London’s Telegraph had an interesting story over the weekend about an innovative program that Flint, Michigan is using to combat its huge drop in population. The article, titled US Cities May Have to be Bulldozed to Survive, explains that the program’s goal is to demolish tracts of vacant housing and return the land to nature, while moving the residents of non-vacant housing closer to the city center.
Flint, sixty miles north of Detroit, was the original home of General Motors. The car giant once employed 79,000 local people but that figure has shrunk to around 8,000. Unemployment is now approaching 20 per cent and the total population has almost halved to 110,000. The exodus – particularly of young people – coupled with the consequent collapse in property prices, has left street after street in sections of the city almost entirely abandoned.
Dan Kildee, the creator of the program, has received support from the Obama administration and a group of charities that want to expand the program to other cities, mostly in the Midwest and Rust Belt. I was recently in Detroit and saw block after block of abandoned buildings, which created huge, rundown holes in the city. It would be interesting to see this program in action there as well.
I think that this is a great idea and will have a decent chance of working. The program should appeal to both Republicans and Democrats, as shrinking cities should lower costs and make cities more environmentally friendly. Lately, we have not seen many new, innovative ideas coming out of our government. Instead, politicians have mostly tried to push any big decisions toward the future and government has not gotten much done.
The American model worked so well in the past because local governments and states acted as labs of democracy, creating new, innovative policies and programs. Some failed and others succeded. The successful ones often spread nationwide. Hopefully, ideas like this that start on the local level and have a chance to spread will reinvigorate both our shrinking cities and our political process.
In an apparent crackdown on online gambling, the US government froze $30m in online gambling winnings of around 27,000 people. In the past, the government had only gone after gambling processors and betting companies. Some how, legislation banning online gambling was attached to the Patriot Act following 9/11, forcing all of the online gambling sites to go offshore, mostly to Costa Rica and the Carribbean. In 2003, PayPal had to pay a fine to the government for processing online gambling payments. Since 2006, the US has been arresting online gambling executives if they come to the US. These laws and crackdowns have not stopped online gambling. In fact, online poker and sports betting has grown dramatically in spite of the legislation banning gambling.
Online gambling has grown into an even more shady industry as the payment processors and site opporatores have been forced into the shadows. There have been numerous cases of payment processors simply walking away from their obligations and stealing gamblers’ money. There are also questions about whether pokers sites are fair and whether the sites can be hacked. In the most publicized case, someone was able to hack into a poker site to see everyone’s cards and win at unprecedented rates. Players guessed it could have been the site itself or an employee, but they could not prove it.
Online gambling is one of the Internet’s biggest growth industries. Its a huge waste of resources to go after this industry that has a clear demand in the US. If the US legalized online gaming, it would be able to tax the $9-12 billion dollars per year that the companies make, plus the government would be able to collect taxes on gambling winnings that are not reported right now.
Opponents of online gambling say that gambling is addictive and its easier to become addicted and spend too much money if its as easy as inputting your credit card information. They say that gambling is wrong and immoral. If gambling were legal in the US, the government could regulate how much and how often a customer puts money into gaming websites. They could also regulate the payment processors and gaming websites to make sure that they are fair and not in the hands of shady characters and criminals. In the beginning Las Vegas was run by the Mafia and other unsavory characters. Online gaming is at the same stage right now. The US should legalize online gaming, regulate it and tax it. It would bring needed revenue to the government at a time we are running record deficits.
Yesterday, I made the trip down to Chicago to see the US soccer team take on Honduras in a World Cup Qualifier at Soldier Field. It was the first time the US had played a qualifier in Chicago, mostly because the US Soccer Federation is worried that Chicago would not give the US a home field advantage, as there are many immigrants in the Chicago area. It turns out that they were right, but the US still was able scratch out a 2-1 come from behind win, just about guaranteeing the US a spot in South Africa 2010 with five more qualifying matches to go. I would guess that at least 35,000 of the 55,000 fans in attendance were sporting el bicolor (white and blue stripes), and it seemed like even more, as the Hondurans knew how to cheer and make noise. There is nothing more intense than attending a well played international soccer game.
I went to the 2006 World Cup in Germany and have yet to find another sporting event that matched the passion, enthusiasm and national pride of the fans. I’ve been to some great Badger football, basketball and hockey games, Packer games and Brewer games, but none matched the intensity of even the Costa Rica vs. Ecuador game in the group stage of the World Cup. The feeling that I had singing the National Anthem in Nuremberg 2,000 or so other Americans was electric and unforgettable.
If you are a soccer fan, or even if you only casually follow the sport, make a point of going to a World Cup Qualifier or Gold Cup Match if there is a game in your area. The fans are into the game, Sam’s Army is singing and chanting and the opposing fans are playing drums and blowing horns. It’s an amazing atmosphere and mostly friendly, but I was disappointed by some Americans, mostly drunk college kids, in the crowd who yelled things like “go jump back across the border” or “go back to mexico” at Honduran families. Its unoriginal and dumb and I wish more people would have told them to stop. In the US, sports and politics don’t usually mix.
To me, the coolest part of the game was that most of the Honduran fans were clearly immigrants to the US, spoke English, and were still proud of where they were born. Many of the Honduran fans sang the US National Anthem and joined in the cheers of USA, USA, USA after the game, but wore Honduras shirts and cheered intensely for Honduras during the game. The woman in front of me made it very clear that while she was cheering for Honduras, she “loved the USA” and “cheered for the US” whenever they weren’t “playing Honduras.” One of the most amazing parts our country is that immigrants assimilate into society and love the country, unlike many European countries where immigrants are shuttered in slums by de facto segregation. It was also cool to see most Hondurans telling their own fans to stop throwing empty cups over the second deck in the second half when they were upset with a call.
In other parts of the world, soccer and politics mix all the time. Ivory Coast’s qualification to the 2006 World Cup stopped their civil war. Iran’s qualification to the 1998 World Cup caused massive celebrations, alcohol fueled parties and women throwing off their veils, that some thought might be the spark that overthrew the government. When Iran beat the US in France ’98, the entire country rushed into the streets to celebrate. A 1969 riot during an El Salvador and Honduras World Cup Qualifier caused la guerra del fútbol, the soccer war, that claimed over 2000 lives.
Iran is back in the news as it tries to qualify for the 2010 World Cup in South Africa. On Friday, the Financial Times featured an article ahead of Iran’s must win Qualifier against North Korea that claimed the Soccer Result Could Affect the Iranian Election.
Some argue that failure to qualify – Iran needs to win its remaining three fixtures over the next 11 days to be guaranteed a place at next year’s World Cup finals in South Africa – could damage the re-election hopes of Mahmoud Ahmadi-Nejad, the president. “The government of Mr Ahmadi-Nejad has shown it would like to make the best use of sports in politics and failure in football will surely have negative impacts on his votes,” said a senior reformist politician. The comment might be seen as wishful thinking by a government opponent but it is echoed by a fundamentalist politician, sympathetic to Mr Ahmadi-Nejad: “The results of these football matches might shift a significant number of votes from one candidate to another.” In an election expected to be close – and where Mir-Hossein Moussavi, the rival reformist candidate, is said to be gaining support – that could be significant.
Iran was banned by FIFA from international competition for a few weeks back in 2008 because the President fired the head of the Football Association and appointed a political hack. After Ahmadinejad backed down and brought the old FA head back, Iran were allowed to continue to compete. This story put me in the awkward position of rooting for North Korea to do something good for a change, in hopes that Iran miss out on the world cup and throw the horrible Ahmadinejad out of office in favor of a more reform-minded alternative.
In Saturday’s qualifier in Pyongyang, Iran and North Korea played to a 0-0 draw, leaving Iran on the outside looking in. Iran need to win both of their next two games in order to qualify and hope that North Korea and Saudi Arabia do not do well. It will be interesting to see how the next few weeks shape up in Iranian soccer, as well as politics.
“I think it is important to recognize that General Motors is a canary in this country’s economic coal mine; a forerunner for what’s to come for the broader economy. Their mistakes have resembled this nation’s mistakes; their problems will be our future problems. If the U.S. and General Motors have similar flaws and indeed symbiotic fates, they appear to be conjoined primarily by the un-competitiveness of their existing labor cost structures and the onerous burden of their future healthcare and pension liabilities. Perhaps the most significant comparison between GM and the U.S. economy lies in the recognition of enormous unfunded liabilities in healthcare and pensions. Reportedly $1,500 of every GM car sold in the dealer showrooms goes to pay for current and future health benefits of existing and retired workers, a sum totaling nearly $60 billion. The total future healthcare liability for all U.S. citizens can be measured in the tens of trillions.” – Bill Gross, PIMCO
Bill Gross is the manager of PIMCO, the world’s largest bond fund, and made a bunch of money predicting the collapse of US housing. This means that when he speaks, lots of people pay attention. In a recent interview with Bloomberg, he predicts, among other things, that the dollar is in trouble and that Americans’ standard of living is probably going to fall, much like I did in a previous post, but the quote above really caught my attention.
Gross’ comparison of GM’s problems to the problem’s facing the US is spot on. GM’s business plan called for new workers to pay for the retirement and health care of old workers. This plan worked while GM was producing quality cars and growing, but once GM began to lose market share, it became impossible for the company to sustain itself without major changes. GM did not change fast enough, leading to its bankruptcy.
Social Security and Medicare work the exact same way, but on a much larger scale. Current workers pay in to support workers who have retired. It worked when both the population and economy were growing, but it will stop working sometime in our lifetime.
If this comparison is correct, can we learn from GM’s unwillingness to change, which ultimately led to its bankruptcy? I think we can. There is still time to fix Social Security and Medicare, but our government has not done much to solve these problems lately. It seems to me that the US is burying its head in the sand, just like GM did. We cannot afford to continue down this path. It will take huge change to fix these problems, but we must act now before its too late and the US government goes bankrupt, just like GM did, because nobody will step up to bail out the USA.
