Last weekend I capped off the winter preparation here by putting the lawn mower in the shed and taking out the snow blower. What is different this year is that it was the first time I have done this wearing shorts. We've had a bit of a warm spell, which has been quite welcome by all of us. Long walks in the waning days of fall as the leaves crunch under your feet are moments to be enjoyed while they last. We took the girls to the pumpkin patch last week and did the corn maze (also in shorts). I hope for all of you that life is this sweet.
Enjoy the week's news:
- Thank you to Friend of STB.org Kaid Benfield who mentioned us in a recent blog post on planning for resilience in the wake of the recent oil spill. Kaid is a great blogger - I highly recommend his recent two day series (Day 1 link -- Day 2 link) on the town of Braddock, PA, which is working to come back from losing 90% of its population. Beautiful pictures and very inspirational. If they can build a Strong Town, we all can. A lot of great lessons there.
- Richard Florida published a fascinating analysis of the shift in the global economy towards Asia, which today has four of the top six financial centers (London, New York, Hong Kong, Singapore, Tokyo and Shanghai). Part of the "success" of globalization is the diffusion of innovation and financial power. I put "success" in quotes because the downside is that America can no longer be as complacent about its future -- or as inward looking -- as it has been in recent decades.
It’s true that big international economic crises – like the financial panic and Long Depression of the 1870s and the Great Depression of the 1930s — have a way of upending the geopolitical order and hastening the fall of old powers and the rise of new ones, and we may be in the early throes of such a shift now.
- Looking closer to home, the financial news is not great for American towns and neighborhoods. We are desperately trying to get the housing market moving again, but interest rates at (gasp) 4.19% are still not doing the job. We're going to be paying people to borrow money pretty soon, especially if the Fed gets its way on increasing inflation. The U.S. is also finding itself paying more to finance our debt while we continue to borrow heavily from the world. None of this feels sustainable, but there does not seem to be a path that we, as a nation, are voluntarily willing to take to address it. It gives this dire article on a pending currency crisis more resonance than your run-of-the-mill gloom and doom.
The world is flooded with excess liquidity of U.S. dollars. Up until now, Americans have been blessed by the fact that the world has been hoarding these dollars, believing they are a safe haven during these uncertain economic times. The world's confidence in the U.S. dollar and strong demand for U.S. treasuries despite the need for the Federal Reserve to monetize our$13.6 trillion national debt will one day be looked back at as the most mysterious paradox of our generation.
The average American today is pouring money into U.S. treasuries. They got crushed when the dot-com bubble collapsed, they got decimated when the Real Estate bubble burst, and now they are loading into dollar-denominated assets. Simultaneously, the Federal Reserve is trying to destroy the purchasing power of the U.S. dollar. The only thing the Federal Reserve should be focused on today is preventing hyperinflation, because hyperinflation always leads to complete societal collapses.
- I love this article about Google creating its own inflation index on many levels. First, it immediately solves the problem of the fox guarding the hen house in regards to financial reporting. Second, the use of technology and crowd sourcing is brilliant. Third, this is another step along the path of using technology to truly democratize -- flatten -- access to information. We need much, much more of this if our markets are to be trusted again.
- California is apparently going forward with plans to pawn the family silver, selling off its public buildings for a one-time financial payout in exchange for a long-term agreement to lease the properties for annual payments. Earlier this year, Ben wrote about a plan in Arizona to do the same thing (Desperate Times....Desperate (Insane) Measures?). Combine this act of desperation with the report that big cities are facing half a trillion dollars in pension benefits (in addition to a $3+ trillion deficit from the states) and do our critics still want to contend that municipal debt is as default-proof as ever?
The combination has raised concern that defaults, which are historically rare in the $2,800 billion municipal bond market where local governments obtain money, could now rise.
“The bondholders would be competing with the pension beneficiaries for scarce government resources,” Mr Rauh said.
- If all of that financial analysis didn't hit home, I'll let James Kunstler (still not my Facebook friend, but I keep the virtual hand extended), sum it all up as only he can.
And sadly too, the truth is that this ghastly mortgage fiasco was a fraud that the whole nation perpetrated on itself in a tragic rush to get something for nothing. Since the failure of authority is complete, it's now up to nature to act as the arresting officer. She's a harsh mistress. She's going to kick our ass.
- Thomas Friedman had the quote of the week, summing up the American mentality in a rephrasing of Teddy Roosevelt's famous dictum, "Think small and carry a big ego." Lest you think this was a bash-America article, read the entire thing and find out how we are literally pinching pennies on our future while we squander hundreds of billions on our past. A shout out to some true Strong Towns thinking in the last sentence.
All of this reminds me of my favorite business quote from a consultant who had worked for the German technology giant, Siemens. He said: “If Siemens only knew what Siemens knows, it would be a rich company.” Ditto America. We still have all the right stuff. The president’s instinct to push out the boundaries of energy science is spot on, but Congress has to think big, too, and help unlock and scale everything that America knows. Please, please: Stop lavishing money on repaving old roads and pinching pennies when it comes to pioneering new frontiers.
- Centrist commentator Matt Miller also had a great column about thinking big that I have been saving but really need to share. He is critical of the current administration, but his criticisms could apply to all government at every level over the past two or three decades.
The late economist Mancur Olson, in his classic study "The Rise and Decline of Nations," warned that advanced democracies eventually grow encrusted with powerful interest groups that hijack government to serve their narrow economic ends. Inefficiency reigns. Growth languishes.
Is there a way to break this fatal interest-group stranglehold? Olson said war or depression could wipe society's slate clean, but that's a bit grim as a strategy. The better path is to promote entrepreneurial innovation and harness capitalism's bottomless capacity for finding new ways to deliver more for less.
- A full 75 years after we spent $50 million ($690 million in today's dollars) on the Hoover Dam, a project that had an astronomical return on investment, we have now spent $240 million building a road so you can drive past it faster. That kind of sums up the Strong Towns return-on-investment argument. In 1935 we did a project that brought electricity to the entire southwest. In 2010 we made it faster to drive between two non-viable cities. Any question why we're broke?
- The Huffington Post featured a photo collage from Jeff Speck (Suburban Nation, Smart Growth Manual) detailing the "Ten Worst Things about Suburban Sprawl". My favorite: driver frustration.
- If anyone out there has played CityOne, please let me know. I've read a review but am fascinated to spend some time with it. It just seems so geeky I can't help but like it.
- Finally, I read this article on "Why blogging still matters" and thought this quote from Anil Dash of Expert Labs fit my feelings exactly.
I'm incredibly privileged and fortunate. I can put a post up on my blog and some number of people who are smart and thoughtful will take it seriously and respond. That's unbelievable. That's the greatest thing in the world.
If I spend an hour writing a couple hundred words about a really interesting challenge that we face as an industry, as a society, as a culture, sometimes I'll get the person that I'm writing about to respond. I could write something about Twitter and get somebody that works at Twitter to respond, or write something about government and get someone who makes policy to respond. That's still a thrill. It also kicks off really meaningful conversations. I think that's all you can hope for.
That was the promise we had when we all first discovered the web. Someday it would bring us all together and we'd be able to have these conversations. It's not perfect. It's not ideal. But in some small way here's somebody like me -- with no portfolio, I didn't go to an Ivy League school, I didn't have any fancy social connections when I started my blog -- and it has opened the door to me having a conversation as a peer, as somebody taken seriously, in realms that I would have never otherwise had access to. That's the greatest privilege in the world.
This truly is the greatest privilege in the world. Thank you for reading our thoughts and ideas, for contributing to the Strong Towns movement, and for all you do to making your local communities a stronger, better place to be.
We especially welcome those of you that found us during Community Matters '10. We publish here Monday, Wednesday and Friday (with an occasional short on the off days), so be sure and check back frequently. You can also join us on Facebook and Twitter. Or you can also sign up for a Curbside Chat and bring the Strong Towns message to your community.