Relaunch

Sorry for the infrequency of the posts.  I’ve decided to more or less stop pretending like I ever intend to regularly blog here.  With the high work tempo in the office, grad school, and about a billion other side projects I just can’t justify keeping a disciplined schedule here.  So, I’m going to lean on the site being more of an online portfolio than blog (I may even have the home page go static).  However, I think that in the course of my work (or other outside activities) I produce stuff that may be of interest to readers, which I will re-post here.  I’m not a lawyer so I don’t know the legal vagaries doing that, and I intend to stay blissfully ignorant until someone demands I take the stuff down.  However, everything I put up will be my own work.

Research Park as Economic Engine: Best Practices

Designing a great, economically productive research park is an exercise closely intertwined with behaviorial economics, believe it or not.  By the end of this, you will understand why. 

Let me identify 4 research parks that are considered to be 3rd Generation, as defined by the Association of University Research Parks (http://www.aurp.org): 

• The University of Virginia Research Park*
  http://www.uvafoundation.com/researchparks/northfork.html
• Sandia Science & Technology Park
  http://www.sstp.org/
• University of California, San Diego Science Park*
  http://physicalplanning.ucsd.edu/PPW-PlansStudiesProjects/N-Studies/srp.html
• Clemson University – iCar
  http://www.clemson.edu/centers-institutes/cu-icar/

*Planned

 Now, what do these parks have in common? 

Master Planned

All of these parks were master planned to incorporate specific design features, custom facilities, and amenities.  More specifically, these parks point to the movement in the industry towards ‘village’ style developments that more naturally congregate people both indoors and, increasingly, out. 

Source: Duany Plater-Zyberk

These are not done on a one-off basis and are preplanned, some even with ‘flex’ components – options that are on the shelf if the need arrives.  Also, these plans strive to create an environment where the architecture and features match the level of vision.

Amenities

Each of these parks have significant amenities, though at different scales.  While the Clemson and Sandia parks are both cutting edge developments, the planners involved with the UVA and UCSD parks are outfitting their spaces with amenity features on a whole new level.  Nonetheless, they all include as a minimum:

• Fitness center
• Public meeting space
• Conference space
• Walking trails
• “Village” Layouts

Source: CU-ICAR

Each of the parks brings something different to the table with regards to amenities, however.  The Sandia Park is exceptional in that it has a childcare center onsite, a full-service credit union, and a full-time program staff (among other things).  Clemson, on the other hand, has a gallery (yes, a gallery), an onsite graduate school, a rooftop garden and an autopark.

As noted, UVA and UCSD have not yet been built.  However, their planned amenities seem to be remarkable.  UCSD’s planned park will be heavy on environmental features like building into the indigenous landscape and intensive use of walking/biking trails.  On the other side of the country, UVA apparently plans are to turn the park into something akin to a self-contained research city (a la Qatar’s Education City – http://www.qf.edu.qa/output/page301.asp), with research space blending into neighborhood-scale commerce and even residences.

Incubation and Collaboration

Each of these parks, which can all be considered “third generation” (or, as is the case with the UVA park, more like v.3.5 or fourth generation), place a heavy emphasis with cultivating their tenants.  While the original model was centered primarily on filling vacant spaces, successful and latter generation parks have instead moved towards aggressive incubation to help their tenants to ‘graduate’ to larger (and higher-rent) workspaces.  This has several advantages, if successful: 1) the focus on commercial viability has direct economic development implications; 2) no sense of ‘poaching’ from rival parks; 3) park loyalty and ‘community’ building; and 4) lower turnover.  Incubators are generally revenue-losers for the short to medium term, but if properly leveraged can pay off handsomely for the park as well as serve as an exceptional economic development tools for the region.

In a sense, incubation is only a component of what is a larger theme of collaboration.  Collaborative work spaces, meeting areas, and architectural/landscape features all work to bring people together either through formal (shared laboratories) or informal means (fitness center).  As research parks become more sophisticated operations, the emphasis (per the national macrocosm) is leaning towards the including elements that are less formal.  Informal mechanisms are gaining appreciation for their facilitation of idea-sharing, commercialization (“say, Frank, that gizmo could really be what ours is missing”), funding (“say, Frank, can we buy your company?”), and problem-solving.  This is why the amenities issue is getting increasing attention.

Human Activity

Another defining feature is the circulation of people, the circulation of ideas.  Just as prevailing economic literature (see Glaeser, Edward) and workforce development discussions (Florida, Richard) have identified density and human networks as elemental to economic growth and productivity, the research park is emerging as a miniaturized version of that same phenomenon.  Like civilization’s most potent ‘research park,’ the city, planners and operators of the next-best research park are trying to emulate the most relevant features of an urban environment (human interactions, sense of place) while leaving out the less desirable or superfluous pieces (crime, prostitution, tenement housing).  Although certain parks will be subject to a higher level of security than the average park, there needs to be natural mechanisms in place to facilitate the circulation of people and their attendant ideas.  In other parks, this has meant things as high-minded as meeting space and regularly hosted events and a graduate school to something as mundane as a credit union or planned eateries.

President Barack Hussein Obama

What to say about Obama’s not-terribly-surprising election?

My very good friend has an interesting post on his weblog reacting to the Obama victory. Even if one doesn’t agree with everything/most of what he says, the emotion of his annotation is palpable. Well worth reading.

I’m still just getting my head around the fact that this happened.  I haven’t fully digested it yet.  It’s such a historic event, such a significant marker in American, in world history that it can’t be overstated.  America has elected its first African American President.  Don’t even need to put that in italics.

I could never truly understand just how incredible, how symbolic, and how healing Obama’s election must be to the black community; nonetheless, its significance is certainly not lost upon me and I find myself smiling at the idea of his election. He’s not only non-white, he’s bi-racial. And his name! I love that his name isn’t Smith or Frank or Bauer. His name is Barack! His name is Barack Hussein! His name is Barack Hussein Obama! I love it. That, to me, is the most amazing thing. He didn’t prove to me that a black man could be president – I always believed it to be so – but that to get there, a man doesn’t have to change his entirety to conform to old ‘presidential’ stereotypes of stodgy gray-haired men with Western European names. Obama’s name alone opens up the presidency to people of innumerable backgrounds, or rather shows that it might have always been the case. An overwhelming precedent has been shown to have no clothes; I wonder how many DiCarlos or Al-Amans or Ishibashis or Mikashvilis will enter politics after today.

And, of course, it’s so nice to have a president who is so articulate, visibly intelligent, and cool. He has savvy political instincts and his campaign was superlative in its coherence, leadership, and execution. That cannot be disputed. The man simply evokes calm and trust in most of the electorate in ways no president since Reagan has. 

But, alas, I did not vote for him. If I am pleased about the historical significance of his election, it’s only as a consolation prize. While I certainly hope that his administration will do the right thing – and I sincerely do, as I have no intrinsic loyalty to the Republican Party – I am not comforted by his campaign, which espoused policies that have never done an iota of good in all of human history. His campaign advocated such ‘change’ that have traditionally been the wish list items of union bosses and anti-competition big business monopolists. The stuff that has never improved an economy (ever) and will only vest further power in an already bloated Federal bureaucracy, and all on the backs of some of the most economically productive people in this country while paying off the rest (40% of whom don’t even pay a cent in taxes) to go along with the plundering. Sorry, but that isn’t change I can believe in.

But then again, I’m encouraged by the last 48 hours. For all of Rohm Emmanuel’s reputation for ferocity and partisanship, he also seems to be a genuine Clintonian moderate in many ways and a firm supporter of Israel. That matters. The talk of Paul Volcker being picked as Treasury Secretary is also encouraging – the man is an intellectual giant and would lend great confidence to worldwide markets. Kerry for Secretary of State would be, um, a mistake; in their jubiliation, have the Democrats forgotten 2004? Richardson would be better.

I’m also encouraged by the fact that Obama and his people seem to be cooling off on a lot of many of his tax and spend proposals in light of an ailing, recession-bound economy. It also doesn’t help that the investor class, all of a sudden, has gotten very bearish on the idea of an Obama presidency. 

What does bother me is Obama’s plans to sign off on the Freedom of Choice Act, which will mandate to allow abortions to be paid for with Federal dollars, among other things, including rolling back parental notification and partial-birth abortion laws. This, I’m afraid, I cannot support. I’m entirely a federalist about this stuff; if we really want to roll back abortion rates in this country, this is not the way to go about doing it. Unfortunately, the real agenda for much of the pro-choice movement had nothing to do with reducing the tragedy of abortion.

Either way, now is the time to give our soon-to-be new President the benefit of the doubt. Everyone says a lot of things during the campaign season that can’t always be taken at face value, so it’s worth finding out what kind of presidency Mr. Obama plans on having. Will he govern as a left-centrist, like Clinton or JFK? Or will he be a well-intentioned, disastrous Jimmy Carter? I guess that remains to be seen, but for now I’m hoping he can actually live up to the post-partisan branding that his campaign ran on so successfully in the primaries and truly bring this country together. 

Although the signs aren’t encouraging, I hope that Obama can wield his tremendous influence to bring people together and truly mend the simplistic and inane divisiveness of Democrats-as-Commies versus Republicans-as-Nazis (No, Obama’s detractors aren’t necessarily racist, and no, this is probably not the end of democracy as we know it). As a Democrat will soon be in the highest office with a Democratic majority in Congress and legions of adoring fans at their call, the burden will ultimately lie with them, although Republicans and dissatisfied independents (like myself) would do well to make the right overtures. Does this mean bipartisanship for the sake of bipartisanship? No, no and no, but it does mean civility and cooperation for the public good. 

In short: Congratulations, Mr. Obama. Don’t screw us over.

A Silver Lining that ain’t Ours

The market downturn and the credit crisis has evoked a great deal of interesting rhetoric from around the world, including Gordon Brown’s declaration that the days of ‘unbridled’ capitalism were over.  Sarko made a similar comment about ‘remoralizing’ a ‘laissez-faire’ economy, which has prompted a horde of professional chatterboxes to stampede left towards the false comforts of bureaucratization and the smothers of regulation.  Of course, the tiresome language being deployed will do little to fix the problems of the crisis, not to mention the potential disaster of implementation, but that will not keep the talkers from talking.

As the deregulation backlash begins worldwide, there is still some hope for the global economy to be had.  Of particular note is the recent agreement between Canada and the EU to get going on a free trade agreement.  But when I say FTA, I don’t mean an FTA of the vanilla sort that we routinely sign with countries (largely unnoticed) or is unreasonably blocked by Congress (Columbia, ahem), or even of the super-variety as is the case with NAFTA.  No, this one is world-changing:

The proposed partnership goes a lot further than Nafta. In addition to allowing free trade in goods and services, it would harmonize regulations, open up the air-travel market, and boost opportunities in government-procurement. Most important, it would free the labor market so that skilled workers could move easily back and forth across the Atlantic.

Or, as the WSJ calls it, ‘NAFTA-Plus.’  This is really big news for several reasons.  First, the timing – although probably planned quite some time ago – is fortuitious as it will probably be later seen as an economic invigorating force for Canada and the big EU countries directly (France, UK, Germany, Italy) and allied economies indirectly (US, other EU countries).  Second: Canada is the United States’ largest trading partner by price volume; an FTA of this scale between the EU and Canada will not only further move Canada as more of an EU economy than a North American one, but will do so at the expense of many trade advantages it has with the US, especially regulatory harmonization.

And finally, as the article notes, the free-labor component is what really separates this deal from anything else.  In effect, Canada is ‘joining’ the EU through something of a backdoor agreement, similar to EU accomodations made with the Swiss to preserve their neutrality de jure without foregoing the benefits of EU membership, particularly that free labor piece.  Through this, Canada is making a historically sharp break with the North American economy and choosing to go the European route.

Why?  Although Canada still remains firmly ensconced within the NAFTA trade regime (and politically/economically dedicated to it, at that), the EU deal is an opportunity that simply cannot be passed up.  And with 9/11 and immigration hysteria walling off a once-unimaginably free border, not to mention cheap potshots by the Clinton and Obama campaigns at NAFTA last Spring, Canada is hedging its bets.  Not only is the EU deal an economically wise move, but one that bolster Prime Minister Stephen Harper’s free trade bona fides at a declining US’s expense.  The irony is truly rich.

Unfortunately, it seems as though the United States is in no position to properly compete.  Under the current administration, whose time is quickly running out, there is no stomach for free labor agreements, especially while little is being done to try and push through a critical FTA with Columbia.  And given the political climate, further freeing up the economy by freeing cross-border labor restrictions is probably the last thing that an Obama administration would pursue.  Interestingly enough, John McCain may be the only candidate – Republican, Democrat, or otherwise – that would genuinely entertain the notion of a free labor agreement with Canada and the EU.  But, alas, though McCain isn’t out yet, his chances don’t look excellent for Nov 4th.

America will surely get some indirect benefits of this agreement with the Canadians, but our overall position will continue to decline as we voluntarily forego the use of important tools for economic growth like larger free trade areas, lower tax rates, and free labor agreements – all for short-term political gain.  Interestingly, it seems that the steady leadership of Canada’s Conservatives will prove a model worthy of emulation, and may be the best hope for capitalism in the wake of this global storm.

Drawing the Wrong Lessons

On Sunday, Wired’s online edition ran a piece entitled Note to Next President: Modern-Day WPA [Work Progress Administration] Will Save the Economy. 

“(Congress) should invest in the more than 3,000 ready-to-go highway projects that could be under contract within the next 30 to 90 days,” says John Horsley, executive director of the American Association of State Highway and Transportation Officials. “Funding these ready to go projects offers Congress a tremendous opportunity to put Americans to work and help cash-strapped states repair and replace our crumbling infrastructure.”

History shows us the time to act is now.

The state of America’s infrastructure — roads, bridges, drinking water, even schools and transit systems — couldn’t be much worse. A report card issued three years ago by the American Society of Civil Engineersgives it all a D. The society says we’ve got to spend about $1.6 trillion just to bring things up to a B-.

Of course, this is ridiculous. Let’s set aside for a moment the article’s shameful reliance on the word of transportation lobbyists and recall that the very thing they propose is a throwback to discredited demand-side, Keynesian economics. Not to knock Mr. Keynes, who by any account was a brilliant man, but he also built a brand on economic policies that have been proven absolutely wrong. Indeed, although Wired article’s author seeks to bolster the argument for a massive infrastructure work program by grafting it to FDR’s Works Progress Administration, which was a taxpayer-funded Federal job scheme, there is no mention of the fact that programs like these actually prolonged the Great Depression. Yes, jobs are good and infrastructure investment is good, but to pour billions (furthering a rapidly-ballooning deficit) into economically inefficient job schemes will not rescue the economy, but will depress growth in critical areas. 

Let’s be clear: I’m not against infrastructure investment per se. In fact, I think the government would be wise to do a top-to-bottom review of this country’s transportation infrastructure strategy (or lack thereof) and make strategic investments to correct current problems and avert future ones. At the same time, funding for such a program should not be driven by job considerations (a recipe for sabatoging the economy) and should not be drawn entirely from a Federal pot. In fact, a longstanding problem with our current transportation regime is that it’s inherently unsustainable as the further development of roadways encourages population disaggregation, diffuse utility networks, and negative environmental and fiscal externalities. And to force-feed that public policy nightmare will only cement (no pun intended) the necessity for later large-scale infrastructure improvements down the road (again, NPI). Color me paranoid, but that sure does seem to be a tidy deal for certain interest groups. 

Naturally, economic growth is often driven by effective infrastructure – mostly a function of governments around the world trying to outdo one another through such investments – but it is nowhere close to being a panacea, and even less so in an information-driven economy. These investments themselves do not produce growth, but might supplement an area’s chances to attract or incubate such enterprise that would. That’s right, folks, it’s business that generates growth. Fin.

This article is pretty much a propaganda piece meant to take advantage of people’s fears and uncertainty to drive a massive, taxpayer-funded capital investments that is not only probably unnecessary (in the scope they describe), but economically deleterious and unmoderated givrn the destructive effects of an exponentially-expanding roadway-infrastructure network. This kind of thing seems to be popping up everywhere these days; with the media’s shrill comparisons of the current economic crisis to the Great Depression, the opportunists are sniffing around to use the fragile climate to push through their carefully disguised agenda for rent-seeking and entitlement-gerrymandering. 

Worse than a Recession?

Unfortunately – or not – I sold all my investment assets a couple of years ago when I moved overseas. Nonetheless, I still try to follow the movement of the markets, as they are often seen (kind of incorrectly) as the bellweather of the national economy. Then again, as the perception gains currency, it becomes kind of a self-fulfilling prophecy. 

Yet, I find it hard to believe that anyone can draw any kind of clear-cut conclusions (if that were ever really possible) from the movement of international markets this past week. First the Dow takes an O’Doyle-esque cliff dive, and now we have rallies like it’s free-money Tuesday. It’s all very curious, and I think this only supports my this-economy-is-whack! hypothesis. The slalom fluctuations in the markets are not really acting as deadweight to our country’s economic output or productivity gains, and yet confidence is lower than low and banks are ready to implode. And while the markets are clearly freaked out, nor do they seem to be particularly assuaged by Federal confidence-building measures, which seem to have only been temporary nudges at best. All in all, market movement is absolutely idiosyncratic.

Like so many others, this seems to be an issue of culture. If it defies explanation through conventional mechanics, then the human element has become such a swollen variable that rational reasoning is no longer entirely adequate. As I seek it, it looks like the markets and the consumer class cannot square the relative health of the traditional economy with the flatlining of investment entities on such a massive scale. When this occurs, confidence ceases to become an issue – it becomes the issue. At the same time, the markets flail because the information, however psychologically motivated, is one that defies economic metrics that are not spelling doom and gloom. In some ways, this is even more unsettling. If it’s a recession, let it be a recession. If it ain’t, then it ain’t. But here, no, we have uncertainty par excellence. Where we don’t even know where we are, where we’re going, or how to get out because indicators aren’t aligning with historical models.  

Normally, in quotidien crest-trough business cycles, economists are usually able to project with moderate accuracy when and how the economy will recover or slide. But not now: everyone is panicking because our compasses are spinning, the gas light is on, and yet we’re still plodding along; utterly incomprehensible. 

Is this worse than a recession? In many ways, no, of course not. Although unemployment is mounting, we’re not getting anywhere near Great Depression levels (to which this crisis is most often compared). If anything, the human fallout is more reminiscent of the dotcom bubble of the early 2000s, which was historically minor. Is this a reason for optimism? Um, sure. But it doesn’t guarantee that we’re going to get out of this cleanly. But, for now, if the climate of panic continues, we could stumble into a real recession from our own moodiness about the markets. Even if we don’t, history may look at this moment as being one of singular confusion and irrationality from confusion.

Indeed, from a human-organization viewpoint, the international reaction is not surprising. We humans are creatures of habit, and we like to have control over our own destinies. When bad things happen that are seemingly beyond comprehension, it is often chalked up to conspiracy or supernatural malice. And here, the cosmology that emerges is not one of forest spirits or Baal, but of singular corporate greed and runaway deregulation – as if something this complex has such simplistic, faraway origins. But the narrative is clung to with desperation, and won’t be released until it’s safe to feel in control once again.

New Theme

Clearly, I’ve activated a new theme for the website. I liked the old one but it was time for a change – and this new one seems to fit the bill. For now. There are a number of other minor updates here and there. More posts coming.

Weirdest Economy Ever

Apologies for having not written for some time. It’s been busy – lots of things going on, foremost being that I have recently changed jobs. I am no longer working for Messr Rendell, but am now doing economic development work for a quasi-public agency that answers to Messr Corzine.

Anyway, the economy continues to be in the news a bit lately, eh? What an understatement: you know it’s news when you’re checking your bank’s press page (I use Wachovia) periodically over the course of the day trying to figure out to whom they are being sold. Still kind of in the dark here, guys.

Clearly, we’re going through some economic travails of enormous proportions. That said, I am have the darndest time trying to figger at just how extensive and bad things are moving towards. There are many reasons to be confused; first – what’s with Congress’s super-secrecy regarding economic indicators and thus the abosolute metaphysical necessity for the bailout bill? Whatever Bernanke and Paulson said to Congress apparently had some kind of crazy, fall-on-your-knees-and-pray kind of effect on Congressional leadership and El Presidente Bush.

And yet, the original House bailout bill failed to pass.

Um, okay? So does that somehow absolve the rest of us from backing Paulson’s magical $700 billion bailout? Even more interestingly – the markets rallied like hell. Weird, right?

So, of course, after the markets rally and the dollar strengthens big, all it takes are some pretty hefty energy pork amendments (?!?) to bribe just enough of those holdouts to approve  the bailout, which El Presidente signs – visibly relieved. And then, of course, the markets tank. As the Drudge Report headline so sensationally heralds: Goodbye, 10,000.

You think that’s strange? Try adding the fact that despite the supposedly exceptional ill-health of the economy, services and exports actually expanded. Yup – and apparently the dollar is doings reps she hasn’t been able to pull for years. Oh yeah, and oil is below $90.

If you’re asking “whisky, tango, foxtrot?!” then you aren’t alone. It’s really hard to say what all this supposedly conflicting information actually means, but the unimaginable complexity of the global economy and financial system may have brought us to a point where the crest-trough flux of the business cycle no longer quite adequately applies. This may be a premature declaration – I’m honestly too confused to be able to say for sure, but most of us are – but I guess it’s about as good a guess as many will find in a situation where government transparency has been at a decided premium. Ironically, this same government is leading the charge to impose more a weighty regulatory regime on the economy to protect against obfuscation.

Funny, right?

Political Correctness and the Mortgage Bust

I’m getting pretty tired of hearing people go on and on about “predatory lending,” especially when affixed to the qualifier of “targeting minorities.” I cannot deny that predatory lending occurs, but the paranoid notion that there is a systemic corporate conspiracy to dole out wads of cash to those who can’t remit is garbage. And to declare that certain minority groups are so-targeted is even more disingenuous.

Let’s be clear – racism exists and most certainly creeps into the business of financial transactions. That said, the ongoing mortgage crisis is not a function of racism. Why are minorities disproportionately affected? Because minorities are disproportionately poorer. Many of the bad loans made to those now in trouble are the result of an industry, already bullish during the real estate boom, overreacting to a political environment that placed greater value on high-levels of minority home ownership than sound lending practices. Denying minorities loans because of poor credit and unfavorable wage levels risked charges of ‘redlining,’ to which the government (think Freddie & Fannie) and the industry are extremely sensitive.

Although both Obama and McCain seem to be clamoring for increased regulation, this issue is actually a textbook case of political agendas spoiling the market. As the government becomes even more involved – whether through a heightened regulatory environment or outright nationalization – the weight of political forces will only increase. The marketplace, eroded and lopsided by the “well-intentioned” state, will only function less reliably, which, ironically, is bound to result in clamor for ever-increasing regulation.

Welcome to 21st century ‘capitalism.’

The End of the War on Terror

My latest TCS Daily piece is up. An excerpt:

I imagine posterity will look back on this moment as the dusk of American unipolarity. Make no mistake, the United States remains uniquely formidable militarily, culturally, and politically, but the force of the once unbeatable ideology of liberal democracy’s unassailable march lies twisted and crushed in the battlefields of the Caucasus. Nation states have joined the rebellion, and done so with a fearsome vengeance. As China coolly flexes its muscles in an extravagant, tightly regulated Olympic Games, so too does Russia as its armies pour into the borders of its enemies. And worse, the American response to Russian aggression has been beyond tepid, and the world is duly taking note.