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Two days ago, Matt Yglesias pulled the pin on a rofl grenade, and yesterday he basked in the lulzplosion. Yet I think it’s worth addressing exactly why it is conservatives have a deep, emotional attachment to doctors – and vice-versa. Indeed, 16 of the 19 doctors in Congress are Republicans.

First, they tend to be old, white, and male.

Second, they tend to be rich.

But even beyond that, there’s lots of strong, deeply-rooted reasons conservatives gravitate towards doctors as vectors for identity politics. They work extremely hard. They are often small business owners or independent proprietors. They are seen (and perpetuate the image of themselves) as beseiged by regulation and government intrusion. They spend many years working extremely hard for little immediate reward, only to be richly rewarded later, a sequencing that matches conservatives views about the virtue of patience, saving, and hard work. And they also do good while still getting rich from doing good and they’re extremely popular which makes them vastly better symbols than CEOs or financiers or even, in some ways, the military, since even though the military is general respected and popular it is also fairly-widely associated with aggression, violence, discriminatory practices, and other negative characteristics that many would avoid.

So suggesting that doctors are actually rent-seekers supping on government cheese served on government silver while drinking fine wine out of government crystal really touches a nerve.

To relate this to another hobby horse of both myself and Yglesias, it’s similar to the reasons conservatives tend to have a giant blind spot around urban land use issues. Essentially, all the identity politics orbit the image of a person in their own, large, private home, being in their own large, private vehicle, owning their own land, away from cities filled with miscreants and students and criminals and socialists and various sundry unwashed masses. That this lifestyle is supported by exactly the kinds of burdensome, costly, stifling regulation they claim to oppose sets off a surprisingly rabid reaction.

Of course, there’s also tremendous cognitive dissonance among conservatives around the very idea that conservatives practice any kind of identity politics, so even brushing that raw patch elicts yowls.

Of course, this could all be changing. Nothing persists but change.

Kevin Grier, the sufferable half of Kids Prefer Cheese, writes this about AirBNB:

I used to think AirBNB was cool, but now that Thomas Friedman has slurped it in the Times, I’m not so sure. One interesting thing in the piece was how the AirBNB founder confuses his company’s revenue with new economic activity.

Surely most of AIRBNB’s revenues are actually just diversion, no? I’d guess that at least 75% of their revenue is just diverted from hotel/motel revenue.

This is a common mistake. “look how much NAFTA increased trade”, “Look how much the new stadium will boost the local economy” are examples of this kind of erroneous thinking.

Creation vs. diversion is an important and often overlooked distinction.

I just had a great stay in an AirBNB property in Brooklyn, but the Staten Island Hilton Garden Inn lost the revenue that AirBNB generated.

He’s right about Tom Friedman, of course, but wrong about everything else. But wrong for interesting reasons!

The first, and simple reason, is that on the margins AirBNB, by creating cheaper, unique, higher-quality, or differently-located lodging options, may result in more overall travel. I may choose to take that why-the-heck-not weekend trip to FunTown if I know I can book a super-cheap night in someone’s apartment, or stay in the cool gentrifying neighborhood that doesn’t have any formal hotels.

Secondly, and more importantly, it is certainly the case that AirBNB is more often than not “diverting” trips that would have otherwise occurred in hotels. But that doesn’t mean it’s not creating new economic activity!

A house or apartment is capital, a machine that provides a flow of services, primarily “comfortable shelter.” When you own a house, you can choose to consume those services however you want – entirely for yourself, rent them out to others, occasionally donate a share of those services to friends or relatives (for example, my in-laws just stayed with us the past week, and next week a friend is staying with us). However, until recently, was difficult and uneconomical to rent out one’s residence for simply a day or weekend or week because of issues relating to information, trust, payment mechanisms, and insurance.

But these are all problems that AirBNB, a new technology, has effectively and efficiently solved, making renting out a portion or the whole of one’s home like a hotel or B&B go from “extremely challenging” to “extremely easy.” This makes houses more valuable. To quote the master, Paul Romer:

Economic growth occurs whenever people take resources and rearrange them in ways that make them more valuable. A useful metaphor for production in an economy comes from the kitchen. To create valuable final products, we mix inexpensive ingredients together according to a recipe. The cooking one can do is limited by the supply of ingredients, and most cooking in the economy produces undesirable side effects. If economic growth could be achieved only by doing more and more of the same kind of cooking, we would eventually run out of raw materials and suffer from unacceptable levels of pollution and nuisance. Human history teaches us, however, that economic growth springs from better recipes, not just from more cooking. New recipes generally produce fewer unpleasant side effects and generate more economic value per unit of raw material.

Basically, the combination of AirBNB + house = hotel is a new recipe that makes existing resources more valuable than they once were. If AirBNB really takes off, what we’ll see is that, as more people elect to take trips and stay in people’s homes (as my wife and I have done before and will do again, thanks to AirBNB) the existing stock of homes become more valuable, there will be substantially increased efficiency in the hospitality industry and there will be more efficiency in urban land use since the hotel-to-overnight-stay ratio will decline and thus valuable land downtown can be used for other purposes, like offices, residences, entertainment or commerce.

I’m not a shill for AirBNB, but it’s a great example of how the combination of information exponentiation and aggregation economies of scale that the internet enables can substantially increase economic growth and human welfare by making all the stuff we already had more valuable. My wife and I got an espresso maker on Freecycle, so we didn’t buy one. We bought something else instead (probably a couple of board games). So in one sense that was just consumption diverted from one thing to another, but comparing the equilibria that’s clearly a net increase for human welfare. In the pre-internet days, that espresso maker goes to a landfill. Instead, it goes to us. So the original owners are unaffected, the public waste burden is reduced, and we get the espresso maker we wanted and other stuff. Someone else went on Craigslist and bought a board game for $5 that cost $60 new, and used the savings to help buy a new espresso maker. It’s all about increasing efficiency, and just because it doesn’t always increase GDP doesn’t mean it doesn’t increase welfare and, eventually, growth.


BeyondDC points to Lydia DePillis quoting Gaithersburg developer Bob Buchanon saying:

”The McMansion out in the suburbs, that world is over. We don’t have the land,” he said. “For those people who say we’re just real estate people who want to keep doing the same thing, we’re not. We know we can’t afford to have ever widening sprawl, because the cost of infrastructure is prohibitive.”

This is mostly correct, and it’s why I’m baffled that drivers feel threatened by bikers. Think about these two facts:

1. There is only so much space on any given road. A good example is I-66 in NoVA; from Prince William County to Independence Ave. it runs just about 26 miles. Forget about the HOV lanes for a moment and let’s just assume that there is an average width of 2.5 cars along that 26 miles; that gives us 65 miles of lane, or about 343,000 feet. If your average car is is 12 feet long that allows 28,583 cars on I-66 at any one time and that’s in literally bumper-to-bumper traffic. Considering that nearly a quarter of DC’s 671,000-person workforce commutes in from NoVA there’s no way you could fit them all on I-66 at one time, each in their own car. But they try! Ergo – traffic. Imagine if there was no Orange, Blue, or Yellow Metro lines and feel the pain.

2. There are two kinds of drivers – those who choose to drive and those who have to. There are lots of people who, for one reason or another, are unable to commute using public transportation; but there are also lots of people for whom driving is simply the cheapest or least-onerous option.

So let’s say you are the first kind of driver. Forgetting any grand principles or ideological concerns, your narrowly-defined self-interest is to get as many of the second kind of driver as possible out of their cars. Every person who decides to stop commuting by car and instead decides to take a train, take a bus, walk, bike, or even carpool/slug to work removes a car from the road, thereby alleviating the traffic that you are stuck in every day.

I can understand why some drivers have a visceral reaction to bikers, especially during the adjustment phase. But over the last decade the percentage of area workers commuting by bicycle increased 86% – to 2.2%. Imagine if that doubled again to 5%, and then doubled again to 10%, and imagine that every one of those was a car on the road replaced by a cyclist taking up far less road space. Congestion would decrease drastically. And especially when you consider that bicycles don’t pollute the air, decrease demand for increasingly-expensive gasoline, etc, folks whose attitude is “you’ll pry my steering wheel from my cold dead hand” should be the most fervent supporters of getting everyone else off the road.

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