Tuesday, February 28, 2012

Oregon January Unemployment Falls to 8.8% on 5,400 New Jobs

The Oregon January unemployment numbers are out and the news is good, mirroring the US unemployment picture we gout a couple of weeks ago.


The state added 5,400 jobs on a seasonally adjusted basis with gains in most industries but a dip in construction.  The increase in the rate was from a combination of these new jobs and from another 8,800 dropping out of the Oregon labor force. This drop out could be due to migration out of the state, discourages job seekers that have stopped looking for work, folks going back to school, etc.

As the two graphs above show, we still have a heck of a long way to go to get back to pre-recession levels of unemployment and employed persons in Oregon, but at least now we appear to be solidly on the right track.

NOTE: Josh cautions me that I am using non-seasonably adjusted labor force numbers (the 8,800) along with the SA jobs numbers.  Tisk-tisk.  He thinks the SA number is porbably more like 1,500 fewer in the labor force.  Go check out his much more detailed post.

He also has a great post on Oregon demographic trends that I was going to try and steal a part of, but I am just too busy, so go read it yourself.

Portland Home Values: Case-Shiller December Numbers

As you can probably tell from the lack of posts that I am currently swamped, so here is a punt to the Wall Street Journal for the latest Case-Shiller numbers.

The basics: Portland down 4% since December last year and down 0.4% from November to December.  This last number is fourth best, but eh year to year is middle of the pack in the 20 metro area group.

Wednesday, February 22, 2012

Policy Endogeneity: Meth Edition

One of the reasons I get so frustrated about the ban on self-service gas in Oregon is that the general defense of the policy generally ends up as something along the lines of, "well, that's just the way we do it here and we don't want it to change." Which to me is the worst possible approach to policy, "because it exists, it should exist" is a tautology and not rational.

Policy makers should be just as eager to remove outdated, ineffective and misguided policy as to make new policy, but sadly, this is never the case.  Times change, society changes, we update old information and learn new approaches all the time.  This suggests that we should always be in the habit of re-evaluating past approaches and willing to change when things change or information changes.  But policy doesn't work like that, most policies create specific stakeholders who will resist change, while the removal of policy generally creates more diffuse benefits.

Which brings us to an interesting new study about Oregon's requirement that Pseudophedrine may only be dispensed with a prescription from a doctor.  The Cascade Policy Institute has released a study of the impact the requirement has had on the illegal manufacture of meth in the state.  They find that the requirement has not had a meaningful impact on the number of "meth lab incidents:"

...the number of seizures of labs, dumpsites, chemicals, and equipments that indicate local manufacture of methamphetamine. [sic]
Here is the main figure:



There are a number of challenges to the study that make causal statements difficult: for example, what other policies were also changing in this period, how was law enforcement changing, and so on, are questions that would need to be answered to raise confidence in this result.

In other words we don't know the counter-factual - what would have happened in Oregon in the absence of the requirement. For example, since Oregon had one of the worse meth problems early on, it is possible that there was a disproportionate law enforcement response.

Still, there is pretty compelling evidence to suggest that the prescription requirement did not make a major marginal impact. It appears that behind-the-counter laws enacted a few year prior in Oregon and neighboring states (and which is now federal law) may have been quite effective and that the additional prescription requirement was unnecessary.

Of course the new problem in meth is the shake-and-bake method of manufacturing it which is causing some serious problems with uninsured people, burned by this very dangerous method, showing up in burn wards of hospitals, further increasing the cost to society of this epidemic. This method uses much less Pseudophedrine and so behind-the-counter restrictions might not be enough going forward.

On the other hand there is a real cost to the prescription only policy to those that would use Pseudophedrine legally and for its intended purpose.  I, for one, am prone to sinus infections and Pseudophedrine is the best source of relief from the symptoms that can be quite debilitating.  Getting a prescription is a pain and requires an expensive doctor's appointment.  Even then, it is more complicated, because the doctor has to get a special prescription form - not the normal scrip - and it all has to go into a centralized database.  That said, decent alternatives exist and if I am really suffering, a prescription can be had.

So, all this is to say that I am not ready to declare that the prescription-only regulation should go, but that this is pretty good evidence that it should at least be examined to see if it is the best policy approach.  First and foremost for those who would see it abolished, I think, is to demonstrate that it is no more effective in reducing the shake-and-bake method of manufacturing.  I suspect that it may be, but by how much?

Tuesday, February 21, 2012

Oden: We Hardly Knew Ye


Another sad chapter in the story of Greg Oden:

Although Blazers executives would not say this is the end of the Oden era, the chances Oden plays again in Portland, or anywhere in the NBA, are doubtful at best. Of his five knee surgeries, three of them have been microfracture procedures, including Monday's surgery in Vail, Colo. Microfracture is the most invasive and serious of knee procedures, and involves making tiny fractures in the knee bone to generate bleeding and stimulate new cartilage growth. No NBA player has come back to play after undergoing three microfracture surgeries.

I feel terrible for the guy but I feel much worse for myself. I know its tough for Greg, but then again he has been paid more then $20 million over the last five years - more than enough to live in luxury for the rest of his life and pursue whatever other endeavors he wishes. But what about me? I was glad the Blazers picked him over Durant, I thought it was the correct decision. Now how many NBA championships will I have to watch Durant win before I can forget the whole episode.

In my life I have only got one autograph from a Blazer: it was Sam Bowie and I ran into him in the old Tower Records store in Beaverton. He was, of course, in a walking cast. So I suppose it is only fitting that the guy I thought was a sure bet would fail so badly.

So now that the cornerstones of the franchise, Roy and Oden, have both been felled by bad knees its back to the annual race to see if the Blazers can make the playoffs and then win a game or two while there.  Oh joy.

Greg sees like a genuinely nice guy and Roy as well so my heart goes out to them, but in the grand scheme of things, life has treated them exceptionally well.  The fates continue to dump on the Blazers though, and I am not sure why.

Monday, February 20, 2012

Eco-nomics: Problems with Cap and Trade in Europe

Photo: Der Spiegel/DPA
Der Spiegel has the story of the collapsing CO2 permit market in the EU.  Permits are so plentiful at the moment that the price has plunged reversing the calculus and actually promoting rather than discouraging coal burning.
The EU is alarmed. The European Parliament's Industry Committee plans to vote later this month on whether Brussels should reduce the number of carbon certificates it provides. A vote in favor would see the EU auctioning off 1.4 billion fewer credits than planned during the next trading period from 2013 to 2020. The cut of roughly 8 percent, it is hoped, will push prices back up.

Yet this type of market intervention reveals the system's central design flaw: Politicians determine the total amount of CO2 that industry in the EU may emit, a limit that applies years into the future, without any way to know how the economy -- and thus the demand for trading certificates -- will develop during that period.

Five years ago, when Europe was experiencing an economic boom, Brussels was generous in providing businesses with free certificates for the trading period from 2008 to 2012; companies were forced to buy only a small portion of their emissions credits. But soon afterwards, many businesses were forced to scale down production as the financial crisis, and then the debt crisis, took hold in Europe. Germany consumed less energy -- 4.8 percent less in 2011 -- and industry as a whole required a lower number of certificates than expected.
Aha! Seems like a job for economists to understand things like derived demand, induced innovation and the like. More than that it seems like there need to be more flexibility in these permit markets - like linking permit numbers to certain conditions, for example.

And then here is a classic situation of one policy undermining another policy aimed at similar goals:
With the certificates so cheap, generating power from environmentally harmful fuels becomes even more of a good deal than usual -- which explains why brown coal consumption increased by nearly 4 percent in 2011, bucking the general trend.

Even more paradoxical, CO2 prices are so low partly because of the billions Germany spends on renewable energy. This decreases the demand, and with it the price, for emissions certificates. That in turn allows coal, a notorious danger to the climate, to be more competitive. In other words, emissions trading isn't stopping climate change, but actually speeding it up.
They go on to propose a CO2 tax, but I'd go one better, a carbon tax at the source. Of course you'd then be stuck again on the appropriate size of the tax...

Friday, February 17, 2012

Oregonian News Network

I am now participating in a partnership with The Oregonian, something they call the Oregonian News Network, there is a logo and link up on the top right of the page (got some problems with black text on a black background but hopefully I can get that corrected soon).  This arrangement is, in economics terms, one of complements: the relationship is mutually beneficial in that it, it is hoped, will bring more readers to both sites.

Other than this cross-posting and promoting, however, there are no ties, editorial or otherwise.  I get no financial benefit and there is no oversight or interference in any way over what I write.  I also have a relationship with the Oregon Business Magazine where they, from time to time, excerpt and link to my posts.  This relationship is similar in the complete lack of any financial or editorial ties.

I write this blog because I like to and because I think it complements what I do on campus at OSU.  I don't do any advertising and I try hard to keep out commercial spam comments.  I started it as a way to try an engage students outside of the classroom and for a select group of present and former students this is true. But it is entirely independent of OSU, this is my blog and I happen to be a professor at OSU - there is no other link to the school.

The blog has become a little different than I imagined - or perhaps it is best to say it is constantly evolving - but I enjoy writing it and I enjoy the interactions it facilitates.  Therefore I am always happy to reach broader audiences even if doing so does not benefit me in any material way.  Obviously there is no such thing as complete objectivity and I have my opinions, but I try and do my best to be as apolitical as possible and where I am opining (as opposed to presenting received economic research) I try and make it clear.

If you have found this blog through the Oregonian News Network then welcome and I hope you enjoy it and please contribute to the conversation.

Thursday, February 16, 2012

PDC


This is disturbing.  Auditors raise a number of very serious questions about just how well the PDC is being run and whether there is proper oversight.  I happen to believe in the general idea of an agency that coordinates the city's development efforts and targets funding, but stories like this only serve to reinforce the public's skepticism about public agencies handling of public money.

California recently abruptly stopped all tax increment financing redevelopment agencies as a way to address budget problems and return money to schools.  In this environment it is essential that agencies like PDC are absolutely squeaky clean and create public trust that their money is being well spent.

Wednesday, February 15, 2012

Picture of the Day: Meanwhile, Across the Pond...

As the US employment situation continues to improve, in the UK things are getting worse:


Actually, that is a bit misleading, the number of people in work has risen but this is largely due to part-time workers who want full-time work, which, as I understand it, in the UK counts in both the jobs figures and in the unemployed figures.

Debate away about austerity v. stimulus but two cautions: one, there is no counter-factual and two, the proof is in the long-term as well not just the short term.

Tuesday, February 14, 2012

Soccernomics: Comparing the Euro Leagues and Financial Market Slowdowns During the World Cup


Two soccer related notes today.

First, a set of charts from the The Telegraph of London compares the top European football leagues (aka the top leagues in the world).  English football is often characterized as more physical and less technical than other leagues, particularly Spain, which is generally considered the most technical in the world. Interestingly the statistics do not bear this out.  The English Premiership has the best passing accuracy and the most goals among the top leagues and the fewest tackles:



Which is not to say that the Prem is superior, just that old notions of route one booting the ball and crunching tackles in England are outdated.

Second, and interesting paper about the slowdown of stock market trades during World Cup matches.  It turns out they fall dramatically when the national team is playing, especially in Argentina.  But the US slows considerably too:

During the 2010 World Cup in South Africa, equity trades plunged an average of 45% at stock markets when the national team was playing, according to a new paper by a pair of ECB economists.

A goal reduced trading another 5%. Trading already tapered off even before the match starts, and stayed slow during halftime.

“Overall, there is a strong sense that stock markets were following developments on the soccer pitch rather than in the trading pit,” ECB economist Michael Ehrmann and David-Jan Jansen of the Dutch central bank wrote.

Argentina had the most die-hards. Trades per minute fell 72% when Argentina was playing, second only to Chile in the 15 countries examined. Trading was still down 40% even when Argentina wasn’t playing, tops on the list by far. Trading in Germany was down almost 60% when Die Mannschaft (The Team) played.

What about the U.S., where soccer isn’t as popular as it is in Europe and Latin America? “We also find strong indications of declining activity in U.S. stock markets,” the authors wrote. Trades per minute were down over 40% when the U.S. played, and around 25% during other matches.

So there you go.

Monday, February 13, 2012

Economist's Notebook: Externalities

I am very fearful of wading into a morass of politics and values but this essay criticizing the mandate that health insurance cover birth control struck me as particularly odd coming from an economist:
I put "insurance" in quotes for a reason. Insurance is supposed to mean a contract, by which a company pays for large, unanticipated expenses in return for a premium: expenses like your house burning down, your car getting stolen or a big medical bill.

Insurance is a bad idea for small, regular and predictable expenses. There are good reasons that your car insurance company doesn't add $100 per year to your premium and then cover oil changes, and that your health insurance doesn't charge $50 more per year and cover toothpaste. You'd have to fill out mountains of paperwork, the oil-change and toothpaste markets would become much less competitive, and you'd end up spending more.
Okay, so we can quibble about the semantics of insurance, but there is a huge difference between oil changes and contraception: externalities. The social costs from someone not taking proper care of their car is pretty small - it may run less efficiently and release more smog, for example, but most of the cost of poor maintenance will be born by the owner. Unwanted pregnancies can have major social costs born by society at large - health care, infant care, foster care, crime (if you believe Levitt) and so on. In econo-speak, there are large negative externalities that come from unwanted pregnancies.

So there is a good reason government stays out of the decision to get an oil change for your car, but potentially has a big stake in helping prevent unwanted pregnancies.

The author does finally mention the externality issue near the end:
But what about the fact, you may ask, that unwanted children are a burden on society as well as to their mothers? Perhaps there is a social interest in subsidizing birth control? Perhaps there is—but if so, this is an awful way to do it.
Which is, in my mind, the same as admitting the whole essay is about obfuscating by referring to a red herring.  Yes, the real question is whether it makes the most economic sense to subsidize birth control in this way.  Politically, perhaps, this this the only realistic alternative, but that discussion is the right one to have.  Talking about oil changes and toothpaste is completely beside the point.  And besides, this incorporates the subsidy in the private sector rather than making another government program, something that is supposed to be preferred.

So discuss away whether the externality is big enough to warrant intervention into the private birth control market, whether there is an efficient solution that can correct the market failure and if this program is the best way to do it.  But don't deliberately distort the issue by talking about oil changes in cars.

Friday, February 10, 2012

Life, Liberty and the Pursuit of Self-Service Gas

Let's suppose that for some reason you expect the whole issue of self-service gas in Oregon to be brought up again in a public forum.  It might be best, then, to be prepared for some blowback.

So, though I have written extensively about self-service gas here in the past let me take a moment to summarize my take on the issue.

I think that the banning of self-service gas is an unnecessary regulation and a costly one: it costs every Oregonian in time and money.  But even if you think I am wrong about the material gains to allowing self-service gas, there still is little justification for the policy.

The main argument I hear is that the policy "creates jobs" and by allowing self-service gas you will send gas station attendants to the unemployment line.  First, would it were so easy to solve the unemployment problem: just mandate that all businesses employ more people!  Every grocery store must have a checker and a bagger, no more ATMs - every bank must only use people for transactions and so on...  Hopefully you can see the logical fallacy - costs for businesses rise causing prices to rise, demand for their goods and services fall which lowers revenue causing businesses to cut back on overall staffing and soon you find that instead of increasing employment, you have caused it to rise.  Rigidities in labor markets create inefficient distortions - they raise prices and and lower employment.

But you say, we are just talking about a small segment, surely there won't be any overall affect on the economy.  To which I respond, why not?  What is exceptional about gas?  In fact, I think retail gas is one of the most influential products around because it represents a significant cost for so many other businesses.  Every extra penny in the price of a gallon of gas, every extra minute you spend waiting at the gas station is a drag on the economy - the effects are widespread and small on an individual level for sure but when you start adding them up they become quite large.

Let's do a little basic back of the envelope calculation from some numbers provided to me by Josh Lehner of the Oregon Office of Economic Analysis.


Using Washington as a comparison and extrapolating from the extra employees per station or the extra employees per population and using the average wages paid per gallon of gas, you get the extra cost of these additional workers per gallon of gas as 3 to 5 cents per gallon.  Now there are MANY caveats here, there are general equilibrium effects that would happen that I am ignoring as well as the fact that Washington has a higher minimum wage and so on.  But a few other numbers jump out - notice that there are fewer gas stations per volume in OR than in WA, suggesting to me that the added costs of the extra employees depresses the number of stations overall.  This suggests slightly lower price competition which is very important in keeping retail gas prices down.

What of the time cost?  Well suppose it takes an average of only 30 seconds more to get gas in Oregon than it does in Washington.  No big deal right.  Well with 915 stations serving an average of, what, 100 customers a day, this adds up to roughly 750 hours a day or 278,000 hours a year of lost time. Again all very rough but you get the idea at least.

There are other defenses from the granny argument - some people need it - to the environmental one - more expensive gas is good.  To which I respond, you can still mandate service on request and if you want to make gas more expensive for environmental reasons, you can do better with a Pigovian tax and then you can use the revenues to offset the damage done.

In the end, it is quite obvious this is more about emotions than anything else: I hate waiting at a gas station for what I consider an unnecessary reason, just as others enjoy it as a little Oregon quirkiness.  But it is not like I lie awake worrying about this.

Thursday, February 9, 2012

Beware of Europeans Bearing Austerity

Update: too early for champaign apparently...

Or so the Greeks have been saying.  But today brings the welcome news that an austerity deal has been worked out:

After days of dramatic talks, Greek political leaders reached a deal on Thursday to support a package of harsh austerity measures demanded by Greece’s financial backers in return for the country’s latest bailout.

The deal is expected to unlock €130 billion, or $172 billion, in new loans and save Greece from a potentially disastrous default.

But, as this nice graphic from The New York Times shows, there is still a lot of Euro mess to be cleaned up. But Greece was the first domino that had to be prevented from falling and it now looks like it will remain standing. Big sigh of relief.



It is not over by a long shot, but this is a big step in the right direction.

Wednesday, February 8, 2012

Good and Bad Oregon Economic News

Let's start with the bad: Oregon projected revenues are off by $35 million, or so says the Oregon Office of Economic Analysis.  This is no surprise and the state legislature has already been preparing for it.  Still, never good to have to do more cutting.

The good is that after a unsettling downward turn, the Oregon Index of Economic Indicators has turned back to positive. This suggests that Oregon is starting to recover albeit slowly and that this trend may be expected to continue with all the usual caveats: Europe, housing, oil, etc.

The OEA blog has a nice summary for the state of the state's revenues. Here is the picture worth a thousand words:

Tuesday, February 7, 2012

Housing has Bottomed Out

Or so says Calculated Risk who has a couple of nice graphs to help make his point:



Both of these graphs suggest that we may have bottomed out on the construction side, but what about prices?  Here is CR again:

There are several reasons I think that house prices are close to a bottom. First prices are close to normal looking at the price-to-rent ratio and real prices (especially if prices fall another 4% to 5% NSA between the November Case-Shiller report and the March report). Second the large decline in listed inventory means less downward pressure on house prices, and third, I think that several policy initiatives will lessen the pressure from distressed sales (the probable mortgagesettlement, the HARP refinance program, and more).

Of course these are national price indexes and there will be significant variability across the country. Areas with a large backlog of distressed properties - especially some states with a judicial foreclosure process - will probably see further price declines.

And this doesn't mean prices will increase significantly any time soon. Usually towards the end of a housing bust, nominal prices mostly move sideways for a few years, and real prices (adjusted for inflation) could even decline for another 2 or 3 years.

I think he is essentially right. We do seem to have hit the bottom but there are a lot of factors that will keep a lid on prices for some time: unemployment, foreclosures, uncertainty, tight credit, etc. But I would not be surprised to see 2012 end with modest gains in average home values as measured by Case-Shiller. And I think Portland will be one of those areas in which we will see improvement by the end of the year.

I think the thaw has begun.

Monday, February 6, 2012

Picture of the Day: Reality Check

Yes the jobs report on Friday was very good, but here is your cold-water moment: things are still historically awful.

Source: Bureau of Labor Statistics. Chart by Amanda Cox/New York Times.

Horizontal axis shows months. Vertical axis shows the ratio of that month’s nonfarm payrolls to the nonfarm payrolls at the start of recession. Note: Because employment is a lagging indicator, the dates for these employment trends are not exactly synchronized with National Bureau of Economic Research’s official business cycle dates.

Friday, February 3, 2012

Good, Very Good: Almost 250,000 Jobs Added in January


The United States' unemployment rate fell to 8.3% in January, which is nice, but the real news is, of course, the jobs number and there the news was very encouraging - 243,000 jobs were added.  The BLS report also included upward revisions to the November and December numbers as well, adding another 60,000 jobs.  The private sector actually added 257,000 jobs in January but the public sector shed 14,000 jobs.

Last month I was sounding hopeful and got some blowback.  I remain hopeful that we are heading in the right direction and we are slowly, very slowly, gaining some momentum.  If we were able to sustain job numbers like these it would still take three years to get back to five percent unemployment.  But given how bad the economy got, given all of the 'overhang' of foreclosed houses keeping a lid on the housing market and given the banking cataclysm we went through, I think you have to be a realist and understand that it is not all going to get unwound in a few months and take comfort in the clear indication that the economy is now heading in the right direction.

Now let's all hope Europe can figure out its problems and we can all start rowing in the same direction.    

Thursday, February 2, 2012

Will Digital Subscriptions Save Newspapers?

Probably not for most.  On-line there is easy substitutability for new content and thus price competition soon erodes away any real profit - or so it appears.  But there are a few uniquely situated news organizations that provide something a bit different: a broad range of coverage, in-depth reporting, a national and even global reach and the reputation for quality.  The New York Times is one such organization and over a year ago they decided to stop offering their content for free and start digital subscriptions.  The results, while not providing any comfort to smaller, regional papers, are encouraging for the Gray Lady.

Here is the blog Newsonomics dissecting the numbers and extrapolating their impact on the bottom line:
The numbers in brief, from this morning’s Times 2011 earnings report:

  • 390,000 digital subscribers overall.
  • Growth rate of 20% fourth quarter over third quarter. 
Those are the public numbers. We’re left to extrapolate the dollars. My extrapolation is that the run-rate for the Times’ new digital revenue is about $86 million a year.

He then goes on to discuss some other interesting numbers:

In talking with Paul Smurl, VP of paid products for the Times, this week, I picked up some related datapoints that help us understand what this first year may lead to:


  • 70%+ % of the Times’ print subscribers have now “authenticated.”
  • Churn is less with digital than print customers: Skeptics opined that people might sign up, but then flee after sampling the paid digital product. The opposite appears true: Smurl says digital churn is less than print churn.
  • About 12% of digital buyers live outside the U.S.: That’s a growing number. It’s an indication that the Times is becoming a global news medium.

And my favorite (because it describes me):

Exploiting Sunday: It took about 12 seconds for Times’ readers to figure out the new subscription math, when the company when digital-paid last year. When they did the math and saw they could get the four-pound Sunday paper and “all-digital-access” for $60 less than “all-digital-access” by itself, they took the newsprint. Which stabilized Sunday sales, and the Sunday ad base.

The problem with local paper like The Oregonian who would like to follow this model is that they don't have a suitably differentiated product - there is just too much competition. The problem for consumers is that it is too hard to judge quality past a certain point - what stories are being missed, what stories are not explored deeply enough, and so on? When such information asymmetries exist in markets the result is well known: all the high quality stuff goes away.

Wednesday, February 1, 2012

Bike-o-nomics: Bike Boxes


From the Oregonian's Joseph Rose's Twitter feed (@pdxcommute) I was alerted to this interesting missive about bike boxes from England.  It starts with a brief description of a truck (lorry) on bike accident that is all too fmiliar: a biker in the bike lane going straight and a truck in front slowing to turn right (or in this case left as the Brits are all crazy and drive on the wrong side of the road). Here is a quote from the London Evening Standard:
Mr Moore had been riding on a cycle lane on the inside of queueing traffic and drew level with the tanker’s front axle virtually as it began pulling away. He tried to cycle straight on but was hit by the lorry - which had stopped in the advance cyclist’s “box” - as it turned.

PC Austin said the Highway Code made clear that Mr Moore had the right of way. “Had he [the driver] looked in his mirrors as Mr Moore cycled up, it’s very clear he would have been visible. He is utilising the cycle lane as is right and just.”

But under cross examination from Mr Gummer’s barrister Alexis Dite, PC Austin admitted: “It would have been a pertinent move, as a cyclist coming down the inside of a large goods vehicle, to show some level of caution.”

… Mr Gummer, who has more than 30 years’ experience as a HGV driver and a clean licence, was found not guilty of careless driving after insisting he had checked his mirrors before pulling away. The CCTV images showed he was indicating left as he waited at the lights.

The author of the blog argues that bike boxes are ineffective because the reality on England's small urban streets is that congestion effectively causes them to be ignored.  Though I am not sure that in the case above the bike box matters at all as the light had already changes and the lorry had commenced its left turn - so the queuing purpose of the box was obviated.  The author then goes on to argue that more needs to be don to protect bikers and mentions a Dutch solution:



This seems a pretty good solution but it still has a flaw - the cyclists themselves.  Which is what concerns me about all the efforts to provide more safety for bikes.  Bike boxes, green painted lanes, additional signage can give a false sense of security to bikes.  As in the above incident, a prudent biker would not assume the truck can see them and would slow down.  Cars do this all the time, it is a basic principle of defensive driving: never assume the other cars see you, anticipate you, etc.  In economics terms these lower the perceived cost of asserting ones rights as a biker more than the lower the actual cost.  It is a false sense of security.

In the case above, bikers would still face a similar problem, if they come up upon a right turning car from behind, the car has to identify them and bikers should never assume this is the case.  Also, bikers wishing to turn left have to wait for the next light change - an extra level of patience often not found in urban cyclists.

Which is all to say that I don't understand why we expect engineering to solve all of these problems.  I believe in infrastructure dedicated to bikes but, as in so many other aspects of life, education and public awareness might yield a higher marginal return on the same money spent.  I would guess that almost all drivers and cyclists would fail a test on the basics of the Oregon code that governs bikes in roadways, for example.  We make drivers learn and pass a test before setting them free, but do nothing similar for bikers nor stress the biker-car interface in the Oregon driving manual or test.  Doing something as including bikes in the Oregon drivers test and a public awareness campaign about defensive biking and good biking behavior might do a lot more than gallons of green paint.