Archive for the ‘General’ Category

Flood!

Thursday, September 2nd, 2010

Flood warning. How my car ended up under waterAmerica’s states are under water in more ways than one.  This writer got a close-up view of how our aging infrastructure is being taxed by the elements.  A summer storm that brought as much as eight inches of rain in just two hours in the wee hours of Saturday, July 24 wreaked havoc in Chicago’s near western suburbs as streets, viaducts and even condominium garages flooded with dirty water when overfilled sewers backed up.  Mine was among them.

One of the hardest hit communities was my home of Forest Park, IL, a diverse suburb of approximately 15,000 just west of the more famous Oak Park and best known for its Irish bars and many cemeteries.  Although President Obama has declared Cook and seven other Illinois counties as federal disaster areas because of the storm and flood,  the federal money likely won’t solve Forest Park’s problem of outdated storm sewers that cannot handle rainfalls such as the one that occurred on July 24.  At a recent meeting with Senator Dick Durbin (D-IL), Mayor Tony Calderone and Village Administrator Tim Gillian said that flood-ravaged Forest Park needs a minimum of $60 million to make necessary upgrades to the storm sewer system.  “The Village of Forest Park will never have $60 million to do a project like that,” Gillian said.  Calderone noted that the $60 million figure came from a 2000 study by village engineers.  The project would now likely cost $70 million.  “This is a complex issue, with no simple answer.  That improvement would take the temporary burden off of one half of the system.  If the pipes downstream could not handle any more water, then the water would still back up here,” Calderone said in a reference to public dissatisfaction about the projected 2019 completion date for the area’s Deep Tunnel project.

One possibility for small suburbs like Forest Park is the proposed U. S. infrastructure bonds,  a vehicle designed to finance public works.  Richard Keston of the Keston Institute for Public Finance and Infrastructure Policy (part of the University of Southern California), said “I don’t see anyone having a sustainable (funding) model in place for general government, let alone infrastructure.  Why not create a vehicle where the federal government could issue infrastructure bonds?”  Debt associated with a national infrastructure investment fund would be backed by fee revenues from projects undertaken by state and local governments.

Green Metropolis Takes Aim at Environmentalists’ Conventional Wisdom

Monday, August 23rd, 2010

Author David Owen thinks that New York is the nation’s greenest city.  David Owen, a staff writer with The New Yorker, has expanded on his 2004 article entitled “Green Manhattan” that roughs up some of the environmental movement’s most closely held beliefs in a new book entitled Green MetropolisA review by Catherine Tumber, originally published in The Wilson Quarterly, notes that “Eco-friendly suburbanites and small-town residents are only kidding themselves as long as they live in sparsely settled, spaciously appointed, auto-dependent communities.  If they really want to reduce their carbon footprint in any significant way, they should live in densely settled, pedestrian-friendly, public-transit-oriented cities like New York.”

Owen suggests that cities like New York build on their biggest low-carbon asset - their large population densities - and place less emphasis on green buildings, urban agriculture and increasing the size of the city’s parks.  He even believes that Central Park is too big and wasted space that could be used to support even more housing.  Additionally, Owen takes aim at “the spectrum of green-tech fixes under development, from residential solar panels and LEED-certified buildings to ‘net-metering,’ de-concentrated ‘distributed’ electricity generation, ethanol production and electric cars.  ‘Nature-conservancy brain’ and ‘LEED brain,’ as he calls these environmentalist fixations, are too often driven by PR and do little more than distract from the more difficult task at hand:  how to get Americans to kick the car habit and live together more closely, in smaller spaces,” Tumber writes.

According to Owen, New Yorkers are environmentalists because they live in a city where a car is a luxury and residents tend to walk, take the bus or the subway.  “In urban planning in particular,” he said, “the best, most enduringly fruitful concepts have usually arisen accidentally, and have endured not because anyone was wise enough to identify and preserve them but because they serendipitously developed what was, in effect, a life of their own.  Owen argues that New York should be viewed as a model for other cities that want to reduce their carbon footprint.

Tumber notes that “Owen makes a point, almost in passing, that also deserves further conversation:  rather than reducing the carbon footprints of apartment buildings or growing food on precious urban real estate, cities should be focusing on ‘old-fashioned quality-of-life-concerns’ such as education, crime, noise and recreational amenities - the very troubles that drove people into suburbia in the first place.”

Elizabeth Warren Ideal Head for the Bureau of Consumer Financial Protection

Thursday, August 19th, 2010

Elizabeth Warren to be our new consumer protection czar.  A leading candidate to head the new Bureau of Consumer Financial Protection is Elizabeth Warren, although her potential nomination is not without controversy.  Writing on CNN Money.com, Katie Benner says “Detractors say that Warren lacks experience, that she’s not impartial, and that she could make it so expensive to extend credit that only the richest Americans and biggest businesses could get a mortgage, a credit card or a loan.  But these knocks against Warren obscure the likely impact that she would have on the bureau.  And mostly, they are straw men.”

Warren is a Beltway outsider and a Harvard law professor.  She did take leave in 2008 to head the Congressional Oversight Panel (COP), which evaluates TARP and oversees the Treasury Department.  Since its inception, the COP has published 22 detailed reports with little dissent, despite multiple differences of opinion regarding economics and politics among the staff members.  Ken Trotske, an economist who serves on the panel, describes Warren as a consensus builder.  “I’m in awe of the work they turn in to meet that schedule, because it’s a demanding schedule.”

In its two years of existence, COP has become an intellectual hub in Washington, D.C.’s efforts to understand the relationship between the federal government and Wall Street.  According to Benner, “The outcry over Warren’s impartiality is a through-the-looking-glass twist on the current state of our regulatory affairs.  It bears repeating that it’s a good thing for the head of an agency designed to protect consumers to actually put the interests of consumers first.  For the last few years, as was made imminently clear by the implosion of 2008, Wall Street regulators were doing anything but regulating.”

In Benner’s words, “Someone like Warren is a shock to that system.  She unabashedly sides with consumers.  She hates fine print and contracts with ‘gotcha’ clauses.  She wants to eliminate predatory loans.  And she thinks that it’s okay for bank profits to be crimped in service of a level playing field between borrowers and their lenders.

Legendary Political Commentator Dan Schorr Dies at Age 93

Tuesday, August 10th, 2010

The radio airwaves lose a commanding presence with the passing of legendary broadcaster Dan Schorr.  Legendary newscaster and elder statesman of political commentary Daniel Schorr died recently at age 93 following a brief illness.  Schorr, who spent the last 25 years of his long career as a senior news analyst with National Public Radio (NPR), aired his final broadcast on Saturday, July 10.  A journalist for more than 60 years, Schorr was the last active member of Edward R. Murrow’s “Boys”, a group of journalists who worked at CBS News in the 1940s and 1950s.  He joined NPR in 1985 and gave regular commentaries on the “Weekend Edition” and “Week in Review” programs.

Scott Simon, host of “Weekend Edition”, said “Nobody else in broadcast journalism - or perhaps in any field - had as much experience and wisdom” as Schorr.  “I’m just glad that, after being known for so many years as a tough and uncompromising journalist, NPR listeners also got to know the Dan Schorr that was playful, funny and kind.  In a business that’s known for burning out people, Dan Schorr shined for nearly a century.”

Schorr was famous for his straightforward coverage of the Watergate scandal of the early 1970s and even discovered his name on President Richard Nixon’s infamous “enemies” list.  “He lived through so many years of history, and he put that to the service of his commentaries,” said Geoffrey Cowan, dean emeritus of the University of Southern California’s Annenberg School for Communication.  “He never lost his edge.  He was also outspoken and independent.”

In 1975, New York magazine called Schorr the “great abrasive” for his pointed coverage of the House Intelligence Committee hearings on covert CIA operations, including assassination plots.  Schorr had been given a copy of the intelligence committee’s draft report and reported some of the contents on the CBS Sunday News - the only journalist to do so.  When CBS refused to back Schorr, he offered the full report to the Village Voice, which published a 24-page special section headlined “The Report on the CIA that President Ford Doesn’t Want You to Read.”  The bold move prompted CBS to demand that Schorr resign, giving him time to write the book “Clearing the Air” before he was hired by a very new 24-hour broadcast operation called CNN.

When Schorr was approaching age 70, NPR asked him to become a commentator, a post that he held until his death.  Schorr says that NPR “accorded some of the respect of an elder statesman” and he became renowned for putting current events into historical context.

Geithner Gains New Powers With Financial Regulation Overhaul

Tuesday, August 3rd, 2010

Treasury Secretary Geithner gains power with new financial overhaul law.  With the passage of historic financial reform legislation, Treasury Secretary Timothy Geithner is being given the authority to reshape bank regulations, oversee financial markets and create a consumer protection agency.  Few Treasury secretaries will wield this much influence once President Obama signs the new financial overhaul legislation passed by Congress.

Geithner’s fingerprints are all over the effort to expand financial regulation.  The bill is extremely close to the initial draft he released last summer but also names him — as long as he remains Treasury secretary — as the head of a council of senior regulators.  The legislation also puts him at the head of the new consumer bureau until the Senate confirms a permanent director.  In other words, Geithner will mold the regulator over the next several months.  It also will be his responsibility to work out several issues left unresolved by the bill — for instance, which financial derivatives will be subject to the strict new trading rules and which risky activities big banks will have to spin off.

The legislation “will help restore the great strength of the American financial system, which — at its best — develops innovative ways to provide credit and capital, not just for our great global companies, but for the individual with an idea and a plan,” according to Geithner.  Efforts to win passage of the financial regulatory bill were driven primarily by the Treasury, proof that Geithner has significant autonomy within the administration.

Sen. Christopher J. Dodd (D-CT), who moved the financial overhaul package through the Senate, said it wasn’t his preference to put the Treasury secretary in charge of the new council.  He would prefer that a member of the Federal Reserve board fill that role.  At the same time, he said, having a member of the president’s Cabinet in charge could make the council “more politically responsive.  It gives you some accountability,” Dodd said.

John Vivadelli: The Real Estate Perfect Storm

Tuesday, July 27th, 2010

Commercial real estate is currently experiencing a perfect storm, one that will utterly change the way corporations utilize their office space in the future.  This is the opinion of John Vivadelli, CEO and founder of AgilQuest Corporation and a well respected industry expert in the fields of alternative office environments; real estate metrics and cost management; and business continuity.

Prior to founding AgilQuest, Vivadelli was instrumental in developing IBM’s workplace management system in the 1990s to support the company’s transformational workforce mobility program, creating their “office of the future”.  This new workplace strategy resulted in reconfiguring the technology giant’s real estate footprint by shedding millions of square feet that saved hundreds of millions of dollars annually. AgilQuest provides the services and systems necessary for companies and governments to achieve similar results.

According to Vivadelli, this perfect storm is impacting both the supply and demand sides of commercial real estate.

John Vivadelli talks about the real estate perfect storm.  On the supply side, the United States has approximately 12.5 billion sq. ft. of commercial office space, which carry an estimated $1.2 to $1.4 billion in loans that will come due in the next two years. Many of these loans will not qualify under new reserve requirements.  While the average base vacancy rate is currently 17 percent nationally; that statistic does not include shadow space - square feet that are paid for but not occupied - which adds another 5 to 20% to the overall vacancy rate.  Additionally, with the upcoming implementation of FASB Rule 13, both owned and leased properties will have to be reported on corporations’ balance sheets.  Off-balance-sheet leasing will no longer be an option.

On the demand side, he sees a fundamental shift downward in real estate absorption.  The nation’s unemployment rate is approximately 10 percent, with an additional seven percent who have opted out of looking for a job. Some of these jobs will never return.  Add to that the number of workers who perform their jobs remotely and stay connected to the office via PDA, cell phone and laptop, and the average actual occupancy rate between 8 a.m. and 5 p.m. is between 30 and 50%.  That means over half of all office space across Corporate America is vacant on any given day.  Considering that an average of $60 is allocated per sq.ft., that adds up to $360 billion that companies are paying to landlords for office space that is empty and they don’t need.  This wastes 1.5 quads of energy and results in 40 million metric tons of unnecessary carbon released every year.  As companies recognize the scale of the problem, the real estate industry will see a profound shift in how we use space.

 
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World Cup Redux

Wednesday, July 21st, 2010

So, another World Cup ends and the succeeding weeks bring a nagging sense of withdrawal  but also a chance to revisit the narratives that were played out.  The pathos of the World Cup tournament came largely from Holland’s defeat - its third in a World Cup final.  This country which has produced some of the greatest players of all time - Cruyff, Neeskens, Gullit and Bergkamp-is the greatest soccer power never to win.  Holland’s loss was especially difficult because they toppled #1 ranked Brazil to get to the finals, taking control of the game in the second half of their game with fine goals by Schneijder and Robben against Brazil’s celebrated defense.The World Cup tournament came largely from Holland’s defeat – its third in a World Cup final.

What makes Holland’s continual failure at this level mystifying is that they are the originators of one of the most imitated styles of play in the history of the game.  Total football was fashioned by former Dutch coach, the legendary Rinus Michels when he  helmed   the team in the early 1970’s.  It called for players to be flexible-equally adept at attacking and defending.  During a match, when the team is being pinned down by the opposition, the team members adopt a defensive stance with all 10 outfield players behind the ball; alternately, if the team is attacking the opposition half of the field, then the players adopt an attacking stance where all ten outfield players support  each other in the opponent’s half of the field.  In order for this strategy to work, a team needs players who are comfortable with the ball and able to switch from attack to defense very quickly.  The irony is that Spain largely adopted total football: their strategy was mainly based on the successful tactics of the Barcelona club team which had been formed over decades by Dutch coaches, including  Michels, Cruyff and Louis van Gaal.

So the final between Spain and Holland should have been a classic struggle of prophet and acolyte.  But it wasn’t.  It seemed like the only team interested in playing  football was Spain.  The Holland team players resorted to roughhouse tactics hoping to unsettle the Spanish team, denying them the space and rhythm to play their close passing game.  Trips, crunching tackles and elbows were the order of the day.  The Holland player, De Jong, launched a scandalous kick to the chest of Spanish player, Alonso, earning only a yellow card from the British referee, Webb.  He should have been sent  off.  Johann Cruyff,  the legendary Holland player from  Holland’s  “Total Football” era of the 1970’s described the team’s performance as “antifootball”.

And what was the other low?  Who would have thought that Italy and France, the teams that played in the last final,  would crash and burn in the first round?  For France, it signaled the end of a 30-year run of glittering, balletic football. From Platini to Zidane, France were a European side that rivaled the South Americans in flair and grace.  Many will remember the epic game they played against Brazil in 1986, an impossible display of intelligence, rhythm and athleticism that ended in a penalty shootout.  Sadly, the 2010 French will be remembered for the fact that their team went on strike when the nation needed their services the most.  This comes 4 years after France’s hero, Zidane head butted Italian player, Materrazzi in the 2006 World Cup final.   Swan song indeed.

Compare the dissolution of Holland’s brilliant gestalt football and France’s aesthetic game to the singular delight of the 2010 tournament which was undoubtedly the re-emergence of Uruguay as a soccer power. Remember that Uruguay was the first nation to win a World Cup, defeating Argentina 4-2 in 1930.  The new  Uruguay team played a crackling game against Ghana to enter the semi finals and came very close to equalizing with Holland which would have taken them to the finals.  Diego Forlan and his teammates gave hope to all the has-beens and minnows in football around the world.  Perhaps their success will wake the soccer greats of yesterday — like Hungary and England — back to form and serve as inspiration to the powers to come.

Rodrigo Silva is AlterNow’s soccer correspondent.  Based in Malaysia, he teaches business and marketing at the MBA level at Segi College in Kuala Lumpur.

Spain Wins the World Cup

Tuesday, July 20th, 2010

Global success starts at homeSpain’s extraordinary win in the 2010 World Cup means the country now joins a rarefied group of soccer royalty - Brazil, Germany, Argentina, Italy and France - as one of the handful of countries to win the game’s highest honor.  The defining features of the Spanish team were their midfield dominance — Iniesta, Xavi, Fabregas  and Alonso– and their close passing game (that and the emergence of David Villa as a Paoli Rossi-like figure scoring goals against some of the most impenetrable defenses in recent history). Some of us older fans were even reminded of the French teams of the 1980’s that comprised Tigana, Fernandez, Girresse and the incomparable Michel Platini.  What’s curious is they actually lost their first group match to Switzerland 1-0. The Spanish coach, Vincente Del Bosque, to his credit, didn’t panic and refused to go back on his strategy of attractive, attacking football. Once the Spanish midfield took control of the midfield in a game, it was difficult for their opponents to have a look-in. The mighty Germans, for example, who easily dispatched England and Argentina with their counterattacks, came unstuck against Spain as the Spanish team denied them space and used their short passing game to press their offense.

Spain’s euphoria over its World Cup win is a signal of the profound impact that soccer (and by extension sports) can have on a national psyche.  Hundreds of thousands jammed Madrid’s avenues as an open air bus conveyed the national team past a sea of red and yellow, the colors of the Spanish flag. The celebration in Madrid, where national unity is at its strongest, was expected. But there was support from other places: The Catalonia region, which has long sought greater autonomy, and the separatist Basque region, where anything pro-Spain is often anathema. For a country that emerged from 40 years of brutal fascist rule under Franco and that now struggles with 20% unemployment, the victory couldn’t have come at a better time.  Spanish Finance and Economy Minister Elena Salgado told reporters Monday that winning the World Cup “generates confidence in our country, here and abroad, and that will also be good for GDP,” she added. An ABN Amro Bank study into the macro-economic effects of the tournament suggested a World Cup provided a GDP gain of 0.7 percentage points, a figure that some economists dispute. There is no question: Spain deserves the World Cup.  Let us hope it helps to boost the country’s fortunes, from its  anemic growth of 0.1 percent of GDP over the first quarter of this year and its projected 0.3 percent contraction over 2010.

Rodrigo Silva is AlterNow’s soccer correspondent.  Based in Malaysia, he teaches business and marketing at the MBA level at Segi College in Kuala Lumpur.

Support the National Alzheimer’s Project Act in Congress

Wednesday, July 14th, 2010

Legislation to create the National Alzheimer’s Project Act is quietly working its way through Congress.  By 2050 - just 40 years from now — nearly 16 million Americans will be afflicted with Alzheimer’s Disease.  Surprisingly, there is not yet a national plan to deal with this looming crisis, although one has been proposed on Capitol Hill.  The National Alzheimer’s Project Act (NAPA) would establish an inter-agency advisory council to address the government’s efforts on Alzheimer’s research, care, institutional services, and home- and community-based programs.  S.B. 3036 and H.R. 4689 would create a government agency to exclusively deal with Alzheimer’s issues.

Co-sponsored by Senators Michael Bennet (D-CO), Birch Bayh (D-IN), Susan Collins (R-ME), Russ Feingold (D-WI) and Jon Tester (D-MT), the proposal would create a special office within the White House to coordinate research, clinical care and services with the goal of preventing, caring for and curing Alzheimer’s Disease.

“Alzheimer’s takes a tremendous emotional and financial toll on over 75,000 Coloradans and their families,” according to Bennet.  “Yet our nation’s healthcare system is not set up to appropriately coordinate and share the research we’re doing to prevent, cure and care for our patients.  This bill will streamline the country’s research efforts so that we can better find ways to combat this disease while also making much better use of our taxpayer dollars.”

Approximately half of Americans who live to 85 will suffer from Alzheimer’s.  Once the legislation is passed by the House of Representatives and the Senate, the Office of the National Alzheimer’s director would be named to the Domestic Policy Council and the Office of Science and Technology.  This director would have input into all policy aspects of the disease, as well as focus on high-risk groups and those underserved by existing Alzheimer’s programs.

The China Syndrome

Tuesday, July 6th, 2010

The unwinding of global imbalances signals the end of China's unfair advantage.  As global financial disparities start to wind down, China is likely to end up a winner because emerging-market economies have a definite advantage rooted in the way the global economy functions. Writing in the McKinsey Quarterly, Lowell Bryan, a director with McKinsey & Company, notes that “Saber-rattling Western trade negotiators frequently focus their attention on the ‘unnaturally’ depressed exchange rate of countries such as China, and this is a component of the structural advantage to which I refer.  But its roots run far deeper - all the way down to the fundamental issue that labor can’t be freely traded on a single global market, while capital and commodities can.  Any company sourcing its production or service operations in a lower-wage emerging market-country therefore can save enormously on labor costs.”

China’s recent decision to relax the informal peg of its currency, the yuan, to the U.S. dollar proves that the world must come to grips with a set of economic relationships that are currently unsustainable.  According to Lowell, “Their unwinding will have serious long-term implications for those executives’ strategic priorities, including where they locate operations and what customers they serve in which markets.  Equally important is the need for preparedness in case the unwinding process is sudden and abrupt.  While we surely seem to be headed toward a new global equilibrium, the transition to that future may not be smooth and gradual.”

The cost of labor in China and India is less than one-third of what it is in developed nations.  Additionally, Chinese and Indian productivity are at extremely high levels and tend to be in highly specialized fields - high-tech assembly in China and software development in India.  To take advantage of the cost savings, many multinational firms are locating production facilities in emerging markets.