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  • Is Illinois ‘Bankrupt’?

    While California’s much publicized budget battles have made the dire financial straights faced in Sacramento a topic of regular media conversation, other states are also experiencing major fiscal woes. According to experts interviewed by Crain’s Chicago Business, Illinois currently finds itself in a state of de facto bankruptcy, with the state’s ledgers appearing “to meet classic definitions of insolvency: Its liabilities far exceed its assets, and it’s not generating enough cash to pay its bills.”

    According to Crain’s, “While California has an even bigger budget hole to fill, Illinois ranks dead last among the states in terms of negative net worth compared with total expenditures.” The state had a record $5.1 Billion in bills past due at year’s end, has failed to pay some vendors for months, and has seen the average time to pay a bill double to nearly 92 days. The state also faces rapidly mounting pension obligations, and has seen it’s ability to borrow restricted by its worsening credit rating. Facing piles of liabilities, and recession reduced receipts, the state is currently “living hand to mouth, paying bills as revenues come in each day, building up cash when special payments are coming due. Cash on hand varies from day to day, sometimes dipping below $1 million”.

    A business or municipality facing such financial challenges might be tempted (or forced) to seek the shelter of bankruptcy protection in order to place it’s books in order. States, however, do not have recourse to that option under existing federal law. As a result “rather than having a court restructure its finances as in a bankruptcy filing, a state [has]to reorganize its spending and debt on its own.” Lawmakers in Springfield, faced with a situation that is bankruptcy in all but name, will have to make difficult decisions regarding future taxes and services.

  • Contributing Editor AARON RENN on Landscape+Urbanism regarding Portland

    Check out the article in todays Oregonian authored by The Urbanophile himself Aaron Renn, entitled ‘Picture Perfect Portland’ explores if our fair city is worthy of the praise it receives on a regular basis. The verdict… sure, with a few caveats.

    Aaron on Landscape+Urbanism

  • Executive Editor JOEL KOTKIN on Oregon Live regarding Portland

    Why is this? Perhaps Portland is actually a bit too livable. As urban scholar Joel Kotkin put it, “Portland is to today’s generation what San Francisco was to mine: a hip, not too expensive place for young slackers to go.”

    Joel on Oregon Live

  • Executive Editor JOEL KOTKIN in The OC Register regarding the UN and Dubai

    Two Chapman U. professors have stirred up some high-level chatter about moving the United Nations to Dubai from New York!

    Joel in The OC Register

  • Executive Editor JOEL KOTKIN on Chron regarding Houston

    Joel Kotkin, an author who writes about urban policy and often cites Houston as a model for successful cities, agreed that Houston’s transit plans could benefit from the new rules because of the city’s dispersed activity centers.

    Joel on Chron

  • Executive Editor JOEL KOTKIN in The OC Register regarding “regressives”

    Another core obstacle to reform is what author Joel Kotkin calls Democratic “regressives” – so-called liberals, or progressives, who are mainly interested in protecting their quality of life by knocking various rungs off the economic ladder for the state’s working class and growing minority communities. He refers to the wealthy liberal elites who live predominantly in high-end coastal communities and who fight economic growth, impose absurd restrictions on land use and whose excessive environmental sensibilities are regulating businesses out of existence.

    Joel in The OC Register

  • Executive Editor JOEL KOTKIN on Planologie regarding cities

    Recent rankings of the “best” cities around the world by the Economist Intelligence Unit, Monocle magazine and the Mercer quality of life surveys settled on a remarkably similar list. For the most part, the top ranks are dominated by well-manicured older European cities such as Zurich, Geneva, Vienna, Copenhagen, Helsinki and Munich, as well as New World metropolises like Vancouver and Toronto; Auckland, New Zealand; and Perth and Melbourne in Australia…

    Joel on Planologie

  • America’s Agricultural Angst

    In this high-tech information age few look to the most basic industries as sources of national economic power. Yet no sector in America is better positioned for the future than agriculture–if we allow it to reach its potential.

    Like manufacturers and homebuilders before them, farmers have found themselves in the crosshairs of urban aesthetes and green activists who hope to impose their own Utopian vision of agriculture. This vision includes shutting down large-scale scientifically run farms and replacing them with small organic homesteads and urban gardens.

    Troublingly, the assault on mainstream farmers is moving into the policy arena. It extends to cut-offs on water, stricter rules on the use of pesticides, prohibitions on the caging of chickens and a growing movement to ban the use of genetic engineering in crops. And it could undermine a sector that has performed well over the past decade and has excellent long-term prospects.

    Over the next 40 years the world will be adding some 3 billion people. These people will not only want to eat, they will want to improve their intake of proteins, grains, fresh vegetables and fruits. The U.S., with the most arable land and developed agricultural production, stands to gain from these growing markets. Last year the U.S.’ export surplus in agriculture grew to nearly $35 billion, compared with roughly $5 billion in 2005.

    The overall impact of agriculture on the economy is much greater than generally assumed, notes my colleague Delore Zimmerman, of Praxis Strategy Group. Roughly 4.1 million people are directly employed in production agriculture as farmers, ranchers and laborers, but the industry directly or indirectly employs approximately one out of six American workers, including those working in food processing, marketing, shipping and supermarkets.

    Yet none of this seems to be slowing the mounting criticisms of “corporate agriculture.” A typical article in Time, called “Getting Real About the High Price of Cheap Food,” assailed the “U.S. agricultural industry” for precipitating an ecological disaster. “With the exhaustion of the soil, the impact of global warming and the inevitably rising price of oil–which will affect everything from fertilizer to supermarket electricity bills–our industrial style of food production,” the article predicts, “will end sooner or later.”

    The romantic model being promoted by Time and agri-intellectuals like Michael Pollan hearkens back to European and Tolstoyan notions of small family farms run by generations of happy peasants. But this really has little to do with the essential ethos of American agriculture.

    Back in the early 19th century Alexis de Tocqueville noted that American farmers viewed their holdings more like capitalists than peasants. They would sell their farms and move on to other businesses or other lands–a practice unheard of in Europe. “Almost all the farmers of the United States,” he wrote, “combine some trade with agriculture; most of them make agriculture itself a trade.”

    Despite the perceptions of a corporatized farm sector, this entrepreneurial spirit remains. Families own almost 96% of the nation’s 2.2 million farms, including the vast majority of the largest spreads. And small-scale agriculture, after decreasing for years, is on the upswing; between 2002 and 2009 the number of farms increased by 4%.

    This trend toward smaller-scale specialized production represents a positive trend, but large-scale, scientifically advanced farming still produces the majority of the average family’s foodstuffs, as well as the bulk of our exports. Overall, organic foods and beverages account for less than 3% of all food sales in the U.S.–hardly enough to feed a nation, much less a growing, hungry planet.

    Then there’s the even more fanciful notion–promoted by Columbia University’s Dickson D. Despommier–of moving food production into massive urban hothouses. In a recent op-ed in the New York Times he argues we are running out of land and need to take agriculture off the farm. According to Despommier, “The traditional soil-based farming model developed over the last 12,000 years will no longer be a sustainable option.”

    Yet Praxis Strategy’s Matthew Lephion, who grew up on a family farm, points out that such projects hardly represent a credible alternative in terms of food production. Urban land is far more expensive–often at least 10 times as much as rural. Energy and other costs of maintaining farms in big cities also are likely to be higher.

    Furthermore the notion that America is running out of land–one justification for subsidizing urban farming–seems fanciful at best. The past 30 years have seen some loss of farmland, but the amount of land that actually grows harvested crops has remained stable. Though some prime farmland close to metropolitan centers should be protected, agriculture has over the past decades returned to nature–forests, wetlands, prairie–millions of acres, far more than the land that has been devoted to housing and other urban needs.

    However ludicrous the arguments, the Obama administration remains influenced by green groups and is the cultural prisoner of the lifestyle left, with its powerful organic foodie contingent. That leaves farmers and the small towns dependent on them with little voice.

    The ability of greens and others to wreak havoc on agriculture can be seen in the disaster now unfolding in California’s fertile Central Valley. Large swaths of this area are being de-developed back to desert–due less to a mild drought than to regulations designed to save obscure fish species in the state’s delta. Over 450,000 acres have already been allowed to go fallow. Nearly 30,000 agriculture jobs–held mostly by Latinos–have been lost, and many farm towns suffer conditions that recall The Grapes of Wrath.

    Not satisfied with these results, the green lobby has prompted the National Marine Fisheries Service to further cut water supplies, in part to improve the conditions for whales and other species out in the ocean. Given these attitudes, farmers, including those I have worked with in Salinas, are fretting about what steps federal and state regulators may take next.

    One particular concern revolves around the movement against genetically modified food. Already there are calls for banning GMOs in Monterey County. Local officials worry this would cripple the area’s nascent agricultural biotech industry as well as the long-term ability of existing farmers to compete with less regulated competitors elsewhere. The fact that a less advanced form of genetic engineering also sparked the “green revolution” that greatly reduced world hunger after 1965 seems, to them at least, irrelevant.

    When viewed globally, the anti-big farm movement seems even more misguided. As Chapman University’s professor of food science Anuradha Prakash observes, India’s own organic farms serve a small portion of the market and cannot possibly meet the nutritional needs of the country’s expanding population. “You just don’t get the yields you need for Africa and Asia from organic methods,” she explains.

    A formula that works for high-end foodies of the Bay Area or Manhattan can’t produce enough affordable food to feed the masses–whether in Minnesota or Mumbai. The emerging war on agriculture threatens not only the livelihoods of millions of American workers; it could undermine our ability to help feed the world.

    This article originally appeared at Forbes.com.

    Joel Kotkin is executive editor of NewGeography.com and is a distinguished presidential fellow in urban futures at Chapman University. He is author of The City: A Global History. His next book, The Next Hundred Million: America in 2050, will be published by Penguin Press February 4th, 2010.

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  • Traffic Congestion in Atlanta

    I was pleased to have the opportunity to have an op-ed produced on transportation in the Atlanta Journal-Constitution on January 17. The op-ed, entitled “Arterial system needed” argued that the most important thing the Atlanta metropolitan area could do to reduce traffic congestion would be to develop a decent arterial street system, something that, unbelievably, does not exist today. Regrettably, the permitted length of the op-ed did not permit much elaboration of the point, or mention of other important issues.

    In metropolitan areas with effective arterial street systems (such as Los Angeles), there is usually a surface alternative to a grid-locked freeway. A skilled driver can use these alternate routes and avoid much of the frustration of congestion. This may or may not improve travel times, but it is certainly better for the psyche. In Atlanta, there are few alternatives to the freeways and even the freeway system itself is very sparse.

    The principal elaboration for which I wish additional space had been available had to do with the role of transit. Many Atlanta officials are of the view that transit is the solution to traffic congestion. Many of them join pilgrimages to Portland (Oregon), where planners are only too happy to reinforce this view, with their doctrine to the effect that transit has transformed their urban area. The reality is that, after nearly 25 years of major transit improvements, transit’s market share in the Portland area is about the same as it was before.

    There are proposals to expand the MARTA transit system and tax from the core counties of Fulton and DeKalb to suburban counties. It is hard to imagine a more counterproductive policy approach. This would shower the overly-costly MARTA system with a stream of revenue with which its out of control costs per mile could escalate. The additional cost to taxpayers and riders would be far in excess of any potential benefits. MARTA’s principal problem is not lack of funding; it is rather insufficient cost control.

    The reality is that to reduce traffic congestion, transit would need to attract a large share of urban trips. In fact, however, whether in Paris, Portland or Atlanta, the transit system that could compete for most metropolitan trips has not yet been conceived of, much less developed or even proposed. Because of the necessity to travel from every point in an urban area to every other point, this is simply impossible. The vast majority of travel demand in all major urban areas of the United States and Western Europe is for personal mobility – automobiles – simply because there is no choice in their modern, affluent economies.

  • Airline Security: The War on Service

    Who hasn’t daydreamed about taking revenge on an industry that has managed to parlay the horrors of modern air travel into a multi-billion dollar federal bailout? Although in most cases, I would guess, the fantasy involves the ticket agent’s undies, not our own, going up in smoke.

    As everyone knows, in response to the Northwest flameout, the Obama administration has adopted policies that are almost exactly the same as those of the Bush administration, turning the flying experience into a political advertisement for all the wonderful things that the president is doing to fight the war on terror.

    Karl Rove’s great contribution to the political landscape was to remind travelers, at every security checkpoint, that unknown aliens were threatening the American way of life, and that the only way to keep jihadists off the USS Dreamliner was to vote Republican.

    That re-election strategy clearly now appeals to the Obama administration, which decided, among other tactics, that an effective weapon in the war on terror is to keep Americans out of mile-high toilets in the last hour of flights.

    The general assumption about the Northwest Airlines Underwear Bomber is that he sought to bring down the airliner in the name of Allah, those seventy-two virgins, and Osama bin Laden.

    But is it possible that he was just another over-wrought airline passenger who has had it with strip searches by airport security agents, surcharges to take a bag on a trip, meal service that consists of peanuts and instant coffee, seats that feel like electric chairs, and those walks through arrival halls that feel like Mao’s Long March?

    Wait until bin Laden hears that we’re coming at him with bladder-busting planes. That measure ought to turn the tide, since clearly banning economy-sized toothpaste tubes from the skies didn’t do the trick.

    While the government uses the flying experience to broadcast political messages, the airlines see the war on terror as a chance to re-price a product that has consistently gone bankrupt, often thanks to corporate mismanagement.

    Most businesses start from the assumption that it is a good idea to try to attract customers with good service and quality products. That is the logic behind the business strategy of a department store or a restaurant.

    The airline business model, however, is based solely on being able to advertise low fares. Once the promotions are in place, the airlines take to the skies with cramped seats, mysterious food, nickel-and-dime charges, surly staff, un-hedged oil contracts, and furious customers, with the hope that the government, if need be, will bail out the industry in the name of national security.

    As the government turns airports into prison lockdowns, the airlines’ response has been to convert their pricing policies into a shell game of bait-and-switch, insuring that travelers get it coming and going.

    Airlines and governments alike conspire to use air tickets to bury all sorts of taxes, oil surcharges, fees, levies, new airport subsidies, and old-fashioned handouts under the banner of “passenger safety,” which has become a variation on a protection racket. Station a few x-ray machines in the nation’s airports, and then charge and tax anything you like for a “war on terror;” by my estimates, it’s a “war” that has taken, on average since 2001, less than 1500 American lives annually, and has cost approximately $500 billion a year in new federal agencies, programs, weapons, and appropriations.

    Am I too cynical? Isn’t the goal safety for the traveling public? In the president’s primetime proclamations, that might seem to be the case, but then what explains the national indifference to the some 40,000 annual deaths, and millions of injuries, on the nation’s highways? Where is the war on automobilism? If the goal is to save American lives, Interstate 80 strikes me as a more accessible target than Yemen.

    The problem with highway safety, as opposed to homeland security, is that it’s a financial and, more important, a political loser. Making car passengers wear crash helmets or body armor, logical as it would appear from the risks of the road, does not lead to as many rewards from the electorate as the specter of al Qaeda crouched in an Afghan cave. And which political party wants to run for re-election on the slogan: “Your Taurus: More Dangerous Than The Taliban.”

    Left to their own devices and customer service, and without government handouts, most large airlines would go out of business. Take the decision on the part of most airlines (Southwest excepted, and bravo to them) to charge passengers for having the audacity to take luggage on a trip.

    Airline bag policies tend to be more complicated than the Da Vinci code, and involve arcane formulas about weight, size, and contents that few travelers can understand. The goal is to lure passengers to an airport, read them obscure airline policies, and demand extortionate payments (“If you wanna see your bags again…”).

    My own bag horror story began when, for an internship in Dubai, my daughter booked onto British Airways, which allows one bag on international flights and charges $50 for a second, which she had.

    Her BA flight was cancelled due to snow in London, and the airline rerouted her on Air France, after an assurance that she could travel to Dubai with two bags. Instead, when she checked in with Air France, that airline demanded $320 to take her second bag (normal size and weight) to Dubai.

    After Air France finished treating her like a shoe bomber, it took an hour for their staff and that of British Airways to arbitrate the second-bag crisis, while my daughter, having been subject to a twelve-hour delay, stood by in tears. I imagine that such unhappy scenes play out thousands of times every day in airports around the world. What other business alienates its customer base for $50?

    Beyond bag hustles, what keeps many airlines in business today is that they have become accomplices in the National Security State, part of a daily pantomime to terrify the traveling public into subsidizing all sorts of undeclared wars, drone missile appropriations, and endless sweetheart contracts to the likes of Blackwater.

    Under this Faustian bargain, the airlines get to charge $50 (if not $320) for extra bags, or $200 to change a reservation, and the government gets to charge $500 billion for homeland security.

    Having tried and failed with Big Brother airlines and airports, why don’t we give the market a chance to sort out the security problem? How much worse could it be?

    Leave it to each private company to decide whether they want to frisk their passengers or not (“Fly Freedom Airways, and Leave the Cavity Searches to Us!”), or charge for luggage, drinks, peanuts, or meals.

    Let each airline decide if they want to take off with armed guards or not. Maybe one of the airlines could dress up its pilots to look like the Lone Ranger and Tonto.

    Finally, let the passengers handle in-flight security. After all, they put out the fires of the Underwear Bomber.

    Matthew Stevenson is author of Remembering the Twentieth Century Limited and An April Across America.