Morning Ed: United States {2017.08.07.M}

[US1] Isn’t stuff like this what we have all that land out west for, instead of using African-American towns in Louisiana?

[US2] So what went wrong in Connecticut? What’s weird about using Connecticut to argue against inequality or argue against tax-and-spend is that moving to New York City solves neither. MBD has a tweetstorm on it.

[US3] The economic threat of wild hogs and the economic potential of killing them.

[US4] Well, the good news is that climate change may not be bad for the whole country, and better yet (for some) may disproportionately benefit Blue America. But… what about Alaska? also, a look by congressional district.

[US5] The future of American cities is corporate headquarters on the coasts and most of their employees inland.

[US6] It sounds like President Trump is on board with The Kansas City Plan! On the other hand, Lyman Stone is coming around to the view that maybe declining migration is good news.

[US7] Move over Silicon Valley, and meet the new startup hub in the the Silicon Prairie. There was a joke in The Office about that, actually! Also, Big Data in the Mountain West!

[US8] Meanwhile, the highest paying ones are consolidating into about eight cities. Of course, you don’t need to pay people that much in Ohio.

[US9] From 1864, a letter from a former slave to his former master.

[US0]


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Will Truman is a former professional gearhead who is presently a stay-at-home father in the Mountain East. He has moved around frequently, having lived in six places since 2003, ranging from rural outposts to major metropolitan areas. He also writes fiction, when he finds the time. ...more →

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66 thoughts on “Morning Ed: United States {2017.08.07.M}

  1. [US1] What, you going to burn all that crap in California? The rich folk would have a fit! And they vote and have money and power.

    [US2] Sounds like what’s playing the state is a “diversified tax base”.

    [US3] IIRC there is no season on while hogs in SC and Georgia either. And big ones are quite dangerous. My stepmother used to carry a .357 as backup when hunting them–in case the hog was wounded and charged. 4 inch tusks aren’t anything to sneeze at.

    [US5] Corporate HQ on the coast? Why? So the execs can have a nice social life? That makes a lot of sense. You could argue that the HQ should be near a concentration of customers, like my old company did, but I didn’t see any reasons/justification for keeping the HQ on the coast.

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    • Corporate HQ on the coast? Why?

      Well, for one, the article is about financial firms. I suppose it makes sense for them to have some key employees where the markets are.

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      • Then the title might have been clearer, “Financial HQ” or such. As I pointed out, it makes sense to have “important people” near clients. That’s one reason why my old companies HQ was near DC, and they had a lobby office in DC. It’s also why we, as of the mid 90s still had secretaries-so a live person always answered the phone. God forbid some important person got voicemail! (I kid, but this WAS a thing. It wouldn’t go over well if a member of congress got voice mail :))

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        • For multinationals, not everybody’s client is in one place. There have been a lot of companies that have moved their HQ to Chicago over the last ten years or so; I think Boeing started the trend. And it was largely due to central location and a major international airport. Unfortunately for Chicago, these types of headquarters don’t bring a lot of jobs; operations management and much of the middle class jobs remained where the work is done.

          http://www.chicagobusiness.com/section/hq

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  2. US5 and US7 are related. A lot of tech companies are going to want a base in the SF Bay Area and/or NYC because that is where a lot of the Venture Capital companies are located but once they get big, they will move stuff like customer service and other low end but necessary parts of the business inland. LinkedIn’s customer service is out of Omaha, Nebraska. There were a few big law firms that moved their support staff/services to places like West Virginia.

    I think you will always need businesses in expensive places because that is where the top-employees and executives often want to live despite how many times conservatives whine about taxes and regulations.

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    • I think as time progresses, it will be the low and middle jobs away from the coasts and only the high jobs staying there. With more rooms for startups in other pockets. But I agree SV and Seattle and so on will always be highly relevant.

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      • To the extent it is possible, this is already happening. I don’t know what “support” services the big firms have in West Virginia but I have to imagine that they still want paralegals, legal secretaries, and some IT guys in the big offices.

        That being said, there is always a cultural misunderstanding angle. As far back as Clinton II, I would hear people complain about all the tech companies in San Francisco and why don’t they want to locate to low tax and low regulation North Dakota or something like that.

        I gotta imagine that these complaints were done by people who want to live in North Dakota but want to work in tech and don’t want to change to icky liberalism.

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        • To the extent it is possible, this is already happening. I don’t know what “support” services the big firms have in West Virginia but I have to imagine that they still want paralegals, legal secretaries, and some IT guys in the big offices.

          The question is whether they will will be willing to pay a paralegal what they need to for the paralegal to want to live there. Right now it’s possible, but all of the affordability problems in SF are going to get worse and not better. Something has to break. Or, if not break, a pressure release. I think the release is going to be more shops and significant jobs elsewhere. Not North Dakota, but places people can be afford to live, which covers a lot of places (Minneapolis and Houston and Nashville and on and on).

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          • There are already people commuting from Napa, Sonoma, and Solano counties.

            For jobs like paralegal, I predict a few things:

            1. Starting to use young college grads who are only going to be in the job for a few years and then move on. To a certain extent, this is the case already. These people will just roommate up.

            2. Moving the paralegals to be out of the city but as close by as possible.

            You need paralegals close by often enough and cities won’t just have high-paying jobs.

            But the affordability problem is only going to get worse and not better.

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    • Actually if I were a tech executive and wanted to maintain my own data centers, they would at a minimum be in Sacramento or ideally perhaps further east, with good fiber optic connections. I have heard that Omaha is an ideal place to put customer service telephone offices as the accents in that area are the least noticeable. On the east at least move data centers out of Manhattan of which lower Manhattan will flood again. (it was close with Sandy)

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  3. US0: Links appear to be broken.

    US7: Re the massive server farmers in the Northwest… One of the important factors for locating huge server farms there is cheap hydroelectricity from the Bonneville Power Administration. The Trump administration’s budget proposal calls for privatizing the transmission network operated by BPA. The consensus is that electricity prices would increase in the region (the disagreement is over how much, not whether they would go up). North Dakota, with cheap Missouri River hydro power (as well as increasingly cheap wind power), also has a growing server farm industry.

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  4. [US7] has a really breathless pitch for how wonderful the North Central region is for tech startups. I want to first reassure people that I think pushing tech out of the narrow confines of Silicon Valley is a good idea, I just don’t know that it’s all that easy, or people would have done it already. All the negatives of my home for the last 26 years are obvious. But the upside is that there is not just venture capital, but deep expertise in how to run web services here that is only slowly leaching out to the rest of the country.

    I’m doing something like this on the small. I have three employees who live elsewhere in the country, and who don’t have the usual pedigree to be hired here. I can train them, but it’s slow going. It’s not because they are dumb, but because there’s just a lot of stuff, a lot of culture stuff, that they don’t know.

    And that’s what it’s going to take to make these companies able to execute, a lot of technology transfer done by people who are good at transmitting that information and bringing newbies up to speed. It’s not a skill that engineers are notorious for having, though some certainly do.

    Because it’s very hard to hire someone who is already here in Silicon Valley to work elsewhere. The more likely scenario is they come here, get lucky and get a big wad of cash, and decide to move home and start something.

    I personally would like to see the Midwest grow its micro businesses, and leverage all that space for workshops and all that expertise in making stuff into a nationwide or continental scale custom manufacturing businesses.

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      • Agree with this. The places that are currently successful all seem to have had some combination of research universities, federal laboratories, quality of life factors, and luck (usually in the form of some seed). Denver/Boulder, for example, has the University of Colorado, Colorado School of Mines, a large National Institute of Standards lab, both obvious and not-so-obvious quality of life things, and an early business building satellites and support systems by Ball Aerospace and what is now Lockheed-Martin.

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    • Because it’s very hard to hire someone who is already here in Silicon Valley to work elsewhere.

      Really? Between the high taxes and high rent (and the extra bite from tax progressivity when they pay you enough to afford the rent), and the unfavorable (for men) sex ratio, I’d think there would be a lot of people willing to take a non-negligible pay cut to get out of there. Does anyone actually want to live in Silicon Valley, other than for the economic opportunities? Of course, this assumes that you’re offering like 80% of an SV salary, and not 50%.

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      • I had an interview with BF Goodrich in Beloit once. Good interview (the production plant there is impressive; they make (made?) industrial engines there, from campus scale diesel generators, to the multi-story engines that drive cargo ships (piston cylinders so wide & deep you can comfortably stuff a grown man into one). Really bad job offer. But it was a very cute town. Good luck to them.

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    • On [US7] and [US8] together, it depends on what you want to build. Let’s face it, spinning up a pair of iPhone/Android apps, with a server backend written in Rails or whatever, running on {some cloud service} — this is easy-peasy-anyone-can-do-it stuff. Get a room full of young nerds from the local University, hand them “Rails for Dummies” and “Smartphone Apps in 45 Days” and set them loose.

      From a tech standpoint, most “apps” (and thus many startups) are not much more than that.

      This exist, of course, because of the enormous technological strides that have emerged from the bay area (along with Seattle, Boston, NYC, the tech triangle, etc.), which has produced the kind of infrastructure that makes these projects easy.

      I got my big career break working for a shitty little startup in Fort Lauderdale. Look, South Florida is a terrible place for tech jobs. Yet, that was where I was stuck. I’m hardly unique. We hire two developers, both young guys from the midwest, looking to escape “flyover” hell, and for them South Florida was a step up.

      We flipped the company. Now two of us live in Boston and one in Manhattan. One is at Akamai. The second is writing code for big finance. And then of course me, working for the Goog.

      Look, you’d have a really hard time launching a Google, Facebook, Twitter, or whatever in Salt Lake City. You just won’t find the kind of talent to build truly huge systems that scale to millions of nodes. But smaller shops with modest goals? Yeah, the talent is there, mostly because so many of the hard problems have already been solved and commodified, which standardized solutions you can pull off a shelf and easily customize.

      Even really tricky machine learning stuff is accessible to small shops. You’ll need a few smarty pants who can read this book and understand it. But that’s not so rare. I did it, all by myself.

      But this doesn’t replace Silicon Valley, or any of the other tech hubs. It is using what we built.

      We built it for a reason. This is the reason.

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        • Breadth of the talent pool can also matter. The Denver metro area has multiple firms that do explosive forming/bonding, as well as School of Mines with a minor in the field and an active leading-edge research program in the field. While the technology is an outgrowth of the long-time aerospace work in the area, it turns out to be very useful for certain kinds of medical devices, and those support services have attracted a number of medical research companies.

          Silicon Valley created demand for a whole lot of technologies (eg, nanometer-accurate positioning) that turn out to be useful for other things. Positive feedback loops like these are hard to create on purpose.

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      • “We built [Silicon Valley] for a reason.”

        Yes; we built it to turn out radars for the Navy during World War II, and after that it was where the Navy built submarine-launched ballistic missiles (right next to the building where the Air Force built spy satellites).

        Everything else started out to supply these efforts and grew from there.

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  5. US2: I find it bizarre that the article concentrates on financial industries (which I’m assuming they’re lumping insurance under) and says nothing about defense contractors. Connecticut’s woes started back when the defense industry took some near fatal blows from the end of the Cold War, as various projects were cancelled, Electric Boat going from 25,000 employees to 9,000 as the Sea Wolf program was cancelled, Sikorsky, Pratt & Whitney and smaller manufacturers suffering similar losses. The number of people employed by the defense industry was reduced by half in just a handful of years.

    And casino revenue is way down. I remember them dismantling the I95 tollbooths when I was a child…seems like bringing some of those back to take advantage of the tourists rolling through would be a smart move.

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    • Legal question: Are there Constitutional problems with tolling of interstate highways? It seems like the Interstate Commerce Clause should prohibit states from imposing tolls, although the Federal government still could, and maybe it could delegate that authority to the states. Preventing states from taxing interstate travel is the main reason the ICC was written, but maybe there’s some exception for reasonable tolls to cover the cost of building and maintenance.

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      • Ah, you must not be from the East Coast.

        Driving from the DC metro area to Connecticut, as I frequently do, it’s about $50 worth of tolls along I-95. Maryland, Delaware, New Jersey and New York all dip into my wallet along the way. Massachusetts will take a turn if I’m continuing on to Boston. So, Connecticut wouldn’t be bucking a trend, or come as a surprise to travelers.

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        • What I remember of the history I was told while I lived on the East Coast is that I-95 incorporated a number of existing toll roads, bridges, and tunnels, and that the states (or other owners) were allowed to continue toll operations on those stretches.

          Toll roads were incorporated in a variety of places, mostly east of the Mississippi. One sort-of-western exception I know about is the Kansas Turnpike that is included as part of I-35. The Kansas Turnpike Authority is a quasi-government agency and the road is financed strictly from toll revenues, without either state or federal tax dollars.

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                • Yeah, I don’t like it much. The surface is okay, not much worse than anywhere else, but it was designed for a different era. In a big truck it just feels cramped and narrow. It’s winding and busy as hell and I just find it very stressful.

                  But a lot of interstates are like that, especially in the Appalachian’s. I-81 in particular, but I-77, 86, 88, 90 thru NY, I-40 thru TN and NC, are all underbuilt (or over-utilized) and they’re not all old.

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      • The interstate highways aren’t federal, the land is owned by the state, they are built and maintained by the state, and policed by the state. They are funded (mostly) by the federal government, which imposes all of the conditions that make it part of a federal system, but this would be regulation through the spending clause.

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        • It’s not the funding I’m thinking about. It’s the regulation of interstate commerce. States aren’t allowed to do it. One of the big problems they had under the Articles of Confederation was stuff like (for example) the Carolinas levying heavy taxes on goods shipped from Georgia to Virginia. So in the Constitution, Congress got the exclusive power to tax and regulate interstate commerce. As decided in Gibbons v. Ogden, “commerce” means not just to trade and goods, but more broadly includes navigation.

          I see two reasonable ways this could shake out:

          1. The court rules that a state may impose tolls for the purpose of funding the road, but no more than is necessary for that purpose.

          2. The court rules that states cannot impose tolls without permission from Congress.

          Will says it’s 2, that seems plausible to me, and I can’t find much information on the topic, so I’ll go with that.

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            • Three? I would count four or five, depending on how pedantic you want to get about it. I-10 runs from Jacksonville, FL to LA, I-80 from NYC to San Fran, and I-90 from Boston to Seattle are all truly coast-to-coast. I-40 runs from Wilmington, NC to Barstow, CA where it meets up with I-15 running down to LA. Not quite c2c technically but a very major continental artery. I-70 runs from Baltimore to Utah where it hooks up with I-15 but it loses a lot of volume west of Denver.

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          • The Northeast, and some other parts of the country got exemptions from ICC (when it came to the roads that became interstate highways) because the roads were already built without using federal funds to build them. The Federal Commission deciding that it would be less of a burden than funding the build of another highway right next to the existing highway. For Connecticut, I guess it depends on whether they’ve lost the right to do so, once they tore the original ones down.

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          • It sounds like you are raising a dormant commerce clause concern. I think the issue is that (a) tollroads don’t regulate commerce, it is a use tax for state services/property which is different than a taxing importation of good and services, and (b) to the extent it effects interstate commerce, the fee is not discriminatory, it effects local and interstate business the same.

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    • Casino revenue is a horrible thing for any city/state besides Las Vegas/Nevada to rely on. Even Las Vegas is moving away from gambling to more luxury weekend/party events. There was an article a few years ago in the New Yorker about how Las Vegas is now trying to attract top DJs for clubs and paying them 6-7 figures a night sometimes. The clubs make this back in terms of bottle service and other booze related sales.

      The other money comes more for getting people to chill by the pool and order drinks and stuff instead of spending it at the tables.

      For decades much of Connecticut was a bedroom community for New York or Boston.

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      • Commutes from Western CT into NY have been common enough for decades (hence Metro North), but the Norwich / New London area maybe have only gotten Boston super commuters maybe in this century (though they’ve always had Pats/Sox cultural affinity over YankMetGiJets.

        That area over to Westerly & Naragansett has also served as a summer vacation destination for Boston metro residents, and easier logistically at peak times than going out to the cape or islands.

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        • Where does most of Connecticut live? Western part of the state or Eastern?

          My family has gone vacationing in Eastern Connecticut. I looked at Connecticut College which is in New London.

          Summer tourism is great during the summer months but not so great during the rest of the year.

          I think Connecticut is pretty pleasant and I am a sucker for Northeast Colonial architecture and town formats (something Connecticut has in spades). If I still lived in the Northeast, I could see picking a town in Connecticut over one on Long Island if I ever moved to the burbs.

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          • Most of Connecticut lives right up the center in the New Haven to Hartford corridor, probably about 55%. 30% live on the western side, although almost all of that is in Fairfield county, which we Nutmeggers view as a suburb of New York and only properly Connecticut when it comes to taxes. Another 15% live on the east side bordering Rhode Island.

            It is a lovely state – lots of small towns, but less than two hours from Boston or New York, so it’s easy to get a big-city fix. Tons of universities, so a higher level of education than you’d expect, even in dairy and poultry towns.

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          • Excluding the Hartford metro area, there’s only a bit more than half a million east of the Connecticut River. With the Hartford metro included, its probably about 750-850k. (But weighted towards the exact center of the state). This is all out of 3.5 million total.

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  6. US9: That letter is just pitch-perfect. All friendly and respectful while reminding him that you shot at me m-fer! And then the careful accounting of back wages owed. Awesome.

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  7. Us3 – there’s a class of cured meats in Tuscany (whose name I can’t remember) made from wild boar hunted specifically to control their population so as to limit the damage they do to other crops Tuscany is famous for.

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  8. The AFQT twitter post seems to have been deleted, but the caution of the data here is obviously selection bias. I do not know of anywhere where it’s required, and the places where high schools may make it generally available probably have a geographic skew over those who don’t. I’m reasonably certain that in the first decade of that data set, you rarely took the ASVAB if you were in a suburban high school with a college track propensity.

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  9. Us3 – CA has a wild boar issue, but the kicker is it is mostly on private land. So, farmers become hunt guides, charging around $500 a pig. The problem being the male is the animal at issue. Females are good hunting* but males, once they get to the point of being destructive, aren’t good eating. We no longer support trophy hunting in the US, so they aren’t really what people want to hunt, which is food animals.

    *According to my FIL, who was a serious hunter.

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    • My in-laws have a feral pig problem on their land in Texas, and they don’t bother eating them.(The males really are pretty inedible.)

      Plus there’s so many. You can’t eat that much pork, it’s so much work to butcher or process….blah.

      They’ve always been “eat what you kill” but they consider feral pigs to be more like vermin control. They’re not killing them for the sport, or the meat, or anything else. They’re killing them because it’s a noxious infestation that has to be culled by something.

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      • This is a really interesting problem. History tells us that if we can come up with even a moderately good excuse to make hunting boars worthwhile, we can easily hunt them to extinction. We just need to figure out something useful to do with the carcasses and we’ll either solve the boar problem or have a new unlimited natural resource on our hands.

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    • Those are kinda dumb, too.

      I mean, if we want to honor all Americans of martial valor, even if they fought against the US Army, we should have some forts named after Tecumseh, Crazy Horse, Geronimo, Chief Joseph, etc.

      (Maybe we do, I’m not sure. Star Trek did it, tho)

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