I didn’t watch very much of the horrific YouTube tape of four inner-city “youths” of color tormenting a special needs white kid – a tape that was all over the alternative media last week, and miracle of miracles, even made it to the national media, where incidents of black-on-white violence usually get to be covered, like with a pillow until they stop moving. It goes without saying that if the skin colors of victim and perpetrators had been reversed, just about every other national news story would have been driven off the front page and out of the first twenty minutes of national news for weeks. (Save perhaps one of the Kardashians bursting out of her dress like an overstuffed sausage in the middle of a top-drawer celebrity event.) I know that, you know that, we all are most tiresomely and cynically aware of that. Many would have been the chins tugged, NPR would have been consulting their golden rolodex for the most plummy-voiced commentator with an air of spurious authority over matters racial, CNN anchors and the correspondents of main-line news broadcasters over the world would have been hyperventilating in their efforts to keep up with the currently-fashionable expressions of condemnation of American racism, brutality, racism, cruelty to the ‘other’, white privilege, racism, the center-city of places like Chicago, Baltimore, St. Louis, Detroit (aside – is there anything left in Detroit to burn?) would have been going up in flames … so on and so forth, und so weiter. Read the rest of this entry »
Archive for the 'Chicagoania' Category
As smartphones become more powerful and more connected there are subtle phenomenon that are very powerful that can go by unnoticed. For years I either walked to work or took public transit but now in the Pacific Northwest I commute by car. Since the surroundings are new I pay much more attention to what is going on than I used to in Chicago.
In Chicago, there aren’t a lot of opportunities to optimize your travel if you are driving alongside major roads such as I290 or the Dan Ryan. Unless you really, really know what you are doing it is not recommended to get off the highway in many Chicago neighborhoods and just to follow your mobile navigation blindly. Thus in Chicago when I was in bad traffic it pretty much looked like this – a speed of zero and stuck crawling ahead.
The first generation of car navigation tools told you how to get somewhere with the most efficient route, taking standard traffic into account. The new generation of navigation apps, however, have real-time information and continuously re-adjust the “recommended” route based on traffic, accidents and construction.
Read the rest of this entry »
Often people focus on the “loud” items and miss the subtle, important events that really change the world. On the positive side, the 401(k) plan has that obscure name because a financial expert basically “invented” it out of a line in the tax code which enabled tax-deferred savings. And Jack Bogle of Vanguard did the same thing with “passive” investing, which reduced fees and for practical purposes has taken over the investing world (along with ETFs).
One very subtle item that is about to occur is the nationalization of state debt (and likely debts of individual cities) by the federal government. At the highest level, states and cities have made promises (mainly pensions) to their employees that are un-payable without raising taxes to extortionate rates. Detroit cracked first but since it was a city and there was some state framework they were able to use bankruptcy, but many more are to follow, including Puerto Rico (right now) and soon thereafter likely the City of Chicago or its teachers’ pensions as well as the state of Illinois.
A very similar event occurred in Europe when the ECB basically put the debts of Greece and Portugal onto the backs of taxpayers in Germany and Holland. The ECB had a moment (several moments, actually) when they could have fundamentally changed how Greece ran their economy, shutting down statist laws and heavy governmental interference in the economy to open up competition and growth, but they blinked and instead just “wired them money in exchange for promises”. The Greeks, of course, haven’t kept their promises, and why should they, given that the ECB continually blinks when the showdown occurs.
The reason that these states and territories like Puerto Rico are in dire straits is because they
1. Spend more money than they make every year,
2. Rely on borrowing to pay for operating expenses,
3. Have giant, unfunded liabilities on top of this that can never be repaid (pensions, medical bills, etc…).
This situation is enabled by a governing class that views funds as an opportunity to redistribute wealth to favored constituents and relies on “fairness” as a bedrock of their planning. The apex of this sort of planning can be seen in crony capitalist states like Brazil, where large enterprises like the National Oil Company (partially on the stock market, partially owned by the state) are used to fund politicians and social programs and are systematically diverted away from their core mission (to make money) until the enterprises are bled almost totally dry. Then, ironically, the state has to bail out the very companies that were supposed to provide for the socialistic wealth in the first place.
The CORE issue is – if you give these sorts of entities money (bailout) without a “root and branch” cleaning of the issues – you will just get more of the same, indefinitely, as their individually painful debts become part of the larger national (or pan-European) debt, which continues the little game of overspending and wasting money on favored political groups for a little longer (maybe a couple years, maybe longer).
The slippery slope – the trigger – is occurring right now in Puerto Rico. That entire economy is corrupt and ridden with subsidies from electricity to taxes to everything else. For Puerto Rico to thrive, it would need to break down barriers to private enterprise, reduce taxes, levies and bureaucracy, and find some way to bring logical industry into their jurisdiction. However, the more likely course is as follows:
1. Point out the current individuals suffering from a lack of funding (the poor, kids in school, the elderly),
2. Note that the debt which was once owned by individuals was bought up by hedge funds for a fraction of its original value – these funds are in a position to fight (legally and politically) for repayment and although they may be termed “vultures” or something else, they really are the last man standing for individuals who lack the means to fight legally for their rights,
3. Use the political system to “promise” reforms that will never be carried out (because why would you if you can use funds to enable the current system to thrive),
4. Talk about the retirees, and “promises” made to them over the years that cannot be paid, and how they can’t go back to the work force and earn more money so that they have to be made whole,
5. Use political or class warfare to point out the groups that run Washington don’t look like the groups that are broke and make it a fairness issue or tied to some century plus grievance.
It is very likely that these tactics will “work” and that the debts of Puerto Rico will be backstopped by the US government. While this technically isn’t a “bailout”, it absolutely is, because Puerto Rico can’t borrow one dollar on their own anymore (who would lend money to someone who says they won’t pay you back?), and we know that without major reform (which won’t happen) Puerto Rico will just continue to bleed money indefinitely (and fall back on fairness arguments and the above listed tactics to ensure that this keeps happening).
Then soon after this subtle bailout (and likely before Puerto Rico fails AGAIN, which will happen again as it will with Detroit), entities of Illinois or the state itself will drive straight through this loophole and federalize their debt, too. The state and entities will make lavish promises about change that will never occur, because this is the lifeblood of the Democratic Party (patronage workers and the public sector) and all of the clout / featherbedding / etc… will continue on indefinitely, without any of the sorts of laws that enable competition.
Watch the headlines… see this occur… it will be seismic in its long-term nature, because it will fundamentally change the nature of the US government, since the debts of the states and cities will become everyone’s debt and we don’t have any “real” tools to govern their behavior or fix the long-term promises that destroy competitiveness and economic growth.
This is the real story, it is happening under our noses, and instead of paying attention we are following these idiotic presidential campaigns of pure vapor.
Cross posted at LITGM
As a promised follow-up to the original posting, I’ll be conspicuously attired in something resembling this (but without the hood). Well, and pants, shoes, etc. Also, there is a slight chance that I will actually talk my way into the tour of what I am calling Pierce the Younger, but it is to end at 4 PM tomorrow.
NB: Sunday afternoon is likely to be wet. I am investigating the availability of some kind of water-repellent device, ideally collapsible for easy transport and storage.
Sycophants, satellites, holobionts, camp followers, groupies, collaborators, stalkers, uncommitted delegates, and newsletter subscribers are invited to check your privilege and join me and a few others in a series of environments where you can be without fear of being made to feel uncomfortable, unwelcome or challenged on account of biological sex, race/ethnicity, sexual orientation, gender identity or expression, cultural background, age, or physical or mental ability. Well, OK, maybe not all of those, but age, certainly, and physical/mental ability after stuffing yourself with pizza and ingesting ethanol, will have protected status. Join for any or all of the following itinerary. For IFF purposes, I’ll wear something distinctive (ie, not maroon-and-white), which will be announced in this forum by late Friday the 8th.
Read the rest of this entry »
There’s a lot of activity along the Chicago River. If you haven’t been to Chicago in a while I highly recommend that you take the river walk along the south side of the Chicago River which extends through Streeterville / River North. They have bars and restaurants and you can rent canoes and do some people-watching at river level. Here’s the official web site.
The construction is fun to watch as you walk down Wacker Drive. They have barges where they bring in equipment and install a metal barrier and then fill it in with gravel to extend out into the river. The river is still green from St. Patrick’s day in this photo above. If you have kids or grandchildren who like to watch construction and cranes and such this is highly recommended, as well.
We keep building new high rises in Chicago. This photo is looking west along the river and you can see the two large buildings that are nearly completed. It is a whole new Chicago!
Cross posted at LITGM
Posted by Michael Kennedy on 18th March 2016 (All posts by Michael Kennedy)
Last summer I posted a couple of columns on growing up in Chicago in the 1940s.
My family history is a story of Chicago as my mother was born there and her parents met in Aurora, a suburb where my grandfather’s sister ran a boarding house. My grandmother lived there while working as a supervisor in a corset factory after she had moved to Chicago from Canada. My grandfather, Joseph Mileham, was a railroad engineer, the equivalent at the time of an airline pilot. My father’s family were farmers and lived 60 miles from Chicago. He and my mother met in Chicago when they were both working at a music company. They had a typical long Depression courtship which included a trip to California by my mother after she lost her mother and brother the same year, 1926.
My growing up was an almost idyllic childhood, although of course it had its moments.
The house I grew up in is shown here.
That photo was taken a few years ago. I took a more recent one a few years ago and the owner of the house, a black guy about 35, came out to see who I was. He insisted on taking me on a tour. He was quite proud of it. He asked if I could send him photos of the house when we lived there. Here are a few more of them.
Now, that neighborhood was the subject of a feature story in the Chicago Tribune today.
Posted by Michael Kennedy on 12th March 2016 (All posts by Michael Kennedy)
The Telegraph Gets it.
Middle America is besieged by radical, anti-American voices trying to drown out alternative opinion. Shutting down a Trump rally won’t silence Trumpism. On the contrary, it affirms it. Why does the Left continue to make this mistake?
Trump’s views are unconstitutional, illiberal and sometimes they trigger hate. But he did not take America to war in Iraq on flimsy evidence, establish Guantanamo in contravention of human rights law or licence the torture of enemy combatants.
Trump’s political style bears comparison not with Mussolini but George C Wallace, who ran for the presidency in 1968 and 1972 on a conservative populist ticket. Protestors turned up to his rallies, too – and he loved it. Wallace perfected the anti-hippie zinger. When kids shouted “F**k Wallace!” he replied: “Why don’t you try learnin’ some other four letter words – like W.A.S.H. and W.O.R.K.?” The confrontations added to the Alabamian’s appeal, confirming him as “the only guy willing to take on the mob”.
I worry about the comparison and hope it is not too accurate.
Last night, the Trump rally in Chicago after rioters invaded the hall and threatened to rush the stage.
Last night saw unprecedented scenes inside the University of Illinois at Chicago Pavilion between an anti-Trump mob and Chicagoans who came to hear the Republican front-runner speak.
While outside, an impatient group of thousands more massed. Temperatures rose.
Multiple law enforcement sources told DailyMail.com that there was a credible threat against Trump from groups of protesters who planned to storm the stage.
I watched some of the TV coverage and the protestors seemed to be a combination of blacks and white “Bernie” sign carrying student age people. There were a few fist fights but the vast majority of the capacity crowd filed out peacefully and drove home. I was struck by the quiet cooperation of the rally goers and the taunting celebration of the rioters.
This will be a long hot summer. Last weekend saw 22 shootings in Chicago’s black neighborhoods. St Louis saw protestors at that Trump rally and there is another big rally scheduled in Ohio tonight.
The political world holds its breath for Saturday’s Ohio rally after Donald Trump’s Chicago event last night went into melt down after bloody brawls and loud demonstrations broke out, amid simmering racial tensions.
As the dust settles in Chicago, hundreds gather in Wright Brothers Aero Hangar for the Republican candidate’s first official address since last night’s fracas.
Supporters were queuing from midnight last night, according to local reports, where there is a heavy police presence and the venue is said to be ‘at capacity’.
Today’s event is arguably the most anticipated of the entire primaries following yesterday’s unprecedented scenes.
The Donald tweeted this much-needed message of encouragement as the crowds anticipate his arrival: ‘The rally in Cincinnati is ON. Media put out false reports that it was cancelled. Will be great – love you Ohio!’
It will be interesting to see if the rioters can create the same disturbance. In Chicago, local politicians helped organize the riot.
Yes, it did and some of them are elected officials. Some are old experienced terrorists, like Bill Ayers who was there.
Ted Cruz managed to look creepy.
Ted Cruz: Ted Cruz is responding to Donald Trump’s cancellation of his Chicago rally, saying the billionaire has created ‘an environment that encourages this sort of nasty discourse.’ The Texas senator is calling it a ‘sad day.’
He says, ‘Political discourse should occur in this country without the threat of violence, without anger and rage and hatred directed at each other.’
Cruz says blame for the events in downtown Chicago rests with the protesters but ‘in any campaign responsibility starts at the top.’
Cruz says, ‘When the candidate urges supporters to engage in physical violence, to punch people in the face, the predictable consequence of that is that is escalates. Today is unlikely to be the last such incidence.‘
An invitation ?
Due to the fact that I live in Illinois which has been carved into districts to ensure Democratic majorities, my vote is mostly useless or a protest vote at best. I wrote about gerrymandering here and the fact that perhaps I live in the most ruthlessly gerrymandered district in the nation (and that is no small feat), the fifth Illinois house district, with our current representative, Ken Dunkin.
Recently I have been receiving a series of mailings for Ken Dunkin’s re-election, which is hotly contested. Currently in Illinois, the Democrats technically have a super-majority, meaning that they can unilaterally issue a budget (more or less) and raise taxes. However, not every Democrat “falls into line” with Mike Madigan, the speaker of the Illinois house, who is the true leader of the Democratic party in Illinois. Rauner is looking for Democrats who might listen to his message of reform or for some reason or another be amenable to working constructively with him (don’t want to speculate too long on why this might be, but you can probably jump to your own conclusion). Dunkin refused to show up for a vote that Madigan thought was crucial in September and conspiracy theories have him aligned with Rauner.
Per this article from the Chicago Tribune:
More than $2 million, an unprecedented sum for a legislative primary contest, could be spent between Dunkin, who has allied himself with Rauner against Madigan, and Stratton, who is backed by organized labor.
This is a ridiculous amount of money to spend on a primary race for a house seat for the Illinois legislature. Given the Democratic machines’ hold on this part of the city, it is accepted as a “given” that the Democratic candidate will win so all of the efforts go into the primary.
Thus my vote is now a precious commodity. Seemingly every day I get a giant, colorful, nearly insane flyer in the mail with the two candidates attacking each other. Here is a flyer stating that Ken Dunkin was convicted of abusing women and is unfit for office.
Earlier this year when I was laid up I bought an indoor / outdoor weather station called Netatmo and wrote about it here. It is a lot of fun and I recommend it highly. It is likely that some of these temperatures are impacted by the sun (although I went to a lot of trouble to keep it out of direct sunlight) although this shouldn’t impact the lows which generally occur at night.
I was struck when I looked at the temperature for October – December. I have lived in the midwest my whole life (traveled a lot) and have never seen this many typically cold months so unseasonably warm. We haven’t had any days below 20 degrees (or at least not on my balcony). This aligns with my experience at the Bears games, which have almost all been nice and warm (and home losses).
We had one day recently with high winds and blowing sleet that was terrible – it felt like I was being sandblasted. We still have snow and big chunks of rock-hard ice on the ground that haven’t melted yet. But that was the exception, and it is likely to all melt away this week.
Not to say that the weather hasn’t been rough in other ways – Illinois and the whole midwest faces flooding from continuous rainfall and my parents’ basement has been inundated numerous times after being mostly dry for decades.
Cross posted at LITGM
I remember when I first joined companies I assumed that the executives in charge knew what they were doing and wouldn’t do something ridiculously stupid. After a while I came to learn that this wasn’t the case.
In Chicago recently an effort is underway to increase the use of bikes and create additional lanes for safety. At the same time they are attempting to create a bus corridor in the loop.
The net result, sadly, is utter and complete gridlock. I have stopped taking the bus unless the weather is horrendous because many of the intersections between River North and the Loop are facing gridlock, where cars are in the intersection after the light changes and no one can move. This was already the case on Thursdays and Fridays after work as everyone moved to exit the city at one time.
They are also building a lot of new high rises, particularly near the Merchandise Mart / Wolf Point. It is incredible that they are able to pack more high rises into that area because traffic is unbelievably bad at that location, already. There is a Brown Line stop nearby but that only is useful for those on that train line and most of the wealthy folks that live / work in that location will likely drive frequently.
On the other hand, it is good for the “steps” that I track on my iPhone. Since taking a cab or even the bus is mostly pointless I am walking to work more often. When the weather gets terrible I will likely just sit on the bus and read my iPhone like everyone else while sitting motionless in traffic.
Cross posted at LITGM
Dan and I go back and forth on the relatively arcane topic of municipal debt. As we all know, the state of Illinois is awash in debt. The situation is so bad that:
1. The State of Illinois is operating without a budget
2. The city of Chicago is proposing a massive property tax increase
3. Cook County just raised our sales tax (one of the highest rates in the country, already) and is proposing additional fees
4. Chicago Public Schools face a major deficit and without some sort of massive state tax relief is likely going to face significant layoffs and a likely teachers strike
5. Note that we are one of the few states and cities to be in such dire straits that we issue TAXABLE debt instead of MUNICIPAL debt which is generally exempt from Federal taxes and some state taxes. This is due to the fact that you generally cannot issue muni bonds to pay off operating expenses (like payroll and legal settlements)
The long term most indebted players have been Detroit, Puerto Rico, and the State of Illinois / City of Chicago. We saw how the Detroit bankruptcy occurred, with bondholders generally taking it on the chin and unsecured pension holders in fact emerging in a relatively better situation.
Now Puerto Rico is up to bat. They have massive, unpayable debts of many varieties (some secured by full faith and credit, some secured with revenues, some bank loans, etc…) and their governor basically said so out loud. All of this is inevitable as their island’s best talent has fled to the mainland USA and the remaining population is more and more reliant on government aid to survive. They also have failed to modernize their power infrastructure and / or build new industries outside of tourism which erodes their ability to compete against the mainland USA that in turn has much higher productivity.
The real issue – long term – is whether or not the Federal government will back up the states. This is essentially the “long game” of the State of Illinois and the city of Chicago – waiting to see whether or not the Federal government is really going to stand by and let us go bankrupt or not. If the government is ultimately going to pick up our debts, it is “business as usual”, and the corruption, back-scratching, and non-competitive behavior can just continue indefinitely, with taxpayers across the nation picking up the debris rather than forcing the citizens of Illinois to clean up our act.
Today Puerto Rico and the treasury announced that they are working to backstop the Puerto Rican debt with some sort of Federal umbrella per this article.
Puerto Rico and U.S. officials are discussing the issuance of a “superbond” administered by the U.S. Treasury Department that would help restructure the commonwealth’s $72 billion of debt, people familiar with the plan said.
And what a great name! A “superbond” means that all the US citizens will pick up the “super” obligations of our corrupt, crony-laden, inefficient city and state. That’s super!
This is the path out for Illinois and the city of Chicago. Play brinksmanship with Federal government and receive a backstop. Puerto Rico leads the way!
Cross posted at LITGM
Dan and I and Gerry often joke about Midwest drinking and how people from other parts of the country simply have zero concept of what the midwesterner’s relationship with alcohol is like. We often go to sporting events together and watch massive drinking binges playing out to the left and to the right.
Recently I was out in Wrigleyville which is just packed with new bars and drinkers as far as the eye can see. The plaque below was at a bar called “Stretch”. For best results, click on the photo and read the individual “merit badges” that have been earned.
Here are some of the “highlights”
8 shots of Bacardi 151 in 22 seconds
Wow that much alcohol that fast is crazy. Dan and I were at a bar with some of the heaviest drinking I’ve ever seen and some crazy guy tried to buy us all shots of Jagermeister (there were 6 of us standing around) and no one would drink them so he just took all the shots and poured them into 2 regular drinking glasses and downed them in a couple gulps. That was so nuts I had to ask Dan the next day if we really saw it.
15 shots and 6 beers in one hour
This sounds about like “Mayor Daley” the merry idiot immortalized at Drunk Bear Fans. That guy was just probably trying to get loaded before going to a Cubs game. The best part about this is that I’d bet that guy drinks like that all the time and someone just had the foresight to document it for history’s sake. When you are on the clock you need to make the most of it, I guess.
The biggest differences occur when someone from another city is just plunged into the madness that we take for granted here in the midwest. A “normal” citizen who walks into Wrigleyville or game day near Madison or any midwestern city on a Friday night in the summer really can’t believe what is happening and thinks it is something special – it can’t be like this every day, can it? Oh yes it can. We are old now but I saw with my own eyes an entire new drinking class at Wrigleyville last night and they cover most of River North at 2am and beyond.
It is nothing to be proud of but it is reality here. You have to see it to believe it. Or just put up a plaque.
Cross posted at LITGM
Years ago, Shannon Love did a series of posts on these pages about “number gut”. From this post:
A number gut is an intuitive feel for the possible magnitude of a particular number that describes a particular phenomenon. A good number gut tells you if the results of some calculation are at least in the ball park.
My number gut (or b.s. detector, in this case) went off today when I saw this story. Here is the money:
Chicago Public Schools officials on Monday proposed a $5.7 billion operating budget for the upcoming school year…
Holy crap that is a lot of money. There are 396,000 students in the CPS. $5.7bb / 396k = $15,447 per student. Really.
From this article from 2014 about the most expensive private schools in Illinois, it looks like all of the students could go to Loyola Academy, and can almost all go to St. Ignatius College Prep for that kind of money.
Posted by Michael Kennedy on 16th July 2015 (All posts by Michael Kennedy)
I have a new post on my own blog which I hesitate to inflict on everyone as there is much family history in addition to Chicago history. It does have some nice photos of Chicago’s South Side many years ago. I found them in a small book of photos of South Shore published in Chicago by a man whose father was a local photographer. If anyone is interested, the link is here.
Recently I went on a diet and began ordering specific drinks ordered a specific way – generally gin with a “splash” of tonic (because tonic has carbs and I want to minimize carbs, but need something to cut against the alcohol). This order, however, has become a running joke among my friends because no matter what I order I usually get the same drink every time – which is a “standard” gin and tonic (see below, the wrong order per usual).
Unlike most people who would shrug it off or get angry, to me this is really an economics issue and not just a “bad order”. When you work with bars and restaurants and other similar industries, if you do anything “outside the norm” your odds of getting it “right” are often less than 50/50. Which leads us to the title of this post…
Recently I was on the “606” Trail and visited one of my favorite spots in Chicago – “Margie’s Candies“. Margie’s makes incredible ice cream sundaes that must be seen to be believed – and they come with an actual silver pitcher of hot fudge that you can pour on the ice cream yourself. Usually I would start with a photo of the restaurant but I wanted to make sure that the “money shot” is above the fold.
The “606” trail in Chicago opened recently. It follows an abandoned railroad track that starts in Bucktown / Wicker Park and heads west from there. I am very familiar with this track since I used to live in Bucktown a decade ago and stared at the crumbling bridges that split the neighborhood.
The trail is named after “606” which is the first 3 digits of the zip code in these neighborhoods. I guess that is an OK name but it’s kind of an obscure reference. Does anyone even send mail anymore? The park is sometimes compared against the High Line trail in NYC but the High Line is way cooler since it moves through a heavily urban area. But the 606 is a massive upgrade from just a crumbling set of train tracks.
Netatmo is a personal weather station that you can buy which is wifi connected and “joins” the netatmo network worldwide so that your information contributes to the grid of stations. I wrote about my experience in detail here.
Here is what Netatmo looks like on your phone – you can see the temperature inside and outside your house (it is also connected with weather alerts) and if you turn your phone sideways you can also graph data along many time series. I find it to be very cool and check it a lot on my cell phone or ipad when I am bored and want to kill some time.
I started looking at the Netatmo weather map on my phone and it also becomes a visual map of wealth and technology adoption in Chicago. While you can’t see all the individuals who might buy an iWatch on a map, the Netatmo weather station becomes a clear signal and it is tied to a clear physical location. Note that when you “drill in” to the map you will see many weather stations in an area such as River North – however if an area is devoid of stations entirely it comes up blank. And there’s Chicago! You can see the stations in the north side, a completely barren west side, and a mostly barren south side, except for the dot along the lake which represents Hyde Park.
Posted by Michael Kennedy on 5th June 2015 (All posts by Michael Kennedy)
Last month, I posted some old photos of Chicago in the 1940s. I grew up in a neighborhood that has since gone badly downhill in spite of a lot of positive features that should have kept it livable. It is South Shore and here is the previous post. We went back for a visit this week and just returned home last night. I posted some more photos of the old neighborhood Here.
We even revisited some spots from my post about a week in Michigan from two years ago.
If you’ve flown much in the last few years, you’ve probably seen what I’ve experienced, as well – completely full planes, high prices, and aggravating extra charges for baggage, wi-fi, etc… This is really a symptom of what has actually occurred, which is that airlines have finally moved past an era of competition into an era of oligopoly.
The real indication of their new status isn’t the high prices and full planes – it is in the stock price.
Here you can see the major carriers which have survived and consolidated the US market – Southwest, American Airlines, Delta, and United / Continental. For years and years the stock prices of major airlines have languished – per Warren Buffet
He said that a durable competitive advantage in the airline industry “has proven elusive ever since the days of the Wright Brothers. Indeed, if a farsighted capitalist had been present at Kitty Hawk, he would have done his successors a huge favor by shooting Orville down,” he joked. “The airline industry’s demand for capital ever since that first flight has been insatiable. Investors have poured money into a bottomless pit.”
Each of the major airlines has predominantly broken their strong unions and taken medicine from bankruptcy to mergers in order to restore their finances. Instead of a focus on expansion, they are operationally focused in terms of filling every seat on every plane at the highest price possible, in terms of ticket costs and extra fees. Today they charge you for every sort of upgrade; “economy plus” which is a seat that you can sit in and get work done, costs extra, as well as for checking bags.
There is absolutely nothing wrong with a company doing all they can to maximize profits, especially after savaging investors for many years with poor stock prices and a lack of dividends (and the high risk of total financial collapse). The airlines have finally figured out technology as well – if you want to upgrade any element of your flight experience, from business to first class to economy plus to a daily club pass – it is all right there as long as you are willing to give them your credit card number.
The airlines have also figured out that their frequent flyer programs provide benefits but also can be a millstone. Rather than rewarding miles, they are looking at the prices of the tickets paid by each traveler which rewards those that actually provide the greatest benefits to the airlines. If you’ve tried to actually use your benefits (except for Southwest), you’ll find that seats are very limited and you need to plan far in advance to receive benefits from these perks.
Moody’s has downgraded the rating of the debt of the City of Chicago to “junk”.
This triggers all sorts of crazy swap termination fees, accelerated payments, and the like. The damage of the downgrade is in the billions of dollars.
The City of Chicago has been in a death spiral for a while now, and I think it is probably time to just go all “Detroit” and get it over with. The bondholders will get a haircut, as well as the pension funds and everybody else.
But that aside, here is yet another case where if the Republicans were smart, they could simply run on a “we’re not them” platform. Every single thing that has happened in Chicago has come under the Democrats’ watch. There is no way out for them. They created it, they participated in it, and they kicked the can down the road for the current generation to watch it all implode.
I have written about this before, but either the Republicans are too nice, or don’t care. It is so easy to put this at the Donks’ doorstep. I just don’t understand why the Republicans don’t do it.
This implosion of a once great city is disgusting and should be front page news. But it isn’t.
Posted by Michael Kennedy on 5th May 2015 (All posts by Michael Kennedy)
I grew up in a Chicago neighborhood called South Shore. At that time, 1943 to 1956, it was one of the nicest parts of the city. Now, now, it is a cesspool of crime.
When my father moved us to the house at 7344 Paxton Avenue, I was 6 years old. The area was quiet and peaceful. Not far away was South Shore Country Club, a beautiful club that offered golf, skeet shooting and a horseback riding to members.
It was a elegant place and I visited a few times but we were not eligible for membership because my father was in the business of owning and repairing juke boxes. That was not a respectable enough occupation. Prosperity was not the criterion. Los Angeles County Club has barred people from the entertainment business for the same reasons.
Our home had been built in 1912 and still had gas lighting fittings in the bathroom and living room, as electrical lighting was still a bit suspect.
This is the house many years after we were gone. It has had the front porch enclosed in brick. Otherwise, it looks much the same. The owner saw me taking a photo and came out to ask me who I was. He insisted on showing me through the house which has had some interior remodeling. He asked if I could send him photos of what it looked like when we lived there but most of my old pictures are home movies.
Today we see that the latest bond offering from the Chicago Board of Education will be priced at over twice what a BBB offering demands. That is brutal. I still won’t touch that with a ten foot pole.
It is inevitable that the State of Illinois and City of Chicago and their organs will be having major financial issues, to say the least, within a year or two. It could be Detroit on an inter-galactic scale.
My question is this – why don’t the Republicans make the Democrats own these massive boondoggles? I understand that in Illinois, many of them are in on the fun – however, the State of Illinois, City of Chicago and Detroit have all been essentially run by Democrats for literally generations – and it is all blowing up.
Is the issue too complex for Joe Six Pack to understand or care about? Are the Republicans afraid to be held to a higher standard? I just don’t understand why they wouldn’t shout from the mountain tops at how much graft, corruption and incompetence it takes to completely tank a city with as much potential as Chicago and a State with so many potential positives as Illinois.
There is a festival here in Chicago focused on movies about music which also has a bunch of bands playing as well. It is our attempt to have a little “South by Southwest” action in the city of Chicago. At least they have some nice weather this year – this weekend seems to be the start of spring and everyone is out side and on balconies and has a lot of positive energy. Here is a shot from one of the movies on the cover of the Reader.
Unfortunately I can’t go to any of the events because I can’t stand in lines for too long and I can’t be jostled or have someone step on my foot and that’s what usually happens at a concert. I will look for some of these movies out there on the internet though later or if they come to an art house movie theater or something. Here is the site listing what is going on and an interview with the founder on Chicago Tonight (a great program) and below are some of the ones I’d go to see if I was able to do so.
- “Danny Says” which is a movie about the manager of the Stooges and the Ramones. That guy must have seen a lot of crazy stuff
- “808” a story of how a device never intended to be a beatbox helped launch hip hop and modern music
- “Morphine – Journey of Dreams” one of my favorite bands of the 1990’s was Morphine and I was very saddened when their lead singer / bassist dropped dead at a show overseas. Also the remaining members played a show under “Vapors of Morphine” as well
- “Jaco” is about the fantastic bass player Jaco Pastorius who was a little crazy and unfortunately died young after being beaten by a club bouncer. At the festival the bass player from Metallica (who is from Suicidal Tendencies if you go way back to “Institutionalized”) talks about Jaco, as well
- Local H is playing too. They are awesome and one of the few survivors of the 1990’s. See them when they come to your town
Cross posted at LITGM