Amy Westervelt und Kyle Pope fassen kurz und treffend die wichtigsten Desinformationstaktiken der Fossilindustrie zusammen: - Fossilindustrie als Garantin der Energiesicherheit - Gegensatz von Wirtschaft und Umwelt - Verbraucher:innen brauchen fossile Energien für ihren Lebensstandard - Fossilindustrien sind Teil der Lösung, nicht des Problems - Fossilindustrien als Wohltäterinnen und Sponsorinnen.

https://www.theguardian.com/us-news/2024/apr/14/climate-disinformation-explainer

Eine der wichtigsten wirtschaftswissenschaftlichen Konferenzen der USA, die Allied Social Science Association conference der American Economic Association, war von Themen beherrscht, die mit der globalen Erhitzung zusammenhängen. In dem Bericht der New York Times wird das als Signal für einen Umschwung in der Wirtschaftswissenschaft interpretiert und unter anderem mit den Rekordtemperaturen des vergangenen Jahres in Verbindung gebracht. https://www.nytimes.com/2024/01/23/business/economy/climate-change-economics.html

• for: polycrisis - entrenched institutional bias, examples - entrenched institutional bias - bank macro economic policy - lobbyist

• paraphrase

  • James provides two examples of major institutional bias that has to be rapidly overcome if we are to stand a chance at facilitating rapid system change:
    • Bank of England controls macroeconomic policies that favour elites and not ordinary people and
      • these policies are beyond political contestation
    • In the normal political system, lobbyists through the revolving door between the top levels of the Civil Service and the corporate sector bias policies for elites and not ordinary citizens

See especially P. Lindert, Growing Public: Social Spending and Economic Growth since the Eighteenth Century (Cambridge: Cambridge University Press, 2004).

Ample evidence has shown that increasing taxes in Western countries along with the states' power to use it during the majority of the 1900s not only reduced inequalities but encouraged growth.

The Left’s Covid failure. (2021, November 23). UnHerd. https://unherd.com/2021/11/the-lefts-covid-failure/

Clift, A. K., von Ende, A., Tan, P. S., Sallis, H. M., Lindson, N., Coupland, C. A. C., Munafò, M. R., Aveyard, P., Hippisley-Cox, J., & Hopewell, J. C. (2021). Smoking and COVID-19 outcomes: An observational and Mendelian randomisation study using the UK Biobank cohort. Thorax, thoraxjnl-2021-217080. https://doi.org/10.1136/thoraxjnl-2021-217080

Trout, L. J., & Kleinman, A. (2020). Covid-19 Requires a Social Medicine Response. Frontiers in Sociology, 5. https://doi.org/10.3389/fsoc.2020.579991

Angulo, M. T., Castaños, F., Velasco-Hernandez, J. X., & Moreno, J. A. (2020). A simple criterion to design optimal nonpharmaceutical interventions for epidemic outbreaks. MedRxiv, 2020.05.19.20107268. https://doi.org/10.1101/2020.05.19.20107268

The Economic Impacts of COVID-19: Evidence from a New Public Database Built Using Private Sector Data. (2020, May 7). Opportunity Insights. https://opportunityinsights.org/paper/tracker/

David R Tomlinson 💙. (2021, March 5). Truth. 💙 @FreshAirNHS @theRCN @TheBMA @mancunianmedic @DrLindaDykes @Chakladar_A @KGadhok https://t.co/Ke2C84KuaT https://t.co/C469qvrSoK [Tweet]. @DRTomlinsonEP. https://twitter.com/DRTomlinsonEP/status/1367962251211202566

OC. (2021, January 22). Leadership. One of the most important and non-trivial steps taken by @JoeBiden is the decision to prioritize the protection of those at the highest risk. In Israel, our analysis shows that municipalities at low SES have the lowest rates of vaccination of at-risk populations.1/4 https://t.co/1aiqymQlMQ [Tweet]. @MDCaspi. https://twitter.com/MDCaspi/status/1352590064900038662

Goolsbee, Austan, and Chad Syverson. ‘Fear, Lockdown, and Diversion: Comparing Drivers of Pandemic Economic Decline 2020’. Journal of Public Economics 193 (1 January 2021): 104311. https://doi.org/10.1016/j.jpubeco.2020.104311.

Partha, D., & David, P. A. (1994). Toward a new economics of science. Research Policy, 23(5), 487–521. https://doi.org/10.1016/0048-7333(94)01002-1

Powerful Headline (words) from a Washington Post article under Economic Policy. WORDS.....! Words..... When you study Legal Theory you learn that "words" play a significant role in all aspects of social order.

Controlling the rhetoric with consistent narrative

This statement simply implies the use of consistent narrative (story) to allow control of the rhetoric. Narrative can be viewed as believable while Rhetoric is a general pejorative. When the rhetoric is mis or dis-information the narrative must be credible.

Main stream media (MSM) has held a long-term standing across the world as being credible. This standing is eroding. It has eroded considerably over the last 25 years among critical thinkers and the general population has started to take notice.

I question everything from MSM especially when narrative is duplicated with identical rhetoric across known government media assets. History is a wonderful thing when searching for Truth. Events in historical time periods can be researched, parsed and studied for patterns based on future evidence and outcomes.

Information "Spin" is real and happens for one purpose, that purpose is to benefit a position, agenda, person, plan, etc., by manipulating (advertising, PR, propaganda) information. Spin is difficult to refute without hard facts. Spin has a short-term shelf life, but that is all it needs to chart a new course, set the "ball" in motion so to say.

History allows Truth to overcome Spin.

Chris Ham: The United Kingdom’s poor record on covid-19 is a failure of policy learning. (2021, January 26). The BMJ. https://blogs.bmj.com/bmj/2021/01/26/chris-ham-the-united-kingdoms-poor-record-on-covid-19-is-a-failure-of-policy-learning/

Gopinath. G., (2020) IMF: New predictions suggest a deeper recession and a slower recovery. World Economic Forum. Retrieved from: https://www.weforum.org/agenda/2020/06/imf-lockdown-recession-covid19-coronavirus-economics-recession

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Snower. D. J., (2020), The Socio-​Economics of Pandemics Policy. Institute of Labor Economics. Retrieved from: https://covid-19.iza.org/publications/pp162/

ReconfigBehSci @SciBeh (2020) For those who might think this issue isn't settled yet, the piece include below has further graphs indicating just how much "protecting the economy" is associated with "keeping the virus under control" Twitter. Retrieved from: https://twitter.com/i/web/status/1306216113722871808

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Mongey, S., Pilossoph, L., & Weinberg, A. (2020). Which Workers Bear the Burden of Social Distancing Policies? (Working Paper No. 27085; Working Paper Series). National Bureau of Economic Research. https://doi.org/10.3386/w27085

Avery, C., Bossert, W., Clark, A., Ellison, G., & Ellison, S. F. (2020). Policy Implications of Models of the Spread of Coronavirus: Perspectives and Opportunities for Economists (Working Paper No. 27007; Working Paper Series). National Bureau of Economic Research. https://doi.org/10.3386/w27007

Berger, D. W., Herkenhoff, K. F., & Mongey, S. (2020). An SEIR Infectious Disease Model with Testing and Conditional Quarantine (Working Paper No. 26901; Working Paper Series). National Bureau of Economic Research. https://doi.org/10.3386/w26901

Barro, Robert J, José F Ursúa, and Joanna Weng. ‘The Coronavirus and the Great Influenza Pandemic: Lessons from the “Spanish Flu” for the Coronavirus’s Potential Effects on Mortality and Economic Activity’. Working Paper. Working Paper Series. National Bureau of Economic Research, March 2020. https://doi.org/10.3386/w26866.

Moser, Christian A, and Pierre Yared. ‘Pandemic Lockdown: The Role of Government Commitment’. Working Paper. Working Paper Series. National Bureau of Economic Research, April 2020. https://doi.org/10.3386/w27062.

Diewert, W. Erwin, and Kevin J Fox. ‘Measuring Real Consumption and CPI Bias under Lockdown Conditions’. Working Paper. Working Paper Series. National Bureau of Economic Research, May 2020. https://doi.org/10.3386/w27144.

Alstadsæter, A., Bratsberg, B., Eielsen, G., Kopczuk, W., Markussen, S., Raaum, O., & Røed, K. (2020). The First Weeks of the Coronavirus Crisis: Who Got Hit, When and Why? Evidence from Norway (Working Paper No. 27131; Working Paper Series). National Bureau of Economic Research. https://doi.org/10.3386/w27131

Bethune, Z. A., & Korinek, A. (2020). Covid-19 Infection Externalities: Trading Off Lives vs. Livelihoods (Working Paper No. 27009; Working Paper Series). National Bureau of Economic Research. https://doi.org/10.3386/w27009

Barrero, J. M., Bloom, N., & Davis, S. J. (2020). COVID-19 Is Also a Reallocation Shock (Working Paper No. 27137; Working Paper Series). National Bureau of Economic Research. https://doi.org/10.3386/w27137

Chetty, R., Friedman, J. N., Hendren, N., Stepner, M., & Team, T. O. I. (2020). How Did COVID-19 and Stabilization Policies Affect Spending and Employment? A New Real-Time Economic Tracker Based on Private Sector Data (Working Paper No. 27431; Working Paper Series). National Bureau of Economic Research. https://doi.org/10.3386/w27431

Modelling the Distributional Impact of the COVID-19 Crisis. COVID-19 and the Labor Market. (n.d.). IZA – Institute of Labor Economics. Retrieved August 5, 2020, from https://covid-19.iza.org/publications/dp13235/

Social Stability Challenged: Pandemics, Inequality and Policy Responses. COVID-19 and the Labor Market. (n.d.). IZA – Institute of Labor Economics. Retrieved August 5, 2020, from https://covid-19.iza.org/publications/dp13249/

Work That Can Be Done from Home: Evidence on Variation within and across Occupations and Industries. COVID-19 and the Labor Market. (n.d.). IZA – Institute of Labor Economics. Retrieved August 4, 2020, from https://covid-19.iza.org/publications/dp13374/

Optimal Unemployment Benefits in the Pandemic. COVID-19 and the Labor Market. (n.d.). IZA – Institute of Labor Economics. Retrieved August 1, 2020, from https://covid-19.iza.org/publications/dp13389/

COVID-19, Stay-​At-Home Orders and Employment: Evidence from CPS Data. COVID-19 and the Labor Market. (n.d.). IZA – Institute of Labor Economics. Retrieved July 29, 2020, from https://covid-19.iza.org/publications/dp13282/

Glover, A., Heathcote, J., Krueger, D., & Ríos-Rull, J.-V. (2020). Health versus Wealth: On the Distributional Effects of Controlling a Pandemic (Working Paper No. 27046; Working Paper Series). National Bureau of Economic Research. https://doi.org/10.3386/w27046

Akbarpour, M., Cook, C., Marzuoli, A., Mongey, S., Nagaraj, A., Saccarola, M., Tebaldi, P., Vasserman, S., & Yang, H. (2020). Socioeconomic Network Heterogeneity and Pandemic Policy Response (Working Paper No. 27374; Working Paper Series). National Bureau of Economic Research. https://doi.org/10.3386/w27374

Guerrieri, V., Lorenzoni, G., Straub, L., & Werning, I. (2020). Macroeconomic Implications of COVID-19: Can Negative Supply Shocks Cause Demand Shortages? (Working Paper No. 26918; Working Paper Series). National Bureau of Economic Research. https://doi.org/10.3386/w26918

Al-Ubaydli, O., Lee, M. S., List, J. A., Mackevicius, C. L., & Suskind, D. (undefined/ed). How can experiments play a greater role in public policy? Twelve proposals from an economic model of scaling. Behavioural Public Policy, 1–48. https://doi.org/10.1017/bpp.2020.17

Naudé, W. (2020). Entrepreneurial Recovery from COVID-19: Decentralization, Democratization, Demand, Distribution, and Demography. IZA Discussion Paper, 13436.

Flowe, H. D. (2020). Patterns of Violence and Its Impact on Women and Children Amidst the Covid-19 Pandemic in Kenya Policy Brief [Preprint]. PsyArXiv. https://doi.org/10.31234/osf.io/zykq7

Arellano, C., Bai, Y., & Mihalache, G. P. (2020). Deadly Debt Crises: COVID-19 in Emerging Markets (Working Paper No. 27275; Working Paper Series). National Bureau of Economic Research. https://doi.org/10.3386/w27275

Granja, J., Makridis, C., Yannelis, C., & Zwick, E. (2020). Did the Paycheck Protection Program Hit the Target? (Working Paper No. 27095; Working Paper Series). National Bureau of Economic Research. https://doi.org/10.3386/w27095

Pindyck, R. S. (2020). COVID-19 and the Welfare Effects of Reducing Contagion (Working Paper No. 27121; Working Paper Series). National Bureau of Economic Research. https://doi.org/10.3386/w27121

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Leiserowitz, A., Maibach, E., Rosenthal, S. A., Kotcher, J., Bergquist, P., Ballew, M. T., Goldberg, M. H., Gustafson, A., & Wang, X. (2020). Climate change in the American Mind: April 2020 [Preprint]. PsyArXiv. https://doi.org/10.31234/osf.io/8439q

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The city of Detroit faces a catch-22: It must modernize to attract residents, but in order to modernize, it needs residents as a tax and community base.

That is the premise of Bill Adler’s article for Grist, which takes Detroit’s conundrum a step further in recognizing an important trend for growth: Going green.

Adler compares Detroit to other cities across the country, including Portland, Oregon, in analyzing how Detroit can grow and attract more residents, in particular Millennials — the new young urban professional.

Detroit’s weather, crime rate, lack of adequate emergency services, high tax rates, and lack of transportation — among other things —conspire to keep the city unattractive. So how to change that?

Greening is important, Adler writes. Part of that is urban density, now recognized as an environmental good for reducing carbon emissions. Detroit has a density of about 5,100 people per square mile, closer to suburban-style cities like San Jose than it is to other industrial-era cities, like Chicago (12,000) or Washington, D.C. (10,000). Its current density is slightly higher than Portland, Oregon, which has been recognized for its urban planning and its attractiveness to Millennials and entrepreneurs.

Detroit has existing infrastructure to support greater density, and can do more — expanding public transportation, investing in urban neighborhoods like Midtown and Corktown, expanding renewal efforts to other potentially up-and-coming areas, and turning itself into an incubator or business hub for certain business segments, such as biotechnology — could help the city become attractive to new residents.

Residents also need jobs, and Detroit does have them, with 232,000 existing jobs and just 169,000 employed Detroit residents. The problem there is that many of Detroit’s high income workers commute into the city from suburbs, while Detroit’s urban poor commute out for minimum-wage positions. Further, the city’s transportation structure is car-centric due to its early years, and it is behind the times in implementing public transit.

Detroit does have one thing in stock that could be very attractive to home buyers: Architecture. The city has Tudors and Italianate and Romanesque Revival mansions in stock and for sale. However, the surplus of beautiful homes is actually another detriment, right now, as homes are bulldozed lest they become a magnet for crime or fire hazards.

All hope is not lost, Adler writes, noting that other cities (he calls them Legacy cities) facing similar problems have managed to bounce back, or are in the process of doing so, among them Chicago, Baltimore, St. Louis, and Brooklyn.

But first, Detroit needs to figure out how to bring in people who want to live in the urban core, and provide them with the services necessary to stay.

Detroit may be America’s largest broke city; it may have experienced tremendous population and job loss — but against the odds, there are still people who want to move to this former industrial hub.

This long feature story and series of personality profiles in the Detroit Free Press identifies five specific types of people moving into Motor City: Urban explorers, property seekers, native sons and daughters, entrepreneurs, and empty nesters.

This article profiled individuals who fit all of those categories in trying to create a picture of what Detroit is now, post-bankruptcy filing, and the kinds of people dedicated to bringing it back.

One pair of entrepreneurs moved to Detroit to open a restaurant, planning to capitalize on Detroit’s local food and urban agriculture movements. Deveri Gifford said: "The DIY attitude is what we really loved about the city. The fact that the city is broke really contributes to that DIY attitude because there's this perspective of 'No one else is going to do this, so if I see a problem I'm just going to fix it.' "

Another couple is moving home to Detroit, where they both went to high school. Although they’ve lived elsewhere, they wanted to return home and be part of the rebuilding effort in their city. One works for Teach for America, and the other is in manufacturing.

Retiree Maria Urquidi saw an opportunity to be part of the change in the city, and help it come back. She liked the idea of “coming up with brand new solutions” to fix problems. Detroit was also a much more affordable option for Urquidi, who worked in New York state. She was also attracted to the city’s architecture, and multitude of available, beautiful homes.

Lesley Daley, a Londoner, was also attracted to the city’s architecture, and its history. Daley called the city “a secret” and said that she has not experienced many of the negatives perceived by outsiders, such as packs of stray dogs.

Other people had varying reasons for moving to Detroit — from civic duty to a sense of opportunity and a desire to be closer to the urban core. They have experienced negatives — one couple had their car stolen, crime is a problem, and social services are lacking. But this group overwhelmingly says their experiences have been positive, and feel it is a good moment to influence change.

One young mother, who boomeranged back to the city after college, said she sees opportunity for her child.

"… He sees a lot of things he shouldn't be exposed to, especially at such a young age. But what I'm going to instill in him is that you have the power to change this. Are you going to be the one to complain about this, or are you going to be the one to change this?" she said.

Edit: Although this is a personality profile/feature piece and not a hard policy topic, it is important to our group's work in that by identifying the people who are moving to the city, we can isolate some potential policy areas to emphasize as recommendations for Detroit. For example, the restaurant-owning couple values urban and local agriculture. The city can then implement policies to foster that culture, and with those policies in place potentially attract more people. By recognizing the values and priorities of potential residents, the city can shape its policy to be more attractive.

G.Nelson

In their article, “Cartographies of Race and Class: Mapping the Class-Monopoly Rents of American Subprime Mortgage Capital,” Elvin Wyly, Markus Moos, Daniel Hammel, and Emanuel Kabahizi illustrate that in order to understand the subprime housing crisis of twenty-ought, one needs to understand the structural inequalities of class-monopoly rent. The understanding of class-monopoly rent has not gone away, but has shifted from a local landlord to an international landlord that regulates the renter upon the predatory practices of subprime lending. Variable rates, expensive fees, and asymmetrical information controls the tenants, like that of the 1960s land-installment contracts.

The group quickly illustrates the process of creating and packaging subprime loans. A bank or mortgage company to a borrower draws up a mortgage; that loan is quickly sold off to a Government Sponsored Enterprise (GSE); in return, the bank or mortgage company receives cash to make more loans. The original loan is, then, pooled into Collateralized Debt Obligations (CDOs) and Mortgage Backed Securities (MBS) –which are backed by Wall Street Investment Banks—and are sold around the world to various public and private institutions. The group highlights that at the time of rising home prices, the risk of a default is limited and the financial impact on the bond (MBSs and CDOs) is relatively mute. The bank could force a new mortgage, and the equity that was in the home would go to generate more income for the bank or, essentially, drop the homeowner and force them to become a renter.

In 1995, the Subprime markets accounted for $65 billion, but by 2006, the markets mushroomed to $625 billion. In 2007 a rush of delinquencies, defaults, and foreclosures, along with decreasing home values, created a credit crunch in the economy and chipped away at the confidence of the investors of MBSs and CDOs. This left the U.S. government vulnerable in which the Federal Reserve took dramatic action to buy up MBSs and of unknown values and government bonds to free up banks’ balance sheets.

Instead of taking blame within the financial markets, industry-defenders blamed the imperfect markets, the consumers for taking out more than they could manage, and the attempt by institutions to help more individuals then the markets could handle. The group illustrates, however, that institutionalized racial inequality because of credit-worthiness and lending practices are to blame for the systemic credit crunch of the twenty-ought.

Risk-based pricing --a theory that determines that an individuals ability to borrow and at what rate—has been the basis philosophy of financial markets of the last twenty years. However, the group illustrates how the philosophy has come under attack recently, and provides anything but the rosey picture that it once promised. The theory only deters moneylenders from lending to minorities and low-income individuals by providing a justification of denial to entry.

A social problem of the lack of access to homeownerships for the “underserved” (minorities and low-income individuals) gradually brought about State and Federal regulations and programs to assist homeownership for the underserved. Within the 1960s, for minorities to build up credit worthiness and equity for a bank to justify a mortgage --even if the minority already had the sufficient income to justify a mortgage—the minority would utilize a land-installment contract. This path towards homeownership often carried higher premiums. Within the 1980s, a series of laws made specific types of loans and lenders exempt from regulatory practices (337). Through the 1990s, federal and state regulators maintained the effort of providing traditional mortgages to the underserved, but at the turn of the century, small lending firms, which were backed by Wall Street, began to provide loans that were not restricted by state and federal regulations. Asymmetrical information, lack of knowledge by the consumers, led many to believe that this is the only way for them to own a home. These small lending firms were bought up by national banks and accounted them as subsidiaries, which allowed the bank to carry the exempt status in its subsidiary firm and continue the predatory practices, but now at this time, in a much grander scale. The loan restriction of the 1960s –which stems from racism-- has only transformed itself back to loan restrictions of today because of the predatory lending that is justified by the risk-based pricing theory.

I am illustrating the foresaid points of the article in my annotation to emphasize the foundation of racial-lending practices that span decades within the U.S. financial system. This will be imperative to tie into the financial credit crisis of 2008, and how municipalities suffered from this sort of practice.<br> G.Nelson

“Can Detroit Rebuild Its Middle Class?” from the National Journal, Tim Alberta (2014) http://www.nationaljournal.com/next-economy/america-360/can-detroit-rebuild-its-middle-class?mref=scroll

In this fascinating article by Tim Alberta (2014) from the National Journal, there is a focus on rebuilding the middle class of Detroit with the image of diversity and self-sustainability. The underlying ideology is that a strong middle class is the key to a thriving city. There are currently 2 Detroit’s: one that portrays a downtown revival with new condos, business, and breweries, and the other that resembles a “zombieland,” completely lacking inhabitants (Alberta, 2014). Alberta (2014) says that the city’s biggest problem is a lack of residents. People are needed to build the middle class and restore the economy. Even though there is a boom of new businesses, it has not been enough to draw people to live in the depressed and abandoned neighborhoods. Reasons that young and educated workers do not want to live in Detroit is because crime is off the charts, the public school system is one of the worst in the nation, and the city’s public services are significantly lacking (Alberta, 2014).

The rebuilding attempts that are taking place are multi-faceted. City and state officials are trying to rebuild the middle class by luring educated, professional immigrants to the area. Non-profits are working to retain the graduates of Michigan’s universities. Additionally, non-profits are providing job-training and connecting employees with in-demand industries. Business organizations and coalitions are diversifying and trying to destigmatize Detroit as a manufacturing only city. Rebranding the city is considered an especially important step (Alberta, 2014). Doing this will reinforce the importance of education that was once not unnecessary to get a manufacturing job in the city. Millions in investment dollars are going into technology and the energy industry to attract a young and diversely educated workforce. “To build a long-term economic base, Detroit, like a low budget baseball team, must develop and retain homegrown talent” (Alberta, 2014). Once the middle-class is stronger, more money will be available for governmental services like schools and public works, and the city will fully start to heal.

Breunig, C., Koski, C., & Mortensen, P. B. (2009). Stability and punctuations in public spending: A comparative study of budget functions. Journal of Public Administration Research and Theory, 20:703-722.

This article published in the Journal of Public Administration Research and Theory by Breunig, Koski, and Morentsen presents a longitudinal study of stability and punctuations of public spending in the United States and Denmark. Breunig et al apply Baumgarnter and Jones’ disproportionate information processing model as a theoretical basis for this research. (The disproportionate information processing model was presented in 2005 by Baumgartner and Jones as a more general model of their punctuated equilibrium model/theory). In addition to the two countries being compared in this quantitative study, the spending patterns across different subcategories of public budgets in the areas of health, education, transportation, military, etc. are analyzed (Brenig et al, 2009). Their findings align with what Baumgartner and Jones predicted would occur universally with spending punctuations; “political decision makers either ignore or overact to information signals from their surroundings. This results in a distinct pattern of both stability and punctuated change in policy outputs often measured in terms of public spending indices” (Brenig et al, 2009, p. 704). A pattern of kurtosis was reflected across multiple subcategories of public budgets in both countries. Kurtosis is represented in a diagram as long periods of flat, incremental change with sharp punctuations that spike rapidly and then quickly return to equilibrium (Brenig et al, 2009).

The usefulness of this study in looking at the situation in Detroit, Michigan and its fiscal crisis is that it helps explain the unprecedented fiscal punctuation that occurred in 2013. Because the policy makers did not make the small, incremental changes to respond to the changing demographics and economic environment that affected the city’s budget subcategories, the largest municipal bankruptcy in US history occurred. Who knows if the crisis could have been averted? However, punctuated equilibrium theory does help us understand why. The data presented in this article by Breunig et al (2009) reminds me of a pressure cooker; if the incremental changes do not occur- to let off steam, then there will be an explosion. This article also made me realize that a good way to study public policy is through budgetary punctuations; these punctuations are either the result of an overreaction or poor planning on the part of policy makers.

G.Nelson

In her article, “Government Budgets as the Hunger Games: The Brutal Competition for State and Local Government Resources Given Municipal Securities Debt, Pension and OBEP Obligations, and Taxpayer Needs,” Professor Christine Chung provides an eye opening and thorough analysis of Detroit’s economic woes. She summarizes the latest statistical findings, which illustrates the severe loss in residents, property blight, crime rates, the maximum statutory limit of taxation reached, citizen flight, and the loss of jobs. Moreover, she illustrates the budgetary debt constraints that have ballooned to more than $18 billion, which helped prompt Detroit to file for bankruptcy; the debt to revenue ratio will only increase over the next few years; bondholders are expected to lose a substantial amount of their investment from the bankruptcy. Chung illustrates that the City’s collapse preceded by an incremental decrease in jobs. From 1970 to 2012 the number of jobs declined from 735,104 to 346,545 (Chung 666).

She illustrates that Detroit is not an exceptional case, but there are numerous municipalities that are struggling to pay debt and other obligations, e.g. pensions. Currently, out of the participating states and localities, only $2.35 trillion has been set aside to pay pensions, health care, and OPEB promised to public sector employees; however, the actual estimated cost is around $3.5 trillion: more than $1 trillion in unfunded obligations (Chung 669).

Because of Detroit’s financial instruments used to manage their budgetary obligations, they took a high stake wager on interest rates, and when the rates declined, “Detroit lost catastrophically on the swaps bet” (Chung 670). Some municipalities have used derivatives to win, but others, e.g. Orange County, California and Jefferson County, Alabama, have lost or struggled with the financial instruments.

Chung posits that the Dodd-Frank Wall Street Reform and Consumer Protection Act does not go far enough to protect stakeholders or prevent from imprudent financial-decisions-makers from erring in how they utilize risky financial instruments. She finalizes her article with the following regulatory recommendations, which should provide a clearer picture of a City’s budget, obligations and revenues: "(i) requiring compliance with uniform accounting standards, so that stakeholders can get a better sense of the state of state and local government budgets; (ii) creating a data collection resource and oversight body to help identify and manage risks associated with complex instruments, (iii) creating a data collection resources and oversight body to help identify and management risks associated with public employee compensation (particularly pensions and OPEB), and (iv) expanding the reach of the fiduciary standard to a broader range of stakeholders involved in local government financial decision-making, including public officials, underwriters, and derivatives counterparties.” (Chung 671)

Honest politicians, clear and transparent accounting, and realistic demands on the City’s and State’s resources are needed, even at the cost of upsetting some constituents. A norm can be redeveloped that can help Cities create stability and longevity.

G.Nelson