The Weekly Sift

Three dots connected.

Dot 1. The Long Descent. The most pessimistic book I’ve ever reviewed in the Sift is John Michael Greer’s The Long Descent: a user’s guide to the end of the industrial age. Greer paints a very plausible picture of how, over centuries, industrial civilization might fall apart.

The short version is that as the climate degrades and fossil fuels become simultaneously more expensive and less useable, each generation inherits from its more prosperous ancestors an infrastructure that it can’t afford to maintain. Society muddles through from year to year — sometimes even seeming to advance — until some part of that poorly maintained infrastructure snaps and causes major destruction. The destroyed area may get rebuilt, but not to its previous level. The resulting community has less infrastructure to maintain, but is also less prosperous, and so the cycle continues into the next generation.

New Orleans is one example. Hurricane Katrina was an act of Nature (and possibly a consequence of global warming), but the reason it destroyed so much of New Orleans was the failure of the city’s infrastructure. As Jed Horne reported in The Washington Post:

key levees, including the 17th Street and London Avenue canals in the heart of the city, failed with water well below levels they were designed to withstand. As the Army Corps [of Engineers] eventually conceded, they were breached because of flawed engineering and collapsed because they were junk. … The Corps and local levee boards that maintain flood barriers pinched pennies, and suddenly Katrina became the nation’s first $200 billion disaster.

For a rising city like London in 1666 or Chicago in 1871, such large-scale destruction is an opportunity to rebuild bigger and better. But New Orleans has rebuilt smaller, losing almost a quarter of its population between 2000 and 2012. The flood protection system has been rebuilt, but still not to a level that could withstand the next Katrina.

The collapse of Detroit lacks a Katrina-level catastrophe, but follows a similar pattern: Detroit’s sinking tax base can’t maintain a major city, and every attempt to either raise taxes or spend less just exacerbates the decline.

At any particular moment, you can always find something else to blame: corruption, say, or mismanagement. But rising cities are also corrupt and mismanaged, maybe more so — see Tammany Hall. It’s not that declining communities lack virtue, it’s that flourishing communities can afford vice.

Greer imagines the same scenario on a planetary scale. He sees places like New Orleans and Detroit not as unique examples of dysfunction, but as coal-mine canaries. The same vicious cycles that are driving them downward will eventually manifest everywhere.

Dot 2. The suburban Ponzi scheme. In June, 2011, Charles Marohn published “The American suburbs are a giant Ponzi scheme” at Grist (also reviewed in the Sift). His point is that car-oriented suburbs create only the illusion of wealth. In the long run, they are enormous bad investments that create unmaintainable communities.

America’s early suburbs were outlying towns that were gradually engulfed by urban sprawl in a more-or-less natural way — Oak Park, Illinois and Arlington, Massachusetts come to mind. But the 20th century created car-oriented commuter towns out of nothing. Everything was new at the same time: new houses, new roads, new schools, new stores, new sidewalks, new bridges, new sewers, and so on.

As a result, nothing needed fixing right away, so taxes could be low. Sound accounting would have required these towns to build up big maintenance funds for the day when things started wearing out. But under sound accounting, those communities wouldn’t have been quite so attractive in the first place. And whatever the accountants said, why would voters tolerate higher taxes if the town was sitting on a pile of money?

As long as there was rapid growth — new subdivisions, new roads, new malls, etc. — the game could continue: Even after the potholes started, the tax base was still big compared to the relatively small part of the suburb that needed fixing. That’s why Marohn calls it a Ponzi scheme: Just as Ponzi’s later investors paid the dividends of the early investors, the suburb’s new neighborhoods pay for the maintenance of its old neighborhoods.

But trees don’t grow to the sky, so eventually a suburb reaches its carrying capacity. And when growth plateaus, the maintenance time bomb starts ticking. A decade or two later, everything seems to wear out at once, while the tax base stays comparatively flat. Now the local government faces a choice: raise taxes or let things start falling apart. Either option makes the town a less attractive destination for the high-income families and high-margin businesses it needs — especially in comparison with fresher suburbs still in their low-tax, low-maintenance, everything-is-new growth phase.

That starts a slow-but-steady decline, until eventually you have not just high tax rates, but also cracked sidewalks, pot-holed streets, underfunded schools, dingy libraries, litter-filled parks … and the kind of residents who can’t afford to live anywhere nicer.

Eventually, in other words, you have Ferguson, whose population reached its current level in 1960. Marohn spelled it out in late August.

When places like this hit the decline phase – which they inevitably do – they become absolutely despotic. This type of development doesn’t create wealth; it destroys it. The illusion of prosperity that it had early on fades away and we are left with places that can’t be maintained and a concentration of impoverished people poorly suited to live with such isolation. … Unfortunately, nothing I’ve brought up here is really unique to Ferguson. All of our auto-oriented places are somewhere on the predictable trajectory of growth, stagnation and decline. Racial elements aside, I think we are going to see rioting in a lot of places as this stuff unwinds.

Dot 3. The Ferguson revenue structure. As I’ve discussed before, Ferguson didn’t erupt simply because Darren Wilson shot Michael Brown. That was just the spark. Combustible anger had been building up in Ferguson for a long time.

Ferguson erupted because the less affluent black majority resented being in a predator/prey relationship with the mostly white police. It would be bad enough if that relationship were entirely based on racism or abuse of power, but it goes deeper than that: It’s economics. Reuters reports:

Traffic fines are the St. Louis suburb’s second-largest source of revenue and just about the only one that is growing appreciably. Municipal court fines, most of which arise from motor vehicle violations, accounted for 21 percent of general fund revenue and at $2.63 million last year, were the equivalent of more than 81 percent of police salaries before overtime.

That’s why in 2013, Ferguson police issued 3 warrants for every household in the city, raising $321 per household. According to Thomas Harvey of Arch City Defenders:

Some of our municipalities are seeking to raise revenue through the use of their municipal courts. This is not about public safety. The courts in those municipalities are profit-seeking entities that systematically enforce municipal ordinance violations in a way that disproportionately impacts the indigent and communities of color.

Charles Mudede of Slog widens his view to include a statistic from AP: The “homicide clearance rate”, i.e., the percentage of murders that police solve in America, has dropped from 91% in 1963 to 61% in 2007.  Mudede suggests a simple explanation:

Catching murderers costs money. Cities do not have money.

In other words, why have your police out spending the town’s money investigating serious crimes when they could be making money for the town by hassling jaywalkers like Michael Brown? In an era when your businesses are already moving away and your property values are stagnant or sinking, how else are you going to raise revenue?

Mostly, that revenue is going to come from poor people who can’t afford lawyers and have no place to move to. That may seem harsh, but if you change the practice, you’ll have to come up with an alternative revenue stream, preferably one that won’t chase away more businesses and more professional-class families. What could it be?

And so, concludes Reuters, changing the way Ferguson polices its people is going to be “easier said than done”.

Put it together. For the last couple centuries, we’ve had a simple formula for increasing wealth: Take something that people used to do with their muscles and figure out a way to do it by burning fossil fuels. Augmenting human effort with the energy stored in coal, oil, and gas has created a level of luxury that would have seemed magical to our ancestors.

During that time of increase, you didn’t have to worry much about either the fuel you were burning — there was more where that came from — or the atmosphere you were burning it into. Now we’re starting to hit limits on both sides. We have to go to extremes — deep in the ocean, deep underground, far into the polar regions — to find new fuel; and if we burn all that we have discovered, the change in our climate could be catastrophic.

So you don’t have to go all the way to Greer-level pessimism to realize that creating wealth will be trickier in the centuries to come. Many of the things that may look like wealth-creation actually aren’t; they just shove someone else into poverty, or create debt that will eventually have to be written off — like the “profits” investment banks booked during the housing bubble.

When generation-to-generation economic growth is large and reliable, you don’t have to worry too much about the long term, because your grandchildren will be rich enough to handle the messes you leave for them. So it makes a certain amount of sense to push costs off into the future. But if we genuinely don’t know whether generations-to-come will be richer or poorer than we are, then it’s important that we do our accounting right. It’s also important that we build robustly, so that communities are viable under a wide variety of scenarios. Assuming that everybody will have a car or that food can be imported cheaply creates brittle communities that someday may have to be abandoned. A flourishing society can afford such write-offs. But if maintaining the infrastructure we inherit is the difference between advance and decline, we’ll have to be smarter.

And finally, we need to figure out how to rebuild or write off the mistakes of the past. Places like Ferguson — and there are a lot of them — are not sustainable in their current form. They will never generate the capital to remake themselves, and the outside capital they attract will be mainly from vultures who want to squeeze the last bits of value out of the community’s decline and despair.

In the short term, the easiest way to deal with that dysfunction is to blame it on the people who live there and lack more viable options. Their local governments can figure out ever more inventive ways to squeeze money out of them and leave them in squalor, while the rest of us lecture them about their lack of middle-class values. But the fundamental mistakes are not theirs. Those mistakes were made decades ago, and have been quite literally set in stone.