Monthly Archives: January 2011

Mubarak and TSA agree: No advantage to them leaving

Posted on by

In “TSA shuts door on private airport screening program,” CNN reports that “TSA chief John Pistole said Friday he has decided not to expand the program beyond the current 16 airports, saying he does not see any advantage to it.”

The advantage, of course, is that it generates pressure on his agency to do better. I hope that he’ll be forced to answer to John Mica, who encouraged airports to do this, and is the chairman of the committee on transportation and infrastructure.

I believe Hosni Mubarak made similar comments about not needing regime change.

A few thoughts on chaos in Tunisia

Posted on by

The people of Tunisia have long been living under an oppressive dictator who’s an ally of the US in our ‘war on terror.’ Yesterday, after substantial loss of life, street protests drove the dictator to abdicate. There’s lots of silly technologists claiming it was twitter. A slightly more nuanced comment is in “Sans URL” Others, particularly Jillian York, said “Not Twitter, Not WikiLeaks: A Human Revolution.” Ethan Zuckerman had insightful commentary including “What if Tunisia had a revolution, but nobody watched?” and “A reflection on Tunisia.”

That conversation is interesting and in full swing. What I want to ask about is the aftermath and the challenges that Tunisia faces. After 24 years of oppression, it’s going to be hard to build the political structures needed to create a legitimate and accepted government.

The American revolution came after years of discussion of British abuses of power. American perceptions of abuses of power like the Stamp Act combined with slow communication to the King and fast local communication to create a local political class that could assemble in a continental congress. Even so, after the American revolution, we had one entirely failed government under the Articles of Confederation, which was replaced with our current Constitution. But that was followed by the whiskey rebellion.

I bring this up because it’s easy to focus on the mechanics of government while forgetting about the soil in which it grows. Perhaps the digital world, with its ability to connect Tunisians to people living in places where we’ve worked these things out, will help. (For those foreigners who speak Arabic, or those Tunisians who speak other languages.) I’m not terribly optimistic in light of the shootings in Arizona and how quickly the online discourse devolved into “why this tragedy proves I’m right.” I’m also not optimistic given our poor understanding of our history.

I am, however, hopeful that the people of Tunisia will manage to take a collective break from the violence for long enough to work out a Tunisian approach to democracy. What would that look like? Would technology play a role?

Unmeddling Housing

Posted on by

For a great many years, US taxpayers have been able to deduct interest paid on a home mortgage from their taxes. That made owning property cost roughly 20% less than it otherwise would have (estimating a 25% tax rate on interest on 80% of a property). So everyone could afford 20% “more” house, which meant that property values inflated until things were in balance again.

It was a good deal for those who were in at the start. But we should also ask, who lost out? First, anyone renting who couldn’t take the deduction. Second, anyone who assumed that this state of affairs would go on forever. Because this week, the chair of the FDIC called for a re-examination of that policy.

Now, this week, Goldman Sachs predicted a 20% drop in Seattle home prices over the next two years, so as a renter, I get to feel a little schadenfreude. But more important, I think, is the chaos of unwinding 50 years of distortion in the housing market.

A great many people have taken the rise in home prices as a bankable truism. Conflating the rise in prices has been a massive increase in the size of houses and lots, underwritten by cheap oil and large highways, but I’m going to mostly set that aside, and focus on the impact of social policy.

Homeownership has a number of downsides. It locks up a tremendous amount of capital in an illiquid investment. It conflates investment and emotional concepts of home. It makes it hard to move when you need a new job.

Now, a government policy to encourage homeownership (uber alles) encourages homeownership. The trouble is, it does so in an unnatural way, and in a way which it now seems appears unsustainable to our bank regulators. That it’s unnatural and unsustainable was always obvious. It’s inherent in the fact that it’s being encouraged. At the margin, there are either people who buy because it’s encouraged, or the policy is an utter failure. So there are people who, without such a policy, would not be homeowners. And homes cost more than they otherwise would.

But after 50 years of meddling in the market, reducing the support for housing is going to be exceptionally complex and chaotic. And the chaos isn’t going to be evenly distributed. It’s going to be a matter of long, complex laws whose outcomes are carefully and secretly influenced. Groups who aren’t photogenic or sympathetic will lose out. (I’m thinking “DINKs” in gentrified urban areas.) Groups who aren’t already well-organized with good lobbyists will lose out. (See previous parenthetical.) Those who believed that the government housing subsidy would go on forever will lose.

Most of all, those of us who lived within our means are going to lose out as the taxpayer “helps cushion” the “unpredictable” changes.

The worst part is, government never needed to get involved.

[This was written in June, I forgot to hit post, so the dates are a little off.]

TSA News Roundup

Posted on by

Man wearing shirt which reads 'property of the homeland'