Last week I was able to take my family to a Twins game at Target Field. My wife demanded that we ride the North Star rail line to the game ($17 for the family) instead of driving and parking three blocks from the stadium in my "secret spot" ($3 plus 120 extra miles), so I got my first taste of our new commuter rail system. I have to say, it was really nice. The cars were excellent, the ride was fast and it was a pleasant experience to not drive. My only complaint was that there was no special train for this game so we were stuck with the regular commuter schedule. This meant I had to hang out for an hour and a half after the game in the hot sun, which would have been cool with my wife but with the two little girls was tough, especially after they had sat through a sweltering nine innings. It was all worth it when Stella, my youngest, told me that she was happy that the Twins won because it makes her dad happy. She had me at "Daddy".
Enjoy this week's news.
- There are times when even I am shocked at the level of delusion out there. It is almost like housing for some has turned into a craps table and, you know, you just don't go this long without rolling box cars.
Some intrepid homeowners are intentionally taking a loss on their current house—and writing a big check to retire their old mortgage—in order to buy twice the home for not much more money. Others, eschewing conventional personal-finance advice, are even opting for "cash-in" refinancings, paying thousands of dollars out of pocket to settle old loans—and then taking out new mortgages with lower payments, shorter durations or both.
- We've not ventured far into the tax debate here at Strong Towns (do we need more or less), but we have offered in the past that our system creates too much separation between the monies we pay and the services we demand. This is especially true in the area of transportation. In reaction to this article and the apparent position of the Obama administration opposing the gas tax, I'll offer that it seems like higher gas prices are inevitable, at least if you believe that population will grow and that people will choose to drive cars. Supply/demand yada yada yada. So as not to wade into the more/less tax debate, I'll just note that it might make more sense to tax fuel (as radicals like George Will have suggested) in order to gradually readjust our economy to be less fuel-dependent than it is to tax mechanisms of job creation and personal income as we do today.
Appearing before a heavily attended conference in Washington, D.C., of the American Road and Transportation Builders Association, [Transportation Secretary Ray] LaHood vowed “raising the gas tax is not an option” to increase money available for federal transport spending.
LaHood said the Highway Trust Fund’s income stream is “insufficient” to meet all the needs, and said “tolling can raise a lot of money” to augment it. The Obama administration has also asked Congress for a new $4 billion ongoing infrastructure fund that DOT would administer much like discretionary stimulus program grants, and LaHood said more use of creative public-private partnerships could help as well.
- Jim Kunstler, who is now on Facebook but has not accepted my "friend" request (perhaps he fears me stalking him - nope, just his ideas), has had exceptionally great columns the last two weeks. On July 26, he touched on the topic of deflation that I have been dancing around here for a while. He describes it differently (better) and I offer this quote to entice you to read the entire column.
We've generated too many future claims on wealth that does not exist and has poor prospects of ever being generated. That's what unpayable debt is. We have such a mighty mountain of it that the Federal Reserve can "create" new digital dollars until the cows come home (and learn how to play chamber music), but they will never create enough new money to outpace the disappearance of existing notional money in the form of welshed-on loans. Hence, money will continue to disappear out of the economic system indefinitely, citizens will grow poorer steadily, companies will go out of business, and governments at all levels will not have money to do what they have been organized to do.
This compressive deflationary collapse is not the kind of cyclical "downturn" that we are familiar with during the two-hundred-year-long adventure with industrial expansion - that is, the kind of cyclical downturn caused by the usual exhalations of markets attempting to adjust the flows of supply and demand. This is a structural implosion of markets that have been functionally destroyed by pervasive fraud and swindling in the absence of real productive activity.
- The August 2 Kunstler column picked up on the deflation theme and related it to our current policies, which are designed to help but actually are having the opposite impact.
We really have a choice between two ways of dealing with this. We can downsize and re-scale consciously and coherently, or we can continue to chase after the phantom of growth and allow the nation to fall into a shambles of desperation. So far into this long emergency of an economic fiasco, we seem to have chosen the pursuit of a phantom. That's what President Obama was doing last week in Detroit, shilling for a new electric automobile which, he said, will make us "energy independent." If Mr. Obama believes this, then it isn't a very good advertisement for an Ivy League education.
We don't need need more highways. We're about to find out that we don't have the money to keep up regular repairs on the highways we already have. The hundreds of millions of "stimulus" dollars that President Obama flung into "shovel-ready" highway projects was among the more tragically dumb mistakes he made early on, and he has apparently learned nothing along these lines since then.
- I have been on the receiving end of some of these letters in my city planner capacity, but I thought this Obstructionist Manifesto had some charm. Wish we had a country of these people, actually.
As an obstructionist, I believe that unless and until city planning reflects the values, ideals and aspirations of the people who live and work here, it cannot work and therefore must be stopped. Only when public projects have the credibility of being created by the people directly involved in their use can they succeed.
- Aaron Renn, The Urbanophile (which I am going to assume is a complimentary title), posted an analysis I found to be absolutely brilliant as well as timely on what he calls the quality vs. quantity debate. I think he is highlighting a very important schism in how people view their built environments - a schism we often straddle. I appreciated his sage advice that each side could learn from the other. It is well worth a read.
In effect, there are two very different and competing visions of what an American city should be in the 21st century, the “high quality” model and the “high quantity” model One side has focused on growing vertically, the other horizontally. One group wants to be Neimans or a trendy boutique and ignores the mass market. The other focuses more on the middle class, like a Costco and Target. It should come as no surprise that there's seldom agreement between the two.
- Money Magazine released a ranking of the best places to live and Minnesota's Eden Prairie came out on top. When I heard the news that this nondescript homogenized mono-cultural place on the map with no distinguishing features that can be described outside of a balance sheet was the "best", I was going to write this column, but blogger Chris O'Leary beat me to it (and did a fine job too).
Money stated in its description of Eden Prairie that it ”doesn’t have much of a downtown.” That’s a lie; it literally has no downtown at all. The entire town is made up of suburban sprawl, office parks, strip malls, and a big hulking indoor retail monstrosity known as Eden Prairie Plaza surrounded by acres of parking without a tree in sight. There is no sense of place in Eden Prairie. How, then, can it be one of the best places to live?
- Our Executive Director, Jon Commers, writes a column for the Minneapolis Star Tribune's Your Voices section and recently posted one that I have gone back and read a number of times titled, "When the Kids Call for Better Behavior." I'm not sure which of us is older - it is pretty close - but he is a few years ahead of me in dad-years. I am learning from him, which means I'll someday be learning even more from my kids.
"At times, these conversations have shifted into early forms of generational charges: Dad, your generation and all the others have blown it big time. We’re not going to face the music with baby steps, so get moving. And they’re right."
- Here is another video of Richard Florida that is a little shorter than the one I posted earlier this week. I got the book (The great Reset) and am delving into it - really good so far.
- Hedge fund manager Hugh Hendry is one of those guys that is just smart enough and just crazy enough to be both entertaining and thought-provoking. He is one of the people we look for on CNBC here at the office. This video is from last year and in it he talks about the fragility of our financial system, quantitative easing and he essentially predicts the deflation and Fed reaction that we are seeing materialize today.
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