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CicLAvia 6/23/13. A 6 mile stretch of Wishire blvd. in downtown Los Angeles, closed to traffic, and we had it all to ourselves from 9am-4pm! I used the "CicLAvia" booklet they handed out, as a way of "opening & closing" the video.
It's good for the image of cycling and the promotion of cycling, no doubt about that. Is it good for cycling itself...well, it depends on whether you think an event that habituates people to riding slowly on closed streets is really likely to get anybody to ride after the streets open up again. To put it mildly, I have my doubts.
Still, I had a good time at each one I've done. It is hard to argue with fun. (Not to be confused with Funzie, who is assuredly not fun)
Yes, I agree with your points on both sides. However putting people in a cordoned off safe zone to ride conveys to me that the bicycles are too dangerous to use as transportation and that bicycles are solely toys, not to be used as a serious conveyance. Getting people on bikes is a good thing for sure, 100,000 people running local errands or commuting to work would be a major boon for cyclists.