Rational/Contemporary

I recorded a demo EP. 5 songs, full-band arrangements, all originals. Themes include climate change, the financial crisis, disillusionment with the Obama administration, the dystopian future, and turning 30. There is even a music video. Check it out on my music website: http://www.stolaroff.com

I started working on this project maybe a year and a half ago. It turns out, recording an album on your own is a lot of work. Why do many of us take on challenging creative projects with dubious rewards? It’s something I continue asking myself, and I think I’ve explored it far enough to know that the answer is not, simply, “for fun”.

The beauty of capitalism, argues Adam Smith and my textbook, is that resources are magically guided by the invisible hand of the market to their most efficient uses. No central planning body is needed, as it is in communism, to decide how much of each product should be produced and who should receive it.

On the micro-scale, this is true in many ways. The individual decisions of millions of businesses, communicating through prices, add up to a system that satisfies most people’s wants with a dizzying array of constantly-improving products. We don’t need a giant bureaucracy to set the price of raisin bagels or determine how many electric lawnmowers should be built.

However, what I’m now discovering is that there is no “invisible hand” analogy on the macro-scale. The “natural” macroeconomic outcome of an entirely free market is abhorrent. Devastating cycles of boom, bubble, and recession; ever-more concentrated wealth; terrible working conditions for the poor; and, perhaps, resource depletion and collapse. It’s entirely up to the government (and, in some cases, labor unions), to guide the market with fiscal policy (government spending), monetary policy (mainly the interest rate), and human rights protections, and to clean up after the market with social welfare programs.

The hands are quite visible. So how much do you trust your government? They’ve been doing a bang-up job lately. Poor monetary policy (years of super-low interest rates, among other problems), contributed greatly to the housing bubble and our current Great Recession.

I just think it’s important to remember when certain pundits and Wall Street executives plead for small government and financial deregulation, that there is no reason to believe that would help in macroeconomic terms.

On the micro-level — when you are talking about things like price tariffs, subsidies, restrictions on trade, product standards — there is a justification, at least in theory, to call for “smaller government” or deregulation. Because here the market allocates resources more efficiently than the government would (again, at least in theory). But we already know what happens to the macroeconomy, left to its own devices, and that is everyone but the fabulously rich and very lucky gets smacked around by the invisible hand.

Waterboarding is torture. It’s a well known and accepted fact by everyone except a small number of extremists like Dick Cheney, and unfortunately, editors of major newspapers like the Washington Post. The torture memos recently released by the Justice Department describe waterboarding, among other forms of torture. However, as one example in a pattern of underplaying torture committed by the U.S. Government, today in a news article the Washington Post referred to the techniques described in those memos as “harsh tactics that critics liken to torture”. This is akin to describing carbon dioxide as “an industrial byproduct that critics liken to pollution” or referring to current economic conditions as “a slowing of the market that critics liken to a recession”.

Of course you can find many people, even people in prominent or powerful positions, who believe carbon dioxide is not a pollutant (e.g. Senator James Inhofe), or who don’t characterize current economic conditions as a recession. But that does not justify presenting a widely-held and generally-accepted fact as a fringe belief. Waterboarding is widely and generally accepted to be torture, not “likened” to torture and not only by “critics”, just as carbon dioxide is not merely “likened” to pollution and not only by “critics”.

I wrote a letter to the editor of the Post about this; I’ll let you know what happens.

I went to a panel discussion last night on “Merging Climate and Transportation Policy”. There were panelists from roughly the political left, right, and center, but all were thoughtful, had many good points, and agreed that the current system for spending federal transportation dollars is terrible. A lot of discussion about transportation and climate change tends to focus on technological fixes, like electric cars or biofuels, but this one focused on reducing driving — essentially changing behavior. The center and left panelists seemed to be boxing at the shadow-accusation that any such attempt is “social engineering”, largely by arguing that putting the right price on driving (i.e., making it significantly more expensive) isn’t about changing behavior, it’s about letting people make the right choices.

Well, prices changes behavior. That’s the point. There is some psychological value to giving people options, even ones they can’t afford, as opposed to mandating something (“You can only drive on odd-numbered days”), but it’s still about changing behavior. We know that raising the price of driving causes people to do it less (cf. recent increases in gas prices and subsequent fall off in car travel), but it’s not a terribly strong effect. If we want big reductions, like cutting miles driven in half, it’s hard to imagine that just pricing people out of their cars ($15 gas?) will be acceptable. I’m convinced the much more powerful (and palatable) tools will be land-use planning, making urban cores more attractive places to live (e.g. by improving urban schools), and cultural shifts toward valuing neighborhoods and urban features.

One of the interesting questions that came up was, “will policies to reduce miles driven also suppress economic growth?” This is something the right and center panelists were very concerned about. And actually, it’s hard to see how a pricing-based policy wouldn’t. There could be some rebound effects, like a more vibrant commercial economy if congestion-pricing makes the city more pleasant to shop and do business in. Or perhaps everyone would save fuel on balance because congestion-pricing eliminates gridlock. However, the main effect of charging more for driving is that people have less money to spend on other things. But let’s think about the other types of policies — the ones that get people replacing cars with transit and living closer to things. Offhand, I would say the economy becomes more service-oriented. People go out to eat more, spend more on cultural attractions, meet each other in bars and so on — the classic urban lifestyle model. They have smaller houses which they spend less to fill with things and, or course, less on cars. Bad for the economy? It’s not obvious, but I’d guess it’s better for communities to have more-local economies in the long run. Another direction it might go is that car travel gets expensive/unpleasant but the alternatives aren’t great either, so people just stay home. Probably yes, this would slow economic growth. Although that shouldn’t be the question. Are people less happy? Spending more time with the family and less time commuting to far-flung jobs is not bad. Staying home to watch tv and get isolated and depressed, on the other hand, probably is bad. So there is a right way and a wrong way to reduce driving. I expect that the strategies based on building vibrant communities support both economic growth and movement to a service-based economy that is better for the environment and connects people with each other.