Pathetic

Yesterday Chicago Mayor Lori Lightfoot announced her budget for the city for next year. It balances a shortfall of $1.2 billion in revenue with wishful thinking, planning for a federal bailout, and loan restructuring that, if it is even possible, may be too expensive for the city to bear. I’m in broad agreement with the editors of the Chicago Tribune:

Given the extraordinary challenges Chicago is facing, the key question surrounding Mayor Lori Lightfoot’s budget proposal unveiled Wednesday is this: Did she do the best she could given the circumstances?

Yes and no. Lightfoot’s budget blueprint for the rest of this year and next year might not look painful to the average Chicago taxpayer. But it relies heavily on expensive borrowing; its balance sheet depended significantly on federal aid from June, not restructuring; and it does not make lasting changes to the tax-and-spend policies that drive deficit spending. The Lightfoot administration says that goal was impossible, given the severity of the coronavirus pandemic.

The Chicago Tribune has been reporting on the city’s questionable borrowing practices since at least 2013. In its series, “Broken Bonds,” the newspaper outlined the precariousness of a borrowing addiction that spent bond money intended for long-term projects on short-term costs. Here is the opening paragraph to that award-winning series that bears repeating nearly a decade later:

“Between 2000 and 2012, Chicago spent $9.8 billion in general obligation bond proceeds with few restrictions and virtually no oversight. In a first-ever accounting, the Tribune found that nearly half of the money went to paper over Chicago’s growing budget problems. The city spent millions in bond funds on short-lived equipment such as Palm Pilot software, spare vehicle parts and items you might find on a weekend shopping list: trash bins, flowers, even bags for dog waste. That’s equivalent to taking out a 30-year mortgage to buy a car and making your children — or grandchildren — pay it off, with interest.”

Scoop-and-toss, as the practice is known, is a financial crutch that involves selling bonds — borrowing — and then using the borrowed money to pay off short term costs or old bonds — sort of like using a credit card to make a payment on another credit card. Under Lightfoot’s budget plan for 2021, the city will rely on $501 million in scoop-and-toss borrowing.

“It is scoop and toss,” Lightfoot said. But given the levers available during a “once-in-a-generation economic meltdown,” the mayor said they had to use “unique tools.”

How much will that borrowing eventually cost taxpayers, along with refinancing planned for the current budget year? The mayor’s budget team wouldn’t say. They would only predict that city taxpayers would come out ahead, once harm to the economy and instability costs were factored in if they didn’t use scoop-and-toss financing in this emergency. In other words, it’s the least worst option.

What goes unmentioned is that the budget contains practically no economization. What percentage of the city’s workforce does the mayor plan to layoff? 1%. That’s while 15% of Chicagoans are unemployed. The city didn’t lay off or furlough any city workers during the city’s lockdown. They were all deemed essential.

In addition practically no one believes that Chicago’s population will be greater next year than this year or greater the year after that than next. That means that fewer and fewer Chicagoans must carry the burden being placed on them by decades of irresponsible borrowing. It’s high time for some shared sacrifice.

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What Will Happen If Biden Wins?

At RealClearPolitics Sean Trende summarizes VP Joe Biden’s path to election:

When I wrote my 2013 series on demographic shifts, including the Case of the Missing White Voters, I outlined a potential path to electoral victory for Republicans that didn’t involve reaching out to non-white Americans as such. Rather, I suggested that a more economically populist Republican Party that was more skeptical of American intervention abroad, aligned against illegal immigration and skeptical of trade deals — and that, above all else, didn’t nominate a guy with car elevators as its standard-bearer — might be able to gain the enthusiastic backing of enough blue-collar whites to win elections. This incarnation of the GOP might eventually win over some non-white voters, who vote for Democrats more because of their stances on economic issues than their stances on identity issues.

This is more-or-less the path that Trump took. Indeed, he proved a stronger version of the “Missing Whites” approach than I had thought was possible, by alienating large numbers of whites with college degrees, who had previously been the foundation of the Republican Party.

But there are limits to what can be done with whites without college degrees, who constitute a significant portion of the electorate, but not a majority. While Trump has, in fact, made progress with non-whites, his bleeding of support among whites with college degrees, especially women, and (at least according to polls) older white voters more than offsets that.

In other words, at a certain point you just run out of groups that you can afford to alienate from your coalition, and Trump may well have hit that point.

Just for the sake of discussion, let’s assume that Joe Biden is elected. Then what? It has been my observation that every administration, early on, throws a sop to its constituents. I think that will certainly be the case for the Biden Administration. Here’s what I think is likely to happen.

  1. Contrary to many of the (in my opinion irresponsible) speculations about whether Trump will leave the White House willingly, although Trump will not concede he will leave the White House willingly, maybe even eagerly.
  2. There is an element of disorder in every transition in administrations and this one will have more than usual.
  3. Again contrary to what the campaign is putting forward, the Biden Administration will largely do the same things the Trump Administration has been doing WRT COVID-19. If there are any attempts at, for example, making wearing facemasks nationally compulsory, without declaring martial law they will be struck down by the courts.
  4. Biden will not face the difficulties in filling a cabinet that Trump has. If anything there will be a sort of feeding frenzy of Democratic apparatchiks jockeying for positions in the new administration. There are already signs of that.
  5. The first sop the new Biden Administration will throw its base will be adding a public option to Obamacare.
  6. There may also be some moves in the direction of the Green New Deal early on.
  7. I think the Biden Administration will be more hawkish than the Trump Administration has been.
  8. I wouldn’t be surprised if there were a significant, premature increase in illegal border crossings from Mexico immediately following Biden’s election.
  9. Despite the noise about raising taxes, I am unconvinced that the Biden Administration will do that early on. The most I would anticipate is adding a new, higher bracket.

We’ll get around to what will happen if President Trump is re-elected in a future post.

Please add your thoughts on what a Biden Administration would mean in the comments.

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Where Was This Guy?

In an op-ed in the Washington Post Rahm Emanuel gives Democrats some good advice:

With health care, climate change and tax reform all on their to-do list, Democrats shouldn’t waste political capital attempting a political maneuver — court-packing — that not even Franklin Roosevelt could pull off at the height of the New Deal. Rather than expand the court, Democrats should expand the playing field. With the filibuster curtailed, they will be equipped to establish a new national voting rights regime that addresses not only the legacy of bigotry in the South but also conservative efforts to disenfranchise people of color across the country.

They will have an opportunity also to expand the district and appellate courts, where much of the key case law gets made, as Sen. Christopher A. Coons (D-Del.) has proposed. And they can move to bring a new level of transparency to our politics, exposing how dark money not only influences the legislative branch but also funds junkets and exotic retreats for judges and justices as well.

Rather than wasting their time on whining about the composition of the Supreme Court or threatening to “pack the Court” or, even worse, redefining what is meant by “packing the Court” so they can claim that both sides do it, they should do something truly remarkable: their jobs. The real power is in the hands of the legislatures whether the Congress or state and local legislators.

My first question about this is where was this guy during the eight years when somebody who strongly resembled him and was also, coincidentally, named Rahm Emanuel was mayor of Chicago? Or during the six years when another guy named Rahm Emanuel had a seat in the House of Representatives?

My second question is why didn’t those Rahm Emanuels see things that way, too? I think I have an explanation. When legislators actually take stands on issues that aren’t particularly popular, they risk losing elections. There are priorities, after all. It’s a lot less risky to let the Supreme Court carry the weight for them.

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IUU

The acronym above represents “illegal, unreported, and unregulated” and you might be interested in Tabitha Mallory’s and Ian Ralby’s article on IUU Chinese fishing activities at Center for International Maritime Security. Here’s their conclusion:

The response to high seas fishing must be global. Scientific understanding of high seas fisheries is not as robust as that of coastal fisheries, and thus a precautionary approach is important. Not only does unsustainable fishing threaten long-term food security and the economic viability of the industry, but it may also decrease marine biodiversity, which is already under threat from climate change. At the national level, the U.S. Seafood Import Monitoring Program (SIMP) could be expanded to cover squid, which is the main genus the fleet targets. Regionally, organizations like the Comisión Permanente del Pacífico Sur, which looks after the collective fisheries interests and management of Colombia, Ecuador, Peru and Chile, can collaborate on high seas management and protection. At the international level, we must support the efforts of the United Nations to establish an agreement on protecting biodiversity in areas beyond national jurisdiction (BBNJ). And the outcome of the World Trade Organization negotiations on fisheries subsidies, concluding possibly at the end of 2020, is crucial—China is currently seeking exemptions arguing that it is still a developing country.

Development, however, can never be to the detriment of the entire planet, and unsustainable fishing practices around the world have put extreme pressure on global fish stocks and dramatically diminished ocean health. Our ability to sustain human life depends on our ability to maintain the resources needed for our sustenance. As much as this matter is up for legal, political or environmental debate, it is most fundamentally a concern for all humanity.

It’s pretty obvious from the statistics they cite that the Chinese authorities don’t give a damn about the sustainability of their fishing practices, the health of the ocean, or human life. It is also clear, as Peru and Argentina may have learned to their sorrow, that the Chinese authorities really don’t want to import food from other countries or anything for that matter and will do whatever is necessary to be self-sufficient.

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Someone

For some reason I feel the need to remind people of one of the oracular pronouncements of the late Mayor Daley: regardless of how it looks now someone will be elected.

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Color Me Skeptical

I can’t agree with John Faso’s highly optimistic claims in his piece on “Operation Warp Speed” at RealClearPolicy:

There is encouraging news on the development of vaccines to beat the coronavirus.

No fewer than four vaccine candidates are in advanced clinical trials. Major pharmaceutical companies such as Astra Zeneca and Moderna are working round the clock to bring an effective vaccine to market.

AstraZeneca did an emergency reset of its clinical trial last week while it looks to me as though Moderna were as interested in goosing its stock price as much as in developing an effective vaccine against COVID-19.

I remain with the poll of pharma executives taken last year: the likelihood of a safe, effective vaccine being available this year approaches zero. IMO we shouldn’t be surprised if such a vaccine is never available.

I have noticed that there are some people prudently considering the logistics of vaccine administration at the scale at which it’s being contemplated. The waste problems alone will be daunting.

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Surveying the Wreckage

There’s a rather lugubrious post at City Journal by Nicole Gelinas that reviews the state of New York City’s economy. It has a number of eye-catching infographics which I won’t sample here. Here’s a snippet:

efore mid-March, New York City’s economy boasted nearly 4.1 million private-sector jobs—a record. No one industry dominated, meaning that the collapse of one would not mean disaster for the city. More than 800,000 people worked in “professional and business” sectors, which include corporate law and software design; another 800,000 worked in health care. Nearly half a million people labored in finance and real estate, and another half-million in leisure and hospitality. Retailers provided nearly 350,000 jobs; manufacturing, about 70,000; building construction, 50,000. There was basically a job for everyone, whether the investment-bank CEO or the dishwasher newly arrived in New York from Central America. Two earlier crisis periods—the tech bubble bursting, soon followed by 9/11, and then the 2008 financial meltdown—showed resiliency in this employment variety, as Gotham’s economy recovered far faster than the rest of the nation’s.

What was hard to imagine in early March is an awful fact now. Shutting down entire industries for months, even for a justified reason, brings mass-scale job destruction. As of late July (the last month for which data are available), New York City was missing 16 percent of its jobs, or 646,100 positions, relative to last July. After the financial crisis, by contrast, New York lost 206,300 jobs.

And in this crisis, New York is faring far worse than the rest of America. By late July, the nation had lost 8.1 percent of its jobs. But locally, industry after industry isn’t just in recession; it’s virtually nonexistent. New York is missing 53 percent of its 471,800 pre-Covid leisure and hospitality workers. The arts and entertainment field has lost 65,200 jobs, or more than two-thirds, and the restaurant and hotel field has hemorrhaged 184,500 jobs, or 49.2 percent. Retail outlets have laid off 45,300 people, or 13.2 percent. All these declines outpace national losses.

It seems to me that many of Ms. Gelinas’s prescriptions are wishful thinking. The city can’t give a property tax holiday or a sales tax holiday. At least if it’s like Chicago it didn’t lay off any city workers while everything else in the city shut down. They were deemed “essential workers”. It had to pay them then and now. It needs the money.

What I see when I look at her statistics and graphs will not make Ms. Gelinas happy. I grew up in St. Louis, second only to Detroit in having lost population since 1950 both in numbers and in percentage. When I use Google’s Street View to look at the house in which I spent my first ten years, I see many empty lots around it and most of the businesses that were nearby are gone. The house in North St. Louis that was owned by my great-grandfather and then my great-uncle and, finally, by his widow, having been occupied by members of my family for nearly a century, has been torn down as have many of the houses nearby. Whole city blocks are derelict.

Maybe many of the jobs lost in the restaurant and hospitality sectors were filled by (mostly illegal) immigrants and they can return to wherever it was they came from. But probably not.

New York City must shrink. If it can’t save itself, we can’t save it.

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Trending

I imagine that the Biden and Trump campaigns are asking a lot of questions of themselves about now. Consider this report from the Gallup organization as of a month ago. Republicans have a one point advantage in party affiliation. That’s within the range of error. It also doesn’t tell the whole story. If you scan down the page a bit you’ll find that more independents lean Democratic than lean Republican by three points. That’s a pretty narrow difference as well.

In both cases the trend is going in the wrong way for Biden. Is that continuing, stopped, or has it reversed?

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What’s Rational?

I found this piece by James Holmes at RealClearDefense, attempting to place a remark by Chinese President Xi into a Clausewitzian framework, thought-provoking. Here’s the remark as reported by CNN:

Chinese President Xi Jinping has called on troops to “put all (their) minds and energy on preparing for war” in a visit to a military base in the southern province of Guangdong on Tuesday, according to state news agency Xinhua.

Presumably, he was addressing multiple audiences: the troops themselves, the Taiwanese, us, other potential adversaries. For the troops he was attempting to promote élan. As Mr. Holmes put it:

Xi was simply entreating the PLA Marines to do their job, not announcing that war is imminent. That’s the banal part.

As Clausewitz noted there are three dominant tendencies in a society:

  • rational subordination of military endeavors to policy
  • chance and creativity and
  • passions like fear, rage, or spite

and three ways of winning in martial strife:

  • overcome your opponent and dictate terms
  • discourage your antagonist or
  • convince your antagonist that the cost of victory will not be worth the price

That last is undoubtedly the message that President Xi is sending to us.

My last word on this subject consists of an observation. Our adversaries, from Admiral Yamamoto to Osama Bin Laden, have routinely miscalculated our reactions. Honestly, it isn’t just our adversaries but our allies as well. I doubt that President Xi would do a better job.

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Understanding U. S. Foreign Policy

Following up on my last post, I think that to understand U. S. foreign policy you need to be able to answer several questions:

  1. Why did Bush invade Iraq?
  2. Why did Obama bomb Libya so as to enable the removal of Moammar Qaddafi?
  3. Why has no president ended our military involvement in Afghanistan?

If your answers are limited to being evil or politically motivated, you’re not seeing the whole picture.

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