Happy New Tax Year

Fred Thompson checks in with a New Years post

With the start of another legislative session, calls for wholesale tax reform are again being heard. Frankly, most state tax-policy specialists are dubious of big reforms. My Georgia State University colleague, Carolyn Bourdeaux, for example, boils the typical reform process down to the following seven steps:

1.     Form a commission

2.     Develop “Principles of Tax Reform”

3.     Hold hearings

4.     Make a proposal based either on the “grass is greener assumption” or the “bold new thinking on taxes notion.”

The former looks like this:

·      If your state does not have an income tax, propose an income tax

·      If your state does not have a retail sales/consumption tax, propose a sales tax 

·      If your state has a corporate income tax, propose a gross receipts tax

·      If your state has a gross receipts tax, propose a corporate income tax

The latter looks like this:

·      If your state relies on personal and/or corporate income taxes, propose the elimination of all exemptions, credits, and deductions

·      If your state relies on retail sales taxes, propose to tax services and internet sales

·      If your state relies on both sales and income taxes, propose to replace them with a value-added tax or mess with local government revenues

5.     If you choose from the first list, your state will probably be no better off than it was before and possibly worse; from the second, you will probably see your proposal go down in flames

6.     Wait 5-10 years until the next fiscal crisis

7.     Repeat.

The fact is that wholesale tax reform is more often than not a mug’s game, especially in Oregon, which has one of the country’s best state and local tax systems. At least that is the consensus among state and local tax specialists. It’s not by any means perfect; what is? But it’s better than what you find elsewhere.

So, instead of talking about wholesale tax reform, what should we talk about? The answers are simple: first, fix the things that need fixing, we know what those things are; second, if the state needs more money, increase the rates on existing taxes; third, funds are inherently limited, set spending priorities and stick to them.

What needs fixing? More than anything else, Patrick Emerson and I have written about the Kicker and its folly here at the Oregon Economics Blog. In what is largely an exemplary state and local tax system, Oregon’s kicker is an embarrassment, or, more correctly, the legislature’s unwillingness to deal with it is simply shameful. There is also the problem of kicking the can down the road with respect to maintaining and upgrading state and local transportation infrastructure, where the best that can be said is that Oregon is probably better than many places, but that still isn’t very good. Moreover, the state has emphasized its needs at the expense of local governments, which, given the network aspects of our transportation grid, is foolishly suboptimal. Finally, the legislature has handed out tens of billions of dollars in business and personal income tax deductions and exemptions, usually with the best of intentions – promoting economic development, conservation, or other worthwhile activities – but tax expenditures are all too often ineffective and excessively costly. Many if not most of these loopholes/subsidies should be repealed (which is, of course, easier to say than to do).

Beyond these measures, if more funds are needed, raise income and business tax rates. By far the worst thing about Measure 97 was the size of the jump it proposed – a 2,500 percent rate increase. It makes sense to consider a more incremental increase in the alternative minimum turnover tax rate, while retaining the offset provision for C-corps.

Boosting taxes requires compromise. Oregonians care about schools and roads, but they are also inherently thrifty, if not actually cheap. At a minimum, support for K-12 and highway spending must be prioritized ahead of other state programs and initiatives. Moreover, cost-saving reforms to the state’s public pension system probably ought to be on the agenda as well. Upholding contracts is one thing, guaranteeing unanticipated windfalls another. If kicker reform, together with other tax increases, are on the table, pension inflation adjustments, especially those which exceed the realized rate of inflation, probably ought to be as well.

Holding broadly valued, highly esteemed programs hostage to special interests is often a winning legislative tactic, but, in the longer run, it’s bad politics, one that the governor acquiesces to at her peril.

Soccernomics: The Green and The Green

It is Friday, I haven't posted in a while and there is lots of serious economic realted stuff to discuss.  So, naturally I am going to talk about soccer!!  As a matter of fact I stayed up way too late watching a grainy pirated-feed of the Timbers (did you know they showed the match in the UAE?) so now it is Friday afternoon and I am over-tired and my post about São Paulo and Buenos Aires will have to wait.

So off we go to talk first about the Soccer

First, turf.  The MLS website (which has undergone a transformation to essentially a news and blog site covering MLS and is quite good) has a long-form piece on the growtrh of turf in US soccer.  Unfortuately for all that length it misses what I think is the most important aspect - it does not discuss at all the aesthetic impact of turf on soccer as a spectator sport.  It asks the question: since turf is becoming so ubiquitious at the youth level will it soon become normal for it to be used at the pro level.  The focus is on players who grow up playing on it be accustomed to it.  I think that matters not one whit.  The point is what it does to the spectator experience and there I am pretty convinced it provides a lesser product.  I prefer to play on turf (except old or worn out turf) becuase the community grass fields are so bad in Portland. And I think they are great for kids. But that does not mean I want to watch pros playing on it.

[NB: Oops, now it is Monday and my unfinished post is still sitting here, so keeping on the soccernomics theme, lets look at the Timbers salaries]

Second, MLS salaries.  Here is the Timbers list:

For all you parents investing thousands of dollars for club soccer for your kids in the hopes that they might one day play for the Timbers and earn millions $35K.  Remember these humble salaries when you are out there cheering - most of these guys are out there for the love of the sport not the riches.

Valeri's salary is not surprising, but I was surprised by Silvestre - didn't think his market value had slipped so far. Takes the sting out of his injury, I suppose.  Piquionne: $150,000 for a rarely used back-up striker...hmmm.  Will Johnson is worth every penny, but I was surprised to see he had raised his value so high.

Ok, there, now I am done.

Futebol no Brasil

Watching Football in Brasil 

The New York Times over the weekend published an article by their travel writer Seth Kugel about watching football in Brazil.  Though I would not call it irresponsible, I would call it a bit reckless.  In it, Kugel urges readers to forgo the guided tours that will take you to a football match and instead dive right in with the torcidas, the supporters groups, and especially try to go for a classico, a match between main rivals.

There are two things wrong with this: one, this is may not be stupid to do, but you should know that you are taking on some risk - much more than he would have you know - especially for those that have no Portuguese.  And I am not sure his three matches are a big enough sample to really give this advice.  Two, there is a middle way: you don't need a guided tour, but if you spend a little more you can sit in good seats in an area that is calm and safe for women and children.  You will still get the full effect of the torcidas, believe me, especially for a rivalry match. This is my suggestion at least.

Why? Well the torcidas are predominately young, male, passionate and drunk.  Need I say more?  Without knowing properly what is going on, what to expect from them and so on you run the risk of getting into a situation that you would rather not be in.  If you do decide to sit with the torcidas, leave that iPhone,wallet, fancy clothes, etc. behind.  Remember that electronics in Brasil go for about twice what they do in the US so that iPhone 5 is worth R$2,400 (about $1,200). You should not take a child. DO carry some money.  The Brasilians I know all make a point of carrying R$25-R$50 in cash in case of a mugger.  No money makes them mad and you risk assault.  This is not to scare anyone, but you should know the risks and I think Kugel does no one any favors downplaying them so much.  He went to matches recently during the less intense state championships, things heat up when the national championships start.

But choose the more expensive seats and everything is generally fine, but as with all crowded places the world over, watch for pickpockets and, again, leave the iPhone behind.  Oh and things might be different in the new stadiums (and probably will be for the World Cup), but in my experience no one pays any attention to their seat assignment.  The more expensive seats are thus physically seperated so just find a free one when you arrive.

All that said, do not come to Brasil and fail to go to a game!  However you go, it will be a fun experience and police have become very good about crowd control before and after the matches.

World Cup in Brasil

The new Macaranã is starting to look close to completion

The World Cup preparations are continuing predictably here in Brasil:  Stadiums are woefully behind schedule and other promised infrastruture projects have long been laid aside.  In fact, São Paulo will not host a confederations cup game, the warm up tournament for the WC.  The biggest city in South America and the one with the most transportation challenges does not get any practice thanks to the Itaquerão stadium being so far behind schedule.  Corruption in the CBF, the Brasilian football authority, is rampant and lots of graft is happening in the name of expediency.

And there are now even quesitons about the stadiums that they are building.  A brand new stadium, built in 2007 in Rio for the Pan-American Games, the Engenhão, has been shut down indefinitely due to fears that the roof will collapse in a strong breeze.

And it is not just the World Cup stadiums that are being built, Gremio has just opened a new stadium (where the grass was not playable initially and a barrier collapsed during a match), and Palmeiras in São Paulo is in the process of building a brand new stadium out of the skeleton of their old one (and just yesterday a worker was killed when a huge concrete section of the old stadium fell).

All this makes me wonder whether in a country lacking in human capital (read: engineers, etc.) can so many stadiums really be built at one time.  Early indications say no.

Still, it will all come off fine in the end, and no one should hesitate to come to Brasil for the World Cup.  I certainly plan to - though perhaps not to São Paulo.   You just need to understand that things here operate a little differently and to allocate much more time than you think to do...just about anything.

Finally here is an amusing aside from the Fonte Nova in Salvador, Bahia where the translations did not quite come off: 'saída' means 'exit.'

Soccernomics: Timbers

Why is it that MLS crests have the little TM on them - even on the game jerseys?
If Barça, ManU, Munich, Milan and others don't need it, do we? Looks cheesy to me. 

Interesting to read (if only from afar) The Oregonian editorial board's take on the MLS Timbers 3 years later.  I find it hard to argue that the Timbers has been anything but a runaway success is just about any metric one uses to measure such things.  But of course there is always those that try and push the economic development engine that is, or is not, professional sports.  I have stated this before that this is not what spectator sports should be sold as. On the other hand there is nothing wrong with providing a city an entertainment option that is clearly valued and valued greatly.  Anyway, all I can say is it is nice to see old Civic Stadium reborn as centerpiece to the city for no other reason than I think it is a cool aspect of the city that I, personally, value.

Now that I have some excuse I can now chat randomly about the Timbers.  [This is, by the way, by popular demand - I have resisted so far to get a better idea of what the Timbers are and about but now I feel as if I am getting to know them better]

Unfortunately, my ability to follow the Timbers in Brazil is severely constrained - I have been able to watch the last two games only through the great and noble efforts of the great citizens of the Philippines, Belarus, Russia and other far flung places that manage to stream live TV on the internets. [Amusingly during Saturday's match with the sounders the person whose TV was being live streamed decided to set his DVR for another game - all of which I watched live and discovered that this person is a Comcast customer in the US]  The first match was televised here on ESPN+ which I don't get but luckily there are bars that do.

Anyway here is my analysis, FWIW.

The team is impressive and much improved over last year's team.  The biggest misconception about playing the 'Barcelona-style' possession game is that it is all about the movement and short passing.  The most under-appreciated aspect of Barcelona is how, when dispossessed of the ball, they immediately press as a team (from Messi on back) and make it incredibly difficult for the other team to work.  They generally win back the ball quickly.  This is a key component of the possession style game and it takes commitment and effort from all 10 field players - one person slagging off leaves gaps and openings that relieves the pressure.  I have been impressed with the Timbers so far on this account.

It is very hard to get teams to play this way for 90 minutes as you are asking a lot of your players.  Bringing in players like Will Johnson who provides the leadership and the effort is key.  It has to come from the field.  Chara has always been this kind of player and, so far at least, Valeri, Nagbe and Ryan Johnson (to name a few) have shown a great deal of industry and effort that shows they are buying in.

Often the way teams try and play against this style is to pack in the box and counterattack (read: Montreal).  The Timbers have shown some frailty in this area and need to improve, but given that Silvestre had little time to get used to Jean-Baptiste, who is young and a bit erratic but looks every bit the real deal, I am not too worried.

The desire to get the outside backs into the attack has hurt them a couple of times.  In my book a balanced attack will push one back up into the attack while the weak side back tucks in for cover.  Something that seemed to be much better against the sounders.

It is really the working through the center of the midfield that stands out to me.  Too often in the last couple of years the ball immediately went out to the wings for a generally poor cross rather than trying to break down the center of the defense (Songo'o at his peak at least showed some willingness to try).  There is a real emphasis on this in this new team, it seems. And Valeri is extremely adept at this and is already showing his class.

The real offensive machine takes a while to work itself out as players get more and more sued to each other.  I expect that the Timbers will, over the course of the next 4 games or so, start to become even more dangerous.

All in all then I give the Timbers an excellent mark so far in the season.  Yes results matter but already they are much more fun to watch and they seem o have much more heart and desire than in previous years.  That said, they still have some big steps to take and the results will have to start coming.

Some other quick thoughts:

Porter seems to be the real deal.  He already has placed his stamp on the team, has them playing exceptionally hard and has done pretty well dealing with the near crisis the center back position has been in (injuries, inexperience, late-arrivals. etc). Putting his faith in Jean-Baptiste is courageous and smart.  He will learn a lot from Silvestre and only get better with more field time.  He got the tactics and adjustments just right against Seattle IMHO, and if not for a blazingly quick and exceptionally well-excecuted counter, we would have shut them out.  He has a clear philosophy and appears, at this point, to be a good man-manager.

On that note, I am waiting to see what he can get out of Alhassan.  He is as talented as you get but still needs to learn to do the dirty work and translate his exceptional technical ability into team-orientated movements.  He is getting better, but I was sad to see him dropped from the Seattle game if only because I love to watch him play and would like to see him successful.

Valeri is the man so far.  Great find.

Wider field is working.  Great to see the Timbers fix a mistake (if not admit it) and make the field wider, it has a noticeable impact on the beauty of the game on the field.  Next up: shift the South goal back about 5 yards and it will be perfect....except for the grass.  Not saying now, but in 5 years that turf has got to go...

Wallace - please don't start calling for him to be in the starting lineup (eg, Geoff Arnold). His energy is great but his technical ability lacks.  He is the perfect super-sub and excels in that role.  It is nice that Porter has identified subs that can come in and inject something into a game.  This was one of the real failings of Timbers past - subs that did nothing to change the game.    Right now Wallace and Valencia both do a lot as subs and make life hard for tiring defenders.

Finally, it is a long and grueling season in the MLS, well see if the Timber can keep up the kind of energy and commitment throughout the year.  I hope Porter is thinking about this as this is a huge difference from the college game.

Oh and the new kit?  Meh.  I didn't mind the new shirts that much but now that I see them in action I think they are a step down from the previous ones.  My kids don't like all the detail that is missing from the youth versions.  Still, they could wear pant suits for all I care as long as they play well...

Go Timbers!

Soccernomics: Growing Grass in Winter

Grow lights at Arsenal

On the day the US unemployment numbers are released, I choose to blog frivolously because I just cannot be moved to again write - recovery, happening but painfully slow.  Then of course I move on to remind folks that the situation in Europe remains painfully dire and so on.  [Actually as an aside, the ongoing crisis in Europe gets lots of press in Brazil, unlike the US where it is of passing interest to the MSM - it shouldn't be]

So let's move on to far less serious things.  I see with some delight that the Timbers have already widened their field to 74 yards.  They are now 74 by 110.  Much better than before but they could use another 5 years in length as well.  When the whole MLS Timbers things was getting underway I worried about the prospect of watching ugly soccer played on a too-small plastic field.  And while I am a season ticket holder and loyal supporter it is very hard for me to recall beautifully-worked goals at Jeld-Wen, most goals come of set plays or sloppy rebounds or, every so often a bit of magic like Nagbe's goal of the season two seasons ago.  In fact most of what I worried about came to pas: despite the ignorant rantings of the Timbers front office the play on the field was sloppy and unattractive.

So now the Timbers are starting to get it (a couple of years too late, but better late than never) and have widened their field.  I am happy with this because, given the rabid fan base (and kudos for having an 96% renewal rate in season tickets), they could very easily not do anything at all to make the on field product better.  So if nothing else good happens, it seems incoming coach Caleb Porter has already affected a positive change.

But if a bigger field is better, it is still plastic.  It is a damn good plastic field to be sure, but no matter how good plastic is, it is not close to grass.  In one of the open houses I attended during the final phase of the construction of Jeld-Wen a statement was made that grass was out of the question as the MAC club blocks the sun for a good part of the year and as such the grass would never grow properly in the north end.  Fortunately, there is now a solution for that and one which is now in use across Europe and even in US soccer and football stadiums: Stadium Grow Lighting.  The Green Bay Packers use it, as do the NY Red Bulls.

Now, there are nights when any grass field is going to have trouble keeping up with the rain in Portland, even with hybrid grass and sophisticated active drainage systems, but nevertheless eventually grass has to happen and the only real excuse left is cost.  But with 15,000+ season ticket holders becoming more and more sophisticated soccer fans, both the financial resources are there and the future demand for a better version of soccer to watch.  Plus you get the added benefit of staging international matches and friendlies with bigger clubs that will not come and play on turf (witness the Sounders hosting of clubs like Chelsea and spending $1 million on a temporary pitch that makes the soccer even worse).

Paulson has said that they will continue to look at grass within the constraints of the usage of the stadium and evolving grass technology.  I think the technology is getting better and I hope that within the next 5 or so years we might see the Timbers make the switch.  

You can begin the debate about the environmental impact of artificial turf versus grass for which you have to apply lots of energy in the form of artificial light...

Soccernomics: Once More About the Pitch

Okay, since it is Friday, I am fried and the Big Game is tomorrow (and I am not referring to the Ducks versus Tennessee Tech), let's revisit one of my favorite topics: the tiny little field at Jeld-Wen.

This is a topic I have ranted about on numerous occasions.  My complaint was not just the size but the size and the turf combo that makes for particularly unattractive soccer.  I was complaining about this as the stadium was being renovated for the arrival of MLS, but soon after MLS came to Portland, comments about the field starting coming in waves: Bruce Arena, Peter Nowak, Robert Warzycha, Frank DeBoer, Dan Gargan, Ben Olsen.  The Timbers were defensive, touchy and not a little bit patronizing in response:

At 70 yards wide, 110 yards long, the pitch at JELD-WEN Field is FIFA certified and meets the governing body’s guidelines as well as those of MLS. Field dimensions are not fixed from one pitch to the next and are a bit like Major League Baseball ballparks in that sense.

The oldest club in English Premier League soccer, Stoke City, play in a stadium with exactly the same dimensions as JELD-WEN. Do other EPL teams complain that it is too small?

Um...why yes, they do.  Stoke didn't need such a small pitch, their stadium is very big, but they did it for strategic reasons so they could win by playing defensively.  This year, in response, the Premier League stopped Stoke from fiddling with their pitch size:

Whereas previously clubs had discretion about the size of their pitch (within quite broad parameters), now they all have to comply with the UEFA standard of 105m by 68m (which, in old money, equates to more or less 115 yards by 74 yds).

So it comes with quite a bit of happiness that the Timbers have announced that they plan to widen the field for next season.  

Portland general manager and interim coach Gavin Wilkinson said the team will widen the field at Jeld-Wen Field for the 2013 season.

The plan is to add two yards on each side of the field, bringing the dimensions to 74 yards-by-110 yards.

"It's something that would be a natural development for us as a team," said Wilkinson, who was named coach of the week by MLSSoccer.com after the Timbers 2-1 win against Vancouver Saturday.

"Coming in as an expansion team, we wanted a tighter area with which to play, to feed off the emotion."

The current field dimensions is one of the smallest in MLS and has drawn some criticism from opponents.

Wilkinson said the move is to help give the players more room for creativity and athleticism, but the plan was in motion before the search for a new coach had started.

It comes with quite a bit of consternation, however, that they have chosen to dissemble and make it sound like this was the plan all along and its all part of a long term scheme.  Bullshit.  They even made their practice fields the same small size (which really baffles as every other field they play on ion MLS is quite a bit larger - no wonder they can't win on the road).  What they have finally done is get over their defensiveness and listen to what a ton of very knowledgable people have been saying about their pitch.  I am sure they have not been listening to the ignorant people like me but I stick to my assertion that a small artificial pitch makes for unattractive soccer. I accept their apology.

Unfortunately they will only make it wider, not longer because they sunk the goalposts in concrete and I assume, until they replace the turf, moving them is not an option.  This is a shame, because the field needs to be bigger all around: 75 x 115 is ideal.  But it also goes to show how no one was thinking of a bigger field from the start.

Speaking of the pitch, it is a shame it has to be turf (and I have come around long ago to the notion that it does).  Watching the US national team in play in a similar sized field in Columbus just reminds one of the types of events that could take place in Portland if there was a grass field.  Maybe one day they'll figure it out.  

Soccernomics: Timbers Practice Facility and Field Size

Photo Credit: Bruce Ely / The Oregonian

Because it is Friday and Timbers game-day is tomorrow I shall cease to worry about the economy and its many woes and instead turn to much sunnier pursuits (especially tomorrow if the weather report is to be believed) - soccer!

So the Timbers unveiled their training facility to the media yesterday and it looks great.  I hope it will be a big help in recruiting and retaining players.  I was also delighted to read last week that they hired a conditioning coach as fitness seems to be a real problem for the Timbers - lack of energy late in games has been a killer.

Anyway the facility looks great and it seems to be a nice public/private partnership - as someone who plays soccer and who has two soccer playing boys, any new turf field in the Portland area is something to celebrate.  But I thought this passage from Geoff Arnold's story on the facility was incredible:

One of the highlights of the facility are the two full size soccer fields - a grass field designated for exclusive use by the Timbers and a second artificial turf field that will be used by the public. The dimensions of each practice field is the same - 70x110 yards - as Jeld-Wen Field.

The whole idea of a grass field is to be able to better prepare for playing the entire MLS away from home (with the exception of Seattle, Vancouver and New England who play on turf) just about all of whom have much bigger fields.  Why don't you have a practice grass field that is of similar dimensions to the actual pitches you'll be playing on?  Odd.  Though any pitch between 70 and 80 yards wide and 110 and 120 yards long is within FIFA regulations, the modern standard is 75 x 115.  Almost all new stadiums built for soccer are using this standard.  Of course the Timbers have opted to make their pitch as small as is allowed by FIFA.  Doesn't sound like a lot but the difference is 12% more space to play in, which is a lot.

What is also interesting is that you hear a lot about how the Timbers want to utilize their speed to their advantage.  But this completely contrary to the size of their pitch.  With such a small area in which to work there just aren't the spaces to run on to.  Now, you can be like the Arsenal of the late 1990s and 2000s, who played on a tiny pitch at Highbury but played a quick passing game which the present day Timbers are trying to emulate.  But this is speed in a very different sense (quick passing and movement in confined spaces and quickness of thought) and requires a supremely high degree of technical ability.  Most importantly it requires exceptionally talented and creative midfielders like Pires, Fabregas and Ljungberg and a withdrawn striker of the Dennis Bergkamp type.  Just watch tomorrow how slowly the Timber switch the ball through the back or through the midfield and you'll see what I am talking about.

In fact most teams that play on a small pitch play a compact defensive style that relies on counter-attacks.  Stoke City famously shrunk their pitch to be able to compete better in the Premiership with a team of limited skill and flair so it is interesting that the Timbers are trying to emphasize skill and flair and yet maintain a tiny little pitch.  Perhaps it is possible to end up playing the Arsenal way in Portland, but I doubt the ability of an MLS team to be able to pay enough to attract a critical mass of players at that level.  I think we are already seeing how a Franck Songo'o, who possesses great technical ability, could end up at the Timbers after a trial: his play and passion are seemingly very inconsistent - at least so far.  Too early to judge, but...

I have accepted that grass is just not going to work at Jeld-Wen but I fail to understand the Timbers dogged insistence on such a small field.  But this is all an exercise in nit-picking.  The Timbers are great the stadium is great and it is great to have them in MLS.  Let's hope they can put in a great performance tomorrow and get back to winning ways.

Soccernomics: Size Matters Redux

Emirates Stadium - Home of the Arsenal

I see the Timbers are getting a little touchy about the size of their field:

Portland are 5-1 in league play at their home. And yet, over the past month, a couple of opposing coaches have publicly taken issue with JELD-WEN Field’s size and suggested that it plays into the Timbers’ favor.

“The pitch, because it’s a little bit too small, when you watch the games they played at home, it’s a little pinball,” Philadelphia Union coach Peter Nowak told local reporters prior to the May 6 game in Portland. “[The Timbers] press the other team, and we’ve got to figure out a good plan for that.”

Too small?

At 70 yards wide, 110 yards long, the pitch at JELD-WEN Field is FIFA certified and meets the governing body’s guidelines as well as those of MLS. Field dimensions are not fixed from one pitch to the next and are a bit like Major League Baseball ballparks in that sense.

The oldest club in English Premier League soccer, Stoke City, play in a stadium with exactly the same dimensions as JELD-WEN. Do other EPL teams complain that it is too small?

Less than two weeks after Nowak brought it up, Columbus Crew coach Robert Warzycha chimed in with his thoughts on Portland’s success at home.

“More than anything, it’s the [artificial] turf and the field dimensions,” Warzycha told the Columbus Dispatch. “And the way they play at home. They’re scoring on set pieces.”

For the record, Portland did score on set pieces to beat both Philadelphia and Columbus. But was the size of the field really working against the opponent?

At JELD-WEN Field, the dimensions are dictated to some degree by the configuration of a stadium footprint that dates to 1926. It also has to do with sight lines for spectators. (From the press box, it is difficult to see the near touchline with out standing up.)

They doth protest too much.  Of course the quote from Ben Olsen that was in my last post was from the coach of a winning team so there is no suggestion of making excuses with him.

Anyway, what strikes me in all of this is the explanation that sight lines are to blame, but not from the stands mind, from the press box!  Are you serious?  You would shrink your field just so those in the press box don't have to stand up?!?  That is so lame.

And by the way, bringing up Stoke City is neither here nor there, but since they did, there is a big difference between the level of play in the Premier League and the MLS for one, and for two Stoke City is grass so the size is not amplified by a fast bouncy plastic surface.  I don't believe that any other Premier League team has a pitch smaller than the 75x110 yards (the modern stadium standard).  Arsenal did have a Jeld-Wen size field and used to be known for cynical defensive football, but then Arsene Wenger came in and instilled a possession, quick passing style of play utilizing world class players who could pull it off.  Still, when they built their new stadium they went to 75x115.

Just sayin'

On the Provision of Public Goods: The New OSU Outdoor Recreation Complex

Public goods like parks, police and fire protection and roads, are under-provided by free markets thanks in large part to the free-rider problem.  If you can exclude non-payers from using them, people will opt to forego payment and yet use the good that others have paid for.  Witness Oregon Public Radio which, as I mentioned before, has only 10% of its listeners making voluntary contributions. This is why government is generally involved in the provision of such goods.  But even so it can be hard - witness the difficulty in getting local governments to pony up for the Sellwood Bridge - as there are always some who value the good more and others who value it less and wonder why they are being asked to share in the burden.

Which makes it remarkable that the students of Oregon State University voted to assess an extra fee on themselves in order to pay for the new outdoor recreation complex which I saw on my drive in this morning has been named "Student Legacy Field."  The fields are right in the center of campus and within easy reach of all of the dormitory buildings. I suspect part of the ability of the students to get the fee past has to do with the fact that current students are assessing a fee on future generations of students, but nevertheless I think it is a tremendously good investment.

Where once there was grass fields - beautiful yes, but totally unusable for a big chunk of the school year - there are now turf fields dedicated to student and intramural use that will help keep students active and fit year round.  I would be delighted as a student and this would be a big selling point as a prospective student.  It does this professors heart good to see soccer players out at 8am in the rain running around and getting exercise.

Throw in some volleyball courts, a renovated MacAlexander Fieldhouse and new tennis courts and you have a public good that is going to have huge social welfare benefits for the entire OSU community.

Well done students.

Moles are not Rational

My experiment with the economics of moles has ended, predictably, badly.  By slightly raising the marginal cost of lining in my yard, I had hoped convince my subterranean friend by use of an annoying emitter of sound waves to seek out more pleasant pastures...like my neighbor's yard.  But alas, not only has my mole remained after three weeks of use, but he is quite happily continuing to dig within a few feet of the 'sonic spike' itself.  The picture above is not the best, but these are two new mole mounds with the solar panel of the 'sonic spike' visible at the edge of the grass.

Clearly my mole has not had an Econ 101 class and doesn't understand decisions at the margin.

But I have made a scientific breakthrough!  Moles are not rational creatures.

Addendum: When you post an entry, Blogger informs you of the having successfully posted on a separate page in which they embed a Google Ad clearly targeted by keywords from your post.  Ironically, the ad associated with this post was headlined" "SONIC MOLE CHASERS WORK" and clicking through takes you here.  You have been warned.

New Waterfront Amphitheater?

I have often wondered why the Waterfront Blues Festival doesn't float a big barge over to the park as a stage and use the natural contour of the land as a perfect amphitheater.  Apparently I am not alone, but instead of a barge, a group is proposing a complete makeover with a lot of concrete and a permanent stage.  Hmmm...keep the grass and maybe we have something.

But where will the dragon boats land?  This is the only water level shoreline downtown.

Economist's Notebook: The Economics of Moles

[I resisted the temptation to call it Mole-o-nomics, aren't you all proud of me?]

This summer a mole (I shall henceforth call him Morris, though in truth I know not its name nor gender) decided to make himself at home in my back yard.   At first I was okay with this development, feeling I could live in harmony with my subterranean little friend.  And at first, this symbiotic arrangement seemed to be working out just fine - a couple of mole mounds appeared, but only one in the grass and I tended to all of them easily.  But then old Morris started to expand his home at the expense of my yard that I had only just completely rehabilitated.  Not really being a good guest this Morris, thought I. And recently he has really gone into overdrive digging up my yard and making a general mess of my lawn.

So what to do?  Well. I went down to the local hardware store to look for mole traps but I quickly began to have serious misgivings as I looked at the description of the violence promised to Morris.  These traps are also difficult to set (requiring lots of digging and careful placement) in addition to their being quite horrific.  Inflicting such horrors on poor old Morris seemed to be cosmically quesitonable, after all Morris is simply being a mole.

But then the good salesperson introduced me to the 'sonic spike.'  This is a device that sends out sonic waves in the ground and claims that this will drive away moles.  My first instinct is that this type of application of technology never works and a quick check of the intertubes reveals less than satisfied customers.  Nevertheless, the manager of the hardware store was claimed to have personally used them successfully in my neighborhood so I figured it was worth a try.

Besides, this approach has economics on its side.   What I mean by this is that the principle of the sonic spike is to make life in my yard not unbearable but marginally less pleasant than other places.  In economics we know that economic decisions are made at the margin.  In other words, Morris doesn't think 'well the benefits of Emerson's yard outweigh the costs even with this annoying noise (which is probably true), so I'll stay.'  No, Morris, being subject to the same incentives that influence us superterranean beings, thinks 'hmmm...here are two yards seperated only by a fence, but one is just slightly more annoying so I think I'll go to the more peaceful one.'  So, assuming I am right about the response of moles to incentives, it'll work.  But even if it doesn't, it makes for a good economics experiment.

Now, you have by now seen the er...moral ambiguity associated with this plan.  My mole strategy has an external cost that will be born by my neighbors: I am not removing the mole, only hoping to get it to move next door.  This is an example of a classic externality problem: if a the total cost of an activitiy is not born by the actor, too much will be done.  I am a good self-interested rational agent, and since I don't have to pay the cost of my neighbors' mole problem, I do not figure it into my calculation of relevant costs and benefits, so I choose the spike.

However, a bigger problem arises if all the neighbors decide on the same mole strategy.  If we all plant sonic spikes, the old Morris will think that every yard is as good as the next and whatever made him choose mine will cause him to chose it again. 

So I am not convinced it is the solution to my problem (and there is the downside of little high-pitched hums that eminate from the spike about every 30 seconds), but it'll be interesting if it is, at least for now.  And it keeps me karmically safe in the interim.

Failing that I may go with what seems the next best route: stick a hose from the tailpipe of my car into the ground and gas old Morris to death.  My big quesiton here is how do you get the car to not stall out due to clogging the tailpipe - isn't this similar to the old banana in the tailpipe trick?

Soccernomics: The Timbers, The Beavers and Paulson

Ross William Hamilton/The Oregonian

The folks that think that the PGE Park makeover for soccer is folly must believe that Merritt Paulson is a naive rube. I think they misunderestimate him. Paulson appears to be a sharp businessperson and, from my small sample of personal interactions with the Timbers front office, he appears to have created an top-class organization, at least on the business end of the deal. I recently purchased my season tickets and had a few questions and concerns was very impressed by the response I got. I even complained recently about the abrupt logo change after buying the boy a t-shirt and got a very professional and courteous response from the company contracted to sell Timbers merchandise.  I think Merritt saw an opportunity in soccer and Portland and has been shrewd in exploiting it and navigating the treacherous waters of local politics.

The news that Paulson is likely selling the Beavers comes as no surprise, with no future in Portland and soccer in the ascendancy, Pauslon's best bet right now is to focus on the Timbers. But don't think he is taking a bath on his Beavers investment: he bought the Beavers and Timbers together in 2007 reportedly for around $16 million and is in negotiations to sell off the Beavers alone for $20 to $25 million. Not bad  for a three year ROI - shrewd indeed.

I, for one, will be sad to see them go and sad at the loss of the lazy summer evenings and afternoons in PGE Park watching baseball.  It is great to know you can walk up, buy a general admission ticket and find a great seat.  But the fact is that PGE Park just doesn't work for baseball in Portland but is great for soccer and soccer is on the rise.  The World Cup ratings bonanza experienced by ESPN and Univision evidences a growing appetite for the sport in the US.  Here is a great recent article from Fortune about the Timbers and Beavers:

FORTUNE -- Portland, Ore. is the city of a thousand nicknames. "Stumptown," perhaps its oldest, harkens back to the region's logging roots. "Beervana," a nod to the city's renowned craft brew scene, is another favorite. Rumor has it, violent protests prompted George H. W. Bush's staff to christen the city "Little Beirut." But if Henry Merritt Paulson III has his way, "Soccer City USA," may become Portland's next big moniker.

The son of former Treasury secretary Henry Paulson, Merritt, who goes by his middle name, bet big on Portland's underserved sports market in 2007, when he convinced his family to buy the AAA baseball Portland Beavers and minor league soccer Portland Timbers for an estimated $16 million. Four years later, the investment may begin paying off when, riding the wave of post-World Cup popularity, the Timbers become Major League Soccer's 18th franchise in 2011, and Paulson, a 37-year-old former NBA and HBO executive, becomes the league's youngest owner.

"The timing is terrific," says Paulson, overlooking the field from his PGE Park office. Tall, thin, and with a collection of baseball and soccer gear strewn about his office, he looks like he could rip off a batting practice session at any moment -- but the constant ding of emails hitting his inbox shows how unlikely that is.

"Anybody who's doubts soccer's relevance need only look at the ratings and the attention that the World Cup has received here in the states," he says. "The awareness and the interest is at a high point."

On the other hand, interest in Portland Beavers baseball couldn't be any lower. Since being named a charter member of the Pacific Coast League in 1903, the team has existed as various franchises under a slew of different owners, and it has been affiliated with an array of major league teams.

Currently, the Beavers are the top farm team for the first place San Diego Padres. But on this day, most of the Beavers' 19,566 seats will sit empty as fewer than 2,500 fans tip the turnstiles to watch the team's ninth inning rally fall short. The Beavers have played in multi-use PGE Park since 1956, and currently share the stadium with the Timbers. But next year, under the MLS's $35 million expansion agreement, they will be evicted. The MLS mandates that their teams play in soccer-specific stadiums. So after $31 million of public and private-funded renovations, there will be a new pitch in Portland, but it won't be for baseball.

MLS's Game Plan

The MLS's edict is grounded in savvy business planning, as the league hopes to dodge financial troubles that have plagued past, now-defunct American soccer leagues. "The MLS has built itself for the long haul," says Paulson. "It's been fiscally conservative and prudent, as well as successful in developing soccer specific venues, which is crucial." According to MLS Commissioner Don Garber, soccer-specific stadiums are necessary to maximize revenue through premium seating, television-optimized sight lines, scheduling priority, and increased advertising opportunities, including naming rights.

Considering the league's track record, it's hard to argue with Garber's recommendations. Founded with the proceeds of the U.S.-hosted 1994 World Cup, the league began with ten teams in 1996 and will number 20 teams by 2012. In 2007, MLS also saw considerable growth after the 2006 World Cup, with David Beckham signing with the Los Angeles Galaxy, the signing of a 10 year $100 million clothing and equipment deal with Adidas, and with Toronto -- one of its most profitable teams -- joining the league.

Expansion fees, which are somewhat commensurate with team values, have also climbed in recent years. For example, Toronto payed $10 million to join MLS in 2007, while the Seattle Sounders paid $30 million to join in 2010. Montreal, the next team to join after Portland and Vancouver, B.C. launch in 2011, will pay $40 million to become a member in 2012. The fees give teams rights to operate a club in their market, the opportunity to join the board of governors, and an ownership share in MLS's marketing arm.

If Seattle's success is any indication, the potential for Portland and Vancouver is promising. The Sounders were just named Professional Sports Team of the Year by Sports Business Journal, beating competition from the NBA, NFL, NHL and MLB. Partially owned by Paul Allen, the team plays at the Microsoft (MSFT, Fortune 500) co-founder's Qwest Field, and averaged 30,000 fans per home game in their 2009 debut season. In 2010, the stadium expanded its soccer capacity to nearly 36,000 seats, and has continued to sell out every match along the way. "In my view, this is one of the most successful launches of a pro sports franchise ever," says Garber.

With about 20,000 seats, Portland can't match Seattle's attendance, but the league still expects it to perform well and hopes some Pacific Northwest rubs off on the team. As a minor league soccer squad, they already pack the stadium and recently sold out a "friendly" exhibition match against Seattle in just six days.

A loud, raucous group calling themselves "the Timbers Army" occupies an entire section of PGE Park and stays on its feet the entire game. Away from the pitch, Adidas makes its North America headquarters in North Portland while Nike's (NKE, Fortune 500) worldwide nerve center is in nearby Beaverton. Local youth soccer participation levels are through the roof, and the area's televised soccer viewing is among the highest in the nation, says Garber. "There's clearly something very special taking place in the Pacific Northwest as it relates to soccer," he adds.

[Read the rest at Fortune]

The lingering question is why hasn't Portland supported the Beavers in greater numbers? Theories abound about whether the city is a 'baseball' town and I don't really know the answer, but decent MLB ratings on Portland TV suggest something else about the reality of professional sports in this media saturated age: when the best is easily available in your home, going out to watch minor league baseball feels like a compromise - especially for a town the size of Portland.  I just don't think minor league sports work well in big cities anymore.  I have a sense that a MLB team would be well-supported, but who knows?  We'll probably never find out.

Anyway, as for me, I have my Timbers tickets and am looking forward to the atmosphere that the new PGE Park will provide for soccer and for never-ending advocacy of moving the small time stuff out so that the Timbers can play on grass. I will miss the Beavers though and those lazy nights at the Park with friends and kids.

Beeronomics: The Hopopotamus™ Debuts and Time Inconsistent Preferences

Despite my claims that it is the Best Beer in the History of the World™, this the first iteration of The Hopopotamus™is good but could use some fine tuning.  The hop alchemy yielded stong citrus but fewer floral notes than I had hoped.  The yeast (Wyeast American Ale II was a wonder, hungry and effective - the final gravity of 1.010) was a good choice and I am pleased with the color and bitterness. But the hops don't sing in perfect harmony.  I slightly under-primed the bottles intentionally to give it a bit of a cask mouthfeel.  And it is definitely a beer that does not like to be served too cold.

UPDATE: Serving it at appropriate temperature transforms the beer.  It is really quite tasty when not chilled beyond recognition.  My fridge seems to have gone a bit hyperactive, once I solved the temp problem the beer really shined.  I am very pleased.  

I have an idea of making the The Hopopotamus™ as an annual experiment in hop alchemy.  Each year the same recipe save for a new mix of many hop varieties.  

Anyway, The Hopopotamus™ made me think of another way in which I fail to act like a textbook rational economic agent: I have a hoarding problem and therefore "time-inconsistent preferences.

...

Do you ever get caught up in the moment - at a pub say - and have that extra beer that later you regret ("I really didn't need that last one and now I have a headache...")? These types of indulgences that lead to later regret - something you would do differently if you had the chance to do it again - are examples of what economists like to call "time-inconsistent preferences."

It applies to procrastination as well, putting of an unpleasant task (like mowing the lawn, say) and then having to do it later under worse conditions (longer grass) is another type of time-inconsistent preference.  

What the term refers to technically is when people make mistakes in their choices because they put too much weight on the present. If people acted like computers they would very rationally take into account all future time periods appropriately and we would never regret our actions (or at least those with predictable outcomes).

For me this behavior manifests itself in many ways but one of the most apparent is my tendency to covet.  I hate to consume something that I enjoy because once I do, I know it will be gone. This could be rational if I get enjoyment in the anticipation and in the consumption - by delaying consumption I could maximize the total enjoyment I get for the good. But for me it becomes a burden, delaying until finally to good itself degrades, or the optimal moment passes. In fact this why, after a period where I was building up a collection, I stopped cellaring wine. I could never deal with the whole waiting until the optimal time problem.

Well, this same type of time-inconsistent behavior bedevils me in beer brewing as well. Last weekend The Hopopotamus™ was finally ready for its debut, and the result is great.  But now I have the problem of coveting it - I want to drink it and it is fresh and ready now, it will only get worse through time, but I don't want to reach the day when it is all gone. So I find excuses not to drink it and eventually will have a number of bottles in the back of the fridge that are way past their sell-by date so to speak. I will then regret coveting it so much and wish I had been less stingy with it early.  

At least I have an understanding and a name for my disorder.

Soccernomics: Grass?

The announcement that the Portland Timbers will take on English Premier League side Manchester City at Merlo Field at the University of Portland rather than at PGE Park makes me suspect that Man City would not agree to play on a turf field.   Merlo field holds less than 5,000 spectators meaning the opportunity cost of playing there is probably about 10,000 lost ticket sales.

One hopes that these economic realities will eventually cause the Timbers to try and facilitate a switch to grass, but it seems like it will take a good alternative for high school football to do so.