Friday, May 31, 2013

Laura Franks Bexley Consumer Price Index quarterly report.

Laura Franks reports the Bexley Consumer Price Index as of First Quarter, 2013.

The Bexley CPI reports on the aggregate prices paid for a uniform basket of merchandise purchased at retail in Bexley and nearby retail stores.

The Bexley CPI measures the change of prices for ordinary retail purchases made by Bexley residents.

The Bexley Consumer Price Index can be compared to the price changes reported by the US Department of Labor.  The comparison can provide useful information for Bexley consumers about local price changes compared to price changes in other parts of the United States.

Comparing current prices to prices for the first quarter, 2012, Bexley prices showed a year-to-year increase of 7.74 percent.for the aggregate cost of the uniform market basket.  The quarter-to-quarter aggregate cost also showed an increase at the rate of 8.51 percent.

Price changes appeared in the amount of sales tax paid, the price of home-office supplies and the price of one personal hygiene product.  The increase in actual sales tax paid is a consequence of the increase in retail prices paid.


Bexley Public Radio Foundation broadcasting as
WCRX-LP, 102.1 FM, Local Power Radio
2700 E. Main St., Suite 208
Columbus, OH 43209
Voice (614) 235 2929
Fax (614) 235 3008

Bexley Public Radio Foundation is exempt from federal taxes under IRC Section 501(c)(3). Donations are deductible from federal income tax returns for individuals who itemize. Checks may identify the payee as Bexley Public Radio Foundation or WCRX-LP, 102.1 FM.

Design is copyright 2010. All rights reserved. Bexley Public Radio Foundation. Text and photo are copyright 2013, 2012, 2011 and 2010. All rights reserved. Laura Franks.

Thursday, May 30, 2013

Mark your calendar. November 19, 2013. Conference on risk management for agriculture producers and lenders. .

The Chicago Federal Reserve Bank will conduct a conference on the risks faced by agriculture producers and lenders.  The conference will also address risk-management tools that are available to lenders and producers.  Details to follow.

Tuesdays at Trinity. Summer music series at the Lutheran seminary in Bexley.

"Tuesdays at Trinity."

This is the 29th annual summer music series of three concerts at Trinity Lutheran Seminary. 

There is free parking at the Trinity parking lot on College Avenue in Bexley.

All performances begin at 7:30 p.m.

All performances are on Thursday evenings.

All performances are at Trinity Lutheran Seminary, 2199 E. Main St, Columbus, OH  43209

There is a free will offering at each performance.

Tuesday June 4, 7:30 p.m.
Raise Choir 
Raymond Wise, director.  Choir members represent several different churches, choirs and denominations.  Raise Choir has received numerous gospel music awards.

Tuesday June 11, 7:30 p.m.
Brass Band of Columbus 
Brian Stevens, director.  Brass Band of Columbus is a well-recognized brass concert band.

Tuesday June 18, 7:30 p.m.
Jazz Concert by Tom Battenberg and Friends.   
Tom Battenberg on trumpet, Michael Cox on sax, Mark Flugge on piano, Terry Douds on bass and Jim Rupp on drums.

Saturday, May 25, 2013

After the Newtown, Connecticut outrage, more consideration of the value of a local armory for Bexley.

Does Bexley need a municipal armory?

The Bexley community should discuss a dangerous fact.  Most households in Bexley have at least one gun.

The purpose of a local armory would be to provide safe storage for privately owned fire arms, ammunition and other weapons.

In American history, there was a time when municipalities and counties erected local armories where weapons were stored and repaired. Ammunition was also kept safe and dry in the local armory.  Local citizens received training in military arts at the armory.  Regular drill with rifles and sidearms was provided at the municipal armory.

The local characteristic of armories changed in the twentieth century.  Local militias were superceded by state national guard units and also US Army Reserve units. 

Armories became part of the national defense infrastructure and any connection to local gun-ownership by citizens was forgotten.

If the city government provided an armory available for use by residents, the safety of the community would increase.  Residents who presently own guns and keep ammunition in their homes would have a convenient, safe choice for storage at the armory.  Parents who are reluctant to have guns in their homes because of the risk of death and injury would have a safe choice for storage of firearms out of their homes and away from their children.

Should a local armory be privately-owed or a public facility? Should it be located within the munipal boundaries or nearby.  Should an armory be near the police station?

Wherever its location, the armory should not have signs identifying its purpose.

If appropriate storage charges are posted, the armory can be self-supporting..

Anyone interested in being appointed the Bexley Municipal Armorer?


Bexley Public Radio Foundation broadcasting as
WCRX-LP, 102.1 FM, Local Power Radio
2700 E. Main St., Suite 208
Columbus, OH 43209
Voice (614) 235 2929
Fax (614) 235 3008

Bexley Public Radio Foundation is exempt from federal taxes under IRC Section 501(c)(3). Donations are deductible for individuals who itemize their federal income tax returns and also for businesses.

Checks may identify the payee as Bexley Public Radio Foundation or WCRX-LP, 102.1 FM.

Thursday, May 23, 2013

Current account deficits are easing in Italy, Greece, Spain and Portugal.

May 22, 2013




New York Federal Reserve Bank

Foreign Borrowing in the Euro Area Periphery: The End Is Near

Matthew Higgins and Thomas Klitgaard

Current account deficits in euro area periphery countries have now largely disappeared. This represents a substantial adjustment. Only two years ago, deficits stood at nearly 10 percent of GDP in Greece and Portugal and 5 percent in Spain and Italy (see chart below). This sharp narrowing means that spending has been brought in line with income, largely righting an imbalance that had left these countries dependent on heavy foreign borrowing. However, adjustment has come at a sizable cost to growth, with lower domestic spending only partly offset by higher export sales. Downward pressure on domestic spending should abate now that the periphery countries have been weaned from foreign borrowing. The risk, though, is that foreign creditors might demand that the countries pay down (rather than merely service) accumulated external debts, forcing them to reduce spending below incomes.

    A country’s current account balance measures how much it lends to or borrows from the rest of the world. A country where imports run ahead of exports is also spending more than it produces and must borrow abroad to make up the difference. Countries in the euro area periphery borrowed heavily from abroad during the several years leading up to the ongoing sovereign debt and banking crisis. As a result, they faced wrenching adjustment pressures when foreign investors became unwilling to extend new credit, even with the lure of sharply higher interest rates. These adjustment pressures forced changes in the balance between exports and imports, and equivalently in the balance between income and spending, without any help from an exchange rate channel because of the shared euro currency.


Exports and Imports
The loss in access to foreign credit meant that export revenues had to rise relative to import purchases. As seen in the table below, much of the recent adjustment in Italy, Spain, and Portugal has come from higher export revenues. From 2010 to 2012, nominal goods and services exports in these countries rose by 15 percent or more, roughly in line with Germany’s performance. Higher exports in these countries have helped support growth, softening ongoing economic downturns. Greece, in contrast, saw export sales rise only 8 percent over this two-year period; this increase provided only limited help easing the country’s severe downturn.


    A look at the geographic breakdown of goods exports shows that the lion’s share of the increase was from sales outside the euro area, particularly to markets in North America, Asia, and oil-exporting countries. Indeed, periphery countries’ sales outside the euro area rose by roughly 30 percent over the two-year period, compared with growth of less than 10 percent for sales inside the euro area.


    Discussions of external adjustment in the periphery often stress the need to improve external competitiveness. Unfortunately, competitiveness measures are at best imperfect. A common metric is based on unit labor costs, that is, on labor compensation growth relative to labor productivity. The intuition is simple: Higher wages erode competitiveness unless offset by productivity gains. However, this measure can be misleading in turbulent times. The shutdown of low-productivity firms boosts the economy’s average productivity, but does not mean that competitiveness has improved at surviving firms. Economy-wide unit labor cost measures can be particularly misleading when downturns are concentrated in low-productivity sectors such as construction. For example, much of the measured decline in Spain’s unit labor costs over the past several years owes to the country’s construction crash.

    The Organisation for Economic Co-operation and Development calculates a measure of competitiveness based on export performance adjusted for the strength of trading partners’ economies. If exports grow more rapidly than trading partners’ total imports do, a country gains export market share; if exports grow more slowly, a country loses it.

    By this metric, Spain and Portugal have done well in recent years, with exports growing 6 to 8 percent faster than trading partners’ total imports from 2010 to 2012. (These figures are based on preliminary estimates from late 2012.) This matches up well with Germany’s performance of exports, which grew 5 percent faster than trading partners’ total imports. Italian exports, in contrast, just kept pace with imports in destination markets. Meanwhile, Greece lost substantial market share, with exports growing 10 percent more slowly than destination market imports did over the period.

    Import weakness also contributed to the external adjustment in the periphery. This was particularly true in Greece and Portugal, where purchases of foreign goods and services dropped 11 percent and 4 percent, respectively, from 2010 to 2012. Italy’s imports rose modestly, while Spain’s rose 6 percent. In all cases, import growth fell far short of export growth, helping to reduce external borrowing.

    Ongoing economic downturns have been the key driver of import weakness in the periphery. Indeed, import spending remains well below levels prevailing before the Great Recession; import spending in Germany, in contrast, has moved well above it pre-recession level. One concern is that periphery import spending might pick up quite strongly once economies recover, bringing a new round of large current account deficits. A more positive take is that the difficult adjustments have brought imports in line with exports; going forward, the two can grow together without the need for new borrowing.

Spending and Income

A current account deficit means that domestic spending is greater than domestic income. An alternative but equivalent measure of this gap is the difference between domestic investment and domestic saving. (Note that a country’s public and private spending goes either to consumption or investment, while income not spent on current consumption is by definition saved. Thus, the gap between spending and income is equal to investment spending minus saving. This same accounting logic means that a country’s fiscal deficit is the difference between government saving and investment spending.) The table below shows that much of the narrowing in periphery current account deficits over the past two years has come from lower investment spending, with declines equal to almost 2 percentage points of GDP to more than 4 percentage points. Higher saving also contributed to reduced current account deficits, with small increases in Italy and Spain and more substantial increases in Greece and Portugal.


    The drop in investment spending, particularly outside the housing sector, could limit improvement in periphery competitiveness and growth prospects. As the next chart shows, this is especially the case since the recent drop in investment comes on the heels of an already large drop in 2008 and 2009—during the Great Recession but before the euro area crisis took hold. In contrast, investment spending in Germany has seen no pullback. Notably, economic recoveries are often led by investment spending. One risk for the periphery, then, is that stronger growth could see current account deficits widening as investment spending is again financed by external borrowing. On the positive side, stronger growth would also help boost public and private saving by limiting government budget deficits and raising corporate profits.


Periphery countries have suffered painful contractions weaning themselves from foreign borrowing. The hope now is that the restoration of external balance in these countries will set the stage for meaningful recoveries. The debt burden from past borrowing remains, however, and argues for caution about the periphery outlook. Much will depend on the behavior of external investors. A further pullback would force periphery countries to lower spending below incomes to generate current account surpluses to pay down (rather than merely service) accumulated external debts. This would suggest an even steeper drop in periphery consumption and living standards. Recent balance-of-payments data have been encouraging on that point, however, as private investors stopped pulling money out of periphery countries in the second half of 2012, apparently reassured by the European Central Bank’s Outright Monetary Transaction program that was announced last August.

The views expressed in this post are those of the authors and do not necessarily reflect the position of the Federal Reserve Bank of New York or the Federal Reserve System. Any errors or omissions are the responsibility of the authors.

Matthew Higgins is a vice president in the Federal Reserve Bank of New York’s Emerging Markets and International Affairs Group.

Thomas Klitgaard
is a vice president in the Bank’s Research and Statistics Group.

Tuesday, May 21, 2013

Volunteer familiar with Shoutcast application.

WCRX-LP needs a volunteer to assist in training other volunteers in working with Shoutcast and webstreaming.

Contact WCRX-LP at (614) 235-2929. 

Ask for Laura Franks.

Security Cameras in Bexley (Originally broadcast September 17, 2009).

Camera #1
Does Bexley need more video cameras as a deterrent to petty property theft?

In a recent broadcast interview with Bexley police chief Larry Rinehart, Bexley Public Radio senior correspondent John Matuszak asked about property theft in Bexley. The chief reported that during calendar year 2008, there were more than six hundred property thefts in Bexley. In the Monday morning Dispatch newspaper, the chief is quoted as describing Bexley as "a city in peril" because of this property crime.

A two hundred dollar bicycle stolen from a Bexley garage isn't a peril for the city but the editorial collective understands the chief's point.

Six hundred thefts, mostly petty thefts, is a large number for sure but not significantly different from the property crime frequencies in Dublin, Gahanna, Upper Arlington, Westerville and Worthington.

For sure, the dollar value of stolen Bexley property is greater than these other suburbs because, well, it's a matter of quality and taste.

Sperling’s Best Places publishes crime rates in American cities on a scale of one (low) to ten. Dublin, Gahanna, Upper Arlington, Westerville and Worthington are rated at eight and Bexley alone is rated at nine. Still all of these communities including Bexley are in the same fourth statistical quartile.

Camera #2
If the average theft involves stolen property valued at $500, there is an economic impact of $300,000 each year on Bexley residents. If the average is $2,000, then the impact is $1.2 million. If damage to door frames and windows averages $1,100, there is an additional $660,000 in economic loss to residents in the community.

Those dollar amounts help to set a range for how much money might be spent prudently to respond to the problem of property theft.

Equipment needs might be eighteen network digital recorders (at $900 each), one thousand infra-red digital night video cameras ($700 each), connecting cables for each camera and installation ($350 each) for a total of $1,066,800. Operations, staffing and repairs will add another $180,000 each year. AEP, Verizon and AT&T will want some compensation when the best camera location is on a utility pole.

Bexley police chief Larry Rinehart is promoting the formation of neighborhood block-watch teams in response to the number of property crimes suffered by Bexley residents.

Camera #3
The Bexley Public Radio editorial collective wonders whether neighborhood block-watch volunteers can be assisted by video cameras.

Currently, video cameras are used in some Bexley retail stores, banks and residences. Should video cameras be installed in all commercial locations in Bexley? Should video cameras be required at all residences?

Should the city install cameras in all of the alleys and along all of the streets?

How should installation be prioritized? Does the Bexley police department analyze property theft by location? Does the police department know which neighborhoods have the highest frequency of property theft? Should frequency of theft be used to prioritize installation?

Camera #4
Does the police department know how many businesses and residences use video cameras? Does the police department have a map of Bexley that shows what views are currently recorded. Banks, CVS and carry-out convenience sores obviously use video cameras currently.

Should Bexley adopt saturation coverage by digital video cameras as part of its response to unacceptable levels of property theft?

Do Bexley residents really want video cameras recording vehicular and pedestrian movement in the neighborhoods? What happens to privacy in our neighborhoods? Is this too much a Big Brother proposal?

Camera #5
Who should own the cameras, computers and discs recording digital data? Should the city own them?. Should the property insurers that carry the property risks in Bexley own the equipment? Should a Bexley property owner cooperative be formed to own the equipment? Should ownership be on a block by block basis?

Installing video cameras everywhere in Bexley sounds like a good stimulus public infra-structure program.

Listener thoughts are welcome. Email to

Contribute to Bexley Public Radio now!!!

This WCRX-LP editorial collective comment was first published February 15, 2009.

Bexley Public Radio Foundation broadcasting as
WCRX-LP, 102.1 FM, Local Power Radio
2700 E. Main St., Suite 208
Columbus, OH 43209
Voice (614) 235 2929
Fax (614) 235 3008

Camera #6
Bexley Public Radio Foundation is exempt from federal taxes under IRC Section 501(c)(3). Donations are deductible from federal income taxes for individuals who itemize. Checks may identify the payee as Bexley Public Radio Foundation or WCRX-LP, 102.1 FM.

Design is copyright 2009. All rights reserved. Bexley Public Radio Foundation. Text is copyright 2009. All rights reserved. Bexley Public Radio Editorial collective.

Administrative Assistant for WCRX-LP Community Programming Advisory Committee

Volunteer administrative assistant position vacancy at Bexley Public Radio Foundation.

Volunteer needed to administer community involvement in programming development. Successful candidate will be familiar with educational and cultural institutions that serve the Bexley community.

Work schedule is flexible and estimated time commitment is 3 hours per week.

Position reports to vice president of programming and production.

Submit short resume or work history and two references to 

WCRX-LP Community Programming Advisory Committee meeting set for August 5, 2013.

WCRX-LP Community Programming Advisory Committee meeting for Bexley Public Radio set for 4:30 p.m. Monday July 1, 2013.

The meeting location will be announced on the prior Friday morning to individuals who RSVP by the prior Thursday.

Community residents are welcome. 

Admission is $5.00 per person.

Cash, check, money order and ID.

Please RSVP to or voice mail to (614) 235-2929 no later than the Thursday prior to the meeting.

Community Programming Advisory Committee is a public  committee of
Bexley Public Radio Foundation
2700 E. Main St., Suite 208
Columbus, OH 43209

Bexley Comedy Writers Guild meeting set for July 1, 2013.

Bexley Comedy Writers Guild meeting set for 3:30 p.m. Monday July 1, 2013.

The meeting location will be announced on the prior Friday morning to individuals who RSVP by the prior Thursday.

Community residents are welcome. 

Admission is $10.00 per person.

Cash, check, money order and ID.

Please RSVP to or voice mail to (614) 235-2929 no later than the Thursday prior to the meeting.

Bexley Comedy Writers Guild e is a public  committee of
Bexley Public Radio Foundation
2700 E. Main St., Suite 208
Columbus, OH 43209

Ohio Public Media Cooperative meeting set for July 1, 2013.

Ohio Public Media Cooperative meeting set for 3:30 p.m. Monday July 1, 2013.

The meeting location will be announced on the prior Friday morning to individuals who RSVP by the prior Thursday.

Community residents are welcome. 

Admission is $10.00 per person.

Cash, check, money order and ID.

Please RSVP to or voice mail to (614) 235-2929 no later than the Thursday prior to the meeting.

Ohio Public Radio Cooperative is a public  committee of
Bexley Public Radio Foundation
2700 E. Main St., Suite 208
Columbus, OH 43209

Saturday, May 18, 2013

The Mississippi Bubble

Federal Reserve Bank of New York

May 17, 2013


Historical Echoes: The “Mississippi Bubble” – When One’s Back Could Be Rented Out as a Writing Desk

Amy Farber

In 1720, the very same year that England was experiencing the “South Sea Bubble”, France was experiencing a bubble as well—the “Mississippi Bubble.” France’s bubble was brought on by government debt and the advice of the head of the country’s finance ministry, John Law (Scottish mathematician, convicted murderer [a duel], gambler, and financial genius), to create paper money and a bank and to invest in his Mississippi Company. (Indeed, at the height of the trading frenzy for shares of stock in Law’s company, a hunchbacked man rented his back out as a desk in the “Street of Speculators” and earned a considerable sum.) Over a three-year period (1718-20), things went very wrong and too much money was printed (the regent’s decision, not Law’s). The text accompanying this portrait of Law describes him as an:

18th century Scotsman, credited by some historians as being “the father of inflation.” Law turned gambling IOUs into “gold counters,” then state debts into paper money, and finally sold all France down the river on the “Mississippi Bubble.”
     In a 2008 Financial Times article, “How the French invented subprime in 1719” (available with subscription), James MacDonald compares the Mississippi Bubble with the 2008 financial crisis. He cites six major similarities, including significant public debt, a charismatic financial wizard (Law), and the power of securitization.

     The full story of the bubble is complex, but an easy way to understand it is to watch this clever and humorous 1978 animation (9.75 min.). Or, if you want to see what the players in this drama really looked like, another clever and wryly humorous video (4.75 min.) tells essentially the same story with a backdrop of portraits and landscapes and a narrator who falls just short of conveying an authentic upper-class British accent. A third video (12.5 min.) has wavering audio but is otherwise excellent. The first video has Law escaping France disguised as a man with an enormous mustache and a beret, but with his Scottish bagpipes visible; the third has him escaping dressed as a woman.

     Two American authors have addressed the topic: Washington Irving, of Rip Van Winkle and Legend of Sleepy Hollow fame, wrote The Great Mississippi Bubble:  a Time of Unexampled Prosperity (or read the less authentic-looking online version) and included it in his 1825 book of essays, Crayon Papers. Could “unexampled prosperity” mean something similar to “irrational exuberance”? The essay is rich in detail regarding events and character traits of the players. Dallas Federal Reserve Bank President Richard Fisher has even referred to the Irving essay in 2008 and 2010 speeches. (Follow the links and note the wonderful Irving quotations included.) From the 2008 speech:

Irving had never heard of a subprime mortgage or an Alt-A loan, an SIV, a CDS, a CLO or a CMO. But he understood booms propelled by greed and tomfoolery and busts born of fear, and that these underlying forces are deeply rooted in human DNA.

     The American writer Emerson Hough wrote a 1902 best-selling historical novel, The Mississippi Bubble (this chapter is part of the serialized newspaper version), with a curious subtitle: “how the star of good fortune rose and set and rose again, by a woman’s grace, for one John Law of Lauriston.” What woman? Is it Lady Catharine Knollys, whom Law married? And what does Hough mean by “grace”? Possibly, the woman forgave Law for being a failure.

     Chauncey Haines composed a “March Two Step” titled “The Mississippi Bubble.” (Listen to it here) The sheet music, also published in 1902, includes an advertisement for the Hough novel, which quotes a review from the Boston Journal describing it as “one of the truly great romances.”

The views expressed in this post are those of the author and do not necessarily reflect the position of the Federal Reserve Bank of New York or the Federal Reserve System. Any errors or omissions are the responsibility of the author.

Amy Farber is a research librarian in the Federal Reserve Bank of New York’s Research and Statistics Group.

Wednesday, May 15, 2013

Driving Data and Forecasts for Transportation Policy

Spring 2013
The Driving Boom – a six decade-long period of steady increases in per-capita driving in the United States – is over.
Ohio PIRG Education Fund Frontier Group, Tony Dutzik, Frontier Group, Phineas Baxandall, U.S. PIRG Education Fund
Americans drive fewer total miles today than we did eight years ago, and fewer per person than we did at the end of Bill Clinton’s first term. The unique combination of conditions that fueled the Driving Boom – from cheap gas prices to the rapid expansion of the workforce during the Baby Boom generation – no longer exists. Meanwhile, a new generation – the Millennials – is demanding a new American Dream less dependent on driving.
Transportation policy in the United States, however, remains stuck in the past. Official forecasts of future vehicle travel continue to assume steady increases in driving, despite the experience of the past decade. Those forecasts are used to justify spending vast sums on new and expanded highways, even as existing roads and bridges are neglected. Elements of a more balanced transportation system – from transit systems to bike lanes – lack crucial investment as powerful interests battle to maintain their piece of a shrinking transportation funding pie.
The time has come for America to hit the “reset” button on transportation policy – replacing the policy infrastructure of the Driving Boom years with a more efficient, flexible and nimble system that is better able to meet the transportation needs of the 21st century.
 The Driving Boom is over.
·         Americans drove more miles nearly every year between the end of World War II and 2004. (See Figure ES-1.) By the end of this period of rapid increases in per-capita driving – which we call the “Driving Boom” – the average American was driving 85 percent more miles each year than in 1970.
Figure ES-1. Total and Per-Capita Vehicle-Miles Traveled, U.S.

* 2012 data from U.S. Department of Transportation’s (U.S. DOT) Traffic Volume Trends series of reports; data from previous years from U.S. DOT’s Highway Statistics series of reports.
·         Americans drive no more miles in total today than we did in 2004 and no more per person than we did in 1996.
·         On the other hand, Americans took nearly 10 percent more trips via public transportation in 2011 than we did in 2005. The nation also saw increases in commuting by bike and on foot.
·         A return to the steady growth in per-capita driving that characterized the Driving Boom years is unlikely given the aging of the Baby Boom generation, the projected continuation of high gas prices, anticipated reductions in the percentage of Americans in the labor force, and the peaking of demand for vehicles and driver’s licenses and the amount of time Americans are willing to spend in travel.
The Millennial generation has led the recent change in transportation trends – driving significantly less than previous generations of young Americans. Millennials are already the largest generation in the United States and their choices will play a crucial role in determining future transportation infrastructure needs.
·         The Millennials (people born between 1983 and 2000) are now the largest generation in the United States. By 2030, Millennials will be far and away the largest group in the peak driving age 35-to-54 year old demographic, and will continue as such through 2040.
·         Young people aged 16 to 34 drove 23 percent fewer miles on average in 2009 than they did in 2001 – a greater decline in driving than any other age group. The severe economic recession was likely responsible for some of the decline, but not all.
·         Millennials are more likely to want to live in urban and walkable neighborhoods and are more open to non-driving forms of transportation than older Americans. They are also the first generation to fully embrace mobile Internet-connected technologies, which are rapidly spawning new transportation options and shifting the way young Americans relate to one another, creating new avenues for living connected, vibrant lives that are less reliant on driving.
·         If the Millennial-led decline in per-capita driving continues for another dozen years, even at half the annual rate of the 2001-2009 period (illustrated by the Ongoing Decline scenario in Figure ES-2 above), total vehicle travel in the United States could remain well below its 2007 peak through at least 2040 – despite a 21 percent increase in population. If Millennials retain their current propensity to drive less as they age and future generations follow (Enduring Shift), driving could increase by only 7 percent by 2040. If, unexpectedly, Millennials were to revert to the driving patterns of previous generations (Back to the Future), total driving could grow by as much as 24 percent by 2040.
·         All three of these scenarios yield far less driving than if the Driving Boom had continued past 2004. Driving declines more dramatic than any of these scenarios would result if future per-capita driving were to fall at a rate near that of recent years or if annual per-capita reductions continue through 2040.
·         Regardless of which scenario proves true, the amount of driving in the United States in 2040 is likely to be lower than is assumed in recent government forecasts. This raises the question of whether changing trends in driving are being adequately factored into public policy. (See Figure ES-3.)
Figure ES-2. Aggregate Vehicle-Miles Traveled in the United States under Several Scenarios of Future Travel Growth, 1946-2040

Figure ES-3. Recent Official Forecasts of Vehicle Travel Compared to Range of Scenarios, 1946-2040

U.S. DOT = U.S. Department of Transportation
STIFC = Surface Transportation Infrastructure Financing Commission
U.S. EIA = U.S. Energy Information Administration
The recent reduction in driving has already delivered important benefits for the nation, while raising new challenges. Future driving trends will have major implications for transportation policy and other aspects of American life.
·         Traffic congestion has fallen. According to data from the Texas Transportation Institute, Americans spent 421 million fewer hours stuck in traffic in 2011 than they did in 2005. Further reductions in driving could lead to additional easing of congestion without massive investments in new highway capacity, as long as roads are maintained in a state of good repair.
·         America is less dependent on oil. In 2011, gasoline consumption for transportation hit a 10-year low. Further reductions in driving consistent with the Ongoing Decline scenario – coupled with expected vehicle fuel economy improvements – could result in the nation using half as much gasoline or other fuels in our cars and trucks by 2040 as we use today.
·         Our roads are getting less use … but the gas tax is bringing in less income. Reduced vehicle travel (particularly in large trucks) reduces the wear and tear on our nation’s roads, reducing maintenance needs. Reduced driving, however, also reduces the amount of revenue brought in by the already-strained gasoline tax.
The recent reduction in driving and embrace of less auto-dependent ways of living by Millennials and others creates a golden opportunity for America to adopt transportation policies that use resources more efficiently, preserve our existing infrastructure, and provide support for Americans seeking alternatives to car travel.
A new vision for transportation policy should:
·         Plan for uncertainty. With future driving patterns uncertain, federal, state and local transportation officials should evaluate the costs and benefits of all transportation projects based on several scenarios of future demand for driving. Decision-makers should also prioritize those projects that are most likely to deliver benefits under a range of future circumstances.
·         Support the Millennials and other Americans in their desire to drive less. Federal, state and local policies should help create the conditions under which Americans can fulfill their desire to drive less. Increasing investments in public transportation, bicycling and pedestrian infrastructure and intercity rail – especially when coupled with regulatory changes to enable the development of walkable neighborhoods – can help provide more Americans with a broader range of transportation options.
·         Revisit plans for new or expanded highways. Many highway projects currently awaiting funding were initially conceived of decades ago and proposed based on traffic projections made before the recent decline in driving. Local, state and federal governments should revisit the need for these “legacy projects” and ensure that proposals for new or expanded highways are still a priority in light of recent travel trends.
·         Refocus the federal role. The federal government should adopt a more strategic role in transportation policy, focusing resources on key priorities (such as repair and maintenance of existing infrastructure and the expansion of transportation options) and evaluating projects competitively on the basis of their benefits to society.
·         Use transportation revenue where it makes the most sense. Transportation spending decisions should be based on overall priorities and a rigorous evaluation of project costs and benefits – not on the source of the revenue.
Do our homework. Federal and state governments should invest in research to evaluate the accuracy and usefulness of transportation models and better understand changing transportation trends in the post-Driving Boom era.

Tuesday, May 14, 2013

Student Debt; Some Geographic Characteristics.

Published originally on the website of the New York Federal Reserve Bank.  May 14, 2013.

Just Released: The Geography of Student Debt
Andrew Haughwout, Donghoon Lee, Wilbert van der Klaauw, and Joelle Scally

This morning, the New York Fed released its Quarterly Report on Household Debt and Credit for 2013 Q1. The report uses the FRBNY Consumer Credit Panel to show that outstanding household debt declined approximately $110 billion (about 1 percent) from the previous quarter. The drop was due in large part to a reduction in housing-related debt and credit card balances. Meanwhile, delinquency rates for each form of consumer debt declined, with the overall ninety-plus day delinquency rate dropping from 6.3 percent to 6.0 percent.

    One of the unique aspects of the FRBNY Consumer Credit Panel, which is itself based on Equifax credit data, is the detail we obtain for each kind of household debt. This quarter, we have taken advantage of the geographic information available in the data set and are introducing a set of maps of our student loan data, which indicate regional variation in several dimensions of student debt. They depict:

               Student loan borrowers as a share of the population. The population with active student loan debts, or “SL borrowers,” as a share of the population with a credit record varies substantially over space. For example, in Hawaii, less than 12 percent of people with a credit report have student debt, while in the District of Columbia over 25 percent do.

               Student loan balances per SL borrower. Student indebtedness is significant for SL borrowers in virtually all states. Educational indebtedness per SL borrower ranges from a low of just under $21,000 in Wyoming to a high of over $28,000 in Maryland. Again, Washington, D.C., stands out: the average SL borrower there owes over $40,000. In general, we find SL-borrower debt levels are highest in California and along the Atlantic and Gulf coasts.

               Percent of balance ninety-plus days delinquent. Delinquency rates show a distinct regional pattern, with states in the south and southwest having generally higher rates than those in the north. The lowest delinquency rate is South Dakota, at just over 6.5 percent, while the highest is in West Virginia, at nearly 18 percent.

    Student loan indebtedness and delinquency continue to generate intense interest and we look forward to sharing data and perspectives that help define the scope of this important issue.

The views expressed in this post are those of the authors and do not necessarily reflect the position of the Federal Reserve Bank of New York or the Federal Reserve System. Any errors or omissions are the responsibility of the authors.