Actually, I think I can phrase this more clearly without bothering with any of the nitty gritty details:

Street parking is a shared public resource. If a shared resource is cheap or free, people will hog that resource. That's fine until we run out of that resource. Then, resource hogs crowd out others and you get a lot of people who don't get to use that resource at all. That's where putting a price on scarce resources comes in. It makes people think about their usage and make rational choices about whether it's important for them to keep using it while others wait their turn.

As you increase the price, fewer people will hog the resource. More and more people will get a chance to use it, and they will use it only for the time they really need it. Yes, you can set the price too high and end up with the resource being underutilized, but that's not the problem San Francisco has. With properly computer-controlled pricing, they can avoid ever having that problem. With proper pricing, you get the largest number of people getting a chance to use the shared resource, and they use it when it's important to them, not just because it's cheap and convenient.

If that's what I meant, that is what I would have said. I did not. You keep making things up and then expecting me to defend them.

There's a reason I used a question mark in my attempted restatement of your position. I'm trying to clarify Because the phrase "ten percent of your users" is kind of ambiguous from the perspective of how a time shared resource is utilized.

Let me rephrase more precisely: "Number of occupied parking spaces" and "time spent in a space by the median parking consumer" are both random variables whose statistical properties change during the day. What does it mean to lose ten percent of your users in that sense? Does it mean that there will be ten percent fewer events of the type "person enters and leaves a parking space?" If so, I disagree with the notion that properly set prices will cause this to happen. If something else, please state it clearly.

More to the point: What are the properties of a set of parking spaces when they're used at maximum efficiency? Is turnover maximized? Is the time the average space spends in the "empty" state minimized? Is time spent looking for a space minimized? I would argue that high turnover and low search times while keeping most of the spaces full most of the time should be the goal. If search times are high, prices are too low. If search times are low because the spaces are mostly empty, prices are too high.

They're not going to feed the meter for another hour unless they really need it, and at that point effect 1 comes into play.

So that's effect number 1, which you and I agree on. You just ignored the more basic effect of (2): that increased prices will reduce the number of hours people buy in the first place. Do we disagree that (2) will happen at all, or do you think that the effect of (1) will dominate? Because in the actual real measured world, (2) dominates (1).

If I have paid an extreme amount (in my opinion) for a certain time on a meter, then I am less willing to just walk away from that investment.

You're also less willing to feed unnecessary amounts of money into the meter in the first place.

If I pay a quarter for an hour at a meter and my business is done in ten minutes, then I don't feel bad about just leaving, opening up the space for the next user. If I pay a dollar for the same amount of time, I'm more likely to see 50 minutes left on the meter when I get done and think "I'm already here, I might as well do something else."

You have a very strange notion of how parking meters work. I've never seen a meter that charges $1 per hour and has a minimum 1 hour purchase. At every meter I've ever seen, you can purchase a few minutes. If you know that you're likely to spend 10 minutes in the store, why would you buy an hour of time? Maybe you would if it only cost a quarter. But if it cost, say $10, you'd probably do what most people do and pay for $2.50 for 15 minutes, do your business, and get out. That's how parking meters really work, especially in a city like SF with the most advanced meters in the country, and especially when you're implementing congestion pricing with the explicit goal of decreasing loiter times.

It is simply absurd to price something to deliberately reduce demand and then deny that you've reduced demand, or at least tried to.

For somebody who screams about "making things up" you've certainly jumped to a weird conclusion about what I'm saying. Raising the price will reduce demand (supply, actually, according to the classic microeconomics terminology) in the sense that it will reduce willingness to occupy the space for a given amount of time. That will have a few effects:

1) Increased turnover.
2) Because of (1), we get increased probability that at any point in time, there will be an empty space.
3) Because of (2), we get decreased time spent looking for spaces, which reduces traffic congestion, driver frustration, and uncertainty about whether you'll be able to find parking when you need it.

If the price is set properly, the spaces should still be mostly full most of the time, so we're not wasting parking spaces by leaving them empty. We've just decreased the amount of time any one person spends in a space, which seems to be what you and I both want. If your thought experiment has increased prices decreasing turnover, it's conflicting with real world experiments, so there's probably something wrong with it.

Your assumption seems to be that a public resource must be priced at a rate to limit demand to what is available, thus optimizing return on investment, not just to cover the costs of providing that service.

It's not at all about optimizing return on investment. It's about efficient allocation of scarce resources and the problems that are created when people try to overconsume those scarce resources. Overcrowded parking is a huge expense in dense cities because people create congestion while driving around looking for spots. The SF Park system was able to dynamically set prices so that there was at least one open space for every N spaces. It kept turnover high and it ensured that people who really need spaces will be able to get them without much cruising. It also distributed parking more uniformly--dynamic pricing encouraged people to park in less busy areas instead of constantly driving around the most congested ones.

With dynamic pricing, really busy spaces cost a lot, keeping people there for short periods of time. Any jackass who tries to occupy the "last" space in order to ransom it off will find that he's paying an exorbitant rate for it and that he's competing with empty spaces that pop up all around him because of the increased turnover. It becomes a money-losing activity.

The number of users of parking spaces will be many times the number of spaces. Each space will be used multiple times a day.

You can add "at any given time" to that to make the statement an accurate model. And assuming you're able to change pricing dynamically (which SF is), it's the correct model to be using. If you can't change pricing dynamically, you're in a bit of a pickle because the price at the beginning of the workday will obviously be totally wrong at, say 10:30pm.

If you force ten percent of those users to go elsewhere because the price is too high, you've lost ten percent of your users.

When you say "lost ten percent of your users", do you mean that if we randomly sample the number of spaces occupied, we'll find 10% of them empty? What's the "correct" number of occupied spaces, given the fact that having drivers driving around without access to empty spaces comes with a cost?

If you make the price high enough on an hour meter, you will increase the number of people who will not simply drive away from time left on the meter. They've paid for an hour, they might as well use it. That reduces the number of users as well.

This, I think is where your model breaks. You've just described a market in which raising the price increases the amount of the resource a consumer is willing to consume. Those markets exist, but they're extremely rare exceptions, and I don't think street parking is one of them. The real model goes more like this:

1) As you say, people who have time left on the meter might be marginally more likely to use it instead of leave early. That has a minor negative effect on turnover.
2) People will put much less time on the meter to begin with because spending time parked in an expensive space costs money. They'll plan to get in and out, minimizing their exposure to meter costs. This has a significant positive effect on turnover.

The net effect should be that (2) dominates (1). Increasing the price should increase turnover significantly. That's what reserach shows, and it's what basic economics predicts.

And, of course, you will lose completely those who would have tried coming downtown to shop if the cost of parking had not become too high to justify it.

By going the other direction, you lose customers who would be willing to pay to park but who don't venture into the area because, "parking is a nightmare." There's no free lunch there. Creating a situation in which a resource is used to its maximum and is rationed by a mixture of luck and waiting in line deters people who aren't willing to drive around in gridlocked streets for an hour looking for a space just as much as a few extra bucks at the meter deters people who don't want to pay a few bucks.

Can you show me where I said it did? Your straw man is very flimsy.

I was mistaken. Most people erroneously think that the number of parking space user-hours isn't limited by the number of parking spaces and that they can somehow get more user-hours out of a space by making the space free. Your error was in thinking that lower prices increase parking space turnover. That's also wrong.

You're right, that isn't the problem here. The problem here is inflating the prices and driving people away, not trying to attract more. And the original problem is increasing the price by running a private auction for a public resource.

The very existence of that auction is due to the fact that SF is underpricing its parking spaces. With their advanced meters, they could very easily just let the price float to market rates. That would have a few effects:

1) The excess revenue earned by the auctioneers would go to the city.
2) Parking would be maintained at optimal density and turnover.
3) This app would go away completely and we could all sleep soundly knowing that nobody had an incentive to ransom spaces, and SF wouldn't have to spend a penny on policing the issue.

Right. That's just dumb. If parking is nearly full but with spaces open here and there, pricing is already optimized. People who are just casually looking for parking are clearly deterred enough to avoid it when possible, most of the spaces aren't being wasted, and there's still enough parking for people who really need it to jump in without cruising for 30 minutes first. That's the holy grail of parking rates. Jacking up the rates won't get you more revenue and lowering rates won't appreciably increase the number of people parking. Anybody who cranks the knob over in either direction clearly doesn't understand how these things are supposed to work.

I guess they could always make more money by lowering rates to fill all of the spaces and then setting really short limits on how long you can park for in order to increase parking ticket revenue (I've seen this in a lot of cities). One parking citation pays more than a full parking space all day, right? But that only works in cities where dicking around with parking is a luxury they actually have. In major urban areas like SF and NY, parking is a serious business. If you're optimizing for anything other than the maximization of space utilization and the minimization of search time, you're causing all sorts of other ancillary problems that just aren't worth whatever revenue you think you're getting.

The very act of pricing public parking to reduce demand means you are reducing demand BY CHOICE, so you really can't argue that you haven't reduced the number of users.

That's not really true. The number of users equals the lesser of the number of people willing to pay for the spaces and the number of spaces. When it's busy (like we're talking about with congestion pricing), the number of spaces is the limiting factor. Increasing the price doesn't reduce the number of cars in spaces until you crank the price way up. It just reduces the number of people cruising around and queueing up for spaces.

Conversely, "free parking" doesn't mean you can cram more cars into the same number of spaces. If you've got empty spaces, sure, you can get more people in by lowering the price. But that's not the problem here.

SF is apparently no longer using the sensors, which is the root of the problem. When the sensors were there, the system was able to keep prices high enough to ensure that there was at least one empty space on most blocks. Under that regime, holding the last space "hostage" would have been prohibitively expensive. They'd essentially be paying the ransom rate in order to demand the ransom.

A few years ago, SF installed smart meters with sensors to do exactly this. Rates were set dynamically with the goal of keeping at least one space open on every block of public parking. It worked really well. There were piles of data generated during the trial run. It appears to have reduced cruising for spaces substantially (which was one of the key goals). They had a map of the most and least expensive places to park so people could adjust their plans accordingly. They're not using the sensors anymore (something about maintenance cost), but prices do change by the hour. If they just kept it up (and expanded it to cover all public parking), this problem would go away completely and the world would be a better place.

Anyway:

Many people at the cities ages or industrial areas are low income workers, so a market rate parking can have a real financial dent. The public transportation response is a non starter until that are has good public transportation.

There's a *ton* of options for public transportation in SF. People who drive in and try to park in the most congested areas are doing so by choice.

I know a lot of low income worker who basically lost 2 hours worth of wages. A 1/4 of the day just to park. What happened is they ended up parking farther away, in a more sketchier area.

That's a very strange result. On the one hand, they were easily getting parking before the meter rates were raised. Now, the meter rates are greater than or equal to 1/4 of a day's wages (otherwise they'd just park at the meter and pay the price). Why are the rates so high if the spaces weren't contested to begin with? Are the spaces now sitting empty?

How do you determine market rate for after work hours parking?

Very easily. You have an algorithm that steadily raises prices as the parking spaces fill up and lower them as spaces remain vacant with the goal of keeping N spaces empty per block of spaces. It works brilliantly (and, BTW, results in some parking meters charging only pennies per day if the place is not busy).

Free parking means more people will shop and enjoy the entertainment, so putting a charge cost business money.

That implies that free parking magically means more parking. If the spaces are full, the same number of people are there. They may be out a few extra bucks for parking, but making the parking free doesn't suddenly allow you to put 2 gallons of water into a 1 gallon bucket.

Even if it comes at the cost of congestion and extra pollution while people loiter around looking for spaces? Even if it's in everybody's best interest for more people to use public transit? Are we really going to cause massive inefficiency and gridlock because we're worried about people who drive their own cars into the city but are too "poor" to afford a few extra dollars to park them?

It's also worth remembering that with congestion pricing, there were plenty of places where parking was really cheap because it wasn't very congested. I'm having a hard time shedding a tear for somebody who doesn't take public transit, doesn't want to park where it's cheap, and then complains that they don't have the money to park in the city.

They have the SF Park system with smart meters. They've shut down the sensors but are still doing some congestion pricing. If they just turned the sensors back on and continued to roll out smart meters to the whole city, this app would become a non-issue. The fact that it exists at all is simply an indication that parking spaces aren't priced correctly. SF Park was a huge success. They just need to keep pushing it.

I generally agree. On a related note, on the "not a subsidy but still a hidden cost" side, I think there's a fair argument to be made that the cost of oil doesn't include the amount of money we spend on military efforts to bring "stability" to oil producing regions by bombing them, but that's less of a subsidy and more a question of policy costs not counting against a product when we evaluate the "cost of oil" versus the "cost of solar." Of course, once could legitimately ask whether all of the billions we spend bombing people is really doing much to stabilize our oil supply--I certainly think it's unlikely to be a net win at this point in history.

As for tax policy, I'd like to treat unincorporated businesses and corporations the same if possible. To the extent that money sits in a "business" account, it's still "inside" the business. It's certainly easier to see when that transition happens when you have a corporation paying out dividends, but I could certainly see tightening up the accounting rules for unincorporated businesses so they could declare a particular bank account as belonging to the business for tax purposes so it can easily retain earnings from year to year and use them to grow the business without being taxed as personal income.

The bottom line is we spend resources and create big distortions by trying to get businesses to pay taxes, and we have very little actual tax revenue to show for it. We do, however, have armies of accountants and financial engineers who get paid to engage in all sorts of wasteful hanky panky for tax avoidance. So we might as well just skip the whole thing and make up the revenue in a more sensible place. Businesses would run more efficiently, taxes would be easier to collect, it would get rid of asinine "double taxation" arguments and rhetoric over whether one industry is favored over another, and it would also likely put a lot of lobbyists out of business.

My fellow liberals don't seem to like the idea, but it seems like it would make the tax code more progressive. Right now, Bill Gates and Poor Old Granny pay the same corporate tax rate on any stock they own. If we taxed distributions, neither one would pay corporate income tax, but Gates would pay a higher rate on distributions while Poor Old Granny would get hers at the lower rates of a retired low-income senior.

Overblown as in, "not really happening to the extent we thought," or overblown as in, "Well, fuck the bees. We don't need 'em anyway"?

On a similar note, my coffee machine is not vulnerable to HeartBleed. Another point for the engineers over at Saeco over the morons at OpenSSL, right?

The bulk of what these companies get in "tax breaks" are really just business expenses or common things like depreciation and the like.

Sure, I imagine so. Oil companies have a lot of equipment and other capital investments that depreciate, so that's probably a giant portion of it.

So, you are saying my "Child Tax Credit" is a subsidy of children?

Yes! Absolutely! Just like the home mortgage interest deduction is a subsidy for taking out a mortgage. Which is really just a bank subsidy once the market has factored everything in. Congress has done a great job of creating subsidies that cost other taxpayers money and convincing the majority of taxpayers that they're just "cutting taxes." But if I cut Bob's taxes and raise yours to cover it, it's no different than if I raise your taxes and cut Bob a check. But one of them is out of control spending and pork while the other one is just "cutting taxes" which is good and holy.

I say there are no tax breaks that amount to subsidies for big oil of any significance. You say they exist. So you need to produce the evidence of subsidies you claim exist.

I didn't say anything about oil-specific tax credits--just that tax credits are subsidies. And you've hedged very carefully with "of any significance," so I'm going to guess that it's very unlikely that anything I post will help here. But a quick Google indicates that there are tax breaks that are specific to extractive industries (most of which are enjoyed by the oil industry) like the ability to deduct intangible drilling costs in one year rather than over time. Intrestingly, it looks like the oil industry's breaks come largely in the form of reshaping how they do depreciation and deduct costs, so everything still ends up being "just depreciation." Anyway, most big politically-connected industries have weird cut-outs in the tax code like this, so I don't think it should be surprising that spends millions on lobbying has a few.

My solution to this type of thing would be to dump the corporate income tax entirely and raise dividend, capital gains, and estate taxes in a revenue-neutral way to make up the difference. We'll never get a corporate tax code that isn't full of bizarre exceptions for powerful industries, and corporations have huge financial flexibility to move money around and work around the laws, so I say we just let corporations act in an economically sensible way and tax the money when it's transferred to human owners.

The point I was trying to make is that this sort of misappropriation of funding is the root cause.

My point is that you might have been able to say that in 1993 (we don't know for sure), but now we have two variables to contend with. In real terms, funding has been cut approximately in half. So even if the system was 30% waste in 1993 and they spent the past 21 years diligently eliminating 100% of that waste, funding has been cut enough for the operation to be considered underfunded. It would have to be more than 50% waste right now assuming it was "correctly" funded in 1993 and a lot more than 50% waste now assuming it was overfunded in 1993 (which seems to be your contention). Sure, we can cut bike paths out, but I'm very skeptical of the notion that bike paths and ferries are major percentage of the federal outlay given that we have almost 48,000 miles of interstate highways or that half of the budget is wasted.

It looks like about half of the budget goes to the "state of good repair" right off the bat, so even assuming that everything else they do is waste, it's a pretty close call to say that the current budget is right, and that's only if the 1993 budget was waste-free.

Let's assume it was "correctly" funded and managed in 1993. Even assuming no new waste in the system, the revenue is down substantially in the face of inflation. Adding to that is the fact that you can drive a lot more miles per gallon of gas now than you could 21 years ago, so revenue per mile driven should be way down. I'm sure there's plenty of waste in the system, but the past 21 years have been a pretty substantial revenue cut by any reasonable measure.