Sunday, September 04, 2005

One Lesson from New Orleans? More Cars for the Urban Poor

Among urban writers, it is fashionable to hate cars. The vehicle is blamed for causing Global Warming, paving the country side and destroying the walking center city. Permit me to say a couple of nice things about the car. The car provides access. Recent research has documented that it can help people access employment. More of New Orleans’ urban poor would have survived the disaster if they had had car access.

EXHIBIT #1: Steve Raphael and Michael Stoll published an intriguing paper for the Brookings Press see web.utk.edu/~trichar9/Car_EmploymentOutcomes.pdf

"Our empirical estimates indicate that raising minority car-ownership rates to the white car ownership rate would eliminate 45 percent of the black-white employment rate differential and 17 percent of the comparable Latino-white differential."

How could this be? One causal explanation is that car access increases a person's ability to access jobs and reach them easily each day with a 30 minute or less commute. Public transit is cheap in terms of $ expenditure but is highly time intensive ( see http://www.nber.org/papers/w7636)


EXHIBIT #2 From today's New York Times: "Many blacks voiced suspicions that thousands of people were left to suffer and die in the floodwaters because they were, for the most part, poor and black."

Here is a "what if" for you. What if these households had access to a private vehicle? The New York Times quote hints that this group was powerless against Mother Nature. George Bush could not personally escort each individual to safety. An alternative method would have been for car enabled households to have driven themselves to safety.

EXHIBIT #3 If the Urban poor had cars, would there be greater support for public school competition and vouchers a la Milton Friedman? Armed with cars, the urban poor would have greater choice and would gain more from such competition because they could drive their kids further.

Fact: If 13% of Americans live below the poverty line are we really talking about so many new cars that congestion and pollution (the negative externalities associated with cars) would really be exacerbated? My suggestion in this post would improve the poor's quality of life at relatively low cost. I challenge you smart economists to show me the unintended consequences and deadweight loss from this proposal!!

10 comments :

Anonymous said...

Low cost!? What planet do you live on?

Anonymous said...

How about building cities so they are actually accessible by public transportation? Given the current (poor) infrastructure of most cities, I agree that people could get to work faster if they had cars. The real question is why this has to be the case.

And to address the main question posed in your blog entry: The true lessons from New Orleans? Don't build cities below sea level; build houses to withstand category 5 hurricanes (and category 5 earth quakes, while you are at it); don't have any drug addicts (who then go out looting because they are desparate for a fix); make sure people have enough savings and good enough credit to simply abandon their house if need be and relocate their entire family over night. I would say these demands are about as realistic as calling for every poor black person to have a spare car in case they need to evacuate.

CJ said...

The poor of New Orleans did not need cars. There were plenty of buses to get them out. Unfortunately those buses sat parked in the lot. Why did the city of New Orleans leave thousands of school buses parked in the lots before the huricane. They sit there now, flooded and useless. Many thousands of the poor could have been bused out on these buses.

Anonymous said...

Cars are expensive.

Buying is the easiest part.
Maintenance, Repair and Insurance are the real killers for the poor.

CJ -
"thousands of school buses parked" is a quite a bit off but they did have enough in the fleet to move 15,000 people per trip.

Anonymous said...

Forgot a nasty car expense for some city dwellers - PARKING.
I have no clue whether this applies to NOLA but certainly on Manhattan island parking can cost a chunk.

JohnG said...

Well, I'm not an economist notwithstanding my major 30 some odd years ago, nor am I a raving maniac, so I'll attempt to respond without spewing invective and calumny like so much New Orleans detretius.

More cars will increase the demand for gasoline, already in short supply (pre-Katrina) due in part to, well, more cars. More cars will also increase the demand for more parking, already tight in most cities - I presume NO was no different. Off-street private parking, even municipal parking, garages are expensive. Expensive to build, expensive to police, expensive to maintain, and, for the individual, expensive to use.

Not intending to cast aspersions upon a group, simply because they are a group, but studies have shown that the incidence of uninsured drivers is higher among the poor, including the recent immigrant, leading to higher insurance costs for other drivers. Unless another solution to current tort liability and traditional insurance policies is instituted, those incidents of uninsured drivers would undoubtedly increase - when money's tight, people tend to buy the essentials, and they generally don't see intangibles, i.e., auto insurance, as an essential.

One idea I've subscribed to was floated 15-20 years ago or so by Andrew Tobias - add 50 cents (or whatever to make the system work) to every gallon of gasoline to go into a fund to compensate injured parties, do away with traditional auto insurance premiums, and traditional tort liability (i.e., civil trials) and institute mandatory arbitration with limited recoveries, i.e., no more multi-million dollar verdicts. Take care of everyone, but do away with the flukes in the system. The simplicity is astounding - the more you drive, the more you pay, something we do not have presently.
And, everyone who drives must pay.

Before anyone gets their panties in a wad, allow me to volunteer that I am, since 1975 when I was admitted, a trial lawyer. Yes, I'm all for cutting off my very rewarding, sometimes lucrative, mostly unjust, means of retirement planning because I believe society is harmed by it.

Additionally, think of the related savings inherent in such a plan - a reduced case load would result in a reduced number of judges, bailiffs, court clerks, court stenographers, judicial law clerks, custodians, computers, courtrooms (ultimately, courthouses), electricity for heating, cooling, lighting, elevators, etc., commuting and parking costs, and a myriad of inefficient and costly municipal construction for ever newer, bigger, better, more modern facilities and bigger staff to support their operation.

Correct, it would not be a net savings as other expenses would increase - hiring of arbitrators and forums to house them. But, hearings would be shorter than trials. No juries involved. No antics and dramatics in the hearing room - no one to impress. Institute a streamlined, evidence taking hearing process instead. Bet there would be more, many more, settlements instead. More settlements equals less hearings equals smaller personnell rosters.

Of course, that's just a thought.

Anonymous said...

I've got a question about that last response.

"...a reduced case load would result in a reduced number of judges, bailiffs, court clerks, court stenographers, judicial law clerks, custodians, computers, courtrooms (ultimately, courthouses), electricity for heating, cooling, lighting, elevators, etc., commuting and parking costs, and a myriad of inefficient and costly municipal construction for ever newer, bigger, better, more modern facilities and bigger staff to support their operation."

How do you account for the "friction" that would cause that money to just be put in some other aspect of government spending, so the same pork barrel dollars get put somewhere else?

Something that kind of bugs me about people who criticize the spending in Iraq--don't take this as saying that I'm all for pouring billions of dollars uncontrollably into the effort...the point is this. Sometimes I hear people say, "Gosh, I can't BELIEVE we're spending 80 billion dollars on the war in Iraq. Imagine what that money could have been done with to help the homeless/improve education/save the whales...WOW, what a waste of money."

I'm not protecting the war effort or anything, everyone should have the right to do their own investigation and decide their opinion. My point is this--that money wasn't sitting in a bank account somewhere, just waiting for Bush to do something with it. Bush wasn't sitting in Texas, thinking to himself, "Dang, I've got 80 billion and I can't decide if I want to invade Iraq or save the whales." That money was sitting right there, in the same reserves (or in the same budget, or wherever it was) as all the other cash in this county. The only people to blame for not spending 80 billion on improving education is "we the people" because we didn't get organized and take the necessary steps to take the appropriate steps to tell our elected officials to do something.

By all rights, Americans are apathetic people--I'm an American, I know that I'm just as apathetic as the next guy. I heard a comedian say one time that the what really gets Americans pissed is "being inconvenienced." The reason there wasn't more outcry against invading Afghanistan was because getting attacked by terrorists is a hell of an inconvenience. When a sub-standard education system for low-income groups in our society starts noticeably affecting our ability to go to Blockbuster and watch football (not that it hasn't already, but the critical mass of consciousness hasn't been able to make the connection, yet...), then maybe we'll starting getting a little more involved.

On a more sober note, I think the large majority of Americans, even those that speak otherwise, truly support the war in Iraq. Why? Because we're scared. I wish we weren't, but 9/11 scared the shit out of us. We don't know exactly what to do right now to protect ourselves, but doing something rather than nothing usually makes you feel better when you're scared.

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