Why I think the “funds aren’t fungible” argument is wrong

So the argument goes something like this:

Starry-eyed person who loves train project X: “Why can’t have this wonderful thing?”

Grumpy economist: “Because wonderful thing costs money, and the money is better spent elsewhere.”

Clever transit advocate: “But transport/transit/capital funds are not fungible, so opportunity cost logic doesn’t work here. So, teh Train!”

This has been the cycle for a few years, and I have to admit, I was impressed by the fanboys who finally thought of the “fungible” argument and actually used the word “fungible,” but I still don’t buy it.

Fungible means “interchangeable”. So the basic problem with economists is that they understand that things cost money. (I am kidding; the fact that they understand that things cost money actually make them really useful to public policy because far too many people do not think about costs.) When you gobble up resources for large-budget capital projects, you can’t use the money for something else. That’s the ‘opportunity cost’ argument. Both the opportunity cost argument, and its “not fungible” rejoinder have their limits.

For one, opportunity costs are entirely real; they are one of the few places where personal budgets do rather mirror public ones. So if you spend all your money on ice cream, you will not be able to buy any video games. Public budgets do not have the same constraints as personal budgets do: your salary is your salary, and while you can try to take on extra work or get higher wages, public budgets might be increased through higher tax rates, new taxes, making the base larger, etc. People who say opportunity costs are BS tend to argue that the public tax base can be altered to accommodate their programs and projects. But as recent decades have taught us in the US, it’s not a simple matter to levy new taxes or raid various funds, so that public budget and tax base constraints, while subject to politics, can also be real and binding.

One way the discussion typically goes is: “I personally would rather see the billions they want to put into HSR go to education.” The HSR advocate says “No, the money isn’t fungible, and opportunity cost arguments can always be made, and it’s not HSR’s fault if there isn’t enough money for education.” Well, some is, and some isn’t. Let’s break down both sides.

To some degree, the HSR advocate is correct on both counts. First, you can construct an opportunity cost argument for anything. “I know you’d rather pay your mortgage, but children in Farifistan need that money to eat.” There are worthy priorities around us, everywhere, all the time, and there is every possibility that there is something out there more worthy than the thing (in this case, education) that you thought more worthy than the original proposal. So the fact that there might be more worthy things out there does not necessarily win any arguments. It DOES, however, suggest a democratic preference, and expressing that preference via comparisons of things you would rather put the money towards strikes me as a perfectly reasonable way to express the fact that you think HSR would be fine to have, but it’s just not a priority to you.

Second is the fungibility question, and let’s get this specific to California. In one sense, some of the project funds are not interchangeable. Those are the funds awarded through the federal government–the ARRA funds, for the recovery act. California suddenly can’t say “well, let’s move those monies to education now.”

And now that Prop 1a did pass, the California money set aside for HSR via that bill is not fungible, either.

But it sure the hell was before Prop 1a. Prop 1a used general obligation bonds for the project. That’s money that, prior to getting the public to vote on it, could have gone anywhere. And to the extent that project encumbers state general revenues, it’s entirely possible that it will wind up displacing other projects out of the general fund. Prop 1a was *born* and made possible out of fungibility of general revenues.

So yeah, now we are committed, but it is not as though fungibility just locks money in. Yes, you can only use gas tax money for transportation, but you can stop collecting the funds tomorrow, let people keep their money to optimize as they like, or allow states to pass an increase in their gas tax money to slosh straight into their general funds to use for college funds for foster kids, dental care for seniors, or….their own bike lanes.

Just as ‘obligation cost’ logic both works and can undermine just about any investment, the ‘not fungible’ argument both works and is a bit of canard. One comes down to “I think this rail project too costly” and the other comes down “Now that I’ve won my pot of money, it can never be moved, no matter how worthy, and thus let’s just keep spending on my favorite things!” Both are useful enough concepts, but both can have an element of bullshitting to them, and I now officially call bullshit on the “not fungible” claim as so many have called bullshit on the opportunity cost claim.

Why? I’ve been watching politics and budgeting for 40 years. Arts funding was never “not fungible.” We’ve seen EPA’s budget get hacked to bits. These are political choices, not hard-and-fast-rules.

#ReadUrbanandPlanningWomen2014 entry #18: Alice O’Connor

This week’s entry was inspired by the lunch discussion at the Bedrosian Center on this piece by Ta-Nehisi Coates on reparations, and its follow up bibliography. The group of scholars at the discussion noted that Coates’ highlighted some work on Federal Housing policy that was essentially unknown. I objected and noted that while mainstream understanding of these issue may be new, housing policy folks have known for a very long time that HOLC and the US Housing Act of 1949 had extremely serious consequences for racial discrimination. The work that Coates cites in the article, Ian Shapiro, was published in 1995; he quotes objections to the policies from contemporary housing experts in 1955, like Charles Abrams. The research on zoning’s contribution to redlining goes back to the 1970s and 1980s as far as I know (and I’m not a specialist; I could be wrong; it could be sooner.) Zoning and redlining go hand-in-glove, and policy and planning can not beg ignorance on these issues. We’ve known this, or had it pointed out, for at least 60 years. Just like both white and black abolitionists with slavery, plenty of people knew that official public policies were wrong, and they hardly kept quiet about it. The choice to ignore or drown out those voices was a choice, not a mere reflection of a culture or a people that didn’t know better.

Nonetheless, it looks like Beryl Satter’s 2009 book on Chicago, Family Properties: How the Struggle Over Race and Real Estate Transformed Chicago and Urban America is truly a must-read. Going on my wish-list.

I personally learned the material in my MPL program from the brilliant Heather MacDonald, who had us read Alice O’Connor, a historian of US public policy. The piece that had a big influence on me was:

O’Connor, Alice. 1999. “Swimming Against the Tide: A Brief History of Federal Policy in Poor Communities.” In Urban Problems and Community Development, Ronald F. Ferguson and William T. Dickens (eds). pp. 77-109. Washintong, DC: The Brookings Institution.

This wonderful piece outlines federal policy involvement in impoverished communities throughout the United States from the New Deal onward, and it has a wonderful insight: that place-based initiatives tend to be lavish, efficient, and hidden for affluent Americans, but stingy, convoluted and high-profile when it comes to poverty:

“A [fifth] pattern is that in its treatment of poor communities, federal policy has operated within a two-tiered system of provision that marks U.S. social policy. In this system poor communities, like poor individuals, are assisted through an elaborate concatenation of means-tested programs, while their wealthier counterparts are subsidized throughout through essentially invisible, federalized, non-means-tested subsidies such as highway funds, state universities, home mortgage assistance, and tax preferences. Poor communities are targeted as places for public assistance–public housing, public works, public income provision–while the middle class is serviced by nominally private but heavily subsidized means.”

She goes on to write about how racial discrimination became encoded in community development policy–a nice overview for people looking to understand the differences in how the US provides social policy.

Brettany Shannon has written about this piece as it was anthologized in the Community Development Reader. Her review appears here, and you should go read.

Frank Conroy on writing

I am reading Dogs Bark, but the Caravan Rolls On: Observations from Then and Now by Frank Conroy, having just finished, Mentor: A Memoir, by Tom Grimes. Both very lovely books, but this quote from Conroy’s book about the Iowa Writer’s Workshop struck me as particularly useful:

The workshop asserts that it is process that counts. All the work is necessary to move ahead, hence it is all valuable. Every writer creates weak, middling, and strong work. No one ever knows when lightening will strike, and are all, much of the time, waiting for it. But we are not passive. We write, we struggle, we take risks. We work to be ready for the lightening when  it comes, to be worthy of it, to be able to handle it rather than be destroyed by it. (Success has ruined more writers than failure.) Writing, sayeth the workshop, is a way of life. You either sign on or you don’t. p.119.

A MOOC can not believe in you

The Gaurdian asks its reader to share stories of great teachers.

This is my favorite:

When i was in year seven my mother (a wheelchair user) was made redundant and my dad was unemployed due to a severe motorcycle accident a year before. I was caring for both of them and my younger sibling. We were due to go on an history trip but i didn’t have the £10 the trip cost. A few days before the trip my history teacher rang my mum and asked why we hadn’t paid yet and my mum explained that we had no money coming in at the moment. The teacher said to sign the permission slip anyway and she’d sort something.

the next day the teacher grabbed me at break and handed me a £10 note. “just give it back to me in class with your permission slip. You’re one of the best historians for your age I’ve ever met and if anyone deserves to go on a trip right now it’s you.”

I seem to recall bursting into tears all over her…

So what? Perhaps by the time you are in college, you don’t need emotional support. You just need and want content.

Perhaps. But I’m an old lady and I still need people to believe in and nurture me.

Just War arguments on Gaza and media effects

Attention conservation notice: the political conflicts in the US about the conflict in Israel tend to fall into two lines of just war arguments. People on the right tend to stress jus ad bellum arguments–the justness of Israel’s self-defense, while people on the left are claiming that, by killing civilians, Israel has violated jus in bellum (just conduct in war) principles because of the disproportionate use of force.

I’ve been reading the various accounts of the press surrounding human shields in Gaza, and it’s following an a-typical trajectory for foreign journalism. The Israeli conflict confronts us a functional worry about the state of journalism right now. There are few national news outlets in the US that have retained their foreign corps, which back in the day was the marker of an elite broadsheet. It was a big blow to the LA Times, for example, when it had it give up its international desk. The consequences of all this scaling back at the elite dailies is that you only have a handful of papers written in English with journalists on the ground. Concurrent with that is the social media use among relatively elite, English speaking computer users leaking into the US media from sources like Twitter and Instagram.

The result is the ever-present claim of biased journalism and social media slant, including Netanyahu’s stupid gaffes with the media (‘the telegenically dead’ crack, among others, and the subsequent discussion that the Israel ‘has the right’ to defend itself against Hamas, who started it, etc etc. There are various riffs on the “telegenically dead” comments in and around the media, from Fox News to Zionist commentators.

I suppose the meta-discussion about bias helps some. One of my goals has always been to help people see how various forms of media influence political narratives, and in particular, urban politics around planning. So the fact that we now have a meta-level discussion about reporting and “the news media” and its role in Gaza, it’s possible for people to reflect on the images they are seeing and what those images mean within our understanding of what is happening and what ought to happen.

However, it doesn’t really help with the problem of whether Israel is now fighting a just war in a just manner. So suppose the Zionist writers are right and Hamas is this congenitally evil group of people who has lined up its own people to serve as human shields (there is evidence of this, of people who crowd into an area after warning shots…even that involves questions. Are they doing so under some threat from Hamas? Or are they doing so because they have a cause they intend to die for?) The various reactions to the human shield question range from the hawkish “Human shields are Hamas’ fault and another reason to revile them” to those who ask the question about what kind of moral war exists when a more powerful entity shoots into in human shields knowing they are…shooting into human shields, voluntary or involuntary. Collateral damage, indeed.

So in swapping allegations of media bias does not help us with the fundamental moral conflicts about what to do when confronted with something like a human shield: stop firing, in the name of human rights, or keep going, despite the deaths, in order to get at the people you want to get at to solve the problem you think you have a just cause to solve.

Just war theories have never helped me out very much thinking about these issues, even though our Just War thinkers are among our very best from Thucydides and St. Augustine onward. Hugo Grotius and Samuel Pufendorf are two I find exceptionally useful.

Just war (justum bellum) theory has multiple components: jus ad bellum (the justice of war in the first place); jus in bello (just conduct in war) and jus post bellum justice after war. The Internet Encyclopedia has a beautifully written introduction to these ideas found here.

A helpful summary of jus ad bellum:

The principles of the justice of war are commonly held to be: having just cause, being a last resort, being declared by a proper authority, possessing right intention, having a reasonable chance of success, and the end being proportional to the means used. One can immediately detect that the principles are not wholly intrinsicist nor consequentialist—they invoke the concerns of both models.

It is here where the Zionist writers draw most heavily. This is a just cause; Israel has a ‘right to defend itself’ from Hamas, an organization whose stated purpose to eliminate Isreal. There are some writers on the left who have contested the just cause framing based on “last resort” criteria.

A helpful summary on jus in bellum:

The rules of just conduct within war fall under the two broad principles of discrimination and proportionality. The principle of discrimination concerns who are legitimate targets in war, whilst the principle of proportionality concerns how much force is morally appropriate. A third principle can be added to the traditional two, namely the principle of responsibility, which demands an examination of where responsibility lies in war.

Here, then, are where most of the outrage on the left comes from about current Israeli conflict. It’s not that Israel has no just cause, it is that they view the civilian casualties as illegitimate targets and the amount of force disproportionate.

We can then get into many arguments about whether, if you voted a party into power, you are still innocent in a war that it provokes, whether you are still a civilian if you voluntarily act as a human shield, etc.

But that is the moral landscape of the political discussion in the US.

Most Americans’ understandings of what is true about the conflict are mediated through the images and stories created by others, which is why journalism and media are so important.

Some things to read.

Michael Walzer Just and Unjust Wars (1977) a
Barrie Paskins and Michael Dockrill The Ethics of War (1979),
Richard Norman Ethics, Killing, and War (1995),
Brian Orend War and International Justice (2001)

Thomas Nagel “War and Massacre” (entire article in html), Elizabeth Anscombe “War and Murder” (entire article in pdf)

Relationships and proximity in the legislature

Planners are big fans of geographic proximity and relationship building, but one thing I have never really bought about urban mixing is the idea that you build relationships in urban contexts. You might. But you are not going to build relationships with thousands of people riding a subway. You are going to have a particular relationship, and if you see the same people every day on the subway, you may have something deeper in terms of relationship and community.

Tom Harkin is retiring from the US Senate; he has served the state of Iowa for 40 years. The money quote:

He was loath, Harkin said during a long conversation, to lapse into a misty reverie on better days, the way some old fogy might. But, the 74-year-old Harkin said, things were better back when.

More than anything, more than argument or intellect, “legislation, good legislation, good things where you really work things out and reach good compromises, depend more on personal relationships,” Harkin said. “And those personal relationships have broken down in the U.S. Senate.”

Small point: There used to be a room on the first floor of the Capitol where senators would gather alone for lunch — no staff, no reporters — and Republicans and Democrats would sit together and talk and swap stories and become familiar with one another on a more personal level.

Those lunches are no more, due in part to the way the Senate now operates.

Lawmakers typically convene for a few “bed-check votes” on Monday night and wrap up their Capitol workweek before sundown Thursday. Lunch on Tuesdays and Thursdays are now partisan affairs, Democrats and Republicans dining separately with their party colleagues. That leaves Wednesday. “But that’s the day you have a fundraising lunch,” Harkin said.

Something I wish my institution understood as well: when a place becomes corporate, nobody does anything except for money.

California Splitsville as an excuse to show you some totally gnarly maps from PPIC

So….this here plan to split California into six states is closer to going on the ballot, which would be totally fun except for the OMG-what-if-it-actually-passed problem. As an antidote to people just assuming the state is a mix of fruit and nuts, go over and see this wonderful discussion from Eric McGhee and Daniel Krimm of California voters and population weighted mapping from PPIC. Here’s their population-weighted map for voting.


Go read!!

#ReadUrbanandPlanningWomen2014 entry #17: JoAnn Carmin

I’m sad this morning posting this, as today I am writing about the work of JoAnn Carmin, a professor at DUSP at MIT, who passed away recently after her second bout with cancer. JoAnn was a major scholar in environmental justice, and I admire her work tremendously. Her students thought very highly of her, and she will be greatly missed in the scholarly world. JoAnn’s work centered mostly on international and development perspectives on environmental justice. She has many papers, but I will refer us to her body of edited work and her own book contribution.

JoAnn Carmin and Julian Agyeman (editors). 2011. Environmental Inequalities Beyond Borders: Local Perspectives on Global Injustices. Cambridge, MA: MIT Press.

Adam Fagan and JoAnn Carmin (editors). 2011. Green Activism in Post-Socialist Europe and the Former Soviet Union. London: Routledge.

JoAnn Carmin and Stacy D. VanDeveer (editors). 2005. EU Enlargement and the Environment: Institutional Change and Environmental Policy in Central and Eastern Europe, London: Routledge.

Tomas Koontz, Toddi A. Steelman, JoAnn Carmin, Katrina Smith Korfmacher, Cassandra Moseley, and Craig Thomas. 2004. Collaborative Environmental Management: What Roles for Government? Washington, DC: Resources for the Future.