This will end well

Illinois is on track to become the first state to declare bankruptcy since 1933:

Now Comptroller Susana Mendoza is warning that new court orders in lawsuits filed by state suppliers that are owed money mean her office is required to pay out more than Illinois receives in revenue each month. That means there would be no money left for so-called “discretionary” spending — a category that in Illinois includes school buses, domestic violence shelters and some ambulance services.

“I don’t know what part of ‘We are in massive crisis mode’ the General Assembly and the governor don’t understand. This is not a false alarm,” said Mendoza, a Chicago Democrat. “The magic tricks run out after a while, and that’s where we’re at.”

It’s a new low, even for a state that’s seen its financial situation grow increasingly desperate amid a standoff between the Democrat-led Legislature and Republican Gov. Bruce Rauner. Illinois already has $15 billion in overdue bills and the lowest credit rating of any state, and some ratings agencies have warned they will downgrade the rating to “junk” if there’s no budget before the next fiscal year begins July 1.

Good job, guys.

Now imagine this crisis on a national level, when the national debt exceeds $30 trillion and the interest payments cost more than defense (about a decade down the road).

Related:

The Chicago Teachers’ Pension Fund (CTPF) paid out $1.5 billion last fiscal year, mostly on benefits to retirees.

But it only earned $7.8 million on its investments, according to a filing it made with the Illinois Department of Insurance.

The Chicago Teachers’ Pension fund operates like a Ponzi Scheme, but it is allowed to do so because the fund is taxpayer-backed. Bernie Madoff’s private Ponzi scheme cost investors $18 billion; he received 150 years in prison.

In addition, it cost CTPF $35.8 million in investment expenses to earn that $7.8 million, according to the filing, meaning it actually lost $28 million between July 1, 2015 and June 30, 2016.

Years like 2016 elucidate how the fund, which is supposed to pay for the current retirements of some 28,000 former CPS teachers and administrators as well as provide future benefits to another 29,000 active ones, is running out of money, and time.

This caught my eye:

Annual payouts to beneficiaries have risen 61 percent since 2007, from $906 million to $1.46 billion. The average CPS teacher salary has risen, too, by 58 percent, from $59,458 to $94,064.

A 58% average salary increase in 10 years? Yeah, that’s perfectly normal and sustainable.

How to manage a budget

Chicago in one sentence?

Paul Graham on the subtle messages that great cities send:

Great cities attract ambitious people. You can sense it when you walk around one. In a hundred subtle ways, the city sends you a message: you could do more; you should try harder.

The surprising thing is how different these messages can be. New York tells you, above all: you should make more money. There are other messages too, of course. You should be hipper. You should be better looking. But the clearest message is that you should be richer.

What I like about Boston (or rather Cambridge) is that the message there is: you should be smarter. You really should get around to reading all those books you’ve been meaning to.

When you ask what message a city sends, you sometimes get surprising answers. As much as they respect brains in Silicon Valley, the message the Valley sends is: you should be more powerful. […]

The big thing in LA seems to be fame. […]

In DC the message seems to be that the most important thing is who you know. You want to be an insider.

As a resident of Chicago, this naturally made me wonder what message the Windy City sends to people. A couple of excellent candidates are proposed on the Y Combinator message board:

Chicago: You went to the wrong fraternity

And:

Chicago: There’s nothing wrong with second place.

But seriously, folks. Chicago is a great global city, it’s just hard to sum it up in one sentence because it’s such a mixed bag of industries. Chicago is said to have the most diversified economy in the US; its “industry mix most closely matches the nation’s, with no single industry employing more than 14% of the workforce,” according to World Business Chicago. Top industries in Chicago range from finance and insurance, to food processing and manufacturing, to publishing and biotech. The city is also a major logistics and transportation hub, as well as a cultural and academic powerhouse.

Chicago has a protean quality that makes it somewhat hard to pin down. There may be no tidy way to summarize the city’s “message.” Part of the issue is that Chicago is a regional magnet for talent, but not a national one. People don’t flock to Chicago from across the country. (That has a lot to do with the weather, among other things.) Thus, while Chicago is a great city, it may not be a true hub of ambition in the way Graham is talking about.

This comment gets the last word:

As a cartoonist covering life in the Chicago area for the past 20 or so years, here is what Chicago says; “You really need to be successful here, but if not, someone just might help you.”

Is it really that hard?

Is public wifi going out of style? I often bring my laptop to cafés and coffee shops in downtown Chicago, intending to surf the internet and work. Almost invariably, I discover one of three things:

  1. There is no wifi at the café/coffee shop in question.
  2. There is wifi, in theory, but it’s so insanely slow and dysfunctional as to be unusable. (After spending several minutes trying to get online, I’ll gripe to the server and get a reply like: “Oh yeah, the wifi is terrible here. I’ve asked the manager to look into it.” Of course, it never gets better, even months later.)
  3. Wifi is available, but you’re not “supposed” to use it, because it’s not for customers, or the network belongs to an adjacent shop. (In these cases, the server will give me the password, sometimes scribbled on a ragged scrap of paper, with a conspiratorial whisper: “Don’t tell anyone I gave you this.” I am not making this up.)

Starbucks usually has fast and reliable wifi – but not always. Any other establishment, probably not.

Now, I’m not complaining. Life is good. A dearth of public wifi is very much a First World Problem that I wouldn’t even mention, except that I’m genuinely curious as to why this would be an issue in the bustling downtown of America’s third-largest city.

Seriously, what’s the deal? Is wifi just becoming a thing of the past? Are people so fixated on their phones that they don’t use their laptops for internet browsing or social media anymore, thus obviating the need for wifi?

My observation is that the few places that do offer wifi are often teeming with people on their laptops, suggesting that establishments with crappy or nonexistent wifi are leaving money on the table.

Is the technology really that daunting? Or is there something else going on?

Just askin’…

Photos: Chicago architecture

Chicago is one of the world’s great cities for architecture. Below are some photos of the downtown landscape that I took with my Samsung phone in Sept-Dec 2016:

 

And some more from 2017:

 

And a few more from the Nikon (the better to take night shots with):

Blast from the past

This is an amazing film about Chicago released by the city’s Board of Education circa 1945-46, with great images of architecture, commerce and industry in what was then allegedly the world’s second-largest city. (By contrast, Chicago doesn’t even make the Wikipedia list of the world’s 91 most populous cities today.)

Much of the urban landscape of today’s Chicago is recognizable in the film, but of course, a lot has changed. It’s a glimpse into a mostly vanished world.

Shenzhen built more skyscrapers than the US in 2016

Because it can:

Skyscraper construction saw another year of superlatives in 2016, according to the latest annual report from the Council on Tall Buildings and Urban Habitat. An unprecedented 128 buildings of 200 meters’ height or more (656 feet) were completed around the globe last year (some of which are pictured in this article), a new record that comes on the heels of two previous record-setting years. Since 2000, 903 such buildings have been constructed, a 441 percent increase.

And, no surprise, China is the world leader by a wide margin, with 84 percent of the total stock of new, 200-meter-plus structures going up in that country, including the 111-floor Guangzhou CTF Finance Centre. The city of Shenzhen saw 11 of these towers completed last year. For comparison, seven such structures were built in the entire United States in 2016.

According to CTBUH, there are 328 skyscrapers at least 200 meters tall under construction across China. Wow.

Shenzhen CFC Changfu Center (completed 2016)

China’s ghost cities are filling up

As expected:

A half-decade ago, China counted perhaps three dozen ghost towns like Tianducheng, places author Wade Shepard called “the stillborn carcasses of cities that never knew life” in his book, Ghost Cities of China.

Littered across the landscape, they were warning signs pointing to the excesses in China’s building boom, an era of unconstrained growth that was the biggest the world has ever seen. But today, they are looking less like epic mistakes and more like temporary disasters.

“There’s not a single one in the country that isn’t in the process of filling up,” said Mr. Shepard.

Or look at Ordos Kangbashi, the Inner Mongolia city built in the desert and so famous for its desolation that tourists flocked to the bizarre site of its Genghis Khan sculpture soaring over emptiness.

The joke used to be that the only people walking the streets of Ordos were BBC reporters.

Now, its population is nearing 100,000, about a third of what it was built to accommodate, and the local government is handing out housing exchange certificates to nearby residents to encourage them to move in.

Ghost towns, it turns out, are easier to fix than the masses of empty apartment towers wedged into the corners of urban centres across the country.

Also, don’t count on the filling-up trend to continue indefinitely. The Chinese government announced a plan in 2013 to steer the movement of some 250 million people from the countryside to the cities over the following dozen years; this was downgraded in 2014 to the more “modest” goal of 100 million people by 2020. This endless supply of people would presumably soak up much of the empty housing inventory in the burgeoning cities.

But life doesn’t always work out according to the plans of Chinese bureaucrats. About 9 million people moved to the cities per year in the 2000s. However, this epic migration has dramatically slowed. In 2015, it appeared to reverse itself, as the migrant population shrank for the first time in three decades, by 5.68 million.

Check out the quoted article for some great images of Tianducheng, a former ghost town with a 354-foot-tall replica of the Eiffel Tower, along with a surreal music video filmed there.