Everything You Love Will Be Eaten Alive

Here are two different visions for what a city ought to be. Vision 1: the city ought to be a hub of growth and innovation, clean, well-run, high-tech, and business-friendly. It ought to attract the creative class, the more the better, and be a dynamic contributor to the global economy. It should be a home to major tech companies, world-class restaurants, and bold contemporary architecture. It should embrace change, and be “progressive.” Vision 2: the city ought to be a mess. It ought to be a refuge for outcasts, an eclectic jumble of immigrants, bohemians, and eccentrics. It should be a place of mystery and confusion, a bewildering kaleidoscope of cultures and classes. It should be a home to cheap diners, fruit stands, grumpy cabbies, and crumbling brownstones. It should guard its traditions, and be “timeless.”

It should be immediately obvious that not only are these views in tension, but that the tension cannot ever be resolved without one philosophy succeeding in triumphing over the other. That’s because the very things Vision 2 thinks make a city worthwhile are the things Vision 1 sees as problems to be eliminated. If I believe the city should be run like a business, then my mission will be to clear up the mess: to streamline everything, to eliminate the weeds. If I’m a Vision 2 person, the weeds are what I live for. I love the city because it’s idiosyncratic, precisely because things don’t make sense, because they are inefficient and dysfunctional. To the proponent of the progressive city, a grumpy cabbie is a bad cabbie; we want friendly cabbies, because we want our city to attract new waves of innovators. To the lover of the City of Mystery, brash personalities are part of what adds color to life. In the battle of the entrepreneurs and the romantics, the entrepreneurs hate what the romantics love, and the romantics hate what the entrepreneurs love. In the absence of a Berlin-like split, there can be no peace accord, it must necessarily be a fight to the death. What’s more, neither side is even capable of understanding the other: a romantic can’t see why anyone would want to clean up the dirt that gives the city its poetry, whereas an entrepreneur can’t see why anyone would prefer more dirt to less dirt.

Vanishing New York: How A Great City Lost Its Soul, based on the blog of the same name, is a manifesto for the Romantic Vision of the city, with Michael Bloomberg cast as the chief exponent of the Entrepreneurial Vision. “Nostalgic” will probably be the word most commonly used to capture Jeremiah Moss’s general attitude toward New York City, and Moss himself embraces the term and argues vigorously for the virtues of nostalgia. But I think in admitting to being “nostalgic,” he has already ceded too much. It’s like admitting to being a “preservationist”: they accuse you of being stuck in the past, and you reply “Damn right, I’m stuck in the past. The past was better.” But this isn’t simply about whether to preserve a city’s storied past or charge forward into its gleaming future. If that were the case, the preservationists would be making an impossible argument, since we’re heading for the future whether they like it or not. It’s also about different conceptions of what matters in life. The entrepreneurs want economic growth, the romantics want jazz and sex and poems and jokes. To frame things as a “past versus future” divide is to grant the entrepreneurs their belief that the future is theirs.

Moss’s book is about a city losing its “soul” rather than its “past,” and he spends a lot of time trying to figure out what a soul is and how a city can have one or lack one. He is convinced that New York City once had one, and increasingly does not. And while it is impossible to identify precisely what the difference is, since the quality is of the “you know it when you see it” variety, Moss does describe what the change he sees actually means. Essentially, New York City used to be a gruff, teeming haven for weirdos and ethnic minorities. Now, it is increasingly full of hedge fund managers, rich hipsters, and tourists. Tenements and run-down hotels have been replaced with glass skyscrapers full of luxury condos. Old bookshops are shuttered, designer clothes stores in their place. Artisanal bullshit is everywhere, meals served on rectangular plates. You used to be able to get a pastrami and a cup of coffee for 50 cents! What the hell happened to this place? (...)

Moss loves a lot of places, and because New York City is transitioning from being a city for working-class people to a city for the rich, he is constantly being wounded by the disappearance of beloved institutions. CBGB, the dingy punk rock music club where the Ramones and Patti Smith got their start, is forced out after its rent is raised to $35,000 a month. Instead, we get a commemorative CBGB exhibit at the Met, with a gift shop selling Sid Vicious pencil sets and thousand-dollar handbags covered in safety pins. The club itself becomes a designer clothing store selling $300 briefs. The ornate building that once housed the socialist Jewish Daily Forward newspaper, the exterior of which featured bas-relief sculptures of Marx and Engels, is converted to luxury condos. Its ethnic residents largely squeezed out, bits of Little Italy are carved off and rebranded as “Nolita” for the purpose of real estate brochures, since—as one developer confesses—the name “Little Italy” still connotes “cannoli.” A five-story public library in Manhattan, home to the largest collection of foreign-language books in the New York library system, is flattened and replaced with a high-end hotel (a new library is opened in the hotel’s basement, with hardly any books). Harlem’s storied Lenox Lounge is demolished, its stunning art-deco facade gone forever. Rudy Giuliani demolishes the Coney Island roller coaster featured in Annie Hall. Cafe Edison, a Polish tea house (see photo p. 32-33), is evicted and replaced with a chain restaurant called “Friedman’s Lunch,” named after right-wing economist Milton Friedman. (I can’t believe that’s true, but it is.) Judaica stores, accordion repairmen, auto body shops: all see their rent suddenly hiked from $3,000 to $30,000, and are forced to leave. All the newsstands in the city are shuttered and replaced; they go from being owner-operated to being controlled by a Spanish advertising corporation called Cemusa. Times Square gets Disneyfied, scrubbed of its adult bookstores, strip joints, and peep shows. New York University buys Edgar Allen Poe’s house and demolishes it. (“We do not accept the views of preservationists who say nothing can ever change,” says the college’s president.) (...)

The greed of landlords and developers is a prime reason that New York is steadily transforming into “Disneyland for billionaires.” But government policy also bears direct responsibility. Throughout New York history, city officials like Robert Moses have either neglected or waged active war against the ethnic populations that stood in the way of development. (“Look on the bright side… the city got rid of a million and a half undesirables,” a mayoral aide observed about the fires that destroyed countless tenements in the 1970s, allegedly partially due to the city’s intentional neglect of fire services.) But Michael Bloomberg was explicit in his commitment to making New York a city for the rich. Bloomberg’s city planning director, Standard Oil heir Amanda Burden, stated the administration’s aspirations: “What I have tried to do, and think I have done, is create value for these developers, every single day of my term.” Bloomberg himself was even more frank, calling New York City a “luxury product,” and saying:

“We want rich from around this country to move here. We love the rich people.”

“If we can find a bunch of billionaires around the world to move here, that would be a godsend… Wouldn’t it be great if we could get all the Russian billionaires to move here?”

“If we could get every billionaire around the world to move here it would be a godsend that would create a much bigger income gap.” (...)

The effort to replace poor people with rich people is often couched in what Moss calls “propaganda and doublespeak.” One real estate investment firm claims to “turn under-achieving real estate into exceptional high-yielding investments,” without admitting that this “under-achieving real estate” often consists of people’s family homes. (Likewise, people often say things like “Oh, nobody lives there” about places where… many people live.) One real estate broker said they aspired to “a well-cultivated and curated group of tenants, and we really want to help change the neighborhood.” “Well-cultivated” almost always means “not black,” but the assumption that neighborhoods actually need to be “changed” is bad enough on its own.

In fact, one of the primary arguments used against preservationists is the excruciating two-word mantra: cities change. Since change is inevitable and desirable, those who oppose it are irrational. Why do you hate change? You don’t believe that change is good? Because it’s literally impossible to stop change, the preservationist is accused of being unrealistic. Note, however, just how flimsy this reasoning is: “Well, cities change” is as if a murderer were to defend himself by saying “Well, people die.” The question is not: is change inevitable? Of course change is inevitable. The question is what kinds of changes are desirable, and which should be encouraged or inhibited by policy. What’s being debated is not the concept of change, but some particular set of changes.

Even “gentrification” doesn’t describe just one thing. It’s a word I hate, because it captures a lot of different changes, some of which are insidious and some of which seem fine. There are contentious debates over whether gentrification produces significant displacement of original residents, and what its economic benefits might be for those residents. The New York Times chided Moss, calling him “impeded by myopia,” for failing to recognize that those people who owned property in soon-to-be-gentrified areas could soon be “making many millions of dollars.” But that exactly shows the point: Moss is concerned with the way that the pursuit of many millions of dollars erodes the very things that make a city special, that give it life and make it worth spending time in. A pro-gentrification commentator, in a debate with Moss, said that he didn’t really see any difference, because “people come for the same reason they always have: to make as much money as possible.” That’s exactly the conception that Moss is fighting. People came to New York, he says, because it was a place worth living in, not because they wanted to make piles of money. (...)

I have to confess, I differ a lot from Moss in my conception of what a good city should be like. I have always found New York City to be something of an armpit, and not because it’s full of high-priced condos. Many of the people Moss adores, the bohemians and artists, I find fairly intolerable. Moss is a poet, and wants a city of poetry. I am not a poet, I generally detest poetry. Moss has a strange fondness for mean New York, the New York that told everybody else to fuck off. I thought that New York was kind of an asshole.

But that’s okay: the philosophy of Vanishing New York is that cities shouldn’t all be the same, that they should have different attitudes toward life and different cultures. If I am more New Orleans than Brooklyn, that means we have a diverse world in which New Orleans and Brooklyn are very different places. The one thing that we should all be scared of, wherever we live, is the collapse of those differences, the streamlining and homogenizing of everything.

And yet the logic of capitalism sort of demands that this occur. If efficiency is your goal, then you’re going to have chain restaurants. They’re just more efficient. If you must perpetually grow and grow, then you’re going to have to demolish a lot of things that people dearly love. If everyone embraces the pursuit of financial gain, then landlords are never going to cut tenants a break merely because their business is a neighborhood institution. In a free market world, everything you love will be eaten alive, unless you’re rich.

by Nathan J. Robinson, Current Affairs |  Read more:

Image: Jeremiah Moss

Even What Doesn’t Happen is Epic

Science fiction isn’t new to China, as Cixin Liu explains in Invisible Planets, an introduction to Chinese sci-fi by some of its most prominent authors, but good science fiction is. The first Chinese sci-fi tales appeared at the turn of the 20th century, written by intellectuals fascinated by Western technology. ‘At its birth,’ Cixin writes, science fiction ‘became a tool of propaganda for the Chinese who dreamed of a strong China free of colonial depredations’. One of the earliest stories was written by the scholar Liang Qichao, a leader of the failed Hundred Days’ Reform of 1898, and imagined a Shanghai World’s Fair, a dream that didn’t become a reality until 2010. Perhaps surprisingly, given the degree of idealistic fervour that followed Mao’s accession, very little utopian science fiction was produced under communism (in the Soviet Union there was plenty, at least initially). What little there was in China was written largely for children and intended to educate; it stuck to the near future and didn’t venture beyond Mars. By the 1980s Chinese authors had begun to write under the influence of Western science fiction, but their works were suppressed because they drew attention to the disparity in technological development between China and the West. It wasn’t until the mid-1990s, when Deng’s reforms began to bite, that Chinese science fiction experienced what Cixin calls a ‘renaissance’.

Cixin himself has been at the forefront of the scene since the 1990s. He is the first Asian writer to receive a Hugo award (in 2015), and the author whose work best captures the giddying, libidinous pace of the Chinese economic boom. His monumental Three-Body Trilogy – first published between 2006 and 2010, and recently translated into English by Ken Liu, a Chinese-American sci-fi writer – is Chinese science fiction’s best-known work. Barack Obama is a fan, and the forthcoming movie adaptations are already being described as ‘China’s Star Wars’. The trilogy concerns the catastrophic consequences of humanity’s attempt to make contact with extraterrestrials (it turns out that the reason we haven’t heard from aliens yet is that we’re the only species thick enough to reveal our own location in the universe). It is one of the most ambitious works of science fiction ever written. The story begins during the Cultural Revolution and ends 18,906,416 years into the future. There is a scene in ancient Byzantium, and a scene told from the perspective of an ant. The first book is set on Earth, though several of its scenes take place in virtual reality representations of Qin dynasty China and ancient Egypt; by the end of the third book, the stage has expanded to encompass an intercivilisational war that spans not only the three-dimensional universe but other dimensions too.

The grand scale of Cixin’s story is supported by an immense quantity of research. He graduated from the North China University of Water Conservancy and Electric Power in 1988 and worked, until his literary career took off, as a computer engineer at a power plant in Shanxi province. That training might sound narrow, but his science fiction, which situates itself at the diamond end of the ‘hard’ to ‘soft’ scale (‘hard sci-fi’ has a lot of science in it, ‘soft sci-fi’ doesn’t), demonstrates a knowledge of particle physics, molecular biology, cutting-edge computer science and much more besides. The Three-Body Problem, the first volume of the trilogy, takes its title from an esoteric problem of orbital mechanics to do with predicting the motions of three objects whose gravitational fields intersect. It’s relevant because the alien race the humans recklessly make contact with come from a planet that has three suns, which causes serious climate change issues. Brief ‘stable eras’, with regular nights and days, give way without warning to ‘chaotic eras’, during which the days can last years and a sun can be so close that it desiccates everything its rays fall on. The ‘three-body problem’ is the reason the Trisolarans are delighted to find a planet – ours – that has just one sun and a predictable climate. Naturally, they want to steal it from us. Unfortunately for them our planet is four light years away, which gives us four hundred years to prepare for their invasion.

New technology and the science behind it are always well explained (though never boringly) by Cixin. The best bits in his books are set pieces that would be hallucinatory, or surreal, were it not that everything is described with such scientific authority. One of the most visionary scenes comes towards the end of The Three-Body Problem, when the Trisolarans develop ‘sophons’: tiny robots made from protons that have been ‘unfolded’ into two dimensions, according to principles derived from superstring theory. The plan is to send them to Earth to confuse the results from particle accelerator experiments and report news of humanity back to Trisolaris. But attempts at unfolding the proton, using a giant particle accelerator, go wrong. On the first try, the Trisolarans go too far and unfold it into one dimension, creating an infinitely thin line 1500 light-hours long that breaks apart and drifts back down to Trisolaris as ‘gossamer threads that flickered in and out of existence’. On the second attempt the proton is unfolded into three dimensions. Colossal geometric solids – spheres, tetrahedrons, cones, tori, solid crosses and Möbius strips – fill the sky, ‘as though a giant child had emptied a box of building blocks in the firmament’. Then they melt and turn into a single glaring eye, which transforms into a parabolic mirror that focuses a condensed beam of sunlight onto the Trisolaran capital city, setting it ablaze.

Besides theoretical physics, Cixin appears to have read widely in history, political theory, game theory, sociology, even aesthetics. The main character in the second volume, The Dark Forest, isn’t a scientist but a sociologist called Luo Ji who comes up with the ‘Dark Forest theory’, according to which the universe is like a forest ‘patrolled by numberless and nameless predators’. Any planet that reveals its location is prey; survival depends on stealth. Luo Ji is appointed by the UN as one of the Wallfacers, a small group of individuals charged with formulating plans to combat the Trisolarans. They are called Wallfacers after a Buddhist meditation technique that involves staring in silence at a wall, because in order to evade the sophons they work alone and don’t have to reveal the details of their plan to anyone, not even the authorities who set up the programme. Most of the plans aren’t put into action: the former US Defense Secretary Frederick Tyler, for example, has the idea of offering the Trisolarans a Trojan horse: a hydrogen bomb hidden in a mountain-sized shard of ice (in the trilogy, even what doesn’t happen is epic). Luo Ji’s plan involves threatening to broadcast the location of Trisolaris to the universe, and it succeeds at least in forestalling humankind’s destruction. In the final novel, Death’s End, it emerges that there are civilisations even more technologically advanced than the Trisolarans: they monitor the universe for signs of intelligent life and wipe out any potentially threatening solar systems with the push of a button – they see it as a cleaning job.

This pessimistic view of the universe, in which civilisations must exist in isolation for the sake of their own safety, illustrates a point that Cixin makes throughout the series: that virtuous behaviour is a luxury, conditional on the absence of threat. The Trisolarans aren’t bad, they just want to survive. After a devastating confrontation between Earth’s space fleet and Trisolaran weaponry, a handful of Earth ships escape into space. The plan is to re-establish civilisation away from the solar system, but their crews soon realise that the ships’ combined supplies aren’t sufficient to get all of them to their destination. The first to act on this realisation is an American ship called Bronze Age, which nukes the others, harvests their supplies and continues on its way. Early in Death’s End, Bronze Age is recalled to Earth. Humanity hasn’t been destroyed, thanks to Luo Ji, and is now living in peace and prosperity. The men and women aboard Bronze Age think they’re going to be welcomed as heroes but when they get back home they’re charged with crimes against humanity. The actions of a chaotic era – Earth’s, not Trisolaris’s – are judged by the standards of a stable era. The same thing happens to Luo Ji. Earth enjoys stability because Luo Ji is waiting by a button, ready to broadcast Trisolaris’s location. But after he retires he is charged with genocide: in order to test his Dark Forest theory, Earth transmitted the location of another (presumably inhabited) solar system, which was subsequently destroyed. Immediately after Luo’s removal from office, Trisolaris attacks and the whole of humankind is banished to a gulag in Australia, where it descends into brutal civil war.

In this context, radical political movements are shown to be self-deluding. They appear during stable eras but are made irrelevant, or are transformed past recognition, by real crisis. Cixin wants us to know that communism, especially, sucks.

by Nick Richardson, LRB |  Read more:

Image: Amazon

[ed. I thought The Three Body Problem interesting until about the last quarter of the book when all the physics got too overwhelming.]

The Brothers Johnson

Repost

The Weirdest—and Possibly Best—Proposal to Resolve the North Korea Crisis

“Washington has a long habit of painting its enemies 10 feet tall—and crazy,” as Fareed Zakaria once noted. Thus, National Security Adviser H.R. McMaster in December called North Korea’s nuclear-weapons program—which according to American intelligence still probably lacks the capacity to hit the U.S. mainland with a nuclear weapon—“the most destabilizing development, I think, in the post-World War II period.” More destabilizing, evidently, than Stalin or Mao’s far larger nuclear arsenals; or the break-up of the British, French, and Soviet empires; or the rise of China; or a changing climate that could soon make major cities uninhabitable. If Pyongyang’s nuclear program is allowed to proceed, McMaster continued, North Korea—whose GDP is one-50th the size of South Korea’s and which spends one-fifth as much on its military—might “reunify the [Korean] peninsula under the red banner.”

Depicting North Korea’s nuclear program as an expression of its geopolitical might is exactly wrong. The program is actually a result of the North’s extraordinary weakness. Which is why the Trump administration’s strategy of threatening Pyongyang with war—and making it feel even more imperiled—is exactly the wrong way to curb its nuclear program. Kim Jong Un possesses nuclear weapons, above all, to deter an American attack. Thus, the best way to limit his arsenal is to help him deter such an attack without nukes. That’s the rationale behind Naval War College Professor Lyle Goldstein’s wildly counterintuitive, and oddly compelling, proposal: The United States should ask China and Russia to deploy troops on North Korean soil.

To understand Goldstein’s reasoning, it’s necessary to grasp how North Korea’s increasing weakness has propelled its nuclear program. The Stanford political scientist Scott Sagan has observed that “most international relations scholars have a clear and simple answer” to why countries develop nuclear weapons. They do so “when they face a significant military threat to their security that cannot be met through alternative means.” Over the last half-century, the military threats to North Korea have swelled while its alternative means of protecting itself have withered. Thus, Pyongyang’s obsessive pursuit of nukes.

First, consider the shifting balance of power between Pyongyang and Seoul. North Korea has long had a smaller population than South Korea. But until the early 1970s, the two countries had roughly the same per capita GDP. Today, South Korea’s is roughly 23 times higher. Ninety-two percent of South Korea’s roads are paved. In the North, it’s 3 percent. The average South Korean lives more than a decade longer than her North Korean counterpart, and is between one and three inches taller.

North Korea has tried to keep pace militarily by devoting as much as one-quarter of its GDP to defense. And it does have more men under arms than the South does. But the technological gap between the two nations’ militaries has grown more and more extreme. North Korea’s most common fighter plane was unveiled in 1953. The South, according to a 2011 Center for Strategic and International Studies report, has “achieved a massive lead in modern aircraft and surface-to-air missiles.” The same pattern holds true on land. North Korea, notes Goldstein, has “tanks from the 1950s and it doesn’t have gas for those tanks and it can’t feed the soldiers who man them.”

But this is only part of the story. North Korea hasn’t only grown weaker vis-á-vis South Korea, it’s grown weaker vis-á-vis the great powers as well. During the Cold War, North and South Korea each had important patrons, which fought alongside them during the Korean War. Then, in 1991, the North’s most powerful ally, the Soviet Union, collapsed. Its successor state, Russia, annulled its mutual-assistance treaty with Pyongyang and opened diplomatic relations with Seoul. By 1992, the Russian and South Korean navies were visiting each other’s ports.

At around the same time, North Korea’s other major ally, China, began cozying up to South Korea too, and trade between the two nations quickly surpassed trade between Beijing and Pyongyang. (South Korea is now China’s fourth-largest trading partner. North Korea is not in the top 15.) China’s relationship with North Korea, by contrast, grew increasingly chilly. In his book, No Exit: North Korea, Nuclear Weapons and International Security, Jonathan Pollack notes that North Korea’s founding leader, Kim Il Sung, visited China every year. His successor, Kim Jong Il, who took power in 1994, didn’t visit until 2000.

All this would have been more bearable for Pyongyang had it improved its relationship with Seoul’s Cold War ally, the United States. But that didn’t happen. Nor did North Korea’s relationship improve with Japan. Instead, the United States—newly confident that dictatorships were on their way out across the globe—waited expectantly for North Korea to go the way of East Germany. Pyongyang found it particularly unnerving that the U.S. continued its annual military exercises with South Korea even after the Cold War’s end. A congressman who met Kim Il Sung in 1993 reported that when discussing the U.S.-South Korean war games, the North Korean leader’s voice “quivered and his hands shook with anger.”

“It is perhaps still hard for most people to appreciate how profound the North Koreans’ sense of crisis was” as a result of these tectonic shifts, writes Fu Ying, the chairwoman of the Academic Committee of the National Institute of Global Strategy at the Chinese Academy of Social Sciences. North Korea began its nuclear program, under Soviet tutelage, in the 1950s. But it’s unlikely Moscow wanted Pyongyang to actually develop a bomb, and had the USSR stuck around, North Korea would have had less desire to. “The events of the early 1990s deeply upset North Korea and led to its decision to go its own way,” writes Fu, “including by making the “‘nuclear choice.’” In 1990, American satellites captured evidence that the North had constructed a secret nuclear facility at Yongbyon.

Since then, North Korea’s geopolitical position has only grown worse. As a result of the 1994 Agreed Framework—which shut down Yongbyon—the Clinton administration in 2000 pledged that it had no “hostile intent” towards Pyongyang. But both North Korea and the United States violated the agreement, and when the Bush administration took power, it refused to reaffirm America’s lack of hostile intent. To the contrary, George W. Bush labelled North Korea a member of the “axis of evil,” and then invaded Iraq. Undersecretary of State John Bolton instructed Pyongyang to “draw the appropriate lesson.”

North Korea has since watched America topple yet another dictator who lacked nuclear weapons: Muammar Qaddafi. It’s seen the U.S. practice “decapitation raids” against its own regime. It’s watched Donald Trump declare, in response to a question about assassinating Kim Jong Un, that “I’ve heard of worse things.” And it’s seen the Trump administration both threaten, and mobilize for, war.

It’s also watched China, its last ally, tilt even more heavily toward Seoul. Since he became China’s leader in 2012, Xi Jinping has met his South Korean counterparts seven times. He hasn’t met Kim Jong Un once. Beijing has backed sanctionsagainst the North at the United Nations. Chinese officials have even declared that they no longer feel bound to defend Pyongyang under the Mutual Aid and Cooperation Friendship Treaty that the two countries signed in 1961.

When it comes to security, in other words, North Korea sees nukes as just about all it has left.

The problem with North Korea’s nuclear weapons is not that Kim Jong Un plans to use them. He has shown no inclination toward suicide. It’s that he runs a cloistered, paranoid regime, which lacks good channels of communication with a White House that is fairly cloistered and paranoid itself. There’s also the danger that North Korea might grow so economically desperate that it sells some of its nuclear technology to actors even worse than itself.

But if you want North Korea to abandon, or even limit, its nuclear arsenal, you must convince its leaders that they can do so and still survive. That’s especially difficult after the Libya intervention, since Kim watched Qaddafi abandon his nuclear program as part of a rapprochement with America, only to be later toppled by America anyway. At this point, the promises of non-belligerence that Clinton offered in 2000—even accompanied by a halt to U.S.-South Korean military exercises—aren’t likely to be enough.

Which is why American policymakers need to think more boldly. Rajan Menon of The City College of New York has suggested promising North Korea that if it abandons its nukes, U.S. troops will leave South Korea. But—in addition to weakening America’s position in Asia—an American withdrawal might tempt Seoul, and perhaps Tokyo, to develop their own nuclear weapons. Which would leave the North just as vulnerable as it is now, and make it cling just as hard to its nukes.

Lyle Goldstein’s idea—which he mentions briefly in his 2015 book, Meeting China Halfway, and has elaborated on since—is different. Instead of U.S. troops leaving the South, small numbers of Chinese and perhaps Russian troops would, with Pyongyang’s permission, deploy in the North.

There’s little chance these forces would embolden Kim Jong Un. To the contrary, they would likely restrain him, since China and Russia both value their relationship with Seoul. But the deployments would make an American or South Korean attack on the North almost impossible. Even the Trump administration—which is frighteningly willing to contemplate war with Pyongyang—is unlikely to risk killing Chinese and Russian troops and thus provoking war with Moscow and Beijing. Thus, Kim Jong Un might gain the security to begin curbing, and perhaps even eventually scrapping, his nuclear program. He’d also gain prestige. Receiving Chinese and Russian troops would constitute a major stature boost for a leader who right now can’t get a meeting with Xi Jinping.

There are plenty of reasons to believe this won’t happen.

by Peter Beinart, The Atlantic |  Read more:

Image: Reuters via KNCA
[ed. See also: China Loves Trump]

We All Have a Stake in the Stock Market, Right? Guess Again

Take a deep breath and relax.

The riotous market swings that have whipped up frothy peaks of anxiety over the last week — bringing the major indexes down more than 10 percent from their peak — have virtually no impact on the income or wealth of most families. The reason: They own little or no stock.

A whopping 84 percent of all stocks owned by Americans belong to the wealthiest 10 percent of households. And that includes everyone’s stakes in pension plans, 401(k)’s and individual retirement accounts, as well as trust funds, mutual funds and college savings programs like 529 plans.

“For the vast majority of Americans, fluctuations in the stock market have relatively little effect on their wealth, or well-being, for that matter,” said Edward N. Wolff, an economist at New York University who recently published new research on the topic.

Both Republicans and Democrats have promoted the idea that a rising stock market broadly lifts Americans’ fortunes. When there was a parade of market rallies, President Trump asked, “How’s your 401(k) doing?”

There was a move toward democratizing stock ownership in the 1980s and 1990s, with the advent of individual retirement accounts, but the busts of 2001 and 2007 scared off some middle-class investors.

Of course, any financial loss can be scary and painful. Indeed, the less you have, the more each dollar counts. And market gyrations could foreshadow deeper problems that signal the end of a nine-year boom and short-circuit the economic recovery.

But the day-to-day impact on most people’s overall wealth is minimal.

“It’s far from where you think that it would be, given the rhetoric,” said Ray Boshara, director of the Center for Household Financial Stability at the Federal Reserve Bank of St. Louis.

A look at some fundamentals may provide a clearer perspective.

Stock ownership is the exception.

Roughly half of all households don’t have a cent invested in stocks, whether through a 401(k) account or shares in General Electric. That leaves half the population with some exposure to financial market whims, but as Mr. Boshara said, “some exposure can be 100 bucks.”

“If you look at where the money is really held, it’s among the top 10 percent,” he said. “And if you break it down by age, race and education and parental education, you’ll see the disparities are even larger.” Parents who lack a four-year degree and, later on, their children are much less likely to have a direct stake in the stock market than college graduates; blacks and Hispanics are much less likely than whites.

“It’s too bad such a small percentage of the population has any real or meaningful ownership stake in equities, given their historic and current growth,” Mr. Boshara said.

Most households had less than $5,000 in total holdings in 2016, the most recent year analyzed by Mr. Wolff. Despite the slow recovery in housing prices, the wealth of middle-class Americans is still concentrated in their homes, which remain their single most valuable asset.

For 9 out of 10 households, even a shift in value of 10 percent — enough to qualify as a “market correction” — would “at most, have a 1 or 2 percent impact on their wealth holdings,” Mr. Wolff said.

If anything, foreign multinational and other investors would feel more of a pinch, since they own 35 percent of all United States corporate stock, up from 10 percent in 1982. That share of the pie exceeds the single slice owned by taxable American shareholders, defined benefit plans, defined contribution plans, or nonprofit institutions, said Steven M. Rosenthal, a senior fellow at the nonpartisan Urban-Brookings Tax Policy Center.

by Patricia Cohen, NY Times |  Read more:

Image: Sam Hodgson

Is Amazon Prime Worth It?

Amazon Prime is the club that makes it okay to ship yourself toothpicks and Cheetos instead of running to the store.

This idea turns out to be catnip for Americans. As of September, an estimated 90 million of us are members of Amazon.com's $99-per-year two-day “free shipping” program. That makes Prime membership as popular in America as cable TV and even iPhones.

But what are we giving up when we can, and do, buy almost anything imaginable from a single online store? In the worst case, a Prime membership acts like blinders: It steers not only what we buy but also how we behave as consumers — and even which companies get to compete for our dollars.

In January, Amazon hiked the price of Prime for members who pay monthly to $13, bringing their Prime bill to an eye-popping $156 per year. The last time Amazon raised annual fees, from $79 to $99 in 2014, it hardly slowed Prime’s roll. As Prime has added perks such as streaming video, music and e-books, members have stuck around — 92 percent after the first year, according to Consumer Intelligence Research Partners, a firm that studies shopper habits, which also produced the new estimate on Prime membership.

“Prime is growing because we provide a better shopping experience than any other retailer online or offline: larger selection, faster delivery and lower prices,” an Amazon spokeswoman said. “And we are improving on each of these dimensions every year.”

I started asking why I pay for Prime because we’re suddenly besieged by subscription fees. Netflix, Hulu, HBO, Spotify and, yes, The Washington Post, all want their monthly cuts. Amazon chief executive Jeffrey P. Bezos owns The Post, but I write about all tech with the same critical eye.

While we’ve been busy filling Amazon carts, the online shopping game has evolved. Shipping has gotten faster and, often, free at lots of places. Walmart, which spent $3.3 billion on Jet.com to get a better foothold online, last year began offering free two-day shipping on orders greater than $35 for more than 2 million online products — without a subscription.

So I spoke with retail insiders, Prime customers, Amazon critics and Amazon itself to try to figure out what makes Prime worth it — or not. To my surprise, I found some people, including me, might not be saving much money with Prime anymore.

But Prime has mastered something much more valuable: the psychology of being a consumer in an era of too many choices.

by Geoffrey A. Fowler, Washington Post | Read more:
Image: Kathleen Brooks/The Washington Post/iStock

[ed. For me it's probably not worth it, Prime doesn't provide two-day shipping to where I live, or ship large items like appliances. I did try ordering two items from Walmart's web site ($26.21 total, with an added shipping charge of $11.15) and they said it would take over 24 days to arrive. Canceled.]

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Teddy Bear Market

If this is a bear market, it's a cute little teddy bear market.

Between Friday and Tuesday morning, as everyone now knows, the Dow Jones Industrials Average fell a massive 2,025 points. The S&P 500 fell over 200 points. The bears were coming out of hibernation! Trump, who touted the Dow's 6,000 points-plus rise as all his doing, is ridiculed for the decline. And yet, despite all the drama, the S&P 500 is only down 0.75% this year. The Dow is down 0.64%. The MSCI World Index is down about the same. That index is mostly developed market stocks. The much riskier MSCI Emerging Markets Index, which will always get bludgeoned in a bear market, is down a whopping 0.5%. Even if every one of these indices fell another 10% we would not be in an official bear market. Emerging markets are down around 9% from their 52 week high registered on Jan. 26.

A bear market is when stocks fall 20% or more from their 52-week peak over a two-month period. In other words, the S&P 500 has to fall another 12.36% between now and April before we're in a bonafide bear market. Until then, investors will be paying attention to the usual economic fundamentals, and the algorithm-based funds and technical guys will be paying attention to the moving averages.

Yesterday's recovery appears to be closely tracking a 15% decline in the CBOE Volatility Index (VIX) since in the pre-market hours. The VIX is up around 8% as we approach noon on Thursday. The S&P 500 is down another 1.3%. Initial resistance is the 50 day moving average in the S&P 500 -- now at 2720 --- and then the 50% retracement level of 2733, which is just 5 points above yesterday’s 2728 high, says chart watcher John Schlitz, chief market strategist at Chaikin Analytics.

by Kenneth Rapoza, Forbes |  Read more:

Image: uncredited

Ruud van Empel, Still Life Funghi (archival pigment print, 2014)
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What Teenagers Are Learning From Online Porn

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Remaking Cities With Midrises Near Public Transit

Scott Wiener is California State Senator for San Francisco, whose SB827, co-sponsored by State Senator Nancy Skinner, will move some zoning responsibility from cities to the state, forcing cities to allow the construction of higher-density housing (duplexes, eight-plexes and midrise, six-story apartment buildings) near public transit stops.

California is in the grips of a terrible housing crisis, with rents and house-prices consuming an ever-greater percentage of Californians' income and more people arriving with few new housing starts to shelter them.

The measure has proved disappointingly unpopular: Berkeley's mayor called it "a declaration of war against our neighborhoods;" Los Angeles City Councilman Paul Koretz warned that it would make Westside "look like Dubai." Critics accuse Wiener of being a "real estate industry puppet."

Wiener also sponsored legislation to permit bars to close a 4AM ("great cities have great nightlife") and California's Net Neutrality bill.

California nimbyism is a form of intergenerational warfare, the terminal phase of treating housing like an asset, rather than a human necessity. Californians who were lucky enough to buy property near transit back when average working families could afford homes are looking around at the shrinking social safety net and the elimination of defined-benefits pensions and deciding that their homes are the only thing standing between them and an old-age in a charity hospital, their kids' only chance of going to college, their grandkids' only chance at a down-payment for a house. So they're resisting anything that threatens their housing valuation, even when that threat is remote and improbable (higher density zoning around your home makes the underlying land more valuable, not less).

And now he’s saying that within walking distance of mass transit, housing shouldn’t be single-family, suburban style. It should be tall, like 45 feet or up to 65, depending on how wide the street is. 

The goal, Wiener says, isn't Hong Kong–style high-rises. It's what housing advocates call the “missing middle,” things like side-by-side duplexes, eight-unit apartment buildings, six-story buildings—a building form even San Francisco built plenty of in the early 20th century. Typically these are wood-frame construction, cheaper to build than luxury steel-and-glass high-rises.

by Cory Doctorow, Boing Boing |  Read more:
Image: uncredited
[ed. See also: A Bid to Solve California’s Housing Crisis Could Redraw How Cities Grow and My Transit Density Bill (SB 827): Answering Common Questions and Debunking Misinformation]

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Shin bijutsukai
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Models Coming into Agreement on Widespread Effects of Arctic Sea Ice Loss

Exactly a year after more than 100 scientists gathered to discuss the connections between Arctic sea ice loss and midlatitude climate (see our coverage), the picture has become a bit clearer. There’s now strong agreement on several of the weather and climate patterns that future Arctic sea ice loss will create, provided that the right types of climate models are put on the task—models that capture the interplay among atmosphere, oceans, and sea ice.

An overview by James Screen (University of Exeter) and colleagues, published on Monday in the journal Nature Geoscience, finds both consistency and discrepancy among models, but with a new consensus on certain points. “Evidence is mounting that Arctic sea ice loss can affect weather and climate throughout the Northern Hemisphere,” wrote the authors.

Computer models have long predicted that surface temperatures would rise more quickly in the Arctic than at lower latitudes, and observations show this happening already. There’s also been a significant drop in the extent of Arctic sea ice throughout the year, most notably in summer but also during the cold season. In the first few days of February 2018, Arctic sea ice extent has been running about 8-10% below the seasonal average for the period 1981-2010, and it’s been breaking record lows that were set just last year (in 2017).

A burst of widely publicized research over the past decade found that the depleted Arctic sea ice could be part of a chain of events weakening the stratospheric polar vortex and hiking the risk of cold outbreaks in northern midlatitudes. These findings have been far from unanimous, though.

“The recent pace of [Arctic] sea ice loss has been nothing short of breathtaking, as about 80% of the volume has disappeared in a human genera­tion,” said Jennifer Francis (Rutgers University) in an overview for the December issue of the Bulletin of the American Meteorological Society (BAMS). (...)

The impact of depleted Arctic sea ice on climate isn’t so much from the absent ice itself as from the ocean that’s newly exposed. Heat propagates upward from the sea surface, and low-level winds flowing atop the exposed ocean thus end up warmer. Along with this direct influence, some more complex processes appear to be at work. (...)

When a full-depth ocean model is used, something intriguing happens: the loss of Arctic sea ice triggers a far-flung response that mimics climate change itself, including a slowdown of the Atlantic Meridional Overturning Circulation (AMOC), a build-up of heat in the tropical oceans over several decades, and a warming of the atmosphere a few miles above the tropics. Clara Deser (National Center for Atmospheric Research) dubbed this a “mini-global-warming.”

by Bob Henson, Weather Underground |  Read more:

Image: National Snow and Ice Data Center

An Email Format That's Getting Weirdly Popular Lately For Some Reason

Hey! Hi! Haha, is this [Your Name]? There were a few other [Your Names] on Facebook but I was pretty sure this one was you, lol. It’s me, [Guy You Haven’t Exchanged A Single Word With In Four Years And Three Months]. [No mention of how the two of you may know one another, or attempt to jog your memory.] How are you? Here’s how I am, unprompted:

• Some work updates at a new job you didn’t know I had

• I visited a foreign country, here’s a Soundcloud link for some reason

• I think I remember an interest of yours, is it this? [It isn’t, but it’s sort of close]

• I think I saw your sister when I was in Chicago last summer, was it her?

• I had a New Year’s Resolution to make more jam so I make a decent amount of jam now

Uh, I don’t know if you remember this or anything, but I feel like I might maybe have hurt your feelings at some point? Or said something weird? Or just generally been creepy? And if I did, that would suck, for sure. But I don’t know.

You know what I mean when I say the word “creepy,” right? Because I don’t really know what I mean. I’m definitely never going to get more specific than the word “creepy,” which can really encompass anything from “that tree looks weird” to “I am being actively murdered.” I plan on staying really non-specific throughout the course of this email and also for the rest of my life, in part because it’s way easier to make broad, leading statements in a manner that suggests anyone who wants to respond in thorough detail is going to kind of feel like I’ve beaten them to the punch. I don’t know if you’ve noticed this, but it seems like if you bring something up first, no one else is allowed to be more specific about it than you are, which seems pretty ideal.

Anyhow, I’ve been vaguely following the news lately – you know, The News? – and I got a vague sort of sense of all-encompassing dread, which sucked. Not because anything specific I’ve ever said or done sprang to mind, because pretty much three days after doing or saying anything, I send any memory of the things I’ve said or done into a sort of mental trash compactor, and never think about them again, which I assume is how everyone else deals with the burden of memory. But, you know, definitely some pull quotes that I’ve seen in the news lately have seemed sort of familiar, and it sort of made me wish I’d spent some more time in self-reflection before the last couple of days.

I’ve definitely been self-reflecting for at least three or four days, and let me tell you, it is the pits!!! I guess one of the nice thing about knowing a lot of women is that it’s like having a million little external memory banks who remember bad stuff for you. I don’t know if you ever noticed that, but it seems like women are like, weird good at remembering the worst stuff! Stuff where it’s like, Who even thinks about that stuff? I guess the answer is you do! I figured that if there was anything I had ever said or done to you that was bad, you know, bad like newspaper bad, or maybe not even that bad but just something that I should be aware of, that you would know about it, and you might be able to tell me what it was, so that I could say sorry if I was creepy or whatever!

Hey, let me mention for a real quick sec that I have a girlfriend/wife/new baby, just so you can bear in mind that if you were to say anything either to or about me, it wouldn’t just affect me, okay? Just so you know, as an FYI!! Not that you have suggested you were planning on saying anything about or to me, or have attempted to reestablish contact between us in any way, it’s just that this is kind of the first time in a while that I’ve second-guessed “that stuff I said” so I have no real sense of scale when it comes to how many bases I’m supposed to be covering, which is why you and like fourteen of our mutual acquaintances are all getting the same email at the same time. Honestly, to be on the safe side, I am probably just going to email every woman whose email I have, because I have no way of knowing if I have like, made three or four women mildly irritated, or if I’ve killed nine or ten.

Something in between, for sure! Something for sure in between those two options, is probably where I’ve landed, if I had to take a guess. Which I am, guessing, because who’s to say, you know? It’s not like anyone makes a habit of mentally noting the stuff they do or say, like some kind of remembering-machine. You know what I mean, right? Nobody plans the stuff they do or say to or at or about or near women, or whomever, or thinks about it afterwards.

Anyways, things are like, crazy out there, do you know what I mean, even though so far I have not actually said anything of substance? Like, I’m not actually making a claim, or recalling anything either of us ever said to each other, or admitting to a fault more specific than “man, the past sure happened, didn’t it,” or attempting to materially alter the way I treat the people around me in any way, but do you know what I mean when I say that things seem really crazy out there? Do you have a sense for when things are going to go back to the way things used to be, because I do not know how many more emails I can send before it’s like, my whole life would be emails, do you know what I mean? But everyone is like, noticing things. And remembering things. And I have already tried to remember about four days in a row and if I have to keep remembering every day for the rest of my life I am gonna be so exhausted, ahahaha.

Anyways, hope you’re great! Heads up, if you do write back with any feedback about something I said or did to you, I will either A) never write back, or B) hoo boy, get ready for the lonnnngest email of your life where I bring up a lot of thoughts and feelings I have about this current moment and also pepper in the fact that I’m actually sober now, so…, lol. And then, you know, obviously, some other stuff will be coming your way, after that super-long email. But either way, you won’t know which response to expect! It’s hard to say which one you’re gonna get, because again, I really cannot stress how little thought I have put into this whole process before just MAKING CHOICES and PRESSING SEND.

If you ever want to get coffee to…discuss things, by which I mean talk very imprecisely about whether or not I am a good person, I would be willing to do that. I promise it will be mind-numbingly uncomfortable, and that I will show up either a few minutes late or wildly early!

Anyways, hope you’re, you know, idk, not damaged or anything,

Sent From My Work Email

You have an additional six JITTERY, VAGUE, ANXIOUS-YET-TRYING-TO-SOUND-CASUAL unread messages from men you haven’t spoken to in years. Would you like to read them now?

by Mallory Ortberg, The Shatner Chatner |  Read more:

Toko Shinoda

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Talk is Cheap

In the early 1950s, the Betty Crocker company had a problem: American housewives liked the idea of cake mix, but they weren’t actually buying it. And so the company approached Ernest Dichter, a Viennese psychologist who had pioneered a new kind of market research, and asked him to find out why.

At the same time, the relatively new processed-food industry was determined to push ready-made food. Frozen foods had enjoyed a boost during the war because of tin rationing, and the first frozen ready meals were launched in 1952. More women were working outside the home, making the convenience of these meals especially appealing. Incomes were rising, too, during this postwar period, which gave families more money to spend on convenience items, and on trying out new dishes. Not all such products were new – cake mix, after all, had been around for decades – but in this postwar climate, the food industry assumed there would be a much larger market for them. And yet, cake mix sales were slow.

Dichter, who called his work “motivational research”, set out to answer the question using a relatively new tool: the focus group. Dichter’s groups for Betty Crocker diagnosed the trouble – women felt guilty that they were not doing the work of baking the cake for their families. Serving prepared foods made them feel inadequate.

Focus groups, which became widespread in the 50s, could illuminate the psychological complexities that blocked women’s buying habits. In one focus group from this period, a woman made a Freudian slip: “Especially when I’m in a hurry, I like foods that are time-consuming.” Her slip of the tongue, in the context of the conversation, revealed the woman’s conflicted feelings about convenience foods, even though she seemed to embrace them. As the moderator, Alfred Goldman, would later recall in a 1964 article for a trade journal, that slip inspired the other women in the group to talk more openly about how guilty they felt over serving prepared foods to their families.

Dichter was creative at coming up with solutions to the problems that focus groups revealed. As Bill Schlackman, a colleague of Dichter’s, would recall years later, in this case the solution was to assuage the housewives’ guilt by giving them more of a sense of participation. “How to do that?” He smiled. “By adding an egg.” With this simple adjustment to the recipe, sales of cake mixes took off. It was an early focus-group marketing triumph.

Focus groups came, over the course of the last century, to shape almost every aspect of our lives, from cake mix to Barbie dolls. Almost nothing is launched into the world without a focus group. Since the late 1980s, they have affected even the political discussions that ultimately determine what kind of society we can have, not to mention the toothpaste we use, the soap operas we watch, the news media we consume, and the video games we play. Focus groups have also helped to create and nourish a seemingly boundless culture of consultation, in which ordinary people weigh in on just about everything, before the people in charge make a decision. Aided by social media and other technologies, the scope of such consultation has, in recent years, expanded its reach with breathtaking speed, allowing companies to aggregate the views and feelings of millions of potential customers. (...)

Whatever the topic – travel, detergent or breast cancer – the focus group has certain commonalities. It is a discussion among a small group, usually numbering between eight and 12 people. Led by a trained moderator, the conversation is intended to answer specific questions for a client: hence the term “focus”. Even if it appears to be freewheeling, or to wander off track, the moderator usually knows where it is going. Often, the client is observing through a one-way mirror from the next room. The moderator might receive notes from the client during the discussion – perhaps demanding that she get the conversation back on track, or that she probe a little bit harder: how do those present really feel about making instant coffee in the privacy of their own homes?

The process looks like democracy in action, and most people enjoy participating. Yet focus groups are widely despised. The public resents the mediocre outcomes of a focus-grouped world, feeling that the culture of consultation dumbs down our politics, entertainment and just about everything else. The clients who commission focus groups to give feedback on a new product or political initiative resent the obligation to listen to ordinary, non-expert people, and often feel humiliated by their judgments. Everyone imagines the participants to be idiots. Since they remain a hugely popular way of understanding consumer tastes and voter opinions, why do we hate them so much? (...)

The story of the focus group is a story of the relationship between elites and the masses. The current culture of consultation has flourished and become more necessary in a period during which the actual power of ordinary people relative to the rich – whether in the workplace or the political arena – has greatly diminished. Listening is not the same as sharing power. At the same time that our society has become more unequal, and gaps in everyday experience much wider, the need for listening has only grown more obvious. Ordinary people – especially working-class women – don’t have much political or economic power. In addition to telegraphing some of the desires of such people to cultural, political and corporate elites, the focus group is a ritual allowing those elites to send the message that they are listening (and sometimes even responding).

Over the past decade and a half, whenever protesters have gathered to defend the values of the left – values of equality and inclusion – they have chanted: “This is what democracy looks like.” A focus group, whether convened in an office park in Columbus, Ohio, or in a brightly lit conference room on Madison Avenue, is not at all what democracy looks like. But a focus group is, in some ways, what democratic participation now feels like. It is one of the ways we crack the egg and feel we are doing something. It has been part of the evolution of our expressive democracy – that is, a society in which the expression of opinion has been dramatically democratised, while the distribution of everything else that matters (political power, money) has only grown more starkly unequal.

The focus group offers us the experience of having a voice and the possibility of influence in a world that offers most people little control over their lives, and little opportunity to influence anything. “Perhaps they will use my idea!” one hopes. Maybe the movie ending I voted on will prevail, saving viewers around the world from sadness or banality. Or perhaps I’ll see my own language in this antacid commercial. A focus group – with brand managers, campaign managers and all kinds of other important people behind the mirror hanging anxiously on every laboured word of these ordinary people’s discussion – can feel like a populist triumph. It takes quite a ritual to produce that feeling.

Most people in the corporate or political elite have no idea what the majority of people – whose votes or consumer dollars they badly need to win – are like. They don’t know people who are not like themselves. Elites live in different neighbourhoods and have different values and habits from most people. Speaking of the clients on the other side of the mirror, former moderator Kara Gilmour says: “A lot of those people are really out of touch. They think they have all the answers because they’re the professionals. But when was the last time that they went shopping in a mid-range mall? They never shop in a mid-range mall. They get all their clothes at the sample sales.”

This vast gulf in mindset and everyday experience between ordinary people and elites is the reason the focus group needs to exist at all. In the US, amid the relentless mid-century anti-Communist propaganda campaigns and purges, with successful radical and populist political movements a distant memory, we became reconciled to having elites. Yet for consumer capitalism and democracy to flourish, those elites would need ways to measure the thoughts and feelings of the rest of the public. The ruling classes – and even the professional managerial classes that make decisions for those rulers – might be increasingly disconnected from ordinary people, but they had to know what the people wanted in order to sell them things and win their votes.

by Liza Featherstone, The Guardian |  Read more:

Image: Leon Edler

The "Dark Store" Method That's Strangling Small Towns

In February, the library in Marquette, Mich., announced that it was cutting its hours.

It wasn’t that its Sunday programming was any less popular, or that it had gotten the short end of the stick in next year’s budget planning. Instead, thanks to a new method that big-box stores are using to game the tax system, Marquette Township owed a $755,828.71 tax refund to the home improvement chain Lowe’s. Essential services like the library, the school district, and the fire department were on the hook to pay for it.

The Peter White Public Library would now be closed on Sundays.

Marquette has been hit hard by a tactic that the country’s biggest retailers are using to slash their property taxes. Known as the “dark store” method, it exemplifies the systematic way that these chains extract money from local governments. It’s also the latest example of the way that, even as local governments across the country continue to bend over backwards to attract and accommodate big-box development, these stores are consistently a terrible deal for the towns and cities where they locate.

Marquette is one of the countless places that has bought into big-box economic development. Over the years, the township in the Upper Peninsula of Michigan spent millions extending water mains, law enforcement, and other infrastructure and services to its big-box commercial corridor along U.S. 41. When the Lowe’s opened there in 2008, local officials including the mayor turned out for a “board-cutting” ceremony—the home improvement center version of a ribbon-cutting.

Then, less than two years later, Lowe’s flipped the script. The mega-retailer, which reports annual net sales of about $50 billion, went to tax court to appeal its property tax assessment. Marquette had pegged the taxable value of the store, which had just been built for $10 million, at $5.2 million. In front of the Michigan Tax Tribunal, an administrative court whose members are appointed by the state governor, Lowe’s won assessments that were, instead, $2.4 million in 2010, $2 million in 2011, and $1.5 million in 2012.

“We honestly thought there had been a mistake,” says Dulcee Atherton, the assessor for Marquette Township. “We had the building permits that said it was worth $10 million. We couldn’t believe the audacity, really.”

What was worse was the methodology that Lowe’s, and the tax tribunal, had used to arrive at the lower figures.

Figuring out the value of a property can be a complicated business. In Michigan, town and county assessors typically use a property’s construction costs, minus depreciation, as a primary metric to determine its fair market value; taxable value is half that amount. Property owners sometimes prefer, instead, to use the sale prices of comparable properties. This was the approach that Lowe’s took—with a catch. Lowe’s looked at the definition of the word “comparable,” and decided to stretch it. It said that, because big-box stores are designed to be functionally obsolescent, comparable stores are those that have been closed and are sitting empty—the “dark stores” behind this method’s name.

“Unlike many other commercial properties,” the assessor hired by Lowe’s argued in court, “free standing ‘big-box’ stores like the subject [property] are not constructed for the purpose of thereafter selling or leasing the property in the marketplace.”

It’s an established part of the big-box retail model that the boxes themselves be custom-built, cheaply constructed, and disposable. If retailers decide that they need a bigger space, it’s cheaper for them to leave the old one behind and build a new one. When Walmart, for instance, opened its wave of new, twice-the-size Supercenters across the country in 2007, it left hundreds of vacant stores behind it. This means that new, successful stores like the Marquette Lowe’s are rarely the locations that are up for sale, and that when big-box stores do come on the market, it’s because they’ve already failed or been abandoned by the retailer that built them. In other words, Lowe’s was saying, it had built a property that, despite generating roughly $30 million in annual sales for the company, had very little value, and because of that, it should get a break in its property taxes.

Lowe’s went a step further. The properties that it offered up for comparison were properties that had been affected by another big-box retail tactic: deed restrictions. When big-box retailers are ready to move on to a new location, they often place these restrictions on the properties they leave behind. Designed to ensure that whoever buys the property won’t become a competitor, these restrictions limit how the store can be used, down to lists of specific items that the new occupant is banned from selling. In effect, they prevent most other retailers from moving into spaces designed specifically for retail, and so depress the values of these properties even further.*

One of the comparables used by Lowe’s, for instance, was a big-box store that, because of deed restrictions that kept out retail, had been partially converted into a go-kart track—a much less valuable use for that property. (...)

There’s also the other side of a local government’s ledger. Big-box retail is expensive to maintain. Because these stores are located outside of town centers and designed for car culture, they require local governments to extend and bolster public services and infrastructure like sewers, roads, and police forces. They also rely on these services heavily. When eight communities in central Ohio looked at the fiscal impacts of big-box retail, they found that the stores actually demanded more public services than they generated in revenue, and created a drain on municipal budgets to the tune of a net annual loss of $0.44 per square foot, or about $80,000 for a typical Walmart supercenter. (...)

Despite all of this, cities and towns continue to buy into the myth, sold to them by the mega-retailers themselves, that big-box stores spark economic development. In service of this myth, local and state governments across the country have granted at least $2.6 billion in subsidies to just six large retailers, including $160 million to Walmart and $138 million to Lowe’s, according to another study from Good Jobs First. That’s without factoring in the cost of services, which as Marquette, Mich., saw, can pile up.

The Locally Owned Alternative

If towns and cities looked beyond the conventional wisdom that the big corporations have peddled, they’d see that there’s an alternative to big-box retail. It’s a familiar option: Instead of courting chain stores that lack a stake in their communities, cities and towns can cultivate locally owned, independent business.

Locally owned retailers provide value to a community in many ways, but one of them is to the municipal accounting books. In a study that found that big-box retail generates a net deficit for taxpayers in a Massachusetts town, the researchers also discovered that specialty retail, like Main Street businesses, are the ones with a positive impact on public coffers, generating more revenue than they require to service.

Then there are the buildings that these businesses occupy. Unlike the massive, windowless buildings preferred by big-box retailers, locally owned businesses tend to locate in walkable downtowns, inside of dense and often mixed-use buildings that have a history of being adapted for many different purposes.

These buildings are the opposite of short-lived and single-use, and they’re also the ones that create far more public wealth. One consultant, Joe Minicozzi, has looked at the “per-acre” value of land, and found that, though low-density development is often hailed as the major municipal revenue generator, it’s high-density development that holds the potential for far greater wealth. Take Asheville, N.C. Minicozzi’s calculated that the city realized a per-acre return on downtown, mixed-use development that’s 800 percent greater than it sees on a large, single-use Walmart. “The result is that the community loses, both in terms of the property tax it collects and the long-term legacy of cheap single-use buildings,” Minicozzi has written. “In basic terms, we’ve created tax breaks to construct disposable buildings, and there’s nothing smart about that kind of growth.”

by Olivia LaVecchia, ILSR | Read more:
Image: by frankieleon