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Sunday, December 27, 2009

Shrinking Horizons and the Devolution of American Rail Transit




As I usually do at Christmas, I took the Amtrak Lincoln train to St. Louis to visit my family. I usually enjoy the ride even when the train is substantially delayed, for even though Amtrak service and amenities are very basic, they compare favorably with air travel in comfort and decency. After my last plane trip to St. Louis in 2005, a red-eye out of Midway, where I was subjected to vicious incivility usually experienced only at an open-seating rock concert, I decided I'd had enough of the savagery of modern air travel and reverted to travelling by Amtrak.

Amtrak service, while not luxurious by any standard, is still extremly comfortable relative to air travel, offering ample leg room, wide, deep seats,the opportunity to get up and walk around, and the freedom to enjoy my electronic devices at will along with an outlet at the seat to plug them into without fear that they'll somehow derange the landing gear or radar. Additionally, the atmosphere is relaxed and the personnel are genial and courteous. The only downside, really, is that it is just too slow, taking 5.5 hours minimum to travel between Chicago and St. Louis, and long delays of 30 minutes or more are distressingly frequent. Everytime I ride, I consider that there were once about a dozen interurban trains traveling between these two cities, and that in the 1920s, speeds of 100MPH were ordinary for passengers trains in the U.S., whose passenger rail system was the envy of the world. Nevertheless, I usually enjoy the trip, and settle into my seat with my music collection, headphones, and a book for the ride.

But the arrival in St. Louis is a distinct downer, and I get just a little depressed as the train rolls into its pocket at the new station downtown. Often, I ride to the charming old commuter station in Kirkwood, which is so close to my mother's house that in fine weather I can walk there, but the layover between St. Louis and the last leg to the Kirkwood Station has been lengthened to two hours, and I can think of better uses for that much time than milling around at the ugly new station, staring at the dismal scenery surrounding it and wondering why we let our cities, and our country, be reduced to this.

Nothing illustrates the devolution of rail transit in the United States like the contrast between the magnificent old Union Station at Market and 18th Streets in St. Louis (pictured at top), and St. Louis' new Gateway Multimodal Transportation Station, a bizarrely configured series of small, boxy segments jammed underneath a tangle of highway overpasses on 15th Street.

While old Union Station, built in the 1890s when St. Louis was the largest rail hub in the world, sits proudly on Market Street opposite beautiful Aloe Plaza with its incredible Carl Milles fountain, affording the rail travelers of the past an imposing view of the city, and grand welcome; the new station, with its two platforms and four pockets for passenger trains, is hidden away in a desolate pocket in downtown's neglected backyard. As you exit the station, the sight that greets you is not a lovely park with sweeping views of the city's skyline, but a dank, dark parking lot under the tangle of highway ramps and support pylons, the USPS parking lot across the street, and a jumble of weed-choked vacant lots and decrepit buildings, from where you can get a glimpse of Union Station's clock tower to the north and west, and your first thought is: why was $31 Million spent on this ugly jumble of buildings that will surely be inadequate to the needs of revived rail in the future, while the magnificent old building on Market Street sits underutilized, as a floundering shopping mall?

Where was the vision here? While rail travelers visiting the city are dumped into this ugly pocket in the city's service alley, Union Station's beautiful mall, which underwent a second renovation in 2007, is languishing, and continuing to lose traffic and retail tenants. The area surrounding the station is thinly populated, and poorly anchored by St. Louis' moribund downtown business district. Basing Amtrack service at Union Station would not only revive the lovely old structure as a rail station that could accomodate vastly expanded passenger rail in the future, but would present the city in its best light to visitors and would feed traffic to the hotel and shopping mall, while providing an impetus to further residential and commercial development in the immediate area.

This sad place is not only indicative of our lack of commitment to rebuilding our transportation system in keeping with the reality of dwindling fuel supplies, but most of all, illustrates the shrinking of our vision of the future and our acquiescence to increasing failure and dysfunction.

Thursday, November 19, 2009

The Hyperion and LFTR: Charles Barton at Nuclear Green Discusses Small, Factory Built Nuclear Reactors

Charles Barton at Nuclear Green discusses the advantages and costs of small, factory-built, sealed nuclear reactors. These plants, such as the Hyperion slated to be installed in Galena, Alaska, which uses conventional nuclear fuel but with a technology vastly different from that of conventional large light-water reactors; and the Liquid Fluoride Thorium Reactor, a technology that India is aggressively developing and whose fuel, thorium, is much more plentiful than uranium and utilizes a much safer, cleaner technology that results in steeply reduced levels of "waste".

Wednesday, November 11, 2009

There's No Such A Thing as Nuclear Waste

One of the larger concerns surrounding nuclear power is the management of the byproducts of fission, popularly known as "waste". As matters stand at the moment, the Yucca Mountain repository is on hold, and further development of nuclear power could be curtailed until a "solution" is found.

Only in a society accustomed to plentiful resources would these materials be considered "waste". France and other chronically resource-short nations recycle fuel, and only a relative abundance of fissionable uranium here in the U.S. makes it possible for us to take such a cavalier attitude toward the 56,000 tons of material residing in containment pools at reactor sites all over the country. Aside from the considerable amount of uranium left behind that can be recycled into fresh nuclear fuel, fission byproducts contain dozens of isotopes that are valuable in many other applications, and include some of the "rare minerals" that we now depend upon China for and that are indispensable in the manufacture of electronic devices, as well as in many other industrial processes.

Kirk Sorensen at Energy From Thorium  writes of the large variety of isotopes produced by fission, and the characteristics and uses for these materials, some of which are rare minerals of the sort that China is now restricting access to. This chart, from the blog, describes them:



As China restricts its exports of these minerals and as the demand for nuclear fuel increases steeply, we will desperately need the fission leftovers and the materials they contain. 30 conventional Generation III reactors are currently in the planning stages here in the U.S., and dozens more are being planned around the world. At current rates of consumption, our estimated supplies of fissionable uranium are sufficient to supply us for only 100 years, which means, of course, that if consumption ramps up steeply, it could become extremely scarce and expensive within a couple of decades. If we want to have regular, cheap, on-demand electricity decades from now, we will have to make use of every material that can provide it, including the most controversial element, plutonium, certain isotopes of which can be blended with uranium to fuel reactors. 

The Unites States is not only fallen far behind the curve technologically, but has a stunning disregard for proper resource management, mainly because we have not experienced genuine scarcity of necessities and essential resources within the lifetimes of most people alive now, and essential resources are still very cheap here relative to their prices other nations. At this time, it is still cheaper to mine uranium than it is to recycle spent fuel, but this state won't last forever, and could end very quickly and just might in another decade or less, as rapidly developing nations containing a billion or more people command more and more of the world's remaining resources, especially fissionable minerals, as well as oil and coal.

Sunday, November 8, 2009

The Role of Government Intervention in the Financial Collapse

In his Wall Stree Journal article, Three Decades of Subsidized Risk, Charles Gasparino discusses the indispensible role our government played in the creation of the tower of unrepayable debt whose unvelling caused the financial collapse of September 2008. 

Those of us who remember the asset bubbles, and resulting financial disasters, of the 80s and 90s also remember the government bailouts of first the S&Ls and then of a major hedge fund, Long Term Capital Management. Our perception was that an immense moral hazard had been created thereby. Simply put, our government made it clear at that time that it would never fail to backstop any risk with taxpayers funds, no matter what the amount, and when all meaningful controls were removed with the repeal of Glass-Steagal, it was only a matter of time before the combination of extremely easy money borrowed at ridiculously low interest from the government, in combination with implied government guarantees of bailouts and the removal of all reasonable controls to blow up the biggest bubble of debt ever to exist.

However, the government role in creating debt and inflating asset values began long before. The Roosevelt administration's "solution" for rapidly-deflating asset values in the aftermath of the 1929 and 1933 crashes was to create a network of government agencies whose purpose was to guarantee home loans that otherwise would be unworkable, by the creation of the FHA and the GSEs such as Freddie Mac, Fannie Mae, and Ginnie Mae. Before the creation of these agencies, and in the decades prior to the Great Depression, down payments of 50% were often required, and no more than a third of the homes in the U.S. were mortgaged.

Since the 1930s, government-backed home lending, the mortgage-interest tax deduction, and numerous other federally and locally subsidized incentives for home ownership have generated enormous over-investment in housing, just as other massive federal programs have provided massive incentives for the development of suburban sprawl and universal auto ownership, and ultimately the emptying of our cities into suburbs, and the depopulation of the fertile, moist Midwestern states in favor of desert states that would never support their current swollen populations were it not for massive imputs of tax funds drawn from older, established cities in conjunction with federal agencies with almost unlimited power to allocate those funds into the pharoanic infrastructure projects we will be most unlikely to be able to maintain in the capital-and-energy deprived years before us.

A rollback and eventual termination of government-sponsored lending and housing "affordability" programs , and most of all a steep reduction in the government's role in directing our economy, would likely result not only in a sounder financial system, with lending based on the borrower's ability to pay, but would also give us more truly affordable houses. Without these incentives and guarantees, it is likely that housing prices would fall much further and that it might once again be rewarding to be a landlord. 

Monday, November 2, 2009

Why We Need the Liquid Thorium Reactor

The Daily Kos once published a great post, Why We Need the Liquid Thorium Reactor, which supplies an easily-understood explanation for a complex technology that is becoming extremely important in the nuclear industry. It's recommended reading for those who don't have the patience to wade through the more technical nuclear blogs I link to on my blogroll.

For those who want to explore the subject in more depth, Charles Barton at Nuclear Green , and Kirk Sorensen  and Charles Barton together at Energy From Thorium discuss the LFTR technology as well as other newer nuclear technologies and "renewable" technologies, in great detail on these two blogs, which are considered by other scientists and technicians to be among the richest sources of energy information on the web.

The United States, now a technological laggard, is planning only Generation III light water reactors, which, while being vast improvements on older nuclear technologies in terms of safety, efficiency, and cost, are still tremendously expensive and inflexible. Current industry players here in the United States tend to be dismissive of the thorium technologies, as I discovered when I attended a "dog and pony" show for a uranium mining stock recently and, when I inquired of its CEO if there were plans to mine thorium, he was downright defensive (it seemed to me) and said that the thorium technology would never be developed and had no potential. I could see from his reaction that I'd hit a nerve, for thorium is vastly more plentiful than uranium 235 and would probably render his struggling little uranium mining operation superfluous. Meanwhile, other countries are not waiting for the United States to put its stamp of approval on the most promising energy technology since the first controlled nuclear chain reaction here in Chicago nearly 70 years ago, but are forging ahead and aggressively developing thorium nuclear power, with us or without us. India has been unable to trade in conventional nuclear fuel because of its exclusion from the Nuclear Non-proliferation Treaty and therefore has a much greater incentive to develop new technologies that do not require it, and is aggressively developing thorium technology to exploit its indigenous reserves of thorium. Not surprisingly, India has become the front-runner in the development of the LFTR and intends to supply 25% of its electricity by this technology by 2050.

The LFTR technology makes for an intrinsically much safer, cleaner and cheaper reactor that extends the fuel cycle almost into infinity, is much more "scalable" in that the units are smaller, for power plants that can consist of one small reactor for a small town, or clustered together as need dictates. The units are built at the factory and transported sealed by truck and rail to the site, and there can be either buried for greater security or, as some technicians suggest, installed in decommissioned coal-fired plants.

The United States, like other formerly successful countries, is pouring the last of its wealth and resources into the rearguard effort to sustain old, obsolete, and unsustainable industries while spurning developments that could considerably offset the depletion of fossil fuel supplies, supply much cleaner energy and far greater quantities of it, and replace our dying old industries as the drivers of economic growth, with new, growing industries supplying the goods, services, jobs, and wealth we will need in the future. Our regulatory agencies and our ossified utilities with their protected monopolies are years behind the curve in knowledge and development of new technologies.

Instead of shoveling evermore money and effort at shoring up the dying auto and suburban-house-building industries, we need to remove the obstructions to new technologies and new industries, and most of all rediscover the sense of purpose and forward motion that made this country, 100 years ago, the greatest industrial powerhouse the world had ever seen and gave us the prosperity and unparalleled comfort and amenity that we now seem to think are God-given entitlements.  The revival of the nuclear power industry and the development of new nuclear technologies could be the start of the development of a new industrial economy that is sustainable for many decades into the future and could make it possible for our swelling population to make a living and enjoy a reasonable level of comfort and amenity in a time of dwindling resources and heated competition for remaining supplies of liquid fuels.

Saturday, October 31, 2009

The Peril of the Savior State

In demanding that our rulers provide for all our material needs and rescue us from the consequences of our own folly and the normal risks of existence, we are paving the way for a totalitarian regime that strips us of the last of our rights and enslaves us to the ruling oligarchy. Charles Hugh Smith at Of Two Minds warns of the dangers to our basic civil rights and constitutional freedoms in his latest post, When the Savior State Becomes the Enemy of the People. 

Smith reminds us that we can't have it both ways. If we desire to retain the liberties guaranteed us by our constitution, then we have to be willing to pay our own way, take our our risks, and accept the results of our actions and judgments.

He says,"In granting the state the power to become a Savior State, you also grant it the power to be a repressive regime or corrupt kleptocracy which openly serves an Elite and is accessible only via bribes/ political donations."

Where would you say we are now on the Nanny State Enslavement Scale? Are we now a "corrupt kleptocracy"  where the citizens exist to serve a dominant oligarchy empowered to strip them of their remaining wealth by means of government force? And at what point will the "corrupt kleptocracy" become a "repressive regime"? A convincing argument could be advanced that that is exactly what we are now and have been for quite a while.

If so, we became so with the enthusiastic co-operation of our citizens, who traded away their rights for the illusion of security and perpetual plenty regardless of the means used to maintain the facade, or the price paid for it. People who want the benefits of a Nanny State should consider if they're willing to front the price- the invasion of our privacy by maintaining health records (the national health plan), the suspension of our constitutional rights for a specious security (the USAPATRIOT Act), the seizure of our property for the sake of the "public good" or "economic development" by eminent domain, or hundreds of other abuses and outright violations of our constitutional rights that have become commonplace and acceptable.

Wednesday, October 28, 2009

How the Chicago Showdown Failed

As was expected, the Chicago Showdown, the massive protest against the efforts of the financial industry to lobby against reform of the financial system, drew many thousands of protesters from across the country to engage in three days of protests against the government support of the greed and larceny of the banking industry.

It was a pretty good protest, as they go, what with the requisite marches and chanting and prayer vigils and some really great costumes, though somehow it failed to evoke enough guilt among the attendees to ruin their enjoyment of a Roaring-20s-themed party, the irony of which was not lost on anyone but the party-goers themselves. Obviously, no one at the American Bankers Association convention gave much consideration to that first great American debt debacle that ended with a decade-long depression, or at least not enough to see any parallels between the multiple speculative bubbles of the 1920s, in land and financial instruments alike, that parallel the vastly more intricate, layered, and global scams of the 2000s.

But the message of the protest was lost, for it was too obvious that many of the protesters suffered from the same disease as the financial fraudsters, which was the idea that somehow the universe owes them "gimmes" and guarantees against losses and respite from the consequences of bad judgment, thoughtless risk-taking, and yes, greed. But the protesters seemed oblivious to the parallels between the greed and deliberate insanity of the financial maniacs who raked in the obscene profits from the ten-year rampage, and their own greed, gullibility, and willful blindness.

The bulk of the protesters were demanding, not an end to the entire structure of socialistic housing "affordability" programs and alphabet soup of federal agencies and GSAs that enabled the greed stampede, but only that they, too, be "rescued" from the consequences of their greed, delusional thinking, and bad judgement, as Senator Durbin and the protesters demanded that the $23 Billion in bonuses being given out to Goldman Sacks executives instead be donated to help people stay in homes in foreclosure. Nobody suggested that those bonuses instead be remitted back to the treasury and to the taxpayers at large, who paid them.

Granted, many people there were genuine victims- people who lived and operated honestly and borrowed prudently within their means, only to be done out of jobs and then homes by the vicious reversal of the fake good times produced by the spate of debt-driven "growth". However, for every person who is losing his home to business reversals or job losses, there are four or five who are in foreclosure because they bought much more house than they ever had reason to think they could afford with loans that they knew, or should have known, were suspect, or who withdrew all the equity in their houses to buy cars and boob jobs and other extravagances,and are no more deserving of gifts from the public till than the financial managers attending the convention were to their bailouts and mega-bonuses.

As in most con games, most of the victims here were absolutely complicit in their destruction, and are not entitled to be "rescued" from foreclosure and loss of homes they never honestly owned to begin with. But most of all, we have all, from the low-income buyers borrowing to buy middle-bracket homes on subprime pay-option loans clear up to the Goldman Sachs bonus babies who are enabled by our government in skimming the taxpayers for decades to come to pay this year's bonus, contributed to the mentality that produced the casino economy of the past 20 years, a mentality made up in equal parts of greed, magical thinking, and a boundless sense of entitlement to unearned rewards.

Tuesday, October 27, 2009

Let's Reduce the Number of Chicago Aldermen: Help Circulate the Petition

The great people at Second City Cop blog have started a movement to reduce the number of Chicago aldermen to 25, one for each police area. A petition has been started, and you can print up copies here and go to work gathering signatures.

Remember, in order to be valid, all signatures must be those of City of Chicago residents who are registered voters, and you must, after getting signatures, attest to their validity by getting your own signature, as a petition circulator, notarized.

WE NEED 121,660 VALID SIGNATURES BY NOVEMBER 14, 2009!

If we can just get one 1000 people gathering 125 signatures each, we can get this on the ballot. Gather 200 just for good measure, in case of overlap or invalid names. Ask if the signer is a registered voter and resident of Chicago, always

Stay tuned to SCC for a collection point for the petitions.

If Los Angeles, a city larger than Chicago and at least as difficult to run, can get by with 15 aldermen, why do we need 50? Estimates of cost savings range from $10 million to $50 million. My own guess is closer to $50 million, if you include the costs of wasted time and corruption. Time to make this $100K-plus-per-annum job into a full-time job.

Friday, October 23, 2009

The Nuclear Energy Option:A Nuclear Power Primer

The Nuclear Energy Option (Dr. Bernard L. Cohen, Professor Emeritus, University of Pittsburgh) an online book summarizing current nuclear power technologies and their costs, benefits, and hazards, is a short summary of the history of civilian nuclear power development, current nuclear technologies and their costs, comparisons of costs and benefits of nuclear with other forms of power generation, the management of nuclear waste, and the regulatory framework and politics of nuclear power generation.

The short booklet is, while not exactly "light" reading, a well-written and easy-to-comprehend summary that translates technical jargon and lucidly explains complex technologies for the non-technical reader. It's essential reading for policymakers and interested citizens.

Thursday, October 22, 2009

Obama Endorses Nuclear Energy

President Obama is learning.

According to a Reuters report, the president, at a public meeting in New Orleans, said that he would like to see increased production of electrical power in the United States and that he recognizes that nuclear energy could play a key role in reducing greenhouse gases

"There's no reason why technologically we can't employ nuclear energy in a safe and effective way. Japan does it and France does it, and it doesn't have greenhouse gas emissions, so it would be stupid for us not to do that in a much more effective way," Obama said.

It appears that Obama is beginning to sort out the arguments against nuclear, and listening to top scientists and engineers instead of lawyers such as Amory Lovins. It might be beginning to dawn on the "greens" that such "soft" technologies as wind and solar will not only not be able to supply more than a third of our current power needs under the best circumstances, and that the denizens of France, which 80% dependent upon nuclear, are not exactly glowing in the dark.

Now that Obama has endorsed nuclear, perhaps Illinois leaders will wise up and repeal the state's foolish moratorium on nuclear development, and give Illinois a fighting chance to regain lost economic ground and compete with other states in economic development.

Tuesday, October 20, 2009

Showdown in Chicago October 25-27

Some people are asking "Where's the outrage?" at the wholesale plundering of the American population by the banking cartel and the U.S. Treasury, to support the banking cartel.

We can show our outrage at the protest this weekend downtown, concurrent with the annual meeting of the American Banker's Association, October 25-27.

So far, the financial bailout has cost us over $3 Trillion dollars, and our leaders are concocting new schemes to strip the American public of the last of its wealth, by offering more E-Z FHA money and an $8000 tax credit to gullible buyers ,for yet another bailout in a couple more years. We have about 7 million foreclosures before us yet, not counting recent FHA borrowers who are already delinquent- all to maintain housing prices and assure profits for loan originators and home builders. The taxpayers are theoretically on the hook for up to $24 Trillion, though $12T is a likelier number. Each $8000 tax credit is costing the taxpayers $40,000- true government efficiency here.

The results are more Americans impoverished since the Great Depression, 10% U3 unemployment across the nation, and fabulous profits for the banks.

Below is the Showdown Chicago Schedule of Events:

Get hyped for the Showdown...
Listen to our podcast!

Schedule of Events
Note: all times are approximate and subject to change

SUNDAY, OCTOBER 25, 2009
If you wish to join us on Sunday, please fill out a Sunday Registration Form. Attendance for Monday or Tuesday does not require registration.
3:30pm – Welcome & Conference Orientation
4:30pm – Put People First: Showdown in Chicago
Hundreds of everyday Americans come together to launch the Showdown in Chicago. A peoples’ Commission will hear testimony and evidence from everyday Americans, well known public figures, and elected officials on how Wall Street banks created the foreclosure crisis and sent the economy into a tailspin. Commission findings will be shared with the Obama Administration, Members of Congress, and the Angelides Commission.

MONDAY, OCTOBER 26, 2009
11:30am – American Bankers Association convention, 301 East North Water Street.
Big banks are spending billions to prevent reforms that would protect taxpayers from their future abuses. Nearly a thousand Americans will take our message directly to the American Bankers Association at their annual convention.

TUESDAY, OCTOBER 27, 2009
MARCH TO THE BANKER'S CONVENTION

10:00am - Prayer vigil on Wacker, east of Michigan Avenue
10:30am - March: starting at Stetson and Wacker
11:00am - Rally at the Sheraton Hotel (301 East North Water Street, Chicago)
No registration required for the Tuesday march. For more information, visit www.stopbankgreed.org or contact rozwadowskik@seiu1.org



Saturday, October 17, 2009

The Price of the New Housing Mini-Bubble: The FHA Will Need to be Bailed Out


Since I work at a stock brokerage firm, I get to listen to Kudlow and Cramer crowing about the "recovery" of the housing market, and how housing prices have "bottomed", which surely means that we're on back on track to house price Nirvanah... that is, from a current homeowner's viewpoint. Aspiring buyers might view the situation differently.

I have a lot of thoughts when I hear Kudlow & Cramer. Mainly, I think about how many ordinary 'merikuns, mostly male, regard their show as the font of all economic wisdom and how they get paid 7-digit salaries to mouth this crap and don't even have to register as Investment Advisors or Broker/Dealers. So if you lost your ass and are in foreclosure as result of following their idiotic rantings over the past 8 years, you have no redress. I, on the other hand, have to exercise a little care about the advice I dispense for pay because I have securities registrations to protect and can't afford the legal fees to defend myself in the event of a complaint.

 What was before hidden from view and justified as a process of the "free market" is now out in plain view, which is that the current flurry of house purchasing is a result of blatant government manipulation, and it will probably produce the same results as the multiple government manipulations that gave us the mega-rampage of the 2000s.

At least the Democrats have some baseline level of honesty regarding the role of the government in creating debt bubbles and driving house prices to unsustainably high levels, whereas the Republicans who ruled in the past decade unblushingly referred to the Fed manipulation of interest rates, the subsidies provided borrowers and lenders through the FHA and the GSAs (FNMA, GNMA, Freddie Mac, et al), and the bailouts that financiers knew they could always count on, as the "free market". The Dems very openly state that they are trying to elevate housing prices by means of heavily subsidized FHA loans on very easy terms, while talking out the other side of their mouths about making housing "affordable".

The lower illustration is one of the signs we've been seeing on parkways all over Edgewater and Rogers Park. I called the number on the sign, and was told that you come in with a FICO of 680 or better and $500 cash, and receive your $8000 tax credit to use as your down payment at the closing. Given the required down payment of 3.5%, and current underwriting rules that permit a housing expense ration of 40%, a borrower with an income of $60,000 a year can pay up to $260,000 for a place with a $500 down payment out of his own pocket. 

Click on the upper image in order to enlarge it so it can be easily read. What it is, exactly, is the underwriting summary for a recently-issued FHA loan, with the borrower's personal information blacked out. It is not a loan for a new house purchase, but is an ADJUSTABLE LOAN for an EQUITY EXTRACTION of $133, 292 from a home appraised at $193,750.  The LTV ratio for this equity extraction (or Home Equity Loan) is over 67%. The Housing Expense Ratio is 41% of the borrower's gross income. The borrower's total expense ratio is 53%. The stated purpose of the loan is CASH OUT REFINANCE.

How long do you think the borrower will be able to service this loan? Do you think that he will make it past the first reset? Or will the loan recast as the house continues to drop in value? Do you think someone with an income of $60,000 can afford a $260,000 home? Do you think that perhaps many of these loans will become problems early on and that delinquency and default rates on the recent generation of FHA loans will equal those on all the subprime, Alt-A, adjustable, interest-only, and pick-a-pay loans that got us into this mess to begin with?

If you are a renter waiting for an opportunity to buy a reasonable place at a sensible price with a loan you can really afford, do you resent your taxes being used to subsidize more bad loans for more marginal borrowers, just to create another tower of unrepayable debt that the taxpayers will once more have to make good on in a couple of years?

Do you think that the housing "gains" based on this kind of borrowing are sustainable, or do you think that the recent surge in home sales and slight bump in prices is a government-manufactured Bull Trap and that we are poised for another steep leg down in prices, as well as the further degradation of our currency and another tax-funded bailout?Do you think that the FHA can survive a combined delinquency and default rate of 24%?

This time, the Dems will not be able to blame the previous administration for the next wave of defaults or the next round of bailouts. Obama and his advisors own the situation now, and not only haven't done anything to reverse the disastrous fiscal policies of the past 10 years but are reinforcing them and building new stories on top of the tottering tower of loans that will never be repaid. And nobody's questioning team Obama on how you can strive to raise housing prices while making housing more affordable, but that is what the tax-credit-subsidized loans are all about.

Tuesday, October 13, 2009

Daley Offers No Alternative to CTA Fare Hikes

Mayor Daley says that the proposed CTA fare hikes and service cuts are "very ugly", but offers no alternative or solution to the the agency's budget problems.

Strange- Da Mare had the funds ($86 Million) to buy the Michael Reese hospital property to be redeveloped as the Olympic Village, but can't find the funds for one of the city's most essential services?

Daley has always considered the CTA to be something of a "frill", and now that the Olympic Games are off the table, he has no interest in repairing or expanding Chicago's once-excellent service, thus condemning our city to second-tier status in the future. There has even been talk of cutting Owl service, which would put at least another 50,000 cars on the streets and put Chicago on the same steep downhill path as other formerly great Midwestern cities such as St. Louis and Detroit, both of whom deteriorated rapidly after all-night transit was eliminated. In St. Louis, the last "owl" ran in 1965, and what had been a gentle glide downhill became a cliff dive into depopulation, disinvestment, and poverty.

Daley was originally opposed to free rides for seniors, but now has nothing to say about this absurdity, and there is no discussion of raising the city's funding contribution to the agency to reflect inflation since the early 80s. Now that we won't need to spend $500 Million or more on costs related to the Games, could we direct some of the TIF slush funds towards our essential services? Our transit, our police department, our schools, and our essential sewer and water infrastructure are in tatters. We need to be replacing 80-year-old water mains, we need to put more police on the street, and we badly need improved transit and to get those improvements in place before the next round of gasoline price hikes, which are coming very soon, and which may come sooner than anyone was figuring if oil ceases to be denominated in the dollar.

While Chicago's transit and that of other large cities is starving, it's competition, auto transit, is more lavishly funded than ever, and at the expense of our largest cities and their needs. Over 60% of the road-building stimulus money being doled out by the Feds is being allocated to the most lightly populated areas of the country to build unnecessary highways. Why are these funds being so allocated? 65% of this country's population lives in the 100 largest urban areas, and 75% of the country's economic activity takes place in them, yet our tax money is being allocated for mega-highways through semi-desert wastes with the lowest population densities in the country. This has been the funding pattern for the past 60 years, to the great destruction of Chicago and other cities.

Chicago is one of the country's largest net taxpayers, behind only NYC and Los Angeles, yet ranks near-to-last in federal givebacks. In other words, we are being taxed to fund mega-highways and heroic water diversion projects in the middle of the Big Nowhere, the better to lure millions of denizens out of livable Midwestern cities to mega-cities in the middle of the high desert that are bound to fail catastrophically as water problems deepen and as the massive water infrastructure becomes impossible to maintian in a fuel-short future- while our services deteriorate and our city, which is one of the world's greatest metropolises, is decimated to pay for all of that. And electing a Chicago machine politician as our president has not helped us get our share.

It's time to get our share of the tens of billions of dollars, or at least get benefits that equal the taxes we send to Washington on a dollar-for-dollar basis. Same thing goes for the State of Illinois- why is the state's largest city treated like a poor, unwanted cousin in Springfield? We need to demand the end of free senior fares and demand that our state and city governments give us something of value in return for our taxes- and adequately fund and manage conscientiously this essential service.

Saturday, October 10, 2009

Celebrating North Coast Artists During Chicago Artists' Month: Andy De La Rosa of Rogers Park


October is Chicago Artist's Month, and our city has a lot to celebrate, with a huge community of visual artists in all media. Our North Coast neighborhoods- Rogers Park, Edgewater, West Ridge, Uptown, and Lakeview, contain great artists working in every sort of media imaginable. I'll be featuring local artists and designers, and so will other local websites, so if you are working in the visual arts or know of a local artist whose work you like and think should be featured, let me know at lauralouzader@yahoo.com.


People who like to hang at Ennui Cafe at the corner of Lunt and Sheridan may remember the numerous beautiful and colorful sculptures that used to embellish the corner on both sides of Lunt, as well as the courtyard of the apartment building containing the Cafe. You will be glad to know that their creator, Andy De La Rosa, is alive, well, and making art in Rogers Park still, now on Glenwood Ave. just south of Morse Ave, where he can be seen working in the yard among his latest fantastic creations, pictured here.

Andy is a very quiet, soft-spoken young man and I did not discover much about his history, but what does that matter? Like all art, these sculptures speak for themselves, no explanation necessary.

What Hath the Loyola TIF Wrought: The Blighting of Sheridan Road by Loyola University

Your Devon-Loyola TIF dollars at work at 6610-28 N. Sheridan Road- still a blighted eyesore three years later, pictured at the left.

The recent destruction of the two charming old commercial buildings at 6572-90 by Loyola University was an unpleasant reminder, to me, of the monstrous misallocation of taxpayer money that is the Loyola-Devon TIF, a $50 million taxpayer-funded windfall for the university that is paying for the renovation of four buildings on the campus and gives Loyola University control over 270 parcels of land lining Sheridan Road from Devon Avenue to Farwell, and along Devon Ave. from Sheridan to Clark. I

Why didn't the university buy and demolish the blight-pit pictured above instead? We would love to see this reeking slum kicked down and replaced with a garden.

It's rather difficult, at first blush, to discern a connection between the economic leverage the TIF granted the university, and the demolition of these buildings. These buildings have been Loyola's property for years, after all. But it's difficult not to think that the economic power and spare funds granted the university by the TIF were a big factor in the university's decision to demolish the properties instead of renovating them. Worse, the loss of these buildings augers very ill for the beautiful, colorful little building that remains, for the TIF grants Loyola control over the entire block, and given modern developers' preference for over-scaled mega-buildings in preference to small ones, it is likely that the university has plans for this block that don't include quirky little buildings.- plans it couldn't contemplate were it not for its access to tens of millions of dollars in public money. If there are plans afoot for a large building down the road, then this building will fall, too, and cost us a beautiful, irreplaceable building and two fine old local businesses.

There was a public meeting concerning the demolition, which was by this time a done deal, and the the university promised to install a garden, which promise they are now talking about reneging on. There was no legal ground to stop the demolition, for these two buildings, while lovely, were not "significant", and the university pointed out that rehabilitating them would cost $500K while demolishing them would cost only $100K. So last week, down they came, and what was once a solid wall of charming, densely decorative old buildings is a gap-toothed block of gravel and dirt lots. The only remaining buildings are the el station building with Harris Bank and McDonald's, Beck's Books, and the incredibly decorative and charming building containing two great local businesses, Affordable Optical and Carmen's. This little building has an incredibly colorful terra cotta facade and it is difficult to imagine that anything built beside it in the future will come near equalling it in beauty and charm.

Thus the charm and character of a neighborhood is lost, and the economic power granted the university by the TIF is used not to improve the area and foster local economic growth, but to blight the neighborhood. Developer Daniel McAffrey's The Morgan at Loyola Station, the beautiful new rental apartment building that went up on Sheridan just south of the Loyola el is a major plus for the area, but it's not a sufficient offset to the destruction the university is wrecking elsewhere along the street. It could also be argued that McAffrey could have developed this building without the TIF, though the funds could sweeten the near-term losses this property is no doubt suffering in the current soft rental market. The rehabilitation of the old Village Theatre-with $200K public money- as the new 400 Theatre is another plus, even though it's not particularly well-done, but it is offset by the blighted 4-plus-1 at 6628 N. Sheridan, whose rehabilitation is being funded by funds from the TIF, and at this point is, three years later, a decrepit eyesore. The construction is proceeding so slowly as to be invisible, and the building appears to be partially inhabited and is advertising apartments as being available for rent. The parkway in front of the building is a weedy patch strewn with litter. 1200 W. Pratt, the very last building in the strip of land controlled by the TIF, was a decrepit slum purchased at an absurdly inflated price and rehabbed slowly into overpriced condominiums by Lohan Realty, and is now a market rate rental. The ground floor retail spaces are still under renovation, and the broad plaza in front of the building, which could easily be renovated into a beatiful focal spot for this street corner, is still a patch of cracked old concrete. While nobody was gladder to see this mangy slum vacated and renovated than I was, except for perhaps my landlord, it's difficult to see how the TIF funding made any difference in the fate of this building.

In summary, the Loyala TIF district has produced very little in the way of economic development relative to the allocation of public money,and has done more to destroy the tax base than add to it; all in all, the only winner is Loyola, which has managed to get the taxpayers to pay for the reno of four large campus buildings with money that is badly needed for municipal services such as police protection and infrastructure repair. Such development as has taken place, like the Morgan, arguably would have taken place without it and might even have taken place sooner were it not for the university's control over the strip. The eyesore at 6610-28 was better kept and occupied before "rehabilitation" began. The corner of Devon and Sheridan is still occupied by a former fast food outlet, which has now been rented to yet another fast food outlet. The Weinstein Funeral Home is now vacant, and the property with its four parking lots fronting (and defacing)Devon Ave., are for sale, with no plans in place for the development of these blighted parcels.

In arguing for the Devon-Loyola TIF, aldermen Moore (49th Ward) and O'Connor (40th Ward), argued that the university is a good neighbor that Rogers Park should be grateful for and that we should extend ourselves to keep the university here by tossing this well-endowed institution $46 million to improve tax-exempt property, which is not an appropriate use of funds under a program specifically designed to expand the tax base. However, their argument is pretty specious in view of the fact that Loyola has been here since 1878, through all the years of Rogers Park's early development and its later deterioration. What was the university doing, exactly, to combat the blight that spread rapidly through Edgewater and Rogers Park in the 70s and 80s? In any case, it's doubtful that Loyola would trash investments it has made on its campus here over the past 100 years simply for lack of a windfall it is not morally or legally entitled to, nor would it be at a loss to fund these projects without the TIF money.

This would be a good time not only to challenge the Devon-Loyola TIF, but the city's other TIF districts that have notably failed in their stated purpose and moreover have fostered ugly, inappropriate development that often fails economically, at massive cost to the public in both money and degradation of the civic envirnonment. The Berwyn-Broadway TIF gave us the strip mall slum at that corner with its incredibly ugly buildings and vast expanses of black asphalt, thus further degrading the blight-pocked Broadway streetscape. The Ashland-Diversey TIF destroyed dozens of charming old apartment buildings that could have been renovated into desirable housing and replaced them with another strip mall of overscaled suburban-styled Big Box retailers. The Broadway-Lawrence TIF is paying for the renovation of two exquisite old Uptown commercial buildings, but the major retailer, Border's Books, which was the beneficiary of local subsidies, will be vacating its space on Broadway as soon as it sublets its space, and will leave a huge vacant space that is unsuitable for a small local business and will probably sit vacant for many years.

But to to challenge these TIFs and to prevent other TIF districts from being formed, we need to not only make use of every law that would enable us overturn existing TIFs, but we need most to attack at the root, which is the 1952 legislation passed by Illinois that enables the formation of thse districts. We need also to demand legislation that protects property owners from eminent domain proceedings.

Tuesday, September 29, 2009

The Audacity of Nope: Chicagoans Protest the Olympic Bid


No Games Chicago led this evening's protest against the Olympic 2016 bid this evening in front of City Hall on LaSalle St. About 200 people turned out to say NO to the Olympic boondoggle. It was a cheerful, orderly crowd that included people of every sort, and the police monitoring the event were grinning broadly at us all.

I saw a number of familiar faces among the other protesters, including our own Lorraine Swanson of Lake Effect News, among the many media reps in attendance.

All our big guns are over in Copenhagen right now, and they must look just a little desperate to the IOC people, what with Barack and Richie and Michelle and Oprah in tow, while other contenders are represented merely by their heads-of-state- sort of like some pathetic social climber from the wrong side of town who has a wedding with 10 bridesmaids or something and gets a HELOC loan to buy a $40,000 dress and invites the mayor and the whole city council to her shindig. What with the country completely bankrupt on every level and fighting no-win wars on two fronts, you'd think Obama would have more pressing concerns, and GOP leaders are seizing on his junket on behalf of Chicago's bid as evidence of his lack of seriousness.

Let's hope they all make royal asses of themselves over there. Rio has come up fast and is now the front-runner. Brazil has guaranteed $14.4 Billion to cover expenses and losses, which is more than the other three contenders put together, and there is no significant opposition there.

This is no time to rest easy, though. Email President Obama and let him know that if he wants to throw some pork to his home town, that we have many more urgent needs than an over-hyped egofest for da Mare that will cost the public at least $4 billion and cause major disruption and displacement.

Monday, September 28, 2009

Environmentalists Protest Desert Solar Plant

There's just no pleasing some folks.

Certain environmentalists, whose cause is being championed by Sen. Diane Feinstein (D-California) are seeking to block the construction of a large solar power plant in the Mohave desert because of its potential environmental impact.

"It would destroy the entire Mojave Desert ecosystem," said David Myers, executive director of The Wildlands Conservancy.





It's difficult to think of any means of electrical generation that has less environmental impact than solar, even wind, and the only thing either wind or solar have going against them is that they are outrageously costly, inefficient means of generating small amounts of unreliable electricity; and that there isn't enough land in the United States to fit the solar panels it would take to generate the power that the denizens of California guzzle in any given month.

However, everything bears a cost, and there is simply no way to generate large amounts of electricity without some environmental impact. There is also no way for a population of 39 million people to conduct any other activity pursuant to maintaining their lives without environmental impact, and even were all the denizens of California (and the U.S.) to relinquish modern life in favor of a primitive hunter-gatherer lifestyle, there would be far-reaching environmental consequences. We can easily imagine the desertification of the entire state of CA as its denizens cut down every growing thing more than a foot tall for firewood for cooking and heat.

The exasperated Gov. Schwarzenegger asked "if we can't put a solar plant in the Mojave, where in the hell can we put it?"

The moral of the story is, of course, that that there is no way to eliminate environmental impact except to maybe lie down and die. Will any of the deep ecologists volunteer to do this? Strange how the human-hating Gaia-worshippers who gloatingly contemplate the die-off of 90% of the species as resource depletion collapses us socially and economically will not volunteer their own lives by way of reducing the human impact on the planet.

People like Feinstein and the people at the Wildlands Conservancy have cost the environmental movement whatever credibility it ever had, yet never has human life been so at risk from environmental degradation and its multiple threats to the basic necessities of human life, such as our water and food supply. The only way to overcome the overwhelming hostility of the public to the concerns of the movement is to make concern for the human being the movement's central focus, for that is really what this is all about- to provide a liveable cradle for human life and to assure that our children and their descendents will have the wherewithal to live lives with a tolerable level of comfort and technological amenity. The point is not to avoid all environmental costs, but to manage and minimalize impacts as much as possible and to manage our resources so that we can continue to live comfortably and with basic technological amenity. For that, we need the cleanest and most efficient means of power generation we can devise, not the means we will be stuck with if we foreclose every means of large-scale electrical generation on the grounds that it may someohow, sometime, have some sort of negative impact.

Saturday, September 26, 2009

The 49th Ward Green Corps Forum:From the Holler to the Hood

Where: Loyola University LakeShore Campus
Life Sciences Building, Room 142
1050 W. Sheridan Road, Sheridan & Winthrop, Chicago, IL
When: Monday night, September 28, 2009, at 7 PM

An e-mail blast from our Alderman, Joe Moore, announced a very important event this coming Monday night.

The 49th Ward Green Corps and the Rogers Park-based Eco-Justice Collaborative are sponsoring a forum on the devastation produced by coal mining and production to discuss so-called "clean" coal and the permanent destruction of the Appalachian landscape.

Loelei Scarbro from the Coal River Valley in Appalachia, an activist and community organizer with the Coal River Mountain watch, will be on hand to discuss the destruction wrought on this part of the world by mountain-top removal on the landscape.

Commonwealth Edison is considering closing two aging coal-fired plants here in Chicago, but Illinois is unfortunately spurning future nuclear development in favor of "clean" coal development. A 600 MgW "clean" coal plant is currently planned in Southern Illinois, while the moratorium on nuclear development remains in place. We in Illinois need urgently to consider whither our current energy policies are leading us, and whether coal is an acceptable alternative in light of the environmental destruction it causes, and most of all its human toll, whether measured by deaths in coal mines, illness and death caused by coal pollution, or the loss of the landscape that has supported a community of human beings for generations, Appalachia.

Friday, September 25, 2009

What Are Our Lives Worth: $1.4 Trillion More for Housing Rescue vs. $8 Billion for Dam Rehabilitation

One of the distinguishing characteristics of a true Third World nation is flagrant disregard for human life,which is usually manifest in a society's spending priorities. In failing societies with rapidly increasing populations and shrinking wealth, what remains of the nation's financial resources are increasingly diverted by political corruption and statist initiatives designed to sustain the unsustainable at unlimited cost to the taxpayers, for the benefit of select constituencies, which in the case of the United States are the Wall Street financial cabal, the homebuilders, and homeowners buried in homes that continue to lose value.

The financial black hole opened by the collapse of our housing and credit markets keeps growing and threatens to suck every dollar of tax revenue we hope to realize for years to come into it with no offsetting benefit to taxpayers (least of those who rent and aspire to buy homes), and most of all at the cost of every other necessity, notably our emergency preparedness and our rapidly decrepitating Pharaonic infrastructure, to which a pittance, relatively speaking, has been allocated to affect urgently needed repairs on critically deficient roads, bridges, and dams. While nearly $1.4 Trillion of taxpayer guarantees have been extended to the housing market over the next few years, Congress is still debating whether to commit $8 Billion to repairs to dangerously deficient large dams whose failure could cost thousands of lives and tens of billions of dollars in economic losses. The Wired Magazine article I linked speaks only of non-federally owned dams that have been "orphaned" by owners who've gone out of business. There is no discussion of the 600-foot or taller mega-dams owned by the Bureau of Reclamation, whose spokespeople glibly assure the public that most federally owned dams are in safe operating condition, despite what is known about a couple of its largest structures, notably the fragile 710-foot-high Glen Canyon Dam that nearly breached in 1983 and has been "shit-rigged" ever since, while the movement to decommission and remove the dangerous structure was quietly tabled by its owner, the Bureau of Reclamation, for unstated reasons.

Is the Glen Canyon really any safer than it was in 2007, when it was named one of the two most dangerous dams in the country, or is it just that there is no money available for the massive task of removing it?

Fixing the 1,800 large American dams that represent the biggest threat to human lives will "cost billions, but can we afford this in addition to roads, bridges, and other projects?" asks one recent article on CNN Money.

How could we even ask if we can "afford" $8 Billion to fix "worst-case" dams with their immense watersheds containing millions of people exposed to major flood hazards, in a context where we are committing trillions to propping up property values, modifying mortgages, and enticing new homebuyers into a falling market, creating yet another future wave of defaults in the process? The money spent on Cash for Clunkers could have paid for the repairs on a couple of the larger and more endangered dams, or for a number of critically deficient bridges. Can we afford not to make these repairs?

"Where food is dear, life is cheap", someone once remarked a couple of centuries ago, and the depletion of our resources and in tandem with an expanding population,falling incomes, and increasing internal divisions and conflicts, has dire implications for our future political and social climate. We seem to be well along the path so many other societies have traveled as they ratchet down the slope of declining productivity and increasing impoverishment, as we become more and more apathetic and callous in the face of rising crime, violence, and poverty.

Sunday, September 20, 2009

The Oil Industry at 150: A Celebration or a Funeral?

You have to wonder if Alex Epstein on the blog Voices for Reason, grasped the irony of the title of his recent post, Oil at 150: An Unhappy Birthday. The blog is operated by The Ayn Rand Center for Individual Rights, which is headed by her designated spokesman and intellectual heir, Dr. Leonard Peikoff.

This article was a follow up piece to his previous post, Oil at 150:Celebrating Oil's Birthday, a short piece lauding the first drill in Pennsylvania 150 years ago and the ensuing discovery of the incredible power and versatility of the liquid that literally built the modern world and to which we owe every essential of modern life.

In his follow-up post, Mr. Epstein lamented that there had hardly been any comment on the occasion at all from either our opinion makers or oil industry leaders themselves.

That might possibly be because for the oil industry and for everyone who aspires to a lifestyle better than that of a 19th Century subsistence farmer, this is a time of grief, not joy, for the landmark Epstein commemorates will more likely be the industry's tombstone, and no one knows it better than oil industry insiders themselves.The most prominent Peak Oil spokesmen are, after all, alumnae of the oil industry; Colin Campbell and Kenneth Deffeyes are retired petroleum geologists who spent their professional lives in the employ of major oil producers, Matthew Simmons is a prominent investment banker and oil analyst, and former U.S. Vice-President Dick Cheney, who remarked on disparity between growing demand for oil and the ever smaller and less frequent discoveries of unexploited reserves, is the former Chairman and CEO of Halliburton. Each of these men, along with dozens of fellow executives and scientists in the energy industries, has expressed their conviction that we have arrived, or will soon arrive at, the peak of global oil production and the inevitable steep decline in available oil supplies.

And none of them, nor anyone else, can say for sure what will replace oil, but there is among them and other students of Peak Oil, the disquieting thought that there will be no replacement for it. And neither the cornucopians nor the "green"' promoters of renewable energy care to dwell on the thought.

I like Alex Epstein and many of the other intellectuals whose writings appear at The Ayn Rand Center for Individual Rights, and intend no disrespect for them or the Objectivist philosophy that they articulate and that I share, when I say that their extremely linear logic regarding the necessity of oil fails to factor in a number of important points, like the possibility that we will likely have to do with a steeply reduced supply of it. Another contributor, Dr. Keith Lockitch, author of The True Meaning of Earth Hour, criticizes the movement to reduce carbon emissions because a steep reduction in emissions would mean a steep reduction in our lifestyles. His reasoning is likewise rigidly linear to the point of simple-mindedness: it says, our comfort and advanced technologies depend upon the ability to consume large amounts of fossil fuels, therefore we must have fossil fuels, and since we demand them they must therefore be available. Well, what happens when they no longer are available, or supplies are steeply reduced from current levels? Will our demand for them in and of itself produce them once every oil field on the planet is in steep depletion along with most gas wells and coal mines?

This is not Objectevist thinking, this is not rationality. This is wish-based thinking that refuses to recognize a distressing reality.

Unfortunately, Dr. Lockitch, Mr. Epstein and other writers at the Center have fallen into the Cornucopian trap that has ensnared most "conservatives", a variety of wish-based thinking that believes that just because our civilization badly needs dense, energy-intensive fuels in order to drive our advanced technology and supply the comforts and amenities that are the difference between a long, healthy life with opportunity, choice, and incredible luxury; and a life that's nasty, brutish, and short, that those fuels will always be there and that the market will provide them simply because we want them, need them, and demand them.

The "conservative" cornucopians are as in denial regarding the hard limits we are confronting as the "liberal" environmentalists and "greens" in their approaches to the inevitable depletion of fossil fuels and other essential resources, and just as irrational, and neither mode of thinking will help us negotiate the tectonic economic and social shifts that are sweeping the globe, and sweeping away our favored way of life and the assumptions we have based our thinking and planning on.

If ever we needed rational philosophy, this is the hour, but the latter-day spokesmen of the philosophy that supplies the epistemology that supports it and defends it are frantically evading it and denying the conclusions to which it would lead them.Evasion, denial, and emotion-based thinking are the hallmarks of irrationality and subjectivity, which are not only cardinal sins in Objectivist philosophy, but will lead us to the same place that they always have, and will defeat our efforts to retain our civilization and develop the techniques and organization we will need to cope in a resource-constrained world.

Thursday, September 17, 2009

Couldn't Happen to Nicer People: ACORN Loses its Federal Funding

Both Congress and the Senate voted overwhelmingly to strip the community activist group, ACORN, of its federal funding amidst allegations that the group counseled its clients on how to commit tax fraud and other crimes. Last week 11 ACORN workers in Florida were charged with submitting fraudulent voter registration papers, and most disturbing of all, ACORN workers are alleged to have aided in human traffic, including the recruiting of underage girls into prostitution.

Many of us here in the 49th Ward of Chicago remember the role this unsavory group played in the hotly contested city election of 2007. ACORN activists worked to help re-elect the incumbent alderman, Joe Moore, and distributed "attack" fliers that slandered and vilified his opponent's supporters, including myself.

It's rather a shame, really. ACORN started out in the 70s as a grass-roots activist group whose mission was to help lower utility rates and provide affordable housing for the poor. Since that time, the group has degenerated into a blatantly political action group that advocates for favored candidates and engages in questionable and perhaps illegal practices on behalf of people who distinctly aren't poor or disadvantaged.

Wednesday, September 16, 2009

Feds Promote Irresponsible Lending

Signs like the one pictured have been sprouting on parkways all over Rogers Park and Edgewater. Looks like we're setting up for another wave of foreclosures after the one just in front of us plays itself out.

If recent FHA loan generations and current FHA delinquencies and defaults can be seen as indications of where the housing market is headed, we can expect another costly home-loan bailout in a couple of more years, in addition to our current soaring default rate and the tottering $3.5 trillion tower of shaky commercial debt. Delinquency rates for recently-generated FHA loans are at 14%.

2nd Quarter Notices of Defaults were the highest ever recorded, and these were for loans that actually defaulted 6 to 9 months before the NODs were issued. Lenders have so large a backlog of delinquencies that many borrowers are in default a year or more before any action is taken against them.

The $8000 tax credit is just about to end, coinciding with the end of the selling season, and we will then see how durable the recent hike in housing sales really is. But it looks from here like the taxpayers will be paying for this recent uptick two ways, first with the $8000 taxpayer subsidy for new home buyers, and then again when these subsidized-down-pay loans start to default. Given that about 80% of all home loans being written now are FHA-guaranteed, that could mean another record-setting wave of defaults and foreclosures.

The Feds always were the most irresponsible lenders of all, inasmuch as the wave of bad lending was made possible by the alphabet soup of government agencies- HUD, GNMA,FNMA, FHA-that either backed or bought the mindboggling array of "creative" loans that got us into our current financial predicament. Now the FHA is THE irresponsible lender, and just about the only functioning home lender.

Sunday, September 13, 2009

Sacrificing the Future to the Past

Readers might have noticed that I've become an unapologetic shill for the nuclear power industry, and have added a number of nuclear advocacy blogs to my blog roll and even posted the Nuclear Advocacy graphic.

My passionate support for nuclear power proceeds from my belief that it is the only way we will be able to provide adequately for the energy needs of our swollen population in the amounts needed to retain the basic benefits of modern technology, let alone real luxury, in the face of terminal fossil fuel depletion, the unacceptable costs and environmental hazards of biomass and ethanol, the need for steep carbon reduction, and the hard limitations on the efficiency and reliability of such "renewable" forms of energy as wind, solar, and geothermal.

One of the best of the nuke blogs, Atomic Insights, recently published a chilling article concerning the ambitious plans of this country's de facto owner, China, to develop the largest fleet of nuclear power plants in the world, in addition to its Promethean dam-building plans and ambitious coal solar power projects, such as the 25-square-mile, 2-gigawatt plant that First Solar is engaged to build there. While not all of these ventures are going to yield the hoped-for returns, China's dedication to exploiting every opportunity to develop its energy production and industrial base while aggressively pursuing control of the world's remaining resources, is indicative of its leadership's determination to remain competitive.

China is also buying futures on as much of the world's future oil production as it can, and more ominously, has drastically restricted "rare earth" elements that are necessary for high tech applications such as lithium ion batteries and numerous other high tech components. China and India are both rapidly developing new nuclear technologies, most importantly those involving smaller reactors with much safer designs that use fuels other than uranium.

In the meantime, the United States under Obama has completely curtailed nuclear development and is investing hundreds of billions of dollars in our corrupt financial system, as well as in attempts to manipulate housing prices upward and in propping up our obselete, failing automobile industry.

In short, China is stimulating its economy by investing its prodigious cash pile into the projects it will need to power its future, while the United States is racking up more unrepayable debt to sustain the unsustainable with the insanely destructive "cash for clunkers" program, $8000 tax credits for first-time home buyers, and insanely easy 3.5% down payment FHA loans, which already have a 14% delinquency rate. In other words, we've invested an untold amount of money in the next wave of defaulting loans and guaranteed another massive, costly bailout effort in a couple more years.

China, India, and other Third World countries are investing the industries and technologies of the future, while we are investing in the dead past.

China and India and other Asian nations are determined to remain as competitive and productive as possible, while we are turning our backs on every opportunity and misallocating our remaining wealth to efforts to resuscitate dying, obsolete, and even pernicious industries (like the housing-inflation and mortgage-fraud machine), and to starting another credit rampage, by extending more loose credit and paying people to buy cars and houses. In the same spirit, we are pouring our road stimulus funds into the very places where the population is sparsest and that generate the least economic activity, and into Bread and Circuses of various sorts.

The United States has lost its lead in almost every field of endeavor that matters. We are now quickly losing our lead in heavy electrical equipment, and lastly, we are beginning to slip in scientific research.

Most of all, we've lost the ability to re-invent ourselves. We're still very heavily invested emotionally in this country's glittering post-WW2 period, and have never grasped that not only was the prosperity of that era founded on an anomalous confluence of circumstances most unlikely to be repeated ever again, but was unsustainable from the outset.

This is the difference between societies that flounder after a few centuries, or even decades, while other cultures endure for thousands of years. Compare cities like NYC and Boston, who embraced high tech as their old smokestack industries withered, to cities like Cincinnati and Detroit, who continued to cling to the old early-20th century industrial model and as it withered away anyway, turned to government bailouts, corruption, and low-wage service industries instead of making the effort to rebuild their battered economies on a different template.

At this point, our book looks written. It looks like we're determined to squander every opportunity to build the industries we will need as we go through the biggest economic shift of the past 150 years, and are destined to become a deteriorated, fourth-world backwater with collapsed cities, ever-increasing crime, violence, filth, brutality, and disorder along with vaulting poverty rates with all the misery we associate with undeveloped countries This doesn't have to happen, but the window of opportunity is closing quickly. Let's hope our current leadership can find the mental clarity and political will to steer us onto a different path than the rut of steep decline we've settled into now.

Friday, September 4, 2009

Peak Coal: Coal Production Projected to Decline

The 50% of U.S. ratepayers whose electricity is generated by coal had best plan for steeply higher electricity prices not far down the road, and they as well as the rest of us need to be thinking of how we will cope when the fuels we depend upon for 63%-coal and gas- of our power are in steep depletion.

Recent reports indicate that coal may not be so plentiful as originally thought, and that not only to we not have a "200-year" supply, but that coal production may go into terminal decline within a few years.

This may seem improbable to a lot of people. The United States is the second-largest coal producer in the world, and 48% of the electricity in this country is generated by coal. Moreover, this has been the cheapest way to generate power to date, even though it carries environmental hazards and costs that we now know we can no longer bear. Coal is surely the dirtiest method of power production ever, and the cost of building a coal plant with necessary pollution controls equals or exceeds the cost of building a conventional nuclear plant with the same generating capacity.

While consumption of all fuels in this country have dropped slightly due to the current steep economic contraction, global consumption of coal is increasing rapidly, with China and India being the largest consumers. The demand for electricity by these two most populous countries in the world will only increase as they continue to industrialize and more of their citizens aspire to Western lifestyles.

According to Richard Heinberg at The Energy Bulletin:

"future scenarios for global coal consumption are cast into doubt by two recent European studies on world coal supplies. The first, Coal: Resources and Future Production (PDF 630KB), published on April 5 by the Energy Watch Group, which reports to the German Parliament, found that global coal production could peak in as few as 15 years. This astonishing conclusion was based on a careful analysis of recent reserves revisions for several nations.

The report's authors (Werner Zittel and Jörg Schindler) note that, with regard to global coal reserves, "the data quality is very unreliable", especially for China, South Asia, and the Former Soviet Union countries. Some nations (such as Vietnam) have not updated their proved reserves for decades, in some instances not since the 1960s. China's last update was in 1992; since then, 20 per cent of its reserves have been consumed, though this is not revealed in official figures.

However, since 1986 all nations with significant coal resources (except India and Australia) that have made the effort to update their reserves estimates have reported substantial downward revisions. Some countries - including Botswana, Germany, and the UK - have downgraded their reserves by more than 90 per cent. Poland's reserves are now 50 per cent smaller than was the case 20 years ago.

These downgrades cannot be explained by volumes produced during this period. The best explanation, say the EWG report's authors, is that nations now have better data from more thorough surveys. If that is the case, then future downward revisions are likely from countries that still rely on decades-old reserves estimates. Altogether, the world's reserves of coal have dwindled from 10 trillion tons of hard coal equivalent to 4.2 trillion tons in 2005 - a 60 per cent downward revision in 25 years.

China (the world's primary consumer) and the US (the nation with the largest reserves) are keys to the future of coal. China reports 55 years of coal reserves at current consumption rates. Subtracting quantities consumed since 1992, the last year reserves figures were updated, this declines to 40 to 45 years. However, the calculation assumes constant rates of usage, which is unrealistic since consumption is increasing rapidly. Already China has shifted from being a minor coal exporter to being a net coal importer. Moreover, we must factor in the peaking phenomenon common to the extraction of all non-renewable resources (the peak of production typically occurs long before the resource is exhausted).

The EWG report's authors, taking these factors into account, state: "it is likely that China will experience peak production within the next 5-15 years, followed by a steep decline." Only if China's reported coal reserves are in reality much larger than reported will Chinese coal production rates not peak "very soon" and fall rapidly.

The United States is the world's second-largest producer, surpassing the two next important producer states (India and Australia) by nearly a factor of three. Its reserves are so large that America has been called "the Saudi Arabia of coal". The US has already passed its peak of production for high-quality coal (from the Appalachian Mountains and the Illinois basin) and has seen production of bituminous coal decline since 1990. However, growing extraction of sub-bituminous coal in Wyoming has more than compensated for this.

Taking reserves into account, the EWG concludes that growth in total volumes can continue for 10 to 15 years. However, in terms of energy content US coal production peaked in 1998 at 598 million tons of oil equivalents (Mtoe); by 2005 this had fallen to 576 Mtoe."

Here we have it: all fossil fuels are in decline or soon will be, and as they deplete, prices will trend sharply upward, and everything we do, make, use, and buy will become more expensive. Much more expensive.

While the fossil fuels that we're so heavily dependent upon deplete, our demand for electricity will most likely increase, especially if we electrify a substantial part of our transportation- and we will most likely have to do exactly that if most of the population is to have access to motorized transportation in the decades ahead as oil supplies become more unreliable and expensive.

Fortunately, there is nuclear, and here in Illinois we can be grateful that 50% of our power is generated by it. Generation 3 cold water reactors incorporate great improvements in safety and are now extremely safe, and can be built much more cheaply than the early essays in the craft, because of increasing standardization of design and mass production of parts. Additionally, newer nuclear technologies have the potential to extend the fuel cycle many hundreds of years beyond the horizons of our limited supplies of U235, while making use of spent nuclear fuel and thus reducing or altogether eliminating nuclear waste.

However, the future of nuclear in Illinois is very uncertain, thanks to the ill-considered moratorium on the construction of nuclear power facilities until the permanent storage of nuclear "waste" (more on that later) is "solved and the current emphasis is on coal-fired generation. A 600-megawatt "clean coal" plant is planned for Taylorville, Illinois, and the Illinois House of Representatives in May passed a bill that would require utilities and power marketers to buy 5% of their power from such facilities. The bill will go to the Senate this fall.

Will Illinois, the crucible of civilian nuclear power and the state most dependent upon it, resume its place as a leader in the development of nuclear, or will we make all the wrong choices and wed ourselves to fatal dependency on rapidly depleting fossil fuel resources, or on "renewables" such as wind and solar, that provide power only intermittently and at a cost that will render regular electic power unaffordable to 50% of the population? Decisions being made now will take generations to reverse, for generating equipment is extremely expensive, and plants being built now will have to serve for at least 40 years. The decision to eschew nuclear in favor of coal could condemn Illinois to increasing economic marginalization and deterioration, complete with further loss of manufacturing and commerce and vaulting poverty rates- and little hope of reversing those trends in our lifetimes.


Friday, August 14, 2009

Our Justice System Is Broken: Would-be Presidential Assasin Lynette "Squeaky" Fromme Released

If you were born before 1965 or so, you probably have vivid memories of Manson Girl Lynette "Squeaky" Fromme, the deranged woman who joined mass murderer Charles Manson's "family" during the period in which he and his followers were engaged in a murderous rampage through California, murdering actress Sharon Tate and a number of her companions, among many other victims, and who later made an attempt on the life of President Gerald Ford in 1975.

Fromme is, according to author Ivor Davis, who has written two books about the Manson cultists and their crimes, the only person who has ever been freed after attempting to murder a president of the U.S. Davis, who has just produced his second book on the cult, Five to Die:The Book That Helped Convict Charles Manson, states that Fromme, who was angered by his first book about the Manson Family, screamed at him, "Do you know what it feels like to have a seven-inch knife down your throat?" He states that he is "stunned" by the lack of public anger over the release of this dangerous woman, and from where I sit, she is still a palpable threat to him, as well as anyone else who may cross her accidentally or intentionally.

She is, after all, only 60 years old, which is nowhere near old age as that is measured these days. She's still young and strong enough to rebuild her criminal career and do untold harm, and she has never forsworn her allegiance to Charles Manson. I would almost suspect a touch of sexism here, for the perception that female murderers are less dangerous than men still persists, but there have been too many vile male criminals, who committed similar crimes, released after laughably short sentences to support that idea.

It's difficult to see Fromme as anything other than an exceptionally violent and utterly remorseless woman who participated in or helped to cover a number of extremely brutal murders, attempted a couple of her own, assaulted other inmates, escaped once, and threatened the lives of numerous other people, including, I recall, the defense attorney who handled the cultists' defense in the Tate-LaBianca trial; Fromme, displeased with what she considered stalling and ineptitude on the attorney's part, wrote him a letter with some very pointed language. "Maybe we've been too nice," she said in the letter, and the attorney reported having been very afraid of her.

Fromme may be the only person who was ever released after attempting to assinate a sitting president, but she's not the first vile criminal ever released after being convicted of heinous crimes to life in prison. Richard Maust, who raped and murdered a 14- year- old boy in the early 80s here in Illinois, was released after twenty years, so that he could murder three more teenage boys in Indiana about 10 years back. In fact, my strictly anecdotal evidence says that most murderers convicted for life usually don't serve more than twenty years, and end up back on the streets at a sufficiently youthful age to be a massive threat to anyone who might run afoul of their tempers or be perceived as nuisance or hindrance to them in some way.

Maybe Americans are simply too exhausted and numbed by forty years of rampant violent crime, and of outrages committed against us, jointly and severally, by both street criminals and the criminals who run our country, to get outraged about anything anymore. The important thing these days is just to stay alive and protect yourself and the people you love. Most people are numb from the unending stream of violence, and a crime that would have rocked the country for weeks on end before 1965 isn't even front page news anymore. Does anyone remember the workplace shooting rampage here in Chicago that left a half dozen people dead, or the guy beheaded on a long-distance bus in Canada? Probably not, because these types of events have become so commonplace that after a while they all seem to run together to form one vast, blood-soaked canvas of insane violence and brutality, and if you didn't desensitize yourself and will yourself to not think about it, you would go insane.

But everyone asks the same question: why can't we keep these people locked up? Why is a "life" sentance almost never for life, but usually for twenty years? Why is criminal justice in this country so irrational, so senseless, and so rigged? Why do some people serve more time for possession of five ounces of weed than some other folks serve for murder and arson?

We can see from this how we are experiencing so much difficulty in abating the violent crime here in Rogers Park, or the rest of the city for that matter, and why we needn't expect any relief anytime soon, because our justice system is utterly trashed. We hear it so often: the police did their job, the prosecutors did their jobs, the jury did its job, but at sentencing, or on any one of a number of subsequent appeals, the whole thing somehow unravelled and yet another dangerous, volatile person who's proved many times over that s/he is capable of doing vicious damage to another human creature, is out roaming the streets.

We not only have over a million people incarcerated in this country, but we are now so impoverished that many states are contemplating releasing tens of thousands of convicts because they no longer have the space or money to look after them. What, exactly, these people will do upon release in the current economic climate, with unemployment hovering around 10%, is an open question, but it's a good guess that the majority of them will resort to various types of crimes, petty and major, to sustain themselves out here, as many formerly legitimate citizens are now doing.

If ever there were a time to Get Rational and fix our justice system, it is now, and the first and most obvious step in that process would be to decriminalize those offenses known as victimless crimes, or offenses against common "morality", such as drug possession, drug dealing, and prostitution. We arguably never had any business imprisoning people for things like prostitution, gambling, or drug possession, and the case for legalization of street drugs and the complete decriminalization of drug abuse, prescription or "street" is overwhelming.

We could then expunge the criminal records of all people who are convicted only of these types of offenses. That would free up tens of thousands of prison berths and free the former convicts to pursue useful lives and indulge their nasty personal habits in peace. Additionally, we could tax the drugs, levying taxes according to the level of impairment and health risk of each substance, and a portion of the revenues from these taxes could be dedicated to providing clinics where addicts could indulge in the more dangerous substances, such as crystal meth, under supervision and for a relatively low cost.

Unfortunately, this country seems to be on the opposite track, towards ever-greater state control of purely personal behaviors, and our current "liberal" government doesn't seem to take any interest in rolling back the fascistic, no-win War on Drugs, but rather, is obsessed with criminalizing habits and behaviors that, while unhealthy and self-destructive, were perfectly acceptable for decades, such as tobbaco. It is so much easier to make life miserable for cigarette smokers than it is to do anything to reduce our violent crime rates, the highest in the developed world, or rebuild the enonomy on an honest footing.

We can't save people from volunteering to die and engaging in self-destructive behaviors, and we have no right to try. We have the right to hold people responsible for whatever they do behind this garbage, and we have the right to prosecute to the full extent possible for any crimes they commit under the influence. But we have no right to dictate what a person can inbibe, inject, inhale, or ingest, and we have no right to dictate how they use their bodies as long as their partners are willing adults.

The criminalization of "victimless" offenses has done nothing to abate the behaviors prohibited , but has perverted our justice system, enriched criminal cartels, and created a truly lawless society where many people understandably have a hard time deciding what is truly right or wrong; what is truly violative of another person's rights and what is merely "offensive". Let's hope we can finally learn from the Prohibition and stop re-enacting it, and make room in our prisons for the people who really need to be incarcerated.

Saturday, August 8, 2009

A Civil Liberties Nightmare: Is the Sorry Story of the Vancouver 2010 Games Repeating Itself in Chicago

Vancouver professor and Olympics Resistance Network organizer Chris Shaw came to Chicago early this year at the request of No Games Chicago, and spoke of the immense public debt, destruction to public parks, and "frontal assault on civil liberties" that have been the results of Vancouver having won the 2010 Games. Chris had the following to say regarding Vancouver's experience with the Games so far:

"Chicago Should Avoid Following in Vancouver's Olympic Missteps

I look back to 2003 and what is happening with Chicago's Olympic bid is eerily reminiscent of Vancouver's successful bid six years ago. Then, as now, bid boosters were promising local citizens the world: fame, wealth, and the host of goodies that would flow from a nod from the IOC. Vancouver's then mayor promised that the 2010 Games wouldn't cost the citizens 'one penny", that provincial and federal funds would be leveraged for local needs, and that the entire process would be completely transparent and accountable. Bid organizers promised a host of goodies including "the greenest Games ever", an arts legacy, and "social inclusivity" (short hand for social housing). It was a lovely dream and many Vancouverites bought into it. In a non-binding Vancouver plebiscite, some 64% of Vancouverites voted for the bid to go forward. The same question was not put to the rest of the province of British Columbia because the sitting Premier knew it would fail miserably.

Six years later, a majority of Vancouverites who supported Vancouver's bid are having serious second thoughts as the early predictions of the "nay sayers" and "party poopers" are turning out to be frighteningly accurate. Those who opposed bringing the Games to Vancouver, and I was one of them, noted that cost estimates for staging the Games were vastly underestimated while at the same time as the benefits were grotesquely overestimated.

We were right, and in spades. In the run up to the IOC's decision, Vancouver's mayor had said the Games wouldn't cost us one penny, but the reality was quite different: construction costs at city venues blossomed to finally approach a $100 million shortfall. Three hundred million dollars more were dumped into an ill-considered subway line that may have been influential for the bid but was not a solution for local transportation. Security costs to be born by Vancouver are still unknown, but could easily be $100 million for the city alone. Endless 'hidden" costs have also accumulated. Finally, as the final blow, Vancouver's choice of the developer for the Athletes' Village went insolvent forcing the city to take over the project and putting it on the hook for nearly $1 billion.

Taken all together, the city with an operating budget of under $900 million and a property endowment fund of about $1.4 billion found itself facing a nearly $2 billion dollar Olympic debt. In brief, with a combination of bad planning and an utter lack of due diligence, Olympic boosters had brought Vancouver to the brink of bankruptcy. The overall cost to all levels of government for the 2010 Games will likely come out at about $10 billion. London's 2012 Games, a likely harbinger for Chicago, is now, five years in advance, already at nearly $20 billion in projected costs.

The financial headaches are only part of the overall meltdown. Building the various venues and roads had not given us the greenest Games ever, but the opposite: over 100,000 trees cut down (much of it old growth), endangered species habitat destroyed or threatened, wetlands bulldozed, and a massive
3.5 megatons of carbon dioxide released before the Games are over.

Poverty continues to climb in Vancouver with an estimated 3,000 homeless on our streets. The best the city and provincial government can come up with so far is a plan to move these "eyesores" away from the city before the Olympics start in February 2010.

Civil liberties? Forget them. The security services have now concluded that the potential for domestic protests against the Games is a greater threat than Al Qaeda and legislation at all levels of government is aimed at suppressing legitimate dissent. Since those opposed to the 2010 Games don't plan to simply give up and lie down, we now face the prospects of preventative arrests and the widespread suppression of civil liberties. If the current trends continue, February 2010 will see massive clashes between protesters and police.

So if this is Vancouver's past, present, and future experience with the Olympics, what should Chicagoans think and do?

First, look at all the facts and the real history of the modern Games. Evaluate the bid organizers' claims with the greatest skepticism since just like those of the Vancouver boosters, they will turn out to be illusions if not complete lies. Determine what real estate projects the boosters want you, the taxpayer, to fund for their benefit using Olympic dollars. Consider the impact on the environment, the poor, and the democratic process. Consider the overall cost and don't be swayed by arguments that claim that hosting the Games will bring economic benefits. The latter is an utter falsehood at the best of times. In the current economic circumstances, it is criminally irresponsible. Finally, think what the billions of dollars wasted on a three week circus could actually do for your community."

For Vancouver, it's too late. The circus is coming to town, the money largely spend, the damage done. And the best we can do is to limit the fallout. Chicagoans still have a choice in the matter and have to show the IOC that the Games are not right for Chicago. The time to stop the bid is now, not after it has won. Look to Vancouver's experience and you will see your future. If you stop the Games from coming to Chicago now, those of us in Vancouver will know that we have saved at least one future city from the Olympic machine."

Now, what more could we ask for by way of previous history than this testimony? Note the striking similarities between the Vancouver process and our own. The subway line that is to be built specifically to accommodate visitors but which does not meet urgent local needs, the Olympic Village that had to be paid for by the city because the developer went broke, the massive cost overruns and abysmal failure of the promoters to account for the inevitable steep costs for security that were sure to arise, and the transformation of a lovely, livable city into a veritable police state- it's all here.

Can we really expect Chicago to do any better, given the long, hoary history of political corruption in Chicago, Cook County, and Illinois? Have we ever been able to rely on our officials for truth and transparency?