Opinion

Reihan Salam

In New York, the rent doesn’t have to be ‘too damn high’

Reihan Salam
Aug 23, 2013 15:35 UTC

The house in which I grew up was built in 1913. It was part of a building boom in New York City’s outer boroughs fueled by the rising incomes, and rising aspirations, of erstwhile tenement-dwellers. As jam-packed Manhattan neighborhoods like the Lower East Side emptied out, once-bucolic stretches of Brooklyn, Queens and the Bronx were transformed with dizzying speed.

A century later, neighborhoods like the one I grew up in seem frozen in amber. The faces are different, to be sure, and so are the languages spoken by the locals. Crime has gone down and property values have gone up, and New York City is as desirable as it’s ever been. Yet we’ve had nothing like the building boom of the 1910s and 1920s that transformed the face of the city. Millions of low- and middle-income New Yorkers thus find themselves squeezed by skyrocketing rents, and hundreds of thousands of others who want to make their home in New York can’t afford to do so. 

In fairness, New York Mayor Michael Bloomberg has presided over the revitalization of the city’s waterfront, where new buildings really are sprouting up. Brooklyn’s Barclays Center will eventually be surrounded by new housing units, and an ambitious new mixed-use neighborhood is planned for Manhattan’s West Side.

But even when these various developments come to fruition, demand for housing in New York will continue to outstrip supply by a wide margin. The inevitable result of New York City’s failure to allow for more housing is gentrification and displacement. If you don’t build enough new housing in the most convenient and amenity-rich neighborhoods, affluent professionals will settle in adjacent neighborhoods, bidding up rents and driving people of more modest means out of their neighborhoods and in some cases out of the city. This means longer commutes and less access to economic opportunity for those who need it most.

One irony of New York City politics is that the most adamant opponents of gentrification tend to also be the most adamant opponents of development, the only force that can contain its spread. Recently, Dylan Matthews of the Washington Post surveyed the housing policies backed by New York’s leading Democratic and Republican mayoral candidates. All of them favor inclusionary zoning, in which developers are obligated to set aside a certain number of housing units for low- and middle-income households. These programs are a boon to those lucky enough to secure an affordable housing unit. But as Robert Ellickson first explained over 30 years ago, inclusionary zoning mandates effectively raise the cost of development, and in doing so, they tend to limit housing opportunities for low- and middle-income households overall. Worse still, inclusionary zoning mandates tend to be packaged with property tax abatements for developers that are eating away at the city’s tax base.

The sober way to legalize marijuana

Reihan Salam
Aug 16, 2013 16:21 UTC

As a general rule, Americans don’t give much thought to Uruguay, a small South American republic with a population of 3.3 million. But Uruguay has embarked on a new experiment with marijuana legalization that merits close attention. As Ken Parks of the Wall Street Journal reported late last month, new Uruguayan legislation will allow individuals to grow as much as 480 grams of marijuana for personal consumption, and marijuana cooperatives with no more than 45 members will be permitted to grow just over two plants per member. The government will also allow for limited commercial production, but Uruguayan lawmakers have made it clear that they don’t want a domestic marijuana market dominated by large for-profit firms.

Might the United States follow in Uruguay’s footsteps? Marijuana legalization seems inevitable—but we’d be wise to follow Uruguay’s lead and carefully regulate the kinds of legal marijuana operations that will follow. 

Marijuana advocates have successfully pressed for the legalization of the medicinal use of marijuana in 20 states and the District of Columbia since 1996, when California voters passed Proposition 215. And efforts to legalize the recreational use of marijuana, as in Uruguay’s new legislation, are gaining ground. In November, three states — Colorado, Oregon, and Washington — had marijuana legalization initiatives on the ballot, two of which passed. Though Oregon voters chose not to legalize marijuana last fall, they will likely get another chance to do so in 2014. Alaska and Arizona could be the next states to follow suit.

The geography of opportunity

Reihan Salam
Aug 1, 2013 20:40 UTC

Something extraordinary is happening in Salt Lake City, Seattle and Pittsburgh and in the suburbs surrounding them, and if we’re going to overcome entrenched poverty in America as a whole, we have to pay close attention to what these communities are getting right. To understand why, consider the findings of an important new study.

According to new findings from the Equality of Opportunity Project, an ambitious venture led by the economists Raj Chetty, Nathaniel Hendren, Patrick Kline and Emmanuel Saez, there are dramatic differences in economic outcomes for children raised in different U.S. cities. This shouldn’t be too surprising, as economic conditions vary considerably from region to region and so does the quality of K-12 schools and other institutions that contribute to success later in life. Yet Chetty et al have now put the consequences of these differences in sharp relief.

The team divided the United States into 741 commuting zones, most of which are named after the biggest city in the zone. Though these zones are conceptually similar to the metropolitan and micropolitan areas used by the Census Bureau, they’re not quite the same. Drawing on anonymized earnings records, the team then sought to track economic outcomes for individuals raised in various commuting zones, including where these individuals wound up in the national income distribution as adults.

Online education can be good or cheap, but not both

Reihan Salam
Jul 26, 2013 15:21 UTC

During his recent economic address at Knox College, President Barack Obama briefly referenced the promise of online learning. Specifically, he celebrated the fact that some colleges are “blending teaching with online learning to help students master material and earn credits in less time,” a development that holds great potential to contain the rising cost of higher education. Yet this potential is still a long way from being realized, as demonstrated by a recent hiccup at California’s San Jose State University.

Like many of America’s public universities, San Jose State has struggled in recent years to increase its graduation rate. Only 8 percent of students who enrolled as full-time first-years in the fall of 2003 managed to complete their bachelor’s degree in four years, a share that climbed to 46 percent over six years. For students who enrolled in the fall of 2005, the numbers barely budged, with 7 percent finishing in four years and 46 percent finishing in six years. San Jose State has an ambitious plan to increase that share, which includes San Jose State Plus, a new effort to harness the potential of online learning.

The San Jose State Plus initiative is a wonderful example of innovative public sector thinking. Rather than build new online courses in isolation, San Jose State partnered with edX, a non-profit organization founded by Harvard and MIT, and Udacity, a highly-regarded education startup, to create courses that were rigorous, accessible and cost-effective.

How computerized work affects immigration

Reihan Salam
Jul 19, 2013 14:53 UTC

In 1900, 41 percent of the U.S. workforce was employed in agriculture. One hundred years later, that share had declined to 1.9 percent. Over that interval, the jobs that were easy and cheap to mechanize were mechanized, and now we are left with a handful of jobs that machines find extremely difficult to do. Machines can’t make strategic decisions about which crops to grow, and as a general rule they can’t fix themselves, so that leaves a significant role for managers and mechanics. Until recently, machines were also really bad at doing things like picking heads of lettuce and other delicate crops, as this requires a deftness of hand and an attention to detail that machines lack.

This is why the agricultural sector continues to have an appetite for less-skilled labor, which has been a huge driver of the recent comprehensive immigration reform effort. The idea is that because native-born Americans will never pick cucumbers — or at least because they will never pick cucumbers at a wage that would make for affordable cucumbers — we need a steady supply of less-skilled, low-wage workers to keep farms that grow cucumbers and lettuce and other delicate crops viable.

Now, however, a number of innovative firms have developed machines that use sophisticated sensors and an enormous amount of raw computing power to do jobs that had once been beyond the reach of machines. The reporters Gosia Wozniacka and Terence Chea recently described a Lettuce Bot that can “thin” a lettuce field in the time it would take twenty workers to do the same. Though the Lettuce Bot and machines like it remain expensive, there is every reason to believe that prices will fall. These picking machines are not quite good enough to pick fresh-market fruit, but they’re getting there. The reason these machines are being developed is the same reason agribusiness interests have been agitating for a substantial increase in less-skilled immigration: the supply of workers willing to work the fields is not big enough to keep wages extremely low, and so farms have been desperate for low-cost alternatives.

Republicans back agribusiness with the farm bill

Reihan Salam
Jul 12, 2013 20:29 UTC

This week, House Republicans passed a farm bill that reauthorizes and expands a wide range of federal subsidies for the agricultural sector. The bill, which is expected to cost $195 billion over the next decade, is far smaller than an earlier $939 billion version that went down to defeat last month, in what was widely seen as yet another blow to House Speaker John Boehner. Conservatives and libertarians are outraged. Heritage Action for America, the advocacy wing of the Heritage Foundation, has issued a scathing denunciation, as has policy expert Sallie James of the Cato Institute, who warns that even the modest savings promised in the farm bill are likely to prove illusory.

And liberals are also furious, as the House GOP, in an effort to paper over internal disagreements, decided to separate out the nutrition programs that had been in an earlier version of the bill, to be dealt with at a later date. Under the earlier version of the farm bill, nutrition programs — which include SNAP, the food stamp program that currently enrolls 47.6 million people — were expected to cost $743 billion over the next decade, $20.5 billion less than under the status quo. Congressional Democrats opposed the cuts on the grounds that they were too steep, while conservative GOP rebels insisted that they were too small.

The expectation is that House Republicans will propose nutrition-only legislation that will be considerably less generous than what came before it, thus bringing the rebels back into the fold. The debate over nutrition programs is obviously crucially important. David Armour and Sonia Sousa, policy scholars at George Mason University, have documented the extraordinary growth of SNAP over the last decade, and there does appear to be room to curb its growth while protecting the interests of the very poor. Whether or not Republican lawmakers choose to take that path remains to be seen. One thing we do know, however, is that the farm bill that has passed represents a serious step backwards for a party that was once committed to rolling back the agricultural welfare state.

Obamacare’s sliding scales and slippery slopes

Reihan Salam
Jul 8, 2013 18:14 UTC

Last week as Americans celebrated Independence Day, the Obama administration made a pair of big announcements about the Affordable Care Act (ACA), the crown jewel of the president’s domestic policy efforts: two of the ACA’s key enforcement provisions—income verification and a mandate for employers to provide healthcare—are being delayed until 2015. The exchanges will still open and subsidies will flow in 2014, but efforts to ferret out fraud, or for that matter honest mistakes, will be put on hold. Reading between the lines, it seems as though the White House was acknowledging that the health system created by the ACA is unworkable in its current form.

As Eugene Steuerle, a fellow at the Urban Institute, has explained, the ACA establishes a “four-part, nearly-universal, health care system” built around Medicare, Medicaid, employer-sponsored insurance, and the new state-based insurance exchanges. The really confusing thing about our new four-part health system is that the federal subsidies available to households earning the same income can vary dramatically, depending on which part of the health system you find yourself in. As long as you are old or disabled, Medicare treats all comers roughly equally. The federal contribution to Medicaid varies from state to state, but the level of coverage tends to be pretty similar across recipients. Subsidies for employer-sponsored insurance, meanwhile, are much higher for households earning high incomes, and thus paying high taxes, than for less affluent households, while subsidies for the new exchange policies are generous for low-earners and phase out for high-earners. The upshot is that subsidies for many low- and middle-income households are far more generous on the exchanges than they are for employer-sponsored insurance.

Given that the subsidies on the exchanges are more generous than the subsidies for employer-sponsored insurance, the ACA took various steps to contain spending. One of the most important was its employer mandate, which imposed a fine on mid-sized and large employers that failed to provide full-time employees with affordable insurance options. The idea was that the fine would nudge employers to offer affordable insurance options, underwritten by the relatively stingy tax subsidy for employer-sponsored insurance, thus containing the growth of exchange subsidies.

Carbon isn’t just America’s problem

Reihan Salam
Jun 28, 2013 20:04 UTC

Canada has 35 million people. Africa has just over 1 billion. But rather remarkably, Canada consumes about as much energy as all of Africa, according to Robert Bryce, a senior fellow at the Manhattan Institute and author of Power Hungry, a provocative look at the global energy industry. As African economies grow, however, it is a safe bet that African energy consumption will grow with it, just as energy consumption has increased in China and India and around the world as hundreds of millions have escaped poverty. And that is the key challenge facing those who hope to do something about carbon emissions, including President Obama.

Despite the fact that less than a third of U.S. voters believe that climate policy ought to be a high priority, according to a Pew survey conducted in January, the president gave a sweeping climate policy address earlier this week. During the 2012 presidential election, Mitt Romney tried to gain traction by claiming that the Obama administration was waging a “war on coal,” a charge the president and his allies adamantly rejected. Yet there is no denying that President Obama has backed regulations that are making it more expensive to extract and burn coal, as Juliet Eilperin recently documented in the Washington Post. The really new development this week is that while the president had been working to make new coal plants unviable, he is now seeking to impose regulations on existing coal plants that will either lead to steep penalty payments or force premature shutdowns.

Though these steps are widely resented in coal country, they are accelerating a trend that has been driven in large part by the collapse in domestic natural gas prices, which in turn has been driven by a technological revolution in the development of shale gas resources. In 2012, the same year Romney and Obama were debating the war on coal, U.S. coal use fell by 12 percent. Not coincidentally, the International Energy Agency has reported that between 2006 and 2011, U.S. carbon emissions had fallen by 7.7 percent, the steepest reduction for any country or region in the world. To some extent, this decrease in emissions reflected a sluggish economy. But it also reflected the shale boom. The president’s war on coal is not without costs, and Republicans, particularly those representing coal states, will fight it vigorously. But for now, at least, it is a war that U.S. energy consumers can afford, and it will contribute to America’s ongoing decarbonization. The deeper challenge for the president and his allies is that while domestic coal use is declining, global coal use is increasing at a stunning pace.

Pushing the immigration debate to the next level

Reihan Salam
Jun 21, 2013 17:08 UTC

It is often said that America is “a nation of immigrants.” But that’s not true in the strictest sense. As of the 2010 Census, the foreign-born share of the U.S. population was 12.9 percent, and so 87.1 percent of Americans that year were native-born non-immigrants. Granted, the nation of immigrants line tends to be used figuratively, to indicate that virtually all Americans come from somewhere else if you go back far enough. That includes the members of the indigenous communities that had settled in what is now the United States many centuries ago, and the descendants of the enslaved Africans who were brought to the Americas against their will. Yet when we use nation of immigrants so loosely, it loses all meaning.

And when you compare the foreign-born share of the U.S. population to other countries, you soon realize that while the absolute number of immigrants living in the U.S. is very large, we’re nowhere near countries like tiny Qatar, where over three-quarters of the population consists of foreign-born individuals, most of whom are guest workers, or Canada, where the foreign-born share is a robust 20.6 percent. The U.S. is roughly in the same ballpark as countries like Germany and Sweden, which have become major destinations for immigrants only in recent decades.

So what would it mean for America’s foreign-born population to dramatically increase in the coming decades? That is the question we ought to be asking ourselves in light of the new Congressional Budget Office analysis of the Senate immigration bill. At first, many observers focused on CBO projecting that because the Senate immigration bill will tend to increase the U.S. working-age population while not increasing the number of retirees, at least not yet, it will tend to increase economic growth, raise tax revenues, and cut the deficit. Over the first decade, the CBO projects that deficits will decrease by $200 billion relative to the current law baseline, while they will decrease by $700 billion over the second decade.

Edward Snowden, model dropout

Reihan Salam
Jun 14, 2013 18:00 UTC

One of the more striking facts about Edward Snowden, the Booz Allen Hamilton contractor who recently disclosed details concerning the National Security Agency’s various domestic surveillance programs, is that he is apparently a successful autodidact. After dropping out of high school, Snowden developed a very rigorous academic curriculum for himself, drawing on community college courses, online education programs and self-directed reading and programming. The fruit of these efforts was a lucrative job with an elite consulting firm, and a top secret clearance that gave him access to a treasure trove of state secrets.

Leaving aside the merits of Snowden’s decision to leak sensitive information to the press, his idiosyncratic educational experience points, however improbably, to a much brighter future for all young Americans, and indeed for anyone around the world hungry for knowledge.

After Snowden emerged on the national scene, a number of observers reacted with surprise, and in some cases dismay, at the fact that a high school dropout had found himself in such a sensitive position. Ralph Peters, a retired U.S. Army officer and New York Post columnist, has made several derisive references to Snowden’s dropout status, calling him, among other things, a “spoiled-brat, dropout Benedict Arnold” who deserves to be executed. David Brooks, writing in the New York Times, suggested that Snowden’s failure to graduate from high school reflected a larger inability to navigate the mediating institutions of civil society, which teach us to make commitments to others and to restrain our passions. Brooks makes an important point. There is a great deal of value in completing high school, as it demonstrates a certain level of discipline and a willingness to work with others.

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