Recently I was riding on the Metra, the commuter rail system that connects the suburbs to downtown Chicago. I picked up “On the Bi-Level”, the flyer that Metra management makes available to riders and was browsing through it when I came upon this innocuous sounding statement:
I certainly will not argue that Metra is without challenges. Perhaps the biggest challenge, and one that will impact many of our plans, is our needs for more capital money to invest in our system. We estimate Metra will need about $9.7 billion over the next decade to achieve a state of good repair on the system, and we expect to receive about a fourth of that amount from traditional federal and state sources. Riders need to understand that fares help us cover our operating costs but have never been a significant source for capital expenses – we must rely on Washington and Springfield for that funding.
Within the utility community there is a concept called “generation equity”. This implies that you need to spread the burden of replacement and renovation across the life cycle of users, rather than hitting them all on the first riders, such as in the case of a train line. On the other hand, you cannot just ignore ongoing capital costs and let the system run into ruin by paying the minimal upkeep costs every year.
In this article, Metra lays bare the facts that:
- Fare costs (riders) only “help” them cover their operating costs
- Funding from other sources (and debt) helps them cover the rest of their operating costs
- Then they rely on largess from the state or Federal governments for about a fourth of their capital costs
- And who knows where they are going to get the rest of the funds for capital replacement
In fact, it would be impossible for Metra to re-build the train lines that they have today in the current regulatory and legal environment. Permits, lawyers, litigation, politically favored contractors, and a welter of archaic tools and practices would make the costs impossibly high and the deadlines incredibly long. By “capital” costs, they are generally talking about replacing bridges, stations and sections of existing track rather than “true” expansion, although they do occasionally add some incremental lines or stations.
Cross posted at LITGM
Recently I wrote about how the district I live in is perhaps the most gerrymandered district in the entire country. Great pains have been taken by the Democrats that run Illinois to ensure that my vote can’t count and the legislator that runs our state district doesn’t even have to bother courting voters like me. Even among Illinois legislators (not exactly the highest quality bunch) my guy is famous for not even voting to impeach Blago. Literally we have the worst of the worst representing us, but he is effectively immortal since all he has to do is win the Democratic party primary and he’s in, due to basic mathematics and party-line voting.
While I know writing posts like this is just like shouting into a toilet Rolling Stone recently came out with an article about Red State gerrymandering. While my district in the article above was in the state legislature, our Illinois US House of Representatives balance has been similarly adjusted to ensure that a 50/50 or so state leans completely blue. Of course the entire article acts as if this is a Republican phenomenon, when in fact both parties are equal opportunists at this sad game.
There is a shred of hopefulness in all of this in some electoral advancements coming out of California, of all places. They have a system where the two top vote getters in the primary battle it out on election day, even if they are from the same party. In this sort of system, the Democrat or Republican that reaches out to the constituents in the middle from the other party has a shot at beating a stone ideologue that will generally cruise through the party primary (like my state representative). This solution was “California Proposition 14“. In parallel, they also have a citizen’s commission to draw districts so that they make more sense rather than be amazing gerrymander constructions. It is too soon to tell if California’s results will help that much but it seems like a step in the right direction.
Cross posted at LITGM
I live in the River North district of Chicago, a vibrant area full of professionals, high rise buildings, and a large service economy. We are adjacent to the Loop (and many of the people who live here chose this area so that they could walk to work) which employs many of these residents in an internationally competitive group of companies, both public and privately held.
In my interactions with these residents, few are political, and I would say that most Illinois citizens I’ve met over the year could be considered middle-of-the-road. However, due to factors unique to the state of Illinois, the state is dominated by Democrats who control most of the levers of power at the state, city, county and local levels. As such, a state of mostly moderate individuals is set up, governed, and managed as if it was the most left-leaning state in the country.
Ken Dunkin is our Illinois State representative for the 5th District, and he helpfully sent me this brochure that outlines his goals and accomplishments as a state legislator. This update provides a great window into the mindset of an Illinois Democrat.
Ken Dunkin is famous for being the only Illinois legislator to skip Gov Rod Blagojevich’s impeachment hearing, and thus being a de-facto loyalist to the bitter end. It is really hard to add anything more to that sort of fact; even his fellow Democrats finally came to the conclusion that Blago had to go, but not Ken.
As a long time city of Chicago resident I have seen the immense growth of new buildings and new residents in areas near downtown which previously had been office buildings, warehouses, dilapidated structures, or simply abandoned. From time to time when I am in an architectural bookstore I glance at books about “new urbanism” or various similar concepts that authors and “urban planners” use to overlay atop the actual growth of a city (or decline, in the case of other parts of Chicago).
If you are from a smaller town or relatively slow moving US city and haven’t been overseas to see “real” growth somewhere like Hong Kong, China, or India, then Chicago’s growth over the last decade or so that I’ve lived near down is pretty astonishing. In River North, where I live, literally dozens of high rise buildings > 15+ stories have been built and are filled to the brim with owners and renters. The entire South Loop has been renovated not only with town homes and large buildings, but huge retail spaces like Target, Costco, and giant movie theaters. While there were many restaurants in River North when I first moved here, we had to walk far and wide to find even a place open for a decent breakfast; now we have a dozen to choose from within 6-8 blocks.
Since there are train tracks downtown for the Metra commuters which arrive from suburbs from all directions (except East, where the lake is) and many of these tracks are on ground level, the streets are cut up and there are sidewalks I used to take under viaducts with few people around. Now, however, immense apartment buildings have popped up (over 40+ stories) and in the morning there is a huge population of well dressed professionals walking along these routes and sidewalks, where previously there was just debris and parking lots. If I go to work late it is either single women walking dogs or nannies pushing single babies in strollers.
There must be 50,000+ well heeled urban residents packed into this place, all arriving from somewhere else whether it is a suburb, another state, or another country. None of them are poor – you can’t be – since rents are in the thousands and move up rapidly, and every new building coming up has more amenities than the competitors in order to attract residents. The demography is very fluid because many of the condominium owners rent out their units, and then the newer buildings have been built as apartments since the real estate crash of 2008.
Read the rest of this entry »
Posted by Michael Kennedy on 1st November 2013 (All posts by Michael Kennedy)
Fernandez begins with a discussion of Obama’s technique with favored columnists.
get him in an off-the-record setting with a small group of opinion columnists — the David Brooks and E.J. Dionne types — and he’ll talk for hours. …
“It’s not an accident who he invites: He reads the people that he thinks matter, and he really likes engaging those people,” said one reporter with knowledge of the meetings. “He reads people carefully — he has a columnist mentality — and he wants to win columnists over,” said another. …
These people are, like him, unsophisticated in technology. They are lawyers or journalists and the numbers of math and science courses represented in the room are few.
The other blog post is titled “Government is magic.”
Our technocracy is detached from competence. It’s not the technocracy of engineers, but of “thinkers” who read Malcolm Gladwell and Thomas Friedman and watch TED talks and savor the flavor of competence, without ever imbibing its substance.
These are the people who love Freakonomics, who enjoy all sorts of mental puzzles, who like to see an idea turned on its head, but who couldn’t fix a toaster.
This strikes me as a huge insight into why this administration doesn’t understand the trouble it is in.
Posted by Charles Cameron on 15th October 2013 (All posts by Charles Cameron)
I’m borrowing this announcement from the New Liturgical Movement blog, where Fr Thomnas Kocik posted it today:
This coming Sunday, October 20th, at St John Cantius Church in Chicago, His Eminence Francis Cardinal George, Archbishop of Chicago, will bless the church’s recently installed, fully restored Casavant pipe organ (Opus 1130) at 4:00 pm.
Immediately following the blessing, a Pontifical High Mass will be celebrated by the Most Reverend Joseph Perry, Auxiliary Bishop of Chicago. There will be a dinner in the church hall at 6:00 pm, and at 7:00 pm the Organ Dedication Recital by Thomas Schuster of Miami’s Church of the Epiphany.
The event, as you see, will be both musical and liturgical: if I come across a suitable video of the liturgy taken during the event, I will drop it in here.
Posted by Lexington Green on 15th October 2013 (All posts by Lexington Green)
With the recent Nobel award to UChicago economists, it is good to be reminded of spirit of Chicago economics, and why it keeps producing Nobel Prize winners.
A friend who is a UChicago economics professor, who was a PhD student at the time, witnessed the following episode.
Gary Becker ran the Applications of Economics workshop in the Department of Economics for decades. This workshop was legendary as Ground Zero for tough microeconomics workshops. Frequent attendees included George Stigler, Ted Schultz, Sherwin Rosen, Kevin Murphy, Eddie Lazear, Bob Lucas & more. In addition, many PhD students (including myself) attended. That’s where we learned how to do research & think critically.
In the late 1980s (probably 1988), Asser Lindbeck came to present a paper he was working on. At the time Lindbeck chaired the Nobel Prize selection committee, & Gary was the #1 choice in the betting pools to receive the Nobel next. He did in fact win in 1992.
Lindbeck sent paper #1 ahead of coming to Chicago. As was the culture of the workshop, attendees had read it & were prepared to discuss the paper. As always, Gary showed up with a couple of questions scribbled on the front of his copy of Lindbeck paper #1.
Unfortunately, Lindbeck had sent the wrong paper. He arrived prepared to present paper #2. At the start of the workshop, he announced that he would not take any questions for the first 20 minutes, while he presented paper #2, & then he would open it up for discussion.
Gary immediately replied, “No, we prepared the paper that you sent, & that’s what we will discuss.” Lindbeck had a stubborn personality & replied, “No, I will present #2 & that’s what we will discuss,” & proceeded.
Gary immediately interrupted him with a question about paper #1. Lindbeck interrupted him with a blunt admonishment that he was going to present #2, & started again.
Gary interrupted again with another question about #1. Lindbeck tried to stop him. This continued for a couple of minutes until Lindbeck relented & we discussed paper #1. A vigorous & constructive discussion then followed (since the audience was prepared).
Watching this as a PhD student was frightening & inspiring. Gary was fearless. He clearly was not interested in playing Nobel politics, but only in running his workshop with the highest of standards. His expectation was that we all read the paper & arrived prepared, that the presenter had high standards, & that the discussion was vigorous, rigorous & thoughtful.
I never forgot this lesson from Gary Becker in what is most important at Chicago: Economics.
May it always be so.
Gary Becker, Nobel 1992, above.
Posted by Lexington Green on 14th October 2013 (All posts by Lexington Green)
See also, this piece from economist John Cochrane, Gene Fama’s Nobel:
“Efficiency” is not a pleasant adjective or a buzzword. Gene gave it a precise, testable meaning. Gene realized that financial markets are, at heart, markets for information. Markets are “informationally efficient” if market prices today summarize all available information about future values. Informational efficiency is a natural consequence of competition, relatively free entry, and low costs of information in financial markets. If there is a signal, not now incorporated in market prices, that future values will be high, competitive traders will buy on that signal. In doing so, they bid the price up, until the price fully reflects the available information.
Like all good theories, this idea sounds simple in such an overly simplified form. The greatness of Fama’s contribution does not lie in a complex “theory” (though the theory is, in fact, quite subtle and in itself a remarkable achievement.) Rather “efficient markets” became the organizing principle for 30 years of empirical work in financial economics. That empirical work taught us much about the world, and in turn affected the world deeply.
Alex Tabarrok at Marginal Revolution on Hansen.
Posted by Lexington Green on 11th October 2013 (All posts by Lexington Green)
The Seminary Co-op is the best bookstore there is. And Hyde Park is where the best book store there is belongs. I have been a regular and a devotee since I first set foot in the place 32 years ago. When my own book came out I talked to Jack Cella, whose name I did not know, but he knew mine! We had been chatting on and off for 32 years, of course. He made sure they had America 3.0 on the shelf. Seeing my book on the shelf at the Seminary, in the very shadow of my alma mater, the University of Chicago, is the single proudest moment I have had as a published writer. I felt somehow I had come full circle.
“Most everyone that I interviewed for the project, not only identified the Co-op as being the physical embodiment of the life of the mind and the ideals that the University of Chicago strives to create and encourage, but they also strongly identify it with Jack himself,” Doherty said, adding that, “for many, Jack kind of is the Co-op.”
Recently I attended a rooftop charity event at the “Life Storage” building in River North. I was able to get a photo of the sunset facing west (I rarely get to shoot in that direction).
River North, the district where I live, is in the midst of a giant building boom and is among the hottest districts in Chicago. Seemingly every empty lot or older building is either being built on from scratch or redeveloped, and the Life Storage building is no exception.
Cross posted at LITGM
Way back in the day when LITGM used to do a bit more of the political type articles I wrote about Illinois representatives’ automobiles. I confused the Lincoln Navigator that Danny Davis (district one) drove vs. the Ford equivalent that Jesse Jackson Jr. drove, and a bit of web hilarity ensued.
Recently I saw another politician’s car and the first thing I did was look it up – and this Lincoln is owned by a Republican in the 6th district, which happened to be Henry Hyde’s old district. It is a matter of how jaded I’ve become that the fact that an elected official drives a Lincoln is barely worth a web peep.
While American’s think that “big money” has captured politics, it is literally nothing compared to the wealth of China’s politicians. This WSJ article describes how wealthy the top Chinese politicians are vs. the USA…
According to the Hurun Report, as cited by Bloomberg, the 70 richest delegates in China’s National People’s Congress have a combined net worth of 565.8 billion yuan or $89.8 billion. That’s more than 10 times the combined net worths of all the members of Congress, the Supreme Court and the President. (Their collective riches are only $7.5 billion.)
Thus I can only imagine the rage I’d have over the same type of rich trappings if I were Chinese. Unfortunately, they can’t vote, and protests tend to go down badly with authorities. As bad as our system is, in terms of being captured by the interests of the wealthy, it is a comparatively egalitarian route compared to our largest economic competitor.
Cross posted at LITGM
Last Sunday I was fortunate to attend the Bears Vikings game at Soldier Field with Carl from Chicago and Lexington Green. A great time was had by all.
As I was walking to my seats in the nose bleeds, I said to Lex “this picture represents pretty much everything about Illinois”. He said I should blog it. So I am.
What you see is the top of the old Soldier Field on the left, with its beautiful granite pillars that used to be atop the stadium. On the right is the new Soldier Field, what we all call the UFO, that was basically dropped in on top of the columns. It is pretty much universally derided as one of the worst plans of all time, at least from an aesthetic point of view.
Of course, the Bears should have put this stadium in Hoffman Estates or somewhere like that, where there is plenty of parking and easy access. But no. The Soldier Field renovations, as with all things Chicago, turned into a giant scam, and now people that choose to see the Bears have to endure insane traffic snarls along LSD, have nowhere to park, and then have to deal with the crazy Chicago traffic to boot.
This represents a lot of what Illinois has to offer, or, maybe I should say, had. The “combine” in Springfield is legendary for hosing down the taxpayers for any of a million different things. But I have anecdotal evidence that maybe – just maybe – things are ripe for some sort of change.
A woman visited me on a business call at work last week and she just voluntarily started spouting about how pissed she was about all things Illinois. She didn’t give a political point of view, but more to the point just said that everyone and everything there “sucked” and that she was going to, for the first time in her life, start to get involved. Lex noted that he has heard many of these same things in his dealings in Chicago.
I hope that this is true. I hope that things that are represented in the photo above come to be a thing of the past, not of the future.
Cross posted at LITGM.
Posted by Lexington Green on 3rd September 2013 (All posts by Lexington Green)
This blog is, after all, called “Chicago Boyz.” One of the greatest and most influential economists of all time, Prof. Coase was for many years a Chicago Boy. A career spanning eight decades has now come to an end.
America 3.0 author Mike Lotus at America’s Future Foundation Chicago, Wednesday, September 11th, 2013
Posted by Lexington Green on 28th August 2013 (All posts by Lexington Green)
Spoiler alert … The answer is YES.
Details at this handy link. (Interestingly, this page has a version of the cover of the book that we did not end up using.)
The event is at Ontourage, 157 West Ontario Street, Chicago, at 6:00 p.m.
You can purchase tickets here. General admission is $10, but for $30 you can pre-order the book as well. That is actually a pretty good deal.
I am thrilled to be speaking to AFF. I like their libertarian stance, which I mostly share. I like the earnestness and braininess. I like the liquor at their parties. I like the tenor of the evening at their events. I like the whole stimmung of it.
Our book has several target audiences, and our libertarian friends are one of them. Let’s see how the ideas go over with them.
I hope to see many of you there.
Posted by Michael Kennedy on 26th August 2013 (All posts by Michael Kennedy)
When my sister and I were very young, I was 10 and she was 7, we used to go on vacation to a small village on the lake in Michigan. It is named Grand Beach. It’s a delightful place across the lake from Chicago. Shortly after the war, we began to spend more time there in the summer. I vaguely remember the first time but the month we spent there in 1948 is one of my fondest memories of childhood. My parents, along with another family, the Coyles, rented a good sized house for the month of August through Labor Day weekend. The house is still there although no longer rented by the owners.
Thirty years ago, my wife Jill and I, plus our three year old daughter Claire, spent a week at Grand Beach with my sister’s family. My sister, Patty, and her husband rented the same cottage last year and this year I joined them for the week. The weather was delightful and we all had a nice time. It gave me a chance to know my nephew Jimmy’s children and my niece, Caroline, joined us for a few days. Jimmy’ wife, Holly, was there and had her hands full with the small kids. The women were also on vacation so we ate most of our meals out. When we were there 30 years ago, Claire hid under a bed with Patty’s dog. Jill was frantic looking for her until someone heard scuffling under the bed. We didn’t have any crises like that, at least.
The village is entered from a frontage road that runs along the railroad tracks. The gate is a large white painted arch that pierces a white fence along the road. In 1948, there was less foliage and I used to help the village policeman, who drove an ancient Model A Ford, retrieve the mail when the train passed and the mail pouch was tossed from the mail car. This was usually about dusk. There was a hook by the side of the tracks which was supposed to catch the mail pouch but they usually missed and I had a good time searching for the pouch along the tracks.
The entry road passes the golf course where I first played golf at age 9 and then the playground, seen here. The entire road is lined with white painted cement pillars that were there in 1948. They may have been there in the 1930s.
For those of you reading this post from the suburbs or rural America you won’t know why this photo of the River North Walgreens drug store is so unique, but city dwellers might if they ponder for a bit… The answer is -
Because there are no bums out front
For people who live in the city, especially women, the presence or absence of bums or aggressive panhandlers in fact is a serious criteria for selecting where you live, shop and eat. This Walgreens in River North usually has a crew of bums accosting everyone going in and out of the turnstiles, like clockwork.
After a while you subconsciously avoid those places and favor other places. Another common bum congregation zone are churches. I usually walk on the other side of the street whenever churches are in my path, except for the brief times when the churches are fully of happy people all dressed up which would be a wedding.
Someday I will walk through the loop and count how many times a day I am asked for money or asked to buy something of no value (i.e. the magazine “Streetwise”). It has to be in the dozens of times. Another common topic of interaction – “can I ask you a question?” is that they have lost their bus pass / CTA pass / need some money for the train back home. This “line of inquiry” is consistently heard anywhere near the commuter rail stations.
Businesses would be wise to hire security of some sort or use their own managers to figure out how to minimize the presence of bums and panhandlers and aggressive street people on their premises. I’m sure many of the smarter businesses have already done this. Women in particular will likely shy away from your establishment if they have to run a gauntlet in order to patronize it.
I feel sorry for the tourists that actually interact with these bums and panhandlers. Their kids are usually surprised and the “smart” bums will try to strike up a conversation with the children that after a brief start of recognition the parents are quick to want to get out of. This is a good tactic to get a buck, and quite sneaky.
Cross posted at LITGM
How very interesting that über-celeb (and possibly former über-celeb) Oprah Winfrey has now tried to walk back a very publically-made accusation of being treated with racial bias in an expensive Swiss handbag shop in Zurich with one of those lame apologies which aren’t really apologies, more of that sniveling, ‘I’m sorry that you were offended,’ statements which are framed so as to throw blame on the offended party merely for being offended. At least, she has skipped over the second part of the pro-forma excuse and non-apology, which is usually some variant of, ‘gosh, don’t you have a sense of humor?’ Both statements of which, I am obliged to confirm, do not remove the sting that a party thus abused takes away from the experience. Or even that that such an apology has been honestly and fully rendered to the aggrieved party.
Read the rest of this entry »
In Chicago a “TIF” stands for “Tax Increment Financing”. Here is a link to the City of Chicago web site which explains how a site qualifies as a TIF. Basically a TIF limits the amount of property tax the city can collect at the location and in effect gives the owner / developer a big tax break. There are many reasons listed by the city as to why a location might qualify but supposedly it is used to eliminate “blighting factors”.
The Chicago Reader has written a series of articles about how TIF’s are used to reward already rich developers with tax breaks. The Sun Times wrote one this week:
It’s time for another serious look at the pros and cons of Tax Increment Financing in Chicago — a tiff over TIF — the controversial economic development program that’s supposed to revitalize struggling neighborhoods by offering financial incentives to potential investors.
The “sweeteners” come from property taxes that, to a large extent, might otherwise be spent on education, housing, parks, libraries, and public safety.
That’s defensible when there’s enough tax revenue to go around, but it’s problematic in lean times, like now, when Chicago is closing schools, firing teachers, reducing library hours and trying to fight violent crime with fewer police officers.
Another concern is that many TIF “districts” are in affluent areas, especially in and around downtown, which violates the intent of the state law that created the program in 1977 to revitalize “blighted” communities.
Here is a project that is being built under a TIF; this is for a $29M park alongside the Chicago River at Canal and Lake Street. the “River Point TIF” is obviously located in an area that doesn’t appear to be tied to much blight…
While it is likely that politically connected developers and clout-heavy individuals are tied to this process, on the other hand this is one of the few ways the city actually and concretely assists businesses that generate all of the economic value for them. Businesses pay very high property taxes in Cook County / the Loop and then the tax breaks fall back to the selective few that run through this process. It is a very opaque process and there is limited information available on the TIF accounts and funding.
Cross posted at LITGM
Last Friday Critical Mass rode in Chicago. I can see it from my balcony in River North – they are traveling Northbound on Lasalle Street. Next time I will try to get down there in person so I can get some of the characters Jonathan talked about down in Florida.
In true Chicago style I don’t have to worry about bicycles because mine was stolen. The hilarious part was that the Chicago police employee actually came and dusted for prints. It definitely wasn’t worth it because you can’t get that messy fingerprint dust off your door jamb or anything else and God knows that no action was taken to find the perpetrators.
While walking along Wacker Drive in a tourist-y part of downtown I passed this planter that had been recently rebuilt over the last few years. Obviously the cold winters and the damage they cause were not contemplated by the “A” Team that built it. While you can’t judge infrastructure capabilities based on a planter, it is easy to find many Chicago examples of large overruns and delays including Millenium Park (4 years late and budgeted at $150M, ended up costing $475M).
We aren’t the only ones screwing up. Der Speigel (English) describes how high profile German engineering projects have been recently failing, as well. Their airports, government buildings, and train tunnels have many prominent examples of being far behind schedule and way over budget. The article also makes the provocative claim that authorities deliberately mislead constituents by downplaying costs at the time of the initial approval, figuring that it won’t be their problem years’ later when the effort is complete and the overrun’s are tallied.
In many instances, the false calculations are deliberate. Werner Rothengatter, a researcher at the Karlsruhe Institute of Technology, has studied major public works projects around the world. He says there’s a similar pattern in democratic societies, where politicians have a tendency to deceive the public about the actual costs of these projects.
Rothengatter argues that cost overruns rarely come as a surprise — regardless of whether they are from the Berlin airport or Hamburg’s new Elbphilharmonie concert hall. During his research, he found that most politicians try to calculate the price to be as low as possible in order to obtain support for the projects — deliberately veiling the potential risks.
“Those who provide honest estimates for projects from the very beginning have little chance of getting them off the ground,” Rothengatter claims. Often those at the political helm take a calculated risk by assuming they won’t be held personally responsible if the costs start to explode.
In a 2009 study, “Survival of the Unfittest: Why the Worst Infrastructure Gets Built,” Danish researcher Bent Flyvbjerg of Oxford University argued that it often isn’t the best projects that are completed, but those that “are made to look best on paper.” Those, of course, are projects that “amass the highest cost overruns and benefit shortfalls.”
The idea that governments make poor project managers and select inefficient efforts for their largess (that they sponsor with your tax dollars) should be obvious, yet it is rarely commented on as a “core” reason for failure. The idea that non-profit government institutions can make wise capital allocation decisions is actually quite popular and is likely a “given” among many of the young, given that the “free” market is demonized on most popular programming. As the government makes up a larger and larger portion of our total economy, you can expect more bad decisions and lousy outcomes.
Government bodies inherently make impaired decisions, since they are insulated from failure and have many other parties to blame along the way. In Chicago, in particular, if you are the selected candidate of the “blue” party and can slog through a primary, your election is guaranteed; many posts run unopposed (even in the primary). It is hard to imagine anything short of epic failure resulting in being thrown from office.
Cross posted at LITGM
Posted by Michael Kennedy on 19th June 2013 (All posts by Michael Kennedy)
The Chicago Teachers Union president is lashing out at the villains in the school mess.
“When are we going to address the elephant in the room?
Say What ???
“When will we address the fact that rich, white people, think they know what’s in the best interest of children of African Americans and Latinos—no matter what the parent’s income or education level,” she said, according to SubstanceNews.net.
Oh. That elephant !!!
How about this one ?
What is it with these union bosses ?
This weekend the Brown Line of the CTA is shut down as they replace the next section of the Wells Street bridge. It is a big deal when they shut down the Brown Line since thousands of passengers ride that line each workday. This is the second shutdown of the Brown Line as part of this project. Since it was a beautiful Saturday I walked to the construction site to take photos with my Pentax K-01 recommended by Jonathan (who has far better photographic skills).
This view is looking East – you can see the new section that they will weld onto the bridge on a barge and it has a lighter coloration.
This view is looking North from the south side of the river. They have the portion of the old bridge that they plan to cut away “on blocks” on a barge.
In the River North neighborhood of Chicago there are many affluent customers packed into a small physical area. The vast majority of these individuals shop online and receive physical packages as a result.
And yet the post office building that sits right smack dab in the midst of all these package-receiving citizens is not a hub of activity; many times it seems empty and forlorn. Why is that? It is due to the fact that the US mail system, which provides service across the United States, is not viewed as either a reliable or competitive delivery mechanism for e-commerce goods delivery, and the flood of packages that arrives is generally delivered by either UPS or Fed Ex.
The post office dutifully delivers all the stuff I don’t want – junk mail, catalogs, bill reminders, an occasional holiday card for those that are sent via snail mail, and notices from governmental entities that haven’t joined the internet era (to their credit some of them have moved much of their operations to the internet).
While the post office is crippled by liabilities, benefits, civil service protections for workers, and a mandate to serve every US address for first class mail, they would be in a much better situation if somehow they had been able to capture a significant share of the package delivery market that flourished right beneath their noses. This article from Slate describes the situation as it exists today.
The loss of the package delivery opportunity is only the most obvious squandered one; think of what the post office COULD have done tied vai the internet (guaranteed, reliable domain names linked to addresses for bill paying or as a pre-cursor to social media) or with sales of goods since they have access throughout the entire USA. However, given that they were set up as a monopoly to do one thing well (deliver first class mail), they didn’t have much pressure to innovate.
In the end the post office is mostly a machine to employ government workers, spread throughout the US and in every congressional district. Per wikipedia (which has a solid write-up here) the US post office employs 574,000 workers, with government perks, pensions and benefits that most of you will never receive, in order to deliver that
first class mail that you mostly throw into the recycling bin. The proposals that they are floating show how tied their hands are; they want to cut Saturday mail delivery which will make them even less competitive vs. UPS and Fed Ex – they aren’t really talking about ways of outsourcing services and cutting expensive staff en mass which would be needed to move even close to breaking even.
The post office is probably just betting that their employees (through lobbying) and government protectors (the politicians) will be enough to stop significant cuts while their service (first class mail deliveries) becomes ever less essential. Since we bailed out the banks and print enormous amounts of money to fund the US deficits, who will ever even notice tens of billions of dollars in losses on first class mail service to boot.
The sad part is, they are probably right.
Cross posted at LITGM.
Recently I saw this sign in River North, indicating the start of another large high rise project, with an optimistic start date of 2016. Apparently there is plenty of money sloshing around to fund the construction of large buildings, because cranes are up in the sky all over the downtown area. I don’t know if lessons have been learned from the last and most recent bust in 2008, where developers who put in only a bit of equity defaulted and handed the projects back to the creditors, who also took big losses. The most obvious lessons would be 1) require developers to put significant equity into the project 2) don’t fund too many projects competing for the same tenants. These projects don’t seem to be condominiums for the most part; I am only speculating but perhaps the failure of so many condominium projects rattled the banks (those that are still standing, at least).
I would consider it a victory if they finished a few of the half-built structures that have stood idle for five or more years without any progress. This hotel in River North is now restarting; I have been looking at this ugly mess for years so it is great to see some sort of actual effort to complete the hotel.
The real issue is whether or not the structures being built right now, at what is likely the apex of the boom, will be seen through to completion. I certainly hope so, because it is depressing to see half-built structures marring the skyline for years. The famous “Chicago Spire” didn’t get far (only a hole in the ground) which is a good thing because it would have been sad to see the “Stub” along the lake shore for years to come.
Cross posted at LITGM
While many states in the midwest are tackling their structural problems head on, Illinois is contentedly doing things the old-school Dem way. Michigan (of ALL states!) recently enacted a right to work law and is taking over Detroit, in an attempt to finally deal with their unending fiscal decline. Wisconsin is famously taking on their state unions (with the usual assortment of hacks picketing the state capitol to boot) as well as implementing a right-to-carry law. Indiana has made fiscal prudence, right-to-carry, and right to work laws a centerpiece for many years, with commensurate success. Yet while these midwestern states attempt to reform, Illinois (mostly) stands pat.
Illinois’ litany of woe is so long that I won’t bother summarizing problems that you can find for yourselves on the internet. We recently bucked trends in the region with a giant tax increase, designed to fix our immediate fiscal hole. The immediate problem is that we are not even paying vendors in a reasonable time frame, much less fixing our structural debt issues.
However, even with this giant tax increase, the state is far behind in paying vendors for services. A WSJ article titled “Startup See Profit in State’s Financial Woes” summarizes the situation:
A Chicago startup is aiming to mine a silver lining in the fiscal misery hanging over Illinois.
The nation’s fifth-largest state is running an estimated $7 billion behind on bills for everything from Medicaid reimbursements to doctors to plates purchased for prison mess halls, forcing some vendors to wait six months or more to get paid.
That is where Vendor Assistance Program LLC is stepping in. The closely held company says it can profit by advancing the money to pay the vendors, then keeping late fees the state owes them. Vendors forego the penalty payments but get their money faster than they would otherwise.
Thus the state of Illinois, which is paying 1% / month on balances over 90 days, is essentially funding this start up. In an era of record low interest rates, our fiscal ineptitude has us paying out these high penalty fees because we cannot get our act together and fund and pay bills on a 90 day cycle.
Given that the state of Illinois funds these programs and creates a budget and just raised taxes enormously, WHY can’t they figure out a plan that pays vendors in 90 days? This should be a scandal, but like everything else in Illinois, you just get inured to ineptitude, and this is just another story among a sea of stories of criminal behavior enmeshed with old-school Dem political hacks.
To be fair, one guy that deserves some credit in Illinois is Rahm Emanuel, who is attempting to close 61 schools in the City of Chicago, and is supporting the growth of charter schools which chip away at the education monopoly and cause competition so that some neighborhood schools and selected high schools are actually up to the type of standards that would cause parents’ to consider sending their kids locally.
Cross posted at LITGM