Urbanization: Atlanta isn’t Delhi … yet

According to economist Dambisa Moyo in her book, Edge of Chaos: Why Democracy is Failing to Deliver Economic Growth and How to Fix It, 55% of the world’s population lives in urban areas and that number is rising.  In this Bloomberg podcast, Stephanie Flanders provides some insights into the inequality brewing in urban areas while at the same time serving as a hub for attracting workers seeking higher incomes.

In the podcast, Ms.. Flanders uses Delhi, Mumbai, and other cities in India as case studies for urban population and economic growth, the problems with governance, and income and wealth inequality. I don’t have to travel to south central Asia to witness inequality.  Living in Atlanta I see inequality everyday where a significant population of Blacks and Latinos take the train into Atlanta’s core to go to work.  Cranes are everywhere downtown as the city continues to put up new office and residential buildings.

And just this evening, Atlanta’s city council heard over seven hours of public comment before approving a proposed project that would turn 40 acres of downtown space into a complex of residential and commercial space.

The concerns about inequality have leaked into public policy proposals, including promises in 2017 by then mayoral candidate Keisha Lance Bottoms to increase the amount of affordable housing in Atlanta.  Today, Mrs. Bottoms is mayor and, to her credit, has made affordable housing the tip of her economic development spear.  Late last evening Mayor Bottoms scored big in persuading Atlanta’s city council to approve the $5 billion project.  One condition of project approval was for developers to set aside a required minimum affordable housing units of 20% or 200, whichever is larger.

I think even with these efforts, Atlanta is on its way to being unaffordable for middle income residents.  Buckhead, Midtown, and soon downtown will be out of reach for the middle class.  Even residential areas in the southwest and southeast quadrants of the city may be unaffordable for an increasing number of residents as people moving back into the city with either sufficient capital or credit have been able to take advantage of low rates and purchase homes in the West End, Westview, and Adair Park sections of the city.

What should Atlanta policymakers do? Nothing. A tax and income redistribution scheme may only provide very short term relief to the middle income populace. Higher property taxes would threaten housing values and give homeowners second thoughts about maintaining residence in Atlanta.  Requiring developers to set aside affordable units for each of their projects can only go so far given the limit on the number of appropriate projects in the first place.

As Ms. Flanders points out in her podcast, municipalities in the United States may have a bit more independence and flexibility to effect affordable housing policy but eventually the market for housing, available capital, and credit markets will limit the availability of units overall and affordable housing in particular making urbanization a difficult environment for the middle class.

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Does Facebook’s business model disrupt the political information markets?

Facebook is engaging in a war against misinformation and divisiveness in the United States as perpetrated via social media, according to published reports by Bloomberg and The Atlanta Journal Constitution. Having done a 180 degree turn from its position last year that its platform was not used to cause a disruption of public opinion leading up to the 2016 presidential election, Facebook is using artificial intelligence tools to identify inauthentic posts and user behavior.  With teams comprised of data scientists, policy experts, and engineers, Facebook is blocking fake accounts and vetting news stories posted on its site.

Critics doubt that Facebook’s attempts to thwart future social media influence will outweigh its incentives to distribute fictional political stories that keep people glued to Facebook while providing advertisers with millions of pairs of eyeballs.  Facebook, according its 10-K annual report, garners almost of its revenues from advertising.  In 2017, advertising made up 98% of Facebook’s revenues.  According to Facebook’s 10-K, at the top of the list of factors that could adversely impact advertising revenues: decreases in user engagement, including a decline in the time spent using the company’s products.

Having used Facebook for eleven years, I witnessed the increase in the use of the platform as a tool for political engagement.  Facebook has expanded opportunities for voters to vet politicians and their policies.  I have seen a significant number of posts, including memes and video, that got the facts wrong; that showed no knowledge of process, politics, or economics.  Cynicism, fear, passion, inaccuracies, sincerity, patriotism, anarchy, and indifference all run rampant on Facebook.  But do I buy the argument that messages placed on Facebook by Russian agents spread so much misinformation that America became suddenly divided overnight? That “Russian interference led to a Trump victory?

No.  The divisiveness was already there.  Giving a couple hundred million Americans the ability to quickly share their thoughts, accurate or not, on the political news of day simply tore away the scab.

Further evidence of divisiveness in American politics: print, broadcast, and cable media.  American media is meeting the demand of a divided public, with Fox News occupying the Right and MSNBC and CNN serving the frenzied Left.

What Washington may truly be afraid of is that politicians have less control over the channels through which they are vetted.  On the one hand, Jeffrey Rosen, president of the Constitution Center, shared the following with The Atlantic’s Jeffrey Goldberg:

“Twitter, Facebook, and other platforms have accelerated public discourse to warp speed, creating virtual versions of the mob.  Inflammatory posts based on passion travel farther and than arguments based on reason.  We are living, in short, in a Madisonian nightmare.”

On the other hand, Americans may be taking to Facebook, YouTube and Twitter in search of alternative opportunities to criticize the political packages and action plans that politicians offer in exchange for votes and increases in taxes.  The divisiveness may be stemming from an increased lack of enchantment with democracy itself.  After all, according to Professor Yuval Harari, democracies are “blips in history” depending on “unique technological conditions” and losing credibility as democracy faces more questions about its inability to provide for and maintain a middle class.

Democracy is hard up to explain why almost all the nine million jobs created post recovery from the 2007-2009 recession have been “gig work” paying little to no benefits.  Democracy has yet to come up with a solution to a wealth gap that the Left invests time in describing, laying blame at the feet of the rich yet coming up with no solutions for a society that prides itself on equal access to the ballot but still comes up short on adequate access to capital.

To the question whether Facebook’s business model has disrupted the political information markets, I would, for now, answer yes.  Facebook has contributed to bringing unreasonable, uninformed voices into the arena. I for one do not want to be lead or have policy fed by impassioned, unreasonable voices, no matter what part of the spectrum they fall on.  What the political class may have to look at for in the near term is that democracy may be less of a facilitator of a peaceful transfer of power between its factions as the mob continues to peel away the scab.