Friday News Digest, Catch up edition

It has been way too long. Two weeks ago I had a tremendously busy week, was a little under-the-weather and was preparing to leave on vacation, so events forced me to skip the News Digest. Then last week, I was relaxing by the pool in Texas while the wires got crossed back here in News Digest. I'm so sorry, and so this week we're going to make it up to you with an extra long, super spicy, action packed and never dull News Digest. And yes, it is July and I went on vacation to Texas. Hopefully this sunburn carries over long enough to keep me warm this winter.

Enjoy this month's news.

  • I admire public officials that blog, especially when they take on weighty issues in an effort to inform and inspire the residents they serve. One of my favorites is Scott Huizenga, the city administrator of East Grand Forks, MN. His recent post on Local Government Aid, the Minnesota government shutdown and the concept of the Buffalo Commons is a great example (and includes a friendly link to STB - thanks Scott).

Most frame the debate in a traditional DFL vs. Republican context.  This stands to reason given that the sitting Governor is a DFLer who favors more revenue (i.e. taxes), whereas the Legislative majority leaders are Republicans who favor budget cuts.  The divide ultimately may be more than simple ideology or party affiliation.  The more critical schism that Minnesota and several states face is urban versus rural populations.  Or, perhaps more specifically, urban versus suburban versus rural.

  • Last week we ran a guest column from Nate Hood, whose work we have featured here in the past. I've asked him to post here monthly as I like his insight and his writing is getting really good, like his post this week where he threaded a narrative on Strong Towns thinking from one edition of his local paper. He's got natural talent and a good eye for this stuff, but it is especially cool for us to watch him take our work and build on it. That's what we're trying to inspire.

New developments paying for infrastructure looks appealing in the short-run. But remember: the City must maintain the infrastructure thereafter. The maintenance cost of an extra turn lane is minimal. Unfortunately, the problem isn’t one turn lane – it’s the dozens upon dozens of unnecessary turn lanes that add no economic or social benefit whatsoever to the community at large. At best, they are only a small financial burden.

  • I was able to enjoy a Twins game with Riordan Frost of Minnesota 2020 this week (Wednesday - we won). Riordan is leaving us to go to grad school in DC, so it was nice to be able to chat before he heads out. In my pile of news is this post he did last month on Complete Streets where he quotes us and the posts we did on the topic. He let me know he would continue to write and seek to get published, so keep an eye out for him.

As Chuck Marohn at Strong Towns warns, however, we must be careful to not let complete streets be confused with complete roads. The difference, as Marohn defines it, is that a road is a thoroughfare existing outside of urban areas, whereas a street exists within neighborhoods and urban areas. The status quo for engineers when it comes to roads outside urban areas is, and should be, to focus on cars, car speeds, and car volume.

  • The website Mez Dispenser (written by Dave Meslin) detailed a Tactical Urbanism-like project taking on the phony traffic analysis presented by their city by doing their own actual counts. A bunch of volunteers went out and physically counted pedestrians, bikers and autos and their results were so far from the "official" count that it was stunning. I'm a professional with an engineering license and a planning certification and I will attest that our cities all need much, much more of this type of intelligent challenges by layman to the standards and orthodoxy of the professionals. The narrative is an entertaining read as well.

One year ago, I wrote a blog post about the City’s “John Street Corridor Improvement Study”.  I called into question the validity of some of the measurements in the report.  Specifically, the study claimed that there was not enough road width to include bike lanes and wider sidewalks.  It was presented as a choice:  bike lanes OR a wider sidewalk.  I took advantage of a high-tech quantifying device called a “tape measure” and proved them wrong.

  • Speaking of biking, congratulations for the city of Minneapolis for holding their first Ciclovia. We need to do this in every city across this state.
  • At our Curbside Chat this week I was told that I made people a little "depressed" with some of the statistics and narrative. I always find that an odd critique because I feel like I am actually fairly optimistic, especially considering that I do not have the luxury of being blissfully unaware of where we are at in this country. Want to see depressing? Try this story from Market Watch detailing ten reasons we are "doomed" to repeat the financial crisis of 2008.

Wall Street rules aren’t like Main Street rules. The guy running a Wall Street bank isn’t in the same “risk/reward” situation as a guy running, say, a dry-cleaning shop. Take all our mental images of traditional American free-market enterprise and put them to one side. This is totally different. For the people on Wall Street, it’s a case of heads they win, tails they get to flip again. Thanks to restricted stock, options, the bonus game, securitization, 2-and-20 fee structures, insider stock sales, “too big to fail” and limited liability, they are paid to behave recklessly, and they lose little — or nothing — if things go wrong.

Treasury Secretary Timothy Geithner (GYT'-nur) says many Americans will face hard times for a long time to come. He says President Barack Obama rescued the United States from a second Great Depression and will keep working to strengthen the economy. But Geithner says will be some time before many people feel like the country is recovering. Geithner tells NBC's "Meet the Press" that it's a very tough economy. He says that for a lot of people "it's going to feel very hard, harder than anything they've experienced in their lifetime now, for a long time to come."

  • I came across a 1982 article from Time Magazine about the rapid rate of business bankruptcies at that time. It was worth reading and gave some context to where we are at today. Individual bankruptcy filings are skyrocketing, but from the data I have seen, it does not look like businesses are in the same position. This is not to say businesses are doing well -- to the contrary -- just that, like other parts of the economy, they are floating in the sea waiting for the next wave to crash into them. From my vantage point, this is especially true for small businesses, which is a major focus of the Time article. The impact of inflation and the need for a run of bankruptcies to cleanse the system described in the article may provide some preview of what is to come for us today.

Despite the anguish corporate bankruptcy causes individuals, many economists agree with Eastern's Borman that it is an inevitable, perhaps even healthy, aspect of capitalism. Like a forest fire that creates more productive land by burning off dead trees and scrub, the failure of one company often yields markets, capital and skilled labor that fuel the growth of another. Says Eugene Lerner, professor of finance at Northwestern University's J.L. Kellogg Graduate School of Management: "For a long time, thanks to inflation, a lot of firms found it convenient to borrow a lot more than was prudent. If inflation had continued, these same guys would have been millionaires. But someone always gets caught when the merry-go-round stops."

  • One of the things that confused me 15+ years ago when I euphorically made my first investment in a rising tech-led bull market was how stock prices would drop dramatically even when there was a positive earnings surprise. I'm not going to pretend that I understand the market, but what I do know is that our securities trading system is not set up for my benefit. This article on earnings surprises explains another facet of the ridiculous nature of the game being played.

The percentage of companies that have beaten expectations often is cited as a barometer of corporate profitability, an indicator of how well the economy as a whole is doing or a predictor of where the stock market is going. What goes unsaid, however, is that these positive surprises are becoming so common they are nearly universal. They are predetermined in a cynical tango-clinch between companies and the analysts who cover them.

  • We've written extensively here about the frail financial condition of America's cities largely wrought by the unproductivity of the suburban pattern of development. Earlier this year we focused in a blog and a podcast on the predictions of Meredith Whitney, a respected analyst that projects large scale municipal bankruptcy. I don't know all of the nuances surrounding Central Falls, R.I., but it looks like they are headed into bankruptcy.

As state officials try to dig Central Fall out of its financial hole, negotiations are ongoing with labor unions and retirees and cuts are being sought from every corner of the budget. Without major concessions, bankruptcy is a very real possibility. Bankruptcy can take a toll on a city’s reputation and put stress on neighboring communities, which might have to step in to provide services.

“It’s a difficult, painful, and wrenching process,’’ said Richard Levin, an attorney who has been advising the city council in Harrisburg, Pa., which has been flirting with bankruptcy because of more than $280 million in debt on its trash incinerator, several times the size of the city’s annual budget. “Some people think bankruptcy is like a bath or a free pass. That’s not it at all.’’

  • We're hoping to make it over to Fergus Falls, MN, very soon for a Curbside Chat. It looks like the discussion there is evolving in the right direction thanks to some really active and informed residents.

When you look at cities of Fergus Falls’ size, particularly many suburbs of the Twin Cities, said [Community Development Director Gordon] Hydukovich, “They’re trying to get down to what we have.” What Fergus Falls has is a pedestrian-friendly, scenic neighborhood within walking distance of a downtown area. Study author Cindy Gray and the 23-person committee determined that such an area is valuable to Fergus Falls and helps set it apart from other cities, although Hydukovich added that the plan could still change before final approval.

  • As I write this, I have CNBC on here in the office and they are featuring all of the politicians talking about the debt ceiling. I read the Economist and find the foreign, generally apolitical, take on our system to be more interesting that nearly anything we produce here. They have some good insights in this brief on the bargaining position of Speaker Boehner.

HOUSE Speaker John Boehner is fond of saying that a debt-ceiling deal that raises taxes cannot pass the House of Representatives. Slice the numbers a bit more carefully and you can easily conclude the opposite: a deal that doesn’t raise taxes won’t pass, either.

  • The Economist also had an insightful take on the sausage being made over a transportation bill, legislation that is guaranteed to disappoint on multiple levels. We've simply built a system that is too big and too unproductive to maintain. All the tax increases and spending cuts imaginable won't change that underlying math.

And America’s roads and railways are deteriorating; the Congressional Budget Office estimates that $20 billion more is needed each year just to keep them in their present poor state. If the parties are unable to bridge their differences, the gridlock in Washington will quickly find its way to streets around the country.

  • The transportation funding gap is something they discuss in depth in this piece posted on The Infrastructurist blog, although they seem to suggest that a gas tax increase can somehow prevent decline. While I won't argue that it will forestall decline in some areas, I think they are more precise in their analysis on the underlying dysfunction of the system, as stated in this quote from the piece:

We’ve all heard about the trillions of dollars America’s transportation needs. The numbers are so big they seem insurmountable. But today’s spending patterns, whether there is more money or less, exacerbate the problem because they are so dysfunctional.

  • The Disney Corporation is brilliant, especially in their design of theme parks, and I've been a huge fan for a long time. I lament that the only place most Americans can catch a glimpse truly good design is at a Disney park, and I often use Main Street USA in speeches to explain some aspects of placemaking for people who have lived for decades in hostile, auto-only environments and know that as "reality" (instead of what it is: an historical anomaly). I don't want to second guess Disney, but I have to admit being baffled and confused by the "Cars Land" they are building in their California Adventure park. I realize the cartoon theme, but watch the walk through video below and decide for yourself is this is space you would enjoy inhabiting.

  • I am not one to get all uptight over obesity statistics. I understand the devastation of obesity and its tremendous social and financial ramifications, but I also understand how obesity is the symptom, not the problem. We won't fix obesity in America until we are much poorer and, as a result, walk more, do more physical work, eat more local and less processed foods, etc... I grew up on a farm and we ate volumes of food I could not imagine consuming today, yet we were very fit and healthy (while today my BMI is, sadly, in the "overweight" zone). Despite my lack of passion for the topic, there are some very revealing statistics and information in this article from Huff Post.

The nation is getting bigger and bigger every year. And looking at state-by-state statistics over the last 15 years, the groups found exponential waistline growth – Colorado, with 19.8 percent of adults considered obese according to 2010 data, would have been the nation's fattest state in 1995.

"When you look at it year by year, the changes are incremental," says Jeffrey Levi, executive director of the Trust for America's Health, which writes the report with the Robert Wood Johnson Foundation. "When you look at it by a generation you see how we got into this problem."

  • Earlier this year we wrote about the perverse subsidy of school busing, especially in suburban and rural areas. Now a school board in Texas is asking parents to pay directly for busing their kids.  I'm not sure this is how I would go about doing this, but I do think we are more likely to see this as schools struggle to keep money in the classroom.

Under the plan, parents or guardians will pay $185 a semester for one child to ride the bus and $135 for a second child. Students who get free and reduced lunches will have to pay $100.

“There will be buses,” superintendent James Veitenheimer told parents after initial worries that there wouldn’t be bus service during the school year. “They just won’t be free.”

  • And finally, my beloved Twins are getting healthy, pulling themselves out of the cellar and becoming a much more entertaining team to watch than their brutal play in April and May. I had planned to post this video of speedster Ben Revere tumbling into a somersault on his way to legging out a triple, but this GIF file of Thome's monster home run took precedence. The great thing about this is not the home run, which you can't see, but the immediate and dramatic reaction of Delmon Young waiting in the on deck circle. You can tell from seeing his expression just how far the ball traveled.

Keep cool, be safe and enjoy your weekend.


If you value what you read here, consider a donation to help support the Strong Towns movement. Your support -- at whatever level -- will go a long ways towards giving us the resources and credibility we need to spread this important message. And tell a friend about us. It all helps us spread the Strong Towns message.