I love that Tom Leppert CMC '77 is Mayor of Dallas.
I also love that he’s going to be speaking at commencement this year. Both of these things makes what I’m about to say that much more difficult, but sometimes you must hold your friends accountable.
When he helped make it illegal for minors to enter or work in strip clubs, he had my respect. I asked myself, “Wasn’t this illegal before his term?” And sure enough, it wasn’t. In fact, the law was implemented because a 12-year old girl was dancing nude at one of these sexually oriented clubs.
And his recent invitation to Mexican President Jose Calderón should be something to be proud of. Maybe Texas (along with the rest of the country) will finally have sensible immigration policies vis-à-vis Mexico. We can only hope.
But still, I have to wonder about some of the thing he’s backed recently. It seems like Dallas used to be a lot more fun and a lot less Nannying.
Dallasites used to be able to smoke in restaurants, walk their dogs without carrying a pooper-scooper, or walk into downtown Dallas without being watched by police video cameras. Homeless people could beg for money and children could run through parks playing with their toy six-shooters.
When asked about this nanny government, Leppert said,
"It goes to the signal we're trying to send to people about the community," he said.
And just what symbol is that Mayor Leppert?
Leppert doesn’t say.
Unfortunately for Dallasite homebuilders, matters are much worse than mere symbolism: Mayor Leppert is going to force them to build "green."
Leppert and his City Council believe that they have a right to tell property owners what to do with their own property! That's a common theme with city governments.
Leppert and the City Council just passed an ordinance mandated that any new buildings. Take a look at this article:
On April 9, the City Council unanimously adopted a green construction ordinance aimed at reducing energy and water consumption in all new houses and commercial buildings.
Is this a mistake? You bet. But first, what exactly does the new code mandate?
Ah yes, the nannies want us to use less water... how compassionate of them!Among the first phase's requirements, effective Oct. 1, 2009: Builders of projects less than 50,000 square feet must use 15 percent less energy and 20 percent less water than current Dallas code standards mandate.
Under the new code, for example, builders must select four water conservation techniques among six options provided, such as installing faucets and shower heads with a two-gallon-per-minute-or-less water flow. The water regulations, in particular, are the product of a compromise by city leaders and builders, some of whom expressed concern over an original green building proposal calling for stronger water standards.
Turns out it's largely hooey.
Leppert's trying to sell this to Dallasite as part of a plan towards good environmental stewardship. In reality, it has everything to do with the state-run energy and water markets, both of which have proven unable (or unwilling) to privatize and give citizens greater accountability.
(At least Leppert knows enough to make people who paid twice the money to get twice the water services!)
Of course at the Claremont Colleges, we know that environmentalists often end up forcing the rest of us to pay for their environmental boondoggles.
Just look at this most recent example at Oberlin College. (One wonders whether Pitzer College is following Oberlin's inglorious lead...)
Well, at least he'll get along well with one such environmental crusader...
Exit question: Is anyone surprised that he used to be ASCMC's President?
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23 comments:
While mandating specific approaches for water conservation is not the smartest approach, water conservation at all levels is important. Property rights are important, but we must also maintain the resources that make the property worth owning. Granted, local and state government are not doing enough on their end to improve the water systems and reduce wasteful leakage, but that means calling on citizens to make these governments accountable for not doing the necessary maintenance.
I would agree with you in part, Jarod, but I disagree in large part. I think the best way to guarantee conservation is to de-politicize issues of natural resources and to use auctions to sell those resources over to private developers.
I like Leppert. To put things in a little more perspective: the Dallas mayor is a mostly ceremonial position (though he is a voting member of the council). Also, the biggest issue facing Dallas prior to Leppert taking over was the high violent crime rate. I believe fighting crime was his #1 priority. That being said, I'm not too bothered by some of the less-than-libertarian policies being pursued for the sake of reducing crime. How do you feel about Mayor Guiliani's administration?
How about the bigger problem here? i.e. we had to ask a trustee to be our graduation speaker because we couldn't get anyone else to do it. Even though, I might ad, we set up a committee of people whose sole job was to find a graduation speaker. Not that I'm bitter or anything.
What do you think about water shortages? (serious question) Is that a crock? And, if water shortages ARE real, what other pressures would you advise on people to conserve?
So what, do you really think that having a conversation with the President of Mexico is the way to begin looking for a sensible immigration policy?
And what's wrong with keeping beggars out of our parks? Or policing down-town with surveillance?
I can't remember where I heard this expression but I kinda like it: the libertarian believes in every right there is, except the right to self-government.
Leppert's trying to sell this to Dallasite as part of a plan towards good environmental stewardship. In reality, it has everything to do with the state-run energy and water markets, both of which have proven unable (or unwilling) to privatize and give citizens greater accountability.
Could you please expand upon this argument? It seems to me that using less water would reduce customers' water bills, which would not benefit the state-owned enterprises and help the people.
Let's assume a simple case of monopoly power, so get your Mankiw out for reference. A monopoly chooses its price and output where MC=MR for a given demand function. If consumers start implementing more efficient shower heads, their demand curve for water will shift downwards. This change in demand is NOT just a simple movement along the original demand function.
This new demand function creates a new MR curve which will be below the original. The new intersection of MR=MC will result in both lower output (from reduced demand) and lower price. Looks like the consumers and the environment win.
This isn't a perfect solution, but it's better than maintaining the status quo in this instance.
Kevin,
I support necessary police powers, but I fail to see how some of the new measures they have in place -- like banning children from using cap guns -- is an appropriate measure of government.
Stagafling,
I was unaware of any such problem, but my general feeling is that we should only have speakers who are either former students or the parents of current and/or former students. I'm more interested in seeing and creating a school community than paying out massive bucks to some two-bit speaker.
Olga et al.,
This article forms the basis of most of my thinking on water shortages. Its provocative title, "Private Water Saves Lives," should be mandatory reading.
Dan,
I'm pretty much of the opinion that a conversation between the two men isn't going to produce much good, but I don't think it will hurt either. Remember Calderon has helped us aggressively go after the Mexican nationals who have committed crimes in the U.S. And I don't hold to the position you have with respect to illegal immigration. I believe that if you are peaceful and do not take from the state, you ought to be welcomed in America (although I have some caveats and this is a much larger conversation.)
As for the libertarian problem, I would argue that your willingness to give government all manner of power is anathema to the very principle of self-government.
There is no way sticking cameras all over the place is consistent with the 5th or 4th Amendment. My view is that if you want to do that kind of thing, you need to go the people through a proposition or amendment.
As for the bums, I don't have a problem with kicking them out of the parks, but I feel that there are better ways of doing it than just a simple ban on pan handling.
Gracchus,
I appreciate your economic analysis, but I think that it's flawed because it doesn't take into account the effect that the water/energy ban will have on property owners who are forced to pay more to install things of dubious value. You are, of course, right that this code will decrease demand, but the question then becomes at what cost?
This kind of solution only treats the symptoms of another problem: the state-run water treatment and the inequality it breeds.
Dan, come on. Video cameras in downtown? Doesn't that scream 1984 to anyone? Look at London -- yes, it's safe, but there are cameras EVERYWHERE and no one has any privacy. And I would contend with any rebuttal that there's no reasonable expectation of privacy. Also, I've read (but don't have time to verify with a solid source -- maybe someone can do this for me?)that London's crime rates are several times higher than, say, New York's -- and as far as I'm aware New York does not have cameras everywhere. If police do their jobs right and investigate when there's probable cause, and if the government does likewise with terrorist threats, cameras really become unnecessary.
I like your quotation, though. But of course we all know Ben Franklin's. “They that can give up essential liberty to obtain a little temporary safety deserve neither liberty, nor safety.”
Funny, though, I once used that quotation in a paper supporting the PATRIOT Act....
Charles,
I did some research for the blog. The links below should clear up any confusion about the efficiency of low-flow shower heads:
Water Savings Calculations
Low Flow Showerhead
The present value of energy savings by installing a 1.5gpm showerhead is $600 and $79 in the first year alone. The Bricor 1.5 gpm showerhead in the second link costs $64.95. Even if you included labor costs of $30 to install, that's still less than $100 of costs for savings worth six times that.
Coupled with my previous argument that if enough households reduce water usage that it would drive down prices, it seems like the mayor's constituents are the winners.
Even if the state-run water utility is bad for the consumer, you need to give the city council credit for doing what they can to help their constituents. The power to remove a state-run enterprise like that rests in the power of state officials.
Charles,
I didn't think you would explicitly call for a return to the CMC good ole boy days, but there it is. I think we'd agree that Gann's efforts might dilute essential CMC characteristics, but is there not some value to using something as ultimately irrelevant as the commencement speaker to get CMC a little more media buzz?
You know, Stagafling, that isn't necessarily a bad idea: to raise the school's profile, but I'm more inclined to hear wisdom from more alums than from someone who some unelected committee thinks is worth hearing. Hearing from alums is generally cheaper, too!
I'm not explicitly calling for the good ole boys. If we want to bring someone's mother here who is accomplished or what have you, I have no complaints. Moreover, I have no problem with bring women graduates.
Gracchus,
I think you are confusing monopoly with perfect competition.
Individual firms in a competitive market chose to produce at MC=MR, i.e. the profit maximizing position. Monopolies are the only producer in the market, and can therefore charge the consumer as much as the consumers are willing to pay. The Demand curve becomes the Marginal Benefit curve for consumers and the maximum price the monopoly can charge.
So the monopoly firm takes the output level from MC=MR and draws that up to the demand curve. The qty is from MR=MC, but the price comes from the demand curve.
The D curve is not the MR curve, but the MB curve. Why else would you have two downward sloping curves?
Based on your analysis, monopolies would not only be efficient, but also desirable.
Aditya,
Yes, I agree with you. I said:
This new demand function creates a new MR curve which will be below the original.
I understand that the MR curve is different than the demand curve in a monopoly. As you said, they choose price based on MR=MC and go up to the demand function. Your argument still doesn't address the two main components of my post:
1. If consumers begin demanding less, this will shift the demand curve and the MR curve downwards. This will result in lower prices for consumers. It still does not beat the benefits of a competitive market, but the Dallas initiative would benefit consumers.
2. Why oppose a plan that saves consumers money? A typical efficient showerhead can reduce water use, leading to lower water and electricity bills. The NPV of the showerhead is around $500.
The problems raised by Charles in the original post cannot be addressed by the mayor. State-run utilities are enacted by state, not local officials. In this instance a local official is implementing measures in the best interest of his constituents.
The best case scenario would be a competitive utility market (although market failure must be watched for) along with usage reduction measures such as the one put forth in Dallas. Why attack a man for a problem that he cannot control?
The attack on the mayor's credibility for his green initiative ought to be retracted.
To clarify my point about monopolies:
The original demand function may be something like q=100-2p.
Now, the Dallas initiative would require a reduction in water usage. For argument's sake, if all people in Texas reduced water usage their demand function would change to something like q=80-2p.
The MR curves would have steeper slopes than their corresponding demand curve.
In the meantime, the Texas water utility would not have changed anything in their business model, so their MC curve would not change. Thus, MR=MC would occur at a point resulting in lower Q and P.
Again, this is not going to make the market efficient, but it will save consumers money. The same logic would apply in perfect competition as well. The downward shift in demand would result in lower P and Q.
Gracchus,
1) By state-run, I meant "state" as in the sense of a political entity, not a U.S. state. Sorry for the confusion. As you can see here, the City of Dallas controls the water, not the state of Texas.
2) What attack? I was criticizing Mayor Leppert for the inefficiencies of the City of Dallas and its treatment of the water problem. Indeed, just look at the most recent problem:
A new $30 million computer system has thousands of Dallas Water Utilities customers awash in problems, ranging from erroneous charges to trouble logging into the city's online payment service.
Dallas water officials acknowledge that the new computer system, which went live in early February and is supposed to make bill payment more efficient and convenient, is experiencing various software glitches.
The city also acknowledges double-billing 15,000 customers, although one City Council member says the figure is much higher.
While you are accurate in saying that all things being equal, the green requirement ignores the externalities and the imposed costs on the builders.
Moreover, it moves government in the wrong direction. Instead of privatizing the water use, they impose still more bureaucracy. As we've already seen, their current bureaucracy is more than costly and inefficient.
Gracchus,
We can't assume that the demand curve would shift downwards. Technological improvements usually increase supply in a competitive market. The impact of new technology in monopolies is seen on a case-by-case basis. There is a strong argument for the DD moving to the right and left because of efficient shower heads. Consumers may not be consuming at peak levels or their desired levels as of now, and would increase consumption as the cost decreases. You need to account for the consumers deterred from usage because of the monopolists prices.
Aditya,
You make a good point. I think we can both be satisfied with this conclusion about the market: either the consumer pays less or consumes more by installing the showerheads. Not a perfect solution, but each outcome would be positive for the consumer.
Charles,
While you are accurate in saying that all things being equal, the green requirement ignores the externalities and the imposed costs on the builders.
I addressed that point in the first place. The showerhead costs approximately $70. A builder would pay that cost and labor to install it, say $30. That brings the builder's cost to $100. In an extreme case, the builder could charge a 100% markup for the consumer, resulting in a bill of $200. The PV of installing such a showerhead is $600. That means the net present value is:
NPV = -200+600 = $400.
Builders can use this information to their advantage. While it does raise the price offered to consumers, a simple explanation of economics could inform them of how a higher price now would save them quite a bit of money.
Hopefully this will be my last post, as I think we've worn this pretty thin, but I noticed a problem in your argument, Aditya.
Technological innovation on the supplier's side will increase supply in competition (say, a better system for recycling water, or a lower cost filtration system). The technological innovation is coming from a third party, the showerhead makers, and is being used by the consumers, thus affecting their consumption trends. That would not give the utilities an incentive to increase their supply of water.
Gracchus,
The third party products in a free market system would only be used by consumers if they could consume more of the primary products in question. No good or service just lands without any cost.
Think about it this way, if the primary product is the internet and you buy a better computer, do you end up using more or less bandwidth?
The net effect of more efficient technology remains the same. Consumers who are deterred from their desired consumption level raise increase their quantity with the shower heads. Consumers already at peak level and with no incentive (debatable) to consume more may decrease their consumption or leave it unaffected, pocketing the gain.
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