Sunday, August 21, 2011

Is America Next To Battle And Burn?

Is America Next To Battle And Burn?

America's 14 Most Ready to Riot Cities

Here's a list of 14 large American cities that may be ready to erupt.   They have been identified by sorting common social, economic and demographic data including: unemployment, education, income, crime, housing and homelessness.

Other data was also included that might indicate probable "flash points" igniting unrest. 
  These include: cities with especially high rates of reported police misconduct, high disparity between rich and poor, city budget deficits threatening social services, high incidence of hate crime, and large differences in home values between neighborhoods.
One such statistic is a "Wealth Disparity Index" calculated as a "Gini" co-efficient. The index measures the inequality of the local wealth distribution. In this case, the closer the index number is to 1 the greater the disparity between the haves and have nots.

Should the American economy take another dive into "official recession" makes little difference if our cities and states become dysfunctional with a recovery that does not include jobs and a safety net to catch those victimized by an economic system based on fraud.

Why should the victims of economic tyranny turn to anger and action?   It has been said that Americans are too self-absorbed to challenge the status quo.   Even under the intolerable stress and life threatening situation of Hurricane Katrina cooler heads prevailed.   For the most part, we are a patient people.

But at some point the fuse will be lit if economic relief is not forthcoming.   The rationale may be factious as it was in Newark, NJ in 1967, when a rumor of police injustice sparked riots that lasted six days and nights.   But when polite protests fail, as they did in London, action speaks louder than words.

As a young man said to an NBC news reporter in Tottenham: "You wouldn't be talking to me now if we didn't riot, would you?"

1. Detroit, MI:     
The poster child for what has gone wrong with American capitalism. One way the city aims to increase revenue is to work with the state to identify businesses that have not been paying the city income tax, an initiative with the potential to generate $49.5 million over the next five years.  Well, every little bit helps.
  • Unemployment 21.6%
  • Income per capita: $14,213
  • Poverty: 36.4% of residents below the poverty line
  • 56% of residents spend over 35% of their income on housing
  • Percentage of single-parent households: 67.1%
  • Homeless: 1,627/100,000 residents
  • 3rd highest U.S. city crime score: 356.44
  • High school graduation rate, public school district: 37.5%
  • Deficit through FY2011: 710,000,000; per capita: $780
  • 9th U.S. large city for police misconduct per capita
  • 88,200 high net worth individuals
2. Miami, FL:  
Here is a moderate example of economic schizophrenia at work. Commuters increase Miami's population 37.3% every work day, then leave the business district a ghost town every evening.   Foreclosure paper work clogs a Miami courthouse with no end in sight. The city faces a $50 million budget deficit for 2012.
  • Unemployment 13.7%
  • Homeless: 1,191/100,000 residents
  •  54.8% of residents spend over 35% of their income on housing
  • Children living in poverty: 43.8
  • Increase in food stamp (SNAP) use from 2007: 45%
  • Percentage of single-parent households: 44.4%
  • Residents with no health care insurance: 35%
  • Housing value disparity: 136% (std. dev. / median) 
  • Wealth Inequity Index: 0.494 (Miami Metro)
  • Share of aggregate income going to top 5 percent of households: 24.9%
  • 18th U.S. city for police misconduct per capita
3. Cleveland, OH
According to The Plain Dealer: "People on the streets of Cleveland... say they are impatient with bullish economists and bickering politicians who don't seem to realize how little the economy has improved. They waved away questions about higher debt ceilings... because many of them wanted to vent about how much the economy stinks."
  • Poverty: 35.0% of residents below the poverty line
  • Children living in poverty: 43.8%
  • Income per capita: $15,583
  • Percentage of single-parent households: 58.6%
  • Increase in food stamp use from 2007: 25%
  • Unemployment 10.7%
  • Residents with no health care insurance: 18.2%
  • 7th highest U.S. city crime score: 260.60
4. Memphis, TN:
"Not so long ago, Memphis, a city where a majority of the residents are black, was a symbol of a South where racial history no longer tightly constrained the choices of a rising black working and middle class. Now this city epitomizes something more grim: How rising unemployment and growing foreclosures in the recession have combined to destroy black wealth and income and erase two decades of slow progress." Source: News One for Black America.
  • Children living in poverty: 38.5%
  • Unemployment: 10.9%
  • Increase in food stamps (SNAP) use from 2007: 23%
  • Percent of residents receiving SNAP assistance:   25%
  • Percentage of single-parent households: 50.0 %
  • Residents with no health care insurance: 18.9%
  • 12th Highest U.S. City Crime Score: 256.32
  • Housing value disparity: 152% (std. dev. / median)
  • Hate crimes per 100,000 population: 5.17
5. New Orleans, LA: (Tie)
Between 2000 and 2009, New Orleans lost more than a quarter of its residents. This decline was largely attributable to Hurricane Katrina. According to Delta Dispatches, New Orleans has rebounded in a big way since 2005.   But the facts say it has a long way to go.   Will the Big Easy keep its cool?
  • Number 1 in homeless: 2,582/100,000 residents
  • Number 1 U.S. city for police misconduct per capita
  • Percentage of single-parent households: 55.0%.
  • Increase in food stamps (SNAP) use from 2007: 54%
  • Unemployment 9.7%
  • Residents with no health care insurance: 24.2%
  • 55.0% of residents spend over 35% of their income on housing
  • Housing value disparity: 157% (std. dev. / median).  
5. Buffalo, NY:   (Tie)
Number one in hate crimes reported and ranking in the top 20 for misconduct of police officers in forces of less than 1,000, Buffalo is skating on thin ice.   It has fared better than many with a relatively low unemployment rate, but poverty and disparity are taking a toll.   SNAP (the new name for food stamps) recipients have increased over 20%.
  • Ranked 1st in hate crimes in large U.S. cities: 11.47 per 100,000 population
  • Poverty: 28.8% of residents below the poverty line
  • Children in poverty: 41.6%
  • Increase in food stamps (SNAP) use from 2007: 22%
  • 49.2% of residents spend over 35% of their income on housing
  • Housing value disparity:   112% (std. dev. / median).  
  • Percentage of single-parent households: 56.3%.
  • 18th U.S. city for police misconduct per capita forces under 1,000 officers
  • Unemployment 8.1%
6. Milwaukee, WI:  
A June 2011 study from the John K. Maclver Institute, a Wisconsin-based think tank that promotes free markets, individual freedom, personal responsibility, and limited government, showed Milwaukee slid 28 spots in a national ranking of economic strength.   With a school district high school graduation rate of only 31.5%, the city's government may want to be less than limited in addressing the community's educational needs.   Other Wisconsin business notables are complaining they don't have enough qualified applicants to fill job openings.
  • Percentage of single-parent households: 52.2%.  
  • High school graduation rate, public school district: 31.0%
  • 45.4% of residents spend over 35% of their income on housing
  • Hate crimes per 100,000 population: 2.64
  • Unemployment 10.4%
  • Increase in food stamps (SNAP) use from 2007: 33%
  • Children living in poverty: 41.3%
  • Per capita income: $18,290
  • 20th U.S. city for police misconduct per capita
7. St. Louis, MO:  
Another schizophrenic urban gas guzzling disaster where the work day affluent commuters boost the city's population by 34.5% and then leave for their suburban oasis each night.   As reported in the St. Louis Beacon: Historian Colin Gordon takes the long view when it comes to understanding how St. Louis has fared during the nation's recent economic downturn -- and his perspective isn't pretty. "We're now in a situation in a lot of settings -- most starkly Detroit but also in cities like St. Louis -- where land values in the central city have fallen off the abyss. There are properties you can't give away," he said. "But by the same token, some of the incentives for building out in a cornfield have been restrained both by the lack of credit and by the undermining of environmental costs. In some respects, when gas prices spiked a couple of years ago, that was at least a temporary wakeup call for the kind of sprawl that areas like this have experienced over the course of their history."
  • Top national crime score for U.S. cities: 381.62
  • Housing value disparity: 124% (std. dev. / median)
  • Percentage of single-parent households: 57.9%
  • Percent of residents receiving SNAP assistance:   36%
  • Increase in food stamps (SNAP) use from 2007: 36%
  • Unemployment 12.6%
8. Baltimore, MD:  
Mayor Stephanie Rawlings-Blake has admitted her latest proposal to balance the city's budget by eliminating marine, helicopter, and mounted units from the police force; cutting 900 city jobs; closing 29 recreation centers; decreasing hours at 311 call centers; and end the Fourth of July firework display, is "unacceptable" and "goes too far." But, Baltimore has other festering problems as well.  What's wrong with this picture?   Baltimore's unemployment is relatively low.   Oh, I forgot.   Working class jobs don't pay very well.  
  • Housing value disparity:   120% (std. dev. / median)
  • Percentage of single-parent households: 59.2%
  • High school graduation rate, public school district: 41.5%
  • Percent of residents receiving SNAP assistance:   24%
  • Residents with no health care insurance: 15.2%
  • City budget deficit through FY2011: $121,000,000   per capita: $190
  • 15th U.S. city for police misconduct per capita
  • Unemployment 7.9%
9. Atlanta, GA:  
The population of Atlanta increases by 62% every workday due to commuter influx. Lot's of homeless, an amazingly high per capita income of $36,912, and a Mecca to young southern professionals.   Atlanta is a shining example of disparity and inequity on steroids.   Hey, good buddy, how many hours were you parked on I-75 today?
  • House value disparity: 218% (std. dev. / median)
  • Percentage of single-parent households: 60.4%
  • Homeless: 1,263/100,000 residents
  • 3rd U.S. city for police misconduct per capita
  • Increase in food stamps (SNAP) use from 2007: 34%
  • Children in poverty: 48.1%
  • Residents with no health care insurance: 20.5%
  • Poverty: 27.8% of residents below the poverty line
  • Unemployment 9.9%
10. Cincinnati, OH:  
"The explosion of violence in Cincinnati--the largest urban disturbance in the US since the 1992 Los Angeles riots--revealed the deep social tensions in every American city... The April riots underscored the most basic fact of life in America: the enormous social gulf that has opened up between the wealthy elite and the vast majority of the population."   Jerry White, writing for the World Socialist Website about the roots of the riots that erupted in Cincinnati, Ohio in April of 2001, following the police killing of an unarmed black teenager, not a rumor, fact.
  • Percentage of single-parent households: 55.9%
  • 17th U.S. city for police misconduct per capita
  • Unemployment 9.9%
  • Increase in food stamps (SNAP) use from 2007: 41.0%
  • Children in poverty: 40.9%
11. Long Beach, CA:  
"These past two years, we have been waging a war of attrition, with each ensuing year requiring additional cuts to service levels.  We cannot afford to continue on this path.  We must find a way to reach structural balance and further invest in our infrastructure. This year presented the most challenging fiscal and budgetary environment in my time as Mayor but has, in recent days, also provided the single most significant step to our long-term fiscal health in the form of a tentative agreement with the Police Officers' Association that cuts pension costs and, if it were to be mirrored by our other employee groups, eliminates structural deficits by the end of FY 13 based off current projections." From the Mayor's Budget Recommendations, Fiscal Year 2012. Bob Foster, Mayor of Long Beach, CA.
  • Wealth Inequity Index: 0.479.  (Los Angeles Metro)
  • Share of aggregate income going to top 5 percent of households: 23.2 percent
  • 45.9% of residents spend over 35% of their income on housing
  • Unemployment 11.0%
  • Increase in food stamps (SNAP) use from 2007: 25.0%
  • Children in poverty: 45.2%
  • Residents with no health care insurance: 18.3%
12. Newark, NJ:
To close the city's budget gap, Mayor Cory Booker is proposing a 7% tax increase in order to maintain the city's current level of service.   The mayor's proposed increase will also reduce the city's current budget deficit of $58 million.   The tax increase will raise $18 million in additional funds.   Governor Chris Christy is also attempting to close a New Jersey State budget gap of just $10.5 billion dollars.
  • Percentage of single-parent households: 56.9%
  • Wealth Inequity Index: 0.504 (New York Metro including North New Jersey)
  • Share of aggregate income going to top 5 percent of households: 24.9 percent
  • 13th U.S. city for police misconduct per capita
  • Increase in food stamps (SNAP) use from 2007: 18.0%
  • Per capita income: $17,396
  • Residents with no health care insurance: 28.5%
  • Unemployment 9.6%
13. Philadelphia, PA
A Flash mob struck Center City Philadelphia Friday night, July 29, 2011 leaving two people injured and several others robbed. Police have arrested four people in connection with the crime.   Mayor Nutter has decided in impose a curfew of 9:00 PM on those under the age of 18.   Businesses can also register their security cameras with the police department.   Don't panic.   This isn't the real angry hopeless commoners with torches and pitch forks, just a bunch of kids.
  • Children in poverty: 35.7%
  • Percentage of single-parent households: 50.1%
  • 46.8% of residents spend over 35% of their income on housing
  • Percent of residents receiving SNAP assistance:   26%
  • Unemployment 10.2%
  • Over 104,000 high net worth individuals

We've Been Warned: The System is Ready to Blow

By Larry Elliott 

August 20, 2011 "
The Guardian" --  For the past two centuries and more, life in Britain has been governed by a simple concept: tomorrow will be better than today. Black August has given us a glimpse of a dystopia, one in which the financial markets buckle and the cities burn. Like Scrooge, we have been shown what might be to come unless we change our ways.

There were glimmers of hope amid last week's despair. Neighbourhoods rallied round in the face of the looting. The Muslim community in Birmingham showed incredible dignity after three young men were mown down by a car and killed during the riots. It was chastening to see consumerism laid bare. We have seen the future and we know it sucks. All of which is cause for cautious optimism – provided the right lessons are drawn.

Lesson number one is that the financial and social causes are linked. Lesson number two is that what links the City banker and the looter is the lack of restraint, the absence of boundaries to bad behaviour. Lesson number three is that we ignore this at our peril.

To understand the mess we are in, it's important to know how we got here. Today marks the 40th anniversary of Richard Nixon's announcement that America was suspending the convertibility of the dollar into gold at $35 an ounce. Speculative attacks on the dollar had begun in the late 1960s as concerns mounted over America's rising trade deficit and the cost of the Vietnam war. Other countries were increasingly reluctant to take dollars in payment and demanded gold instead. Nixon called time on the Bretton Woods system of fixed but adjustable exchange rates, under which countries could use capital controls in order to stimulate their economies without fear of a run on their currency. It was also an era in which protectionist measures were used quite liberally: Nixon announced on 15 August 1971 that he was imposing a 10% tax on all imports into the US.

Four decades on, it is hard not to feel nostalgia for the Bretton Woods system. Imperfect though it was, it acted as an anchor for the global economy for more than a quarter of a century, and allowed individual countries to pursue full employment policies. It was a period devoid of systemic financial crises.

Utter mess

There have been big structural changes in the way the global economy has been managed since 1971, none of them especially beneficial. The fixed exchange rate system has been replaced by a hybrid system in which some currencies are pegged and others float. The currencies in the eurozone, for example, are fixed against each other, but the euro floats against the dollar, the pound and the Swiss franc. The Hong Kong dollar is tied to the US dollar, while Beijing has operated a system under which the yuan is allowed to appreciate against the greenback but at a rate much slower than economic fundamentals would suggest.

The system is an utter mess, particularly since almost every country in the world is now seeking to manipulate its currency downwards in order to make exports cheaper and imports dearer. This is clearly not possible. Sir Mervyn King noted last week that the solution to the crisis involved China and Germany reflating their economies so that debtor nations like the US and Britain could export more. Progress on that front has been painfully slow, and will remain so while the global currency system remains so dysfunctional. The solution is either a fully floating system under which countries stop manipulating their currencies or an attempt to recreate a new fixed exchange rate system using a basket of world currencies as its anchor.

The break-up of the Bretton Woods system paved the way for the liberalisation of financial markets. This began in the 1970s and picked up speed in the 1980s. Exchange controls were lifted and formal restrictions on credit abandoned. Policymakers were left with only one blunt instrument to control the availability of credit: interest rates.
For a while in the late 1980s, the easy availability of money provided the illusion of wealth but there was a shift from a debt-averse world where financial crises were virtually unknown to a debt-sodden world constantly teetering on the brink of banking armageddon.

Currency markets lost their anchor in 1971 when the US suspended dollar convertibility. Over the years, financial markets have lost their moral anchor, engaging not just in reckless but fraudulent behaviour. According to the US economist James Galbraith, increased complexity was the cover for blatant and widespread wrongdoing.

Looking back at the sub-prime mortgage scandal, in which millions of Americans were mis-sold home loans, Galbraith says there has been a complete breakdown in trust that is impairing the hopes of economic recovery.

"There was a private vocabulary, well-known in the industry, covering these loans and related financial products: liars' loans, Ninja loans (the borrowers had no income, no job or assets), neutron loans (loans that would explode, destroying the people but leaving the buildings intact), toxic waste (the residue of the securitisation process). I suggest that this tells you that those who sold these products knew or suspected that their line of work was not 100% honest. Think of the restaurant where the staff refers to the food as scum, sludge and sewage."

Finally, there has been a big change in the way that the spoils of economic success have been divvied up. Back when Nixon was berating the speculators attacking the dollar peg, there was an implicit social contract under which the individual was guaranteed a job and a decent wage that rose as the economy grew. The fruits of growth were shared with employers, and taxes were recycled into schools, health care and pensions. In return, individuals obeyed the law and encouraged their children to do the same. The assumption was that each generation would have a better life than the last.

This implicit social contract has broken down. Growth is less rapid than it was 40 years ago, and the gains have disproportionately gone to companies and the very rich. In the UK, the professional middle classes, particularly in the southeast, are doing fine, but below them in the income scale are people who have become more dependent on debt as their real incomes have stagnated. Next are the people on minimum wage jobs, which have to be topped up by tax credits so they can make ends meet. At the very bottom of the pile are those who are without work, many of them second and third generation unemployed.

Deep trouble

A crisis that has been four decades in the making will not be solved overnight. It will be difficult to recast the global monetary system to ensure that the next few years see gradual recovery rather than depression. Wall Street and the City will resist all attempts at clipping their wings. There is strong ideological resistance to the policies that make decent wages in a full employment economy feasible: capital controls, allowing strong trade unions, wage subsidies, and protectionism.

But this is a fork in the road. History suggests there is no iron law of progress and there have been periods when things have got worse not better. Together, the global imbalances, the manic-depressive behaviour of stock markets, the venality of the financial sector, the growing gulf between rich and poor, the high levels of unemployment, the naked consumerism and the riots are telling us something.

This is a system in deep trouble and it is waiting to blow.

On The Precipice? 
'UK On Edge Of Civil War'

British police are cracking down on users of social media for allegedly encouraging mass uprising during a time ripe with riots. One message on Facebook even got two Brits four years behind bars recently for what they say was just a drunk joke. Now human rights groups are sounding the alarm, saying the courts are over-reacting by dishing out penalties which are far too harsh.

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