Cheesed off

Credit: Gonzo fan2007/Wikimedia

My piece in this week's Economist covers the increasingly bitter dispute in Wisconsin over the future of the governor Scott Walker. The piece went to press prior to the release of revised (but unverified) job numbers

I thought one of the more interesting parts of the interview with Governor Walker was where he suggests that when he is re-elected there will be an appetite for overhauling the recall laws in Wisconsin.  Even though Wisconsinites are pretty cheesed off with the whole recall process, such a change would be pretty controversial.



  

 Wisconsin’s recall vote

Cheesed off 

The state is embroiled in a bitter dispute over its governor’s fate

May 19th 2012 | MADISON | from the print edition

SOME call it a civil war. Others say that the debate over the future of Wisconsin’s Republican governor, Scott Walker, is now so rancorous that neighbours, families, and co-workers are refusing to discuss the subject. The only thing that everyone agrees on in Wisconsin is that they will be glad when the recall election is over on June 5th. [More...]

Rebuilding Chicago

Infrastructure renewal, Chicago. Picture: City of Chicago.

I wrote this week in The Economist about the new Chicago Infrastructure Trust--the piece was co-authored with Ryan Avent in Washington.

I have also blogged recently about Chicago's obvious need for a great deal of infrastructure investment. 



A question of trust 

Chicago pioneers a new way of paying for infrastructure

May 12th 2012 | CHICAGO AND WASHINGTON, DC | from the print edition

FOR decades America has underinvested in infrastructure—even though poor roads, delayed flights, crumbling bridges and inefficient buildings are an expensive burden. Deficiencies in roads, bridges and transport systems alone cost households and businesses nearly $130 billion in 2010, mostly because of higher running costs and travel delays. The calculated underinvestment in transport infrastructure alone runs to about $94 billion a year. This filters through to all parts of the economy and increases costs at the point of use of many raw materials, and thereby reduces the productivity and competitiveness of American firms and their goods. Overall the American Society of Civil Engineers reckons that this underinvestment will end up costing each family in the country about $10,600 between 2010 and 2020.

Yet though investment in infrastructure would bring clear gains in efficiency, there is little money around, and all levels of government are reluctant or unable to pile up more debt. Traditional sources of funding, such as the (flat) tax on petrol, have delivered a dwindling amount of revenue as soaring prices at the pump have persuaded people to drive less. The federal government has been unable to get Congress to agree on other ways to generate new sources of funding for transport, to the point where money for new highways has almost dried up. [More...]

Goodbye, Peter

I'm greatly saddened to hear of the death of my colleague Peter David, our Washington Bureau Chief, writer of the Lexington column and a friend.

The last time we met was at the end of April, when he and some colleagues from Washington came to Chicago to meet with the Obama Campaign team. It was a lovely spring day. We met in the sunshine outside the Prudential Tower.

He told me that he had spent the morning going for a walk down Navy Pier, and said I was lucky to live in such a beautiful city. It is, indeed, a lovely walk from downtown to the lake. We had coffee, and he proudly showed me his new ipad (red leather cover). Peter was a generous and considerate friend, and always available to offer advice and support. I miss him.

He was lost in a car accident. It's a terrible tragic waste of a man of enormous talent.

Updated: 

Peter David's blog as Lexington

Economist's D.C. chief dies in car crash, Politico. (With many remembrances from colleagues)
Some great pictures of Peter David.
Picture of Peter meeting Arafat shortly before Arafat's death in 2004. 
Peter's biography on our staff pages. Prior to joining the Economist he worked at Nature magazine.
Beautiful piece by our former deputy editor, Clive Crook, who is now with the Atlantic.
Washington Post obituary. May require subscription.
The Economist tribute to Peter David.

Drive-thru ATM

The drive-thru ATM is something of a novelty to us British folk.

Chicago Street Art

Art outside the Lill Street Cafe, Chicago. Fill in your own blank.

The Crumbling City

Everywhere you go in Chicago you'll find signs of urban decay. Not the sort of middling decay you find in most cities but decades-old, ground in, well-worn and surprising decline. But crumbling walls, fragile sewers, rusting struts and wobbly bridges are not the sort of fabric upon which a thrusting and growing 21st century city is built upon.

So the task at hand for the new Mayor, Rahm Emanuel, is catch up with the long-overdue repairs to his city, while making the necessary improvements that will make sure that people want to move into the city rather than out of it. The city has little or no money, and citizens are against the idea of raising taxes. The state is broke too. Dribs and drabs come from the federal government. So how does one fund a serious $7 billion improvement program?

Besides borrowing more money, the answer in Chicago is to do something rather like a private finance initiative. This is to ask the private sector to come in and invest in projects that deliver some steady returns over a number of years.

Chicagoans have been rather anxious about this new idea. Rather ironically private finance of public projects is actually more common in "socialist" Europe. But in Chicago particularly, everyone remembers the parking deal that went bad. The time when a previous mayor sold the lease to the city's parking meters for 75 years for a fraction of its value. This is not the same idea. Nobody is talking about selling off the city's assets. The Chicago Infrastructure Trust wants to match private finance with investments in the city that will yield ongoing returns.

That is not to say that the idea is without risk, there are many things that can go wrong with private financing deals. The public side can end up taking on more risk than it realises when it has to pick up the pieces (a half finished school for example) when things go bad. (See Wikipedia on Criticism of PFI.) And if the investment depends on user fees (say a toll road), sometimes these can be uncomfortably high. And the costs of the project can be too high as well, as experience with school and hospital building has shown in Britain.

But if it is done properly, it absolutely does work--as experience with Britain's new Treasury building shows. And let us not forget how badly public-financed projects can go wrong. The new Scottish parliament building was originally supposed to cost 40m GPB ($64m), but actually cost 400m GPB.

So there are risks, and there are huge potential rewards. While there is anxiety, few appreciate the fact that Chicago needs to act quickly. It lost 200,000 people in the last decade. If this sort of pattern picks up in the next census, rather than reverses, it will be a disaster. Chicago could become just another one of those hollowed out former industrial Midwestern cities, with the wealthy taking refuge in the suburbs and the city loosing its energy and dynamism. Chicago has to be the place that people seek out in the Midwest, not flee from.

So when the mayor says that the city cannot afford to wait for the federal government to act with regards to infrastructure investments, he probably means it. By the time the next census comes around in a decade from now, the city needs to have stemmed or reversed this trend of population decline. Its a tough nut to crack, but this probably explains why the new major has been like a hyperactive squirrel in the last year, scurrying from new project to new project. Time is of the essence.

Restoration drama

Restoration drama - by Natasha Loder, The Economist print edition

America’s under-appreciated community colleges hold promise 
Apr 28th 2012 | CHICAGO AND BOSTON 

COMPARED with its world-famous universities, America’s community colleges are virtually anonymous. But over half of the nation’s 20m undergraduates attend them, and the number is growing fast. Poor, minority and first-generation-immigrant students are far more likely to get their tertiary education from community colleges—where two-year courses offer a cheap route to a degree—than from universities. And, increasingly, many policymakers are wondering whether more attention to the colleges might be a low-cost way of resolving the nation’s shortage of skilled workers.

America’s problem with training was laid bare in a report published last year by Deloitte, a consultancy firm, and the Manufacturing Institute. It identified 600,000 positions that were going unfilled because there were too few qualified skilled workers. Too many colleges, it seems, still fail to align themselves with the needs of local employers, a mismatch that is bad both for the employers and for potential employees, though arguably universities are even worse at doing this. [More...]

• Really good comments on this article, including one that points out an important flaw in using graduation rates as a metric of success in community colleges. Not sure what the answer to this is.