Thursday, January 31, 2008

UCLA Sustainability Efforts

Today Focus the Nation has taken UCLA by storm. For more info look here:
The events today will focus attention on climate change.

Is UCLA a "green campus"? How do you know a green campus when you see one? Adopting solely an energy consumption criteria; UCLA faces some challenges.

Our total gasoline consumption for commuting to and from campus =

where N = number of commuters = students + faculty + staff
P = probability commute by private car
M = mile distance from residence to UCLA
E = Gallons per mile (or inverse of Miles per gallon)

UCLA is quite big so N is quite big.
Nobody takes public transit to UCLA so P is big.
UCLA is in westwood and this town is quite expensive so urban economics predicts
that most people who bought housing recently live far from campus so M is big
While some people drive hybrids, the parking lot is filled with fuel inefficient cars so E can be big.

How can UCLA incentivize its members to reduce N*P*M*E? I'm trying to think about this and I'm trying to get some people on campus to allow me to run some field experiments. To encourage a smaller E, smaller M and smaller P.

Monday, January 28, 2008

UCLA's Lab School is in the News

My son attends the UCLA Lab school. We are generally happy with his education but we would like to see him doing more math and having more homework. I voiced these opinions to another UCLA faculty member, whose child is in my son's class, and she told me that I'm not a progressive thinker. I'm hoping you are willing to defend me. Here is taste of her work ---

Front Page Los Angeles Times
UCLA's Seeds school wants new branches in low-income areas.
By Carla Rivera, Los Angeles Times Staff Writer
January 28, 2008

Corinne A. Seeds University Elementary School at UCLA has a rich history of providing experimental teaching to students lucky enough to secure a spot at its wooded Westwood campus.

Now, the quasi-private, quasi-public-laboratory school is embarking on a mission to make its research-based programs more widely available by opening satellite campuses in low-income communities. Targeting South Los Angeles and the Pico-Union district near downtown, school leaders say they can more directly attack the educational challenges posed by poverty, lack of English fluency and achievement gaps on the part of racial and ethnic minorities.

The campuses would also add to an expanding array of educational choices, including charter and magnet schools open to families seeking remedies to low test scores, high drop-out rates and inadequate college readiness.

The 125-year-old Seeds school hopes to throw its multilingual programs, team teaching and technology-rich instruction into the mix. But it faces challenges in transferring a program that has thrived on the UCLA campus to communities where crime, decaying housing and social dysfunction pose significant roadblocks to learning. Local school districts and unions may also resent the prospect of an upstart taking their students and teachers.

But educators at UES, as it is known, are intent on becoming major players in the education debate.

"We are entering a crowded field, crowded with people who want to help but not crowded with people who have concrete answers that provide clear evidence of what would work," said Principal Jim Kennedy, who took over in July. "We're a major research university in Los Angeles and we need to be deeply engaged in that conversation."

The school, an arm of UCLA's Graduate School of Education and Information Studies, is not bound by the federal No Child Left Behind law, which requires rigorous standardized testing. Some testing is done for research and comparison and the school aligns its curriculum with state standards. Its students are high-performing: Sixth-graders scored in the 80th percentile in reading and the 79th in math compared with other sixth-graders across the country. Fifth-graders scored in the 85th percentile in reading and the 87th in math.

To give validity to research projects, the student body mirrors the state's racial, ethnic, gender and socioeconomic demographics.

The Westwood campus -- which charges $11,650 in tuition -- is in high demand, with 600 applications this year for 40 preschool openings and a handful of spots in other grades. More than half of its graduating sixth-graders move on to some of the area's leading private schools, and less than one-third attend public middle schools.

After its founding in 1882 at the site now occupied by the downtown public library, the school moved several times before finding a permanent home on the UCLA campus in 1947. Several of its buildings were designed by architect Richard Neutra.

In the late 1980s and early '90s, UCLA considered moving the campus to Santa Monica and turning it into a charter school, but parents vigorously fought to maintain the school's status and location.

The campus -- bisected by Stone Canyon Creek -- sprawls across several acres and includes groves of eucalyptus, oaks and redwoods, student playgrounds and picnic areas. The classrooms include walls of windows.

The school offers a progressive curriculum in which its 435 students -- ages 4 to 12 -- learn at their own pace. Textbooks are rarely used; instead, students choose literature and other books from baskets in every classroom. On any given day, a neuroscience professor might bring along a brain on a visit to a classroom of 9- and 10-year-olds.

On a recent day, the 12-year-olds in Scott Smith's social studies class used the Internet for a lesson, linking to a site projected on a large screen that showed Chinese scroll paintings. In the darkened room, some students sprawled on the floor.

"How many years did it take this guy to make this?" one boy asked. "They call this the Mona Lisa of Chinese painting," Smith responded.

Planning for the community classrooms is still in the early stages, but each school would accommodate 60 to 80 students and be organized like the Westwood campus, which eschews grades and groups students by age. Children from the community, ages 4 to 14, would be given priority for enrollment, with any extra spots assigned to students at random. Ultimately, the schools would each enroll about 200 students and offer support services and extended day care for families.

The schools will be funded entirely through private donations, said Kennedy, which won't affect the fees for students attending the Westwood campus. The new schools will charge tuition but also probably provide more partial or full financial aid for students.

Though the first new campus is not expected to open until September 2009, administrators this spring will begin hiring teachers -- many from the targeted communities -- to give them experience in their disciplines. Educators also plan to reach out to nearby public schools, providing them with teacher training and program support.

Not everyone is convinced of the need for a new educational model.

Joshua Pechthalt, a vice president of United Teachers Los Angeles, said he welcomed innovation but that if given the freedom, public schools can improve on their own.

"The effort to transform public education is going to happen within the public education arena," Pechthalt said. "Our contention is that if everybody stayed in the game and began to work together in a united way to make those changes, we'd get there a lot sooner."

Pechthalt said he doubted that the most skilled teachers would give up the lifetime benefits they've earned in public schools. (Seeds teachers are organized through UCLA's lecturers' union.)

Priscilla Wohlstetter, a professor of educational governance at USC, said new alternatives and more collaboration between schools will benefit everyone.

"It's the right kind of school to scale up because it's got a good track record," Wohlstetter said. "The idea of partnerships has taken off across the country in places like Chicago and Philadelphia, but Los Angeles has been slow to come to that realization."

Kennedy conceded there may be initial misgivings that the new campuses will draw talent away from public schools. He is setting up talks with Los Angeles Unified officials, including local district superintendents, on how the schools can work together.

"We share common goals," Kennedy said. "We're there to be partners and I envision working together. We're not competitors."

The community classrooms have broad support from families and teachers, said Christopher Knight, an investment firm manager whose 12-year-old son attends UES and whose oldest son graduated three years ago.

"What Jim has pointed out to parents is that the addition of community-based classrooms is not going to detract from the quality of education here, and because of our research function it can only benefit," said Knight, who also heads the school's board of advisors. "This will be a great opportunity to show people what UES does."

The initiative is only one of the new ideas being developed by Kennedy, an energetic reformer who previously ran L.A. Unified's Magnolia Elementary School near downtown. He's also been principal at a San Fernando Valley math and science magnet school, supervised elementary math programs for L.A. Unified and taught math and research methods to teachers at Cal State Northridge. Kennedy holds a doctorate in educational leadership from UCLA and had hired several teachers from UCLA's teacher education program at Magnolia.

The Seeds schools provide all of the challenges of improving education for low-income families that he relished at Magnolia, but with more flexibility for him to implement his ideas on a wider scale, Kennedy said.

"I'm like a fish out of water in some ways," he said, "but very anxious to start making a difference."

Sunday, January 27, 2008

NIMBYism in China: Evidence from Shanghai

In democracies, the state is supposed to respond to the desires of "the people". Is this also the case in non-democracies? This case study below tells an interesting tale of of urban protest in the face of a new transit Mega-Project in Shanghai. There will be winners and losers from this project and the losers clearly want some Coasian compensation. Who has the property rights here? Is this a "takings"? How will the Chinese authorities respond; With tanks or with a $ transfer?

January 27, 2008
Plan to Extend Shanghai Rail Line Stirs Middle Class to Protest

SHANGHAI — Yang Yang, a 29-year-old saleswoman, had never imagined herself in the role of advocate.

But when she learned from her housing development’s electronic bulletin board of the city’s plans to extend Shanghai’s futuristic magnetic levitation, or maglev, train line within 30 yards of her house, she was angered about the effect on property values and began networking with other middle-class opponents both in her neighborhood and all along the planned train route.

Word of the antitrain sentiment quickly gathered momentum, and on Jan. 12, a sunny Saturday afternoon, Ms. Yang found herself in Shanghai’s most important public square with a few thousand other similarly disgruntled residents, many of them carrying signs and chanting slogans denouncing the train project, in one of the largest demonstrations this city has seen in recent years.

The citizens like Ms. Yang who marched on People’s Square are wary of calling their event and the antitrain movement a protest. Most even shy from the word “march,” preferring to speak instead of a “collective walk” to the square. But the coalescing of homeowners here around issues like property values, environmental safety, urban planning and how tax money is spent is seen as the strongest sign yet of rising resentment among China’s fast-growing middle class over a lack of say in decision making.

Ms. Yang said: “The money is from us, the taxpayers. Shanghai may be relatively rich, and it enjoys fast growth, but this is no justification for them spending the money collected from us on a pure prestige project.”

Many of the early opponents of the route extension seized upon objections cited in a protest last year that forced a retracing of the line in which people voiced fears about radiation from the train’s powerful electromagnets, but grievances have multiplied.

Beyond the voicing of deep-seated skepticism about the government’s priorities and about what many feel is the waste of taxpayers’ money, what most distinguishes this wave of demonstrations from other recent protests is a new insistence that the government seek the public’s consent in decisions that directly affect their lives.

“You could say this is a sign of a rising middle class and the awakening of a sense of real citizenship,” said Hu Xingdou, a professor of economics at Beijing Institute of Technology.

With its tradition of top-down decision making, secretive deliberations and little tolerance for dissent, the Chinese government has almost no practice of real popular consultation.

Recently, though, under President Hu Jintao’s policy of “harmonious development,” the state has made tentative efforts to solicit public opinion, but opponents of the maglev train and other critics say the Shanghai crisis has shown the government’s initiatives to be far too timid.

“Why are they so late to reveal their plans and why so secretly?” said Zhang Junying, 71, who lives along the projected train route.

He was referring to the government’s mention of the new route on an obscure environmental Web site in January, with an invitation for responses by letter or e-mail within two weeks. To many, the announcement seemed intended to attract as little attention as possible.

That discreet approach quickly backfired as word spread among residents that the government had only given them a two week window to stop the project. City offices were besieged by phone calls as well as by letter and e-mail writers. When the government did not respond, a protest movement was born.

Those who set out to change the government’s course through protests took encouragement from a smaller homeowner-led demonstration against the maglev train last year that resulted in a change of route, and an even more recent “people’s victory,” as it was called in the press, in the southern city of Xiamen, where civic mobilization forced the suspension of plans to build a large chemical plant in an urban area.

Xiamen officials have portrayed the suspension of the project as an example of the new, harmonious approach to government promoted by Beijing. But some observers say the Xiamen example, which is often cited by demonstrators here, complicates things for Shanghai’s leaders, and potentially for Beijing itself.

On the one hand, the outbreak of unrest, or even prolonged opposition in a city that functions as China’s international showcase would be unwelcome.

But if a citizens’ movement here did manage to force the government to reverse its plans, disgruntled citizens in cities all over China could take their cue from Shanghai.

“The Xiamen incident has served as a demonstration, and as people from other places learn from Xiamen, and new methods are put into place as they learn, then a snowball starts rolling and getting bigger and bigger,” said Liu Junning, a researcher at the Institute of Chinese Culture, who studies public opinion and popular movements.

A well-known dissident author, Wang Lixiong, spoke far more cautiously. “The precedence of Xiamen could have the opposite effect for Shanghai,” he said. “The authorities might think they cannot encourage a pattern where compromise follows collective walking.”

Shanghai’s leaders seem mindful both of the stakes and of their limited room to maneuver. A recent editorial that was widely attributed to the city’s newly appointed Communist Party boss, Yu Zhengsheng, suggested the city would postpone any decisions on the train until tempers had cooled.

Behind the scenes, the government is working hard to break the back of the movement, sending scores of police officers to neighborhoods where meetings have been held, briefly arresting people who appear at gatherings to oppose the maglev, forcing them to erase digital photos they have taken of protests and to sign confessions. Demonstrators say they have been warned that if they are arrested a second time, they will be detained for 15 days. Others have been told by their employers that they will be fired if they participate in protests. News media coverage of the controversy has been banned.

The protesters seem to have anticipated many of the government’s responses, however, and the loose movement has configured itself in ways that make it difficult to suppress, using electronic bulletin boards and YouTube to post news of protests and keeping the protests publicly leaderless, to avoid having key people arrested.

Zhao Fang, 35, a housewife, suggested that the authorities were underestimating opposition to the project. She had no job to lose, she said, and would not be intimidated by the arrests. “They think we’ll only be strong and angry for a while and then we’ll cool down and become confused.”

Thursday, January 24, 2008

The Next Generation of Conservatives?

My six year old son is a big fan of Senator Obama and does not particularly like Senator Clinton. These impressions were based on seeing both of them on TV. He also once had a snack at the UC GSB with Austan Goolsbee and he thinks that Austan would be a fine CEA Chair. He is confused about who Senator Clinton would choose to run the CEA. Somehow I doubt that it would be Robert Barro.

My son has evinced some Barro-esque world views. His progressive school (UCLA's UES) is encouraging the kids to bring in 100 pennies both to count coins and then the school will collect the money to give to less fortunate children. My son is angry about this second part. He has argued that we are renters who need money to buy a home and why do we have to give it away? While this selfish logic makes me a pinch uncomfortable, his following statement made me quite happy.

He argued that if every other kid in the class donates the money to give to the poor then it's no big deal if we contribute nothing. The child of two economists has figured out free riding with no explicit coaching from his Chicago Trained parents. I like his Nash equilibrium logic. While he says he wants to be an astronomer, I believe that his life course is now set. This 6 year old kid will soon make Robert Barro look like Robert Reich. We are hoping that "progress not regress" will not be his mantra.

There has been a huge rise in the number of children of economists becoming PHD economists. UCLA has Christian Hellwig but he represents just the tip of the iceberg. How do you explain this trend? Harvard's PHD program is filled with these "legacies".

Tuesday, January 22, 2008

New UCLA Sociology Research: What Predicts an Oscar Nomination?

What do sociologists do all day long? We know that some Columbia University sociologists study social networks and others write about their graduate student days embedded in a Chicago street gang. But what do UCLA sociologists do? By reading my recent campus email, I can now provide a partial answer.

Jan. 22, 2008

UCLA–Harvard study reveals strongest predictors for Oscar nominations

Analysis of nearly 20,000 films shows that odds favor dramas, female performers, big distributors

Meg Sullivan,
(310) 825-1046

If you're an actor angling for an Academy Award nomination on Tuesday, you better hope you didn't leave the audience rolling in the aisles, suggests a new study from UCLA's California Center for Population Research.

"The odds of being nominated for an Academy Award are so much greater for performers who appear in dramas that — at least this time of year — it really pays to be a drama queen," said Gabriel Rossman, one of the study's two authors and an assistant professor of sociology at UCLA.

Albeit to a lesser degree, it also helps to have a major film distributor, prior Oscar nominations, a high spot in the pecking order in past movie credits, fewer films competing for attention and good collaborators. And it doesn't hurt to be a woman.

"A performer's odds of being nominated are largely set before the cameras even start rolling, back when the script was bought, the director was signed and the film was cast," said Nicole Esparza, the study's lead author and a Robert Wood Johnson Scholar in Health Policy Research at Harvard University. "It's surprising how many variables other than a performer's talent play a role in determining who gets nominated."

The 80th Academy Awards nominations are scheduled to be announced at 5:30 a.m. on Tuesday at the Academy's Samuel Goldwyn Theater in Beverly Hills.

Using Internet Movie Database (IMDb) records for every Oscar-eligible film made between the founding of the Academy of Motion Pictures Arts and Sciences in 1927 and 2005,

Esparza and Rossman looked for conditions that improved the odds of a performer getting the nod.

The researchers looked at number of Oscar-eligible films in any given year, the distributors and studios behind each performer's films, the film's tone or subject matter, the cast size, the sex of the performer, the performer's contacts within the industry, and past Oscar nominations among a film's cast, directors and writers.

The single greatest predictor of a nomination proved to be serious subject matter — or at least a film that was classified by IMDb as a drama, despite the possible presence of comedic elements. In examining IMDb records on 171,539 performances by 39,518 actors in 19,351 Oscar-eligible films, the researchers found that actors were nine times more likely to receive a nomination for their work in a drama than in a non-drama.

"In the entertainment industry, there's long been a sense that the nomination process prefers dramas, but I don't think anybody is aware of the magnitude of the effect," Rossman said.

The second strongest predictor of a nomination proved to be the number of films screened in any given year.

"It's better to be nominated in a year when fewer films were screened, because there's less competition come awards time," Rossman said.

Actresses, meanwhile, proved more than twice as likely to be nominated as actors for any given performance, making being female the study's third strongest predictor of a nomination, the authors say.

"At least in this case, being underrepresented on the job works in women's favor," said Esparza. "Because there are fewer female than male performers in films, and both are eligible for the same number of awards, actresses stand a better chance of being nominated than actors. It's a simple matter of arithmetic, but as far as I know, nobody has ever raised the point."

The higher a performer ranked in past movie credits, the more likely he or she was to be nominated. A history of high rankings in the movie-credit pecking order more than doubled the odds of a nomination, making pecking order in past credits the fourth strongest predictor, the researchers found.

"It turns out the performers with enough clout and respect from their peers to push themselves to the top of the credits also have enough clout and respect from their peers to be nominated for Oscars," Rossman said.

Having a major distributor also provided a boost. Coming in as the fifth most likely predictor, appearing in a film represented by a major film distributor nearly doubled a performer's chances of being nominated.

Having been nominated for an Oscar in the past also improved the odds of being nominated.

"This is an instance of what sociologists call the 'Matthew Effect,' after Matthew 25:29, in which Jesus says, 'For to everyone who has, more will be given and he will grow rich,'" Esparza said. "Just as the rich tend to get richer and popular Web sites get even more traffic, so do honors seem to pile onto those who have already been honored, be they scientists or movie stars."

Performers also got a lift when they appeared with previously nominated writers and directors — what the researchers dubbed the "Robert Forster Effect," after a prolific but undistinguished character actor who never received a nomination until he appeared in the 1997 film "Jackie Brown," which was written and directed by Oscar-winner Quentin Tarantino and co-starred Oscar-winner Robert De Niro and Oscar nominee Samuel L. Jackson.

"There's a very good reason that Academy Award acceptance speeches are so long — an actor's collaborators are responsible in no small measure for their achievements," Esparza said.

However, performing alongside previously nominated cast members proved to be a mixed bag. Appearing with past nominees did not improve the odds of being nominated as a leading performer, but it did improve the chances for performers in supporting roles.

"If there are other good people in the cast, they appear to be competition for the lead performer nomination," Rossman said. "But there's no downside if you're in a supporting role. Working with really good performers may elicit a better performance from you or it may simply bring attention to your previously unrecognized talents, but either way, working with good co-stars definitely helps you get a supporting nomination."

There were limits, however, to the value of contacts. The researchers were surprised to find how little influence industry ties had. Performers who had worked over the years with a wide array of Academy members were no more likely to earn a nod than those with fewer industry ties. This was even the case, the researcher found, during the height of the studio system, when studio heads allegedly ordered talent to vote in blocks for other studio talent.

"In all kinds of walks of life, conventional wisdom holds that it's not what you do but who you know," Esparza said. "And Hollywood may be no different, except when it comes to Academy Award nominations. Surprisingly, who you know doesn't make or break you at nomination time."

The complete study can be found at G

Monday, January 21, 2008

A Negative Review of Green Cities

Be careful what you wish for! I had hoped that the Journal of Economic Literature would review my Green Cities book and in the December 2007 issue they do. Ed Mills is a giant in Urban Economics. He is not one to hide his opinions. In this review I cite below, he gives me a good spanking. I can't say that I deserved it but I slightly enjoyed it! His review reminded me of his grumpy day to day talking style that I enjoy so much. His review displays his contempt for environmentalists. Unlike Dr. Mills, I believe that it is crucial to engage greens in a honest unemotional discussion of the issues. As Larry Summers learned in the case of his World Bank Pollution Haven memo, economists cause big problems for themselves when they address issues that are likely to trigger an emotional response without addressing the world view of their readers. I intentionally wrote my book in a way to diffuse such emotional responses to help focus attention on the "big issues" of urban growth's environmental consequences. My book is better than he portrays it and I'm a pinch surprised by his tone.

He does have a sharp way about him. I once attended a Brookings Institution Dinner where the Mayor of Washington D.C was the guest dinner speaker. The Mayor was surprised by Dr. Mills' sharp questions concerning his disfunctional public schools.

Here is the entire set of reviews and Dr Mills' review starts in the middle.
Ed Mills' Review of Green Cities

If I was allowed to reply to Ed's comments, I would make three points.

1. Unlike Ed Mills, I believe in Mary Poppins. Recall that she said that a spoonful of sugar makes the medicine go down. In the case of my book, the "medicine" is Chicago free market economics. My book is pro-capitalism and clearly focuses on harnessing incentives to achieve sustainable urban growth.

A "macho" in your face book would not receive the time of day from a non-economist who views himself as an "environmentalist". How does Dr. Mills believe that he will influence the next generation of liberal thinkers if he just makes fun of them? My approach is to meet them half way and discuss my own environmentalism and to use ideas commonly used in environmental studies (such as the ecological footprint).

2. Ed Mills read my book too quickly and missed its tone. He makes fun of me for quoting Jason DinAlt but permit me to quote from my own book.

"As Jason DinAlt argues, "The last thign the world needs is more Americans. The world just cannot afford what Americans do to the earth, air and water." If this argument is taken seriously , it suggests that environmentalists should support limits on immigration to the United States in order to reduce the world's ecological footprint."

Note that I carefully used the words "If this argument is taken seriously"... I was trying to show readers how ecologists think about these issues and what are the logical policy implications from adopting their views.

3. He makes fun of me saying that I like "greenbelts" in Boulder , Colorado but ignores my discussion of the Glaeser/Gyourko work on housing supply regulation and its unintended consequences. Despite his protests, I am a card carrying economist!

I have a great respect for Ed Mills but I would like to see him write a better book!

Balance California's State Budget Deficit Using a "Windfall Profits" Tax on Home Sales

I started to write the following editorial for submission to the Los Angeles Times. Rather send it there, I decided to shirk and publish it here. The gist of the idea is that California's home prices have soared in recent years and a 5% sales tax on the 500,000 homes that sell each year in the state would generate enough revenue to balance the budget. Would Henry George approve? Is this tax progressive? Is it distortionary? As a renter and as a UC employee, self interest motivates me to support this public policy. Note that Michigan or Missouri would be unlikely to be able to use my idea to balance their budget but California is special --- this state is paradise and the home owners who were smart enough to buy early would still get to keep 95% of their asset.

Should academics be writing editorials in the first place? Don't forget my editorial debut

Balance our State's Budget Through a Property Sales 5% Windfall Tax

by Matthew E. Kahn

Facing a state deficit of $14 billion dollars for the 2008 fiscal year, California may soon release convicts early from jail, prune down the size of its regulatory staff, close parks, and repudiate recent efforts to build up public education at the elementary and university level. Is this good public policy?

Assuming that it is unconstitutional to confiscate Britney Spears' or Paris Hilton's assets, there still remains a revenue source that can be tapped into. In case you haven't noticed, home prices in California have increased by xx% since 2000. While some of this growth may be due to home improvements, the bulk of this real estate appreciation was an unexpected windfall generated by a combination of low interest rates, low exchange rate, and a growing demand for living the California lifestyle and the supply side conditions such that it is difficult to buld new housing in the desirable areas in the state's leading cities.

I propose that home sellers must pay a 5% tax on capital gains from real estate sales. Suppose a Los Angeles household bought their home in 1982 for $55,000 and sold it in 2008 for $1.1 million. To calculate this household's windfall tax, the original sales price would be converted into 2008 dollars using an inflation adjustment. Given the consumer price index (CPI), measured in 2008 dollars this home was purchased for $210,000. This household would be taxed .05*(1.1-.210). Is this communism? The household is able to keep 95% of its capital gains. If the average house seller nets $500,000 then his tax bill will be $25,000. If 500,000 homes in the state are traded each year, then this tax would generate $12 billion dollars in revenue.

The Windfall Profits tax was first introduced in the 1970s as the price of gasoline soared and oil company profits sharply increased. These profits were viewed as "unearned". Is the situation different today?

Who would be the winners and losers from this proposition? People whose homes have appreciated the most would pay the bulk of this tax. In subprime areas of Riverside and San Bernardino, this tax would equal $0 while in Santa Monica or Brentwood the tax would add up to some revenue.

This tax would help to counter Proposition 13. Permit me to quote Wikipedia;

"The proposition's passage resulted in a cap on property tax rates in the state, reducing them by an average of 57%. In addition to lowering property taxes, the initiative also contained language requiring a two-thirds majority in both legislative houses for future increases in all state tax rates or amounts of revenue collected, including income tax rates. Proposition 13 received an enormous amount of publicity, not only in California, but throughout the United States.[1] Passage of the initiative presaged a "taxpayer revolt" throughout the country that is sometimes thought to have contributed to the election of Ronald Reagan to the presidency in 1980. However, of 30 anti-tax ballot measures that year, only 13 passed.[2]

A large contributor to Proposition 13 was the sentiment that older Californians should not be priced out of their homes through high taxes.[3] The proposition has been called the "third rail" (untouchable subject) of California politics and it is not politically popular for Sacramento lawmakers to attempt to change it.[3]"

Prop 13 protected households from rising property taxes but no symmetry , California has not asked incumbent home owners to sacrifice to keep the state going. In the absence of Prop 13, home owners would have paid higher property taxes as their asset appreciated. In the absence of the "Kahn Tax", such households enjoy the benefits of asset appreciation without paying "their share".

Sunday, January 20, 2008

Saudi Arabia Plays "SimCity" for High Stakes

This New York Times Article highlights that armed with trillions of "petro-dollars" Saudi Arabia is getting ready to build some brown cities whose employment base will specialize in making plastics and other dirty manufacturing activity. This will be a fascinating test case of "Scale versus Composition versus technique" in determining urban environmental externalities. In english, how polluted will this city be?

The pictures of the city indicate a vision of a very dense New York City style city (rather than a sprawled Houston) --- the capital stock will all be brand new. Will it be clean? Or is the composition of industries (i.e plastics) and the raw scale of industrial activity such that this will be a nasty city and millions of people will live in close proximity to this nasty pollution?

Which educated people would want to live and work in such a city? How large will the wage premiums be to work there?

Here is a cite for the original Sim City

This case study would seem to support Copeland and Taylor's view that pollution havens arise in nations armed with capital (The Factor endowment effect overrides the pollution haven effect). Do you agree?

New York Times
January 20, 2008
The Construction Site Called Saudi Arabia

RABIGH, Saudi Arabia — THE alarm bell sounded the end of the lunch break here one November afternoon, and suddenly thousands of workers — on foot, on bicycles and in buses — streamed in, seemingly from out of nowhere, and jolted this huge construction site to life.

Amid a forest of cranes, towers and beams rising from the desert, more than 38,000 workers from China, India, Turkey and beyond have been toiling for two years in unforgiving conditions — often in temperatures exceeding 100 degrees — to complete one of the world’s largest petrochemical plants in record time.

By the end of the year, this massive city of steel at the edge of the Red Sea will take its place as a cog of globalization: plastics produced here will be used to make televisions in Japan, cellphones in China and thousands of other products to be sold in the United States and Europe. Construction costs at the plant, which spreads over eight square miles, have doubled to $10 billion because of shortages in materials and labor. The amount of steel being used is 10 times the weight of the Eiffel Tower.

“I’ve worked on many big things in my life, but I’ve never worked on anything this big,” an American project manager mused during a bus tour of the project, called Petro Rabigh, a joint venture of the state-run oil company Saudi Aramco and Sumitomo Chemical of Japan.

Size isn’t the only consideration. The project is Saudi Arabia’s boldest bet yet that this oil-rich kingdom can transform itself into an industrial powerhouse. The plant is part of a $500 billion investment program to build new cities, create millions of jobs and diversify the economy away from petroleum exports over the next two decades.

“The Saudi economy was in idle mode for 20 years,” said John Sfakianakis, the chief economist at SABB, formerly known as the Saudi British Bank, who is based in Riyadh, the Saudi capital. “Today, the feeling here is, ‘We’ve won the lottery; let’s not waste it.’ ”

The kingdom’s lofty economic goals would have been unthinkable without the surge in energy prices that has filled the coffers of oil producers. Oil prices have quadrupled since 2002 and reached $100 a barrel in New York this month.

Persian Gulf countries earned $1.5 trillion in oil revenue from 2002 to 2006, twice as much as in the previous five-year period, according to the Institute of International Finance, a global association of banks that is based in Washington. As the top exporter, Saudi Arabia has been the main beneficiary.

Despite all the recent headlines about Middle East investors bailing out troubled American banks like Citigroup, a growing share of today’s petrodollars are staying at home to finance megaprojects like Petro Rabigh, analysts say. That money is financing the biggest economic boom in a generation, helping to build not only the high-rises of Dubai, where the world’s tallest tower is going up, but also telecommunications networks, roads and universities throughout the Middle East.

Abu Dhabi is planning to spend close to $1 billion for a new museum with the help of the Louvre, in Paris. Dubai’s latest grandiose idea is to build a small-scale replica of the French city of Lyon, complete with residential housing, a museum, a culinary school and a soccer club.

In Saudi Arabia, Riyadh looks like a boom town: sprawling over 40 miles, it is teeming with shopping malls, electronics stores and luxury boutiques. But while times are good today, many Saudis realize that their country is locked in a race against time to create industries that produce more than just oil in order to keep a young and growing population employed. The kingdom, which has a population of 24.5 million, including nearly 7 million foreigners, has what one analyst called a “human time bomb.” About 40 percent of Saudis are under 15, and because the country has one of the world’s highest birth rates, the population is expected to reach nearly 40 million by 2025.

“It has been a social, and therefore a political, imperative of the Saudi government to develop the economy and to create employment opportunities,” said Timothy S. Gray, the chief executive of HSBC Saudi Arabia.

That could well mean that higher oil prices are here to stay. One paradox of modern-day Saudi Arabia is that while it seeks to reduce the importance of petroleum to its economy, it needs those exports more than ever.

TO be sure, the region’s economies are too small to absorb all the oil riches on their own. Too much money is chasing too few assets, analysts say, forcing oil producers to invest some of their revenue abroad and diversify their holdings, either through opaque state-owned investment funds or through direct private investments.

Last year, for example, a fund controlled by the government of Abu Dhabi bought a stake in Citigroup for $7.5 billion, while another run by Dubai’s ruler bought a large share in Sony, the Japanese consumer electronics giant. Sabic, a major Saudi petrochemical company, bought the plastics division of General Electric for $11.6 billion, and the Kuwait Petroleum Corporation bought half of Dow Chemical’s commodity-plastics unit for $9.5 billion.

In recent weeks, other big banks plagued by losses from the mortgage crisis, like Merrill Lynch and Morgan Stanley, have raised tens of billions of dollars from a variety of Middle Eastern and Asian funds, including ones from Kuwait or Saudi Arabia.

According to data compiled by Bloomberg News, overseas investments by Persian Gulf countries reached a record $75 billion in 2007. Arms deals, a time-worn way of recycling petrodollars, remain popular in the region; the United States is pushing for a $20 billion weapons sale to Saudi Arabia, for example. But while oil-rich states are still buying American Treasury bonds or military hardware from the West, analysts say the more significant trend is for a growing share of their investments to be pumped into local projects.

“The vision is to turn the kingdom into a major industrial power by 2020,” said Jean-François Seznec, a professor at Georgetown University who is a specialist in industrial policies in the Persian Gulf. “A billion dollars here and a billion there, and soon you’re talking about real money.”

Projects like Petro Rabigh, Mr. Seznec said, will allow Saudi Arabia to become one of the top three chemical producers in the world within a few years. Unlike Kuwait or Abu Dhabi, Saudi Arabia does not have a sovereign fund responsible for investing the country’s petroleum riches.

Ali Al-Naimi, the kingdom’s energy minister and one of the grand architects of Saudi industrial policy, summed up the country’s goals at the dedication ceremony for Petro Rabigh in 2006.

“I would like to highlight the fact that the Petro Rabigh project is part of a bigger picture,” Mr. Naimi said at the time. “This strategy includes expanding the base of the Saudi economy, diversifying national income sources, attracting international investments and reaping the direct and indirect benefits that these types of projects will accrue to the Saudi citizen.”

The trend to modernize and develop the economy is not entirely new, of course. Saudi Arabia has been trying to diversify itself for over two decades. It famously tried to make the desert bloom in the 1970s and ’80s by investing heavily in water desalinization plants and growing crops.

But a long period of low oil prices, from the mid-1980s through the 1990s, stalled much of its effort. The government still relies on petroleum exports for 90 percent of its revenue; oil sales account for half of the country’s gross domestic product.

The current level of oil prices has given the country’s industrialization strategy a new spring, allowing the government to improve its finances while investing in large infrastructure projects. The Saudi G.D.P. has doubled in the last five years. Not counting oil, economic growth has been 4 percent to 6 percent a year since 2002.

Oil has not been the only engine of growth. The country’s private sector has also thrived and now accounts for 45 percent of the economy, compared with just 20 percent about 20 years ago. Since the 1990s, the share of private Saudi money invested at home has doubled, and now represents about 20 percent of total holdings, according to SABB.

“There is a lot of money looking for investment opportunities,” said Mr. Gray at HSBC.

The financial turnaround has been spectacular. In 1999, the Saudi government’s debt amounted to 120 percent of G.D.P. That number has dropped to less than 20 percent as the government paid back its obligations and put its finances in order.

Last year, the government recorded a budget surplus of $48 billion, five times the surplus of 2003. This year, it has built its biggest budget to date around a conservative estimate of oil prices of $45 a barrel; that will almost certainly yield a substantial surplus at the end of the year.

All of that is a far cry from the 1990s, when oil averaged $20 a barrel, thanks mostly to Saudi concerns at the time to keep oil prices low.

One of the most noticeable illustrations of the industrialization push is a plan championed by King Abdullah, the 83-year-old Saudi monarch, to build six new cities throughout the country — including the King Abdullah Economic City on the western coast, near the city of Rabigh; the Knowledge Economic City, near Medina; and the Prince Abdulaziz bin Mousaed Economic City, in the north.

The intent is to create industrial centers that double as housing and commercial hubs for the country’s young and growing population. The Saudi Arabian General Investment Authority, a government agency, expects these cities to add $150 billion to the country’s G.D.P. by 2020, create one million new jobs and be home to as many as five million people.

Drawings of these new towns depict a cross of the futuristic “Blade Runner” and traditional Arabic design. But the new cities are also expected to become new industrial centers that focus on four main sectors: petrochemicals, aluminum, steel and fertilizers.

According to SABB, these cities together will have four times the geographical area of Hong Kong, three times the population of Dubai, and an economic output equal to Singapore’s. Other plans include building four refineries, two petrochemical plants and a modern graduate-level university with an endowment of $10 billion.

THE frenzied growth of the economy has had some serious downsides. Inflation has been rampant in the last year; food prices and rents have risen sharply. Traffic jams in Riyadh and other Saudi cities have become a constant affliction, while real estate values have soared and the construction sector is strained by a lack of workers.

The stock market, meanwhile, has yet to recover from its collapse two years ago. From 2000 to early 2006, the local Tadawul stock index surged from 2,000 points to a peak of 19,870, a return of almost 900 percent. But the overvalued market went into a panicky free fall that caused it to lose two-thirds of its value in a matter of months.

After being flat for most of 2007, the market has recovered in the last quarter, gaining more than 40 percent. Still, its value is only about half that of its peak two years ago.

One reason for the partial rebound was anticipation of the sale of shares in Petro Rabigh earlier this month. For the first time, Saudi investors had a chance to buy a major asset linked to Aramco. The initial public offering, for 25 percent of Petro Rabigh, raised $1.23 billion and was the largest stock sale in Saudi history. The stock is expected to begin trading at the end of the month.

The project itself is still about a year away from completion. Once in operation, it will produce 2.4 million tons of plastics a year. This venture, along with dozens of other megaprojects, will firmly anchor Saudi Arabia as one of the world’s top suppliers of chemical products as well as oil.

“Saudi Aramco has a vision of itself as Exxon Mobil,” Mr. Seznec of Georgetown said, “except much bigger.”

Friday, January 18, 2008

Green Cities: The Benefits of Density

In past blog entries, I have talked about the environmental benefits of sprawl. When people live at low density, this creates a moat effect reducing contagion and exposure risk. I am well aware that people consume more resources when they live a low density. You can read this paper ( if you don't believe me!

Ed Glaeser and I are writing a paper right now where we will rank U.S cities with respect to their greenhouse gas emissions per-capita and dense cities will rank higher both due to transport and residential energy consumption.

This article highlights another "Green City" benefit of density. Scavengers face lower transaction and transport costs in a big city and less "garbage" ends up in landfills.

This article highlights the efficiency of this market as low value of time guys (i.e bums) sort through the NYC trash and find "gold" and sell it back to the used book stores. So as long as you don't smell the book you are reading (I hope you are not near sighted), this is an efficient market with few negative environmental consequences. In a sprawled city such efficiency would not be possible because the bums do not have cars to drive the book store to drop off the loot they found at 3am in your garbage can.

NY Times
January 18, 2008
Big City
Their House to Yours, via the Trash
By 9:15 most mornings, Thomas Germain, a ruddy-faced man in a yellow slicker, is pushing his oversize black wheeled suitcase down 12th Street in the direction of the Strand Bookstore on Broadway. Sometimes, the suitcase is stuffed full of books; sometimes the books fill a box or two or three that he balances carefully on top of it, a mass of swaying literature he rolls all the way from Greenwich Village or SoHo or Stuyvesant Town.

By 9:30, he’s often sitting outside the Strand, waiting for the store to open, drinking a breakfast of Budweiser with his friend Brian Martin, who’s pushed and pulled his own collection of books to the same destination in a large, teetering grocery cart.

The men are regulars at the Strand, book-scavenging semipros who help the city’s best-known used-book store keep its shelves stocked. They have no overhead, no employees and no boss. They also have no home. What they have is experience, and a fitful sense of industry.

“Perseverance,” Mr. Germain, said one recent Monday. “Other people fail at this because they don’t persevere.”

For them, that means rising from their street-side slumber around 3 a.m. to start sifting through recycling bins outside people’s homes or in front of buildings. (For the record, paperbacks are recyclable; the city requires the covers to be removed from hardcovers before they can be recycled, a request that for booklovers is tantamount to asking 10-year-old girls to rip Barbie’s head off before discarding her in the trash.)

The two 50-ish men — Tommy Books and Leprechaun , they call themselves — are often the first people waiting on the Strand’s bookselling line, a queue also populated by N.Y.U. students, genteel booklovers moving to smaller apartments, frugal cleaner-outers, and a fair number of down-and-out fellow book scavengers, many of whom live on the street.

Hundreds of men and a smaller number of women eke out a living scavenging books in Manhattan, according to Mitchell Duneier, author of “Sidewalk,” a book about the subculture of sidewalk book scavengers and vendors. Some of them sell their books on the street; others, the less entrepreneurial, or the more impatient, go for the surefire cash at the Strand.

When the store opened that Monday morning, Tommy Books and Leprechaun each in turn emptied their boxes onto the counter, where Neil Winokur, a Strand employee, quickly sorted them into two piles. An incomplete encyclopedia got rejected, as did Donna Tartt’s “Secret History.” (Too many on the market.) An hour or two later, another scavenger scored a hit selling the store a supply of children’s books, but had no luck with Newt Gingrich’s “Winning the Future” (“No one buys him here,” said Mr. Winokur).

Around lunchtime, Neil Harrison, another regular who’s lived mostly on the street, showed up with a stash of leather-bound 19th-century books, their marbleized covers aswirl with greens and blues. He said that a building superintendent had allowed him to clear out a storage area used by a man who had died whose family did not want the books. Mr. Harrison didn’t know the authors — Thackeray, Gibbon — but he knew enough to know that the books had value.

Sure enough, the books went straight to the third floor, where book preservationists would clean them up and eventually offer them for sale. “Six hundred,” Mr. Winokur told him (he thought the store could sell the Thackeray volumes for between $1,000 and $1,500). When he heard the number, Mr. Harrison crossed himself, then whooped. He peeled off a $20 to give a clerk as a tip; he left and came back five minutes later to hand Mr. Winokur $20, paying back some money he’d borrowed from the store the week before.

Is there any other industry in which such high-quality goods regularly make their way to consumers via a trash bin? Stand in the bookselling line at the Strand and the store starts to feel less like a dusty bastion of erudition and more like a messy, mulchy place where old ideas struggle to find new life.

Even in better days than these for books, the economy of publishing was bloated, based on guesswork, mercurial taste and the talents of people whose keenest interests rarely included making money. Book recycling in Manhattan is just the opposite, a perfectly efficient system with no fat at all: So many discarded books go from someone’s garbage to a scavenger to a bookseller and, often enough, land gently in someone else’s home. Feel guilty, if you must, for never finishing Tony Judt’s “Postwar: A History of Europe since 1945;” but don’t feel guilty for chucking it. It will most likely live to haunt someone else’s bedside table. It will find a new home.

Tommy Books and Leprechaun would like a new home themselves, they said. Also, a van.


Thursday, January 17, 2008

Job Talk Season

UCLA's Economics Faculty Recruiting is in high gear. We made good progress on senior recruiting in the fall and now we are in the middle of junior recruiting. There are a large number of talks taking place so there are endless 1/2 hour meetings, lunches, dinners, talks. Yesterday, I attended two job talks (one in public policy and the other in Economics).

You have to be a little bit envious of Harvard and MIT. Each of these heavyweights may have 6 job talks, vote 4 offers and hire 2 or 3. That's much less work for a department and everyone can be a "good citizen" because there are relatively few talks in total taking place.

I have learned some economics from the candidates coming through. I feel for them. They are nervous and hopeful. They wear bad suits. They refuse to tell the truth about the strange habits of their thesis advisers. Without gossip, what's the point of meeting? I'm kidding. UCLA knows that junior recruiting is a key part of building up the department and keeping the place young and active. Junior people are the reason that UC Berkeley has thrived.

Its interesting that I haven't seen any of the other bloggers blogging about "JoB talk season". Does it bore them? Or are they afraid they may reveal their school's secret strategy of cracking the "ToP 10". It would interest me who in the Profession has a good eye for predicting who will be a Star and which Stars are unable to pinpoint the young future stars?

My wife has pointed out to me that it is now easy to figure out who other schools are bringing in. I must admit that I keep an eye on Washington University in St. Louis to see who they think they may lure. I'm also watching out to see who Tufts will hire to replace me. Is there a perfect substitute for such an astute blogger?

In environmental economics today, it feels like there are 30 open Endowed Chairs and much less supply. I suggest that you enter my field and arbitrage these rents.

Monday, January 14, 2008

Jared Diamond versus the Critics: A Quick Debate on the Ecological Footprint

The Chronicle of Higher Education offers more insights than simply providing academic gossip about which Dean from which state school is moving to the Ivy League. I suggest that you read through this; Chronicle of Higher Education Piece on Sustainability

Sunday, January 13, 2008

Pollution Havens, Dead Cellphones and Reducing "E-Waste"

It was 75 degrees today here in LA, so it was time to climb as high as man my age can at Will Rogers State Park. I'm glad Mr. Rogers left his estate to the public. I wonder which celebrities today will do the same? 50 years from now will future UCLA faculty walk around at Britney Spears State Park or the K-Fed Nature Preserve? Real estate prices are falling here so maybe I will buy a 10 acre spread in Brentwood.

Back to reality. This article below is quite interesting.

I'm preparing a strange overview paper for this conference:

My paper is titled: "Globalization and The Environment: Lessons from Larry Summers, Nafta and the Toyota Prius"

The paper hashes out 3 prominent cases in the trade and the environment literature;

1. Summers = his world bank toxic trade memo

2. Nafta = would Mexican free trade with the U.S turn Mexico into a pollution haven?

3. Prius = globalization's impact on the rise of green products produced for export

This article below speaks in part to case #1

New York Times Sunday Magazine
January 13, 2008
The Afterlife of Cellphones

1. Cellphones in Hell

Americans threw out just shy of three million tons of household electronics in 2006. This so-called e-waste is the fastest-growing part of the municipal waste stream and, depending on your outlook, either an enormous problem or a bonanza. E-waste generally contains substances that, though safely sequestered during each product’s use, can become hazardous if not handled properly when disposed. Those products also hold bits of precious metals like silver, copper, platinum and gold.

The Belgian company Umicore is in the business of reclaiming those materials. It extracts 17 metals from our unwanted televisions, computers and cellphones and from more ominous-sounding industrial byproducts like drosses and anode slimes. Umicore harvests silver from spent photo-developing solutions collected at American big-box stores and sells it to Italian jewelers. The company describes its work as “aboveground mining.”

Umicore has roots in actual mining. In the late 1800s, during the reign of King Leopold II, the firm mined copper in the African Congo and shipped it to a riverside smelter near Antwerp. Today the same property houses a sprawling, state-of-the-art $2 billion smelter and refinery. Here, metals are recovered and processed. Then they are sold, sometimes to Asia, where they are used to manufacture brand-new electronics. It’s a reshuffling of the colonial arrangement: an abundant resource is sent from richer countries to poorer ones, made into goods, then sent back. That resource is our garbage.

Umicore’s smelter was burning furiously at 2,116 degrees Fahrenheit one afternoon last fall. Two heavy-set men in blue overalls sat in the control room, staring expressionlessly through heat-shielded windows. They were eye-level with the mouth of the smelter — a pit 13 feet wide by 46 feet deep. A conveyor belt fed shredded circuit boards and scrap into the fire in a dim, fast blur. I imagined the black-and-white television in my mother’s basement, or my first blue Nokia cellphone — all the devices I’d gotten close to and outgrown — spilling out and squealing like lobsters in a pot.

The metals exit the smelter’s base as a glowing sludge. It streams into another caldron the height of a house. From there, it moves into tanks of acid. The acid is electrocuted. As electricity flows through the mixture, copper accumulates on the tank’s end plate. I watched a giant claw move across the ceiling, rip out the plate and, with a violent whack, cleave off a gleaming layer of 99.9 percent pure copper, with the unmistakable sheen of a new penny. It was thrilling to see something so clean and recognizable emerge from such an alien process.

After explaining the final stages, Thierry Van Kerckhoven, Umicore’s e-scrap manager, handed me another of the end products from this process: a one-kilogram bar of gold. It felt the way I thought it would, based on what you see in the movies: substantial, mesmerizing. It was worth about $24,000. “This gold is recycled gold,” Kerckhoven said. “This gold is green gold.”

Recycling feels good because we imagine it as just this kind of alchemy — which Umicore achieves with impressive environmental controls. The centerpiece is a monstrous gas-cleaning-and-filtration system that captures and neutralizes enough of the carcinogenic and endocrine-altering chemicals produced from melting e-waste, according to Umicore, that the faint yellow emission finally released from its smokestack easily surpasses the European Union’s air-quality standards. (Martin Hojsik, who campaigns against toxics for Greenpeace International, notes that the process followed by Umicore and its few, similarly equipped competitors around the world is “not entirely clean” but still “the preferable solution” for recovering metals from e-waste.) Ultimately, by weight, only 1/2 of 1 percent of the e-waste Umicore takes in cannot be safely sent back into the world in a usable form. “There is often a discussion of separating what is valuable from what is toxic,” Christian Hagelüken, Umicore’s senior manager of business development, told me. “But sometimes they are the same thing.”

This may never be more true than for cellphones. They are the most valuable form of e-waste. Each one contains about a dollar’s worth of precious metals, mostly gold. And while single phones house far less hazardous material than a computer — an old, clunky monitor can incorporate seven pounds of lead — their cumulative presence is staggering. Last year, according to ABI Research, 1.2 billion phones were sold worldwide. Sixty percent of them probably replaced existing ones. In the United States, phones are cast aside after, on average, 12 months. And according to the industry trade group CTIA, four out of every five people in the country own cellphones.

Umicore estimates that, together with its competitors, it received only 1 percent of all phones that were discarded globally in 2006. “This of course is a lousy percentage,” Hagelüken said. “Computers are also bad, but phones are the worst.” Our obliviousness has mostly kept them from being recycled at all. When we do bother, we may not know, or be able to control, where the “recycled” phones go. Many enter a secondhand market in the developing world through a receding series of middlemen.

Reuse, we are told, is as green a virtue as recycling. But with e-waste all the old ecological dogmas start to become ambiguous. Cellphones represent only a part of the world’s e-waste problem. But they are a key to understanding how complicated it is. They also embody the kind of high-tech products that we will be throwing away more of: easier to upgrade than repair, increasingly disposable-seeming but also deeply personal. As governments around the world, from the European Union to New York City, propose or pass laws to require the recycling of e-waste, there’s little consensus about what recycling actually means. No matter how close our relationship with our phones has become — how faithfully we keep them with us, how we hold them to our faces and whisper into them — we rarely wonder where they go when they die.

2. Cellphones in Purgatory

If we think at all about what to do with old phones, we may realize we can return them to the wireless industry. With the idea of extended producer responsibility gaining traction — the notion that businesses should manage the disposal or recycling of their products — most major carriers and manufacturers in the United States now run voluntary take-back programs. But because we stop wanting phones long before they’re unusable, they also represent a kind of neglected value, there to be capitalized on. Seth Heine, who founded the company Collective Good in 2000, recognized this early.

Collective Good is a profitable business that, as the name suggests, Heine also sees as a vehicle for philanthropy. People send in their phones, and Collective Good sells the ones that still work into a global secondhand market. A portion of each phone’s resale or scrap value goes to one of more than 500 causes — ranging from the Red Cross to the Humane Society to the Obama campaign — selected by the phone’s donor. Used phones are sold to people overseas who can’t afford new ones, and hazardous waste is kept out of landfills. “It’s a self-cleaning oven,” Heine says.

When I visited his office outside Atlanta a few months ago, Heine was introducing a new venture,, which pays donors directly for their phones. Mail a BlackBerry Pearl, for example, to GreenPhone, and Heine will cut you a check for $65. And because Heine still isn’t entirely comfortable with all the paper consumption this entails, GreenPhone also plants a tree for every check it writes.

Heine is 40, a whip-smart and mildly self-righteous environmentalist with an M.B.A. and a boyish love of sports cars. There’s a lava lamp on his desk, but also, hanging behind it, a motivational poster that says VISION. Recently, he moved most of his operation to a larger facility in Colorado. But phones were still arriving at the small Georgia warehouse when I was there; they come in prepaid envelopes printed off the company’s Web site or from collection boxes at every Staples and FedEx Kinko’s in the United States. Each month, Heine receives 20,000 phones of at least 800 different makes and models.

They were scattered around the room: silver ones, a battered flip-phone with a sticker of a wolf on it. A store in Beverly Hills had been sending boxes of gold-plated, limited-edition Dolce & Gabbana Motorola Razr phones, turned in when customers traded up for something even newer. “That phone can’t be more than six months old,” Heine said at one point. Later, he handed an employee a Nokia with a note rubber-banded around it. It was something a friend gave him at dinner; that happens all the time, he said, “when you’re the Fred Sanford of phones.”

Heine’s business succeeds or fails based on how well it can assess and then realize the value of each phone. “I refer to that as the pachinko machine,” he told me. “You dump in a phone and it rattles around. It’s got to come out somewhere at the bottom.” The question is, where?

Phones beyond repair, or with little value, are dispatched to Umicore for their gold. But because acquiring the phones costs so much — all those individual, prepaid envelopes add up — recycling them must be subsidized by reselling the reusable ones. The most valuable handsets find their way to a room across the hall from the storeroom, where two employees sell them on eBay. Most, however, are sold via private auction to a stable of about 20 different resellers. Some, once refurbished, will be sent to American consumers to replace broken phones under warranty or covered by insurance. But it’s through the resellers, and the unfathomable network of resellers they sell to, that many also end up overseas, where the price of new phones can be prohibitively expensive.

American wireless carriers like AT&T and Sprint offer new phones below cost, or free, as incentives to get customers to sign lucrative two-year service contracts. Users in much of the world don’t purchase contracts, though. They buy chunks of prepaid minutes instead and can transfer their phone from one carrier to another more easily. Foreign carriers have no incentive to offer great deals. Phones we get free can cost upward of $200 in Latin America or Africa — where customers have less to spend. “A lot of people in the developing world will never own a new phone,” Heine says. They depend on our castoffs.

Ever-changing technology means that specific phones work only in specific networks, but relatively few are obsolete everywhere in the world. As one reseller says, “There’s always a place to put the phone.” Small-time entrepreneurs known as aggregators prowl the Internet cobbling together orders of thousands of a single make and model. “There are many, many thousands of us,” Joseph Khan told me. Khan, who lives outside Los Angeles, works as a limousine driver but has a side business in phones. Recently, he claims, he purchased several thousand Qualcomm QCT-1000’s for $11 each and resold them in Ukraine for $121 each. The QCT-1000 was introduced in 1996. “The battery is the size of a printer!” Khan says.

The need to refurbish or even significantly repair most phones is another reason vast quantities of them end up overseas — particularly in Asia, where cheap labor and replacement parts make the cost of fixing all sorts of phones with cameras and color screens and other features so low that many buyers do not even care if the phones turn on.

America’s largest phone-recycling company, ReCellular, based in Michigan, sells millions of phones annually to 375 refurbishers in 40 different countries. Some of these refurbishers, Mike Newman, a vice president of ReCellular, told me, “are going to be highly sophisticated companies with really sparkling, huge plants,” while others might consist of an entrepreneur with “10 small stores in the Dominican Republic who has, in the back of one of them, a place where 10 people are doing some refurbishing — just sitting on some benches and old tables, taking off the housings and fixing them.” ReCellular handles the phones from most of the major recycling programs in America sponsored by wireless carriers, including Verizon, Sprint and AT&T. It expects to receive seven million phones this year. Financially, according to Newman, the “backbone of these programs is the resale of usable phones.”

It’s hard to track ReCellular’s or Collective Good’s phones. But Jack Qiu, a professor at the Chinese University of Hong Kong who has studied the movement of used computers and phones in China, describes one route phones take. In Kowloon, in Hong Kong, Pakistanis and other immigrants (often asylum seekers) import phones from Europe by the shipping container. These are fixed or cannibalized for parts in stalls at a local market. In the past, Nigerians and other African exporters swept in to buy tens of thousands of phones at a time, particularly so-called “14-day phones” — those that have been returned under warranty and used little. But recently, Qiu says, the markets for these phones have become saturated in African cities. So the Nigerians, needing to take their business to poorer African villages, have been leaving Hong Kong for Chinese cities like Guangzhou, where they can purchase cheaper, more heavily used phones from the larger refurbishing companies there. Many Nigerians have learned Mandarin in order to do business in Guangzhou, Qiu says, and the city now has an African-style coffee shop.

Africa is one of the biggest markets for used phones. Seventy-five percent of all phones in the least-developed African nations are cellphones — and usage in many places is increasing by 30 or 40 percent per year. Their impact can not be overstated, particularly where roads are poor and settlements separated by great distances, places that land lines never reached and now have no reason to do so. Consequently, cellphones are not easily abandoned — and, when they are, someone somewhere is still likely to see some value in them. Jim Puckett, the coordinator of the Basel Action Network, a nongovernmental watchdog group that focuses on e-waste, visited Nigeria in 2005. He describes, at one Lagos electronics bazaar, repairmen sitting on dirt floors under shelves of scavenged parts, jury-rigging phones back together, over and over again, until the things are absolutely dead.

“I’ve never seen the real end,” Qiu says. “I’ve seen landfills in China full of used computer parts, but I’ve never seen a single landfill of used mobile phones or phone parts.” The Chinese themselves “retire” between 200 million and 300 million phones every year, he says. These phones are sold in places like India, Mongolia, Vietnam and Thailand. And from Thailand, they are sold to buyers in Laos, Cambodia, Bangladesh and Myanmar. In other words, the pachinko machine is global, and there are millions, or even billions, of phones still clattering down its channels.

In 2001, Basel Action Network filmed a documentary in Guiyu, China, a town overrun by shipments of old computers from recyclers in the United States and elsewhere. Guiyu’s residents, including children, make their living sorting, dismantling and burning computer parts or bathing them in nitric and hydrochloric acids to recover precious metals. This not only mobilizes a device’s hazardous constituents; it also creates new ones. The health consequences are immense; respiratory problems and elevated blood-lead levels in children are reportedly rampant in Guiyu and, around the time of BAN’s visit, the nearby river contained up to 2,400 times the World Health Organization’s acceptable threshold for lead.

In 2005, BAN found 500 shipping containers of electronics arriving in Lagos each month. Useless computers were being tossed into burning piles behind a marketplace. And the phones — no matter how many ramshackle resurrections they experience — will at some point presumably meet the same fate, Puckett says. “It sounds like a cellphone’s just a little thing — if you burn it it’s not such a big deal,” he explains. “But we’re talking about mass volumes going to countries that have no infrastructure or ability to deal with it.”

Moreover, manufacturers now sell “ultra-low-cost handsets” — new, no-frills phones specifically for consumers in the developing world. Some cost less than $20. These phones, says Badii Kechiche, a market analyst with Pyramid Research, are what really fuels the spread of phone usage across Africa — not the comparatively skimpy supply of our used ones. As a consequence, used cellphones — just rare enough to stay out of the planet’s globalized digital trash heaps so far — may come to be more like regular junk. “If ultra-low-cost handsets are coming in,” Kechiche says, “and they’re much cheaper or cheaper than refurbished handsets, what’s the point of getting a refurbished handset?” The people we rely on to take our garbage are not only losing their need for it. They’re becoming firsthand generators of that same garbage.

In a study published last year, 34 recent-model cellphones were put through a standard E.P.A. test, simulating conditions inside a landfill. All of them leached hazardous amounts of lead — on average, more than 17 times the federal threshold for what constitutes hazardous waste. Under a stricter state of California test, they also leached four other metals above hazardous levels.

The E.P.A. says modern American landfills are designed to keep toxics stewing inside from leaking out, so they don’t contaminate surrounding soil or drinking water. But landfills do fail, says Oladele A. Ogunseitan, an environmental-health scientist at the University of California, Irvine, and an author of last year’s study. More important, he notes, such landfills don’t exist in the developing world. In many places, garbage is tossed into informal dumps or bodies of water or burned in the open air — all dangerous ways of liberating and spreading toxics.

The electronics industry is greening significantly, though. E-waste take-back programs are starting to spread around the developing world. A landmark law, the RoHS directive, enacted by the European Union, requires all electronics manufacturers to drastically lower concentrations of hazardous substances, including lead, in their products. Nokia and Sony Ericsson are among those voluntarily phasing out other dangerous substances not covered by RoHS.

Still, according to Ogunseitan, there will always be risks, or at least unknowns, accompanying the improper disposal of such products. The compositions of consumer electronics evolve through long sequences of trial and error. “In a phone that you can hold in the palm of your hand, you now have more than 200 chemical compounds,” he says, citing the results of an analysis of one new cellphone. “To try to separate them out and study what health effects may be associated with burning it or sinking it in water — that’s a lifetime of work for a toxicologist.”

The laws governing the export of e-waste present their own difficulties. An international treaty restricting the movement of hazardous waste to the developing world, a 170-nation agreement called the Basel Convention, is ambiguous when it comes to electronics. Namely, when is an item repairable — and thus freely exportable as a reusable product — and when is it just hazardous waste? Nothing requires exporters to even test the products they ship. Consequently, exporting products for “reuse” is often used as a loophole to dump them. In any case, the United States has not ratified the Basel Convention.

Electronics recycling “has always been the used-car lot of the recycling world,” Seth Heine laments. With no clear standards to follow, he enforces his own. He claims to thoroughly assess the condition of all his phones. He’s also quick to send working phones with limited potential for reuse straight to Umicore rather than sell them for far more money to less scrupulous buyers in the secondhand market. Heine figures this means he is leaving $150,000 on the table each year, easily. (Several environmental groups I contacted, including BAN, singled out Heine for his integrity and seriousness about the environment.)

Mike Newman told me that ReCellular supports establishing standards for exporting phones. But he also questions their effectiveness. A company could say it doesn’t sell irreparable or untested devices to the developing world, but, “How does any company really know where their phones end up?” he asks. “Once you sell them, they’re not your phones anymore.” Newman claims that ReCellular tests all of its recycled phones anyway. But on the day we spoke, there were lots made up of hundreds and thousands of phones (even up to 15,000) listed for sale on ReCellular’s Web site and labeled Bulk Beyond Economical Repair and Bulk Used/Untested. Newman would later clarify: these phones were not from recycling programs. They were returned under carrier warranty programs; ReCellular acquires and resells tens of thousands of these devices too every month and doesn’t bother testing them.

Given this state of affairs, you can’t help wondering if throwing your old phone in the trash, and into the high-tech sarcophagus of an American landfill, could end up doing less damage to the environment than recycling it. But that ignores yet another crucial part of the equation. As Heine explains, even though what he sells will probably be thrown out eventually, if a phone gets three or four more lives, “it’s absolutely better for the environment than having to make three or four more phones — phones that wouldn’t be recycled, either.”

Reusing phones conserves natural resources, which reduces the environmental damage that comes with mining them. That damage isn’t necessarily obvious. When I called Allen Hershkowitz, a senior scientist at the Natural Resources Defense Council who specializes in solid-waste issues, he was less interested in discussing the toxicity of old electronics than the costs of mining a particular metal, tantalum, to build the capacitors for new products. Tantalum comes from an ore called coltan. Control of coltan deposits was a factor in perpetuating Congo’s civil war in the late 1990s, and the people mining it there now, Hershkowitz says, rely on “critically endangered” gorillas for food. Tantalum is one of the metals Umicore can’t recover from e-waste.

Much of the world’s gold and copper, meanwhile, is mined in open pits, which means it is leached out with cyanide or sulfuric acid. Using data from the United States Geological Survey and mining companies’ own reports, Earthworks estimates that mining the gold needed for the circuit board of a single mobile phone generates 220 pounds of waste. The environmental nonprofit calls this “an extremely conservative” estimate.

What’s more, the world’s supply of these metals is finite. So even as the E.P.A. plays down the risks of throwing e-waste into landfills, it also urges us not to. Tim Townsend, an environmental engineer at the University of Florida who has studied the toxicity of mobile phones for the E.P.A., sums up the absurdity of just tossing this stuff away: “If we know these metals are, overall, bad for us, it doesn’t make sense to keep digging them up from the earth’s crust and bringing them into the biosphere while — at the same time — we’re taking the ones we’ve already got and burying them.”

As with most environmental issues, then, no option for getting rid of a phone is free of trade-offs, and nothing is as simple as we’d wish. But the truth is, few of America’s phones are turned in for “recycling” in the first place. (It’s unclear how few. The figure of less than 1 percent, put forward in a groundbreaking report on phone recycling by the nonprofit Inform five years ago, is still repeated. ReCellular estimates that it’s more like 10 percent now.) While a phone’s small size may give even normally conscientious consumers a dispensation to slip it into the trash, there seems to be a more typical solution, what ABI Research estimates nearly half of Americans do: stick the thing in a desk drawer and leave it there.

Every recycler I spoke with talked about “the drawer.” It turns out to be the real purgatory for phones. Using predictions from Inform, the United States Geological Survey estimates that in 2005 there were already more than half a billion old phones sitting in American drawers. That added up to more than $300 million worth of gold, palladium, silver, copper and platinum. Heine says he still receives phones in prepaid envelopes addressed to the Kentucky tobacco barn where he started Collective Good in 2000. It tells him that people get motivated, take the envelope, then stick that in a drawer for a long time.

“As soon as [a phone] makes its way into the drawer, it’s hard to get people to dig it back out,” ReCellular’s Newman told me. I asked him how hard. “I have employees,” he said, “who have them in their desk drawers.”

3. Cellphones in Heaven

Given the intimate place of cellphones in our lives, why do we get rid of them so quickly?

Sometimes we don’t have a choice. We switch to a new carrier and must buy a phone adapted to its particular network. (Late last year, Verizon announced it would eliminate this requirement.) Or we trade up for new features: first a camera, then an MP3 player, then a Web browser. Apple’s iPhone promised to put an end to this chase by combining everything in a single, graceful device. But the industry knows the iPhone is just a momentary milestone in its race to replace laptop computers entirely — and that we will follow, one revolutionary but not-quite-perfect device at a time.

Regardless, recyclers say that from their vantage point it’s obvious that most phones are retired because of psychological, not technological, obsolescence. “There’s some fashion driving all of this and, by its nature, fashion is not eternal,” says Mark Donovan of M:Metrics, which tracks the wireless industry. Phones were initially an afterthought, given out free so that customers had something to talk into after buying the real product, the service contract. But carriers learned, as Donovan puts it, that “if you deliver something cool, and if it’s a bit of a status symbol, people will pony up and pay cash for it.” He adds: “People want them to become more than an awkward gadget. People want it to be an expression of their personalities.”

Right now, there are roughly 470 models of phone for sale in the United States. About 16 new ones come out every month. Many are only slightly altered versions of existing phones, suggesting how easily we get bored — how we’ll crave something that slides, say, instead of flips open. (There are currently 46 styles of Motorola Razr; Motorola has, in fact, projected which colors and finishes we’ll find most attractive through the year 2009.) And we have the perfect incentive to get whatever we want every two years when our contracts are up and the discounts for new phones roll around. When I asked Iain Gillott, an analyst with iGR, what makes a person get a new phone, he told me, “They’re cruising through the Sunday paper, and they see a fabulous phone for 50 bucks and they say, ‘Well, I haven’t had a new one in 18 months.’ ”

Gillott estimates 50 to 60 percent of phones are replaced “because people get tired of the design.” Otherwise, consumers want a new feature — even, it seems, if there’s no real need for it; according to M:Metrics, 82 percent of those with Internet-enabled phones do not go online. Steven Herbst, a psychology researcher at Motorola, told me: “All that pressure to have the latest — something that people will be impressed by — is compounded by the fact that all of a sudden somebody is doing something with their mobile phone that you can’t do.” In other words, it’s because we’ve made phones such deep and indispensable extensions of ourselves that we dump them so quickly. Who can bear seeing himself as even slightly outdated or incapable?

“Somewhere during the last 100 years, we learned to find refuge outside the species, in the silent embrace of manufactured objects,” Jonathan Chapman, a young product designer and theorist at the University of Brighton, writes in his book “Emotionally Durable Design.” But designers and consumers have snared themselves in an unsustainable trap, Chapman told me, since our affection for many high-tech objects is tied exclusively to their newness.

“The mobile phone occupies a kind of glossy, scratch-free world,” he says. Whereas a pair of jeans gains character over time, a phone does no such thing. “As soon you purchase it, you can only watch it migrating further away from what it is you want — a glossy, scratch-free object.” You might leave the plastic film over the display for a few days, just so you can take it off later and “give yourself a second honeymoon with the phone,” he says. But ultimately everything that first attracted you to it only deteriorates. You start looking at it differently. “It’s made of some kind of sparkle-finished polymer and it’s got some decent curves on it, but so what? The intimacy comes more from the fact that, within that hand-held piece of plastic, exists your whole world” — your friends’ phone numbers, your digital pictures, your music — and that stuff can be easily transferred to a new one. So you “fall out of love” with the phone, Chapman says.

Even the most idealistic visions of how e-waste should be recycled and reused take for granted that consumers and businesses will never reconsider why we are buying and discarding so many of those products, so quickly, in the first place. If the rush of castoffs isn’t likely to stop, we need to clear a proper path for it, considering all the inevitable compromises and costs along the way and delivering those products to as consequenceless a place as possible.

There is no heaven for cellphones. Wherever they go, it seems that something, somewhere, to some extent always ends up being damaged or depleted. The only heaven I came across was what Chapman described. It is an image in our heads — not of a place where we can send a used phone but one where we imagine each device when it’s brand-new, right before we first get our hands on it. That illusion of perfection, no matter how many times we see it spoiled, will always lure us into buying the next new phone and sending the last one careering on its way.

Jon Mooallem, a contributing writer, last wrote for the magazine about the science and commerce of sleep.

Wednesday, January 09, 2008

Celebrities Near UCLA

There lurks a hypothesis about West LA that I hope is false. "For every year a person lives in Hollywood, they lose two points off their IQ." Maybe it is time for Britney Spears to relocate from near UCLA and move to Cambridge, MA? The article below gives UCLA some well earned recognition.

Oops, now Britney's lost her car
By JOHN ROGERS, Associated Press WriterWed Jan 9, 8:52 AM ET

It was just another night on the town Monday, and then another headline in the tabloids on Tuesday, for Britney Spears after the pop star had her car towed away and her visit to a high-end hotel triggered a scuffle between a photographer and a security guard.

The scuffle resulted in police being called to the Four Seasons Hotel near Beverly Hills about 90 minutes after they had a private towing company haul Spears' car away. But Officer Karen Smith said the pop star wasn't to blame for the Four Seasons dust-up.

"She was leaving the hotel when one of the paparazzi and a security guard at the hotel had a scuffle," Smith said.

Police took a battery report but the photographer had left the hotel by the time officers arrived and no one was arrested. The hotel's head of security did not respond to a message for comment.

Police said Spears left her 2008 Mercedes-Benz on busy Sunset Boulevard, near the University of California, Los Angeles campus, about 8 p.m. Monday because of a flat tire.
"She left it unattended and it was blocking traffic, so it was towed," Smith said.
It was unlikely Spears would be ticketed because the car was disabled, but police said she would have to pay a towing and impound fee to get it back. The vehicle was taken to Quicksilver Towing, where an employee who answered the phone Tuesday said he didn't know if it was still there.
"We had several Mercedes towed last night," he said, adding storage charges are $35.20 a day.
According to the celebrity Web site, Spears caught a ride home from a member of the horde of paparazzi who follow her everywhere. Then it was off to the Four Seasons.
The car and hotel incidents were only minor bumps in the road for Spears, who is involved in a bitter, public custody dispute with ex-husband Kevin Federline over the couple's sons, 1-year-old Jayden James and 2-year-old Sean Preston.
Spears was hospitalized last week after an hours-long standoff at her home that was triggered by the custody battle. The next day, a court commissioner gave sole physical and legal custody of the boys to Federline and suspended Spears' visitation rights.

Copyright © 2008 The Associated Press. All rights reserved. The information contained in the AP News report may not be published, broadcast, rewritten or redistributed without the prior written authority of The Associated Press.

YouTube for Nerds

Have any economists competed yet on American Idol? This new "YouTube" for nerds will give us a chance. I must admit that I'm intrigued. There are endless possibilities here related to open source and idea sharing. Will Greg Mankiw post videos of his Harvard Ec10 lectures? Would this increase or decrease his intro book sales? How many people would tune in to watch Jim Heckman discuss the benefits of early investment in children? How many people would tune it to watch me crack jokes and talk about the costs and benefits of living a green life? Economists like data --- what field experiments would be ran to test what hypotheses?

Which economists will use this site as an audition tape to try to make it to the big leagues like Jeff Sachs and make it on to HBO or the morning TV talkshows? Will bald economists or fat economists have to deliver higher quality presentations to generate as many "downloads" as more attractive economists? How will the Hammer use this data in his work on Beauty?

Will the pay premium for good teachers increase as this website will highlight which university professors are good teachers? Until now, publishing was an observable verifiable output but this new website may shine a spotlight on good teachers; by identifying them and letting the market speak.

Will Universities who are considering making an offer to 1 of 2 candidates demand that the 2 candidates duel on "Nerd Tube" to see who gets more votes? Or do you trust the tenured faculty to make this decision? Is there wisdom in crowds or do you trust the Yodas?

New York Times
January 7, 2008
Ex-Harvard President Meets a Former Student, and Intellectual Sparks Fly

In June 2006, Peter Hopkins, a civic-minded and idealistic 2004 Harvard graduate, trekked up to his alma mater from New York for a meeting with Lawrence H. Summers, the economist and former Treasury secretary. Mr. Hopkins, who finagled the appointment through his friendship with Mr. Summers’s assistant, had a business idea: a Web site that could do for intellectuals what YouTube, the popular video-sharing site, did for bulldogs on skateboards.

The pitch — “a YouTube for ideas” — appealed to Mr. Summers. “Larry, to his credit, is open to new ideas,” Mr. Hopkins recalled recently. “He grilled me for two hours.” In the age of user-generated content, Mr. Summers did have one worry: “Let’s say someone puts up a porn video next to my macroeconomic speech?”

It took awhile, but a year after that meeting, Mr. Summers decided to invest (“a few tens of thousands of dollars,” he said, adding “not something I’m hoping to retire on”) in the site, called Big Think, which officially makes its debut today after being tested for several months.

Big Think ( mixes interviews with public intellectuals from a variety of fields, from politics, to law to business, and allows users to engage in debates on issues like global warming and the two-party system. It plans to add new features as it goes along, including a Facebook-like application for social networking, and Mr. Hopkins said he would like the site to become a popular place for college students looking for original sources.

“I’ve had the general view that there is a hunger for people my age looking for more intellectual content,” said Mr. Summers, who resigned as Harvard president in 2006 after making controversial comments about the lack of women in science and engineering. “I saw it as president of Harvard when I saw C.E.O.’s come up to my wife and want to discuss Hawthorne.” (His wife, Elisa New, is a professor of English at Harvard).

A handful of other deep-pocketed investors also decided to chip in, including Peter Thiel, the Silicon Valley venture capitalist and co-founder of PayPal, the online payments site; Tom Scott, who struck it rich by founding, and selling, the juice company Nantucket Nectars and now owns Plum TV, a collection of local television stations in wealthy playgrounds like Aspen, Martha’s Vineyard and the Hamptons; the television producer Gary David Goldberg, who was behind the hit shows “Spin City” and “Family Ties”; and David Frankel, a venture capitalist who was the lead investor in Big Think.

“I tend to follow my own curiosities, and I know millions of people are like me,” said Mr. Scott. “I’m into this kind of thing. I do think there is a market for this.”

Mr. Frankel, the lead investor, said, “The initial investors may put in more. I imagine we will go out and raise more money in the future.”

Mr. Hopkins and his partner, Victoria Brown, germinated the idea for Big Think while working together at PBS on the “Charlie Rose” show in 2006.

When they surveyed the landscape, Mr. Hopkins, 24, and Ms. Brown, 33, saw a vast array of celebrity and sophomoric video content (remember the clips of cats urinating in toilets that caused a sensation on YouTube?).

“Everyone says Americans are stupid — that’s what we generally heard from venture capitalists” when trying to raise money, Mr. Hopkins said. Obviously, Mr. Hopkins and Ms. Brown felt differently, and the success of the business basically hinges on proving that Americans have an appetite for other kinds of content.

Of course, Mr. Hopkins and Ms. Brown are not the first to see the Internet as an opportunity to further public discourse. It was invented largely by academics; numerous sites, like Arts & Letters Daily, an offshoot of the Chronicle of Higher Education, seek to serve intellectuals.

Big Think’s business model right now is rudimentary: attract enough viewers, then sell advertising. “We’re going to wait until it gets attention before going after advertisers,” Mr. Hopkins said.

So for the time being, money will be flowing one way at Big Think, out the door. Over the last several months, Big Think’s handful of producers, working from a pod of desks in a Manhattan office space, have amassed a library of about 180 interviews with leading thinkers, politicians and business leaders, like Mitt Romney, Supreme Court Justice Stephen G. Breyer, Richard Branson and the co-founder of Blackstone, Pete Peterson. Many of the interviews were conducted in a closet-turned-studio in a back room off the office kitchen.

The interview style, which Big Think’s founders said was derived from a technique used by the filmmaker Errol Morris, places the interviewer in an even smaller closet, behind a shower curtain, hidden from the subject and making the person asking the questions almost an afterthought. The subject hears the questions from a closed-circuit monitor.

The finished product even eliminates the interviewer’s voice, and the questions appear as text on the screen. The goal is to not create a confrontation between interviewer and interviewee, or goad the subject into saying something provocative (but if it happens, that is a bonus.)

“The whole idea is really to take the interviewer out of the equation,” said Mr. Hopkins. “It allows people to be very candid. Pete Peterson went on about how his mother never loved him. It was like he was coming in for his last testament.”

When Mr. Peterson left his interview, he surveyed the makeshift studio and said, “You kids are really making lemonade out of lemons.”

Tom Freston, the former chief executive of Viacom, has shown little interest in publicly reflecting on his 2005 firing by Viacom Chairman Sumner M. Redstone. But he agreed to discuss it with Big Think, saying in an interview, “Say if you’re a C.E.O. of a public company, a lot of it you’re playing defense. You’re dealing with problems or crises. At the moment in the smaller life I have for myself, I’ve got a lot less of that, which is a good thing.”

Those videos stockpiled over the last months will be introduced piecemeal and used in a variety of ways. For example, the site may pose the question “are two parties enough?” and assemble clips from people like John McCain and Arlen Spector and Dennis Kucinich. Readers would then have an opportunity to submit their own views.

“The idea behind Big Think is that you do have to sit down for a few minutes and listen to people who know more than you do,” Mr. Hopkins said.

Mr. Hopkins knows his site will naturally appeal to secular East Coast intellectuals, but he wants to challenge their secularism with sections on faith and love and happiness. “There’s a ton of evangelicals,” said Mr. Hopkins, including an interview with Rick Warren, the pastor and best-selling author of “The Purpose Driven Life.”

“People, whether or not they believe in God, these issues really resonate,” said Mr. Hopkins. “Look at the success of ‘The Secret’ and ‘The Purpose Driven Life.’”

He also hopes the site can transcend partisanship and become a destination for thinkers open to hearing opposing views.

“We live in this hyperpartisan world with really smart people on each side,” Mr. Hopkins said, invoking John Locke and John Stuart Mill, two enlightenment thinkers who believed in being open to hearing out the other side. “But there’s a lot of information not being exchanged because of these false barriers. People should expose themselves to the counterpoints.”