Emergencies Without End, the Paradox of Housing, and the Musklash
Off-Ramps for 30 January 2025
Welcome to Off-Ramps! Today I’ll highlight four interesting pieces that I think you will enjoy reading. Please enjoy these on your morning commute, or save them for your weekend.
1. The Endless Emergency, Still Not Ending
Earlier this week, The Energy Mix reported that Canada’s Transit Crisis Intensifies as Operating Funds Run Short. To me, this story reads like a checklist of the dynamics I have described as constituting The Endless Emergency.
A vicious cycle across the nation of declining fare revenue leading to service cuts leading to fewer riders leading to declining fare revenue? Check.
Grudging subsidy that only covers capital costs, not operations? Check.
Complaints that relying on fare revenue for operations “places responsibility for transit on the backs of the people who can least afford it”? Check.
The piece uses TransLink’s situation as a case study, and it perfectly illustrates the structural trap that defines the Endless Emergency. TransLink’s buses are overcrowded, “bursting at the seams” with demand… and in response, TransLink is poised to cut its bus service in half. Why? Because every transit trip costs the agency money, so the agency’s very success is bankrupting it.
The sting in the tail is that the politics continue to play out as it always has. The federal government calls funding transit a provincial responsibility, and the provinces demand federal support. Nonetheless, as one advocate notes, politicians at all levels “want to be at the ribbon cuttings... but when it comes to actually solving day-to-day operating problems, they try and point to each other.”
The Endless Emergency rolls on, and it will continue to do so, unless we do something that we haven’t done before.
2. The Endless Emergency, Affecting Other Systems
Speaking of the Endless Emergency, it is not limited to transit; similar dynamics will play out in any area where we don’t practice full-cost recovery of a valuable public service.
My fellow Fellow of the Roots of Progress Institute (RPI),
, has published a short piece on electricity generation in sub-Saharan Africa:Africa’s electric utilities are caught in a death spiral. They are forced to charge below-cost tariffs, which degrades service quality, which encourages their best customers to exit, which worsens financial losses, and so on. The solution to better reliability lies in restoring utilities’ financial viability. Smart policy design can achieve this when clearly balanced with other social objectives.
Sound familiar?
In an earlier issue of Off-Ramps, I name-checked another RPI fellow,
, who wrote about this phenomenon stalking California; an African reader (shout-out to P. O.) wrote to me on that occasion to describe the death spiral that Gilbert describes playing out in his country. Returning to transportation, our failure to adequately price road use leads to an Endless Emergency of its own, of ever-rising congestion, even as the traditional cost-recovery mechanism, the gas tax, fades.The first step toward becoming serious means recognizing the problem. The second step would be doing something about it.
3. The Paradox of Housing Supply
I read this new report from Beaudry and Kronick of the C.D. Howe Institute, on housing supply, with interest. It describes a paradox: the cost of housing in Canada is among the worst of its peer nations. At the same time, among those same nations, Canada’s investment in new housing has been above average and sometimes leading. How can both things be true? They ask, “All things being equal, isn’t greater housing supply expected to reduce the price of housing?”
Beaudry and Kronick’s answer is that Canada has been putting that housing in the wrong place, adding it to Vancouver and Toronto and neglecting the rest of the country. So long as the country’s largest cities are the only place people want to move to, no increase in supply will be sufficient.
Reading this made me think of the always-trenchant Alon Levy, who wrote a short piece last year comparing the YIMBY cities of Tokyo and Seoul with their NIMBY European counterparts. Levy’s conclusions resemble those of Beaudry and Kronick: nations that aggressively build housing generally don’t improve overall economic equality by doing so. The housing growth is useful economically, but only insofar as changes who gets to live where: Tokyo's working class can actually live in Tokyo, while London's gets pushed to the periphery.
The answer to this problem, say Beaudry and Kronick, is for Canada to build more large cities, rather than more housing in existing ones. Satellite cities to Toronto and Vancouver should, in their view, grow to be economic centres in their own right, just as Raleigh-Durham and Galway have done.
has been recently arguing the same case, that the United States should be aggressively creating wholly-new satellite cities.I like the thrust of Beaudry and Kronick and Pueyo’s arguments. Eighteen years ago, when I worked for the Ontario Ministry of Infrastructure, one of the policy goals we pursued was encouraging growth in places that were not Toronto: in terms of public infrastructure, like wastewater pipes or electrical transformers, the marginal cost of adding a newcomer to a peripheral city like Barrie or Windsor was much lower than to Toronto. Little came of it, though, because while it would be useful for the government if people wanted to live in other cities, we couldn’t make them want that.
This is the problem that
has been exploring in his recent series on new cities. Creating successful urban centers from scratch, or even augmenting existing ones, is not a thing one can simply choose to do: “declaring a hundred square miles of ocean a common-law jurisdiction won't make Atlantis rise up from the depths”. The agglomeration effects that make cities valuable emerge from complex interactions that can't simply be legislated into existence; they take decades of organic development, as well as good luck, to achieve. Fiat is not enough.My takeaway from all this is that yes, housing affordability will require nurturing the conditions that allow new satellite cities to emerge, but we should hedge that bet by continuing to aggressively add supply where people already want to live.
4. The Musklash
Max Read's analysis of Elon Musk's recent troubles suggests that, for all of his success in this moment, both his ego and his political position are extremely fragile.
Read’s hook is comic: the world's wealthiest man has been caught in “the kind of weird lie that most people haven't encountered since they were 11” about his gaming prowess. But the pattern of behavior extends far beyond gaming.
Just this week, Musk claimed on X that the throughput in the Boring Company’s Las Vegas tunnels "is already better than an average subway." It’s a false claim, and obviously so: the highest throughput per hour those tunnels have recorded, to the best of my knowledge, is 1,455 passengers per hour; and by the company’s own computations, the theoretical maximum is 4,400. The average subway, meanwhile, has throughput of 30,000 passengers per hour. X's own Community Notes system pointed this out; but within hours, the correction mysteriously vanished.
It’s farcical, but it illustrates the dynamics Read identifies: Musk makes an outlandish claim, faces pushback from a system he himself championed, and then apparently uses his ownership to shield himself from criticism… even as this undermines the very credibility mechanisms he once touted as crucial.
Musk’s brashness and carelessness made him a national hero and a political insider, but those same qualities now may portend his downfall. Read identifies three key pillars in the MAGA political alliance Musk has joined—conservative nationalism, tech wealth, and otherwise-politically-disengaged fans—and shows how Musk, by simultaneously advocating for H-1B visas, defaming Sam Harris after Harris won a bet with him, and lying about his own video-game skill, has managed to alienate all three.
Read’s conclusion is that while President Trump’s political talent allows him to transcend the clash of interests in MAGA world, Musk, for all his wealth and influence, lacks this ability. Instead, he is increasingly becoming a target for the coalition's internal tensions. Read doesn’t say so, but I will: Musk serving as a lightning rod for MAGA disaffection is one reason the President keeps him around. That’s bad for Musk… which means it’s bad for the things Musk and I both care about: driving automation, space commercialization, cheaper solar power and batteries, and more.
If I could speak to him, I would tell him that it’s still the case, as I wrote last year, that “I respect Musk’s genuinely world-historical achievements, capabilities, and vision, while deploring his many missteps. I encourage my readers to do the same.” And then I would give him some honest advice. Trump will always be the good Tsar, and so Musk should walk away before he becomes the bad boyar.