Sunday, December 13, 2009

Barcelona

I love Barcelona. My love affair now stretches back over thirty-five years. I first went to the city in the 1970s. After a long train journey from London, traveling through the night across France, changing trains at the border between Spain and France, I arrived at the Barcelona Station. At the foot of the Ramblas, this station was the gateway to a vibrant metropolis, so charged with energy and difference it was scary and exciting, overwhelming and stimulating. Compared to the sedate British towns of my youth, it was wondrously excessive. Neither Spanish—too much Catalan for that—nor Southern European—there was too much of a hard commercial sense for that—the city was unique, old and modern combined in a complex urban fabric. The old Gothic Quarter, the softened-edge grid of the nineteenth-century extension and the legacy of Gaudi and Catalan modernism all combined to give Barcelona an architectural dazzle. I stayed in a cheap hotel in the old quarter where if you came back after 10 pm you clapped your hands in the street, and someone threw down a key. That Barcelona was hot and humid and pungent. And I loved it.



(Photos: John Rennie Short)

I have visited Barcelona regularly but infrequently since then, and between those intervals, both the city and I have changed. I became more traveled, more used to big, strange cities. And Barcelona changed in turn: it became the capital of a more autonomous Catalan in a more democratic Spain. It hosted the Olympics; it became ‘cool’, a fashionable destination for tourists from across Europe and around the world, now a pilgrimage destination for Japanese lovers of Gaudi. And in this process, the locals again rediscovered the wonders of their city, which is a welcome yet unexpected artifact of Barcelona’s globalization.

The city is now more cosmopolitan, more used to the foreign other and the international tourist. While the tourist crowds overwhelm parts of the city, the city is still too big, too complex, too much still in the process of becoming, and the vibrant street life and commercial vitality too exuberant for it to become a place at rest, the mere end point of tourist pilgrimages. Including my own.

Thursday, December 3, 2009

Return to South Korea

I have returned from a quick visit to South Korea, my second trip to the country. The first time was in 1993. I noticed a number of changes. Some obvious. The banks of the Han River are much greener, more landscaped and more accessible. The city as a whole looks much greener than the uniformly grey of the concrete city I remember. Air quality, despite the huge increase in traffic, is noticeably better although still not great. The sheer weight of traffic as well as the airborne pollution from China creates a pall of smog across the city. Seoul is more globalized: there are Starbucks and more signs in English. South Koreans are connected to the rest of the world through economic linkages as well as diasporic connections and Internet traffic.

Of course there are the things about any foreign country that stand out. The ethnic homogeneity continues to be very obvious compared to other powerful economies. South Korea is more economically than culturally globalized. South Korea is one of the world’s most educated societies. Almost 90 percent of South Koreans go on to higher education, a truly staggering figure. Colleges and universities are some of the driving forces of national and local economic development. The confidence and ambition of a rapidly growing economy stand out against the slower pace of more developed economies. In some cases the confidence is played out in massive modernization projects such as the new district of Songdo currently being built near the city of Incheon.

Songdo (Photo: John Rennie Short)

There are also more subtle changes. A more pragmatic attitude to the costs as well as benefits of rapid economic growth is increasingly evident from speaking with the people and listening to their debates. There is fuller reckoning of the colonial legacy of Japanese control, of the collaborations as well as the resistances. While there is justifiable pride in economic achievements, there is a deep sense of the trauma inflicted on the country by the recent history of colonialism, war, and rapid industrialization. There is a palpable grappling with history. Seoul now boasts a new National Museum of Korea and the grand Joseon palaces of Changdeokgung and Gyeongbokgung are refurbished and open to the public.

Ceremony at Gyeongbokgung (Photo: John Rennie Short)

Other visible reminders of the past are not such venerable legacies. You do not have to travel very far from Seoul to see the barbed wire that separates South and North, a developed country from one bordering on mass starvation. Since my last visit, South Korea has prospered while North Korea has spiraled down into even more authoritarian rule, misery and hunger.

Countries are too large to understand and summarize in a quick visit. South Korea seems poised to enter a more settled period in which the legacies of the past and the prospects of the future are now regarded as more nuanced and complex. To visit the emerging city of Incheon or the fast-paced metropolis of Seoul is to get a glimpse of the speed and feel of a high-octane modernity coming to terms with its past and establishing its future role in the world.

Monday, November 9, 2009

East and West: Twenty Years On

Germany. 9 November. Twenty years ago to the day, the Cold War began its final decline with the toppling of the Berlin Wall. I have spent the day in a unified Germany. I crossed the now historical border between East and West when I left Weimar by train very early this morning to arrive at Frankfurt. I arrived last week for a conference about the legacy of the Bauhaus for the contemporary city.

Historic Weimar (Photo: John Rennie Short)

Weimar is at the historical center of German culture. The home of Cranach, Goethe, Schiller and Herder. The town is filled with memories of classic German culture as well fragments of the modern movement. Goethe’s house is a site of pilgrimage. The historic Haus am Horn built in 1923 stands as one of the very earliest examples of modernist domestic architecture. The modern soon turned into the dark and savage. From the Bauhaus studios where Kandinsky, Klee and Moholy-Nagy taught and argued you can see the tall gray memorial tower on the site of Buchenwald concentration camp. A visit was distressing and incomprehensible.

For the past few days the newspapers and television are full of images of the wall falling twenty years ago. East Germans streamed across in their thousands, people started to party and spontaneously chip away with hammers and picks at the symbol of oppression. The integration between East and West is still an ongoing process. Unemployment is still twice as high in the East as in the West. A solidarity tax is still leveled on all citizens to bring the East up to the standard of the West. The legacy of disparity in investment is evident in the newer roofs in the villages and towns of the old West compared to the old East with its abandoned factories and depopulating towns. But there are also signs of a smoothing out. Weimar, formerly in the East, now boasts lots of new buildings and the whole historic center was spiffed up for its designation in 1999 as European Capital of Culture. With more rich elderly West Germans moving in, it is becoming an affluent retirement town.


Bauhaus Weimar (Photo: John Rennie Short)

I spoke with some people who had lived in East Germany. They remember the polluted smell of coal-fired power stations, the lack of goods and the restricted freedoms. But the memories are disappearing from view. Ex-Stasi (secret political police) members are now running for office asking voters to put the past behind them. Early this morning I asked my taxi driver if he could remember the great day twenty years ago. No, he said, I was only five. A new generation is coming of age that only knows one Germany. As the momentous day fades into historical memory we will forget the seeming solidity of what was before.

Thursday, October 15, 2009

Socialism for the Very Rich: The Case of Professional Sports in the USA

One of the themes swirling around the current health care debates is the notion of a European socialism. In the standard rhetoric, not just restricted to health care, the pervasive and enervating affects of collective provision of goods and services are contrasted with the dynamism and freedom of pure market mechanisms. Well and good, but why is this model not used in the USA where most markets are dominated by cartels and collusion? Only the ideologues believe in the free market. The rich and powerful do not. And to prove my point I only need to look at professional sports in the USA. ‘Collectivist’ Europe has a fierce market system in the dominant game of soccer. Take the English Premier League (EPL) where at the end of every season the poorest performing teams are relegated to lower divisions, thus losing out on valuable televising rights revenues. The successful teams in the lower leagues move up to the more lucrative divisions in a direct relation between performance and pay. The very successful teams in the EPL get to compete in European-wide competitions where there is an even bigger payout. Competition is used to reward the successful and punish the unsuccessful.

Compare this with the closest USA equivalent, the National Football League. Here poor performance is rewarded not punished. If your team has a lousy season, you get the first round draft picks—the most promising players coming from college—and your schedule is adjusted the next season so you face weaker teams. Getting lower draft picks and a tougher schedule against good teams in contrast punishes the successful teams. The emphasis is on creating parity between teams. Where is the free market? Where is the competition? Relegation for the awful? Forget about it. Lousy teams are never relegated. Owners get to keep their teams in the lucrative TV-revenue sharing deals. The emphasis is on continually leveling the “paying field” so that mediocrity is always rewarded and excellence is always penalized. Of course the whole system is geared so that owners can keep raking in the money no matter how incompetent their franchises. Owners and players are kept in clover with no fear of relegation or revenue loss. Real competition? Forget about it. A monopoly system continually reproduces itself so that the poor and the weak get to stay with the rich and the strong that would have Karl Marx applauding. Sounds like socialism to me. And this same system also extends to baseball and basketball, where we have perennially woeful teams such as the Pittsburgh Pirates in baseball and the LA Clippers in basketball. So let’s bring all this criticism of European-style socialism even closer to home of the professional sports cartels. When the NFL looks like the EPL, that is when people can start speaking about a real market in sports. Until then sit back and watch Europe-style socialism at work in the NFL. To accurately reflect the business model used, the acronym needs to be changed to NSL for the National Socialist League.

Friday, October 2, 2009

And the winner is Rio, or is it Chicago?

Rio is the winner of the competition to host the 2016 Summer Games. The announcement made today from Copenhagen is now being celebrated in Brazil. Sadness reigns in Chicago, and Obama is second-guessing his decision to be the first US President to lobby in person for a US Olympic bid. But are the real winners the cities like Chicago that just failed to win the final nomination?

The Games will come to Rio along with all the costs and benefits. Hosting the Games demands major urban infrastructural investment. For the 1988 games Seoul expanded its airport, built three new subway lines, and cleaned up the polluted Han River. For the 1992 Games, Barcelona built a new waterfront and upgraded a declining area of the city as well as making numerous improvements throughout the metro area including new roads, a new sewer system, and the creation or improvement of over 200 parks, plazas and streets. For 2000 Sydney built a new road linking the airport to the downtown and the main venue on a contaminated inner city site. Athens spent close to $16 billion in large-scale public investments in water supply, mass transit, and airport connections to get ready for the 2004 Games. Beijing undertook a building frenzy with an estimated $40 billion of Olympic-related buildings and infrastructure including a new expressway and ring roads, miles of rail and subway tracks, and a $2.2 billion new airport that is the largest in the world.

The Olympics Games provides both the opportunity and the deadline to implement long-held redevelopment plans. In Greece, for example, the rest of the country had long resisted national investments in Athens. The international showcase of the Olympics provided the necessary spur. The Games start on a specific date with a global audience. The brute reality of such a severe deadline overcomes political resistances, bureaucratic logjams, and administrative inertia. The temporary and permanent greening of the city is also a possibility since the IOC now promotes ‘green’ games. The Sydney Games were held on a former abandoned waste site, Homebush Bay, and the Games were part of a wider urban remediation and greening project.

Are the Games a net cost or a net benefit to the host city? An honest answer has proved elusive. Inclusive cost-benefit analyses are severely hampered by lack of proper accounting methods, technical issues, such as accurately estimating exchange rates of foreign currencies, and such basic issues as the lack of available data. Costing the Olympic Games is a fiscal mystery made more complex by the partisan nature of much of the analyses. Organizations seeking to promote, justify, or attract the Games generate the vast majority of cost cost-benefit analyses. While many studies highlight the positive benefits of the Games (largely funded by organizations and groups seeking to justify the Games), fewer studies examine the costs of the Games and their redistributional consequences. The Games involve massive investments that crowd out other forms of public investment, such as spending on education and social welfare that may serve better the long-term needs of ordinary citizens. Other costs include the dislocation to the city during the construction period and the possibility of increased house prices and rent levels. There are also social and environmental costs that are rarely factored into the standard cost-benefit or economic modeling approaches. A recent report estimates that the staging of the last twenty Olympic Games displaced 20 million people, including the displacement of almost three quarters of a million people for the Seoul Games, 30,000—predominantly African Americans—for the Atlanta Games, and approximately 1.25 million displaced for the Beijing Games.

Objective cost-benefit analysis of hosting the Games remains at a rudimentary stage, with few accurate or comprehensive studies and little comparative data. There is often massive public investment in the Olympic Games that goes unrecorded in most cost-benefit analysis. The existing analyses suggest that the distribution of costs and benefits is regressive with most of the costs borne locally, especially by the more marginal urban residents displaced to make way for the Games, while most of the benefits accrue to local elites and a global media market. The measurement of costs and benefits and their social distribution deserve much more careful analysis.

A reputedly $40 billion Beijing Games raised the stakes: Beijing’s lavish spending and the grand spectaculars of its opening and closing ceremonies all ratchet up the expectations for subsequent Summer Olympics. Hosting the Games provides an opportunity for city reimagining. In the context of a global media spotlight, the spectacular staging of the Games launches the makings of a new city. But these new urban dreams are also fleshed out in the bids of serious candidates. So perhaps Chicago gets to make the dreams of making a better city without having to bear the heavy costs of actually hosting the Olympics.

Saturday, September 12, 2009

Generational Inequities

The USA already has socialized health coverage. It is called Medicare; it covers 45 million people, all senior citizens. It costs around $431 billion each year, and it constitutes 57 percent of all Federal health spending. Medicare is socialized health care that no one wants to disturb. Republicans who rail against the principle of government involvement stake their criticisms well short of Medicare entitlements.

The stark difference between Medicare’s coverage and how the rest of the population’s health care is paid for is a clear example of generational inequity. Those born in good times get advantages over those born in bad times. Assume the (fictional) average American. Born in 1900, you experienced the Great Depression and the Second World War. It was only in your fifties that things began to turn around. Born in 1940 in contrast, you were carried along on the great postwar expansion of economic growth, rising incomes, and new and extended benefits. If you were white it was easy to get a job and do well. Sandwiched between tough times, those born between 1935 and 1970 are the lucky generations.

There are lucky and unlucky generations. Generational inequity really kicks in if those paying for the elderly are unlikely to see the same benefits. Older adults are advantaged because they have publicly provided pensions, healthcare, food stamps, housing subsidies, tax breaks, and other benefits that younger age groups do not. What is more, the younger groups, for a variety of reasons, including the relative decline in USA wages and incomes due to globalization, are unlikely to receive the same level of benefits. Born in 1990 you are coming into a job market in the Great Recession, with well over a generation of stagnant incomes and increasing costs. To add insult to injury you have to work to pay for your elders to have privileged health care and generous social security payouts that you are unlikely to see for yourself.

The kneejerk defense of Medicare, while millions are uninsured and underinsured, is simply one more example of an intergenerational divide. Class, race and gender have long been identified as sources of difference, advantage and disadvantage. We also need to add age to that list.

Monday, August 10, 2009

The USA As Failed State

The journal Foreign Policy conducts a yearly survey to highlight failed states. Top of the list for 2009 is Somalia, followed by Zimbabwe, Sudan and Chad. The USA, lodged between France and Singapore, is ranked 159. The least failed states are the Scandinavian democracies with Norway, Finland and Sweden coming in 177, 176 and 175 respectively. The USA, at first glance, seems to be in a relatively good position. But look again. Amongst the measures used to construct this index are group paranoia, uneven economic development, progressive deterioration of public services, security apparatus acting as state within a state and the rise of factionalized elites. When we look at these in more detail as they apply to the USA, the long-term trend is not comforting.

There is intense group paranoia in this country, especially strong on the right as the wackiest are given voice by talk radio hosts eager to boost their ratings and by a Republican Party seeking traction through partisan politics. An open society needs a free marketplace of ideas, but what we are witnessing is the rise of voices that demonize and delegitimize that necessary interchange. Inequality has increased in the past thirty years in a trend that transcends which party is in power. The very wealthy have gotten even richer while rising costs and stagnant incomes squeeze the middle class. The stock market meltdown wiped out many of the assets of the middle class. Public services are also getting worse. To fly from Asia or Europe to arrive at a USA airport is to fly from the First World to the Third World of public services. Public infrastructure has been underfunded and poorly managed. There has been an assault on government waged since Reagan. And in the wake of 9/11 security measures have trumped individual liberties. State security has been beefed up, extended and deepened. And there is the rise of factionalized elites. Finance capital is now dominant. Goldman Sachs personnel, whether former, present or future, now dictate fiscal policy. And the political elites are less and less familiar with the everyday experience of average Americans.

So scoring the USA on the indices of a failed state:

• group paranoia--check
• uneven economic development--check
• progressive deterioration of public services--check
• security apparatus acts as state within a state--check
• rise of factionalized elites--check.

The USA is not yet a failed state. But it is heading in that direction. Failed states begin somewhere. The USA in its present crisis could be at a starting point on the road to failure. For those who have ever wondered about when and why great empires and nations fall, perhaps they now have an opportunity to witness this process unfold.

Tuesday, July 28, 2009

Whose Country?

These are difficult times. I am not speaking of the great recession that is causing economic havoc. No I am referring to the crisis of belonging. Two stories to illustrate my point. The first is told through a recent video clip of a public meeting in Delaware hosted by Congressman Mike Castle. A white woman stands up and harangues him about Obama not being an American citizen. She is repeating the ranting of the right wing bloviators, but there is a moment of authentic grief in her voice when she says, “I want my country back.” She articulates an often understated yet strongly embraced white fear that somehow the country she knew and cherished is being taken away from her. The obvious intellectual retort is to remind her that this was never just her country: it was stolen from the Indians and developed by people of all colors from all over the world. The country has too complex a history to submit to easy readings or singular appropriations.

The other story concerns Henry Louis Gates, Jr.’s run-in with the Cambridge police. We will never know the exact details, as it is a case of he said /he said. But what is clear is that the confrontation crystallized issues of class and race and probably age. It seems more the result of testosterone than skin color. But for many blacks it was just another example that police oppression is a clear and present danger that has not yet faded into history. For many whites, myself included, it seemed a more complex scenario of race and class with a privileged black man expecting more deference than he was receiving. In this case the privileged man is Gates, a very well paid Harvard professor who jets around the world, is a constant presence in the media, and can call upon the President of the Unites States as a character witness. Startled that a policeman would question his presence in his own home--and who would not be startled--he responded with the message of class--you are dealing with someone important--but also of race, when he remarked that this is how a black man is treated in America. Gates felt attacked. The policeman felt betrayed by a President who seemed to defend his buddy publicly without knowing all the facts.

A middle-aged white woman, a rich black guy, and a young white police officer: they all feel under attack; they share a sense of threat and dread that pervades our culture. The US has no single ethnic or racial identity. That fact is a source of strength but also a source of anxiety, and it is this anxiety that informs the delusions of a white woman who can question the national identity of her President, a privileged black professor who responds in class terms by invoking race memories and a white policeman in someone’s own house who fails to recognize the charged politics of a racial encounter. In each case, there is a profound sense that power and authority is somewhere else, controlled by the other. There is a crisis of belonging that we need to address. The “discourse entrepreneurs” of race and class and gender--the always available black spokesperson, the right wing ideologue, the routine racist--only add to our woes by coming up with the simplistic slogan, the easy remarks, the crazy claims . Some of the early commentators on the Gates incident repeated the need to have a discussion of race. No. Spare us the easy slide into comforting clich├ęs. We have had enough unsophisticated discussions of race that fail to understand the overlapping and often undercutting concerns of class and age and gender and sexual orientations. Gates to his credit addresses some of these issues in his writings, so it is ironic that while his work elicits the nuanced view, this one incident generates the simplistic response. We need more intelligent debate where the freighting of complex issues with simple slogans of race or political alignment is replaced by more complex understandings of the sources of difference in this country. Failure to address this complexity leads everyone to think that it is not their country. And when more people believe that, we really are in big trouble.

Friday, July 3, 2009

Westward Across The USA

I got lucky. Good weather. A clear cloudless sky and a window seat on an early morning flight from Baltimore to San Francisco. In 1804 it took Lewis and Clark nearly two years to reach the Pacific. Wagon trains following the Oregon Trail took between four to six months to cross just half the country. In 1876 a train from New York to San Francisco took nearly 84 hours. In late June 2009 a standard flight took me under six hours.

I still have a childlike enthusiasm about flying. I always try get the window seat and, if the weather permits, prefer to look on the earth below rather than close the blind and watch the latest movie. To see the country unfold before you is an experience that borders on the magical.

First we rise from the tarmac to leave the eastern seaboard. It is late June, early morning. Below, the earth is sensuous green almost tropical, heavy with humidity. The sprawling suburbs of Megalopolis soon give way to the wooded ridges of the Appalachians. I look out for the telltale signs of mountaintop coal removal. Too far north. It looks like virgin territory, the river systems outlined by the sinuous lines of early morning mists.


Appalachia: photo John Rennie Short

We cross the Ohio Valley. A giant coal-fired power station shooting a white smoke high into the air to fall as poisonous particulates where I live and breathe. We fly west into the land of the giant grid. The landscape here is an embodiment of rationalist enlightenment thought and the product of the 1785 land ordinance that divided the lands into units of 640 acres combined into one mile squares that stretch in a seemingly unending grid across the land. We fly west across the well watered river plain rich in alluvium into the drier lands where the square grid now share the same space as the round circles of the center pivot irrigation systems. The land is all geometry, a humanized rational landscape.


The giant grid: Photo John Rennie Short

We cross the 100th meridian that marks an important climatic divide between wet and dry, fertile and arid. In the late nineteenth century, John Wesley Powell suggested that west of this line the climate was too dry to support intensive agriculture. The powerful railway lobby overrode his proposal and generations of failing farmers paid the price. The dry landscape is still a testament to Powell’s sage proposal. The grid begins to disappear as we fly across the gently rising upper plains and then…almost without warning the western edge of the Rockies rises up dramatically. The first sight of the snow capped peaks take me by surprise and elicit wonder. It is midsummer yet they are high enough to retain winter snow in north facing crevices and shaded cracks.


The Rockies: photo John Rennie Short

The sharp edge is soon replaced by the high plateau, an eroded gullied landscape still freshly scarred from the turmoil of its recent creation. Stark, beautiful and empty. It is a dry, desiccated landscape full of gorges and gullies, long strips of ridges, possibly a meteorite crater quickly glimpsed before it disappears. Slashed and gashed, jagged, raw and rough.


The High Plateau: photo John Rennie Short

Then, another sharp rise in topography as the snow streaked peaks of the Cascades mark the western edge of the Rockies. I look straight down and glimpse the convex granite slopes of Yosemite, one of the nation’s first wilderness parks. Their vertical majesty flattened out by my 35,000 feet aerial perspective. Then the grid of the Central Valley, one of the most productive lands in the nation. There sits the grid square of Sacramento. The ocean is almost in sight. We cross the dry foothills, golden and brown, the plane loosing altitude rapidly as it gets ready to land. We fly low across Silicon Valley, skim the bay and land at the airport.

Monday, June 15, 2009

The cacophony of the power-tooled suburbs


I live in the suburbs. Low density with lots of greenery, and that is the problem. All that greenery has to be whacked and manicured in order for the suburban image to be achieved and maintained. Grass has to be cut in summer, leaves blown in fall, snow plowed in winter, trees and bushes pruned in both spring and fall. None of this is done slowly and quietly by hand. No. Brute, electronic force does it all. My neighbors, each with the carbon footprint of a medium-sized African city and the mechanical clout of a small European army, wield an ear-wracking array of power tools. They use these on the weekend. During the week the hired gardening crews marshal their own arsenals of landscaping weaponry whose decibel levels resemble sticking your head three feet from the jet engines of a 747. The end result is a neighborhood filled with the electrified screech and aching whine of the machine.


The manicured lawns and precision cut trees of suburbia rely on noisy machine power. Because I do much of my work at home, I get to listen to the landscaping firms who work during the week and then also to hear my neighbors exercise their right to make as much noise as possible on the weekend with a battery of ever-escalating domestic machinery. Unlike the big central city where there is a constantly high level of background noise, the leafy suburbs go quiet in the late evening, but that makes the daytime noise all the more difficult to take. Not inured to the constant noise of the city dweller, the suburbanite who lives in the suburbs, rather than just sleeps there, has to experience the deafening weekday noise of professionals as well as the weekend warriors. Because of the constant drone of the power tool, the suburbs are leafy and green, but definitely not quiet.


Photos: John Rennie Short

Thursday, June 4, 2009

The Comfort of The Grid

For the past 10 days in Milwaukee my journey to work is a 15-minute walk from an apartment complex to the university library. It is an easy path to chart as I follow the rigid grid system of the street layout. Now the concept of the grid has come in for a lot of criticism over the years, particularly regarding the notion of an “unfortunate” triumph of geometry over geography, of an artificial human-made network with unforeseen consequences imposed on the natural landscape. And yet the grid system also has its advantages: for example, it is a great comfort to visitors in a new city, easy to understand and simple to navigate. I contrast such ease with my experience in Tunis last August, when I wandered through the tortuous street layout of the old Medina, hopelessly lost and pulling a suitcase through the crowded, narrow walkways. Arabic curses filled the air behind me as my suitcase bumped against unsuspecting legs. Disorientated, sweating profusely and on the verge of panic, I reached my hotel more by sheer luck than guided skill. In contrast to the unknowable layout of this centuries-old organic street pattern, the grid is a friend to the visiting stranger.

North Prospect Avenue, Milwaukee


My commute is along North Prospect Avenue through a neighborhood of dwellings built as the 19th century turned into the 20th. What I like about this area is the quality and quantity of usable public space. From the edge of most houses, there is a porch that extends about 10 feet, an unfenced front garden of about 30 feet and then a sidewalk, of around 20 feet. The early summery weather coaxed people onto to their porches and into their gardens. The porches and gardens are semi-public spaces, as people using them become part of the total street scene. The street reminded me of a remark by Jane Jacobs, the grande dame of Urban Studies, who noted that the more people we have on the street, the safer we feel. This neighborhood contrasts with many of the new up market areas, where despite the sinuosity of the street pattern (a contemporary reaction to the grid), the amount of public space is minimal; many affluent areas have no sidewalks, and few have the generous public and semi-public space along North Prospect.

We need more usable public space. It is not police that make us feel safe in public but the presence of lots of people going about their everyday business. Other people make us feel safe. And to use public space we have to be generous in our allocation of usable public space. We need to avoid design determinism, forms of design facilitate rather than cause human behavior. But the quality and quantity of public space does have an affect on the livability and conviviality of cities.

Wednesday, May 27, 2009

Dateline Milwaukee

Two items in today’s news. The first is that the Comptroller of the City of Milwaukee proposed the privatization of Milwaukee Waterworks, the public utility that provides drinking water to the citizens of the city. Note: I am currently in the city doing research in the American Geographical Society Library at the University of Wisconsin, Milwaukee. The second piece of news is that General Motors is closer to bankruptcy as the company was unable to reach a deal with its bondholders to swap debt for equity. The federal government, unwilling to let the company sink into oblivion, will continue to prop it up. The federal government will end up owning almost 70 percent of the famous company.

Two very different government trends. On the one hand local government, loaded with debt, responds by selling assets, cutting budgets and laying off workers. On the other hand federal government, also loaded with debt, prints more money, spends money and makes major investments through the stimulus package.

The country is experiencing two very different policy responses to the economic crisis simultaneously. At the local and state level we are in the world promoted by the conservative economists--cut deficits and reduce spending. At the federal level we have a return to Keynesianism--never mind the deficit for the moment, just spend the damn money. So while I receive a tax credit from the feds, the State of Maryland cuts my wages.

It is proper to try a variety of policy responses to a major economic crisis. But should we be pursuing such contradictory aims? We are now in the confusing world of market economics doctrine at the local and state levels with Keynesian spending at the federal level. When we get out of the crisis, proponents of both policies will accept credit and assign blame to the other. The Keynesians will say that the recovery was hampered by the actions of state and local governments while the Republican right will point to the rash spending of the feds.

In an ideal world where thought experiments do not have social consequences, we could designate a few states to try the right wing policy and not accept any federal stimulus. In the real world, the governor of South Carolina, earlier this year in a bid to burnish his credentials for a Presidential run, initially refused any federal stimulus money. He was voted down by popular feeling that rightly put welfare before ideology.

The root of the paradox is the federal structure that is much lauded across the land but clearly has its limitations, nowhere more acutely than in the present crisis where one level spends while the other cuts. We have competing economic polices, and because we will be unable to fully test just one, the doctrines will remain untested. This competition will remain even after one worked and the other one didn’t. Since we are employing both at the same time, we will never really be sure which one works the best.

Monday, May 18, 2009

Five Lessons From The Economic Crisis

The economic crisis, as many have said, is too good an opportunity to waste. But what can we learn? Here are five things:

1. The financial services sector is bloated and inefficient. The market will correct some of the issues, such as those rating agencies more concerned with maintaining good relations with institutions than with adequate and risk assessment. Trust has been broken between many of the firms and institutions and will only be reestablished with better business practices in the market place. Now that everyone perceives the many under-assessed risk and over-promoted gains, returning back to the status quo is impossible. So self-reform will occur in the market.

2. Self-interest amongst financial institutions should ensure major changes, yet the sector is incapable of true self-regulation. They simply do not understand what’s best. They do not even know what’s right, what’s sound or in some cases what’s legal. So we now know that formal regulation is needed, necessary and long overdue.

3. The current systems of regulation are inadequate. The failure to identify the fraudulent Madoff enterprises despite many warnings and red flags indicate that the SEC basically failed. We need not only new regulations but also a new regulatory order with less cozy relations between the players and the regulators.

4. Economic deregulation as the dominant ideology has been dealt a deathblow--at least until the current interventionist mode is delegitimized. There have been three dominant economic ideologies in the US. At the beginning of the twentieth century, laissez faire capitalism held sway until the Great Depression rendered its underpinnings of limited government obsolete. The New Deal and Keynesian economics inaugurated a more interventionist government and mixed economy system. The stagflation of the 1970s forced a reassessment, and the election of Thatcher in UK and Reagan in the US reflected the political rise of a deregulated, minimal state. Opinion shifted to the right so that even New Labour and the Democrats boasted of cutting income taxes and of reducing the size of government. The latest economic crises have swept away the assumption that unfettered markets lead to untarnished growth. We are now at the beginnings of a new fourth era, one in which government has a larger and more central role in terms of both direct fiscal intervention and of greater regulation.

5. Our sense of time is affected. To live in period of sustained long-term economic growth makes it easy to believe in timely progress towards bigger and better and brighter things. All the pension funds, for example, are based on the assumption that investments will always just grow and grow. That linear sense of an upward trajectory is being replaced by a more circular sense of repeating cycles: our present condition is compared and contrasted with the Great Depression. Yet whether or not we are repeating or avoiding history is moot. What is not moot is that our confidence in a steadily increasing curve of growth and expansion is shattered. The future is now, but it is not the optimistic future we have been led to believe.

Sunday, May 10, 2009

The Myth of A Meritocracy

A recent “Letter from Washington” in The New Yorker profiles Obama’s Director of the Office of Management and Budget, Peter Orszag. Mostly a ponderous piece describing fairly Byzantine policy machinations, it does reiterate nevertheless a common assumption about Orszag’s rise to power. Pronounced throughout is the conviction that this climb is the result of sheer brilliance, just one more reflection of the US as meritocracy.

In the opening section of The New Yorker piece, Orszag's resume is listed: Exeter, Princeton, London School of Economics, Clinton White House. This article promotes this rather recognizable track as extraordinary, a feat of great intellectual achievement. Born and raised in Britain I take a different tack. I see Orszag as yet another privileged person following a well-connected circuit. Neither The New Yorker or indeed the many articles on the new Budget Director think it worthy to note that Exeter is a very elite school where fees are now almost $40,000 a year for boarders and a feeder school for top universities in the US. Neither does the article mention that Orszag’s father Steven Orszag was a professor at Princeton, yes the same Princeton that Orzag the son attended. So, if I get this right, this guy attends an incredibly expensive private school, goes on to an incredibly expensive elite private university where his Dad is a professor, and then uses his many connections to hustle up the Democratic hierarchy. This is not to say that Orszag is neither bright nor hardworking. There are lots of people with his background that do not end up as Budget Director. But there are also lots of hard working and bright people who do not end up as Budget Director.

What all the recent pieces on Orszag seem to share is an assumption of meritocracy: that where you get to in the US is through hard work and smarts. The unspoken contrast is with the old Europe with its supposed entrenched class and hierarchy where merit is not rewarded. In fact, as many recent studies attest, social mobility is not any greater in the US than in Western Europe. Now there are enough “outlier” narratives in the US--and of high profile outliers at that--take the cases of Clinton and Obama, for example, that tell of meteoric rises. These narratives feed the illusion that we live in a pure meritocracy. In fact the US is only mildly meritocratic. The best way to ensure success and wealth, in the US as in most countries, is to be born to successful and wealthy parents. And as long ago as 1956 C. Wright Mills reminded us of the dominating influence of what he called “the power elite”.

Wright’s ultimate conclusion of a permanent power elite was never popular in the US; it does not jibe with the ideology of an aspirational society or the bedrock of individualism that assumes we are where we are in the society because of our own efforts. Sadly, we are where we are largely through the accident of birth and fate. We are not prisoners of our life circumstances, but neither are we freed from them. Success does have a recipe: brilliance and hard work are the dough but the yeast that raises the dough is the added mix of being born to wealth and privilege with advantageous family connections.

Friday, May 1, 2009

We are not all to blame

There is an article in today’s Washington Post by the columnist Michael Kinsley. Under the title "Where This Buck Stops", he tackles the torture issue. Under the guise of a critical thinking piece, 'I am not a mere journalist more a deep thinker' kind of piece, he ends up with the conclusion that "If you’re going to punish people for condoning torture, you’d better include the American citizenry itself”. We, the American people, it seems, are the real culprits. I must have had a hand in those torture memos from the Justice Department. Funny, I cannot remember doing that.

This is a recurring theme in sloppy op-ed pieces. They slide from specific issues--torture, the subprime fiasco, the financial meltdown--to the general conclusion that the real fault lies with us all. Baloney. This spurious argument, all the worse for pretending it is a profound analysis rather than a tired old argument, is wrong in two respects. First, we are not all responsible. We did not all write memos justifying torture, we did not all ok risky mortgages or all gamble shareholders savings in dubious enterprises. We are not equal actors in these dramas. There are specific people responsible for specific things and to make the ‘we are all to blame’ argument’ is to reassign blame from those responsible to the general public. Second, it rests on the mistaken assumption that since we are citizens of the country we have an equal part in making decisions. Citizens do not have the same degree of economic power and political access. The ‘we are all to blame argument’ works to make us believe that we all have equal shares, equal responsibility and hence equal culpability when things go wrong. No. Let’s have less blather parading as profound criticism and a sharper focus on who did what. That way we get a much better sense of the distribution of power and a more accurate understanding of the distribution of responsibility.

Sunday, April 26, 2009

Thank you Barbara Ringer

Our lives are bound by complex ties that connect us to people we never know or never meet. I did not know this woman who died on April 9 at the age of 83. I only realized our connection when I read her obituary in the Washington Post on Sunday April 26.

Barbara Ringer, you see, was the main architect of the Copyright Act of 1976. This Act affects my life as a writer and academic on a near daily basis. The law it enacted allows fair use whereby scholars can quote short extracts from copyrighted work, and it also extends copyright for an author’s lifetime plus fifty years. Before Ringer’s bill revised copyright, it only lasted for 28 years from the date of publication unless renewed. Every year I receive small--very small--royalty checks. My royalties offer little purchasing power but enormous satisfaction. They are manna from heaven, small but wonderfully unexpected gifts and cheering reminders that my work continues to be read and used.

Barbara Ringer worked at the Library of Congress most of her life. She crafted the basis for the 1976 Act, thus assuring me the ability to quote other writers as well as securing the copyright of my work for a long time. She defended the rights of creative people to have their work protected. Receiving her law degree from Columbia University in 1949, Ringer had to battle a sexist world, and she successfully won a discrimination suit in 1973 after she was passed over unfairly for promotion. She gave her collection of books and movies to the Library of Congress. Furthermore, she placed the land she owned in conservation easements so that the property remains wild in perpetuity. Her many good deeds will live on long after she has gone.

So thank you Barbara Ringer.

Thursday, April 16, 2009

Finance Capitalism and Public Policies

In the early 20th century, the Austrian economist Rudolf Hilferding proposed that a new form of capitalism was taking hold. In his book of 1910, Finance Capitalism (Das Finanzkapital), he ventured that the increasing concentration of economic activity and banking into larger and larger combines was effectively producing a new form of capitalism, the finance capitalism of the book’s title. Because this new form of capitalism controlled the flow of investment, he suggested that it was displacing competitive industrial capitalism while creating a demand for a centralizing and “privilege-dispensing state.” According to Hilferding, finance capitalism was always on the lookout for state intervention to prop up its wealth and privilege. Sound familiar?

Here is a photograph of a scary looking Rudolf Hilferding.

Fast -forward almost 100 years and we can see the full unfolding of Hilferding’s prediction. It is evident in the massive amounts of money being made. Lloyd Blankfein, the CEO at Goldman Sachs, received compensation of around $43 million for fiscal year 2008. Lots of people make lots of money in this sector, and as we now know it is neither connected to their skill in assessing risk or foresight in managing change and economic uncertainty. The compensation reflects itself: people get paid a lot, not necessarily because they are any good, but because they are in this sector. And the sector binds government to its needs and requirement through the slick passages of individuals who move effortlessly and often from finance to government and back. These moves transcend party affiliation: Paulson moved from Goldman Sachs to Treasury Secretary under Bush: Rubin moved from Treasury under Clinton to Citibank after deregulating the banking system; and more recently Rubin’s colleague at Treasury, Larry Summers, moved from a lucrative hedge fund gig to advising Obama. In the May issue of The Atlantic, the former chief economist at the IMF writes of a quiet coup in which the US government was hijacked by the finance industry (http://www.theatlantic.com/doc/200905/imf-advice).

Public policies are not only shaped to suit finance capital--and these include the promotion of free movement of capital across borders, the repealing of regulatory frameworks and the overturning of oversight regimes--but also are taken for granted as “the right and only things to do” in the name of general welfare. While change is currently afoot for reregulation, be on the lookout for how the resultant systems will be shaped by financial interests.

In the fall of 2008, the US Congress could not move fast enough to prop up the banking system. The $750 billion TARP (Troubled Asset Relief Program) bailout was exactly the “privilege-dispensing” Hilferding was writing about in 1910. And compare the political response to the banking crisis with the meager, parsimonious reaction to the problems of the automotive industry or even of the housing crisis. Cars and housing are important, but not nearly as important, in this new form of capitalism, as finance and banking. Paulson and Bernake managed to frighten politicians into accepting the package by painting a scenario that the world was going to collapse if nothing was done. This may or may not be true. My argument is that this conclusion comes less from a fully formed economic analysis than from the contemporary ideology that fixates on banking and finance. The power of finance capitalism is such that this ideology is now viewed by the US government as the only the way to see and understand the world. Current policies and beliefs clearly reflect the interests of bankers and not the general welfare or common good.

Wednesday, April 15, 2009

Interview

Click on the above title to see me being interviewed by Professor Steve Braude about two of my recent books. It is a short 12 minute clip.

Thursday, March 26, 2009

New infrastructure spending demands new thinking, oversight

This is a slightly revised and updated version of an op-ed piece that first appeared in the electronic journal Stateline.org. Click on the title above for the link.

Much has been made of the need for infrastructural investment to stimulate the economy. Traditionally, economists advise against large-scale infrastructure investments because they take too long to inject increased spending into the system. But this recession is likely to be so long and deep that long-term investments will play an important role in getting us to the other side of this mess.

The states and the feds have a huge backlog of things they need to build and repair, from schools and bridges to airports and mass-transit systems. Recent years have highlighted the costs of not tending to infrastructure. The collapse of New Orleans’ levees in the wake of Hurricane Katrina was the main reason for the flooding of the city. The collapse of the bridge over the Mississippi River in Minneapolis on Aug. 1, 2007, was a deadly reminder of the full costs of delaying repairs and maintenance.

According to the American Society of Civil Engineers the backlog of infrastructure now exceeds $2.2 trillion, yes trillion with a t. In their report card for 2009 the Society gives the nation a D for its infrastructure provision and maintenance.

Photo: John Rennie Short

We are in a crisis. But it is useful to recall that the Chinese word for crisis consists of two letters: One signifies danger, the other opportunity. This crisis affords us an opportunity to both stimulate the economy and tend to our much-needed infrastructure backlog. And many of these jobs cannot be outsourced. The work is done in this country, adding to effective demand and providing a basis for sustained growth.

There are two potential hazards associated with large-scale infrastructural investments. The first is that the money will be allocated in the usual pork-barrel fashion with powerful U.S. House and Senate committee personnel steering funds to their districts and states irrespective of the benefits.

In order to short-circuit the possibilities of future bridges to nowhere, we need a bipartisan commission that evaluates objectively the cost and benefit of major infrastructural investment. We already have a model that works. The recommendations of the Defense Base Closure and Realignment Commission (BRAC) cannot be cherry-picked by members of Congress. The recommendations are voted up or down in a block so that individual members cannot influence the fate of individual bases. A similar procedure for a National Infrastructure Commission is essential to reducing wasteful spending.

A second potential problem is that, just like with wars, we tend to fight the next one with the strategies of the last one. We must avoid building new infrastructure geared towards the needs of the last economic growth wave.

A National Commission on Infrastructure would need a mandate to build for the future, not just for the short term and the present. The interstate system was perfect for the car age coming into its own in the 1950s. What we need now is infrastructure that promotes smart growth and long-term sustainable economic growth. Building more bridges or motorways just because that is what we always have done is to build for the 1950s, not the 2050s. New and improved infrastructure should be directed toward more creative use of mass-transit systems, refurbishing our aged inner cites and inner suburbs and improving citizens’ lives, and laying the basis for a greener economy.

We are in a crisis. From the nation’s last great crisis we created the New Deal. We need a New ‘New Deal,’ one that appropriately funds and fairly distributes infrastructure projects to states that lay the foundation for a smarter, greener, more competitive economy. We need a Metro Green Deal for a new infrastructure commission that allocates investments so that we can link public and private, city and suburb, rich and the poor in an America of and for the future.

Monday, March 23, 2009

A moral economy

The great historian, E. P. Thompson, first raised the issue of the moral economy of the crowd in a paper published in 1971. He was referring to the food riots, which occurred every ten years or so in late eighteenth-century England. He demolished the old belief that the riots were spasms of hunger, suggesting instead that they represented a ‘highly complex form of direct popular opinion’. They were about establishing the moral price of food rather than the going market rate.

We have witnessed the moral economy of the crowd last week in the US with the public outcry over the $165 million retention payments to workers in the bailed-out insurance giant AIG. The company had followed some very risky practices, jeopardized the entire US financial system, lost a great deal of money and was eventually bailed out by the federal authorities.

On the surface, the retention payments are small compared to the $170 billion that the company received. With more to come. And many of the people responsible for the risky behavior had long left the company. But the popular sentiment was not a calibrated public policy response; it was a restatement of a moral economy in the face of a market economy out of step with current realities and popular concerns.

Crowds in Washington DC. Photo: John Rennie Short

The financial service sector at the top level is over rewarded. The system of bonuses and retention packages originated when both profits and risks were borne by partners in trading companies. Now, in large public companies, the upper executives overpay themselves, a practice authorized and condoned by compliant, collusive boards, while the risks and costs are socialized and paid by the shareholders or eventually the government and the public. The former CEO of Countrywide, a mortgage company that specialized in risky subprime mortgages, made out very well in the last six months of 2007. Angelo Mozilo, who looks like a lizard in an expensive suit, was paid almost $2 million in salary, given $20 million in stock and sold $121 million in stock. The company meanwhile lost $1. 6 billion while the share prices fell 80 percent. Bad luck for the shareholders, but no problem for Mozilo.

It is against the background of the widespread appreciation of privatized benefits and the public nature of the costs that people responded to the AIG bonuses. What is surprising is how quickly the political system responded to peoples’ anger: within a week of the bonuses becoming public, the House introduced a measure to tax the benefits up to 90 percent.

The close connection between the public mood and federal response is rare. The founders were distrustful of a full and functioning government by all the people. The Congress and the other two branches, the executive and the judicial (an oligarchy of lifetime appointees whose ideology always seems half a century behind the general public), limit and blunt the expression of the popular will into policies and politics. Policies in Washington DC are shaped by interest groups who hone regulations to meet their needs. The political system listens to the power of money. Politicians desperately need money to stay competitive, win races and stay in power. Those with most money have the best access: they have the power to influence and advise. Ordinary people exercise political choice at elections but those with money exercise real political power.

So the events last week in Washington were highly unusual. The consequent legislation may not stand up. Already experts are pointing to its haste and questioning its legality. The proposed legislation was not well thought out, and it was done in haste and anger. But so are much of US federal policies. It was a raw expression of a true democracy. It was the moral economy of the crowd armed with blogs and emails rather than pitchforks and street demonstrations, reaffirming values of fairness and community over greed and self. The moral economy expressed against an amoral economy.

Wednesday, March 18, 2009

Suburban Gothic

Click on the title above to access the link.


Photo: John Rennie Short

Tuesday, March 17, 2009

Recent book review: Olympic Cities

This is shortened version of a book review first published in the Annals of Association of American Geographers. Click on the title above to access the link.

The summer Olympics are a global spectacular event. The first games of the modern era, held in Athens in 1896 involved 241 athletes from only fourteen countries and limited press coverage. Over the years, the Games have grown in size, scope and international media coverage. Over 10,500 athletes from over 200 countries participated in the 2008 Games in Beijing. The Games are now the most watched events on television, with a truly global audience. The Olympic Games embody the increasing globalization of the world; they represent a significant regime of international regulation, provide a shared cultural experience and create important platform for economic globalization as transnational corporations advertise in and through the Games. The increasingly global Games are hosted by cities. The Games are a global event that unfold in a particular place. There is increased academic attention. The 2007 collection, Olympic Cities; City Agendas, Planning, and the World’s Games. 1896-2012, edited by John and Margaret Gold, . John R. Gold and Margaret M. Gold is a very useful addition to the literature.

Centennial Olympic Park, Atlanta. Photo: John Rennie Short

The book is in three parts; the first considers the four main elements of Olympics festivals. The editors note a shift in the Summer Games from a shared but minor partnership with World Fairs through to the centrality of the modern Games. Stephen Essex and Brian Chalkley look at the stages in the evolution of the Winter Games from minimal infrastructure transformation, 1924-1932, through growing infrastructural demand to tools of regional development and large-scale transformations. The Olympics as cultural festivals is a less well know element. Margaret Gold and George Revill show ‘the cultural dimension of the games still struggles to gain significant international or even public recognition’ (pp. 81). They go on to point out that the Olympic Arts Festival can help to rebrand the city and encourage cultural tourism. The Paralympic Games are the most recent element of the modern Games. Their origins lie in the efforts of the staff of Stoke Mandeville hospital in England in the late 1940s to encourage physical therapy for paraplegics. The Stoke Mandeville Games took place in 1952. The Paralympics became part of the Summer Games in Rome 1960 and the 1964 Tokyo Games, then dropped only to reappear in Seoul in 1988 since when they have become part of every Summer Games. From 23 countries and 400 athletes in 1960 they have also grown; almost 4000 athletes from 150 countries will compete in the Beijing Paralympics. Part of London’s successful bid to host the 2012 Games was its commitment to make the Paralympic even more central to the Olympics festival.

Part 2 takes a more thematic look at the Games with separate chapters on financing, promotion, accommodating the spectacle and urban regeneration. As a very quick review they are useful, but readers looking for a closer examination of the costs and benefits, and the role of the games in urban renewal will have to look at more detailed studies.

Part 3 is a series of eight case studies: Berlin, Mexico City, Montreal, Barcelona, Sydney, Athens, Beijing, and London. The earliest is the Berlin Games of 1936 and one of the most important in terms of global spectacular and urban impacts. The subsequent selection is curious. We jump from 1936 to 1968 and some of the more recent Games are not considered. Another edition might want to include all the Games since 1968

This is a comprhensive collection that provides a historical perspective on the rise of the Olympics as a global event in held in particular cities, is suggestive of thematic issues and gives informative and detailed case studies. The issues of environmental sustainability and social justice are regularly addressed. It is an excellent addition to a growing literature on an event that embodies the global-national-urban nexus in all its complexities and paradoxes.

Recent article: Cities and The Summer Olympic Games

Click on the title to access the link to the journal.

Abstract:
This study examines the relationship between the increasing globalization of the Summer Olympics and the affect on host cities. The impact of the Games on city structure, the competition to host the Games, the selling of the Games to urban communities, the real costs and benefits, the city as a focus of global media attention and the role of the Games in the global city imaginary are critically discussed.


Olympic Stadium in Athens: Photo John Rennie Short

Opening Paragraph
“And the winner is…”
At a ceremony that began at 7:30 a.m. (local Singapore time) on July 6, 2005, the President of the International Olympic Committee (IOC) announced the winning bid to host the 2012 Summer Olympic games. The five finalists - London, Madrid, Moscow, New York, and Paris - were narrowed down in four rounds of voting to Paris and London. Dr. Jacques Rogge, in a message carried live around the world, named London the winner. In Trafalgar Square, in the heart of London, jubilant Londoners celebrated the victory, while stunned Parisians gathering outside the City Hall openly wept....

Tuesday, March 10, 2009

Devaluation of Ideas as well as Stocks



There has been a massive devaluation of our stock. To be sure the Dow Jones Industrial Average fell over 53 percent from a high of 14,165 on October 9, 2007 to 6,678 on March 9, 2009. And the stock of companies previously considered blue chip have fared even more dramatically worse: Citibank has lost over 95 percent of its stock value in little more than year. As Marx and Engels first noted, all that is solid melts into air. But it is not just the value of companies and stock markets that is plummeting; so is the intellectual stock of ideas that underpins the present crisis. Three ideas in particular are worthy of some note.

The first is the idea of small government. In his first inaugural address delivered on the west front of the US Capitol on January 20, 1981, Ronald Reagan said, “In this present crisis, government is not the solution to our problem; government is the problem.” No American president, or indeed any government leader this side of sanity, would use the same or similar words to address the present crisis. There is now recognition that markets left to their own devices can wreak havoc as well as bring economic growth. There is a sense that government is the problem solver of last resort when markets fail to work. Just as in the Great Depression of the past, so in the Great Recession of the present, we discover again that governments are important and have a vital role in economic growth and management. This recognition does not answer the question of what precise role the government should play. The continual reference to a New Deal is in many ways a clinging to the past. The original New Deal maintained monopolies, kept prices high and while it did reduce employment, it was always tinged with a narrow economic nationalism that needs to be avoided in the present circumstances of such a linked global system. So let’s have a new term to mark a new beginning, perhaps Global Compact or a nod to an even older reference, The New Social Contract.

New Deal Poster


The second idea that has lost value is the notion that deregulation is the cure for our ills. Markets are always embedded in cultures, societies and states, so there is really no such thing as a pure market. The call for deregulation was really a demand for an overturning of government oversight, mandated standards and systems of control. In the wake of the economic meltdown these now seem like good things; it as if we have rediscovered previously undervalued stocks that are holding their value in the present crisis.

The third idea is that financial globalization, especially the free flow of capital, is a good thing that needs to be encouraged by little or no controls. Unfettered, unregulated flows, especially of the more exotic credit swaps, hedge bets and futures trading, have been creating major problems for years. We had a preview of their inherent instabilities. There was the case of Nick Leeson, a trader in Singapore who brought Barings Bank to collapse with not very smart trades in Japanese stock index futures. In 1995 his losses reached $1.4 billion and the bank was declared insolvent. Then there the futures trader Jerome Kerviel who in 2008 cost the French bank Societe General $7.14 billion, about a fifth of its total capitalization. Both incidents were designated as problems of rogue traders whereas in fact they reflected, embodied, and predicted systemic failings of the entire system. We cannot say there were no warnings.


In the wake of all rapid devaluations we need to re-evaluate our intellectual stock portfolio. The blue chips of small government, deregulation and the unregulated flow of capital are failing and falling. We need to invest in some new, or in many cases old and undervalued, ideas that may give us a better return and create some longer lasting value.

Friday, March 6, 2009

Tuesday, March 3, 2009

The Neighborhood Effect or The Social Nature of a Capitalist Economy

Like many people I am appalled at the prospect of bailing out banks and feckless homeowners. And the pundits are having a field day with the notion of a rule-governed, tax-paying people--that’s us--subsidizing scoundrels and incompetents--that’s them. But much of the anger is based on the mistaken notion that our economic self-interest is undermined by such intervention. This individualistic ideology is particularly strong in the United States. And there is a very real issue of the moral hazard of the public subsidization of reckless private behavior. But we also have to be aware that our financial security and economic health is crucially dependent on other people. Let’s consider the housing crisis as an example. As an individual owner-occupier, I am concerned with the value of my home. But this value is based not only on the characteristics of the individual dwelling but also on the going price of my neighbors’ homes. If they go down in value, so do mine. The price of any home is a function of the homes around them. We can refer to this as the neighborhood effect. Foreclosures increase the number of vacant and abandoned properties and so home values, including mine, decrease. It is in our economic self-interest to have the mortgage crisis solved. And even if you live in a neighborhood untouched by foreclosures--less of a possibility as the crisis worsens--the housing market is based on long chains of purchase. House sales form chains from the top to the bottom of the market. When someone buys a property at the entry level, that enables the existing owner to sell and use the proceeds to buy a more expensive house that in turn allows the owner of a more expensive home to buy another place. A broken link has effects further up the chain.

Neighborhood effects and housing chains are just some of the ways that we as individual homeowners and purchasers are enmeshed in wider connections and ties. We need to remember this so that the debate can more effectively be about the details of stemming foreclosures and minimizing their neighborhood effects rather than on the principle of government intervention as an inherently bad thing. Underlying much of the criticism of economic policy is a mistaken assumption that we are economic isolates. We need to be aware of the social nature of even a capitalist economy, and more especially, of a functioning capitalist economy.

Thursday, February 26, 2009

Memo to New Secretary of State: Declare The War on Terror Over

The newly appointed Secretary of State, Hillary Clinton, can have an immediate and dramatic impact with no fiscal impact. She can declare that the war on terror is over. A simple declaration that the war is over does not imply victory or defeat. It does not imply we do not face serious threats to our national security. It does mean that we can strike out on a new, more effective course.

In the immediate aftermath of 9/11 President Bush declared a ‘war on terror’ at a joint session of Congress on September 20, 2001, and for a crucial time in the lead up to the invasion of Iraq, the mainstream media effectively became Administration mouthpieces rather than watchdogs of the public interest. During the conflict, an almost total policy reliance on military hard power contributed, ultimately, to the shame of Abu Ghraib and Guantanamo Bay. The fiasco of Iraq has turned many nations against the US.

Even the Rand research center, which counsels the Pentagon, came to the conclusion in a study released last year that military force on its own was not a useful strategy against global terrorism. Their study of 648 terrorist groups strongly urges the U.S. to change course and rely less on military and more on policing and intelligence to successfully combat terrorism.

The ‘war’ not all that effective. The Taliban are making a comeback in Afghanistan and while the surge is working in Iraq, it has little to do with the ‘war’ on the terrorists that continue to threaten our national interests. The very war on terror acts as recruiting agency, according to the National Intelligence Estimate produced by our own intelligence agencies. Since the invasion of Iraq jihadi attacks across the world have increased sevenfold. Recent events in Mumbai bring home the message that the terrorist threat is ever present all around the globe.

Of course we need an effective strategy to deal with terrorist threats. But to frame the struggle as a war is to see the solution primarily in military terms. To describe us as a nation ‘at war’ stifles criticism, prioritizes military solutions, halts questioning of policy alternatives, concentrates power in the Executive, links us with repressive regimes, enlarges the military-industrial-security complex, and dissuades allies around the world from joining the cause.

We have created a giant military hammer that will always find a nail somewhere in the world. Since their will always be terrorist threats, a war on terror is an open-ended commitment with no end strategy or exit date. It is a policy that will of course be promoted by elements in the military who want their budgets increased, military contractors who want lucrative deals and security interests who benefit from this government policy.

Let’s face it: Democracy rarely comes in the tracks of military humvees, particularly when we are engaged in a struggle against nihilistic criminal forces. These forces require civilian as well as military responses, soft as well as hard power, ongoing alliances rather than a lone cowboy approach, continuing vigilance and a more flexible set of policies. Extremism results from economic stagnation in countries that give its population little sense of hope or progress. These problems require shaping appropriate global economic policies and forging international cultural connections more than military maneuvers. We also need a new name. The ‘war’ thing is not working. We are engaged in a very long global struggle against terrorists. Calling it a war is a powerful piece of rhetoric that distorts our policy alternatives and is ineffective over the long haul. The war is over and it’s time now for the new Secretary of State to work with other nations and convince them to join us in the continual struggle for freedom, security, democracy and tolerance.

Suburbs in Crisis

In October last year Levittown in New York’s Long Island celebrated a sixty-year birthday. When it opened in October 1947, it was the first of many suburbs that set in motion a major transformation and the creation of truly suburban society. However, many suburbs built at this time are now showing their age and without attention will undermine the stability of these middle class strongholds.

These inner-ring suburbs built between the opening of Levittown and 1970 are now in difficulty as their housing stock deteriorates and population losses mount. As people move back to the city or into new housing on the metropolitan edge many of these inner suburbs are in decline.

The new metropolitan reality is not one of declining central cities and booming suburbs, but of rebounding central cities, expanding outer suburbs, burgeoning exurbs and declining inner suburbs. Fifteen percent of inner ring suburbs are in crisis with deteriorating housing conditions, decline in both income and population and an increase in poverty. These inner ring suburbs in total contain 6.2 million people and 2.3 million housing units; so the problem is substantial.

Few regions of the country are shielded from this mounting social and economic crisis. Yet across the country policymakers and planners have focused attention and public dollars on the development of sprawling edge cities and the redevelopment of downtown central cities. The inner-ring suburbs are caught in the middle of these two stronger development forces and political constituencies. They are the forgotten crabgrass frontier.

If we care about the future of our inner-ring middle-class suburbs, we must act now or risk even more decline. We need only remind ourselves of the history of decline in the nation’s central cities to know what’s at stake.

Three recommendations to save our suburbs:

First, we must reinvest in our inner-ring suburban communities and make them places of destination in our metropolitan regions. In Maryland, the Baltimore County Office of Community Conservation stands out as a national example of what a jurisdiction can do to reinvest in declining suburbs. The office was created in 1995 and has invested over $1 billion in a decade in its older suburban communities that has gone towards improving dilapidated housing stock and struggling commercial strips. This is the type of public commitment required to tackle suburban decline. As part of the investment in infrastructure, a vital part of US economic recovery, we need to consider the inner ring suburbs as primes candidates for major investment.

Second, regions with politically fragmented jurisdictions must find ways to cooperate with one another, or they risk even more suburban decline. The political balkanization of American local government causes suburban municipalities to compete with each another for valuable resources, public dollars, and residents. When struggling inner suburbs compete to offer substantial tax breaks to private investment it can become a zero sum game. This ultimately undermines the ability of government to tackle the problem. Through political cooperation, jurisdictions must find a way to come together and cooperate on regional issues like transportation, housing and poverty.

Third, we need to find a way to rebuild, renew and rehab the aging infrastructure and older housing stock. Congress and the new president should reconsider legislative proposals to create a federal trust fund to revitalize older suburbs.

The time is ripe to act. After the sixtieth anniversary of Levittown, let us not let the legacy of a stable, prosperous middle-class suburbia fade and die.




This piece was written with Bernadette Hanlon, a research analyst at the Center for Urban Environmental Research and Education at UMBC and Thomas J. Vicino, an assistant professor at Wheaton College. Bernadette’s book on inner ring suburbs will be published by Temple University Press. Tom is the author of the book, “The Transformation of Class and Race in Metropolitan Baltimore: Suburban Crossroads.”

Tuesday, February 24, 2009

Legitimation: The Other Looming Crisis

While the news is filled with stories of the mounting economic crisis less attention is paid to what I call the legitimation crisis: the growing loss of public confidence in our economic and political leaders. Of course the two are connected, when the economy is growing our leaders look smart, when it falters they look fallible and replaceable. Part of the problem lies in the elites’ own response. They take the credit when things are going well but when things go bad they tend to deflect any criticism. It’s not our fault! Who could have seen it coming? Its unprecedented! But if leaders can only respond to the foreseen they are not really leaders and they deserve neither deference nor excessive payment. In other words they are like you and me stumbling along; neither masters of the universe nor geniuses. It then becomes more apparent that people in leadership positions are not there because of their greater intelligence but more the result of accident of birth, connections and luck. Their elite status is less a function of ability more a reflection of good fortune and useful connections. Another sure sign of their ordinariness is their inability to adjust to the new situation, whether it be senior executives justifying bonuses while their business are tanking while demanding for public monies or Cabinet appointees still persisting despite income tax records that reflect either incompetence or greed.

I have nothing against Timothy Geithner, a man considered a genius until his income tax returns were made public, or former Merrill Lynch CEO John Thain, a man paid lavish bonuses as his company lost billions, but their behavior reflects the arrogance and insensitivity of too many of America’s leaders.

The elite they did well in the growth years and look set to do well in the downturn. They seem to lead a different life from you and me. It is not just that they have more money but that their lives are protected from consequences. Their mistakes are not punished but seemingly forgiven in the political confirmation and executive compensation equivalent of endless do-over. Not so for the car workers laid off or state workers like me, whose wages are furloughed. No the lives of the US elite continue to go on in an endless succession of continued compensation and privilege. The notion of shared sacrifice vital in a democracy undergoing economic trauma is rendered obsolete by an elite permanently insulated from downturns.

We are becoming a nation led by a tiny insulated elite that seems unaffected by democratic political changes. A new administration, same kind of political appointments as wealthy Clinton retreads move from their lofty perches on boards and think tanks back into government and meanwhile ousted Republicans fill the vacancies left on the boards and finance houses. It is an endless revolving door as former political elites become part of the economic elite and transform back again. Cabinet nominee Tom Daschle did not seem to think that getting a free car and chauffeur was a taxable benefit. He must have assumed that is was just something he got as of a right when he entered the revolving door that leads from the Senate to a series of cushy economic positions and lucrative business appointments.

The difference between open and closed societies is that elites can be replaced or at the very least renewed with new talent. What is very disturbing is the shift towards a closed elite reflected in the rise of well funded political dynasties such as the Bushes, Clintons and Kennedys, but also embodied in the reality that as the middle class becomes more separate and more pressed for resources, they and their offspring find it more difficult to break through the class ceilings. You need money to make money, you need an expensive education to assure you of the right connections-- witness all the Harvard and Yale alums in the new administration-- and you need the residence and lifestyle that connects you with the other elites. As elites cocoon themselves in privileged lifestyles, they reinforce the connection between each other and reduce the entry of the rest. A number of serious studies show that social mobility, both intergenerational and short term, has declined in the US. Not only do the poor remain poor but also the middle-class now has less chance of joining the wealthy.

What made America so great, and so different from many other countries around the world was the level of optimism. It had many sources but chief amongst them was a sense that economic and political leaders are smart, relatively honest, share lives and shoulder sacrifices much like our own with the real opportunity that talented people can rise to the top. But when the elites are politically deaf and economically dumb, when their lives are so different from ours, their gains so high and their sacrifices so small, and when entry to the top is so restricted, then our belief in the system falters and our optimism fades. Economic crisis can be fixed with upturns in the business cycle and government stimulation. A crisis of legitimation is more corrosive and longer lasting, as it leads to a steady decline into cynicism and indifference. And that is something that even a trillion-dollar stimulus package cannot put right.