At the beginning of this week my oldest niece – a sophomore at the University of Minnesota, two attributes that make me doubly proud of her – got her four wisdom teeth removed. Reports are that she is doing all right with the swelling starting to subside. She had a monopoly on my sympathy this week until our dog, Avalanche, went in to get “one or two” teeth removed and would up having 14 extracted. I didn’t know dogs even had that many teeth! He’s laying here in pain, all the normal Avalanche craziness wiped out, and while I’m laughing a little inside – he is a 70 pound, in-your-face kind of dog – I am hoping he feels better soon.

Here’s the week’s news.

  • If you didn’t catch Gracen Johnson on our blog and our podcast, here’s a good recap that she provided on her blog, Another Place for Me. Here’s the important part.

I think this message [Strong Towns] will resonate in Fredericton and I appreciate the work going on at so I'm getting more involved with their team. In fact, I'll be a regular blog contributor and podcast guest going forward.

  • My good friend Aaron Brown of the blog MinnesotaBrown this week weighed in on a controversial mining project here in our home state. He included a couple of quotes from me in an effort to broaden the conversation in a way that I think is very healthy. I’m hoping to have Aaron on the podcast soon because he’s not only very insightful, he’s a really fun guy to talk to.

Like me, Marohn is frustrated watching the attention local leaders pay the regulatory process on a big project like PolyMet, when obvious, solvable problems are all around.

“Sadly, our trickle down, big project approach robs us of more than our money,” said Marohn. “They steal our focus, our energy and our resourcefulness. I think a modern Iron Range leader could make a convincing case that the future is not in chasing these huge investments — projects that will come to us eventually — but in making Range cities strong and healthy places for people to live right now.

  • Incidentally, Aaron Brown also had the best Facebook status update this week lamenting Minnesota’s current shortage of propane gas, which is an essential commodity when the weather is in the minus 20’s.

  • I also want to thank the blog Transport Providence for the reference (and research) in a posting and for reaffirming to me that there are a lot of younger people out there who – contrary to the assertions of their elders – don’t appear to be in a hurry to change their driving habits, even when they contemplate children.

I feel like we have a value in the United States which says that cars are the way we do things, and then we try to adjust everything we do to that preconceived position. While someday I expect that I may find it useful to get a drivers' license and use a car occasionally, I actually plan on carrying out my parenting duties mostly without a car. That's the way my great-grandparents did it. It's halfway how my grandparents did (they were each single-car households). And now car use is declining again. The ironically named Baby Boom generation is really a blip on the radar screen, even within modern times.

  • And someone added the word “stroad” to the site Made Up Words, a collection of words not yet recognized by the masses. I’ll take it.

Stroad: A hybrid between a street and a road that’s too inefficient to move cars at high speeds, but too swift to facilitate lasting economic strength, by engineer and city planner Charles Marohn.

  • Iowa, most important for being the narrative backdrop for the movie Field of Dreams, is apparently going to experience the “fiscal cliff” this year when it comes to transportation. They did what states are allowed to do – and many have done – which is to borrow ahead on their federal transportation dollars. That means that the federal revenue they get this year is going to pay for projects they did in the past. Congratulations to the past. Our apologies to the future.

Whether or not state lawmakers raise the motor fuel tax Iowa this year, Iowa faces a fiscal cliff likely to reduce transportation construction funds – and jobs — later this year.

That’s because the money in the federal Highway Trust Fund for the federal fiscal year beginning Oct. 1 will be dedicated to pay for commitments made in prior years, Iowa Department of Transportation Director Paul Trombino told the House Transportation Committee Jan. 23.

“There will be no more dollars to cover the next fiscal year’s program,” Trombino said. “Those funds will be eaten up by programs from previous years.”

  • I have to laugh at the notion of a “cliff” of any type when it comes to transportation spending. If I’m driving headlong towards a cliff, I try to stop. Or perhaps change direction. I don’t plow on straight ahead hoping that someone builds a bridge (or a dual divided freeway) before I get there.

[The video from the site won't embed, so check it out here.]

  • In Minnesota, our transportation dialog does not include reflection on how we got here, a conversation on how we do things differently, an accounting of whether or not we have made wise investments or a questioning of whether our future plans make any financial sense. Our dialog is simply an obsession on how we get MORE REVENUE. And that revenue needs to come from some very familiar places (because if it didn’t, it would force us to reflect, converse, account and question, which we don’t want to do). This is so maddening. (Note: listen to this week’s podcast with Rick Rybeck.)

"Transportation is built around the premise that the people who use or benefit from it should pay 100 percent of the cost through the gas tax, transit fares, motor vehicle licensing and potentially trip pricing," the interviewer said.

But the interviewer pointed out that the state's investment in improvements to Highway 610 in the northern suburbs of Minneapolis is opening up hundreds or thousands of acres of land for development. "That land appreciates in value tremendously the minute MnDOT announces it's going to build a four-lane, controlled access freeway," the interviewer said. "Shouldn't the state say to the landowners, we would like a return on that appreciation in value?"

[Minnesota Transportation Commissioner] Zelle responded, "Value capture around transit hubs and interchanges of freeways hasn't been done. I like the idea. I'm not sure the state has really thought about that being our role."

"Our funding comes from multiple sources," he continued. "Fuel taxes provide less than half the funding for the Trunk Highway Fund. That funding hasn't been keeping pace with inflation. The county and municipal road systems are largely on the back of property taxes, so we will find little value captures. But we're so capital heavy that we must take a 20-year look. We need dedicated funds to make these investments." 

  • The brilliant Ian Rasmussen sent me an email yesterday with only a subject line: Atlanta = Fragile. We have been a little smug here in frozen Minnesota in how we’ve heard of the plight of you poor Georgians. (Ian’s from NYC – different kind of smug.) My favorite story is how the National Guard has been delivering MRE’s to stranded motorists. I’ve eaten MRE’s. Sitting in your car for hours on end, being handed an MRE would be a bad joke. My initial thought on hearing these stories was, “why would you not just leave your car and walk?” But then I remembered, this is Atlanta. With snow. Can you imagine walking 25 miles home along an expressway, over interchanges, through parking lots and around chain link fences? Now add snow, cold and hunger to a population not attuned to any other those. Makes Cormac McCarthy seem almost reasonable. Yes, Atlanta = Fragile.

The rare snowstorm deposited mere inches of snow, but overnight, the South saw fatal crashes and hundreds of fender-benders. Jackknifed 18-wheelers littered Interstate 65 in central Alabama. Ice shut down bridges on Florida’s panhandle and the Lake Pontchartrain Causeway, one of the world’s longest spans, in Louisiana. Some commuters pleaded for help via cellphones while still holed up in their cars, while others trudged miles home, abandoning their vehicles outright.

  • Speaking of fragile, it has always astounded me how people in the Southwest who are capable of doing simple math can sleep at night. You take so much water out of the ground each year. Each year so much water goes into the ground. And each year your water level sinks. This doesn’t seem like difficult math. I was not aware that San Francisco was experiencing similar problems, but reports that some Bay Area communities could be out of water in four months does not surprise. Droughts are not predictable, after all, says the person to whom documented history began when they were five. Eat, drink and be merry, my friends. When your water runs out, you can simply move here to Minnesota where we have plenty, at least the frozen kind (although bring your propane – we seem to be very short of that).

As the drought in California continues, 17 communities throughout the state could run out of water within 60 to 120 days, state officials said. In some districts, the wells are running dry while other reservoirs are nearly empty.

  • For once I am thankful that the Commercial Appeal in Memphis forces you to buy a subscription just to read a single article. The headline is enough to make me depressed. Yeah, all the Memphis area needs is a little more auto-based retail (not).

Southaven outlet mall to get state subsidies

The Outlet Shops of the Mid-South, the outlet mall to be built in Southaven, will receive $33.9 million in state subsidies to get the project underway.

  • Apparently the subsidy-givers (which is what I believe a Strong Towns version of George W. Bush would call them) there in Tennessee have not been reading any financial news lately. Like the last five years, but even the last five days where it has been reported that a tsunami of store closings is expected to hit retail. America has a statistically bizarre amount of retail space. It is an artificial bubble looking for a pin. Subsidizing more would be like Noah spending his time working on a process for turning gold into water instead of constructing a boat.

Experts said these headlines are only the tip of the iceberg for the industry, which is set to undergo a multiyear period of shuttering stores and trimming square footage.

Shoppers will likely see an average decrease in overall retail square footage of between one-third and one-half within the next five to 10 years, as a shift to e-commerce brings with it fewer mall visits and a lesser need to keep inventory stocked in-store, said Michael Burden, a principal with Excess Space Retail Services.

  • And that housing recovery…..gosh, it is always so surprising (not) when economists are surprised. Leave it to realtors to attribute it to a lack of inventory and pent up demand. Greetings, fellow passenger of the Titanic. I see we’ve slowed our forward progress somewhat. This gives me time to show you our unique collection of millstones we have on hand. Priced to move in a buyer’s market.

Signed contracts to buy existing homes dropped 8.7 percent in December as abnormally cold weather hit much of the U.S., according to a new report from the National Association of Realtors.

The plunge caught economists by surprise. Economists polled by Reuters had forecast pending home sales would tick up 0.3 percent.

  • This was an absolutely fascinating article on some of the ways inflation and deflation are manifesting in a globalized market as we experiment with what it means to have a fiat global currency being wildly devalued with no credible or attractive alternative. If you are one of these people who believes economics is an equation you can learn, master and then tweak to fine tune the system, well, I’d love your thoughts on some of these impacts.

The report said they may need capital controls to navigate the storm - or technically to overcome the "Impossible Trinity" of monetary autonomy, a stable exchange rate and free flows of funds. William Browder from Hermitage says that is exactly where the crisis is leading, and it will be sobering for investors to learn that their money is locked up - already the case in Cyprus, and starting in Egypt. The chain-reaction becomes self-fulfilling. "People will start asking themselves which country is next," he said.

Emerging markets are now half the global economy, so we are in uncharted waters. Roughly $4 trillion of foreign funds swept into emerging markets after the Lehman crisis, much of it by then "momentum money" late to the party. The IMF says $470bn is directly linked to money printing by the Fed . "We don't know how much of this is going to come out again, or how quickly," said an official from the Fund.

  • Classic.

This weekend we have a bunch of my best friends and Strong Towns supporters in Brainerd for a retreat and strategic visioning session. I’m very excited for all of it. Enjoy your weekend and we’ll see you back here on Monday.