Friday, January 14, 2011

What if Your House Was on Fire and Nobody Came: How to Collapse a Major City

What if your house caught fire and the CFD did not respond?

Because, maybe, they didn't respond because nobody was at work. And they weren't at work because they didn't get their last paychecks. 

Or, maybe, the city couldn't pay the fuel bill for the fire trucks and other emergency vehicles, and was out of fuel.

Most Chicagoans can't even imagine it. Most of this city's denizens can't imagine a city where the street lights are off on most streets on alternating nights because the city is having problems paying its power bill, or where the police take 15 minutes to respond to a call from a mugging victim who is sitting on the sidewalk bleeding, because there are only nine officers manning a district of 6 square miles and they were all busy dealing with the mayhem in just two blocks of the district. Or where a foot of raw sewage is allowed to stand for months on end, or where a dead body is allowed to lie on a main thoroughfare for 4 hours in July, because the city's first responders are stretched so thin that no one had time to get over to pick it up.

These are the things that I've witnessed in failing cities and that happen when a city starts to unravel financially, and everyone with resources and prospects starts to leave. The taxes escalate while services are reduced, in the usual vicious downward spiral, thus driving out more businesses and more residents. Eventually, after a few decades, all that remain are people too poor to support anything, and the corrupt politicians and street criminals who build their careers on exploiting them.

I received my first lesson in how civilization collapses on the evening that I sat at dinner on the River Queen in St. Louis, celebrating my birthday back in 1970, and we watched a building in East St. Louis burn down directly across the river from where the boat was docked, while the fire department did not respond for forty minutes after the place began to smoke and burn. The structure was a fine old warehouse that appeared to have been built sometime in the 1920s. Halfway through dinner, we noticed dark smoke pouring out of the basement windows. Then, about 15 minutes later, flames started to flicker behind first-story windows, but there was still no response from the local fire department. Another half hour passed and the immense seven-story building was fully involved by the time 2 fire trucks showed up, and no more trucks came. The firefighters, who were way too few for the job at hand, could only stand and watch the inferno as the flames leaped out of the roof, and portions of the building started to collapse. This drama was repeated many times over the next few decades, as that city spiraled into complete destitution, as anyone who had any prospects elsewhere fled the place... and the same process has played itself out in a number of American cities since: Detroit, Cleveland, Newark, St. Louis, Memphis, Rochester.... places that look, as one Brit diplomat remarked about St. Louis, like the victims of saturation bombing.

Many people will say that you can't compare a huge, wealthy international city like Chicago to these failed cities. They forget that places like Cleveland and St. Louis, or even Rochester and East St. Louis and Camden, were not always destitute backwaters with staggering violent crime rates and miles of abandoned, wrecked buildings. Before 1900, St. Louis was a wealthier city than Chicago, with a much larger GDP, and the largest rail hub in the world. Newark and E. St. Louis were prosperous manufacturing centers, and most of the appliances people bought for their houses were manufactured in Cleveland or Akron.

Chicago may still glitter with affluence, and we are suffering rather less in this deep recession than other locales. Our unemployment rate is somewhat lower than that of other major cities, and we are not seeing the widespread destitution so prevalent in other places. However, thanks to the diversion of hundreds of millions of dollars in tax revenues to subsidies for private purposes, including for businesses that will only come here if lured by a multi-million dollar subsidy, our city has been destroyed financially and is ranked by Forbes Magazine as one of the 18 cities most likely to go bankrupt in 2011. We will almost surely have to raise taxes simply to maintain our essential services and emergency response at current reduced levels, and many necessary improvements and upgrades to essential infrastructure are proceeding very slowly or being deferred altogether as the city struggles with steep budgetary shortfalls.

In such a context, it's difficult to see how we can afford still more diversions of public money,such as the proposed 49th Ward RIF, or $200M in funding to renovate privately-owned Wrigley Field;  and it's even more difficult to understand why so few of our candidates in the 2011 municipal elections are addressing the city's fiscal problems. Among aldermanic candidates, only one candidate, Phil Bernstein, candidate for Alderman in the 48th Ward, has addressed the city's financial problems, and no mayoral candidates have. Worse, the voting population seems unconcerned, with various constituencies each clamoring for its share of tax-funded "gimmes"- for tax credits for "green" energy, for funds to fix up rental apartments, for a new 850-unit luxury condo high rise development in one of the most glutted condo markets in the country, for new strip malls, for "affordable" housing, for hugely wealthy sports team owners, and for whatever else someone can stretch the definition of "public purpose" to justify.

These diversions, added to extant tax-funded boondoggles, will greatly compromise this city's ability to meet its basic needs as matters stand at the moment. The budget for 2011, remember, was only balanced by using most of the money the city was paid for the parking meter concession; and we should keep in mind that with that money, the city promised JP Morgan a given level of revenues and assumed the obligation to offset any deficiencies in meter revenues. This means that we not only have no way to balance the budget in 2012 without either steeply raising taxes, specifically property taxes, and/or making steep cuts in services.

This begs the question of just how we will cope when fuel costs double or triple from current levels, which looks like it could easily happen when we start down the slope of depletion in earnest. That could be very soon, and in fact looks to happen in 2012, when energy analysts predict that global oil production will fall 5%. Many believe that we are now on the downslope from the peaking of global production, which occurred in 2005. This augers much steeper fuel prices from 2012 forward, and I personally expect oil to establish a new floor of about $150 a barrel by that time. A major hike in fuel prices would cause the expense of such things as fuel for our emergency vehicles, and basic infrastructure repair and replacement, to skyrocket, and it's extremely likely that Chicago would not be able to pay for these things. That, of course, would mean critical and cascading failures of essential infrastructure, and basic, life-support services reduced to skeletal levels, endangering the lives and health of the city's 2.9 million residents, and those of residents in near suburbs that rely on our systems.

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