Back to Work!

Three days on the beach in Carpinteria, California is a good way to clear one's mind.   While there was some fog today, the other two days featured blue skies and 70 degree days.  For a guy from NYC, I'm not used to that weather in late November.

For those of you who don't live in California,  this photo will provide some insights into the view and the life.

With my three days on the beach now behind me, I'm ready to work.  I will fly to Boston in early December and this will provide me with a sense of what I'm missing on the other coast.

Hard Money Loan #22 Getting Paid Off

I received word yesterday that Hard Money Loan #22 is scheduled to be paid off the first week of December. No details on the sale. In fact, it's been 1 year since the loan was made, so it's possible this is a refi and not a sale at all. The property was a triplex with renters in place who wanted to stay, so it's possible the buyer is going to keep it himself.



I'll also take this opportunity to take the interest I received from this loan and add it to the principal for my next one. Manual compounding, if you will..

The NY Times Discusses Climate Change Adaptation

There are three very good articles in today's NY Times focused on climate change adaptation.  First, there is an article on how to use solar power as a backup electricity provision technology when power lines fall down. Second, the Arts section discusses several ideas related to flood barriers.   Finally, the Science Section discusses engineering solutions using balloons to protect the under ground subways from future flooding.   I see endogenous innovation and experimentation taking place. This is the "small ball" of climate change adaptation.  This is the "micro foundation" for how our cities will continue to thrive in our hotter future.  

The World Bank Ignores How Capitalism Can Help Us to Adapt to Climate Change!

The World Bank's core mission is to foster equitable economic growth in the developing world.   I have always assumed that its research team were fans of free markets and capitalism's amazing ability to provide opportunities and possibilities.   But, I have now read this report on climate change's impacts and I can't find a single sentence focused on how capitalism will help LDC nations to adapt to climate change.  Strange!   It is also noteworthy that Section 6 (which focuses on sectoral impacts) discusses Agriculture, Water Resources, Ecosystems and Biodiversity, and Human Health but skips urbanization!  Yet in 15 years, over 60% of the world's population will be living in cities.

International trade in goods, ideas, agricultural products, capital and labor will help many nations  to adapt to the new climate realities.  I have spoken at the World Bank about these topics but apparently my work has not influenced the Bank's thinking on this topic. I will repeat again my key thought.   The World Bank should focus on supporting free international markets and then it can be more confident that the costs of climate change will be lower.

As I read this WB document, I see a science document with no discussion of how the 7 billion self interested people on the planet will respond to the "news" embodied in this report.  The anticipation of a challenge gives rise to ex-ante investments and coping strategies that mitigate the sting of the blow.  Intuitively, if you see the punch coming you duck!   At least based on this publication, the World Bank views the developing world as passive victims here.    Here is a direct quote from the piece:


"Largely beyond the scope of this report are the far-reaching and
uneven adverse implications for poverty in many regions arising
from the macroeconomic consequences of shocks to global agricultural production from climate change. It is necessary to stress  here that even where overall food production is not reduced or is  even increased with low levels of warming, distributional issues  mean that food security will remain a precarious matter or worsen  as different regions are impacted differently and food security is  further challenged by a multitude of nonclimatic factors."

I will let you explain to me what this vague paragraph means.

A brief examination of the references to the report indicates that only 4 economists are cited in this report. I congratulate Josh, Matt, Wolfram and Michael for being cited here!


Schlenker, W., & Roberts, M. J. (2009). Nonlinear temperature
effects indicate severe damages to U.S. crop yields under
climate change. Proceedings of the National Academy of Sciences, 106(37), 15594–15598. doi:10.1073/pnas.0906865106


Zivin, J. G., & Neidell, M. J. (2010). Temperature and the Allocation
of Time: Implications for Climate Change. Cambridge, MA.
Retrieved from http://www.nber.org/papers/w15717



Apparently 200 years of economics research has yielded only 2 relevant papers on this subject!  Interesting!

To my many friends at the World Bank I must ask,  given how many talented Ph.D. economists you have on payroll, do any of you have anything to say about applying basic logic from microeconomics to thinking about climate change adaptation?  I know that you can buy a cheap copy of Climatopolis on Amazon.  Should I subsidize such a mass purchase?

The Spatial Distribution of Deaths in the NYC Region Caused by Sandy

For young geographers,  here is a useful map.   I see certain obvious geographical patterns in these maps.  Those who are risk averse must move to higher ground.   Urban economists have consistently argued that urban zoning laws must be changed to allow for more high rise construction.  Such a strategy would create urban living opportunities in safer parts of coastal cities.  

We will see if Sandy is a "salient shock".  Life appears to be getting back to normal.  I see that NYU's downtown campus is up and running and that this south of 39th Street school is  holding an interesting conference on what are the lessons from Sandy.