Tuesday is Dues-day: Betrayal of the American Dream

Today is Dues-day, but what are the dues?

Paying attention . . . Yes, by simply schooling yourself on how our local governance is organized, who are the players, what are the screw-ups, where is the money and what things get reported you can legitimately call yourself a citizen, an advocate for democracy.

Citizen Tip = Look beyond conventional media (steeped in entertainment)

It's not quite so simple to compartmentalize local and national news in this economic recession (depression for millions).  Listening to local news and to standard cable stations is where real disinformation is propagated. The Sunday shows are the worst of the worst.  This is an opinion I share with an outspoken political blogger, driftglass.  It isn't even about politics for this crowd, it's about a lifetime gig of punditry with staggering income.

"Because despite having long ago devolved into a sinkhole of Beltway centrist twaddle, it is still viewed by altogether too many people as a bastion of Very Serious people -- it's the strip-mall of political opinion where casual shoppers go to feel smart and validated."

Here, in the Democracy Now video below, is an alternative with a true journalist asking probing question of notable writers with actual facts to talk about why and how our nation's middle class and working people have been betrayed.  Even presenting this is a leap of faith that our community is filled with people unafraid to read, to study and to ponder . . . just as they are willing to sit through council meetings, study agenda reports and write community commentaries and letters to the editor.  We have our share committed advocates and know we will engage more.  The times are becoming more and more critical to do so.

ALEC Rock

Schoolhouse Rock remains one of the catchiest tunes from a generation to teach how a bill becomes a law.  Trouble is, in 30 years this legislative process has been completely sabotaged by big money and special interests.

For those who read and follow the national systems breakdowns that have been rapidly speeding up in the last decade, ALEC is no mystery.  Here is a brief overview of "What is ALEC?" for the rest of us from ALEC Exposed:

"ALEC is not a lobby; it is not a front group. It is much more powerful than that. Through ALEC, behind closed doors, corporations hand state legislators the changes to the law they desire that directly benefit their bottom line. Along with legislators, corporations have membership in ALEC. Corporations sit on all nine ALEC task forces and vote with legislators to approve “model” bills. They have their own corporate governing board which meets jointly with the legislative board. (ALEC says that corporations do not vote on the board.) Corporations fund almost all of ALEC's operations. Participating legislators, overwhelmingly conservative Republicans, then bring those proposals home and introduce them in statehouses across the land as their own brilliant ideas and important public policy innovations—without disclosing that corporations crafted and voted on the bills. ALEC boasts that it has over 1,000 of these bills introduced by legislative members every year, with one in every five of them enacted into law. ALEC describes itself as a “unique,” “unparalleled” and “unmatched” organization. We agree. It is as if a state legislature had been reconstituted, yet corporations had pushed the people out the door."

If comparing on a macro level this corporate collusion via ALEC, it has many similar qualities with our local crony club behavior that writes contractoral agreements like the ERGA agreement creating a public-private partnership that is largely hidden from public view.  Or what about the ongoing ERAC group hand selected to advise council on the General Plan Update?  When all is said and done, it largely scale that makes these all different things.  The elected officials, their paid staff, lawyers, bankers and lobbyists create the confusion to obfuscate pretty simple concepts of greed and dubious financial arrangements underwritten by taxpayer dollars.

The only reason it works is the public's lack of awareness and outrage.  Like the cartoon, great simplification - but let's hope the tune sticks.

We Write Letters: Zoning Ballot Initiative

Let Encinitas Voters Decide What Sort of Development We Can Live With
A new community group is pushing for a ballot initiative that would let voters have a say when it comes to major development projects that impact quality of life.
July 27, 2012 Patch
Dear Editor,

For most participants, the process of updating the housing and land-use elements of the Encinitas General Plan has been frustrating and difficult. These elements must be resolved before the City Council can consider the overall General Plan Update. To engage the public in re-drafting the housing element, the city administered a dot-mapping exercise that pitted the five Encinitas communities against each other. We have yet to see the results of that exercise.

Consequently, the General Plan Update is stalled after two years of work, and there’s still no red-line version of the current general plan. These circumstances should produce local political drama in the run-up to the November election.
Some residents who were concerned with the potential outcome of the dot-mapping exercise have formed a committee called the Encinitas Project. The committee’s goal is simple: a ballot initiative that would let registered voters in Encinitas decide on major density increases in the city.

At issue are up-zoning decisions meant to increase the density set by the present General Plan. A four of five member majority of the Encinitas City Council is required to approve certain up-zoning in the five communities—New Encinitas, Old Encinitas, Cardiff, Leucadia, Olivenhain—that make up the city.
Because the General Plan Update won’t go before the current Council before November’s election, the next City Council will eventually vote on it, should the present procedure remain in place. However, if the Encinitas Right-to-Vote Initiative reaches the ballot and voters approve it, residents will decide if major density increases should be allowed in the city.
With the Encinitas Right-to-Vote Initiative in place, voters would have the opportunity to decide if proposed changes respect community character, and maintain or improve their quality of life. Poorly planned projects that would increase traffic and the carbon footprint, degrade infrastructure, force density or height changes, or just fit badly with our community character would have little chance of approval.

The initiative is not no-growth, but it would mean growth most people can abide. The City of Escondido adopted a similar initiative, and that community has since approved two development projects because voters felt they were a good fit.
The Encinitas Right-to-Vote Initiative would take the trickery out of land speculation. Developers would have to work within current zoning. Pushing city council members to up-zone would stop. Similarly, city planners would have to submit proposed up-zoning to a vote of the people. The initiative would subject the General Plan Update to a voters’ referendum.
The Encinitas Right-to-Vote Initiative would govern major housing and land-use amendments. The initiative defines a major amendment as any that:

• Increases the number of permitted dwelling units on a residential lot
• Increases the number of separate parcels that might be created from an existing parcel

• Changes zone type for a parcel from Agricultural, Public/Semi-Public, Ecological Resource/Open Space/Parks or Open Space to a different zone type
• Changes zone type for a parcel from a non-mixed-use zone to a mixed-use zone
• Changes a parcel from any residential land use to any non-residential land use
• Increases the allowed maximum height of development or how height is measured
• Increases the maximum allowable commercial or retail square footage for a parcel
• Repeals any planning-policy document 

Most Encinitas residents want to maintain our small beach-town atmosphere. We’re concerned about environmental issues, traffic, adequate resources, proper infrastructure and overall quality of life. We love our town and want to continue loving it. As Encinitas approaches built-out status, growth can only go two ways: denser and taller. A look at community history reveals that local control of growth motivated Encinitas to incorporate as a city in 1986. Passing the Encinitas Right-to-Vote Initiative is in keeping with that precedent. 

Volunteers are starting to walk neighborhoods to gather the number of signatures needed to get the initiative on a future ballot. Volunteers will also be in front of stores with forms for registered voters to sign. You can also find out more about the initiative by visiting the committee’s website at http://www.EncinitasRightToVote.com. 

The Encinitas Project Committee is encouraged by the very positive response it’s received so far. The committee’s website will soon list dates and locations where registered voters can sign the ballot initiative petition.

Thank You,
Encinitas Project
Editor’s Note: You can also follow the group on Twitter at @EncinitasRTV.

The Story of Change

From Annie Leonard - Story of Stuff Website:

I used to think the truth would set us free. Like many who care about the environment, I spent years thinking that information would lead to change. So I wrote reports, gave speeches, even testified before Congress.

Some things changed. Sadly, the big picture didn’t.

For a long time I couldn’t understand why. Now I’ve realized that it isn’t because we don’t have enough data, white papers or experts to tell us we’re in trouble. The problem is we’ve forgotten what it takes to make change.

My new movie, The Story of Change, argues that’s partly because we’ve gotten stuck in consumer mode. 

She continues:

I’ve come to see that we have two parts to ourselves; it’s almost like two muscles – a consumer muscle and a citizen muscle. Our consumer muscle, which is fed and exercised constantly, has grown strong. So strong that “consumer” has become our primary identity, our reason for being. We’re told so often that we’re a nation of consumers that we don’t blink when the media use “consumer” and “person” interchangeably.

Meanwhile, our citizen muscle has gotten flabby. There’s no marketing campaign reminding us to engage as citizens. On the contrary, we’re bombarded with lists of simple things we can buy or do to save the planet, without going out of our way or breaking a sweat. 

No wonder that faced with daunting problems and discouraged by the intransigence of the status quo, we instinctively flex our power in the only way we know how – as consumers. Plastic garbage choking the oceans? Carry your own shopping bag. Formaldehyde in baby shampoo? Buy the brand with the green seal. Global warming threatening life as we know it? Change your lightbulb. (As Michael Maniates, a professor of political and environmental science at Allegheny College, says: “Never has so little been asked of so many.”)

Now, all of those are good things to do. When we shop, it’s good to choose products without toxic chemicals and unnecessary packaging, made by locally-based companies that treat their workers well. But our real power is not in choosing from items on a limited menu; it is in determining what gets on that menu. The way to ensure that toxic, climate-disrupting choices are replaced with safe and healthy alternatives – for everyone, not just those who can afford them – is by engaging as citizens: working together for bigger, bolder change than we could ever accomplish as individual consumers.

Look back at successful movements – civil rights, anti-apartheid, the early environmental victories – and you’ll see that three things are needed to make change at the scale we need today. 

First, we need a Big Idea of how things could be better – a morally compelling, ecologically sustainable and socially just idea that will not just make things a little better for a few, but a lot better for everyone. Millions around the world already have that idea: an economy based on the needs of people and the planet, not corporate profit.

Second, we need a commitment to work together. In history’s most transformative social movements, people didn’t say “I will perfect my individual daily choices,” but “We will work together until the problem is solved.” Today, it’s easier than ever to work together, online and off. 

Finally, we need all of us who share that Big Idea to get active. We need to move from a place of shared concern, frustration and fear to a place of engaged citizen action. That’s how we build the power to make real change.

We have to aim high, work together and act boldly. It’s not simple, and it won’t be easy. But history is on our side. Let’s get to work to make the kind of change we know is possible.

posted by Annie Leonard
July 17, 2012

Pure Evil?

Build Community

"Learn from new and uncomfortable angles" meant a lot this week with the posts on gun violence and homophobia.  Community, like relationships, like family means being able to allow oneself to be uncomfortable to address difficult things.

Learning how to be community-minded is a challenge for the 21st century.  After decades of systematically learning how to be almost completely self-involved as the preferred lifestyle choice, we must un-learn our commodities focus world view in order to withstand change and stress to come.

Thanks to Teresa Barth for her recent Facebook entry.

Religious Symbol Rather Than a Lethal Weapon

The Denver shooting yesterday in a movie theater and the San Diego man who did the killing with many guns and many victims is something some are still processing. Too close to home? You can be sure it won't be labeled terrorism, the shooter is white. 

In the New Yorker, Adam Gopnik laments that "no one—really no one—anywhere on the political spectrum has the courage to speak out about the [destruction] of unleashed guns and what they do to American life." 

Quoting Gopnik's piece, Digby adds:

 "We will mourn the casualties the way we mourn the deaths of those in hurricanes and tornadoes. Gun violence is now a 'natural' event in America, as unpredictable as the weather, and there's nothing we can do about it except gather together in the aftermath to help the victims. Indeed, the only enduring threat these events foretell is from those who would question a culture that deifies the gun as if it were a religious symbol rather than a lethal weapon." 

Appreciation to Melissa McEwan for the quotes, links.  Having lost a daughter to such a "religious symbol" in the form of a 9 mm Beretta, there are no words to convey my contempt for this culture.  And speaking of contemptible, Rifle Magazine tweet Friday morning. Wretched timing . . .

hat tipTengrain

Councilwoman Barth's Letter to the Editor

I have long been a champion of Open Government and the Peoples Right to Know. I also believe government should welcome the public’s participation in the decision making process.

In California, the cornerstone of openness and transparency in government is the Brown Act. This is the state’s open meeting law that requires local governments to prepare and post agendas for public meetings and disclose decisions made in closed meetings. Because these requirements are considered to be a state mandate the state must reimburse the cities, counties and other agencies for the costs associated with these requirements

When the state budget was adopted, the money to reimburse those costs was cut from the budget. By suspending the mandate, the state also suspended the requirement to continue posting public meeting agendas.

Without public notice of where and when meetings are scheduled and what business is to be addressed the public is shut out of the decision making process. Furthermore, actions taken in closed sessions may never be revealed to the public.

In such cases the public will have no basis for challenging the secrecy and no remedy for correcting it.

That is why I requested that this issue be placed on the August 15 council agenda, the first meeting after the summer recess, to ensure that in Encinitas, the Brown Act requirements and all legal remedies will be enforced. [ed. bold]

It is critical that the City of Encinitas send a clear message to the citizens that we value open government and public participation. I believe the city council will agree and will join other cities in reaffirming our support for the agenda and disclosure requirements.

Show your support for open government by contacting the city council and let them know you want the city to continue with the current Brown Act posting and action disclosure requirements and their enforceability by any of the judicial remedies provided in the Brown Act.

You can also help to ensure a permanent, statewide solution. Senator Leland Yee’s Senate Constitutional Amendment (SCA) 7 would place on the statewide ballot a simple constitutional requirement: “Each public body shall provide public notice of its meetings and shall publicly disclose any action taken.” If approved by the voters, it becomes the law and could not be “suspended” again without a vote of the public.

However, this bill is stuck in the Appropriations Committee. Contact Assemblymember Fuentes, Chair of the Assembly Appropriations Committee and Speaker of the Assembly John Perez and let them know you want SCA 7 (Yee) released from the Appropriations Committee suspense file and to allow the bill to go to the full assembly for a vote.

Hon. Felipe Fuentes (Chair) Email assemblymember.fuentes@assembly.ca.gov
Hon. John A. Pérez (Assembly Speaker) Email speaker.perez@assembly.ca.gov


Teresa Arballo Barth
Councilwoman
City of Encinitas

Chick-fil-A - rhymes with Rue the Day

Just so you know . . . the news this week in Encinitas is the opening of Chick-fil-A.

In the news nationwide this week:

The Chick-fil-A corporation has long funded anti-gay organizations. According to an Equality Matters analysis of public records, in 2010 the company’s foundation distributed nearly $2 million to anti-LGBT groups including the Marriage & Family Foundation, the Family Research Council, and Exodus International — and millions more in previous years. But this past March, when Northeastern University rejected a proposed contract to bring a Chick-fil-A restaurant on campus, a Cathy bizarrely claimed that the company had “no political agenda.” 

So here is an idea - how to make your own chicken fillet sandwich. Looks good and Hilah is great fun.

If homophobia intensity isn't enough, check out this bit of paranoia and control issues from the corporate owners of this fast food outfit opening in Encinitas.

Chick-fil-A, the popular chicken chain with the homophobic charity arm, is worried about kale. Specifically, they are worried that consumers might confuse their illiterate spokescow's slogan, "Eat Mor Chikin" with Vermont folk artist Bo Muller-Moore's silk-screened "Eat More Kale" t-shirts. Can't make this stuff up! 

Muller-Moore took his story to the AP, which reports:
In a letter, a lawyer for Chick-fil-A said Muller-Moore's effort to expand the use of his "eat more kale" message "is likely to cause confusion of the public and dilutes the distinctiveness of Chick-fil-A's intellectual property and diminishes its value." 

For his part Muller-Moore, who says his gear is "an expression of the benefits of local agriculture," is not planning on backing down. He already stood up to the company over the slogan five years ago and doesn't see any reason to stop now (that legal matter never went to court and was resolved, which he assumed meant he won). The 38-year-old says "This feels like David versus Goliath. I know what it's like to protect what's yours in business." So he's gotten himself a lawyer, and his lawyer sounds confident. 

"Bo's is a very different statement. It's more of a philosophical statement about local agriculture and community-supported farmers markets," lawyer Daniel Richardson said. "At the end of the day, I don't think anyone will step forward and say they bought an 'eat more kale' shirt thinking it was a Chick-fil-A product." 

If you want to support Muller-Moore, whose day job is fostering adults with special needs, you can buy a shirt at his website or just sign this petition.

Contact the author of this article or email tips@gothamist.com with further questions, comments or tips.

Quote of the Day

"Eight years was awesome and I was famous and I was powerful," Bush told the Hoover Institute's Peter Robinson. "But I have no desire for fame and power anymore. … I crawled out of the swamp and I'm not crawling back in." George W. Bush

Jeebus, the US electorate are the stupidest people on the planet.  How could we?

It's good at this stage to remember we didn't.  The Supreme Court crowd put this clown in charge. But still . . .


We have very little reason to believe that stupidity will reign in this upcoming election that big money is attempting to buy people who lack essential core beliefs.  It can't work with those who are aware of what they believe, why they believe in what they are voting for in 2012.  But, if the past decade holds true (with few exceptions), this is what basic human rights and future prosperity is up against this worldview these days.

Americans’ Core Beliefs:

Don’t make me feel bad about the way I live, and

It will all work out, we’re Americans.

Tuesday is Dues-day: Public Health / Public Safety

Today is Dues-day, but what are the dues?

Paying attention . . . Yes, by simply schooling yourself on how our local governance is organized, who are the players, what are the screw-ups, where is the money and what things get reported you can legitimately call yourself a citizen, an advocate for democracy.

For most people local politics only becomes a reality when you are afraid for your home, your property or your neighborhood. Fears can be physical, financial and cultural.  Fears can be great motivators, as so many activists' stories of initial involvement attest.

Citizen Tip = Public Health / Public Safety and Trust

Who do we trust when it comes to the world around us? How aware are most people of the deep erosion in regulatory responsibilities by federal, state and county agencies when it comes to our air, soil, water & public utilities?  Since the hard fought protections legalized in the 1970's it is easy to be lulled into complacence and assume those who protest have been accurately scapegoated by the media as hippies and hotheads.  Instead, alarm bells should be going off.

Here is a huge threat far too close to home, the San Onofre Nuclear Power Plant.  Initially the news was about possible increases in electrical costs to consumers and outage possibilities because the San Onolfe had been taken offline since January.  There have been news stories recently like here, here, here and here which expanded this to the very real danger to life within this 50 mile radius that includes Encinitas.  Thanks go to Councilwoman Teresa Barth's inclusion of all these stories in her weekly newsletter.

The video below a different way of reporting by having a scientist to help us visualize what exactly is going on in the reported faulty tube design.  Big thanks to scientists who make the complex issues more clear for us. (That deserves a whole post as this community is filled with accomplished scientists.)

On June 13th at city council, speakers protesting the safety issues at San Onefre sat through the whole meeting to voice their concerns. Patch reported, At the behest of concerned citizens, Encinitas City Council will examine safety concerns associated with the San Onofre Nuclear Generating Station on a future agenda. (This is yet to have been scheduled.)

“Even though it’s shut down right at this point in time, we’re in great danger with the amount of nuclear fuel sitting there,” resident Harold Johnston said. Some residents questioned whether Encinitas has an adequate evacuation plan in place should San Onofre have problems; several brought up the Fukushima Daiichi nuclear power station disaster.

We know how devastating nuclear disasters and their aftermath can be because of Fukushima, Japan's nuclear catastrophe.  Lying to the public only compounded the problem in Japan.  We dig for truth even when our public servants and local media don't. 

Hat tip to Crooks & Liars. For a complete story go here.

Designing the Future . . .

Just because the officials in charge refuse to acknowledge new realities, changing paradigms, credible science, expert experience, sound reasoning and dissenting insight; this doesn't mean we sit down and shut up.  We keep trying.  Our community is filled with individuals who have so much to offer. There is international recognition (with Bernard Minster being one), brilliance in other branches of science too. Russell Levan has demonstrated for decades that there is dedication here.

Possibly our best hope would be to charge each and every activist, advocate, commissioner and council watcher to select one or two people to mentor.  Even if our strong community members for example a former mayor, Sheila Cameron, could give a prepared piece to some neophyte to present to council and then have this new gal help prepare the next and so on - we'd bring a new wrinkle in the process. More than anything it would prepare another wave of activism.  Plus it would be harder for the complicit press and sneering mayor to dismiss so many wonderful contributions out of hand.

Speaking of expertise, the following two clips are filled with sound information and probing financial concerns for the Hall property park.

For many years the science, financial, ecological, design, historic, landscape, use and other concerns have been couched as either - or choices, or considerations that will jeopardize deadlines, EIR approval, regulatory constraints or other obstacles.  Most of these are and were just not true.  It was political worldview to deliberately use of this property to create win - lose battles that demonized individuals and communities.  The future holds the new culture possible for us where diverse ideas can be accommodated without needing accusations and blame as the only strategy.

Skateboarders Rejoice!

At the end of the day (literally) the skateboarders were the most joyous crowd at the Special City Council Meeting at the Encinitas Community Center last night (7/11/12). Thomas Barker, a young man many of us met through Teresa Barth last year, gave a rousing, genuine appeal to the city council and to the community to bring a skate board park to a reality. The council voted unanimously to go ahead with the entire park.

Thomas Barker's Skateboard Park Facebook page.  Great shots & park layout, details.

How can you not look at these faces and see the future of Encinitas?  Now that is a subject for a Tell-A-Vision post.

Public Lands Private Profits: 3 Clips Released

One week ago we previewed the 3 documentary stories from the Center for American Progress, the Sierra Club an others. 

Yesterday the following clips were released with this introduction.

Dancing with the World

After all of the crash course posts focused on the artificial world of finance for the past five days, the financial math contortions for tonight's special council meeting . . . a stimulating endeavor for the left brain functions, its time to shift.

Here is a respite steeped in the right brain functions swirling with the arts, the heart, humanity and deep emotion.

Where the Hell is Matt? "See with eyes, we're going to trip the light" . . . A new approach just released. Enjoy.


Have you followed Matt over the years?  He's been dancing for years.
As Abby Zimet reports,

Having badly "danced" his way through 100 countries, self-described deadbeat Matt Harding of Seattle has released his fourth "Where the Hell is Matt?" video with a key difference: From doing a goofy dance alone in iconic places, he has evolved to the collective act of dancing, from Egypt to Mongolia to Gaza to North Korea, with the people who live there. En route, he raises money for groups from Generation Rwanda to Haitian Relief to Afghan Mobile Mini Circus for Children. Intoxicating.

Humanity. We won't make it without it.

Growth Ponzi Scheme, Crash Course Part 5

In lieu of the regular Tuesday is Dues-day, this is the crash course finale to the Growth Ponzi Scheme.  Rather than just a day for citizen tips, this last week following "Independence Day" has been devoted to the dues of a five comprehensive installments regarding the destruction of wealth in our current development model.  Independence Day is in quotes as is its getting tougher to deny the utter dependence on our current broken economic practices and the effect on our lives.


by  CHARLES MAROHN
There is a fine line one walks when doing a series like this, and I struggle with it myself. On one side of the line, there is a tremendous problem we've identified, it has dramatic consequences that we are largely unaware of as a culture, and I want to yelp at the top of my lungs to make people aware. On the other side of the line is an awareness that the world does not want to listen to a sky-is-falling, doom-and-gloom, pessimist. We tend to call such people "crazy" and, in time, zone them out.

In this regard, I am certain that some people felt my last comment yesterday was unnecessarily provocative. 

Our national economy is "all in" on the suburban experiment. We cannot sustain the trajectory we are on, but we've gone too far down the path to turn back. None of our dominant political ideologies can solve this problem. In fact, there is no solution.

I feel bad, but I am not trying to be provocative. There truly is no solution. This may be disappointing to those of you that have hung with this series -- or by the hit counts on our site, joined mid-week -- because I have no magic bullet, no series of policies and no simple course correction that solves our current financial spiral. There truly is no solution.

Let me pass on an analogy I have used here before. Let's say that a person gets in a car accident. For whatever reason, they are seriously injured -- maybe even disabled -- and they don't have insurance of any type. They are unemployed and have no savings. What's the solution? There really isn't one. But looking at the situation, there are responses that a third-party observer would call "rational" and "irrational". 

America is in a slow-motion car wreck. Lots of people are being hurt by it, some very badly. We've long lost our insurance by accumulating so much debt. We've also relinquished our production capacity. And we have little savings to speak of. What's the solution?

I wish I had one. I really do. I would be a very popular person, indeed. Unfortunately, all I can offer are rational and irrational responses.

For me, the rational response starts with this picture.

This is my hometown as it appeared in 1894. Today this street looks like Dresden in 1945, an empty wasteland of parking lots and low-value, partially-abandoned buildings. But in 1894, this place rocked. Look at it! Look at those buildings -- we'd give anything to have that here today.

Now ask yourself how this existed in the first place. How did we build such an amazing place before the home mortgage interest deduction? How did we accomplish this before zoning? Before the International Building Code? What created this place before we had state and federal subsidies of local water and sewer systems? Before HUD? Before DOT? Before the state highway system? Before Fannie and Freddie and subprime mortgages and collateralized debt obligations? How did we ever accomplish this before tax abatement, tax increment financing, SBA and local economic development? Heck, we did this before the advent of the 30-year mortgage!

Here's the answer, and the key to the correction we need to make: We built places that financially sustained themselves. Do you know how I know this? Simple. If this place did not financially sustain itself, it would have gone away. In 1894, nothing was going to artificially prop it up.

This is not an anti-government argument. In fact, just the opposite. To pull off what my ancestors created -- a successful town in the center of the deep woods of Minnesota -- they had to have excellent government. Their future depended on it.

They had to organize themselves and use their collective resources very wisely. I look at the pictures of the beautiful way in which they maintained our now decrepit parks, the purposeful way in which they placed grand public buildings, the way in which they regulated the public realm and it is clearly evident to my trained eye that these people understood how to wring every penny of value they could out of their built environment. They knew the art of placemaking.

Today we have largely relegated this art to Disneyland and isolated parts of the faux-downtowns we are trying to "revive". We have the New Urbanists to thank for resurrecting the lost knowledge of placemaking, much the same way engineers of the Renaissance recaptured the knowledge of the Roman bridges and aqueducts, an understanding literally lost for centuries. The transition in our understanding has been no less dramatic.

So there's the primary supporting strategy: placemaking. We need to wring more value out of our places and that is only going to happen if we understand how to create value in the first place. This is a monumental task because for two generations we have built our places without bothering to consider how they would be sustained (or whether they would even be worth sustaining). None of our public officials has ever asked the question: Will this public project generate enough tax revenue to sustain its maintenance over multiple life cycles? Try asking that -- you will be amazed.

So a rational response is to start insisting that our places show a positive financial return. That will require a completely different approach to building our cities along with a completely different understanding of growth. If you need help getting started on this, check out our Starter Strategies for a Strong Town as well as our Strong Towns Placemaking Principles. 

In addition to this, there are two irrational responses that we need to acknowledge. The first irrational response is to simply continue the present course until we are forced to change.

I'm astonished and more than a little depressed at the shallow nature of the public debate we are having over this crisis. Do we cut the budget or spend more? Do we raise taxes or reduce them? Does raising the debt ceiling signal fiscal responsibility or a lack of restraint? Do we build rail lines or highways? How do we restore housing values? How do we lower unemployment? And this is a sampling of the more intelligent lines of thought going on amidst the salacious and the ridiculous.

Nobody has acknowledged that a) the bubble economies of tech and housing were not financially real, b) we can not "recover" to a condition that was not financially real in the first place, and therefore c) we need to start focusing on a transition to something close to reality, which is a long ways from where we currently are. (editor emphasis)

This brings me to the second irrational response; Clinging to the belief that nothing needs to really change. 

Yesterday I had someone tell me, "Chuck, I think you are right. I can't argue with a thing you say. But I believe in the ability of the American people to adapt and innovate and overcome any challenge we face."

Let me interpret this statement because I hear it all the time. "Chuck, I think you are right, but I believe that someone, somewhere is going to come up with some trick or gadget that will solve this mess and keep me from having to change my lifestyle too much." I wonder if the Americans of 1870 or 1930 had this same belief (or the inhabitants of Easter Island).

I firmly believe that we have the ability to adapt, innovate and overcome. We will emerge from this a better people. But I don't see a way through this that allows us to keep the same lifestyle, the same living pattern and the same lack of productivity in our places. Like our innovative and resourceful ancestors before us, we'll find a way. But like those ancestors, it is going to involve a lot of painful change. Wishing for a miracle is fine, but depending on a miracle is irrational.

At Strong Towns we are trying to explain our current financial crisis -- and the transition in our living arrangement that must happen -- in a way that local officials can understand and discuss in their own communities. We are also working hard to develop the tools that are needed to help our cities, towns and neighborhoods make this difficult transition. [snip]

by  CHARLES MAROHN
This Crash Course is a product of Strong Towns and use is authorized via  a Creative Commons Attribution-ShareAlike 3.0 Unported License.

Growth Ponzi Scheme, Crash Course Part 4

In today's Myths Encinitas at the Our Mayor Stocks blog, is the mythical strength of described in this crash course. Jerome's Stocks state of the city speech excerpts the perfect illustrations of the growth Ponzi scheme. No, he didn't invent this, but he is unwilling to invite any alternatives. Part 4 follows here.

The great American experiment in suburban development entices communities to take on long-term liabilities in exchange for near-term cash advantages (see Part 1). But as those liabilities cost the community more than the development creates in overall wealth, the approach ultimately results in insolvency (see Part 2). To forestall the day of reckoning, more growth is induced, setting up a Ponzi scheme scenario where revenue from new development is used to pay liabilities associated with old development (see Part 3). This is unsustainable, but that has not kept us from trying desperately to keep it all going.

Much of my thinking in this post was shaped by my reading of Richard Florida's The Great Reset, as well as follow-up research I have done into the causes of the Long Depression of the 1870's and the Great Depression of the 1930's.

While these events defy simple explanation, the Long Depression included an over-development of the nation's railroad system and a corresponding malinvestment in speculative real estate associated with railroad expansion. Also, the increased access for farmers to broader markets helped create a commodity price crash, which was exacerbated by overproduction. Farmers with declining profits produced more to compensate, driving down prices. Price drops were so dramatic that some crops became more valuable for burning than eating.

The depression persisted until there was, as Florida calls it, a "spatial fix". In essence, our capital and productive capacities were redirected from farm expansion and railroad-based speculation into industrialization and building of the industrial city. The result was the Industrial Revolution, a dramatically different living arrangement than the formerly-agrarian America had known up to that point. For many people of that era, this was a painful transition.

Fast forward to the 1930's. Economists and social scientists argue over the causes of the Great Depression as well as the factors that ultimately ended it. What is clear is that the lack of fundamental growth in our real economy was made up for with an expansion in the paper economy. Industrialization had brought huge gains in productivity, production-capacity that actually outstripped our consumption-capacity. Leverage-driven speculation on continued profit gains created a financial bubble that, when deflated, proved destructive.

Years of New Deal spending failed to create enough demand to correct the imbalances. Spending for World War II provided a temporary recovery, but economists at the time were concerned that the end of war spending would send the United States back into depression. What happened next was another spatial fix; suburbanization. We redirected our capital and productive capacities to building suburban America and created the greatest economic advancement the world had ever seen. It was a very painful transition, especially for our major cities.

This is where I (humbly) depart from Richard Florida. It is not that I think he is wrong -- he argues that suburbanization has run its course and that the new, creative economy requires a spatial fix that will favor highly-connected mega-regions -- but that there is a pivot point critical to understanding our current situation.

That pivot point comes roughly one life cycle into the suburban development pattern, the time when the financial structure of the Growth Ponzi scheme starts to have outflows (maintenance costs) in addition to inflows (new suburban growth). This would have been roughly during the mid-1970's, when we were forced to leave the gold standard, had an energy crisis and experienced a convulsing economy characterized by the new term "stagflation". Another new term -- the Misery Index -- was used to measure the painful impacts of high inflation and high unemployment.

Once again, there is a ton of complexity here and I'm not trying to oversimplify things, but ours is an economy that relies on growth and, in the post-WW II era, growth has largely meant horizontal suburban-type growth with all of the related consumption. We embarked on a path that makes us reliant on new growth to generate excess wealth. When that new growth becomes old and starts to cost us money, it puts contraction pressure on the economy that counteracts the near-term, financial benefits of new growth. (See Part 3).

The critical insight today is to understand how we reacted to the end of the first life cycle of suburban development, when those maintenance costs started to come due and cut into our growth-generated wealth. This time there was no spatial shift as seen in the other large, economic corrections. Instead, we made a choice to double down on the suburban experiment by taking on debt.

We used debt to drive additional growth and sustain the unsustainable development pattern for a while longer. A lot of this debt was public debt, but we facilitated mechanisms for increases in private debt as well (for example, Fannie and Freddie early on and then subprime mortgages and securitization later). Here is a graph showing our public and private debt levels since the beginning of the suburban experiment. I have noted roughly the first and second life cycles of those initial investments.

Debt levels post WW II as compared to GDP. Note that the green line is private sector debt, which far exceeds public sector debt..The first generation of suburbia we built on savings and investment, but we built the second -- and maintained the first -- using debt. Unprecedented levels of debt. 

And in the process, we transformed our industrial economy into one based on consumption. As James Kunstler has noted quite often, when you take away the suburban-growth-related jobs from our economy, what you are left with is "heart surgery and KFC workers" (his way of saying highly-skilled professionals and low-skill wage earners).

This strategy is a disaster of monumental proportions for the United States. Not only have we created an entire economy based on a growth model that can't be sustained, in the process we have highly indebted our population. The quality employment opportunities available for the masses rely solely on the perpetuation of this unsustainable model, so we can't even work our way out of this mess. We've tied up our individual wealth into homes -- homes whose value is tied to community infrastructure that we cannot afford to maintain without continued hyper-growth, which we are now powerless to induce. So as our wealth disappears and our economy painfully grinds to a halt, we're left with no options to continue on this path.

And to top it all off, we've tethered our national psyche to the suburban ideal we call the "American Dream", our auto-based, utopia where everyone gets to live a faux version of European aristocracy on their own mini-estate. 

Oh, and by the way, the American Dream, as so defined, is absolutely non-negotiable.

Our national economy is "all in" on the suburban experiment. We cannot sustain the trajectory we are on, but we've gone too far down the path to turn back. None of our dominant political ideologies can solve this problem. In fact, there is no solution.

This is why tomorrow we will offer some rational responses -- ways that communities can begin to prepare for the spatial shift that is coming.

 by  CHARLES MAROHN
This Crash Course is a product of Strong Towns and use is authorized via  a Creative Commons Attribution-ShareAlike 3.0 Unported License.

Growth Ponzi Scheme, Crash Course Part 3

Day 3 in examination of growth with Encinitas in mind. Time to roll out the graphs and charts. The ones in this lesson are from a well run town. Looking closely at facts behind the happy talk we in this town hear at every financial presentation reveals a break down on the horizon or even at our feet.  In a few days we'll be able to challenge this happy talk with some real language from these lessons learned.

So far this week we have examined how the American development pattern of the post-WW II era entices cities to exchange the near-term cash advantages of new growth for the long-term maintenance obligation of new infrastructure. This is a bad trade, because as we also looked at yesterday, the pattern of development costs more to maintain over the long run than it produces in revenue. In short, our development pattern is not productive enough to sustain itself.

A new development goes in. The developer builds the street and then turns it over to the city for maintenance. Houses are built and the city sees its property tax receipts rise. Imagine for a moment that the city took and saved the portion of those new receipts that was to be used for street maintenance. If the city did that every year throughout the life of the street, adding the new tax receipts to those already saved, and then used the cumulative savings to repair the street, here is how the cash flow diagram would look.

Cash Flow Diagram for a single street. Revenues are from collected taxes and expenses are due to infrastructure maintenance costs.Everything looks great until the end of the street's life cycle. At that point, the cost of the repairs far outweighs the revenue collected. If the city were reduced to this one street, it would be insolvent.

But a city is not one street. A city has many Peters to rob in which to pay Paul. For example, if the project modeled above were repeated every other year -- a condition where the city was growing at a steady rate -- the cumulative cash flow diagram changes substantially at the end of that first life cycle. By adding the tax receipts from multiple projects together, here is what it would look like.

The cumulative cash flow of multiple projects in succession.

So growth "solves" the insolvency problem. As long as a city continues to grow, as long as it can continue to exchange near-term cash flow for long-term liabilities, it will be just fine. Or so it may appear at the end of the first life cycle.

Here is what happens during that second life cycle. The model I am using assumes that growth continues at the same moderate pace, with a new development of similar size added every other year. 

The cumulative cash flow of multiple projects in succession over two life cycles.The results are obvious and devastating. When the private-sector investment does not yield enough tax revenue to maintain the underlying public infrastructure, the balance can be made up in the short term with new growth. Over the long run, however, insolvency is unavoidable.

We need to pause here and point out a couple of important things. First, this is actually a model of a well-run city, one that puts money away for future improvements. I've yet to see one that has such fiscal discipline. We can spend all day blaming politicians for wasting money on "big government" or giving unwarranted tax breaks to "the rich". These debates are ultimately tragic sideshows to the underlying lack of productivity in our development pattern.

Second, this model shows the impact of continuous and steady growth. In reality, that is not the pattern most cities experience. Most cities have a phase of rapid growth followed by stagnation and then decline, as described by Jane Jacobs in The Economy of Cities. Superimpose the financial underpinnings of the American model of development and the results are even more devastating - a flood of liabilities all coming due right at the time that growth is starting to wane.

I know I promised "rational responses" for tomorrow, but I need to put that off. [snip]  Tomorrow we will examine how America has responded to the economic reality of our places thus far.

by CHARLES MAROHN

This Crash Course is a product of Strong Towns and use is authorized via  a Creative Commons Attribution-ShareAlike 3.0 Unported License. 

Photo by Kevin Dooley via Flickr


Editor note:  There's some serious disagreement around here about the "sideshow" of tax breaks for the rich. LOL Yet, the point is strong about the fundamental issue of lack of productivity in our development pattern.  Bedroom community or not, resilience demands this. 

The Growth Ponzi Scheme, Crash Course Part 2

We in Encinitas know all too well about street maintenance deferred. The crash course from Strong Towns continues. This part will appeal to the more wonky among us who will have some real numbers to crunch in the examples.

In yesterday's post we pointed out how cities routinely trade the near-term cash advantages of new growth for the long-term financial obligations associated with the maintenance of infrastructure. Cities pay little for new growth, but receive enhanced revenue from the development. In return, the city assumes the obligation -- and the long-term financial liability -- to maintain the now-public infrastructure.

At this point, it is easy for any of us to see the perverse incentives underlying this system. Politicians are generally inclined to worry more about the next year than an event that will occur a generation into the future. The public is likely to join them, discounting the future commitments they are making in favor of added financial benefit today. It is near-sighted, yes, but this type of thinking is also part of human nature.

It is tough to forgo real benefits today for the theoretical enjoyment of an uncertain future. The ubiquitous nature of dieting books, dieting plans, diet coaches and diet foods, all in a land of unprecedented obesity, does a great deal to validate this observation.

Examining the underlying finances of our cities at face value, one must acknowledge the following: In order for our development pattern to financially work, the amount of revenue generated by the new growth must ultimately cover the expenses incurred by the public for maintaining the new infrastructure. If cities are not raising enough revenue to repair and replace their infrastructure, the system cannot sustain itself.

Understanding this, we began to collect hard numbers from actual projects and compare those costs to the revenue generated by the underlying development pattern. This work continues, but in every instance we have studied so far, there is a tremendous gap in the long-term finances once the full life-cycle cost of the public obligations are factored in. Without a dramatic shift of household and business resources from things like food, energy, transportation, health care, education, etc... and into infrastructure maintenance, we do not have even a fraction of the money necessary to maintain our basic infrastructure systems.

The following is a smattering of examples. We link to a further explanation of the underlying numbers for those with a deeper interest in our methodology.

Rural Road

A small, rural road is paved, with the costs of the surfacing project split evenly between the property owners and the city. We asked a simple question: Based on the taxes being paid by the property owners along this road, how long will it take the city to recoup its 50% contribution. The answer: 37 years. Of course, the road is only expected to last 20 to 25 years. Who pays the difference? Click here for this case study.

Suburban Road

A suburban road is in disrepair and needs to be resurfaced. The modest project involves repair of the existing paved surface and the installation of a new, bituminous surface. The total project cost was $354,000. We asked the question: Based on the taxes being paid by the property owners along this road, how long will it take for the city to recoup the cost of this project. The answer: 79 years, and only if the city adjusted upward its budget for capital improvements. For the city to recoup the cost of the repairs from the property owners in the development, an immediate property tax increase of 46% would be needed. Click here to read this case study.

Street Serving High Value Homes

A group of high-value lake properties petition the city to take over their road. They agree to pay the entire cost to build the road -- a little more than $25,000 per lot -- in exchange for the city agreeing to assume the maintenance. As one city official said, "A free road!" We asked the question: How much is the repair cost estimated to be after one life cycle and how does that compare to the amount of revenue from these properties over that same period? The answer is that it will cost an estimated $154,000 to fix the road in 25 years, but the city will only collect $79,000 over that period for road repair. To make the numbers balance, an immediate 25% tax increase is necessary along with annual increases of 3% with all of the added revenue going for road maintenance. (Case study available on request.) 

Urban Street in Decline

An urban street section is in need of repair, which will consist of milling up and replacing the bituminous surface. The development along the street has stagnated for decades in favor of new growth on the periphery of town. As such, over the estimated life of the new street, the City expects to collect a total of $27/foot for road repairs. Depending on the alternative chosen, the cost for repairs is estimated to be between $80 and $100 per foot. (Case study will be posted next week.) 

Rural Industrial Park

A rural town has an industrial park that is stagnating. The park consists of 25 rural lots sized at roughly 2 acres each. As part of an undertaking to encourage more development in the park, the city engineer recommended serving the park with municipal sewer and water utilities. While the city is pursuing a grant to pay the costs, everyone understands that they will assume the maintenance liability, so we asked the question: How much private-sector development is necessary to sustain the infrastructure. The answer: $316,000 per lot. This is more than double the current rate of investment seen in the park. Click here to read this case study. 

Suburban Industrial Park

A suburban industrial park with full utilities was constructed in 1995. Over the years, the park has filled out with a mix of commercial and industrial uses. City officials, pointing to the park as a major success, seek to double its size. We asked the question: If the city could spend the same amount of money today and have the same return in terms of private investment, would this be a good investment. To answer the question, we applied an inflation adjustment to bring the 1995 costs into today's dollars and then compared that against the current tax receipts. If a $2.1 million project immediately induced $6.6 million in private investment, and if all of the income to the city were devoted to paying off a bond to finance the improvements, it would take 29 years for the park to break even. In that time, the businesses in the park would rely on other taxpayers to plow the streets, provide police and fire protection, etc... Of course, the $6.6 million of private investment happened over 16 years and was often subsidized, factors that would extend that payback period significantly. Click here to read this case study - see page 50.

Small Town Wastewater System

A small town received support to build a sewer system from the federal government back in the 1960's as part of a community investment program. Additional support was given in the 1980's to rehabilitate the system. Today, the system needs complete replacement at a cost of $3.3 million. This is roughly $27,000 per family, which is also the median household income. Without massive public subsidy, this city cannot maintain their basic infrastructure. It is, essentially, a ward of the state. Click here to read this case study.

Aggressive Expansion Project

A town that was represented in Washington by a major political powerbroker initiates a project that is designed to essentially double the tax base of the city. The project requires the dredging of a river to create a harbor, the extension of major infrastructure and the repair/replacement of existing utility systems. The projection is for the improvements to induce $32 million of private-sector investment. We asked the question: If the private-sector investment was guaranteed, how long it would take the city to pay off a bond for the project costs (since they are taking on the long-term maintenance obligation)? The answer: 71 years, far beyond the expected life of the improvements. Click here to read this case study.

--- 

The last case is probably the clearest example of the perverse incentives of the American pattern of growth-based development. The city gets $9 million of federal money to induce new growth. It costs them relatively little. If the growth happens, they get the tax revenue. If it does not happen, they are out relatively little. This all works fine until the end of one life cycle, when large-scale maintenance or replacement is needed. At that point, the costs vastly exceed the ability of the city to pay.

And this is where the Ponzi scheme aspect kicks in, because what is the solution to this unsolvable problem? In America of the post-WW II era, that's easy: The solution is more growth.

When more growth is created, the city gets excess cash (in the near term). That cash can then be applied to the old obligations. So long as the city continues to grow at ever-accelerating rates, the system works just fine. But like any Ponzi scheme, as soon as the rate of growth slows, it all goes bad very quickly.

If you want a simple explanation for why our economy is stalled and cannot be restarted, it is this: Our places do not create wealth, they destroy wealth. Our development pattern -- the American style of building our places -- is simply not productive enough to sustain itself. It creates modest short-term benefits and massive long-term costs. We're now sixty years into this experiment, basically through two complete life cycles. We've reached the "long-term", and you can clearly see we've run out of options for keeping this Ponzi scheme going.

Tomorrow we'll look at how we've reacted to this lack of productivity and the position that has placed us in today. [Then] we'll offer some rational responses to this dilemma.

 by CHARLES MAROHN

This Crash Course is a product of Strong Towns and use is authorized via  a Creative Commons Attribution-ShareAlike 3.0 Unported License. 


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