Maybe I am too eager to believe it, and...

..I expect to be smote down for saying it, but I think the two month old, mediocre, Case-Shiller number that came out today is consistent with the idea that the housing market will really come back big this year (I said so in the paper and on the radio today, so I might as well say it here).


Inventories in many hard hit markets are now low by historical standards.  Time on market has fallen.  HARP II can accelerate amortization (which is its most important feature).  Prices are really cheap, both when the user cost they produce is compared with rent, and when compared with incomes (by World standards).

State growth and the composition of spending

Paul Krugman rightly calls out Arthur Laffer's junk economics on the impact of state and local taxes on economic growth (I have no idea about why anyone listens to Laffer about anything, but that is for another day).  At the same time, however, a good, liberal friend of mine told  me yesterday that for the first time in his life, he will vote against a tax increase in California--the temporary tax increase proposed by Jerry Brown that will be on the ballot on November 6.

My friend has no issue with government spending per se; his problem is that he gets to observe the doings in Sacramento quite closely, and as he puts it, "it is even worse than you think up there."

California's state and local governments spend a lot of money.  We ranked 4th in 2010 among the 50 states in per capita state and local spending.     Yet if one looks at education spending, we are only average.  Even worse (from the standpoint of my parochial pride, anyway), we trail Texas in education spending per capita.

My understanding is that once upon a time, California had among the most efficient and accountable governments in the country.  The public schools were a particular source of pride.  But the vast amounts of money are not being well managed now--such mismanagement is harmful whether it occurs in the public or private sector.  How well government money is spent may be just as important as how much money is spent.

Hannah Green:What is the purpose of protesting? - The Daily Northwestern - Northwestern University

She writes:

As we took the Red Line back from the protest, I continued to have mixed feelings about it. I thought that the rally especially had been too disorganized and too angry. I thought that Salek was making fun of me when he said that a protest wasn’t the same thing as an academic forum (He later told me that he wasn’t). A rally isn’t meant to convince people of anything, he said, but to get people who were already convinced energized. He said that there wasn’t enough time during the rally for all those with important issues to completely clarify their positions subtlety. There had been forums and discussions earlier in the week for that.

I then became nostalgic for a time that I had never lived in. I thought of protests from the ’60s and ’70s that I’d heard about. Protesters were convincing because they made their cases by showing their humanity rather than their anger. But this is a different kind of protest, Salek said. There was a wider variety of problems on the table. Part of the point was to just make people aware of the diversity of the issues and stake, and, yes, to give people a place to (peacefully) channel their anger. That’s how a movement can gain its momentum.

Omit needless words...

My dear friend Steve Malpezzi on John Quigley

He writes:

I first encountered Professor Quigley through his research; later, we connected through our mutual friend the late Steve Mayo. I was honored to count John as a friend, but he was also a professional and scholarly inspiration to me, and to many, many others. Professor Quigley was an active researcher and teacher for over four decades; a long career by some standards, but he left those of us who knew him, and his work, wishing we could have had a fifth, if not a sixth.

In the history of the allied fields of urban economics, real estate economics and finance, after the original generation of William Alonso, Richard Muth, Edwin Mills and John Kain, John Quigley shaped our field like no one else. The breadth of his contributions, in urban, housing, public finance, finance, and many other fields, is breathtaking.

I’m not alone in that judgment, and those of us that hold it can easily show that it’s not simply sentiment for a passed friend. Many colleagues share my high opinion of John Quigley, and have said so, unbidden, for years, long before his illness. Several years ago, for fun, I asked six PhD students to write down the name of the person who, according to their study, all-in, made the greatest contributions to our field. (I told them they couldn’t name anyone from Wisconsin, but of course that was to save face :-).

Five wrote “Quigley.” Well, it wasn’t all six, but I’m not going to stretch the truth for the sake of the story!

Read the whole thing.

Yongheng Deng, Gary Painter, and Christian Redfearn on the Life of John Quigley

Yongheng, Gary and Chris write a lovely tribute for AREUEA:

Monday, May 14, the community of AREUEA was deeply saddened to learn that John Quigley passed away on Saturday, May 12, 2012.

Since our early years at Berkeley, John has been a wonderful mentor and friend to us. John has been a member of 84 PhD committees since 1990, chairing 26 of them (including the three of us). He was a distinguished academic, a mentor for his students throughout their entire career. He excelled in each of the areas we value: research, teaching, and service. He published 22 articles in just the past three years alone, and his work has earned more than 10,000 citations. His service to the profession is unparalleled.

Within AREUEA, John served in many capacities including President and most recently as the chair of the International Selection Committee. He served as the chair of the Department of Economics at UC Berkeley, the editor of Regional Science and Urban Economics, and as a role model to many. Beyond these which can be counted, John's mix of conviction, energy, and laughter made him a singular character in our worlds. We will remain ever grateful for his guidance and advice, but beyond all of it, we also just liked him. He was good company--on a panel just as he was on the train from Shanghai to Beijing. John made life fun. He not only helped us join a profession, but helped us become part of a community. Simply put, we would not be the academics that we are today, if it not for him. We feel so fortunate that we have had him as a teacher, mentor, friend and collaborator.

We will always cherish the memory of John in our heart as a great scholar, a wonderful human being, a man of great intelligence, kindness, dedication, generosity, and profound integrity. We will forever miss him and miss him dearly.

Yongheng Deng (NUS), Gary Painter (USC), and Chris Redfearn (USC)

AREUEA Officers and Board Members

$920 million for 12 mph

I have taken the new Expo line now three times from USC to downtown LA.  According to Google Maps, the distance is 2.5 miles.  The trip has, on average, taken 13 minutes.  This works out to 11.5 mile per hour.

Metro spent $920 million on a line that does not get signal priority at traffic lights--in other words, it expended huge capital costs on a large bus that is stuck on one route.