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Wednesday, July 29, 2009

Edgewater Historical Society Faces Developer Lawsuit

The Edgewater Historical Society and Museum is facing a developer lawsuit and is seeking financial assistance and/or pro bono legal assistance in paying legal bills associated with the suit.

The Society sent the following announcement to supporters:

Edgewater Historical Society and Museum

Important Message To Our Members, Friends and Supporters:

The Edgewater Historical Society and Museum (EHS) and several board members were sued last year in the amount of $1.1 million for our efforts to support a proposal to landmark an “orange” rated house in Edgewater. Continuous efforts have been underway to dismiss this suit, but without success so far. We have been confident that we have a strong case, and that we were only exercising our free speech rights, in the democratic traditions we have come to accept in Edgewater.

But litigation continues, and we are not even at a trial stage. We are fortunate to have excellent representation and we received considerable pro bono support up until now. We are now at a critical juncture because EHS must now financially support all future legal representation. This has serious consequences for our community.

Should we go to trial and lose, the museum will be forced to close and we would probably have to dissolve the Edgewater Historical Society; in addition, our board members might be liable for considerable personal financial risk.

Should we go to trial and win, the future is likewise bleak, because the high cost of defending this case could generate legal fees that would jeopardize the continued viability and existence of the museum. We cannot be certain of recovering legal fees, even if we win!

In the near future, we expect a decision on whether this case will be dismissed or will go to trial.

We are urgently concerned about the future of the museum and EHS. We are seeking help to support our legal effort (with pro bono legal aid). If you know of individuals or organizations that could provide such assistance, please contact us as soon as possible.

The outcome of this suit has far reaching and chilling prospects for Edgewater and any community group that advocates or participates in community discussions about planning, zoning, and historic preservation. Enclosed is a statement of the facts about the lawsuit.

We are very proud of EHS and the museum as an important community institution; we want to continue to serve Edgewater. We hope you agree. We will keep you up to date as this proceeds.

Thank you.

Bob Remer

President

Edgewater Historical Society and Museum

(1) enclosure

Statement of Facts About Lawsuit:

Statement of Facts About Lawsuit Re: 6018 N. Kenmore :

The Edgewater Historical Society and Museum, and four board members (Betty Mayian, Leroy Blommaert, Kathy Gemperle, and Thom Greene) have been sued by the owner of the single family property at 6018 N. Kenmore for allegedly illegally interfering with the sale of the property to a condominium developer; the plaintiff is seeking $1.15 million in damages.(1) This was subsequently reduced to $600,000 on June 23, 2009.

EHS had taken a position to support the land marking of the building which is “orange” rated according to the City of Chicago . Under the city’s landmark ordinance, an “orange” rated building is the second highest rating and allows certain legal protections including provisions for requesting delaying demolition permits.(2)

EHS had also supported a plan presented to the community by Alderman Smith that she received that had been developed by the City Department of Planning staff. That plan included the property at 6018 N. Kenmore in a Landmark District along with several other buildings in that vicinity. EHS and some other community organizations and individuals supported that proposal at the Alderman’s Zoning and Land Use Committee. The proposal failed.

Attorneys for EHS have filed motions to dismiss the lawsuit based on, among other reasons, the protections granted by the Citizen’s Participation Act (CPA) which was passed in 2007. CPA was passed to protect individuals and organizations from retaliatory and intimidating lawsuits, when legitimately expressing their first amendment rights in matters of zoning, development, etc. Sen. John Cullerton was the chief sponsor. The Act was supported by all the state legislators who represented Edgewater. (3)

EHS is being represented by attorney Richard F. Friedman and the law firm Neal & Leroy, LLC. All matters and discussions pertaining to the lawsuit are being handled by our attorneys.

Hearings on the motions to dismiss have been ongoing; we anticipate some resolution by the end of the summer.

Information on EHS and preservation efforts is available at www.edgewaterhistory.org.

The membership of EHS will be kept informed of the progress of the lawsuit.

Sincerely,

EHS Board of Directors

(1) Plaintiff Brigatta Riedel, Trustee of the Walter and Marie Kraemer Living Trust; filed on September 16, 2008.

(2)From Preservation Chicago Web site: When a demolition permit for a Red or Orange rated building is applied for, the Landmarks Commission is notified and the demolition permit is posted on the city’s public web site. Once posted, a 90-day hold is placed on the demolition permit, although the city may release the hold sooner, under certain circumstances. During that time, research of the historic and/or architectural merit is done to determine if the building should receive Landmark Protection. Alternatives to demolition can also be explored.

(3) Senator Ronen, and Representatives Osterman and Harris.


The Society has extremely limited financial resources, and does not have the financial wherewithal to survive this suit, even should it prevail. Anyone who would like to contribute with pro bono legal assistance or financial contributions is urged to contact the Edgewater Historical Society and Museum, 5358 N. Ashland Ave., Chicago, IL 60640. Tel: 773-506-4849

Community Meeting on Chicago's 2016 Olympic Bid

The Chicago 2016 Committee will hold a public hearing in the 49th Ward on Chicago's 2016 Olympic bid. 2016 Olympic Committee President, Lori Healey, will lead a presentation, and there will be time for questions and answers and comments from the community.

The meeting will be held at:

Wednesday, August 5
7:00 PM
Chicago Public Library
Rogers Park Branch
6907 N. Clark St. (Clark St. & Farwell)
Chicago, IL 60626

Tuesday, July 28, 2009

Renewable Energy: Not in Your Lifetime

Stoneleigh of the Automatic Earth blog has graciously granted me permission to reprint in its entirety her July 1 post, "Renewable Energy: Not in Your Lifetime." I have read hundreds of articles on various forms of renewable or "green" energy generation, including articles in scientific journals, but nothing I have read so clarifies the enormous complexity and technical challenges of energy generation and how extraordinarily challenging, and likely impossible, it will be to integrate the intermittent, diffuse, low-output, low EROEI forms of electrical power generation the Green movement is promoting, with our strained grid and the need for steady, high output. Everyone who has an interest in and a stake in the future of power generation needs to read this short article, which by itself does a better job of illustrating the difficulties in front of us than hundreds of other books and articles combined.

Here is Stoneleigh's view of the future of the electrical grid in connection with "alternative" energy forms such as wind and solar:

"Since it is the major world conundrum with the shortest timescale, I usually focus on finance here, but alternative energy sources and power systems are my day job. Ilargi suggested that, in response to a question about the potential for renewable energy and electric vehicles (EVs), I write an article on the future of power systems.

With people hanging so many of their hopes on an electric future, it seems timely to inject a dose of reality. This is meant as a cursory overview of some of the difficulties we are facing with regard to electrical power in the future. The extraordinary technical and organizational complexity of power systems is difficult to convey, and there is far more to it than I am attempting to address here.

First off: As we are entering a depression, within a few years hardly anyone will have the money to buy an EV. Second: the grid could not come close to handling the current transportation load even if EVs could become common. An economy based on EV transportation would have to be fueled by base-load nuclear that doesn't currently exist and would take decades to build, and no one builds anything in a depression.

What they do is mount a losing battle to maintain existing infrastructure and hope they don't lose too much before better times return. This depression will last long enough that the infrastructure degradation will be enormous, even without the impact of above ground events resulting from serious societal unrest. Attempts at recovery after deleveraging are going to hit a hard energy ceiling. Power systems are critical to the functioning of a modern economy, but are almost completely taken for granted. That will not be the case in a few short years.

Here in Ontario, Canada (pop.13 million), the provincial government has just passed the Green Energy Act, and renewable energy proponents are queuing up to sign 20-year feed-in tariff contracts for power generation at a premium rate per kWh (varying by technology and reaching a maximum of 80 cents/kWh for small-scale roof-top solar).

The general assumption is that we are well on our way to building a future of renewable energy powered smart grids that will be able to accommodate not only our current demand, but much of our transportation load as well, thanks to EVs.

Unfortunately, much of this techno-positivist vision is nothing but pie-in-the-sky, thanks to the limitations of the electrical grid, as well as the low EROEI of renewable energy, the effect of receding horizons on the prospects for scaling up renewable energy development and the impending deflationary collapse of the money supply.

Investment in grid infrastructure, as with public infrastructure of most other kinds, has been sadly neglected for a long time. Much of the existing grid equipment is at or near the end of its design life, as are many of the power plants we depend on. (For instance, in Ontario we haven't got around to paying for the last set of nuclear power plants we built, that are now approaching the end of design life and have had to be very expensively re-tubed in recent years.

The outstanding debt is some $40 billion, and the debt retirement charge we pay doesn't even cover the interest.) Liberalization in the electricity sector has led to a relentless whittling away of safety margins in many places. Where we once had a system with a great deal of resilience through redundancy, that is generally no longer the case. In North America we now have an aging system with a very limited capacity for accommodating either new generation or new load, and we have great difficulty building any new lines.

As the power system was designed under a central station model to carry power in one direction only, with high voltage transmission and low voltage distribution, the modifications that would be required to enable two-way traffic, especially at the distribution level, are very substantial. Comprehensive monitoring and two-way communication would be required down to the distribution level, with central control (dispatchability, or at least the power to disconnect) of large numbers of very small generators.

The level of complexity would be vastly higher than the existing system, where there are relatively few generators to control in order to balance supply and demand in real time, and maintain system parameters such a frequency and voltage within acceptable limits.



The image above conveys by analogy the essence of power system frequency control - the easiest parameter to visualize. Frequency must be maintained at a set level by balancing supply and demand over the entire AC system. There are 4 such systems in North America - the east, the west, Texas and Quebec - and each functions as a single giant machine. The trucks in the image are generators and the boulder they tow up the uneven hill represents variable load. The trucks must pull the boulder at an even speed despite the bumps.

For a more accurate representation, one would actually need additional trucks, some moving at the same speed waiting to pick up a line if one should be dropped (spinning reserve) and others parked by the side of the hill (standing reserve). Some of the trucks would have to be able to start the boulder moving again from a standing start if it should stop for any reason (black-start).

We are looking at a world where there would be many more trucks, but each would be much smaller, and some of them would only pull if the wind was blowing or the sun was shining. The difficulty of the task will increase exponentially, and frequency management is only one parameter that must be controlled.

The mismatch between renewable resource potential, load and grid capacity is considerable. Resource potential is often found in areas far from load, where the grid capacity is extremely limited. Developing this potential and attempting to transmit the resulting power with existing infrastructure to where it can be used would involve very high losses. Many rural areas are served by low voltage single phase lines, and the maximum generation size that can be connected under those circumstances is approximately 100kW.

Even where three-phase lines exist, so that larger generators can be connected, carrying the power at low voltage is particularly inefficient, as low voltage means high current, and losses are proportional to the square of the current. Building high-voltage transmission lines to serve relatively small amounts of renewable energy would be an exceptionally expensive and difficult proposition, especially in a capital constrained future.

Renewable energy generation far from load could amount to little more than a money generating scheme, as a premium rate will be paid from the public purse for the time being, but little of the power might reach anywhere it could actually be used.

Difficulties occur when generation proposed would amount to more than 50% of the minimum load on the feeder. At this threshold, special anti-islanding measures are required that add considerable cost to the grid connection. In North America, we have large geographical areas served by a network of long stringy feeders with very low load. Adding much of anything to this system will be very challenging.

In much of Europe, where renewable energy penetration is relatively high, the population density is high enough to be served by a three-phase grid composed of relatively short feeders with high loads. Many of the limitations faced by North America simply do not apply in places like Germany, Denmark or the Netherlands. The North American grid has more in common with rural Portugal or the Greek Islands.

In this province alone, the amount of grid construction required in order to connect our renewable potential with load would cost tens, if not hundreds, of billions of dollars, and it would take decades to build. The cost of building, installing and connecting the necessary power generation equipment would also be enormous, and we would have to maintain at least some of the large plants needed for power system control and ancillary services (rapid load-following adjustments for frequency management, spinning reserve, rapid-response standing reserve, black-start capability, provision of reactive power etc).

This will be difficult as many large plants are due for replacement, large power plants take many years to complete, conventional fuels are depleting and capital will be very limited. While demand destruction will build in a temporary supply cushion, the lack of maintenance and new construction, which will inevitably follow a lack of funds, will take a huge toll in relatively few years.

Far from a future of greater high-tech connectedness under a smart-grid model, where EVs would charge at night and cover both transportation needs and power storage, we are looking at a much more fragmented picture. We are very unlikely to see massive AC grids covering anything like the area they do now, and much less likely to see power carried over large distances.

Rural areas may well be cut off and will have to provide any power they need themselves (yet another example of the core preserving itself at the expense of the periphery). This will mean a drastic cut in demand to a third world level in many rural areas, and may lead to other areas with no power production, and no money to build any, being abandoned completely or reverting to a pioneer lifestyle.

In urban areas, where dispossessed rural people migrate in very hard times, electricity provision in places down on their luck could look more like this picture of a favela in Rio de Janeiro. It's a far cry from a neat and tidy high-tech vision of efficiency."





Many thanks to Stoneleigh and The Automatic Earth for this article.

Saturday, July 25, 2009

No Free Lunch: The Hidden Hazards and Costs of Renewable Energy

Whoever first said that "there's no such a thing as a free lunch" may not have been thinking of energy, but there aren't many fields where the trade-offs and offsets come into play with such a vengeance as in energy production.

Conventional nuclear power produces radioactive waste that remains highly toxic for tens of thousands of years. Solar leaches toxic chemicals into the water during the manufacture of the panels, and a solar plant that that generates 1 Gw (1000 Mw, or the capacity of one reactor at the Braidwood Nuclear facility) requires 8 square miles of space, based on the approximately 13% efficiency of modern solar panels. Wind power is noisy, and wind turbines can throw blades, at great hazard to any humans in the vicinity. Hydroelectric dams have been known to collapse, resulting in steep death tolls and widespread devastation- the collapse of the St. Francis Dam (Los Angeles) in 1928 killed nearly 500 people, and the Teton Dam (Idaho) in 1976 collapse killed 11.

And now it appears that deep-drill geothermal projects, the kind that involve drilling into deep rock, may cause earthqakes. Altarock Geothermal, one of the many "green" energy companies in which former Vice-President Al Gore has a significant financial stake, is planning on drilling into rock in an area two hours north of San Francisco, in one of the most seismically sensitive areas of the world, and intends to use the same method that former oilman Markus O. Haring used in 2006 in Basel, Switzerland and that triggered a 3.4 M earthquake, which was followed by thousands of smaller aftershocks. Altarock knew of this earthquake but did not disclose it on the report of potential seismic impact which they were required to submit prior to being given approval.

Given that there are significant hazards attached to all methods of energy production, this particular method seems to bear outsized risks in relation to the potential energy produced, and relative to other methods. San Francisco has been the site of a few catastrophic earthquakes in the past 100 years or so, most recently the disastrous 1989 Loma Prieta, and in view of the potential for major loss of human life and widespread property damage in the event of a major tremblor, and the very real possibility that a project like this could trigger such an event, it is astonishing that California authorities would consider permitting this project anywhere near San Francisco. In fact, it seems highly inapropriate to do such a drill anywhere along the fault-riddled and densely-populated Pacific coast at all in view of the known hazard.

Such is the power of religion- and the pursuit of "green" energy has become a religion, whose tenets are not to be questioned even in the face of a mountain of contrary evidence. The central tenet of the Green religion is that we can make a painless switch to "green" solar, wind, and thermal energy with no adjustment or rearranging of our lives and industry necessary. This belief would be touching were our future well-being, and possibly the very lives of tens of millions of us, not dependent on decisions being made now regarding the future of electrical power generation, and it is chilling to consider that these decisions are being made not on the basis of known facts, but by blind faith and wishful thinking.

In view of the known downside of many forms of renewable energy, it might be wise to slow the push to replace fossil fuel with "renewables" until objective risk assessments and costs analysis comparing the various forms of energy generation are made. Some renewable sources may be ideal for large-scale power generation, while others are better for "distributed" power- that is, on an extremely small scale, such as a household. Some may be so inherently costly that there is no hope that they can provide more than a tiny fraction of our power, while others may entail hazards that are unacceptable at any level of efficiency or cost.

Most of all, we need to relearn the concept of tradeoffs and price-paying. Energy generation is and has always been expensive and fraught with risk, even in the age of cheap fossil fuels that has just passed. We are now at the threshold of another era, one in which energy will be costlier and more difficult to generate in the amounts we need to supply our swollen populations with the level of comfort and amenity now considered minimal, and we are most likely going to be confronted with many difficult choices, each of which will have an outcome that is not exactly ideal.

So, what will we choose?

Will we choose methods of power generation that are capable of generating the kind of power we will need in the amounts we need and at a cost we can afford, to power our society in the face of growing demand and the need to convert our transportation to electricity as fossil fuels deplete, even if that means we must build more coal, nuclear, or gas-fired plants?

Or will we opt for solar, wind, and thermal, which will either be much costlier, have physical hazards that we are only beginning to grasp, and will most of all be so expensive and unreliable that 50% of our population will not be able to have reliable electricity at all?

Will we continue to build coal and gas-fired plants in spite of the known depletion of coal and gas, and the known environmental hazards of coal, to the detriment of nuclear development?

Does the potential loss of life due to nuclear power compare with the certain loss of life, steeply reduced lifespans, and widespread misery and poverty that will result from reversion to pre-technological lifestyles should a large portion of our population lose access to reliable electricity?

These are the choices we will have to make, and rather soon, and we'll have to decide just how steep a price in human misery-mass impoverishment, rampant epidemics, famines, steeply reduced lifespans, and random death on a mass scale- we are willing to pay to avoid assuming the necessary risks and making the requisite difficult adjustments we will have to make to retain the life-giving technological amenity we've enjoyed for the past century.

Tuesday, July 21, 2009

Repeal the Nuclear Moratorium

Efforts to repeal Illinois' 20-year-old moratorium on the construction of new nuclear power plants until arrangements are made for the permanent storage of highly toxic nuclear waste products, have stalled once more, even though the sponsor of HB2971, State Representative Jo Ann Osmond (R. 61st District) intends to re-introduce the bill next year. The bill faces strong opposition from the environmentalist movement, as well as the doubts and fears of a public imprinted by the partial meltdown at the Three Mile Island plant in Middletown, PA; and the level 7 disaster, the worst in the history of nuclear power generation, at the Soviet-designed and operated Chernobyl plant in Ukraine.

The exploitation of these two events by anti-nuclear activists, along with the wide-spread public ignorance of the risks, benefits, and costs of various sources of energy, have combined to create a hostile climate for the further development of nuclear power in the United States generally, but particularly in Illinois, which is ironic considering that this state is the crucible of civil nuclear power in this country, and is more dependent upon nuclear for electrical power than any other state.

Americans have allowed themselves to be lulled into dangerous complacency regarding energy supplies, thanks to current low oil and gas prices, and the more immediate threats to our well-being from the collapse of our financial system and resulting economic morass. The deepening recession has caused an immediate steep drop in demand for energy, with the result that prices for most energy sources have tanked, and concerns regarding our precarious energy situation have been shunted to the back burner.

This complacency could prove deadly in a very short time, as global demand for energy continues to increase rapidly, and other nations, notably the large, rapidly developing nations of Asia, compete with us for dwindling supplies of fossil fuels. The two most populous nations, India and China, are aggressively staking claims on future oil production and rapidly increasing their electrical generating capacity, while the OPEC nations sequester more of their supplies for their own use and other developing nations are catching up to the two Asian superpowers in industrial capacity and energy demand.

According to the International Energy Agency (IEA), countries around the world must build at least 32 nuclear power plants each year by 2050 in order to meet increasing demand for electricity. The United States will have to build about 30 large facilities just to replace its aging nuclear fleet and stay even with current demand. Additionally, if we are to convert our transportation to electrical power on the time table dictated by global depletion of liquid fuels and the subsequent rapid increase in fuel prices that will result, we will have to increase our generating power substantially, and we don't have forever to do it before increasing fuel prices render the project unaffordable.

Americans, however, are apt to rest easy, for we are so accustomed to a plentitude of cheap energy, and already have enough electrical generating capacity in place to meet current demand, so the peaking of oil production seems to many of our political and business leaders to be a distant threat at worst, given the current temporary gasoline glut and falling demand. Additionally, we have immense reserves of coal, and natural gas is still plentiful and its production peak lies several years out.

Worse, though, is our sanguine assumption that "renewables" will offset the reduction of oil, and eventually gas, and that we can make an easy and seamless transition to solar, hydro, and wind with no loss of amenity and no re-arrangeing of our lifestyles, industry, or commerce necessary. This dangerous fiction is driving U. S. energy policies, as articulated by Chairman Jon Wellinghoff of the Federal Energy Regulatory Commission, who stated with great certainty that no new nuclear or coal plants will ever be needed again in the U.S. and that renewables like wind, solar and biomass will provide enough energy to meet baseload capacity and future energy demands and that nuclear and coal plants are "too expensive".

This is a very scary utterance, coming as it does from the mouth of the man who has the power to determine the direction of energy development in this country, and it has life or death implications for 310 million people, a large fraction of whom could find themselves unable to afford electricity in any form on any terms, if we fail to keep up with the increase in demand and to offset the loss of fossil fuels. Steep and rapid reduction in the availability of fossil fuels could force many tens of millions of people out of cars and onto public transit, causing a massive surge in demand for electrical power that cannot conceivably be met by renewables in their current state of development, and it's most unlikely that these diffuse and intermittent forms of energy will ever supply more than a small fraction of current demand, let alone meet future increases in demand. Moreover, a massive surge in demand concurrent with conversion to coal for generation would reduce our coal reserves from a 250 year supply, which estimate is based on current demand, to a 50 year supply if use of coal should increase by even 5% yearly.

Anti-nuclear activists claim that the expense of building and operating nuclear plants exceeds that of most renewables. Their comparisons are based on the extremely high costs of Generation 1 light water reactors, the first generation of plants constructed. Nuclear power was a pioneering technology during the decades these plants went up, and like all new technologies, was costly, clunky, and tricky to operate. Down time was frequent. The plants were custom built down to the last reinforcement rod, which resulted in long construction delays and massive cost overruns. Surprises were frequent. Generation 2 plants incorporated new and refined technologies that reduced both construction costs and down time, and included vasty improved safety features. Generation 3 reactors incorporate many mass-produced parts, realizing steep reductions in costs and in construction time, and are vastly safer than their predecessors.

Moreover, the newest nuclear technology, developed 30 years ago and now commercially viable, the Liquid Flouride Thorium Reactor, is a vast advance on even the newest and most advanced light water reactors. This nuclear technology uses thorium, which is abundant, instead of uranium 235, which is depleting rapidly. It is an inherently safe technology and produces fissionable by-products that can extend the fuel cyle hundreds of years and that cannot be used to produce nuclear weapons. The reactors are small and are to be mass-produced in factories, requiring a lesser skill set, thus saving labor costs, and can be transported to the site by truck or rail. Several units can be combined at a particular site to provide power for larger communities.

This is not to say that renewables should be abandoned. But at this point, renewable sources either don't "scale" to the power needs of large populations, or will not work in many locations due to climate or topography- unless that population is to give up most of the basic improvements in lifestyle of the past century, including advanced sanitation, motorized transportation in any form, and regular electricity available 24 hours per day.

The quality of our lives, and possibly whether or not a large percentage of us will even be able to survive at all, depends upon decisions being made now regarding the funding of energy research and development, and the regulation of the industry. The decision to foreclose any future development of an energy source that is potentially can provide more power for many more years into the future with minimal pollution, will have tragic consequences for millions of people, including me and most likely you as well.

We can't afford to not to build more nuclear reactors, and we need to pressure our representatives to repeal the nuclear moratorium in Illinois and hope that other states do likewise.

Friday, July 17, 2009

The Continuing Crisis- Buy a $3.5 Million House With No Down and No Income Verification

Anybody who thinks that the air is out of the housing bubble or that there is any end in sight to the financial debacle need only follow the title link to the real estate listing for a mansion in the pricey Hollywood Hills neighborhood in Los Angeles.

Here is the proof that the trillions of dollars worth of interventions and bailouts promulgated by the federal government over the past two years not only will fail of their stated purpose, but create more problems of the same type they purport to solve. Worse, the people who created the debacle will continue to be rewarded for their criminality and insanity at the expense of the population at large, and the biggest losers of all will be the prudent and responsible.

Yes, this 8,000 sq. ft. palace can be purchased with no money down and no income verification ("liar loan"). Here is the text from the Redfin listing:

BANK OWNED LANDMARK ESTATE IN HOLLYWOOD HILLS! Financing available w/NO INCOME VERIFICATION! Move right in & live like a king w/ 360 degree views of the entire city! Move-in condition & the pride of the previous owner. Privately gated, well cared for & approx. 8,000 sq ft w/ 5 bdrms, 2 master suites, office, library, media, office, maids, bonus rooms, 3 car garage, lg motor court. Bank says sell & will help you buy it! Move in quickly without the hassle of finding a bank to approve your loan!

Is this for real? If it is, then we are in worse trouble than we thought, and we can count on many more foreclosures, many more failed banks, and many trillions of dollars more for bailing them out. There's no way this house would be advertised in this fashion if sensible lending standards were being enforced.

Instead, we are now ramping up for the next big wave of defaults and foreclosures. All the various housing rescue programs and financial bailouts have accomplished is to insulate the financial houses from the results of their lunacy and malfeasance, while providing the financing for the next wave of unrepayable mortgages. Right now, the FHA is underwriting loans for 4X the buyer's income, with 3.5% down-95% of all home loans for moderate-priced housing are now FHA insured. And, as we can see from this, the worst lending practices have not ceased. And why should they? Our authorities have done nothing to tighten lending standards or impose regulations that might prevent a repeat of the past 10 years. Instead, they're pulling out every stop to revive the credit-creation machine and bubble economy of the 2000s.

The situation is so hopeless and our leadership so corrupt and clueless that in my weaker moments, I'm tempted just to acquiesce to the Zeitgeist of the times and Get Mine. I mean, why am I sitting here struggling to pay off my credit card debt while my hours and pay are chopped, and my job possibly will not exist by the end of the year, when I could do what the people involved in this house are clearly doing, which is setting up a straw deal to defraud the mortgage lender, whose agent is probably in on the deal and in line for a "consideration" from it. Obviously, I can still get any kind of mortgage I want for any kind of property, and the lenders are clearly not concerned with potential losses, because the U.S. Treasury is picking up the tab for them.

So why should I let a few bills, a shrinking paycheck, and the possibility of job loss deflect me from enjoying the lifestyle I so richly deserve? Why should I not lie about my income? Why should I not just get a $4.4 M liar loan with $500K cash back at the closing so I can quit my crappy job and spend a year or two living a fantasy lifestyle rent-free- for if they'll get me a $3.9 M liar loan why not $4.4M? I'm not going to be able to pay back $3.9M any faster than $4.4M, and given that there are more foreclosures in front of us than behind us, it will take the the lender at least a year of non-payment on my part to even file an NOD, and another few months to serve it on me, and then at least another year to go through all the other stages of the process. In the meantime, I'll have $500K to live on, which will free me from having to work for a living and give me cash for a few shopping sprees at the all the trendy stores, because I'm sure sick of shopping in consignment stores in Edgewater.

Jeez, I could even buy a CAR. I want a Tesla Roadster. Why not? All things are possible with the magic of the NINJA loan, thanks to the hundreds of billions of dollars in TARP and TARF funds shovelled into our financial system.

Sounds like a great vacation to me, if you don't consider the possible tax consequences pursuant to the cash back. And when it's over, I can just file bankruptcy. And anyway, there are so many millions of people out here who also got and spent hundreds of thousands of dollars via equity extractions that they can't pay back and strictly speaking owe taxes on, that it will take the IRS forever and a day to get to me, and I'm sure the bankruptcy receivers won't make me give back the Sonia Rykiel sweaters or the $45,000 Hermes croc Birken bag.

That's if there still are any receivers, or process servers, or banks, remaining, which is pretty doubtful considering the situation that is becoming manifest as the unravelling of the global economy speeds up, and our government wonks just keep promoting and subsidizing more of the crap that created this debacle to begin with.

Because, if this is how the bailout is working, and this is what's possible under the new, "reformed" financial regulations, then there will so many defaulting jumbo loans and commercial loans, and so many vacant mansions, condos, houses, apartments, shopping centers, and office buildings, I'll be able to squat in the place indefinately, and my only problem will be where to find food and how to get around in a country where the grocery store shelves are not being replenished and we can no longer afford to buy the oil we need for the most basic services and operations of our fragile, energy-dependent society- which will no longer exist.

This is the kind of thing I think of when I read of three orphans and their gaurdian being evicted from a junk apartment in the Northpoint apartment building because of the death of the kid's grandmother, who was the legal lessee. A couple of commenters on Craig Gernhart's blog, who are clearly oblivious to what's taking place around us at every level of our economy, stated that they didn't think their tax money should have to pay for housing for these orphaned children. Well, they need to see what their tax money is paying for.

We're being stripped of our remaining wealth out to guarantee the profits of the members of the Financial Kleptocracy, and to insulate them from any risk. Our system of taxation and network of subsidies and incentives is now set up to funnel as much tax money as possible to the perpetrators of financial fraud, while services we badly need, such as minimal support for orphaned or abused children, are decimated, and the industries and technologies that could rebuild our economy and provide us with the advanced technologies we will need to retain a reasonably comfortable life in a fuel-short future, are still-born for lack of investment capital.






Thursday, July 16, 2009

Our Cities are Murdered by Federal Policy:Cities Lose Out on Stimulus Funds

The allocation of federal "economic stimulus" funds under Obama's stimulus package is a case study in the tendancy of overly centralized authorities to misallocate money and resources from those who paid for them, are most needy of them, and can best utilize them, to unproductive and wasteful uses and economic dead ends.

Since World War Two, public policy at the federal and state levels alike has constituted one long economic assault on our major cities in favor of remote rural areas that are sparsely populated and supply a fraction of the tax revenues to either the U.S. treasury or state coffers. For the past 60 years, the old industrial powerhouses of the northeast and midwest- New York City, Chicago, Detroit, St. Louis, Newark, Boston, Gary, Indianapolis, Milwaukee, Pittsburgh, and other centers of industry and commerce, with their advantageous locations on major waterways and proximity to fertile hinterlands- have been quite systematically plundered to fund projects that were designed to empty them of population and rob them of the wealth they generated, to build cities in the desert and to steer the population from city centers to remote, auto-dependent suburbs. Their wealth funded the interstate highway system that destroyed their physical cohesion and funneled their population to remote auto-dependent suburbs,and to cities that would scarcely exist without this massive auto subsidy, as well as to the pharaonic water diversion projects funded by the country at large so as to make life possible in climates that would otherwise be unfit for human habitation, such as the deserts of the Southwest.

The allocation of federal transportation stimulus funds is following this destructive tradition. According to an analysis by the New York Times, while two-thirds of our citizens live in the 100 largest metropolitan areas and three quarters of the nation's economic activity takes place in them, these cities and their metropolitan areas are getting less than half of the funds from the pot of transportation stimulus money provided by Obama's stimulus package.

The article quotes Owen D. Gutfreund, an assistant professor of Urban Planning at the City University of New York and author of 20th Century Sprawl: Highways and the Reshaping of the American Landscape: “We have a long history of shortchanging cities and metropolitan areas and allocating transportation money to places where few people live.” This is no doubt due to the bias that Americans have against urban life even though that is the life that most of us live.

Thus, the wealth of the country is being diverted from the people and places that produce it to places that produce very little, for just as most of our population lives in major metroplexes, most of our economic activity takes place in them and most of our tax revenues are generated by them. Taxes paid by Chicago and New York City, two of the nation's largest taxpayers, as well as other major urban areas, have been diverted away from these places to places that produce very little activity or tax revenues.

In this fashion, urban areas are forced to subsidize their own destruction. As cities lose federal taxes they have paid to underpopulated areas, they are forced to raise taxes and fees stseeply at the local level to offset the loss, which is one of the reasons that New York City, Chicago, and other large cities are burdened with such steep local taxes. This is not to dismiss the role of political corruption here in Cook County as a driver of expenses and taxes, but there can be no doubt that the routine fleecing of our major cities for the benefit of first, the suburbs, and then of sparsely populated states that contribute little in taxes, has been a major factor in the decimation of our older cities.

This destructive process is replicated at the state level, as most of the stimulus funds are given to the states, which tend also to allocate disproportionate benefits to sparsely populated rural counties at the expense of the large towns and cities that contain most of the population, generate most of the tax revenues, and have the greatest need of the road funds due to their congestion and heavy traffic.

Additionally, the power of our authorities to allocate vast sums of money at their total discretion has created a highway system of such a size as to be economically unsustainable in the best of times; 5.7 million miles to be exact. While most people view such an "accident" as the collapse of the interstate bridge in Minneapolis as an isolated event, it should really be regarded as the "canary in the coal mine", a sign of early-stage system failure which will become unmaneagable and catastrophic as we struggle to work out trillions of dollars of bad debt against a backdrop of a contracting economy and permanent fossil fuel depletion.

And these failures will be much costlier and effect the lives of many more people because they will be taking place in the cash-starved urban centers that are being robbed of the wherewithal to maintain their highways, roads, sewers, water mains, and other essential infrastructure as well as lifeline services such as police and fire protection. Worse, while a bridge failure, say, in a remote county with a population of 20,000 people is surely a tragic event, infrastructure failure in a city like Chicago can mean millions of people exposed to injury, disease, and death as essential systems fail.

The surest corrective to the anti-urban policies of the past 60 years would be restore the free market to endeavors that have usually been considered the proper purvue of government authorities, such as the financing and construction of limited-access high-speed roads and bridges, while limiting government authority to surface roads necessary for basic transport. Starting now, we could fund interstate repairs by means of tolls, and roads that did not generate sufficient toll to pay their maintenance costs could be triaged, or reduced in width to those lanes necessary to facilitate the maintenance of the electric grid.

But that will take a long time if ever we can make it happen. So the only thing we can do in the meantime is to light fires under our elected officials, from our senators and congressional representatives in Washington D.C. and the state house, and pressure them to work for the people who elected them and make sure that the Chicago area gets its fair share.

Sunday, July 12, 2009

Is Public Policy an Obstacle to Privately Owned High Speed Rail?

Could a high speed rail system be built and operated at a profit by a strictly private concern? And, if so, why has it not been built and what is obstructing it?

Private banker Marilyn M. Barnewall discusses the possibility of a nation-wide high-speed rail system built by private capital to operate profitably without any sort of tax subsidies or support. Ms. Barnewall states in her article, "There is an alternative to having government build America’s high speed rail system. A private company has offered a high speed rail deal to the government – years ago. The deal offers high speed rail, not just “faster trains.” It promises to use no taxpayer funds. I repeat, no taxpayer money… just private capital."

Ms. Barnewall goes on:
"The offer says the company will: “Build and PAY without liens or encumbrances a total and complete Hi-Speed Bullet type domestic railroad system, based on existing Japanese/Chinese and/or other alternatives.” The offer further states the company will use American employees, suppliers and fabricators. The plans are thorough. Attention has even been paid to using high speed rail for emergency evacuations… what a difference that could have made for Katrina victims!

I was highly intrigued by this, and wrote to Ms. Barnewall to seek more information regarding the identity of the company and the specifics of its plan, including costs and technology. She sent me back a courteous reply stating that at this time, the identity of the company has to remain confidential, but offered to forward my name to the company so that I could receive mailings from them.

I don't doubt the statements of this prestigious private banker. For, after all, the United States once had a passenger rail system that was the envy of the world and was made up of hundreds of lines operated by dozens of carriers, large and small, whose principal purpose for being in business was to make a profit. In the 1920s, speeds of 100 MPH were commonplace, and our Midwestern cities were major rail hubs from which ran hundreds of trains daily, and they ran frequently and on time. So the pertinent question is, not how it is possible to operate a passenger railroad profitably, but rather, how and why did our railroads fail to begin with?

More important, if indeed it is possible to operate a high-speed passenger railroad profitably in the United States, why is no one doing it right now, and why are we discussing allocating tens of billions of dollars of government money toward building a government-run high-speed railroad, to be operated by none other than Amtrak?

Most of all, if a company is able to contemplate such an investment and desires to do so, what's obstructing it? And why is it necessary to work with the federal government? If investors perceive a market for an indispensable service, calculate that they can compete where the heavily-subsidized but still failing airlines cannot, and wish to place their own money at risk for an extended time horizon of many decades to make it happen, why are they being obstructed?

That this company is being actively obstructed, or at least doesn't have the clearance it needs to go forward, is obvious. Ms. Barnewell states that the company has "offered a high speed rail deal to the government- years ago." That's interesting, because never, during either the Republican administration that just passed on nor in the previous Democratic administration, did I read anywhere, in my eager searches for anything pertaining, of any private entity that could or would enter into such a project.

So we have to ask just what our leaders and their crony capitalists have to gain by suppressing the development of modern, efficient rail while allocating lavish subsidies to the fuel-guzzling, rapidly failing air carriers, who receive in excess of $14 Billion annually in federal subsidies, and pouring nearly $100 Billion more into rescuing the Detroit automakers who refused to adjust to changing market conditions and proved unable to generate technology and products in keeping with changing consumer demand, and have steadfastly clung to outdated business models and turned out inferior products ever since .

What conclusions can we draw from the lavish government support of failing, outdated, and parasitical enterprises alongside the aggressive obstruction of new industries manufacturing the products and services we need and want now, and will need desperately as we progress further into the twilight of the Age of Oil? Why is our "progressive" Democratic administration, just like the "regressive" Republican administration before it, throwing its policy-making weight, and trillions of dollars of tax revenues into supporting industries that are dying precisely because they have no purpose in an era of energy scarcity, and are impediments to developing the technologies and systems that we will need in order enjoy something like current levels of technological amenity?

For that is what "market signals" are increasingly telling us- that we are going to have to re-organize our transportation and other living arrangements drastically to retain our present level of comfort and be able to make a living in an economic landscape greatly altered by the loss of cheap energy. This company and its plans are a Free Market response to the growing scarcity of fossil fuels and the necessity to rebuild our rail system to replace both passenger air travel and heavy auto dependence as well as long-distance trucking, all of which will become impossible as liquid fuels become more expensive.

So, we have to conclude that our government not only will not supply the leadership necessary to mediate the transition from energy abundance to energy scarcity, but will be the most important obstacle to the adjustments, large and small, that we will have to make if we hope to manage this epochal shift with our lives and our civilization intact. We will have to build new industries and re-organize our lives completely, from the way we inhabit our land and the way we make a living, travel, and do and make just about everything else, in the face of government obstruction financed by bigger chunks out of our paychecks in the form of higher taxes at every level, in order to support the very things that have created our largest economic problems and the industries that cannot support themselves any longer because they are based on waste and require ever-larger supplies of fossil fuels, and have been possible only by the reckless extension of credit over the past twenty five years, mainly the FIRE economy, the creation of suburban sprawl, and total dependence on automobile and air transport.

We can also figure that our leaders no longer really care if we make it out here or not and that our federal government has become a conduit between the taxpayers, and Goldman Sachs and other members of the Crony Oligarchy, as we are forced to support with our taxes the large financial firms that engineered the collapse of our financial system as well as the wasteful and sadly obsolete Detroit automobile makers, and finance the construction of more highways that will be utterly unnecessary in coming years and whose construction and maintenance is environmentally destructive and a serious drain on our financial resources now; and we are supporting the construction of more unnecessary and unsalable houses in the exurban wastelands that are rapidly losing value and utility even now, under the auspices of the FHA, while financing the next wave of bad loans to under-qualified borrowers.

Yet we are, as a nation, sold on the notion that only government policy makers can solve our economic problems or supply the solutions to our current economic problems or the leadership necessary to transition to a new energy regime. Well, the evidence increasingly indicates that not only can our political leaders and multiple bureaucracies not help us here, but that they are the biggest part of the problem, mainly by their ability to impose broad, sweeping policies that support and reinforce obsolete and wasteful industries and practices, and whose disastrous results cascade and amplify down through decades.

However, we're stuck with the current situation for the time being, which is that any major industrial project has to have the approval of policy makers and clear a path through layers of obstruction, including the airline and auto lobbies as well as layers of bureaucracy and regulatory obstruction put into place 50 years ago with the aim of destroying our passenger railways. If we want to see a privately-financed high-speed network built instead of throwing good money after bad and funding a government-operated system with the waste and incompetence we have come to expect, we can pressure our legislators and senators at the federal and state levels both to remove legal obstructions to private rail development and let this system be built.



Tuesday, July 7, 2009

High Speed Rail: Do We Really Need 220 MPH Trains?

According to a feasibility analysis that has just been published by the Midwest High Speed Rail Association, trains running as fast as 220 MPH between Chicago and St. Louis are doable. The Association pegs the cost at $11.5 Billion in 2012 dollars, not including new trains or maintenance facilities.

A plan to run service at 110 MPH, which would reduce the trip on the current route to 4 hours, would cost only $2 Billion.

At first blush, this is very good news. I use Amtrak to travel to St. Louis frequently, and right now, rail travel between the two cities often takes six hours and involves several miles of single-track operation on badly-maintained track belonging to freight carriers, and frequent delays from standing on a siding for 20 minutes to let another train pass. Additionally, service is infrequent, even though more trips have been added to meet the greatly increased demand. Right now,though, it's easier to catch a plane to St. Louis than it is public transit to many Chicago suburbs.

The trouble with most plans for rebuilding the U.S. rail system is that proponents just can't leave the words "high speed" out of it. The idea, of course, is to make rail competitive with air travel, and promoters are looking at the example set by Europe and Japan. What many people are not looking at is the cost of the super-high speed service in France and Japan, and the doubts that exist regarding the sustainability of these systems, given expense involved, especially as fossil fuels become scarcer.

Note that the cost of building a true high-speed system that runs at more than 200 MPH is at least five times the cost of a line that runs at 110 MPH. Can we really justify this massive difference in cost when we are confronted with so many critical needs at the same time we are also facing a terminal decline in fossil fuel supplies and the workout of trillions of dollars of bad debt?

A train does not need to run at 200 MPH to be competitive with a plane that flies at 325 MPH, even when travel-time is the only consideration, for flying time includes many hours on the ground: the trip to and from the airport, time spent checking in and going through multiple security checkpoints. These major time-wasters can add four hours to the time spent in-flight.

Grandiose programs involving major technological upgrades and much less fuel efficiency ought to be reconsidered in favor of more practical plans that might actually be feasible within a few years and whose cheaper cost might make the difference between a system that covers all cities and major towns, and runs frequently enough to be a reasonable alternative to air and auto travel, as opposed to one that is very flashy, but too expensive to build and operate to provide extensive, reliable, and frequent service. We arguably don't need a high-tech showcase that is so expensive to build and operate that there is no chance it can ever operate profitably, and will end up being just as intermittent and unreliable as the sad service we have now. If the fuel usage and operating costs approach those of our airlines, which are failing rapidly in spite of receiving $14 Billion a year in government subsidies, then it is clearly unworkable.

The U.S. rail system of the early 20th century was the envy of the world, and private carriers were able to run profitable operations running trains at 100 MPH during the 1920s, while providing a level of luxury and creature comfort that has never been equaled by the airlines. If we could once more have railroads that operated as well and efficiently as those of that era did, we'd be well off, and it matters more to have frequent, reliable service to all cities and major towns, than it does a glittering showcase that serves few people relative to its cost.

The focus on grandiose plans to the detriment of what is practical and proven is typical of development driven by government policy rather than private enterprise that has to respond to market demands in order to survive. Instead of diverting part of the outrageous subsidies for highways and airlines to Amtrak, we would do better to remove regulatory obstructions that now strangle our railroads, and level the playing field between the various modes of transportation so that we can clearly see which is more economical and efficacious, by rolling back the subsidies that are keeping our airlines aloft and maintaining our monopolized passenger rail.

Monday, July 6, 2009

Shooting at 6549 N. Lakewood

A 19-year-old man was shot in the buttocks at 6549 N. Lakewood, in Rogers Park, on Saturday night. His current condition is unknown.

How many shootings does this make in Rogers Park for the year so far?

Friday, July 3, 2009

The Olympics Financial Time Bomb

Crain's Chicago Business, in this week's issue has very helpfully clarified the point that anti-Olympics activists have been trying to get across to the entertainment-obsessed moron supporters of the idiotic Olympics 2016, which is, in short, that we are being lied to about the cost of the games to the public, that they will be vastly more costly than advertised, and that the public will bear most or all the costs, inasmuch as Chicago must pledge to cover any costs that the private sector won't.

First, the costs that the supporters admit to keep mounting. First, the games were to cost only $700 million at the most. Then, the costs were to be capped at $2 billion or so, never mind that they ended up costing Bejing over $40 Billion, and London regrets its decision to bid for the 2012 games because the costs have run over $20 billion to the city so far. Now, according to Crain's, "With as many as 3,000 units, the proposed South Side housing complex is the single costliest item in the $4.8 Billion Olympic budget. Chicago expects private developers to pick up the construction tab, betting that they'll profit by converting the buildings to apartments and condominiums afterwards."

HUH? I mean, but the last damn thing that Chicago developers want or need is 3,000 more condos and apartments to sell or rent to a sinking midde-to-upper middle-income population in the most glutted real estate market in history , in the worst economic downturn since the Great Depression. Does anyone seriously believe that developers will want more inventory than they already have? Does anyone really believe that the Village will not be built at the expense of the taxpayers, and at the expense to the 10,000 or so poor people whose lives will be disrupted as they are forced out of the Washington Park area to make room for the games? Chicago is glutted with unsold condos, many of which are upper-bracket units in new highrises in south Streeterville, the Near North Side, and other prime neighborhoods. The city is awash in condo foreclosures. The South Loop is an absolute disaster area comparable to Miami. But, according to the supporters of the bid, developers here will just leap at the chance to develop more condos and apartments, and that buyers will be lined up to buy or rent

Did anybody tell Daley about all this, and that we're in the middle of the unwinding of the biggest credit swindle that was ever foisted on humanity in the history of the world? We are only one leg down, and there are more foreclosures, developer foreclosures in front of us than behind us, if the record number of Notices of Default (the first stage of foreclosure) is any indication. And these will be much bigger defaults, for the commercial credit is just beginning to unravel, and the shuttered shopping malls and half-completed apartment and condo developments are stacking up allover Chicago and its suburbs.

Will all these bankrupt or struggling developers who are already up to their ears in all this crap be willing or able to finance the construction of Olympic Village? And, anyway, developers don't expect to have to support stuff like this. They expect to be supported by stuff like this. They expect to be guaranteed against business risk by TIF districts and tax abatements and other crony inducements. Anybody who thinks that private developers, if any remain who are solvent, are going to volunteer to pick up a tab that the city has already pledged to meet, is too naive to be let out alone at night.

Philip Owen, former mayor of Vancouver, is quoted. "You'd better get your checkbook, " he says, "you're going to need a lot of cash. There are always a lot of surprises." Vancouver is another city that regrets having bid the games.

Daley has decided to provide a blanket guarantee to cover operating losses incurred by private developers and businesses for the 2016 games, a decision few of our aldermen disputed and one that most of the real stakeholders- the taxpayers of Chicago- had no voice in. So much for all the assurances that this event won't cost the taxpayers a dime. Given that funding for new commercial development has collapsed and that the work0ut of the trillions of dollars of bad debt sitting on the books of failing banks will probably take another five years at least, and that most of it will never be recovered, it seems unlikely that any developer is going to be able to get financed for a risk like this, and that the public will surely be picking up the cost.

At this time, 70% of the residents of Chicago support the bid, according to polls. That's no surprise. American people are very childish and love big spectacles and love feeling like they live in the most important city on the planet, and, like most children, do not count the costs, or connect the dots between massive financial commitments reaching far into the future, on top of an already strained city budget; and our escalating taxes and fees, our hostile business climate and the continuing exit of businesses from the city to places where they are obstructed less and taxed less, and the continuing deterioration of lifeline services such as police protection, public transit, and infrastructure maintenance.

And this is not the only massive project Daley is trying to shove down our throats. The north lakefront infill with an extension of the outer drive and the construction of a marina in Edgewater or Rogers Park, is still alive. This is something Daley has wanted for a long time, and he's not about to be deflected from it by the vehement opposition of residents in affected neighborhoods of Edgewater, Rogers Park, and Evanston, nor do considerations such as the decreasing number of boat owners and the effect of a marina on lake pollution, weigh with him and his supporters; nor does the minimum cost of $400 million.

Daley and our aldermen are pledging away the money we will need to maintain and rebuild our decrepit infastructure, fund our undermanned and outgunned police force, and otherwise maintain the services we need in order for the city to function and its denizens live decently and safely on a day to day basis- all for unnecessary "vanity" projects and grand circuses that few of our citizens will be able to even attend, let alone capture any economic benefit from. The economic benefits will accrue to the developers and crony businessmen who will be guaranteed against all normal business risk.

There is not much time left to topple this inane and hideously costly project. We who oppose this project need to get busy, and apply pressure not only to our local pols, but to the people who run the games, such as Prince Albert of Monoco, who is one of the members of the International Olympic Committee. These people need to know that Chicago has neither the money nor the infrastructure to support this event.

And so do our leaders and our citizens.