New York’s suicide

I have had a bad feeling about New York City for a while, but even I am a bit surprised at the scale and speed of Gotham’s collapse. Because that is what it is. Not a collapse in the zombie-apocalypse, I Am Legend sense, but a psychological and cultural collapse, and an ongoing, early-stage political, economic and social collapse. Do you doubt it? Have you noticed that Midtown is an absolute ghost town? Apparently everyone is waiting for a vaccine to resume some semblance of normal urban life, because the virus is still out there, on the prowl, and it wants nothing more than to make you drown in your own lung juice! It’s mean and spiteful like that. Meanwhile, on Friday there were 5 reported COVID-19 deaths in all of New York State, including 3 in New York City. Total COVID hospitalizations in this state of 20 million people are down to 523. The epidemic is over.

That might come as news to Governor Cuomo, who refuses to lift the insane restrictions that are keeping the city’s malls, museums and concert venues closed and restaurants limited to outdoor seating (impossible in Midtown). Now it is estimated that up to one-third of the city’s 230,000 small businesses will close forever. Cuomo is also setting up “quarantine checkpoints” for inbound travelers, a useless but invasive measure that symbolically disconnects the city from the rest of the country – perhaps as the prelude to a real cordon sanitaire such I warned about back in March.

New York City isn’t going to recover from this. The sad truth is that the city completely destroyed itself in a spasm of hubris, cowardice and folly and you don’t come back from that, not for a long time and not without painful introspection and remorse. There is no evidence that that is going to happen, so the death spiral continues. New Yorkers either actively support or passively acquiesce to the madness that has wrecked their city. Or they flee.

Entrepreneur and angel investor James Altucher, author of Choose Yourself, has taken his own book’s advice by heading for the exit:

In early March, many people (not me), left NYC when they felt it would provide safety from the virus and they no longer needed to go to work and all the restaurants were closed. People figured, “I’ll get out for a month or two and then come back.”

They are all still gone.

And then in June, during rioting and looting, a second wave of NYCers (this time including me) left. I have kids. Nothing was wrong with the protests but I was a little nervous when I saw videos of rioters after curfew trying to break into my building.

Many people left temporarily but there were also people leaving permanently. Friends of mine moved to Nashville, Miami, Austin, Denver, Salt Lake City, Dallas, etc.

Now a third wave of people is leaving. But they might be too late. Prices are down 30–50% on both rentals and sales no matter what real estate people tell you. And rentals are soaring in the second- and third-tier cities.

I’m temporarily, although maybe permanently, in South Florida now. I also got my place sight unseen. […]

Broadway is closed until at least the spring. The Lincoln Center is closed. All the museums are closed.

Forget about the tens of thousands of jobs lost in these cultural centers. Forget even about the millions of dollars of tourist-generated revenues lost by the closing of these centers.

There are thousands of performers, producers, artists, and the entire ecosystem of art, theater, production, curation, that surrounds these cultural centers.

Most New Yorkers blame this catastrophe on the “pandemic.” And will continue to do so. But it wasn’t the pandemic that did this; again, look at the recent numbers and ask yourself why everything is still closed. The truth is that New Yorkers didn’t care enough to keep their city alive, and so it died.


UPDATE: A couple of counterpoints to this grim perspective are in order.

(1)

(2)

760 million people on lockdown

One-tenth of the human race is under some form of quarantine… but “it’s just the flu, bro”…

From the NY Times:

To stop the spread of the coronavirus much of China has effectively shut down. What’s not been fully appreciated is how extensive the closures are. By our calculations 760 million are living under some kind of residential lockdown.

A friend of mine in a large city not in Hubei province wrote (Feb 7):

A lot of companies are going to shut down soon. No business is allowed to open. Shopping malls are closed. There is nobody in the street. It’s like a zombie movie.

This person, who runs a small business, a few days later told me his office lease was about to expire and he had fired all his staff.

I cannot even go to my office. The government is asking all companies to apply for a certificate to open a business. Before you get the certificate you cannot go back to the office. But you are still paying for the rent and your staff. Amazing. In order to get the certificate, you need enough supplies: masks, sanitizer… make sure it’s enough for all your staff to use for at least a month. Nobody is going to want to do business after this. I cannot even get enough supplies for myself, now I have to provide for my staff.

Today I received the following messages:

Supermarkets and pharmacies are open. All restaurants are shut down. Malls are open but nobody goes shopping. They only go to the supermarkets in the mall. Cinemas are closed. Some companies are back to business. Most are still not open. Employees work at home. There were some incidents where employees got diagnosed with the virus after back to office. Then the whole company/floor has to lock down. All people have to be isolated.

A Reddit user comments:

It might not fit the true definition of a a quarantine, but the restrictions are still locking everything down. You can’t enter certain cities, currently, schools are going all online or cancelling altogether, 95% of all businesses are closed or operating on a skeleton crew with limited hours, and restaurants are banned from dine-in in most cities. Couple that with being required to wear a mask outdoors and constant temperature checks, plus most housing districts not allowing visitors inside, it’s as close as you can get without locking the front doors.

John Robb, a former advisor the Chairman of the US Joint Chiefs of Staff who is not given to hysteria, comments thusly:

Top tier US Government national security insiders all saying the same thing:

China’s extreme mismanagement of the virus (Chernobyl-like reflexive information control, refusing intl aid, etc.) makes it very likely it will become a pandemic. US needs to prepare.

Simple way to think about this:

Very easy to get sick with this virus (possibly very high % of people getting sick).

80% get a little sick (as little as a slight fever).
20% get very sick.
2-3% die (mostly elderly + smokers) vs. 0.1% w/flu.

And this is hardly reassuring:

As the number of coronavirus cases jumps dramatically in China, a top infectious-disease scientist warns that things could get far worse: Two-thirds of the world’s population could catch it.

So says Ira Longini, an adviser to the World Health Organization who tracked studies of the virus’s transmissibility in China. His estimate implies that there could eventually be billions more infections than the current official tally of about 60,000.

China’s shrinking cities

Hegang, China in 2012

Hegang, China in 2012

China has almost 1,000 cities that are losing people:

The perception that China’s urbanisation is still in full swing is untrue for nearly one-third of Chinese cities, whose populations are shrinking, according to new findings by a Chinese university.

A research team from Tsinghua University used satellite imagery to monitor the intensity of night lights in more than 3,300 cities and towns between 2013 and 2016. In 28 per cent of cases, the lights had dimmed.

China now has 938 shrinking cities, according to Long Ying, an urban planning expert at China’s Tsinghua University, who founded and led the research group, Beijing City Lab. This is more than any other nation on Earth.

The urban shrinkage is related to China’s declining population.

The Chinese cities under the greatest pressure of shrinking include those heavily dependent on natural resources, such as the coal mining town of Hegang in Heilongjiang province.

Also diminishing are cities “in the process of transformation”, such as Yiwu in Zhejiang province, once christened the “largest small commodity wholesale market in the world” and famous for its sprawling networks of stalls selling counterfeit goods.

More about Yiwu here.

Most Chinese city planning is detached from the reality of today, Long said after his team reviewed ambitious urban development plans for more than 60 cities. The plans usually include key infrastructure projects, as well as industrial, commercial and residential developments that may diverge significantly from the demographic trends.

The best-laid plans of mice and men. Anything is possible in China, but Herculean development plans (such as the Greater Bay Area “blueprint”) need to be taken with a grain of salt.

Huge apartment buildings dominate the skylines in most Chinese urban areas. These buildings would be much more costly to tear down should they be vacant than the standard smaller houses in shrinking cities in the US, for example.

These large buildings may also be sparsely occupied – it could be difficult to survey how many homes are empty, Long said. Furthermore, no official wants to face a decision over whether to tear down a building that might just have a few occupants.

Chinese academic Gan Li calculates that some 22% of the nation’s housing stock is vacant, or more than 50 million homes.

However, the desolation that haunts many of America’s decaying post-industrial towns could be replicated in China, if the situation is not managed properly, Long said.

“Although shrinking cities in the US and China are different on many levels, many landscapes in the US rust belt could be the future of some of China’s shrinking cities,” he warned.

Preview of a blueprint of a vision

Guangzhou central business district

Guangzhou (Source)

…so to speak. I am referring to the news that the Chinese government will “unveil” a “blueprint” for the 11-city “Greater Bay Area” initiative in southern China, which is believed to contain the planet’s largest concentration of humans in a single urban area. The blogger Big Lychee weighs in:

The basic proposition is that you have a bunch of coastal cities clustered around a river delta/estuary, and if you do something (to be revealed on Feb 21, fingers crossed) it will start to perform a similar ‘powerhouse’ economic function as the Silicon Valley area around San Francisco Bay, or maybe the vast industrial region around Tokyo Bay, because an estuary is sort of like a bay. Voila – the world’s top bay area.

Regional geography types might point out that the Pearl River Delta is already performing such a function, with its vast swathes of factories, banks, sea ports, airports, power stations, residential areas, road and rail links, malls, schools, 7-Elevens, pet-grooming salons and everything else an economic dynamo needs.

Promoters of the concept excitedly insist that the extra yet-to-be-announced something can unlock the area’s great additional potential. They note that it is currently divided among a dozen or so municipal jurisdictions, whose mayors and other leaders compete with one another, and two of which are de-facto city states with their own currencies and laws, separated by international-style borders.

Linking a bunch of cities together into a seamless megalopolis is certainly a compelling idea, but the enormous amount of propaganda surrounding the extremely nebulous and inchoate Greater Bay Area concept suggests an ulterior motive. What that motive might be is astutely suggested by the blog:

Skeptics point out that while merging Guangzhou, Zhuhai, Shenzhen and other mainland cities’ planning and other functions might produce economies of scale and efficiencies, it is difficult, if not unconstitutional, to absorb Hong Kong and Macau into the Mainland this way.

Some fear the whole thing is a plot to subsume Hong Kong politically and economically within a bigger cross-border entity. Others suspect the idea is more psychological or symbolic – aimed at encouraging the idea or feeling that Hong Kong is just a part of something bigger. In other words, to dilute Hong Kong’s separate identity. As in ‘We will no longer be Hong Kong people, but Greater Bay Area people’.

That sounds about right. I guess we’ll find out. By the way, I love how Guangzhou is assigned the role of “a national central city” while flashy Shenzhen gets to be “a special economic region and an innovative city.” Poor Guangzhou. At least it’s visually interesting, and the Cantonese culture is great, if you’re into that sort of thing. (It’s also the Guangdong provincial capital.)

China’s population begins to shrink

Beijing traffic jam

Welcome news for some

China’s population is believed to have shrunk last year for the first time since the founding of the People’s Republic in 1949. Despite the loosening of the one-child policy in 2016 to allow for two children per couple, new findings from a researcher at the University of Wisconsin-Madison indicate that China’s population dropped by 1.27 million in 2018. The number of live births nationwide dipped by 2.5 million last year, after being projected to grow by 790,000. Thus, China is on track to get old before it gets rich.

This is most alarming:

The number of women of childbearing age is expected to fall by more than 39 percent over the next decade and China’s two-child policy isn’t enough to shore up dwindling birth rates, [Yi Fuxian] added.

That is an absolutely colossal decline in 10 short years. For reference, a Chinese newspaper gives the total number of women of childbearing age (15 to 49 years old) as 346 million. If we apply Yi’s 39% reduction to this figure, that would mean a net removal of almost 135 million women from the childbearing population. That’s more than the whole population of Japan. In a decade!

He is now urging the government to get out of people’s bedrooms by scrapping the two-child limit and offering more incentives including generous maternity leave and tax breaks for parents.

If the government doesn’t intervene now, “China’s aging crisis will be more severe than Japan, and the economic outlook will be bleaker than Japan,” Yi said.

China’s labor force is becoming smaller as the population grays, putting intense strain on the country’s fragile pension and health care systems.

[…]

“The U.S. economy will not be overtaken by China, but by India, which has a younger population,” he said.

“China’s economic vitality will continue to decline, which will bring about a disastrous impact on the global economy.”

Ditching the two-child limit would be most welcome. It’s questionable, however, whether pro-natalist incentives like maternity leave can make a significant dent in the problem. Chinese women have to really want children.

Here’s an insight from the financial blogger Luo Zhen (罗臻) way back in August 2013:

Consider the bigger picture. China is urbanizing and one plan for keeping growth from collapsing to near 0-3% is to push more people into cities. The fertility rates in the cities is already low by choice. China increasingly looks like Hong Kong, Taiwan and Singapore, where the fertility rates are 1.1, 1.1 and 0.8 children born/woman, respectively. China’s fertility rate is currently about 1.6 children born/woman.

If they want to raise fertility, they should deurbanize. China’s fertility rate is headed lower, one child policy or not.

There’s an idea: deurbanization. Perhaps it’s time to ease back on the crazy city-building drive and start ushering people back to the countryside. It’s been done before, sort of: China sent roughly 17 million youths to the countryside during the Cultural Revolution.

Guangzhou photos

In early 2013, I spent several days ambling around Guangzhou with my Nikon D5100. One of the best, but most underappreciated, ways to experience a city is by walking across it, so that’s exactly what I did (it took more than one session). The southern Chinese megacity formerly known as Canton has well over 80,000 restaurants and the whole place revolves around food. You may get a sense of that from some of the pictures below.

 

No relief for Chicago

Illinois governor Bruce Rauner rules out sending the National Guard to restore order in the nation’s most notorious open-air shooting gallery:

Gov. Bruce Rauner says he will not dispatch the Illinois National Guard to Chicago to stem gun violence.

The Republican said Wednesday that “the National Guard is not for neighborhood policing.”

He dismissed suggestions that he call up the Guard after more than 70 people were shot in the city last weekend. At least 11 were killed.

Chicago police have said 600 additional officers will be patrolling the affected neighborhoods.

Rauner told reporters in Peoria that “the violence in Chicago is heartbreaking, it’s got to end.”

But he says state troops would only be appropriate for “a riot or some issue like that.”

Rauner says improving economic opportunities will help end the violence.

Economic opportunities! That’s the ticket.

In the meantime, a Chicago pastor asks Trump to mobilize (federalize) the National Guard to relieve the Second City. Here’s a Chicago Tribune op-ed from last year demanding intervention by the Illinois National Guard:

What in the world is wrong with us in Chicago? How many lives must be lost before we mobilize to end the insane carnage in our streets? A thousand deaths a year? Two thousand? […]

Most Chicagoans, particularly those who live in killing fields like Englewood and North Lawndale, may be unaware of an experiment that virtually stopped the bleeding for one blessed weekend in November 2016.

On those amazing few days, Chicago police, Cook County sheriffs, state police and federal agents saturated the three most dangerous police districts in the city. Shooters were silenced. Open-air drug markets closed. Gangs couldn’t loiter at liquor stores, vacant lots and viaducts.

The strategy worked. The killing ceased. That weekend there was exactly one shooting — one — in the area under patrol.

If we are truly serious about ending gun violence, we need this kind of bold action. We have to unpack the plan created by Robert Milan, former first assistant state’s attorney in the Cook County state’s attorney’s office, and former deputy U.S. Marshal Jim Smith.

The mission: crush the violence with a six-month saturation deployment of law enforcement that mirrors the November 2016 weekend experiment.

But we live in a city that is broke. We don’t have the money or the manpower to repeat the tactic, let alone sustain it.

Worse, perhaps, we don’t seem to have the courage to swallow our pride and our politics to keep our people alive. Why else would Mayor Rahm Emanuel and the City Council reject the idea of seeking assistance from the Illinois National Guard?

In fact, the city should ask that guardsmen be deployed, along with local police, to the South and West sides, not to militarize them, but to restore public safety and save lives.

When living in Chicago, I was amazed at the lack of beat cops in the downtown. You could go a week without seeing a single police officer or cop car.

It’s rather astonishing that America is incapable of maintaining basic law and order in its third-largest city. Serious countries do not allow large swaths of their major cities to descend into anarchy, while citing budget problems as an excuse for failing to take appropriate law enforcement action.

Distinctive national architecture vs the Borg

Before:

After:

What happened?

“100 years ago it was reasonable to talk about national architecture. Today it almost doesn’t make sense, how is it possible that everybody build the same things?” Suggest [Rem] Koolhas. Absorbing Modernity: 1914-2014 is this year main challenge offered to all 65 national pavilions taking part at the Biennale. Each of them has been called to investigate and show how countries have been welcoming (or refusing) contemporary challenges.

Talk amongst yourselves. But I just wanted to point out that I happen to have worked in the China office building pictured above. It was alright, but the elevators needed a serious upgrade.

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.”