Friday, December 29, 2006

musings and AM radio

Not that you ought to care, but when growing up my family's first car was a used 1973 Ford Pinto. That may seem like a straight line for a joke, but it's true. The price of Pinto's dropped through the floor when the gas tanks started to blow up. But one thing I remember was that it had just an AM radio.. and an AM radio with rather limited reception at that. Thus one of the few stations you would be able to listen to was KQV. That memory came back today just because I was listening to KQV for the first time in a long time today. Their news preamble must be the same as it has been for decades. What really caught my attention was their phone survey which they seem to do every day.

The topic today was "What do you think of Governor Rendell's performance?". Fair enough question. The results when I heard this were something like 480 or so saying "poor", a handfull saying "fair" and something in the 40's saying "good". So worse than 10-1 against the Governor. Now I know that these types of call in surveys are not surveys in any real sense and I think they had an honest disclaimer to that effect. But no matter what you actually think of the governor's performance, he did win state-wide and locally by 20 percentage points give or take. Some self selection in who listens and calls in is understandable, but supposedly measuring a 10-1 sentiment against a politician that won by a large margin is pretty screwey. Compared to a random draw from the population that voted 60% for Rendell, to get 90% against him in a sample of 500 or so people would be a zero probability event.

Purely speculation, but I have a hypothesis that I will never be able to test. This call-in survey was measured by calling into one number to register your vote for "poor" and another number for "good". Your 'vote' gets tabulated by calling in automatically, you dont need to talk to anyone. What I wonder is whether the numbers that represent which side of a question are consistent. i.e. would the 'liberal' answer always have one number and the 'conservative' answer a different but consistent number. If so I would wonder if some people are just in a routine of calling one number or the other without actually taking account of the question.


Thursday, December 28, 2006

completely random thoughts today:

I gather from various news accounts that the Penguins have not even contacted any local public official concerning their future. I suspect this is all still required per their deal with Isle of Capri, but it does put in perspective how much media attention is spent on the topic. I was thinking though: If some Canadian city either builds a venue for them or offers them any other type of incentive with public money... does that violate NAFTA?*

and remember that $10 you owe? Two local graduate students develop a web site to help people remember those informal debts.

Mostly fluff but Expansion magazine says some nice things about Pittsburgh.

Immigration and cities is the topic of the current issue of the Next American City.

* the answer is no. but its fun to think about trying to use that as a bargaining tool.... at least that argument didn't work the other way for the Nordiques or the Jets. Also, Canadians are actually not so keen on public support for private teams so if a team was lured north it would likely be with private money anyway.


Wednesday, December 27, 2006

Ford to City: Drop Dead

Can I connect the passing of President Ford to Pittsburgh? It may be a little tenuous, but you bet. If you ever think relations between Pittsburgh, the ICA and/or the Act 47 team are dicey. President Ford is responsible for one of the sharpest headlines ever run in an American newspaper. As New York City teetered on the brink of bankruptcy and seeking federal help, The New York Daily News ran the headline Ford to City: Drop Dead.

New York City was arguably worse off than Pittsburgh. At the time it could not actually file for bankruptcy because the laws governing Chapter 9 (municipal) bankruptcy required that a filer negotiate with every creditor prior to entering a bankruptcy claim. The sheer size of a municipality such as NYC, with innumerable potential creditors, made that an impossible prerequisite. Bankruptcy code has been modified to prevent that being an issue in itself. New York State actually then passed legislation that would nominally prevent NYC from being allowed to declare bankruptcy... but New York City would fail to make certain bond payments and so it would go down in history as a technical bankruptcy no matter and eventualy the feds did come in to assist the city. The Municipal Assistance Corporation, which was put in place to oversee NYC's finances is in some ways the progenitor of the city's current ICA.

And President Ford did come to speak at the Pittsburgh Economic Club in 1976.


Tuesday, December 26, 2006

John Macintire and KDKA... a Long Tail casualty?

Some may not realize that John Macintire McIntire has again lost his spot in the Pittsburgh media universe. His daily radio program on KDKA is being axed. The KDKA press release, media coverage, and JM’s own blog all do not give much insight into why. More than a few people I have heard mention this have jumped to the conclusion that he must have run afoul of management in some way by saying something inappropriate or just being too liberal.

I myself am skeptical that this was anything other than a business decision. There is an allusion in the news to finding another spot for JM on another local station. When you think about it, KDKA’s 50K watt flamethrower antenna was never the right place for JM’s content which I am sure was very Pittsburgh-oriented... maybe even City of Pittsburgh oriented. Yes, he would expound on national politics, but as you move away from the city you get into markets where people just don’t want to hear either Pittsburgh-based or less-than-conservative content. So I bet they had some Arbitron data that said the show was doing ok close in, but pretty abysmal out in the sticks. That or maybe some of their advertisers took issue with the content and the station could not make up for it with more local (Pittsburgh) content. City-based advertisers need to pay for KDKA’s broad coverage area, a cost that does not make a lot of sense for many. In fact, I am surprised they didn’t realize this would be the case going into the deal.

This gets to some interesting issues. Some may have read the current popular biz book The Long Tail which emphasizes how marketing is becoming dominated by catering to multiple niche markets and not the broad middle which used to be the case. At 50K watts, KDKA is the anti-long tail of media outlets. The only way for the station to leverage that signal strength is to appeal to the broadest of markets across a large and diverse region. The legacy 50K watt KDKA station is arguably an anachronism as people get ever more radio content from satellite, the yet to catch on digital (HD) radio , low power stations or innumerable other ways people get news/talk these days. The very purpose of the 50K license was to provide broad service into areas that would not get any other local radio signal.. an issue that may not matter as much as it used to. The poor programming folks at KDKA have this odd problem of programming for a national audience on a local budget. JM's show may be the first casualty, but it may not be the last. He may not be the first actually. Does this argument apply to why KDKA lost out bidding for Pirate baseball broadcasting locally?


Sunday, December 24, 2006

If it weren't for immigration...

From the Washington Post on Friday:
"If it weren't for immigration, we'd be Pittsburgh," said Lang, referring to that city's fabled contraction after its steel mills closed.

If you look at the state census estimates just out driving that story, an interesting factoid on Pennsylvania pops out. Let's skip the longer discussion of just how good these annual estimates are. Pennsylvania shows a net loss people due to migration to other states of all of 492 people. As a percentage of the state's 12.4 million population that is essentially even. Good/bad? At the very least it's hard to say hordes are fleeing Pennsylvania. Comparable numbers for neighborhing Ohio ( -48K people or -0.42% of total population) and New York (-225K/ -1.17%) are much worse.

What does it mean for Pittsburgh. Likely not much. The growth parts of the state are likely the same as they have been for years: mostly the NE part of the state seeing growing migration of residents from the NYC area, also south central parts of the state seeing growth and expansion of the Washington/Baltimore area.


Saturday, December 23, 2006

When does Barden send the check?

Hard to believe there are other casino related topics to talk about. Yet, 90% of the post-decision discussion has been so narrowly focused that I suspect 90% of the important things have not been talked about at all.

Here is a question? Majestic Star was the one venue that did not propose building a temporary casino site to open in 2007. Even on an accelerated construction schedule, it just can't open up until 2008. I think he is on record as saying the casino could open 14 months from now which seems awfully optimistic. 18 months seems a lot more realistic if not longer. A temporary facility would clearly have required payment of mandated fees/taxes to state and city governments in 2007. Without that temporary facility, will those intitial and ongoing fees be deferred until the site opens sometime in 2008? How much did the city budget have as a placeholder specifically for anticipated casino-related revenue? $17 mil give or take I do believe. Whether the state will fill the gap in the meantime is a real question.

Also on the read board: the Charlston Daily Mail has more on the West Virginia perspective on what the dawn of Pennsylvania gaming means for them.


Friday, December 22, 2006

Go Figure - State house edition

Now that the senate race is over, what really may be the most important political story in the state is the battle for the state house. It is a story not getting the attention it deserves given what it could affect in coming years. News only yesterday that the race for PA's 156th district was conceded. Does it mean the control of the state house is conceded as well? Far from it. See my earlier post suggesting some of the possible shenanigans.

but the Philadelphia Inquirer has been keeping closer track with both recent articles and a blog just on this one race. What may be more interesting is the detail of the recount of the paper ballots. Luckily, the debates do not rise to a chadian level, but you can still see a lot of the same issues

for example you can see the scans of some of the contested ballots here:

and since CP gave up this beat, here are some factoids from the general election for 203 Pennsylvania General Assembly seats in 2006:

- Best showing by a non-major party candidate: Raymond Ondrusek, a Libertarian, who garnered 19.8% of the vote against Rosemarie Swanker in the 102nd Legislative District.

-total number of non-major mary candidates with party lines on the ballot: 33. (Green: 11, Libertarian: 6, all other: 16).

- Votes that Barbara Mcilvaine won the 156th State House District by: 27. As a percentage of the 23K votes cast: 0.1%

-Number of districts won by less than 5 percentage points: 11.

-Democratic margin in the state house 50.2% to 49.8%. Democratic margin in the popular vote for state house races: 53.1% to 45.7%

all are my completely unofficial counts


Wednesday, December 20, 2006

This takes the (cup)cake

I really am beginning to wonder. Those of you who read Mike Madison’s PITTSBLOG know that I inadvertently coined the term ‘cupcake class’ in response to Mikes satirical* blog post about how Pittsburgh needs to work on attracting cupcake shops Pittsburgh. From that you get this in the media (from today’s Trib):

Getting a cupcake shop can say a lot about your city, according to lawprofessor Mike Madison and economist Chris Briem, who write about the local economy at "Pittsblog". They've speculated, semi-seriously, about "the rise of The Cupcake Class."

Uh, no. not ‘semi-seriously’. Not even semi-semi seriously. I mean, do these people get their news from the Carbolic Smoke Blog as well. And if you go back and read all that is on Pittsblog. What did I say anyway? I coined the term is all. Where I speculated anything is unclear to me. Poor Mike. They extend their reprint of this pseudo-comment in his subsequent post:

"Cities that want to compete economically in the 21st century need to attract 'The Cupcake Class': people with the time, money and taste to consume small amounts of upscale baked goods," writes Madison.

Makes you want to cry. In fact Mike actually posted a follow up blog-post explaining the joke to the satirically challenged because one confused person actually sent him mail presuming he was serious… but I suppose he felt it unnecessary for the 99% who understood the post and he didn’t leave it online.

It really makes you wonder. Note I have nothing but good wishes for all the new cupcake vendors in town. May they retire after their 1000’th franchise in Topeka opens up. I myself will continue to get the 50 cent specials at Paddy Cake Bakery in Bloomfield thank you.

lest I continue.. I will let Mike explain this in ever more precise detail here.

A work of literature that mocks social conventions, another work of art, or anything its author thinks ridiculous. Gulliver's Travels, by Jonathan Swift, is a satire of eighteenth-century British society


Tuesday, December 19, 2006

tick tock

Like everyone else I feel obliged to comment on the imminent casino announcement. I am tempted to make some prediction about who will get the license tomorrow..... but the truth is I have no basis to pick one way or the other. Ubiquitous prognostication aside, the state gaming board can do whatever it chooses and nobody has any clue whatsoever about their thoughts at this point. Never has so much been written about which we know so little. There are enough pro's and con's which each proposal that they could find some justification for any of the choices at hand. In that sense they are even freer to do whatever they want. I am not sure about this, but I don't think will be required to provide any detailed report or justification for their decision even after the fact. Will we ever really know what went into this decision?

I will just say that it would be ironic that after all the ink about whether Harrahs or Isle of Capri would get the license:what if Don Barden's Majestic Star proposal wins in the end. We will see.

Maybe people can help me with this. It would be useful to add up all the official/semi-official or otherwise stated opinions about who will or should get the license before ex-post revisionism sets in. Off the top of my head I come up with:

City Planning: Harrah's
City's Gaming Task Force: Isle of Capri
Local Hockey Fans: Isle of Capri
Tom Murphy's 'fix': Harrahs
Steelers: not Majestic Star

I am sure the list is a lot longer, but it's a start. Is it even worthwhile to start going thought individual politicians and their stated preferences?


Monday, December 18, 2006

elastic Pittsburgh

Here is a question.. does anyone know the last major annexation by the City of Pittsburgh?

I was thinking about that question because of the news recently about how Pittsburgh will be providing garbage collection for Wilkinsburg. I think this is actually more important than the passing media attention it got. That's not to blame the media, who really wants to read about garbage collection. Nonetheless, it represents a concrete example of cooperation among municipalities, and there are few examples like it to go around.

Just for the record, I can't really see this happening in my lifetime, but as a thought experiment it is worth asking whether Wilkinsburg would ever merge with the City of Pittsburgh. If you take the quotes in that article at face value, some in Wilkinsburg think it could be a stepping stone toward the City providing other services.

but back to the question. If you ignore the mostly vacant riverfront land northwest of Hays which the City acquired in the 1950's and a few other smaller parcels of land.... the last major annexation that expanded the city came in 1931 when it annexed parts of Mifflin Borough which would become the neighborhood of Homewood Heights and some other sections of the 31st ward. I have put the history of Pittsburgh's growth online here.


Sunday, December 17, 2006

taxo ergo sum

The existence of Brownsville borders on a metaphysical question these days. PG has a story today about how the town has laid off all but one (part-time) employee. May be a good time to take a look at the work done by then county controller (now court of Common Pleas judge) Frank Lucchino and this old report on Voluntary Disincorporation of municipalities. To a degree the debate over the legal basis of disincorporation is becoming ever more moot. I have mentioned in the past that the de facto disincorporation of our region's municipalities has already begun.

Just an aside. Some may think the oped in the PG by San Franciscan Aaron Gellner about Pittsburgh looks a little familiar. Some may remember that his original oped from last October we blogged about back then.

and if you missed it. The news that Westinghouse won a contract in China is seriously big news. When you can't decide whether a deal is worth $5 or $8 billion it tells you something.


Friday, December 15, 2006

Allegheny Passage Complete

I have posted this before.. but readership seems to be up. In light of the news today that the Great Allegheny Passage is now complete here is the link for a report done in 2002 by my colleague Steve Farber on the economic impact of the Allegheny Trail Alliance.

Update Dec 26: Coverage in the USA Today.


Wednesday, December 13, 2006

more maps: PA gov race

My friends at the Pennsylvania State Data Center have put together this map of the election returns from the governor's race: You can click on the map to get their full PDF.


just trivia

I have not had time to either see the movie or read this book as yet... but for those who will be seeing The Good Shepherd you may be interested in the biography A Patrician of Ideas recently written by my friend Clarke Thomas about Pittsburgh's Adolph Schmidt. Mckeesport native Schmidt had a few similarities to the movie's Edward Wilson in that he spent WWII as an OSS agent in Europe. He would return to Pittsburgh and have an interesting public-private career here and eventually wind up as the US Ambassador to Canada.


Tuesday, December 12, 2006

Tax lien postscript

A telling postscript on the whole city lien buyback. Not only did MBIA sell the liens back, but they did so running away from the entire business. Within hours of selling its lien portfolio back to the city it promptly sold off the entire business unit.


Monday, December 11, 2006

it's a curve alright

I was kind of waiting for someone somewhere to comment on the NYT piece last week about anti-immigrant efforts in Altoona. The sad part is that there are almost no immigrants in Altoona to speak of. Even sadder is a quote from one of the local politicians saying they were just trying to "stay ahead of the curve". Well, some curves point downward.

It really is worth noting how few immigrants are there in Altoona? The piece references a census number that there were 295 foreign born residents of its 49,523 total population. (I actually get a number of 533 from the census but the point is the same, it's something between 0.5% and 1.0%). A better number: In 2000 the total number of foreign born residents who arrived over the previous decade was just 130 or 0.2% of the population. In other words, most have been in the US for more than a decade, many for many decades. Not only that but a third of those recent immigrants were already US citizens. Per the census Altoona had a total of 83 non-citizen recent immigrants. I bet a fair number of them are doctors and other professionals the community relies on for more than they want to admit. Per the NYT piece, one of them (literally 1+% of the recent immigrant flow) is a yet to be naturalized immigrant married to the politician quoted. What trend is he trying to prevent? Here is the historical trend for the foreign born population in Altoona*. It is kind of a curve into oblivion.

Just to be clear. This is not to pick on Altoona any more than Pittsburgh which can be much less welcoming than we like to think it is. I have some friends who are 2nd and 3rd generation Mexican immigrants, born, raised and had lived their entire lives in a suburban community I would rather not name. After 9/11 they found themselves continuously harassed because people assumed they were Middle Eastern not that that excuses anything... but the point is that people here don't even know what they are talking about when it comes to immigration of any kind...

I actually had a longer rant about this.. but best not to get myself in too much trouble.

* The 1950 number is just the foreign born white population because that is what the census reported. Total foreign born is going to be higher. Basically the foreign born population in Altoona is down ~90% between 1950-2000.


Sunday, December 10, 2006

the most important football news you missed last week

Yes the Steelers won. btw it was cold and I still feel it. It was not as cold as the AFC Championship game in Jan 2005 which I had tickets to. Then I only barely survived section 525 row ZZ or whatever it is just below ozone.

This was mentioned in passing in local papers, but The Deal has more about our Senator (the one remaining in office) and his desire to get rid of the NFL's antitrust exemption. There is also some discussion of sports programming on cable and stadia deals as well. Important stuff.


Saturday, December 09, 2006


As the casino tsunami approaches... here is some required reading for the community: The Journal of Gaming Issues. Make sure to check out the archives, there is some good material in there. The March 2005 edition has an article on A study of superstitious beliefs among bingo players ... or better yet the seminal article Fruit machine addiction in an adolescent female: A case study.

More seriously. Lots of good research in there, almost every other article addresses problem gambling in one form or another.

Does anyone get the title of this post?


Friday, December 08, 2006

on tax liens

The news that the city is going to buy back most of the tax liens it sold off in the 90's is about as good a story as there is these days for the city these days. While I know the effort to buy back the liens has been something being worked on since BO came to office I still am a little curious about the timing. I wonder if/how much MBIA came down in price once the Bloomberg article came out putting them in such a bad light. Just as companies will clearly pay to advertise and build their brand, they will also pay to avoid bad PR and this was looking pretty bad for them.

Lots of interesting angles to the whole history of the tax lien sale. The city actually wound up making a pretty penny off the deal. Buying back the liens at a fraction of their nominal value isn't so surprising. The strange thing was that anyone thought the liens were worth that much to begin with. MBIA learned the hard way that these were not performing debts and had clearly written off most of the debt on their books already. The original deal was clearly overpriced and in a certain sense, the city got a good deal. Almost a classic example of imperfect information given the subsequent court rulings that hurt the value of the lien holdings. In the end it seems the city made 60 million of the whole deal. Not only that, but the 6 million being spent to repatriate the liens is probably not a net loss. Some of these liens will be performing, at least at 10 cents on the dollar which could get the cost to breakeven. The city could actually record a gain out of all of this.

A colleague asked me why all of this really matters. How could tax liens really hold up development. If the demand for these properties was really out there, someone would have been willing to buy these properties and pay off the liens. If so, getting rid of the liens is not really that important. Maybe so but it gets to a fundamental question of why city land markets do not clear. The existence of so many vacant and underutilized properties is evidence that it does not clear entirely and that is the problem. Once MBIA or its predecessor started holding up transactions until the liens were paid, the value of the liens had to be fully capitalized into sales prices. Some of the examples in the press are a little extreme, but where tax liens exceeded market price you would push the nominal market price of some properties into negative values. That does not usually work: not too many residential owners are going to pay you to take property off of their hands. As mentioned in the article, many of the property owners owing these taxes were deceased and death is what we call a transversality condition.


Thursday, December 07, 2006

NY Perspective

While we fret over the loss of the Mellon HQ here in Pittsburgh, New York's City Journal has a more nuanced perspective on what the merger will mean. Their thought is that NY may lose more back office 'middle class' jobs they call them to Pittsburgh but gain the higher end securities industry jobs. That may be a less than half full perspective for us but maybe it's not so bad. The bigger point near the end: finance is a global industry. Having a seat at that table as the global finance industry consolidates may work out in the end.



The number of Pearl Harbor fatalities.


Wednesday, December 06, 2006

Westinghouse on the board

According to the PG Westinghouse has chosen Pittsburgh over competing regions to locate their anticipated business expansion. I will stand by my prediction that this could be the biggest economic story of coming years as these jobs actually grow here.

The thing is that I have heard the job numbers being thrown out are actually quite conservative. 1,000-2,000 new jobs are common numbers bantered about in the press. These may be the number of new jobs Westinghouse needs if they actually do not get some of the big new contracts out there such as China, India, Russia and even new reactors on the board for US sites. If they actually do get any of these contracts it may be 1,000 a year for some time to come. One key thing is that these jobs all represent net new income into the region.

If true, where would these jobs go within the region? The choices are supposedly Monroeville or Cranberry. If I were to guess it may be Cranberry solely because of better access to the airport. Remember, these are jobs to support a national and worldwide industry and may generate a fair bit of travel in and of themselves.

Why did they build here? It is likely a workforce story more than anything else. Years ago the local Siemens division, another former division of Westinghouse, was going to build a Fuel Cell plant in Munhall. That plan did not work out but they had chosen a site in Munhall at the edge of the Waterfront to implement this. They did so despite some fairly excessive public incentives being offered in Texas to put the plant there. As I hear, Ross Perot himself had a pointed interest in bringing the project to Texas. Yet they chose Pittsburgh because they assessed that their core workforce would not move out of region and relocate down there. The same may be true for Westinghouse which is going to be hard pressed to find the workforce needed to expand. They need their experienced workforce more than ever to bring on and train all these new workers. It will be a challenge because the national nuclear industry has had such anemic growth in recent decades that the training pipeline for the industry has atrophied.

Yet before people get carried away with extending the workforce argument too far. There are a lot of interconnections in the economy, let alone some important history that helped build up that specialized workforce here. For more I will defer to my old oped on Energy-Burgh. Lot's of things helped build that workforce here.

Its worth bringing up that Westinghouse, and in particular its R+D operation here for decades, has had a huge impact on the region. Even more than is really noticed today. There are more than a few high tech companies that are here in one way or another because of Westinghouse. Either the business or technology spun out of work going on there or it was just because entrepreneurial engineers were originally brought to the region because of earlier employment at Westinghouse. And for those who look at local diversity issues here, I am pretty sure Westinghouse is in itself responsible for a sizable part of recent international immigrants who were brought to the region in recent decades and who stayed.

But for those who do not realize the importance of the local nuclear power industry. Pittsburgh has been for decades one of the largest concentrations of nuclear power engineers in the country if not the world. Nuclear engineers are also the best paid engineers in the region. International trade gives some insight into the role of the nuclear power industry here. If you remember just a few years ago the US put international tariffs on imported steel. Europeans did not like these tariffs as it impacted their own steel producers. At one point they proposed countervailing tariffs on goods produced in the US. The question was what products to put opposing tariffs on. The goal is typically to focus countervailing tariffs on products that affect the same regions that were benefiting from the offending tariffs. Some uber-wonk in the EU bureaucracy came up with the idea of putting some of these countervailing tariffs on nuclear power plant parts. Why? While I can not say for sure, someone must have figured out that that is the one product that is concentrated here more than elsewhere. It didn't really go over well. One reason is that the public perception of steel here still outweighs most everything else. So the perceived benefit here of protecting steel was high, while I am not sure anyone even noticed the plan to tax nuclear power plant parts. So it didn't go very much as a political exercise. Then there was this irony in that Westinghouse was then owned by BNFL, a European company, which understandably got a bit upset at EU countervailing tariffs that just wound up hurting them.


Tuesday, December 05, 2006

Controller-less Pittsburgh

Only passing media mention is made of this lawsuit filed by the city controller in an attempt to keep his office's budget from being cut. It's just not a good sign that parts of the city are being sued by other parts, not that this is anything new.


Monday, December 04, 2006

Pitt Veggiemobile

Parked outside my office today was the Pitt Veggiemobile. I didn't know this existed. If it is still there tomorrow I will add a picture. I wonder how many miles you get per Primanti sandwich. It's a neat idea.. but just so I don't get accused of encouraging a crime I have to add the disclaimer that I don't think this type of conversion is legal just yet. Yet it's one of those things I am not sure anyone goes out of their way to prevent. You too can buy a conversion kit.


Friday, December 01, 2006


Just fyi. I didn't know this was out there. Others also may like to read the semi-official guide to Used Books in Pittsburgh: Actually their sales list is quite comprehensive and useful. Who knew there could be 50 pages of book happenings in Pittsburgh.