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Saturday, July 11, 2015

What Is Community?

Forty-seven years after I left home I have moved a dozen times in three states and have lost track of all those people I used to know from my neighborhoods.  The one thing that remains is the idea in my mind that everywhere I go on a continuing basis, everywhere I live and everywhere along the way in between those end points is my neighborhood.   Instead of trying to ignore the passage of time between start and finish I try to make an interesting trip of getting there.

New Yorkers know about this concept.  When you travel on the sidewalks in an urban place the opportunities abound to interact with people of all character.  New Yorkers are not highly automobile oriented.  Mainly there is the lack of parking spaces.  Secondly there is the level of traffic.  Thirdly there would be the isolation that comes with having to attend to a car and drive alone to ones destination.  People who live in NYC do so for the diversity of people who live nearby, walk the same streets and ride the same subways.  Part of the idea is to reside close to work and not have the commute that suburban dwellers must do to work in the city.

The sidewalk is neighborhood just as are the apartments next door and across the hall, and maybe even more so.  There is wondrous interactions between store owners, cafĂ© waiters and the customers on the street.  You can meet the love of your life, an old acquaintance, a future employer, some guy whose brain spews poetry.  To meet them while driving a car, you’d have to run them down and get out to apologize.  I understand that has been done, but I don’t recommend it.

The train, the plane, even a greyhound bus ride can make for an interesting time if you are not too critical.  After all this is ‘being out in public.’  You get the good and the bad.  It is what you make of the time and the encounters.  I have met some very interesting people on plane, trains and in subways.  I have never met anyone interesting at a highway rest stop.  First they are all too busy getting where they are going and all wrapped up with getting the kids and the dog into  the vehicle and all the accumulated trash out.  For them the highway is a necessary evil to be endured between home and the National Park or Grandma’s house.

What you know about your neighborhood becomes part of your mental geography.  Just like some people can drive around anywhere and remain oriented, others just know how to get from one point to another over sometimes thousands of miles of distance.  Without many years of being accustomed to public mode of travel, many people do not feel comfortable in any other mode than flying to distant airport and taking a taxi to the hotel.  The driver is supposed to know the way and assist with stowing the suitcases in the back. 

Transit oriented travel can be just as easy if the traveler is in tune with the methods.  For example, in my mind is the mental map of the entire trip between my Baltimore home and the house my sister has in Gloucester, Mass.  The transit oriented trip requires 7 segments with 6 inter-modal exchanges.  The automobile oriented flight requires 3 modes with 2 inter-modal exchanges.  The latter travel itinerary costs a $15 taxi ride and the commitment from my sister to drive 2 hours for 100 miles to pick me up at Logan Airport.  The former method utilizes two free shuttle buses, a subway ride and a commuter train ticket to the end of the line in Gloucester.  It ends with a five minute car ride by my sister from the train station to the house.  Going back home is just the same.

To accomplish the transit oriented trip one must know the details of the systems to be used or just be well aware of how such methods work.  One doesn’t have to have ridden a city’s subway before to be aware of how subways work.  One doesn’t have to drive every Interstate highway to know how Interstates work.  It all depends on what you put in your head.

Not everyone is compatible with public transit modes of travel.  To them, I say keep driving.  We would not want reluctant participants being forced to ride a bus or train.  They would mess up our enjoyment of the trip like so many road-ragers do on the highways and streets for motorists. 

The future holds for us that which is inexorable truths.  Fuel to operate our cars will continue to be much more expensive and in lesser supply as globally more people want it.  The roads will become more decayed even as there are more cars and drivers wanting to drive more miles per year.  The demand for “lane-space” will outstrip our ability and our funds to build more.  It takes decades to build any road or fixed-guideway transit project so we better get started.  You are getting older and may one day be denied the privilege of driving on a public thoroughfare because you can’t see well enough, react fast enough or remember where you are going and why.

The following are still truths but we can do something about them. Homes and jobs are getting further apart requiring longer commutes.  Peoples’ incomes are getting smaller so they will be able to afford only less.  Whether it is a big impact or a small one, too much carbon in the atmosphere is going to do damage. 

Communities and neighborhoods are all human settlements, but not all human settlements are neighborhoods and communities.  When people associate with each other by the choice of where they go, their home locations are not communities or neighborhoods.  Families choose several communities for themselves that relate more so to their preferences than their residences.  There is the school community that relates to their children.  There is the church community that relates to their faith.  There is the work community if the adults actually like where they work and want to associate with their co-workers.  Some even have a vacation community where they visit every summer.

The world and this county in particular will change over the next few decades. There will the periodic variations that appear to indicate remission or even a return to earlier times such as when global politics resets lower the price of motor fuel for our automobiles. This will be only a temporary reprieve.

The warmer climate may manifest as cooler summers in one spot of the globe while increasing it in others. Some level of solar activity may dampen the heating of the planet for some period of time, but the trend continues as we force the atmosphere to accept all our exhaust.

Neighborhoods will be splintered in one place while others will be made firmer and more durable. It is for all of us to do what must be done to keep our activities part of a System that functions for a sustainable future.

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Thursday, July 9, 2015

Austerity! Austerity! We must have Austerity!

Austerity! Austerity! We must have Austerity!

The concept of Austerity with a capital A is mostly a European invention. It was used during the second War to End All Wars, aka WWII, to bolster popular support for doing without essential commodities so that the Allies could win the war. Germany imposed its brand of austerity but more with the butt of a rifle than with the rhetoric of the Ministry of Food and other governmental bureaucracies. The populace was exhorted to conserve, ration, and do without in order to spread around what supplies remained available so that everyone had something.

During WWI and WWII the shortages were due to Germany's armies attacking the supply ships and resource producing capacities. Today the austerity stems from government inaction, willful refusal to raise the necessary financial revenues that the economy needs and the unfunded growth in living population that requires support.

In America we call it "cutting entitlements" while the rest of the world calls for Austerity. In the US the Conservatives disparage the poor, low-wage employees, the lazy, and moochers for the state of deficit and growth of spending. The reality is that the greatest growth in public spending is military, increased cost of pharmaceuticals and other medical costs, the cost for each additional American who reaches retirement age and tried to start collecting his/her pensions and Social Security. Public welfare costs are the smallest portion of the total costs.

In the US a sizable portion of the retired and soon-to-be retired population has privately funded and employer paid pensions. In the European economic sector most people are expecting to receive publically funded pensions. Here in the US, Republican-led legislatures are gutting the public pension sectors in advance of accelerated retirement of our "baby boom" population that is 59 million strong. The people who were in charge of making sure that the revenue collections and investment returns were adequate to the task failed to perform. Now they seek to pin the blame of too many "welfare queens", moochers and Union Thug attitudes that gift big pensions to public sector union employees at taxpayer expense.

On both sided of the Atlantic the underlying causes of national debt and budget deficits are the aging population and the failure to assess and collect taxes on business profits. In Greece the businesses just don't pay and nobody has the juice to pursue the deadbeats. In the US the corporations and wealthy families sequester their wealth in off-shore nations where the US Treasury cannot yet touch them. The estimate of domestic profits of US companies sequestered abroad range from 2 to 6 Trillion Dollars. Sometimes these same Dollars are the ones that were used to buy the foreign and US national debt bonds. The difference between the investments and the funds paid as taxes is that the bond funds generate interest while the taxes don't.

The Three Things That Money Will Get You

The idea that money will get an investor even more money via interest and capital appreciation is only the first and simplest of the benefits of having lots of spare money. Even a few percentage points on a billion dollars is a huge return. Even just 2% is $20 million per year.

The second benefit of lots of money is the ability to leverage an investment. $100 Million as matching can leverage another $900 million and build a lot of asset property that will generate annual income and possibly appreciate in capital value for later sale.

The third benefit of lots of money is power over other peoples' lives. When someone owes you money they owe you allegiance as well. This is the most seductive of the three uses for the entity that has the money. It is also the one that gets the lender the biggest potential reward.

Making a loan that is paid back on time has an arithmetic maximum value. That 2% interest is good for $20 million a year for maybe 10 years. So the value is limited to $200 million. If the borrower is late, the interest amount paid goes up.

If the borrower becomes less than AAA rated, the lender may require additional collateral to be signed over to protect the balance. That total collateral may actually exceed the original loan balance and might appreciate during the loan term.

Lastly, if the borrower defaults the lender may acquire valuable assets that he had his eye on all along.  Such is the urban Real Estate game in some neighborhoods in some cities. What the borrower wanted was title to all the properties within a contiguous area. Over lending on the property, employing low introductory adjustable rates and helping a neighborhood to decay assures that it is only a matter of time before everyone defaults and walks away from their homes. Then the urban redevelopment is designed and built.

In the case of major lending to governments, even though the loans are not expressly collateralized, when a default and a bankruptcy occurs, all public assets are placed on the table to be haggled over by the parties and the court.

The world saw that exact practice employed in South American countries in the 1970s when Venezuela, Chili, Argentina, and other countries were forced into submission with debt and austerity that left the populace unable to resist the fire sale deals their US installed military Dictators signed with multinational corporations. Prior to the privatization process, the countries' governments owned all of the major businesses and resources: Gas and oil rights, water distribution, telecommunications companies, roads and bridges, dams, and electric generation capacity. Afterwards most of those assets were owned by the likes of ITT, Goldman Sachs, et al.

Later the same maneuvers were applied to Eastern Europe, Asia and Russia.     

Austerity is one of the methods that Naomi Klein describes in detail in her book "The Shock Doctrine: The Rise of Disaster Capitalism". Cut the revenue stream i.e. don't actually collect taxes, slash all public spending, raise prices, and lend money to "balance" budgets then collect. Currency becomes worthless, banks are closed. Then the government sells all its public assets (schools, water distribution, sewage systems, telecom, natural resources at fire sale prices of Cents on the Dollar.) Does all this sound familiar about Greece? It should!
. . .
This is a practice invented by the Milton Friedman devotees and employed widely in South America in the 1970s. They used it to privatize much of the economy by multinational corporations.

Greece is now in jeopardy of defaulting on billions in national debt that was provided by lenders outside of Greece. The German government finance people brokered the original loans and convinced the backers of the International Monitory Fund (IMF) to lend the funds. Those backers used German peoples' pension funds to make those loans and now Germany is loath to forgive any amounts because Germans would have to feel the pressure of the loss of their money. It goes around and around and can be described by the Domino Model as described in the Principle of Imminent Collapse. One weak link in the financial chain can bring down a host of other money funds that are dependent on the music not stopping in the Game of Musical Chairs.

The USA can issue additional dollars any time it wants to to bolster and stabilize its currency and have sufficient funds for people to continue to do business and pay their bills. As part of the Eurozone, Greece cannot do that. They cannot devalue their currency relative to other nations because it is Euros and they don't control that. With Drachmas they could. But with an exit of the Eurozone at this troubling time chaos would surely follow. This is not to say that an orderly exit after becoming stable again, Greece won't choose to leave.

The bigger worry in the world is the debt to GDP ratio that must be maintained in order for people to not revolt must be kept in order. Every Western nation and in Asia is on the same track to bankruptcy in they do not do something about their lack of government revenues needed to pay their debts. In this scenario, Greece is merely the Canary in the mineshaft and I've seen the canary.

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Austerity and Cuts to Entitlements

Here are some selective readings on where we have gotten in the world today. The global issues with which we are faced are not simple and straight forward. If the solutions were easy we would have done them by now and this conversation would not be necessary (nor would all the commentary that passes for intelligent discourse - you know which you are.)

Each of these sections are Blogspot blogs and contain far more than is listed in this short list. Well considered comments are invited, but moderated.

I know that I am an "idiot", "moron" and numerous other descriptions, so you should endeavor to refrain from pointing that out. Resorting to ad hominem attacks is the sign of having nothing more to contribute. If you want silly bugger content there is for that.

Sustainable Geometry

Sustainable Geometry

Invest Versus Spend

In Praise of The Nanny State

Its No Wonder That The Economy Sucks

Dear Tea Party Members (An Open letter)

Sustainable Unemployment

Vulnerable Geometry

You Say You Don't Like Giving People Welfare

Wall-Street: An Abusive Parent

Attack On The Middleclass

Its All Tuna!

Debt And Tax Breaks

Sacking The Treasury

Political Concepts of Wealth and Taxation

Principle of Imminent Collapse

The Domino Model

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Tuesday, July 7, 2015

Military Bases: Can't Live With Them – Can't Live Without Them

It just goes to show ya how entrenched in the economy that the US military is. This is not a good versus evil, conflict profiteering rant about defense contractors getting billions of dollars from the taxpayers. Well it is just a little bit.

The bigger economic issue is that military bases are good for the local economy even if the soldiers are deployed for immoral money profiteering purposes. The businesses just outside the gate definitely earn a significant amount of their revenues from the service men and women who are stationed there. All one needs to do is drive along the highways that lead to the guard gates and see the number of liquor stores, automobile dealers, pawn shops and gun stores, convenience stores, check cashing/payday loan signs that line the road on both side of the pavement until the actual base displaces one side of the strip or the other.

Civilian workers also draw their paychecks from the military bases and spend some of it locally. Restaurants, supermarkets, drive-thru banks, doctor offices and clinics proliferate in the region. Motels and schools are also part of the local economy that is driven by the presence of the bases. The bases provide a reason for the community to exist. The foregoing description doesn't intend to characterize which type of businesses that either military personnel or civilians might choose or need to patronize.  

Base Realignment and Closure (BRAC)

JeffersonCounty, N.Y. Fort Drum. Is an example of the boom and bust cycles that military spending and budget cuts creates and destroys. The military version of the Tire Plant or Automobile Plant closing similarly leaves communities bereft of the employer-base that make the location viable for people to live.

When the military economy is booming, houses get built, hotel space and all the amenities of a thriving human settlement materialize through the auspices of the private enterprise sector. Many times the local government which is itching to promote development give tax breaks and incentives for investors to invest. But then comes the inevitable downturn that kills so many military base communities. A base like Fort drum can station several hundred thousand soldiers and civilian employees making it larger than all small towns in the US. (under 25,000 is small, regions under 50,000 can be labeled rural). During a reduction in force, a base may lose 10,000 to 50,000 people when family members are considered. They constitute 1 or 2 small towns in size.

The military budget consists of three parts: 1) munitions and expendable hardware, 2) personnel, and 3) mobilization.  Personnel salaries are about 10% of the total annual budget so reduction is force have only a small impact on the overall budget. It is, however, the easiest to reduce. Soldiers have no lobbyist clout or unions to boost for them at time of reductions.

The massive defense contractors do have the ears of the Congress. Once Congress approves a budget and the military brass sign a contract for hardware and munitions, there is little chance of "walking it back." The multi-year, sometimes multi-decade, procurements rarely get curtailed as being "good money after bad" when a weapon system fails to materialize as contracted. It is extremely difficult to stop a procurement.

Defense contractors have a home too and their communities are loathe to lose their bread and butter either.

Mobilization costs can be curtailed the easiest by just not deploying soldiers and materials. The problem is that a tank that is sitting in formation at a military base cost nearly as much to keep it ready when it is not going to be used as it does to use it. An aircraft carrier devoid of purpose and a regular complement of crew still needs human attention. The closing of a base doesn't stop the expenditures that it incurs while fully commissioned. The Defense Department is loath to ever sell off any bases that ever were built in the first place.

With all due consideration, not too many private developers would even want the land on which a military base ever existed. Most structures were built at a time that paint and pipe were common, asbestos insulation was common and all sorts of chemicals and munitions were summarily "disposed of" on site just like coal fired electric and nuclear power plants also do.

So it costs taxpayers money to have a military base open and it costs money to close one and keep an eye on it while preserving as much of it as possible for the day when it would be reopened.

The Reason to Exist for a community must remain or it will become a ghost town. The difference is that the military base ghost towns will remain guarded forever.

"I am the midnight watchman down at Miller's Tool and Die.
I watch the metal rusting, I watch the time go by." ~ Harry Chapin

The creation of human settlements rarely involve more than one reason to exist. Cities may be the exception as in when the city is at the head of river navigation and serves as the transfer point to overland transport. The city of Pittsburgh was founded on iron and steel production, but branched out in to a major corporate headquarters city. The city almost died as the steel industry evaporated and the corporations consolidated, moved or themselves evaporated. But Pittsburgh found a new reason to exist with lighter industry and high-tech enterprises that now drive a far cleaner economy.

Base Realignment and Closure studies need to brainstorm new purposes for the community or just be prepared to say the entire location is being given up for dead. There are two sides of a base closure. One side is the military personnel who can be helped to relocate to another site. The other side is the hole that those people leave in the local economy when they depart.

American backroads are littered with the detritus of towns that bloomed in the sun then died on the vine. This process is a manifestation of the capital economy we embrace. Unfortunately, people get left behind when they cannot or will not leave with the rest of the place. For them is the future of haunting the skeletons of their former communities.