The Daily Parker

Politics, Weather, Photography, and the Dog

One-third San Francisco and two-thirds Detroit?

So says urbanist Pete Saunders on the economic bifurcation in Chicago:

[T]he two economic narratives emerging across two wildly different sets of Chicago neighborhoods are being reflected in changing demographics. The downtown and Near North Side, stretching from the Loop to neighborhoods such as Bucktown and Logan Square, has boomed in ways similar to superstar cities such as New York, D.C., Seattle, and Austin, while large stretches of the rest of the city have suffered from decreasing middle class populations, disinvestment, and in the worst cases, abandoned property and increased crime.

“On its own, the portions of the city that includes the Loop, north lakefront, West Loop, and Logan Square have the population of San Francisco, are about the size of Manhattan and nearly as dense, and have been booming,” he tells Curbed. “It’s as safe, vibrant, and walkable as any of the other cities you’d associate with success.”

[R]ecent economic growth has been unevenly distributed. According to recent UIC research, in 1970, roughly half the city was considered middle income. In 2017, that distinction applied to just 16 percent of Chicago. Income segregation and extreme, concentrated poverty have become more pronounced. Saunders called it Global Chicago versus Rust Belt Chicago.

“A few years ago, I published something on my personal blog that characterized Chicago as one-third San Francisco and two-thirds Detroit,” he says. “I caught some flack from Rahm Emanuel for that, and I get it. Nobody wants to be associated with Detroit; it’s my hometown, so I know how that goes.”

Saunders recently pointed out on his blog that we Gen-Xers started the Back-to-the-City movement, ultimately blazing a trail that our Boomer parents and Millennial (and now Gen Z) followers benefited from.

The Laffer-stock of real economists

In a move one can bet the President Trump himself doesn't really understand, he will later today confer the Presidential Medal of Freedom—our nation's highest civilian honor—on fraud economist Art Laffer:

Laffer's journey to this moment began 45 years ago with a round of drinks in a Washington cocktail lounge. At the time, Laffer was a young economist at the University of Chicago, trying to persuade President Ford's deputy chief of staff — a guy named Dick Cheney — that lowering taxes could actually boost government revenue.

"Art was trying to explain to Cheney how the Laffer Curve works," recalls Grace-Marie Turner, a journalist who later went to work on Ford's reelection campaign.

Cheney was struggling with the idea, so Laffer resorted to a visual aid.

"He sketched out this Laffer Curve on a paper cocktail napkin at the Hotel Washington, just across the street from the White House," Turner said.

Nobel laureate economist Paul Krugman has had a lot to say about Laffer over the years. For example:

Back in 1980 George H. W. Bush famously described supply-side economics — the claim that cutting taxes on rich people will conjure up an economic miracle, so much so that revenues will actually rise — as “voodoo economic policy.” Yet it soon became the official doctrine of the Republican Party, and still is. That shows an impressive level of commitment. But what makes this commitment even more impressive is that it’s a doctrine that has been tested again and again — and has failed every time.

Yes, the U.S. economy rebounded quickly from the slump of 1979-82. But was that the result of the Reagan tax cuts, or was it, as most economists think, the result of interest rate cuts by the Federal Reserve? Bill Clinton provided a clear test, by raising taxes on the rich. Republicans predicted disaster, but instead the economy boomed, creating more jobs than under Reagan.

Then George W. Bush cut taxes again, with the usual suspects predicting a “Bush boom”; what we actually got was lackluster growth followed by a severe financial crisis. Barack Obama reversed many of the Bush tax cuts and added new taxes to pay for Obamacare — and oversaw a far better jobs record, at least in the private sector, than his predecessor.

So history offers not a shred of support for faith in the pro-growth effects of tax cuts.

The recent history of Kansas also provides just the evidence you need to conclude the Laffer curve is laughable.

Essentially, then, the president is handing out a medal to a party stalwart, much as previous authoritarian rulers would have handed out the Order of Lenin. We can no doubt expect more of this over the next two years.

No one wants McMansions

People who thought moving to far suburbs made economic sense in the 1990s and 2000s can't seem to sell their ugly, too-large houses:

"For most of the 1990s, if you looked at the geographic center of jobs in the Chicago area, it was moving steadily northwest, out from the city toward Schaumburg," homebuilding consultant Tracy Cross says. Like the corporate campuses that popped up in that era, the houses were often built big.

A generation later, tastes for both have faded: Corporations have shifted their offices to downtown Chicago in unprecedented numbers, and once-stylish suburban luxury homes are derided as McMansions. Affluent people now show a well-documented preference for living in or near the city, a preference that's fueling the vigor in the high-rise condo market downtown as well as in Bucktown and in Wilmette, among other places.

Phil Chiricotti felt the double-barreled blast when he sold his home in Burr Ridge. Chiricotti, who was a retirement-planning executive, built the four-bedroom, 6,800-square-foot home on 77th Street in 2002, "when Tuscan-style homes were what everybody was doing," he says. The house has arches, columns and balconies made of stone.

"I had murals painted in that house, I had exotic Romanesque stenciling done," Chiricotti says. "Everyone told me my taste was spectacular. But the operating costs to live in that house were $25,000 a year." He put the house on the market in 2009, asking just under $2.7 million, and sold it almost six years later at a real estate auction for $1.47 million.

("Exotic Romanesque stenciling?" Yes, that would qualify as spectacular taste, just not good taste.)

Schaumburg, Ill., is about 50 km northwest of the Loop in western Cook and norther DuPage Counties. It spreads west from I-290 along a spiderweb of ugly strip-mall-encrusted stroads, and contains a giant mall and a huge IKEA. The village adopted, without irony, "Progress Through Thoughtful Planning" as its motto when it incorporated in 1956, and then thoughtfully planned winding residential roads without sidewalks that appeal to people who drive to their mailboxes.

I've joked before that "Schaumburg" is German for "Why would anyone live in this town." (It actually translates to "foam town," which amuses me.) Schaumburg epitomizes Suburbistan to me: a place that tries to take the best parts of rural and urban life and, missing the point entirely, creates something entirely horrific instead. A place where no one really wants to live.

These sad people paid millions for houses so ugly they don't so much rebuke good design as represent the antithesis of design itself, in suburbs so soulless just writing about them makes me want to clap on one and three. So this news fills me with a feeling described by another German word: Schadenfreude.

AOC vs Chase Bank

Representative Alexandria Ocasio-Cortez (D-NY) has no patience for Chase Bank's latest Tweet equating getting a latte with irresponsibility:

She continues:

When I was waitressing, I used to jerk awake in the middle of sleep worried that I may have forgotten if a bill cleared, or if I had enough $ to pay a Dr in cash. Was that bc I was “irresponsible?” No. It’s bc I wasn’t being paid a living wage as cost of living skyrocketed.

Now I’m going through a huge income transition compared to living off tips (which diff pay every week, very hard). & I have HEALTH INSURANCE, which now means I have fewer expenses. According to banks, I’d be more “responsible,” but my character hasn’t changed. Just my math.

The myth that bad credit or struggling w bills = irresponsibility is a heinous myth. Paying people less than what’s needed to live is what’s actually irresponsible. GDP + costs are rising, wages are not. That doesn’t mean YOU’RE bad. It means working people are set up to fail.

It’s a big part of what makes this Chase tweet so bad. It’s the idea that if you choose to have any expense beyond mere animalistic survival - an iced coffee, a cab after a 18hr shift on your feet - you deserve suffering, eviction, or skipped medicine. You don’t. Nobody does.

Read the thread. This is part of why she'll be president in 12 years.

David Graeber on Bullshit Jobs

I've just started reading anthropologist David Graeber's book Bullshit Jobs. It's hilarious and depressing at the same time. For a good summary, I would point you to Graeber's own essay "On the Phenomenon of Bullshit Jobs" that ran in Strike seven years ago:

A recent report comparing employment in the US between 1910 and 2000 gives us a clear picture (and I note, one pretty much exactly echoed in the UK). Over the course of the last century, the number of workers employed as domestic servants, in industry, and in the farm sector has collapsed dramatically. At the same time, ‘professional, managerial, clerical, sales, and service workers’ tripled, growing ‘from one-quarter to three-quarters of total employment.’ In other words, productive jobs have, just as predicted, been largely automated away (even if you count industrial workers globally, including the toiling masses in India and China, such workers are still not nearly so large a percentage of the world population as they used to be.)

But rather than allowing a massive reduction of working hours to free the world's population to pursue their own projects, pleasures, visions, and ideas, we have seen the ballooning of not even so much of the ‘service’ sector as of the administrative sector, up to and including the creation of whole new industries like financial services or telemarketing, or the unprecedented expansion of sectors like corporate law, academic and health administration, human resources, and public relations. And these numbers do not even reflect on all those people whose job is to provide administrative, technical, or security support for these industries, or for that matter the whole host of ancillary industries (dog-washers, all-night pizza delivery) that only exist because everyone else is spending so much of their time working in all the other ones.

These are what I propose to call ‘bullshit jobs’.

It's as if someone were out there making up pointless jobs just for the sake of keeping us all working. And here, precisely, lies the mystery. In capitalism, this is precisely what is not supposed to happen. Sure, in the old inefficient socialist states like the Soviet Union, where employment was considered both a right and a sacred duty, the system made up as many jobs as they had to (this is why in Soviet department stores it took three clerks to sell a piece of meat). But, of course, this is the sort of very problem market competition is supposed to fix. According to economic theory, at least, the last thing a profit-seeking firm is going to do is shell out money to workers they don't really need to employ. Still, somehow, it happens.

The book expands on the essay's themes, and adds scholarship, so it's therefore even more depressing than the original column. But he suggests an alternative: public policies to redistribute wealth back to the people who created it, and actually free up our time from these bullshit jobs.

Too funny, except it's not

I had planned to talk about this thoughtful article on congestion pricing and how free roads aren't really free, but just a few minutes ago I saw a headline that made me laugh out loud:

President Trump is planning to nominate former GOP presidential candidate Herman Cain to the Federal Reserve’s board of governors, two people familiar with the push said, a move that would significantly escalate the White House’s effort to exert political pressure on the U.S. central bank.

A Senate GOP leadership aide, speaking on condition of anonymity to discuss the nominee’s prospects, predicted that Cain would ultimately not have the support to be confirmed.

Sen. Sherrod Brown (Ohio), the ranking Democrat on the Banking Committee, suggested Cain and Moore were both underqualified for the Fed board.

"I thought it was a joke at first when I heard that, but I guess it's at least as serious as Stephen Moore," he said. "I'll just leave it at that for now."

"Underqualified." No, I'm underqualified for the Fed. The administration's proposed nominees are so unqualified laughter is the only option at this point. Remember, Cain is the guy who ran for president in 2012 without the slightest guess about the location (or names) of several strategically-important countries, making Rex Tillerson look like a Rhodes scholar.

Remember, these guys hate competence, especially in government. But wow, I didn't think they'd go this far. It's hard to believe Trump filed for bankruptcy all those times, with his giant brain.

More winning by the administration! Well, the Putin administration, anyway

Paul Krugman points out how President Trump's alternating bluster and surrender over trade has left us "less trusted, less respected, and weaker than we were before:"

On U.S. unreliability, consider the way the current administration has treated Canada, probably the friendliest neighbor and firmest ally any nation has ever had. Despite generations of good relations and a free-trade agreement, Trump imposed large tariffs on Canadian aluminum and steel, invoking national security as a justification. This was obviously specious — in fact, Trump himself basically conceded this point, justifying the tariffs instead as retaliation for Canadian dairy policy (which was also specious).

The lesson for the world is that America can’t be trusted. Why bother making deals with a country that’s willing to slap sanctions on the best of allies, and clearly lie about the reasons, whenever it feels like it?

Meanwhile, the sudden retreat in the confrontation with China shows that we talk loud but carry a small stick. It would be one thing if the U.S. had changed course on the merits. But backing down so easily, after all the posturing, tells the world that the way to deal with America is not to bargain in good faith, but simply to threaten the president’s political base, and maybe offer some payoffs, political and otherwise. (I’m still wondering about those floors China’s largest bank rents at Trump Tower.)

Meanwhile, Michelle Goldberg looks forward to the multiple congressional inquiries launched this week as "Trump's TV Trial."

As America and the West get weaker, Russia gets stronger. So much winning. Just not ours.

Stuff that piled up this week

I've had a lot going on this week, including seeing an excellent production of Elektra at Lyric Opera of Chicago last night, so I haven't had time to read all of these articles:

And I shall begin reading these...soon. Maybe tomorrow. Sigh.

Whither Chicago's middle class?

The University of Illinois at Chicago (UIC) has published a study of Chicago income by census tract, and has found a disturbing trend:

Chicago’s middle class, once the backbone of the city, is declining so swiftly that it’s almost gone, and a set of maps from a local university lays that reality bare.

The dynamic stands to affect nearly everything about Chicago going forward, from politics to schools to who will live here.

“It raises a lot of questions as to what kind of city it will be,” said Janet Smith, co-director of the Nathalie P. Voorhees Center for Neighborhood and Community Improvement at the University of Illinois at Chicago, which compiled the maps that document Chicago’s shrinking middle class — and an increasingly polarized city — over the past five decades.

UIC’s maps show that fully half of the city was middle income in 1970, including large swaths on every side of town. Today, just 16 percent of the city’s 797 census tracts are considered middle income. Those middle income areas are confined mostly to the corners of the city, and to thin strips between areas of wealth and poverty.

Lutton goes on to examine the economic, cultural, and other trends that are driving this change.