Wrap Up for July 2021

What shifts in labour demand since the pandemic, are most likely to last?

"In a saner world, it would be advocates of government intervention who would insist upon a proper and regular assessment of its works."

El Salvador provides a teaching example for different monetary roles.

"the age-earnings profile is getting both higher and later in life."

For Scott Sumner, productivity losses are one of the most important economic stories.

The Agricultural Revolution was overshadowed by the Industrial Revolution.

Which economic patterns will return to normal?

A book review: Colonial Ecology, Atlantic Economy

A Texas example for sustainable towns  

Some concerns regarding digital currencies. 

"Market observers said they have already begun to see diminishing demand for units in older buildings in the areas that are typically occupied by lower-income tenants and retirees" 

Lowering carbon emissions would require lifestyle changes which nations have yet to address. 

What kind of utilitarianism is most reasonable?

"Eventually some structures and activities will retreat from the coast because they are not economic. Maintenance and insurance costs will increasingly be factored into decisions about where people choose to live, work and invest."

The condo collapse in Surfside, was an extreme example of the kind of infighting HOAs often face.

Some explorations of long-run growth.

Solar and wind have become competitive to the point of no longer needing subsidies.

Low interest rates are not a policy, but an outcome of both monetary and non monetary factors.

Why is Cuba in such dire straits?

What will happen to the High Streets after the pandemic?

Is inflation always a monetary phenomenon?

Climate change is affecting the productivity levels of U.S. wheat crops.

Who is journalism actually for?

Inflation levels face the challenges of demographics, globalization, and E-Commerce.

What would Milton Friedman think of today's monetary policy?

"Our economy doesn't create meaningful high-paying work for people, and that's the problem."

Are our daily lives too comfortable and convenient?

The move from a gold standard to one of fiat money, wasn't easy.

When does technology have broader purpose?

Brian Potter looks at sixty years of homebuilding.

Homebuilders are finding it difficult to build homes that are affordable for first time homebuyers.

The "leakage problem" adds extensive and often unnecessary infrastructure costs.

What is inflation, and why does it matter?

An astonishing survey re confidence in institutions.

Interesting addition to books which seek to "mend a broken society".

The authors of this study found a pronounced rise in cognitive distortions since the turn of the century.

Some jobs won't come back.

Limited supply made the housing market "too hot" during the spring.

In Britain, "Neo-Nazis make up 20% of the current prison terrorist population"

Even though utility is difficult to measure, so are other policy goals. Should policy makers embrace utility?

Why are high administrative costs for healthcare in the U.S. so difficult to reduce?

Could Building Maintenance Become Less Costly?

The recent condo collapse in Florida serves as a reminder, that many concrete structures are overdue for millions in repairs. And already it's evident how rusting steel contributed to the condo's demise. But what makes steel rebar so important for concrete construction in the first place? Indeed, this is far more than a cost concern for residential condo owners, since much of a nation's physical infrastructure is also composed of concrete and steel. At the very least, a recent Axios article notes some possibilities which might lessen long term maintenance costs for physical infrastructure:

The rebar can be made more resistant to rust, by coating it in zinc, or passing an electric current through it, or making it out of glass-fiber reinforced  polymer, or carbon fiber, or bronzed aluminum, instead of steel. Such actions involve greater upfront cost, while saving a lot of money over the long term. 

It's even possible that some concrete buildings might not need any reinforcement at all, so long as the concrete is only under compression. No steel rebar means no erosion, after all. But that's still a step too far for most architects and engineers - and most buildings will always end up passing some kind of steel pipes through the external concrete, for things like water, gas, and electricity.

While the above recommendations could prove helpful, the higher upfront costs of those initial suggestions are less likely to be adopted in residential construction, where individual owners bear ultimate responsibility for both upfront costs and long term maintenance. What about the possibility of relying on compression instead of steel rebar? For one, I question the rationale that people should pass pipes and wiring through walls to building interiors for utility needs. Not only does this procedure mean higher upfront costs, but it includes long term maintenance requirements which have become prohibitive for lower income groups. 

Fortunately there are viable ways to avoid internal utility installations, altogether. It's time to explore the advantages of external utility compartments, which could be designed without "permanent" connections to building materials such as wood, brick, stone or concrete. Only recall how many of these connections have to be broken, sooner or later. 

External and detachable utility compartments would not only benefit individual property owners, but also those with shared ownership in multi level building construction. The adoption of such technology should make it simple to embrace concrete construction which relies on compression rather than steel rebar. While external utilities might limit design ideas for internal floor space and layout, that would be a small sacrifice, given the ultimate gains in both initial and long term building costs.

Much about future growth and prosperity, depends on our ability to improve building construction of all kinds. Let's contribute to the process with improvements in flexible design. Granted, as a older Baby Boomer, I know it's a bit late to expect innovation which translates into affordable housing retirement options for myself. Indeed, the main affordable "options" for many retirees are deteriorated older homes in need of extensive utility renovations! Small wonder some Baby Boomers are remaining in place (with sizable homes consequently kept out of the marketplace), when they would otherwise seek to downsize.

In all of this, recent questioning about the safety of old condos (many of which house older folks), puts additional housing supply pressures on communities which refuse land sales for tiny homes. This especially affects retirees who lack the stamina to start over with dilapidated housing stock, and recognize tiny homes as a cost effective, low maintenance way to avoid doing so! But who knows, within the next decade, communities might become open to zoning which better reflects retiree's needs. Plus, architects and engineers could also embrace external utility compartment design. If they do, that would benefit people of all ages and income levels, not just retirees. External utility compartments would also make it easier for people of all ages and incomes to renovate older housing stock, some of which otherwise is likely to be demolished due to long term neglect. With a little luck, perhaps the last of the Baby Boomers will finally gain real retirement housing options which retirees such as myself only dream about.

Addressing the Confusing Incentives of Shared Ownership

The tragedy which unfolded recently at Champlain Towers South, has also exposed some basic problems regarding shared ownership for physical properties. When it comes to shared ownership: the larger the relevant structure, and the closer its proximity to other installations, the more difficult it may be for all involved to resolve maintenance issues. 

Many who have paid close attention to these events in Surfside Florida, are at least gaining a better understanding re complexities in shared ownership responsibilities. As it turns out, when maintenance delays accumulate exponentially, the situation will sometimes prove impossible to successfully resolve. For instance, in the case of Champlain South, due in part to "extensive concrete deterioration and corrosion of reinforcement", Morabito Consultants indicated it would not be able to perform some much needed remediation that had been deemed necessary. There were also questions in this October 2020 assessment, whether full repairs might negatively impact nearby structural features. 

Hence Champlain Towers South became "a catastrophe in slow motion". An article from CNN discusses some of the relevant ownership issues:

The disaster appears to have exposed some of the limitations of condo associations, which are made up of condominium owners with a vested interest in the property but that seldom possess much expertise in structural engineering. And it has raised questions about whether other residential structures could be at risk in Miami-Dade County, where sea levels are rising, the salty air is corrosive and nearly two-thirds of all commercial, condo and apartment buildings are as old or older than the 40-year old edifice that went down.

Granted, the collapse doesn't necessarily mean excessive risk elsewhere, since much also depends on the degree of ongoing maintenance. Nevertheless, as Peter Dyga, the president of Associated Builders and Contractors noted,

We're probably going to overreact. But it's understandable--people want a level of assurance that their building is safe.

It's being said this is a "wake up call on many fronts" - one which basically translates into more laws, regulations and building inspections. But might this be our only societal response? How will additional regulations accomplish what is truly needed in this instance? Already, the condo residents were quite aware of ongoing problems due in part to regulations already on the books, not to mention ongoing inspections. Chances are, the main problem was finding a "meeting of the minds" in a timely manner. Of course, what would have been timely, given the extensive concrete issues?

These shared ownership issues are problematic in much of housing in general. Only considered for instance, how shared family ownership in single family housing (which may be further undermined by family law rigidity), often results in extensive housing deterioration. Clearly, the difficulty of achieving "meetings of the minds" can mean maintenance breakdowns for shared ownership in every capacity imaginable. 

For one thing, proactive market frameworks are needed which leave more room for individual decision making as to ongoing maintenance. In other words, more promotion of home ownership specifically for individuals. However, this post is primarily about problems in shared ownership and how they might be addressed. Perhaps the best possibility is a "meeting of the minds" in free market building innovation, to reduce need for intensive long term maintenance, altogether. Only consider that when ongoing maintenance is neglected, that often leads to a costly "starting from scratch" at some point. 

Meanwhile, we've been learning some hard lessons about basic 20th century innovations. Concrete maintenance is beginning to emerging as an important issue. Equally important however, are the long term maintenance problems of today's plumbing and electrical systems. Even though 20th century plumbing brought tremendous gains in health and public sanitation, much of it was constructed in ways which pose additional stressors for buildings of all kinds. Some of what is becoming obsolete, is not easy to remove and replace without compromising structural integrity. Equally important, is how the fact plumbing pipes and electrical wiring were installed behind walls and interiors, makes it difficult for lower income groups or (many) senior citizens to participate in basic maintenance responsibilities. 

Even when monies are available for extensive renovations in older structures, it sometimes proves impossible for people to live normal lives (in place) in these buildings, once extensive maintenance needs arise. For example, consider how even the desire of condo owners in Champlain South to keep their pool in use, is one factor which made complete renovations impossible. It's not difficult to extrapolate this example to deterioration in older homes that are continuously lived in and essentially co-owned by multiple family members, once electrical and plumbing systems near the end of their useful lives. Often when completely new beginnings are required for these systems - especially if they have otherwise damaged the buildings in some capacity - it may prove impractical to live in the affected buildings for at least a full year.

Ultimately, greater flexibility is needed. It's time to design external home components for plumbing and electrical which can be changed out as needed, so we won't routinely have to take jackhammers or axes to "permanent" building fixtures. Doing so is almost always a major inconvenience! As it turns out, much of our so called building permanence since the 20th century has been largely an illusion, especially in a time of climate change. The need for greater building component flexibility should be obvious to everyone by now, since the short life cycles of plumbing and electrical systems in interior walls are becoming more evident by the day -  let alone what occurs when concrete and steel are exposed to the elements! Let's build in the future, so that both interior and exterior mini-demolitions will become less necessary - likewise the major demolitions that can be such a relief, once failed notions of permanence get out of hand.