettrain_side::airplane::airplane::airplane::cinema::cinema::cinema::cinema::cinema::cinema::cinema::cinema::cinema::cinema::spades::spades::spades::spades::spades::spades::spades::roller_coaster::roller_coaster::roller_coaster::wine_glass::wine_glass::wine_glass::wine_glass::wine_glass::wine_glass::wine_glass::wine_glass::wine_glass::wine_glass::wine_glass::wine_glass::wine_glass::wine_glass::wine_glass::wine_glass::wine_glass::wine_glass::wine_glass::wine_glass::wine_glass::wine_glass::wine_glass::wine_glass::wine_glass::wine_glass::wine_glass::wine_glass::wine_glass::wine_glass::wine_glass::wine_glass::wine_glass::wine_glass::wine_glass::wine_glass::wine_glass::wine_glass::wine_glass::wine_glass::wine_glass::wine_glass::wine_glass::dollar::dollar::dollar::dollar::dollar::dollar::dollar::dollar::dollar::dollar::dollar::dollar::dollar::dollar::dollar::dollar::dollar::dollar::dollar::dollar::dollar::dollar::dollar::dollar::dollar::dollar::dollar::dollar::dollar::dollar::dollar::dollar::dollar::dollar::dollar::dollar::dollar::dollar::dollar::dollar::dollar::dollar::dollar::dollar::dollar::dollar::dollar::dollar::dollar::loudspeaker::loudspeaker::loudspeaker::loudspeaker::loudspeaker::loudspeaker::loudspeaker::loudspeaker::loudspeaker::loudspeaker::loudspeaker::loudspeaker::loudspeaker::loudspeaker::loudspeaker::loudspeaker::school::school::school::school::school::school::school::school::school::school::school::school::school::school::school::school::heavy_dollar_sign::heavy_dollar_sign::heavy_dollar_sign::heavy_dollar_sign::heavy_dollar_sign::heavy_dollar_sign::heavy_dollar_sign::heavy_dollar_sign::heavy_dollar_sign::heavy_dollar_sign::mans_shoe::mans_shoe::mans_shoe::mans_shoe::mans_shoe::mans_shoe::mans_shoe::mans_shoe::church::church::church::church::church::church::church::church::church::wrench::wrench::wrench::wrench::angel::angel::angel::angel::angel::angel::angel::angel::angel::angel::angel::angel::angel::angel::angel::angel::angel::angel:

:heavy_minus_sign::passport_control::passport_control::passport_control:

PRIVATE INVESTMENT

:office::office::office::office::office::office::office::office::office::office::office::office::office::office::office::office::office::office::office::office::office::office::office::office::office::office::office::satellite::satellite::satellite::satellite::satellite::satellite::satellite::satellite::satellite::satellite::satellite::satellite::satellite::satellite::satellite::satellite::satellite::satellite::satellite::satellite::satellite::satellite::satellite::satellite::satellite::satellite::satellite::satellite::satellite::satellite::satellite::satellite::satellite::satellite::satellite::satellite::satellite::satellite::satellite::satellite::satellite::satellite::satellite::satellite::satellite::satellite::satellite::satellite::satellite::satellite::satellite::satellite::satellite::satellite::satellite::satellite::satellite::copyright::copyright::copyright::copyright::copyright::copyright::copyright::copyright::copyright::copyright::copyright::copyright::copyright::copyright::copyright::copyright::copyright::copyright::copyright::copyright::copyright::copyright::copyright::copyright::copyright::copyright::copyright::copyright::copyright::copyright::copyright::copyright::copyright::copyright::copyright::copyright::copyright::copyright::copyright::house_with_garden::house_with_garden::house_with_garden::house_with_garden::house_with_garden::house_with_garden::house_with_garden::house_with_garden::house_with_garden::house_with_garden::house_with_garden::house_with_garden::house_with_garden::house_with_garden::house_with_garden::house_with_garden::house_with_garden::house_with_garden::house_with_garden::house_with_garden::house_with_garden::house_with_garden::house_with_garden::house_with_garden::house_with_garden::house_with_garden::house_with_garden::house_with_garden::house_with_garden::house_with_garden::house_with_garden::package::package::package::package:

GOVERNMENT

FEDERAL DEFENSE

:bomb::bomb::bomb::bomb::bomb::bomb::bomb::bomb::bomb::bomb::bomb::bomb::bomb::bomb::bomb::bomb::bomb::bomb::bomb::bomb::bomb::bomb::bomb::bomb::bomb::bomb::bomb::bomb::bomb::bomb::bomb::bomb::bomb::bomb::bomb::bomb::bomb::satellite::satellite::satellite::satellite::satellite::copyright::copyright::copyright::copyright:

FEDERAL NONDEFENSE

:bullettrain_side::bullettrain_side::bullettrain_side::bullettrain_side::bullettrain_side::bullettrain_side::school::school::copyright::copyright::copyright::copyright::airplane::airplane::post_office::post_office::post_office::post_office::post_office::post_office::office::satellite::copyright::copyright::copyright::copyright::copyright:

STATE AND LOCAL

:school::school::school::school::school::school::school::school::school::school::school::school::school::school::school::school::school::school::school::school::school::school::school::school::school::school::school::school::school::school::school::school::school::school::school::school::school::school::school::school::school::school::school::bullettrain_side::bullettrain_side::bullettrain_side::bullettrain_side::bullettrain_side::bullettrain_side::bullettrain_side::bullettrain_side::bullettrain_side::cop::cop::cop::cop::cop::cop::cop::cop::cop::cop::cop::cop::cop::cop::cop::cop::cop::cop::cop::cop::cop::cop::cop::cop::cop::cop::cop::cop::ambulance::ambulance::ambulance::ambulance::ambulance::ambulance::ambulance::ambulance::ambulance::cinema::cinema::cinema::cinema::office::office::office::office::office::office::office::office::office::office::office::office::office::office::office::satellite::satellite::copyright::copyright:

NET EXPORTS

EXPORTS

:corn::corn::corn::corn::corn::corn::corn::corn::factory::factory::factory::factory::factory::factory::factory::factory::factory::factory::factory::factory::factory::factory::factory::factory::factory::factory::factory::factory::factory::factory::factory::factory::factory::factory::factory::factory::factory::factory::factory::factory::factory::factory::factory::computer::computer::computer::euro::euro::euro::euro::euro::euro::euro::euro::euro::euro::euro::euro::euro::euro::euro::euro::euro::euro::euro::euro::euro::euro::euro::euro::euro::euro::euro::euro::red_car::red_car::red_car::red_car::red_car::red_car::red_car::red_car::red_car::iphone::iphone::iphone::iphone::iphone::iphone::iphone::iphone::iphone::iphone::iphone::bullettrain_side::bullettrain_side::bullettrain_side::bullettrain_side::bullettrain_side::airplane::airplane::airplane::airplane::airplane::airplane::airplane::airplane::airplane::airplane::copyright::copyright::copyright::copyright::copyright::copyright::copyright::copyright::heavy_dollar_sign::heavy_dollar_sign::heavy_dollar_sign::heavy_dollar_sign::heavy_dollar_sign::heavy_dollar_sign::heavy_dollar_sign::heavy_dollar_sign::heavy_dollar_sign::heavy_dollar_sign::heavy_dollar_sign::heavy_dollar_sign::heavy_dollar_sign::heavy_dollar_sign::heavy_dollar_sign::heavy_dollar_sign::us:

IMPORTS

:heavy_minus_sign::corn::corn::corn::corn::corn::corn::corn::nut_and_bolt::nut_and_bolt::nut_and_bolt::nut_and_bolt::nut_and_bolt::nut_and_bolt::nut_and_bolt::nut_and_bolt::nut_and_bolt::nut_and_bolt::nut_and_bolt::nut_and_bolt::nut_and_bolt::nut_and_bolt::nut_and_bolt::nut_and_bolt::nut_and_bolt::fuelpump::fuelpump::fuelpump::fuelpump::fuelpump::fuelpump::fuelpump::fuelpump::fuelpump::fuelpump::fuelpump::fuelpump::fuelpump::fuelpump::fuelpump::fuelpump::fuelpump::fuelpump::fuelpump::fuelpump::fuelpump::fuelpump::fuelpump::rocket::rocket::rocket::computer::computer::computer::computer::computer::computer::computer::yen::yen::yen::yen::yen::yen::yen::yen::yen::yen::yen::yen::yen::yen::yen::yen::yen::yen::yen::yen::yen::yen::yen::yen::yen::yen::yen::yen::yen::red_car::red_car::red_car::red_car::red_car::red_car::red_car::red_car::red_car::red_car::red_car::red_car::red_car::red_car::red_car::red_car::red_car::red_car::tractor::tractor::tractor::tractor::tractor::tractor::tractor::tractor::tractor::tractor::tractor::tractor::tractor::tractor::tractor::tractor::tractor::handbag::handbag::handbag::handbag::handbag::handbag::handbag::handbag::handbag::handbag::handbag::handbag::handbag::handbag::handbag::bullettrain_side::bullettrain_side::bullettrain_side::bullettrain_side::bullettrain_side::airplane::airplane::airplane::airplane::airplane::airplane::copyright::copyright::heavy_dollar_sign::heavy_dollar_sign::heavy_dollar_sign::heavy_dollar_sign::heavy_dollar_sign::heavy_dollar_sign::heavy_dollar_sign::heavy_dollar_sign::heavy_dollar_sign::heavy_dollar_sign::heavy_dollar_sign::heavy_dollar_sign::jp::jp:

LEGEND (similar categories merged):

:red_car: New Cars
:blue_car: Used Cars
:nut_and_bolt: Car Parts
:door: Furniture
:tv: Appliances
:fork_and_knife: Foodware
:hammer: Tools
:computer: Information Equipment
:football: Sports Equipment
:golf: Sports and Recreation
:books: Books
:watch: Watches and Jewelry
:wheelchair: Therapeutic Equipment
:book: Educational Books
:briefcase: Luggage
:phone: Phones and Faxes
:corn: Food
:beer: Alcohol
:dress: Women’s Clothing
:necktie: Men’s Clothing
:baby_bottle: Children’s Clothing
:tshirt: Other Clothing
:fuelpump: Gas and Fuel
:pill: Pharmaceuticals and Medical Equipment
:game_die: Recreational Items
:package: Supplies and Inventories
:eyeglasses: Personal Care
:smoking: Tobacco
:newspaper: Newspapers, Magazines, etc
:house: Rental Housing
:house_with_garden: Owner Housing and Housing Construction
:potable_water: Water
:electric_plug: Electricity
:ambulance: Medical Services
:hospital: Hospitals
:taxi: Vehicle Services
:bullettrain_side: Transportation
:airplane: Travel
:cinema: Culture
:spades: Gambling
:roller_coaster: Other Recreation
:wine_glass: Restaurants
:dollar: Financial Services
:loudspeaker: Communications
:school: Education
:heavy_dollar_sign: Professional Services
:mans_shoe: Clothing Services
:church: Religious Activities
:wrench: Home Maintenance
:passport_control: Net Foreign Travel
:angel: Nonprofits
:factory: Industrial Supplies
:rocket: Aircraft
:euro: Other Exports
:iphone: Consumer Goods
:copyright: Intellectual Property
:us: Governance Exports
:yen: Other Imports
:tractor: Durable Goods
:handbag: Nondurable Goods
:jp: Governance Imports
:bomb: Defense
:office: Structures
:satellite: Equipment
:cop: Police
:post_office: Other Federal Services
:heavy_minus_sign: subtraction from the total

This tweet from Joe Weisenthal:

Reminds me of a thought I had the other day.

I had this thought when driving from DC to northern Florida, which Mrs. Rooted and I do in a single day when we visit the in-laws, partially because it means we can bring this guy:

i'm sunning

But also because it’s cheaper. And when you’re chugging along 95’s least-compelling stretch for hours on end you think a lot, especially about cars, and especially about how much longer we have to wait until our promised jetpacks arrive. A good amount of attention has been focused on the long-term consequences of self-driving cars for intra-metropolitan transportation, but less has been focused on inter-metropolitan travel. But this is at least equally fertile ground for a major shake-up.

Speed limits are fairly high along southern 95, mostly 65 or 70 mph. It gets even higher out west where things are flat and straight, and there’s a patch of Texas where you can legally go 85 mph. But that’s still pretty slow – less than a fifth the speed of an airplane. But self-driving cars will likely be able to (barring congestion or poor conditions) go much, much, faster. And that can make a huge difference.

When we drive to my in-laws, we drive 774 miles, mostly along I-95, which at an average speed of 70 mph plus just an hour for various breaks is still a 12-hour door-to-door journey. When we fly, the flight is only 2.5 hours to the nearest large airports (Orlando or Jacksonville – they’re much closer to Daytona but flights to that airport are fewer and often more expensive in our experience). But the trip, as Joe points out, is actually a lot longer. If we want to get to the airport with at least 45 minutes to spare before takeoff, we have to leave at least that long before the flight, and that’s if we’re leaving from the closest airport to our home (DCA). Once we land, it takes roughly half-an-hour before we’re in the car heading to our destination, and then it’s at least another hour before we arrive. Adding it all together, the trip is more like six hours, not two-and-a-half. And that’s assuming the plane leaves on time.

To go 774 miles in six hours you’d have to go 130 mph. That’s really fast. But in a world where cars are doing the driving along highways especially designed for that purpose, it’s totally plausible. And what that means is that once self-driving cars are universal they will demolish short-haul flights. So long as road capacity accommodates, flights under two hours in length will likely vanish, and flights under four hours will decline markedly. Shoot, at 200 mph, if no driver needed to be conscious you could leave DC at 8PM Eastern and sleep most of the way across the continent, arriving in San Francisco at 7AM Pacific. Even at 15 mpg and $5/gallon, that’s a < $1,000 trip, which if you’ve got more than two people in the car, is quite competitive; if you imagine that self-driving cars will be much more efficient than that, it’s a almost a no-brainer for personal travel.

This gets us back to the promise in the title of the post. If self-driving cars really do displace short- and even medium-haul domestic flights, a once-scarce resource becomes suddenly plentiful – airport capacity. Assuming energy scarcity is not a crippling obstacle (and if it is we have bigger problems), this should mean a much greater volume of international flights, especially flights across the ocean. If our cars can drive us from New York to New Orleans, then we have more planes, pilots, runways, and fuel to take us to New Delhi.

My new job is in a building with a revolving door, and spinning that thing around a few times a day will get you thinking. We already know that revolving doors have the potential to save a not-insignificant amount of energy through climate control efficiency. But I wanted to know the answer to a more ambitious question – if we made every door in the United States a revolving door, and attached a turbine to them, how much energy could we generate?

I’m not such a science whiz, but fortunately I had a little bit of help – the inestimable Randall Munroe had already tacked a similar question, and his calculations were a good guide to the information I needed to know.

Fortunately, the MIT study cited in both the above links had already done a decent chunk of work, calculating that an average revolving door requires, in foot-pounds, fourteen times the length of the door, which is also the radius of the circle which incloses it. Browsing this brochure, a decent estimate for the average diameter of a revolving door is 2700mm, and from there we can do a little simple math and deduce that on average it takes 0.023 watt hours to open a revolving door (and let’s assume the turbine can perfectly convert work to electricity for now).

Next, I had to guesstimate how many times Americans would enter or egress through revolving doors, assuming revolving doors were the only ways in and out of all buildings except single-family houses. Using some data from the BLS time use survey (augmented by NMHC data) I came up with a few coefficients using the venerable technique of “meh that seems rightish” and came up with a daily aggregate average of 5,221,919,613.23. This works out to about 21 spins per person per day, which seems more than close enough to estimate. Then you just need to do some multiplication and then attach a price to electricity (Randall used $0.15, but I’m going to go with a dime based on this EIA data). Once you’ve done that, you get a grand total of….$4,451,115.65.

If this sounds underwhelming, it is. Revolving doors start at $2,500, and therefore the Fermiest of estimates suggests that retrofitting every building in America with one might be a $20 billion job, meaning your ROI here is, generously, two-and-a-half basis points.

The reasons for this, fundamentally, is that it just doesn’t take very much work to push a revolving door relative to the energy needed to power modern society. A kilowatt hour is enough energy that, if you hit a golf ball with that much force at St. Andrews, you could sink a hole-in-one at Pebble Beach. Going through a revolving door only generates one fifty-thousandth or so of that much energy; but your average American house uses thirty times that much energy every day.

What does this all add up to? Our whole social, economic, and political order is built, on a very fundamental level, on massive production and consumption of energy beyond that humans and animals could supply directly with their body. Finding sources for that energy is hard, and even if you could capture all the adult humans in the United States exert, you’d probably only be generating at most $20 billion a year, which is still not even 10% of the energy residences alone consume annually. This, semi-coincidentally, is also why The Matrix was pretty dumb.

Anyway, to really meet our energy needs as we wonder whether fossil fuels will run out before or after we’ve trashed the planet beyond the point of no return, we need to turn to much vaster sources of energy. You know, like the sun.

Oh, and:

 

“The second overarching initial condition was that Brazil’s soils and climate were ideal for sugar cultivation, and thus form the sixteenth century onward it was one of the world’s major sugar producers. Sugar has a number of features that predisposed it to being grown on immense plantations with slave labor. If cut sugar cane is left unprocessed for more than 12 hours, the crop is lost to fermentation. Additionally, there are tremendous economies of scale in the milling of cane and the processing of the resulting cane juice into sugar; grinding mills and boilers left idle represent money lost. As a result, there has to be very careful coordination of the harvesting and processing of sugar. The most efficient organization of the production is for the processors to own the plantations where the cane is grown, so that cane can be cut and delivered to the mill at a pace dictated by the machines. That organization of production presents something of a problem from the point of view of managing a labor force: cutting cane with a machete in the tropical sun at a pace determined by immense grinding machines is not just backbreaking, it is soul destroying. The grim solution was to use slaves, organized into gangs, so that the pace of work could be maintained regardless of what happened to backs or souls.”

This is the dumbest post I have ever written. You have been warned.

 

I found that last bit…intriguing. Backing our currency with cat videos would, of course, be very difficult to work (backing a currency with something whose marginal cost of replication of zero is probably not a recipe for stability)…but what if we backed our currency with actual cats?

i can haz currency stability

The biggest question to answer is ‘how many cats would the government need to hold in reserve to make the standard work?’ So I went back to look at how much gold the government had when it had a gold standard, and then, in need of a denominator, indexed it as a ratio to national income (using Piketty & Zucman’s data).

look this all made sense at the time

 

 

Rather than over-analyze the data, I just took the average value of all the individual year values, came up with 1.98%, and multiplied that by national income today (just over $14.5 trillion) to estimate that the government would need to hold in reserve $288.7 billion in cats to maintain a cat standard.

This means we have a problem. The Humane Society estimates that there are 95.6 million owned cats in America, and that there are another 30-40 million stray or feral cats. That means an outside estimate of ~135 million cats in the United States. Which means even if the government eminently domained every living cat in America, that would still imply a valuation of over $2,000 per cat, which is an order of magnitude more than the current market price. This would, among other things, be highly disruptive to the cat market. It would also be hard to sustain, since rescue cats are largely sold by non-profits at the marginal cost of vaccinations, microchipping, etc.

So what the government needs to do is breed cats. Lots of cats.

MOAR MOAR MOAR

Assuming we’re not talking about a purebred standard, the kind of cats the government might be keeping in reserve would probably have a market value of around $100/each, which means we would need the government to hold, in reserve, twenty times as many cats as exists in the United States today – 2.7 billion cats. Firstly, that could take a little time – depending on how large a cat base the government started with (presumably they wouldn’t catnap every cat in America), as long as a decade. This is not the insurmountable obstacle, though.

Land is.

Cats, by nature, are kind of territorial.

all mine

One study, in fact, shows a leading cause of death for outdoor cats is…other cats. Meouch.

That same study showed that outdoor cats have quite a substantial home range – as large as 1351 acres, though the average is just 4.9 acres. Even applying that average across the board, to 2.7 billion cats that gets you to 20.7 billion square miles – over a third of all the land area on Earth.

So let’s assume substantial overlap – even if you assume 100 cats per home range, that still gets you to 200 million square miles, 5-6 times the size of the United States. To get all those cats into, say, Wyoming, you’d have a density of 27,602 cats/square mile – which is shockingly close to the human density, 27,779 people/square mile, of New York City.

Wyoming, in other words, would look like this:

everybody! everybody! everybody wants to be a cat!

And it turns out Wyoming land isn’t cheap –  if you apply  the $450/acre for ranch land quoted in this article, over $28 billion.

Of course, total land value in the United States is probably over $15 trillion at this point so we could just have a land standard. That would be a lot easier. A whole lot easier…

 

 

 

Than herding cats.

damn right i went there

 

Dylan Matthews brings our attention to this map from the Tax Foudation:

all about the variable purchasing power of a benjamin

Basically, they inverted the BEA’s Regional Price Parities and mapped it – cool!

It needs a bit of context, though. Specifically, there’s something very clearly driving this outcome. Fortunately for us, BEA subdivides the RPPs into Goods, Rents, and Other Services, and provides us with a good-enough guide to how it weights them that we can create a parallel “non-housing cost” index and see what happens. And what do you know?

histograms ftw

Once you exclude housing, the distribution of outcomes is much narrower and much more clustered around its central tendency. Or more bluntly – everywhere costs a lot more like everywhere else when you don’t consider housing.

Of course we should consider housing! It’s really important! But we should also be clear what expensive housing means – lots of people want to live somewhere. Often because wages are high. And guess what? If we graph the state rent index against state per capita income:

mo money mo housing demand

It becomes pretty clear that higher wages (or at least higher average incomes) are likely the reason housing prices are high.

So if you live in DC, you’re probably not paying that much more for most things than an Alabaman is; you’re just paying a premium to live in a high-wage area that can’t – or won’t – build enough housing to keep up with the demand to live somewhere wages are high.

Tyler Cowen posted this the other day:

A typical cow in the European Union [in 2002] receives a government subsidy of $2.20 a day.

And if your next thought isn’t “of course he’s going to reconstruct this figure” then you haven’t read this blog before, have you?

Turns out, though, that doing so was surprisingly challenging, in part because it meant recreating all the assumptions behind that figure and in part because European agricultural policy is an epic rabbit hole (cow hole?). But, after some slogging and some tweaking, I was able to recreate the methodology that produced the original $2.20/day (and subsequent $2.60/day) figure, but it came with a wallop of a surprise:

the cow jumped over the moon but didn't exactly stick the landing

I didn’t adjust the currency because that’s it’s own field of cow holes, but yes, those 2002 and 2003 numbers basically check out. But look what’s happened since then!

Before you get too excited about the EU attempting a radical break with subsidizing agriculture, it turns out that this is a consequence of the ‘decoupling’ – the shift in EU ag policy from subsidizing specific commodities to subsidizing practices and benchmarks that cut across commodities, which has lead the OECD to basically throw up its hands in terms of trying to derive consistent commodity series. Don’t worry, though, I used a rough previous average of milk as a share of total ag subsidies to impute the recent numbers:

ma he's imputing cows!

And given the wealth of data and anecdotal evidence that dairy farmers in Europe are still getting plenty of government (don’t say cheese don’t say cheese)…tofu?…anyway, there’s no reason to think European cows are getting too shafted, even though it does seem like 2002-03 was perhaps peak season for cow bucks.

But this doesn’t get into the larger issue with this number – that the vast majority of the total subsidy to dairy as computed by the OECD doesn’t come in direct government-to-producer payments but in implicit support, for example through tariffs, whose impact is much harder to quantify – they impute it through trying to measure negative consumer surplus. As Jacques Berthelot wrote at the time, their methods are far from bulletproof. Either way, the figure gives the at least somewhat-misleading impression that the $2.20/cow/day is received entirely in the form of cash transfers, which I suppose is misleading to the extent that you draw a distinction between the two.

Anyway, in conclusion – we no longer know how much subsidy European cows get, and maybe we didn’t really know at the time.

A final thought – a dairy cow in Great Britain will put you back, roughly on average, $2,500 (or just under 1500 GBP, or just over 1,850 EUR). So you could always try this yourself.

My post last week on the case for homeownership as an investment has received some good feedback (the e-word is hereby banished from this blog), a good chunk of which has been constructively critical. While I responded to specifics in comments, I also wanted to supplement the post by fleshing out the remainder of the argument and adding a couple of points.

It has been pointed out to me that there are certain costs – mostly taxes, insurance, and maintenance – that weren’t included in my spreadsheet and only implicitly in my analysis. This is – for the most part – true! I did handwave away depreciation, as much for the sake of simplicity as anything, but I only touched on the other two to the extent that they’re wrapped up into the rent counterfactual. Let’s delve into that some more.

Rent – the price of shelter to non-owners – is in the simplest analysis driven by the same things that drive all markets prices: supply and demand. That means rents aren’t directly responsive to the costs of housing, but those costs do impact the supply curve. If the costs of creating and renting new housing can’t be justified by rents, then supply will not rise even if demand does, driving up prices until they are so justified. Therefore, in general we should expect the costs of renting shelter to be similar (though not equivalent) to those incurred by the owner of the same. In fact, I bet if you play around with The Upshot’s ‘Buy vs. Rent’ calculator, you’ll find that housing and rental costs are very similar.

This brings me to my next point; while people have pointed out what costs I didn’t include, fewer have mentioned the benefit I didn’t include in my analysis, even though that benefit is much vaster. I focused solely on the capital gains returns of buying a house to demonstrate the power of leverage, but the huge share of the returns to a house are the rents you receive as an owner. This is central to any complete case in favor of homeownership. It is further worth noting that these imputed rents are, in fact, an enormous share of our economy.

a vampire weekend song entitled "david ricardo"

Net imputed rents, as I pointed out in my Piketty thinkpiece which seriously you must have read this thing by now also tend to be fairly stable, returning between 4-6% of the house’s price over time.

seek those rents seek them hard 

This chart actually understates the stability of imputed rents (as the former chart makes clear) since most of that volatility is driven by volatility in the denominator. For context, here’s the Case-Shiller index, since basically forever (with bonus real interest rate series):

 oh hai the aughties

While volatility has more recently increased (consider that my application for the Understatement of the Year Award), note that houses, at the very worst, tend to be inflation proof (the Case-Shiller is a real, not nominal, index) – an asset whose nominal price grows alongside inflation while consistently returning 4-6% annual net returns is, hey, not too bad, and if you can use tax-privileged leverage to buy it, not too bad at all. Especially since we’re going to pay a bundle for housing no matter what we do:

 what would a cake chart look like

…using housing as a vehicle for savings makes an additional sense.

That leads me to an additional point on volatility; here’s Shiller’s stock price index, also since basically forever:

 oh hai the 20s oh and the 90s hello

That looks a lot more volatile than house prices, huh? Which brings us to a key point – as asset price volatility increases, so does the importance of investment timing. This, as Neil Irwin recently noted, can make long-term averages of returns misleading.

seriously though fuck umberto nobody likes that guy anyway

While his examples are obviously stylized, they clearly-enough make the point that otherwise-identical savings behavior in a volatile market can achieve vastly different outcomes depending on the timing of returns even holding long-term average returns constant. Therefore, the relative stability of housing returns – prices + rents – helps savers reduce long term risks.

I want to conclude, though, by taking a major step back and examining the whole purpose of this exercise. When we’re talking about savings from a consumer perspective (not from an investment perspective) what we’re talking about is retirement; and when we’re talking about retirement, we’re always talking about the same somewhat-odd phenomenon. When a person retires, they cease all economic production through labor, yet continue to demand a share of the economic output of their society. We tend to view these claims as just and deserved because they are made by the elderly, who we feel have earned it/are unable to work/are generally venerable (as opposed to similar claims from the non-elderly poor, which we treat very differently) but that doesn’t change the underlying structural nature of the phenomenon, in which we are trying to ensure that a substantial portion of the adult population is consuming an broadly-equally-substantial portion of present economic output while providing no inputs.

Debates about savings and retirement, therefore, are all about how to structure this phenomenon – specifically, what network of programs, policies, mechanisms, incentives, and behaviors we want to establish to justify to the working and capitalists that a portion of their labor and capital outputs be directed to the non-working old, which we often do by creating mechanisms that somehow tether those portions of redistributed present income to guarantees of future income. All governments in wealth nations do this, and the ways in which they vary are influenced heavily by politics, ideology, and other socioeconomic factors. In the United States, our prevalent ideology around a certain kind economic freedom means we tend to be less generous in direct public redistribution and instead attempt to subsidize private savings through the tax code and public insurance – ergo, 401(k)s, the home mortgage interest deduction, and the Pension Benefit Guaranty Corporation. Indeed, the increasing prevalence of that ideological strain is driving defined benefit plans into extinctions in favor of defined contribution plans.

good thing we don't have unions anymore

This leads us to many debates about the best savings vehicles for middle class Americans, yet those debates are to a decent extent a red herring – the vast majority of retirees receive the majority of their retirement income from Social Security, and for many, it’s all the income they have – though to be consistent, I’m nearly certain the figures in the chart below don’t include imputed rents, though I could be wrong, and this is important because 80% of seniors are homeowners:

society secured 

This is very good evidence for the proposition that a vastly disproportionate share of the private-savings-for-retirement subsidy network flows to those who need it least. And it suggests that questions like “houses v. stocks” are, for many Americans, mostly a red herring – if we want to put more money in the hands of retirees, we should simply make Social Security more generous – or, in a better world, maintain it at its current level of generosity while implementing a Universal Basic Income.

stewie "david ricardo" griffin

Linking to Dylan Matthew’s generally-excellent piece on the correct way to manage one’s personal finances, Matt Yglesias says “stocks are on average a much better long-term investment than houses.”

This, of course, is an increasingly common view in the “internet wonk community” (one I consider myself an member of), distinct from the related and equally-prevalent view that ‘homeownership should be much less subsidized than it it now.’

This is also a view I take issue with, which you’d already know if you read my big Piketty #thinkpiece – you read my big Piketty #thinkpiece, right? right? – and one that I think needs a little elucidating and defending in detail.

There are three basic reasons that buying a house is a vastly better investment than current wonkpinion suggests. The first is that making large leveraged investments can pay off hugely even if the underlying growth rate of the purchased asset is slow. Let’s demonstrate.* Let’s take an average American buying an average house in an average way – $200,000 purchase price, 20% down, 4% closing costs, 5% interest rate. Now let’s say the value of that house grows reeeeeeeally slowly – just 0.3%/year, which just so happens to be the compounded annual growth rate of the Case-Shiller index since 1947.

If our average American sells their house after 10 years, their initial $48,000 equity investment will become $67,691.08 – which means their equity grew at a CAGR of 3.5%! If they sell after 15 years, they’ll net $92,209.57, which is a CAGR of 4.45%. Hey, that’s a lot higher than the 0.3% growth rate of the house’s price itself, isn’t it?

It sure is! The amazing power of leveraged investments is that you can turn a little bit of equity into a large return, as Matt Yglesias notes concisely here. Here, in fact, is a nice little graph demonstrating the implied return rate of selling your house after making regular mortgage payments for a given number of years, given the interest rate paid, assuming that meager 0.3% growth rate:

n33ds m0Ar l3vr1j

After 13 years, you’ll get a 3% return even at a very high interest rate; at 19 years, you’ll get a 4% return. In fact, you can assume zero growth and still get a substantial return on your initial investment – as long as you don’t count the regular payments on the debt.

Hey, what about the regular payments on the debt?

Good question! This brings us to my next two points. Because if leveraged investments are so awesome, why don’t we empower (and perhaps subsidize) average people to make large leveraged investments in stocks, which have a much larger underlying growth rate? Beyond all the other problems with that idea (not that nobody has pitched it), the thing about a house is that it has an unusual counterfactual. If you buy stocks with leverage, in theory the payments on the debt should come out of your savings, creating a counterfactual of simply saving and investing that money. But the counterfactual to owning is renting. This creates some curious conditions that lead to my next two points in favor of buying a house – inflation protection and subsidies.

There is obviously some connection between the purchase price of a house (and therefore the amortized monthly payment on the mortgage) and the rent it could fetch – regardless of where you fall on the capital controversy that dare not speak its name, there must be some fundamental link between the price of an asset and its expected returns. However, a mortgage is detached from the imputed rent (the flow of sheltering services) a house delivers, and therefore is nominally frozen in a way that rents are not. So therefore even if a mortgage today is substantially more expensive than the rent payment on an equivalent housing unit, in thirty years even very low inflation will change that drastically. Just 2% average annual inflation entails an 80% increase in the price level over three decades, meaning the annual mortgage payment declines by nearly half over that time. Rent, in the meantime, keeps going up (except in rare cases which can entail its own problems), at least as fast as inflation. Therefore even a mortgage whose monthly payment is more expensive than a rent payment today will be much cheaper than renting in a few years.

Aha, you might say, but there is a problem with this – the magic of compound interest means that the difference-in-monthly-payment savings accrued today by the renter will be much more valuable in retirement than the parallel savings accrued years from now by the owner. This is true! But that’s where the subsidies kick in. Our primary national subsidy for homeownership is to allow mortgage-payers to deduct the interest portion of their payments from their income – and the amortization structure of mortgages means the share of payments comprised of interest are highest right when the mortgage begins, and declines until the loan expires:

interest on your interest

This benefit comes when “housing” costs – really, housing-purchase-debt costs – are at their highest, also because earlier in life is when incomes are their lowest. It is difficult – very difficult – to defend the home mortgage interest deduction as currently structured, as such a large portion of the benefit goes to such a small and disproportionately well-off group. It is worth considering, though, whether the idea at the core of the program is sound. And either way, whether you think we should have them or not doesn’t mean that you don’t consider them when considering what constitutes a good investment under the status quo.

Of course, I haven’t even touched on imputed rents once a house is fully-owned (or, conversely, actual rents), which are of course the most important return to a house, well beyond the capital gains discussed heretofore. But this leads to the most important conclusion: not that houses are such a great investment per se; just that they’re a great investment for people without a lot of capital because of their unique pathway to leverage. If you had half-a-million dollars, should you buy a house (or apartment) to rent or a portfolio of financial products? Almost always the latter. But if you only have an order of magnitude less than that to your name, it may make sense to buy something with a lower return (not to mention wholly undiversified) because you can lever up. Just another way that large capital concentrations can secure higher returns – or at least exercise more freedom of action.

Spreadsheet, as always, attached – calculate your own expected returns on your housing investment!

House Investment

*All of these numbers are real and net-of-depreciation unless otherwise noted.

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