Tag Archives: #Economics

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Oh the poor little lambs who don’t want to return to the office!

During the COVID-19 panicdemic — no, that’s not a typographical error, but is spelled exactly the way I see it — employees who could work from home were told to do so. As it happened, my younger daughter, an IT/communications professional, worked from our farm. Fortunately, I had already installed an outdoor electric receptacle on the screened-in porch, and she did a lot of her work there.

A cup of raktajino — Klingon coffee — in a mug celebrating my status as a descendant of white, Christian, settler colonialists to start the morning.

And she was quite honest about the whole thing: she was just not as productive working at our home. With cats and dogs and chickens, with fine Kentucky spring and summer weather, there were simply too many distractions.

And it’s good for the employees as well . . . as long as they are not Jeffrey Toobin. A cup of coffee in the morning costs me 50¢, not $4.50 at Starbucks.

Logically, if most employees were as productive working from home as they are at the office, employers would love that. Having employees working at home means that employers could maintain smaller offices, have smaller parking lots, reduced janitorial services, reduced office ‘perks’ expenses, just a whole host of things. It only makes sense to require people who could work from home to come into the office if productivity is a real issue.

From The Wall Street Journal:

Meet the People Who Refused to Go Back to the Office and Lost Their Jobs

These people are coming to terms with the fact that they might never work from home again

by Callum Borchers | Wednesday, December 11, 2024 | 9:00 PM EST

If you’re reading this from your home office, it’s time to consider whether you’re prepared to lose your job over a return-to-office mandate. Continue reading →

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Ivy League research associate wants clerks at Wawa to pay for her commute

Talia Borofsky, from her Twitter profile.

Cry me a river! Talia Borofsky is “a postdoctoral research associate in Princeton’s High Meadows Environmental institute, where she researches the evolution and ecology of cooperative hunting.” Dr Borofsky lives in foul, fetid, fuming, foggy, filthy Philadelphia but commutes to work at Princeton University, and she greatly saddened by the fact that cashiers at WalMart and hamburger flippers at McDonald’s won’t be paying as much for her daily commute!

Amtrak’s sudden fare increases bite the hand that feeds it

Amtrak recently raised multi-ride fares along the Northeast Corridor without adequate prior warning to its ridership. The drastic increase is a slap in the face to taxpayers, writes Talia Borofsky.

by Talia Borofsky | Thursday, August 15, 2024 | 12:00 PM EDT

In July Amtrak raised multi-ride fares along the Northeast Corridor by anywhere from 32% to 70% without directly notifying its ridership in advance.

Amtrak, a federally funded and federally majority-owned company, is meant to serve the public. The drastic fare increase is a slap in the face to taxpayers after the infrastructure bill dedicated a total of $22 billion in direct grants to the company.

You might think from Dr Borofsky’s first two paragraphs that her complaint is that she wasn’t notified far enough and directly enough in advance, but that’s not it. What upsets her is that she’s having to pay more for a direct service she receives.

Investopedia notes:

Amtrak receives considerable subsidies from both state and federal governments but it’s managed as a for-profit company. This isn’t unusual. No country in the world operates a passenger rail system without public support.

But Amtrak’s “for-profit” status is sadly ironic. The train company has never been profitable since its founding nearly fifty years ago. It’s only thanks to its subsidies that the company has survived.

In other words, Dr Borofsky’s daily commute has never been entirely paid for by her fares. It has always been subsidized by taxpayer dollars, many of which are taken from people who earn less money than she does. But hey, if you’re a daycare worker in Philly, or a laborer for a roofing company in Lexington, shouldn’t you be glad to know that some of the money you pay in taxes goes to pay for “a postdoctoral research associate” at an Ivy League university, who earned her doctorate at Stanford, the hoitiest and the toitiest of the colleges west of the Mississippi, to research “the evolution and ecology of cooperative hunting”?

As a postdoc at Princeton University, I commute from Philly to Princeton using Amtrak. This commute used to make financial sense; rents in Philadelphia are almost half the price of those in Princeton, and Princeton provided a helpful although limited commute subsidy.

However, the commute became unaffordable for me and likely many others on July 1; the 10-trip (one-way) ticket package between Princeton and Philly shot up from $230 to $390, and the monthly pass increased from $576 to $975. These sudden increases have impacted many postdocs and graduate students at Princeton, whose budgets were already strained by the previous fares.

There’s such a whiff of elitism from Dr Borofsky’s OpEd. As a “postdoctoral research associate” at an Ivy League university, she is paid much more than most Philadelphians. According to Glass Door:

The estimated total pay range for a Postdoctoral Fellow at Princeton University is $57K–$67K per year, which includes base salary and additional pay. The average Postdoctoral Fellow base salary at Princeton University is $62K per year.

The minimum of $57,000 is slightly higher than the median household income of $56,517 for Philadelphians overall. But Dr Borofsky apparently believes that the baggers at Giant Food Mart or the clerk at Wawa brewing her large coffee for the train ride — yeah, I’m guessing about that last, but everyone in Philly should drink Wawa coffee! — should have to contribute a bit more to pay for her train ride.

Dr Borofsky continued to tell readers about Amtrak’s poor service, and that the suddenness of the fare increase was “exploitative.” I have no qualms with her point that the increase was sudden, nor that Amtrak’s service isn’t the greatest.

But it’s her concluding one-sentence paragraph that gets me:

Train travel should be viable for all, not just the wealthy.

No, train travel should be available to those who pay for the service. Why should I, a retiree, be required to pony up some of my tax dollars so that Dr Borofsky doesn’t have to pay for the service she receives? Why should the janitors at Princeton be required to help fund her commute?

The subtitle of her article states, “The drastic increase is a slap in the face to taxpayers,” but no; the drastic increase is a boon to the taxpayers, the ones who are already subsidizing her train ride. The good research associate should pay for the services she receives herself.

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I know how to save The Washington Post! Find a new billionaire owner who doesn't care if the paper is losing money!

I know how to save The Washington Post! Just have Jeff Bezos, net worth $196 billion as of June 4, 2024, owner of the newspaper, give it to MacKenzie Scott, net worth $33.3 billion as of June 4, 2024, Mr Bezos’ ex-wife and a noted philanthropist who has no problem in giving away her money. Just a straight-up reassignment! Mr Bezos stops losing $77 to $100 million a year on the Post, and Miss Scott, with five times as much money as Patrick Soon-Shiong, net worth $6.3 billion as of June 4, 2024, and who is finding the Los Angeles Times’ losses too much to bear, can easily handle losing money, because she doesn’t seem to care if she makes money or not. Continue reading →

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Lies, damned lies, and statistics Who are you going to believe, Joe Biden, or your lying eyes?

“The Party told you to reject the evidence of your eyes and ears. It was their final, most essential command.” — George Orwell, 1984

The official inflation rate has come down from its highs earlier in the Biden Administration, and the Democrats are arguing that inflation has been whipped, that wages are rising just as fast as prices, and even a little bit faster. But Erin McCarthy of The Philadelphia Inquirer wrote something that just doesn’t go along with the Democrats’ meme. Continue reading →

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The Golden Rule

Have you heard of the Golden Rule? “He who has the gold makes the rules!”

We have noted, many times, how deep-pockets donors have reacted very badly to the tolerance of anti-Semitism on campus. Several major corporate CEOs have said that they would not hire Harvard students who signed a stupid document blaming Israel for Hamas’ October 7th attack, and at least one CEO has said he will never again hire anyone from Harvard, MIT, or Penn following the three presidents’ debacle. Continue reading →

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But, but, but, it’s just so unfair! Caitlin Clark's new endorsement deals are all about the Benjamins

Caitlin Clark was the top NCAA women’s basketball player this past season, and was the number one draft pick by the Indiana Fever. She was the major reason that the Iowa Hawkeyes’ women’s team got more coverage this year, and that the women’s tournament drew a lot more viewers than the norm. And, as her rookie season begins, the advance television schedule shows that the Indiana Fever will get a lot more national television coverage. Continue reading →

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When a reporter has more of an agenda than an understanding of economics and business.

We have twice reported on the decisions of Wawa to close down some stores in foul, fetid, fuming, foggy, filthy Philadelphia. The late Josh Kruger complained bitterly about such.

This crime is not new, and The Philadelphia Inquirer reported that the Headhouse Square Wawa “will become the sixth Center City Wawa to shutter since 2020.”

So, you would think that an article in the newspaper on food ‘deserts’ in some Philly neighborhoods would at least mention crime. But, if you did think that, you would be wrong.

About 40 million people in the United States don’t have access to a full-service grocery store

The 2023 update of the Limited Supermarket Access Study examines the lack convenient access to health food options across the nation — and in Philadelphia.

by Lynette Hazleton | Thursday, March 21, 2024 | 5:00 AM EST

What food is available has everything to do with the food stores that are available.

When the food store is a full-service supermarket, like the ShopRite in Parkside, it usually means you will have the access to a wider variety, higher-quality and lower-cost food, explained Michelle Schmitt, a senior policy analyst at The Reinvestment Fund (TRF) as she walked around the bustling 15-year-old supermarket.

As you can see, the article wasn’t produced by the regular Inquirer staff, but the Leftist Lenfest Institute for Journalism, the non-profit which owns the newspaper. I have previously noted that, as a subscriber, I sometimes receive begging for donations letters from the Leftist Lenfest Institute.

When you don’t have the same access to high quality food as you do to chips, fast food and soda, it can contribute to an unhealthy eating pattern that can ultimately lead to chronic disease.

How is it that Lynette Hazelton, the Philly native who reported this story, couldn’t bring herself to note that the densely-populated rowhouse neighborhoods which make up a significant part of the city’s neighborhoods don’t really have room for a huge Giant Food Mart? Yes, there are corner bodegas in most of the neighborhoods, where you can get those chips, fast foods, soda, beer, lottery tickets, and the occasional bullet in your chest. But the kinds of supermarkets that Miss Hazelton envisions take up around ten acres when parking lots are included.

Schmitt is the main author of the 2023 update to the Limited Supermarket Access (LSA) study which determines who is and is not well served by their grocery store. The official definition for limited supermarket access is 500 people in a low income tract where urban members are more than a mile and rural shoppers are more than 10 miles to a full service store. It is the fourth update since 2010 and the first to include Alaska and Hawaii.

The big take away: about 40 million Americans live without easy access to healthy food options.

Take Parkside, Belmont and Mantua neighborhoods of West Philadelphia. Together they are home to roughly 48,755 residents. Virtually all the blocks are very densely populated, 66% Black and almost half the people had an annual income of $25,000 in 2021, the latest data available.

This was some sloppy writing. Did Miss Hazeltom mean that $25,000 was the median income?

While this is the neighborhood many traditional stores would overlook, it is the type of neighborhood that the LSA study showed was in desperate need of a supermarket.

OK, why would “many traditional stores” overlook those neighborhoods? The author noted that “Virtually all the blocks are very densely populated,” which means less available area to put in a ten-acre supermarket. The neighborhoods are mostly poor, and grocery stores “operate on razor-thin profit margins. The industry average is between one and three percent, far below other retail sectors. With such lean margins, grocery stores rely on high sales volume and inventory turnover to thrive.” Then you throw in Philly’s crime rate, and the obvious question is easy to determine: how could a supermarket make a profit there?

Supermarkets were once associated with suburbs, and by the 1970s seven out of every ten food dollars were spent there. But also supermarkets did not place their businesses in low-income communities which lead to real consequences.

This paragraph alone tells you just how poor Miss Hazelton’s article was. The source she hyperlinked told her that grocery stores in Philly were mostly the ‘corner grocery store’ type, operating in the rowhouse neighborhoods, yet somehow, she couldn’t figure out that those neighborhood structures dictated the kinds of grocery stores that were there. In more rural areas, we had “general stores” before supermarkets were developed, and many lament that so few of those old general stores exist. Alas! The old general store that was near where I now live went out of business, became someone’s auto repair shop for a while, and is now a small volunteer fire station. Kroger and Giant and Aldi forced those old country general stores out of business, but in the suburbs and rural areas, there was the physical room for supermarkets.

Perhaps it’s as simple as the reporter having more of an agenda than an understanding of economics and business.

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The Philadelphia Inquirer tells us about yet another government economic program that just didn’t work.

My good friend Daniel Pearson — OK, OK, I think he knows who I am, but we’ve never met other than in debates on Twitter — is an editorial writer for The Philadelphia Inquirer, and that makes him a liberal, but he’s not a far left whacko, and conservatives can actually talk to him. And, other than the fact that he appears to be holding a disgusting Philly cheesesteak in his Twitter pic — a hot, freshly baked Philly pretzel would be more than acceptable, but cheesesteaks are vile — I pretty much like him. Today’s main editorial shows that, for a liberal, he’s not completely ignorant of economics.

Inclusionary zoning has failed to deliver on affordable housing promise | Editorial

Since enforcement began in July 2022, only five housing projects — with a total of 106 new apartments and fewer than 30 income-restricted units — have received permits within the restricted area.

by The Editorial Board | Tuesday, February 27, 2024 | 6:00 AM EST

In December 2021, Philadelphia City Council created a new affordable housing program — known as inclusionary zoning — that sounded almost too good to be true.

With no public subsidy, density bonuses, or other financial concessions, developers of new properties with 10 or more units in parts of West Philadelphia and the greater Kensington area were required to set aside 20% of every proposed new development for affordable housing. Given the then-hot real estate market in these areas, supporters pitched the concept as a cost-free way to prevent displacement as neighborhoods changed.

The problem is obvious. Developers, like is the case with all other types of investors and businesses, are in business to make money, the maximum amount of money possible for the shareholders. A requirement to set aside 20% for “affordable housing”, without any financial kickbacks or concessions, means that there’s less money to be made. Not only is there less money to be made on the “affordable” units, but the presence of the lower cost units brings down the sale value or potential rents for the luxury condominiums or apartments.

“Philadelphia is in the midst of a full-blown housing crisis. If we continue to do nothing, housing prices will continue to go up, and the Black and brown people who are the backbone of this city will continually be pushed to the fringes,” said Councilmember Jamie Gauthier at the time. Gauthier, along with then-Councilmember Maria Quiñones Sánchez, proposed the bill.

Two years later, the legislation hasn’t lived up to those lofty goals — and it’s clear a new approach is needed.

Ryan Spak, an affordable housing developer with a track record of delivering new income-restricted housing without public subsidy, predicted that the concept would struggle. Spak told anyone who would listen that the bill would force him to either raise prices to unsustainable levels or to do business outside of West Philly. The math simply didn’t work out.

Mr Spak did the math, writing on January 6, 2022:

Today, rents have already risen to unseen levels. This legislation forces those costs to rise faster and higher because developers will have to charge more for the market-rate units to pay for the affordable units. For one example, to meet the required 20% of the units at 40% AMI (Area Median Income), Spak Group would need to rent a two-bedroom apartment in Cedar Park for $2,150 per month — $500 per month more than I’ve ever achieved in my 10 years developing and managing rentals in West Philly. The market will reject these prices; the project will never be constructed and, as a result, neither will the affordable units.

Other requirements would have different math, but he noted that “every analysis” made, with different tweaks of the proposal, would fail without direct government subsidies.

Going back to the first cited article, we can see the problem:

Gauthier said that while developers might make less money, the potential of adding 200 income-restricted housing units a year was too promising to reverse course. The fruits of the program, however, have been minimal, and even those were achieved only by reopening the door to subsidies.

Mr Pearson, who had told me personally that he strives to keep his editorials around the old 750-word limit, was pretty kind to the Third District Councilwoman with that small paragraph. What she actually wrote was:

A complaint we’ve heard from developers since day one is that MIN will diminish the return on investment for their projects — and yes, it’s true that this legislation will require them to see lower profits than they’re accustomed to. It remains unclear to me why we should find it unacceptable for developers and investors to see less of a return, but fail to question why we continue to build housing that doesn’t meet the needs of current residents. Just because the existing system works for developers and investors doesn’t mean we should let socially irresponsible development continue, unfettered.

Opponents of this legislation say it will stymie development in my district. I have a hard time believing that. To say that commercial development is booming in University City would be an understatement — and we know that today’s workers want their jobs to be close to their homes, which will lead them to continue moving to this part of the city. MIN will ensure that this growth doesn’t displace working-class residents and that we have equity in our neighborhoods for years to come.

So, why was development booming in University City? The area is home to the Ivy League University of Pennsylvania[1]2023-24 cost of attendance, $73,494, not including housing., Drexel University, the former University of the Sciences, now part of St Joseph’s University, the very famous Children’s Hospital of Pennsylvania (CHOP), along with several other places of note, and has been gentrifying since the 1960s, pushed by Penn’s programs to help faculty and staff buy there. And, of course, there’s student housing.[2]We have previously noted, and the Inky reported, on the absolute mess that the very liberal and environmentally-conscious students left when they moved out in May of 2023. The furthest left candidate … Continue reading Simply put, there were people with money to spend, and developers have chosen to make money in an area where there was money to be made. Miss Gauthier might believe that developers would blithely accept “lower profits than they’re accustomed to,” rather than considering the possibility that many would not accept “lower profits” and would simply invest their money elsewhere.

There’s more than that, or course. As we have reported previously, there is significant resistance to city projects in West Philly that some believe would lead to more gentrification in the area.

In a plan for a safer, vibrant 52nd Street, worried West Philly neighbors see gentrification looming

Angst is roiling minority neighborhoods as they struggle to balance the opportunities and the threats created by gentrification. “West Philly is the new Africa,” one resident warned at a community meeting. “Everyone wants the property that’s in West Philadelphia.”

by Jason Laughlin | February 21, 2020

The topic of the community meeting — a plan to beautify 52nd Street, to make it safe, welcoming, and prosperous once again — was, on its face, nothing but good news for West Philadelphia’s long-declining business corridor.

Yet the audience of about 50 residents and retailers, mostly African American, grew increasingly agitated as urban designer Jonas Maciunas flipped through a PowerPoint presentation of proposed improvements. Many weren’t seeing a vision of a neighborhood revitalized from Market to Pine Streets. Instead, in the talk of redesigned intersections, leafy thoroughfares, and better bus shelters, they heard the ominous whisper of gentrification.

“It just seems that when white people decide to come back to a certain neighborhood, they want it a certain way,” said Carol Morris, 68, a retired elementary school teacher.

Morris’ declaration opened the floodgates of fear and anger that recent night at the Lucien E. Blackwell West Philadelphia Regional Library. Maciunas and Jesse Blitzstein, director of community and economic development for the nonprofit Enterprise Center, which is spearheading the project, were peppered with skeptical questions ranging from the validity of surveys showing community support for the improvements to the maintenance of trees that would be planted.

Now, why would any developer want to risk his money on a project that the neighborhood doesn’t want? Who among the higher-end buyers and renters, would want to buy or rent in a neighborhood in which many of the locals don’t want beautification projects because they might bring in more white residents?

Mr Pearson also noted that Philly isn’t the only place where ‘inclusionary zoning’ hasn’t lived up to the promises made for it:

Portland, Ore., enacted inclusionary zoning in 2020 and saw a similar decline in the construction of large apartment buildings, with many developers instead opting to reduce the scale of their projects so they did not meet the threshold that required set-asides. The well-meaning measure also seems to raise the cost of existing homes.

California towns with inclusionary zoning saw housing prices increase by 20% relative to towns without it. Those kinds of spikes limit the restrictions’ potential to stave off gentrification. It isn’t much use to provide 30 new affordable apartments if the price of Philadelphia’s existing 700,000-plus homes goes up.

Gee, how ’bout that? Governments try to push and pull on the economy, doubtlessly aided by doctors of economics, yet they always seem to get it wrong.

Councilwoman Gauthier got everything wrong, because she was basing her ‘economic’ policy on what she sees as promoting ‘socially responsible development’. Well, investors don’t care about socially responsible development; they care about making money!

In the end, there’s a great fact about economics that so many people, liberals and conservatives alike, and economics professors, just don’t understand. The economy simply cannot be controlled, because the economy is 250 million taking over a billion economic decisions, every single day. Deciding whether to stop on the way to work at Wawa or just making a cup of coffee at home is an economic decision, deciding to scarf down two pieces of toast at home or grab a bagel at Dunkin’ Donuts is an economic decision. These things may seem small, and individually, they are, but when a thousand potential customers have to decide whether to get coffee and a sandwich at Ultimo Coffee or go elsewhere, because the baristas are on strike,  those things, in the aggregate, start to become influential economic decisions.

And those decisions are taken by people, not graphs or flowcharts or city councils. Miss Gauthier’s act, pushed through the Philadelphia City Council, didn’t work out the way she expected, because the economic actors she wanted to influence, took their decisions differently from what she hoped.

 

References

References
↑1 2023-24 cost of attendance, $73,494, not including housing.
↑2 We have previously noted, and the Inky reported, on the absolute mess that the very liberal and environmentally-conscious students left when they moved out in May of 2023. The furthest left candidate in the 2023 Democratic mayoral primary, Helen Gym Flaherty, received a plurality of the votes in wealthier, whiter and more heavily Asian University City.
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Maybe Jeff Bezos could spend some of those tax savings on The Washington Post?

I will admit it: I liked the way that Amazon founder Jeff Bezos bought The Washington Post, to save it when the Graham family were running out of money. Full disclosure: I am a basic digital subscriber to the Post. I have previously said that I appreciated billionaires who bought newspapers, to fail an otherwise failing industry, as long as they understood that losses were inevitable. Sadly, Mr Bezos isn’t too happy with that last part. We have also noted that Patrick Soon-Shiong, the billionaire who bought the Los Angeles Times, with a piddling $5.9 billion to his name, might feel much more pressure than Mr Bezos, current guesstimated net worth of $194.1 billion, in taking $40-$50 million a year losses.

Well, perhaps Mr Bezos can put a little less pressure on the Post, now that he’s made this money-saving move:

Jeff Bezos will save over $600 million in taxes by moving to Miami

by Robert Frank | Monday, February 12, 2024

  • Last year, Bezos announced on Instagram that he was leaving Seattle after nearly 30 years to move to Miami.

  • In 2022 Washington state imposed a new, 7% capital gains tax on sales of stocks or bonds of more than $250,000.

  • Bezos plans to unload 50 million shares of Amazon before Jan. 31, 2025. Posting those sales in Florida will save him at least $610 million.

Jeff Bezos’ $2 billion stock sale last week came with an added perk: no state taxes.

Last year, Bezos announced on Instagram that he was leaving Seattle after nearly 30 years to move to Miami. He said the move was to be closer to his parents and his rocket launches at Blue Origin. The timing also suggested another reason: taxes.

In 2022 Washington state imposed a new, 7% capital gains tax on sales of stocks or bonds of more than $250,000. Washington state doesn’t have a personal income tax, so the new levy marked the first time Bezos would face state taxes on his stock sales.

Starting in 1998 Bezos sold billions of dollars worth of Amazon shares almost every year for more than two decades to fund his philanthropy, his space company Blue Origin, and more recently his $500 million mega yacht and a growing collection of mansions purchased with his fiancé Lauren Sanchez.

In 2022, when the tax took effect, Bezos stopped selling. He didn’t sell any Amazon stock in 2022 or 2023, gifting only $200 million of shares at the end of last year.

After his move to Miami, Bezos made up for lost time. Last week, a filing with the SEC revealed that Bezos launched a pre-scheduled stock-selling plan to unload 50 million shares before Jan. 31, 2025. At today’s price, that would total more than $8.7 billion.

Simply put, rapacious state governments trying to steal more money from the people who earned it wind up influencing the decisions of the people who earned that money. Mr Bezos had the freedom to move away from the left coast to the far more sensible Sunshine State, and did.

Florida has no state income tax or a tax on capital gains. So on the $2 billion sale last week, he saved $140 million that he would have paid to Washington state. On the entire sale of 50 million shares over the next year, he will save at least $610 million. And that’s assuming Amazon shares remain flat. If they continue to rise, the value of his shares — and his tax savings — will be even higher.

That’s some major bucks he doesn’t have to give to a left-wing state government, which would doubtlessly spend it on welfare and illegal aliens. Mr Bezos could, and should, spend some of those savings on the Post, to decrease the financial pressure on that august newspaper, at least if his girlfriend Lauren Sanchez doesn’t persuade him to waste more of it on yachts and mansions.