There has been less longing, in recent years, to be part of our own countryâ€™s version of a rust belt â€“ the one that comprises such Southwestern Ontario cities as Windsor, London and St. Catharines, and patches of Eastern Ontario. Young people have fled in droves as the regionâ€™s employment numbers have tanked, seeing the loss of more than a quarter of manufacturing jobs in the last decade.
The plight of the region has been a driving force behind a provincial deficit that remains at over $10-billion, as well as a net loss for Ontario in the migration of people within Canada, and an alarmingly aging population.
Even with Alberta driving the national economy, the country could ill afford Ontarioâ€™s struggles; itâ€™s hardly healthy for the largest provinceâ€™s per-capita GDP to be lower than the rest of Canadaâ€™s, and it helps explain why the federal government has remained in the red.
With oilâ€™s current slide, Canada really canâ€™t afford for it to remain a drag â€“ and in fact there is some expectation that Ontario will instead reclaim its old role as the leader of Canadaâ€™s economic growth. Its premier, Kathleen Wynne, recently expressed optimism that plummeting oil prices and a sinking dollar will prove a boon to manufacturing. â€œI donâ€™t wish for low oil prices and a low dollar for Alberta,â€ she said earlier this month. â€œBut at the same time, we want our manufacturing sector to rebound. So if that [low oil price] helps, then thatâ€™s a good thing.â€
While they could indeed help in the short term, itâ€™s difficult to imagine those volatile factors leading to the lasting revival of traditional sectors competing with consistently low-cost jurisdictions such as Mexico, China and even the American South.
For sustainable renewal, Ontarioâ€™s old industrial towns will have to work harder at reinvention â€“ and they should be looking to some of their counterparts in the U.S. A two-week road trip through Pennsylvania, Ohio and Michigan revealed in often surprising ways how our neighbours are much further along in reinventing their most hard-hit cities, and how much we have to learn.
â€œThe wind is at the back of these cities in a way that it wasnâ€™t before,â€ says Jennifer Vey, a fellow at the Brookings Institute who studies the revitalization of old industrial centres. And although many of them will remain smaller than in their industrial heyday, the numbers bear that sentiment out. When the Manhattan Institute ranked Americaâ€™s 100 biggest U.S. metropolitan areas for their economic performance in the wake of the Great Recession, mid-size Northeastern and Midwestern cities accounted for nine of the top 20.
As Mr. Piiparinen and others are quick to stress, jobs will always be the cornerstone of any regeneration. But employers themselves can be drawn to a city by affordability and infrastructure, and like to set up shop where highly skilled people want to put down roots. The renaissance of former industrial powerhouses is fuelled by attracting and keeping well-educated, entrepreneurial citizens committed to community-building and capable of creating wealth and quality of life around them.
Of course, direct comparisons between the U.S. and Canadian experience is never exact: The places I visited tended to be larger than their Canadian counterparts; and although they may have such superior amenities as major-league sports teams and world-class museums, they also suffer from some entrenched disadvantages â€“ notably an appalling history of race relations that has left a legacy of poverty, crime and troubled public schools.
So why is it that a younger generation is finding opportunity in these Rust Belt cities (or some of them, at least; nobody sees Flint, Mich., or Gary, Ind., as models) more than in places like London or Windsor, which have some decent bones themselves? As Ontario attempts to take back Canadaâ€™s economic reins, it would do well to learn from whatâ€™s worked, and know what itâ€™s up against.
SYRIZA has promised to cancel the austerity measures Greece adopted as part of the bailout package and renegotiate its debt obligations. This could trigger a confrontation with Athensâ€™ lenders in Europe and the IMF, potentially resulting in a Greek exit (or â€œGrexitâ€) from the eurozone. Prime Minister Samaras is playing up this risk. â€œWe shed blood to take the word â€˜Grexitâ€™ away from the mouths of foreigners, and SYRIZA is bringing this word back to their mouths,â€ he said in a speech late last year.
It seems Samaras is getting help in this campaign from Berlin. By 2012, Merkel had decided Greece must be kept in the eurozone to mitigate the risk of a â€œcontagionâ€ effect that could hasten the departure of other members and threaten the common European currency. This position implied Greece had some leverage, because its exit would hurt Germany and other eurozone members, as well. Now, according to the German news magazine Der Spiegel, Merkel appears willing to accept a Greek exit, and her government is preparing for that possibility. Officially, of course, Berlinâ€™s policy hasnâ€™t changed: It wants to keep the eurozone intact. But itâ€™s hard to read the unnamed â€œGerman officialsâ€ who spoke to Der Spiegel and not conclude that Germany wanted to send a message to SYRIZA that Berlin will call its bluff if Athens demands onerous concessions or scuttles austerity.
Tsipras publicly scoffs at the possibility that Greece will be forced to leave the eurozone. â€œWe are through with the possibility of a Grexit, and there is only a Samaras-exit,â€ he has saidâ€”a nifty bit of sloganeering that has failed to soothe the nerves of Greeks who worry a SYRIZA victory will result in tumult between Greece and its creditors. Tsipras has tried to lessen those fears. The closer he gets to power, the softer his rhetoric has become. Only six months ago, says Economides, it looked like a SYRIZA victory would result in a Grexit. â€œNow theyâ€™ve talked their way out of that corner, and theyâ€™re leaving it open that theyâ€™ll do their utmost to stay in the eurozone,â€ he says.
London is gloriously un-plannable and horribly unplanned. From the Romans to the Romanians, the immigrant tribes who now call themselves English have been drawn to our uniquely cosmopolitan capital. This heterogeneous cultural mixture may help to explain the lack of appetite for plan-led â€œimprovementsâ€ or urban reshaping. There is no common cultural foundation upon which to create a formal grand plan.
On my bedroom wall hangs an artistâ€™s perspective of the plan Wren touted for the City after the Great Fire of 1666, fleshed out with buildings of classical design, looking like a beaux arts continental city. It is the first thing I see when I wake every morning and provides a constant reminder of the dangers of â€œmaster-planningâ€. If Wren, or any other planner, had had their way London would have ended up like Paris, Bath or Milton Keynes â€“ architecturally inspired, but difficult to adapt to changing and unforeseeable future needs. Paris is formally planned, lacking in cultural diversity and inward-looking â€“ no one can become a Parisian. London is unplanned, culturally diverse and a world business centre â€“ anyone can become a Londoner.
Of course un-planning only takes you so far as the author continues. Â Without planning (more specifically, land use restrictions), your entire city will suffer.
But while gloriously un-plannable the capital needs to be loved if we want to avoid the phenomenon of â€œlights-out Londonâ€, with homes just used as boxes for spare cash. It cannot survive without careful management and subtle control. Left to untrammelled market forces it will become an unstoppable nuclear reaction. George Osborne has claimed our dizzying house price inflation as his miracle of â€œeconomic growthâ€. Long gone are the days when planning was the bag of a politician of intellectual calibre, such as Michael Heseltine.
He goes on
Workers and residents want comfortable accommodation near the ground, with attractive spaces and facilities close at hand. Manhattan, the City and Canary Wharf can justify building office towers because their land area is constrained and demand for commercial space high. Office towers can be built in tight, sustainable clusters. This minimises their environmental impact and maximises their economic advantage â€“ if they are serviced by a high-capacity public transport system.
The same does not hold true for housing. The highest density residential neighbourhood in London is Chelsea, which is gloriously free of towers. In the 1970s, the Greater London Council created some of the highest density housing estates. These six- to eight-floor redbrick developments were built around the edges of their site, leaving attractive central gardens. Lillington Gardens, in Vauxhall Bridge Road, is a fine example, beautifully maintained and highly popular with its residents.
A residential development in Central London is now likely to make four to six times more profit than an office scheme. Without planning control, much-needed offices have given way to piles of â€œsafe-deposit boxesâ€ rising across the capital. These towers, many of dubious architectural quality, are sold off-plan to the worldâ€™s â€œuber-richâ€, as a repository for their spare and suspect capital. The purchasers are attracted by Londonâ€™s rocketing residential prices, born of our unusual fixation on home-ownership. But many chose not to live here.
Rented housing is a much more efficient use of scarce urban land, because people only rent what they need. Londonâ€™s house price inflation is also being fuelled by that â€œbuy-to-letâ€ property boom, which has aggravated the situation by reducing the security of tenants. We need an expanded, professionally managed, residential rental sector with dependable tenant security if we are to have any chance of addressing Londonâ€™s housing crisis. This would provide equal scope for development investors and the construction industry but also provide Londoners with what they need â€“ not just a global financial laundry cum bank vault.
The Treasury now controls the policies, delighting in the destruction of the last tools of planning. The Use Classes Order has been neutered to let offices, and soon shops, be turned into homes without planning permission. Rather than stimulating the reuse of empty buildings, this measure has seen the rapid disappearance of much-needed office accommodation in prime locations. Without land-use control, planners are powerless.
Jerry Weiers lives less than two miles from University of Phoenix Stadium, where the New England Patriots will play the Seattle Seahawks in the Super Bowl on Sunday. Weiers also happens to be the mayor of Glendale.
Yet as politicians, chief executives and tens of thousands of well-heeled fans rub shoulders that day in the stadium in Glendale, a western suburb of Phoenix, he plans to watch the game on television in his living room, because he has not been offered a ticket.
â€œIt was on my bucket list, but itâ€™s not going to happen,â€ Weiers said. â€œIf I had my druthers, Iâ€™d rather be in the stadium. Iâ€™ve had people say that if I was a team player, I might have gone to the game. But Iâ€™m a team player for my city.â€
Weiers is not shy about making that point, so he is not surprised that he was snubbed. Critics have called Weiers ungrateful because the Pro Bowl and the Super Bowl will draw thousands of visitors to his city, and some of them will visit restaurants and hotels there. Glendale will also receive lots of free advertising during game broadcasts, though a vast majority of people visiting Arizona for the Super Bowl will visit the city only on game day.
James Cassella, the mayor of East Rutherford, N.J., was also criticized after he complained last year that his borough had been overlooked even as the Super Bowl was played at MetLife Stadium there.
But the friction in Glendale is acute because the city has a reputation for betting big on sports â€” and paying a price for it. In the last decade, the city spent hundreds of millions of dollars to build a hockey arena for the Coyotes and a spring training complex for the Chicago White Sox and the Los Angeles Dodgers.
The hope was that the facilities would prompt residential and commercial development. But when the recession hit in 2008, the Coyotes went bankrupt, the mall next to the arena foundered, and the city was overwhelmed by its debt payments and was forced to slash public services.
â€œThe city of Glendale is the poster child for what can go wrongâ€ when a city invests heavily in sports, said Kevin McCarthy, the president of the Arizona Tax Research Association. â€œYou donâ€™t want to be building stadiums and not be able to hire police officers.â€
Glendale is by no means the first city to have sports facilities turn into albatrosses. Cincinnati and Miami, to name just two, built stadiums for wealthy owners in deals that backfired.
But the scale of spending in the city of 230,000 residents is unique. According to Moodyâ€™s Investors Service, Glendaleâ€™s debt is equal to 4.9 percent of its tax base, nearly four times the national median and twice the average rate for cities in Arizona. More than 40 percent of the cityâ€™s debt is dedicated to paying off sports complexes.
What the NFL does to Super Bowl host cities is a crime. Â NFL owners want to host a big party and the taxpayers pay for it. Â It is insane.
As for his Super Bowl ticket?
Whether that attitude gets Weiers invited is another question. Cassella, the East Rutherford mayor, said that after stories surfaced that he, too, had been unable to get a Super Bowl ticket, Jim Irsay, the owner of the Indianapolis Colts, invited him as his guest. John Mara, an owner of the Giants, sent him a parking pass.
The Conference Board of Canada predicts this drop will cause Alberta to slip into a recession by the end of the year. Jeff Rubin, the author of “The End of Growth” and former chief economist of CIBC World Markets believes the dip in the sector could affect Saskatchewan as well, though not as seriously.
“I don’t expect Saskatchewan or Newfoundland to be as adversely affected as Alberta,” Rubin said.
“But it’s going to impact the economy, it’s going to impact tax revenues. Governments are going to be challenged in the sense that if they don’t challenge spending, they’ll see their deficits go off side.”
It could also affect property prices.
The Conference Board of Canada predicts that Alberta will slip into a recession before the end of the year. Rubin echoes that warning. He said Alberta could experience its worst recession since the late 1980s.
At the end of the day, Saskatchewan will be okay because we have what the world needs. Â It may not be as great as it was in 2009 but we will be okay. Â That being said, we are so reliant on commodity prices that these kind of dips are going to impact us forever with no way out. Â In that way the new Saskatchewan under Brad Wall isnâ€™t a lot different than the old Saskatchewan under Grant Devine or Roy Romanow. Â Like the rest of the world, the global economy will always have a big impact on us for good or for bad.
Cam Broten has said before that he wants more eggs in more baskets. Â I think we all do in Saskatchewan but man is it hard to do. Â I posted before about Albertaâ€™s struggles in diversifying their economy and the same thing has happened here. Â I agree with diversification but we are a province of a million people and there are going to be times that the world economy conspires against us and makes it really hard. Â This is one of those times.
Almost every respondent wrote that the fact of his being the first black president will loom large in the historical narrative â€” though they disagreed in interesting ways. Many predict that what will last is the symbolism of a nonwhite First Family; others, the antagonism Obamaâ€™s blackness provoked; still others, the way his racial self-consciousness constrained him. A few suggested that we will care a great deal less about his race generations from now â€” just as John F. Kennedyâ€™s Catholicism hardly matters to current students of history. Across the board, Obamacare was recognized as a historic triumph (though one historian predicted that, with its market exchanges, it may in retrospect be seen as illiberal and mark the beginning of the privatization of public health care). A surprising number of respondents argued that his rescue of the economy will be judged more significant than is presently acknowledged, however lackluster the recovery has felt. There was more attention paid to China than isis (Obamaâ€™s foreign policy received the most divergent assessments), and considerable credit was given to the absence of a major war or terrorist attack, along with a more negative assessment of its price â€” the expansion of the security state, drones and all.Â
As for policy, the Alberta government tried to diversify the Alberta economy in a deliberate fashion back in the 1980s and early 1990s.
Starting under then Premier Peter Lougheed and also under his successor, Don Getty, the provincial government provided loans, loan guarantees and equity stakes to companies in the non-energy sector.
In one example, the provincial government backed â€œmade in Albertaâ€ banks, trust companies and investment firms. After the early 1980s recession and then a mid-decade collapse in oil prices (to $10.25 a barrel in April 1986, down from $26 in December 1985), Albertaâ€™s real estate values also plummeted. That took down many of those same provincially guaranteed financial institutions, themselves heavily invested in real estate.
The price tag to the provincial government for that diversification effort was $1.8 billion, for everything from failed loan guarantees to partially covered consumer and investor deposits.
In another diversification attempt, the province also loaned, guaranteed and took equity partnerships in everything from a forestry company to a meat packing plant, a provincial bitumen upgrader, a waste treatment plant and a high-tech company. By the early 1990s, defaults and foregone capital investments from all of the above cost the province $2.2 billion â€” in addition to the $1.8-billion financial sector collapse.
These efforts didnâ€™t help Albertans adjust to a new reality or diversify the economy. It was simply activist industrial policy, where governments pick winners and losers. The latter cropped up more regularly than the former.
Way to go WestJet. Â Incredible idea. Â Incredible video.
Some really good news for Mayfair and Caswell.Â From the City of Saskatoon news release.
Saskatoon City Council has recently made possible the final step in creating Saskatoonâ€™s newest Business Improvement District (BID), which includes both sides of 33rd Street from Alberta Avenue to Avenue G.
â€œWe are tremendously excited about establishing a BID for 33rdÂ Street.Â The business owners in this area have worked very hard to achieve this goal, and it has now become a reality.Â WeÂ couldn’tÂ be more pleasedÂ with Councilâ€™s decision,â€ says Nicola Tabb, representing the 33rdÂ Street BID Organizing Committee.
At its November 24, 2014 meeting, City Council approved Bylaw No. 9235 â€“ The 33rd Street Business Improvement District Bylaw, 2014.Â A BID is an area of commercial and industrial property owners and tenants who work in partnership to create a thriving and competitive business area.
Over the past two years, a group of dedicated business owners on 33rd Street have worked toward organizing a BID, which is made up of a variety of unique businesses such as restaurants, shops, services, and a major grocery store.Â The business group saw the potential in forming a BID to improve and enhance the appeal and viability of the district now and into the future.
â€œThe creation of a BID benefits not only the 33rd Street commercial district, but the city overall,â€ says Alan Wallace, Director of the City of Saskatoon Planning and Development Division.Â â€œThe success of other BIDs in Saskatoon has directly resulted in thriving, attractive areas where residents and visitors alike can come to work, shop, and play.Â The 33rd Street BID will certainly create the same positive impact for their commercial area.â€
The 33rd Street BID will begin operations in 2015.
Great job by the businesses that reside on 33rd Street.Â If they can accomplish a fraction of what has been done by the Riversdale BID; Mayfair, Caswell, and of course some businesses in the area are going to benefit greatly.
In the nineteen fifties, people with money began leaving the cities in unprecedented numbers. They were getting married, getting jobs, starting families, and buying housesâ€”they were moving to the suburbs. A Time Magazine article in 1954 observed: â€œâ€¦since 1940, almost half of the 28 million national population increase has taken place in residential suburban areas, anywhere from ten to 40 miles away from traditional big-city shopping centers. Thus, to win the new customersâ€™ dollars, merchants will have to follow the flight to the suburbs.â€
They did, and the suburban shopping mall was born.
But the original idea for the mall was not just about retail. Victor Gruen, the father of the suburban shopping mall, envisioned something much bigger. He wanted outdoor areas, banks, post offices, and supermarkets; he wanted to give the suburbs a soul, one inspired by the public squares of European cities. But that never happened. Instead malls were faceless, sprawling. Gruen was so disappointed with what malls became, he gave a speech in 1978 in which he said, â€œI refuse to pay alimony for those bastard developments.â€ Malls turned out to be the very monoliths of soullessness that Gruen had tried to overcome.
Itâ€™s not just that there are better malls than Collin Creek in the Dallas area. Itâ€™s that there are so many malls; Dallas has more shopping centers per capita than any other city in the United States. And according to some estimates, fifty percent of indoor malls nationwide will die over the next two decadesâ€”partly because some shoppers are opting for newer, better malls, but also because, as a recent Guardian article put it, â€œthe middle class that once supportedâ€ mid-market malls is dwindling. Or, put yet another way, by retail consultant Howard Davidowitz: â€œWhatâ€™s going on is the customers donâ€™t have the fucking money.â€ Which, of course, wasnâ€™t always the case.
As these old malls die off, theyâ€™re being replaced more and more by upscale, outdoor shopping centersâ€”with lofts, grocery stores, offices, public meeting areas, and day cares. At least four have popped up in Dallas within the past ten years, and theyâ€™re always packed. Sixty years after Gruenâ€™s ideas were bastardized by short-sighted developers, they are finally seeing their day. Inklings, maybe, of the suburbs finding their soul.
To counter this, maybe there is some life for malls in winter cities.
You can hardly blame the Finns for wanting to shop in giant, self-contained malls. After all, winter tends to start early in Finland (like, November) and end late (say, in April). Temperatures in Helsinki, which is at the nationâ€™s extreme south, with a relatively mild maritime climate, rarely get above freezing in the coldest months, and have been known to go as low as -30 degrees Fahrenheit. In late December, the sun in Helsinki doesnâ€™t rise until well after 9 a.m., sets soon after 3 p.m., and stays low in the sky â€” only getting to about 6.6 degrees above the horizon on December 27, for instance (compare that to New York, where it reaches an altitude of 26 degrees on the same day).
So itâ€™s no surprise that the idea of walkable urban centers are a hard sell in Finland. Still, some in the nation are calling for Finland to rethink its love affair with the shopping mall.
Yet recently I have been shocked at how quiet Confederation Mall is (a ghost town), Lawson Heights Mall, and Midtown Plaza is when I am in there. Â Then you look at how busy at the same time other places are. Â Maybe we are growing tired of malls as well.Â
In September, at a speech at NYU, Holder defended the lack of prosecutions of top executives on the grounds that, in the corporate context, sometimes bad things just happen without actual people being responsible. “Responsibility remains so diffuse, and top executives so insulated,” Holder said, “that any misconduct could again be considered more a symptom of the institution’s culture than a result of the willful actions of any single individual.”
In other words, people don’t commit crimes, corporate culture commits crimes! It’s probably fortunate that Holder is quitting before he has time to apply the same logic to Mafia or terrorism cases.
Fleischmann, for her part, had begun to find the whole situation almost funny.
“I thought, ‘I swear, Eric Holder is gas-lighting me,’â€‰” she says.
Ask her where the crime was, and Fleischmann will point out exactly how her bosses at JPMorgan Chase committed criminal fraud: It’s right there in the documents; just hand her a highlighter and some Post-it notes â€“ “We lawyers love flags” â€“ and you will not find a more enthusiastic tour guide through a gazillion-page prospectus than Alayne Fleischmann.
She believes the proof is easily there for all the elements of the crime as defined by federal law â€“ the bank made material misrepresentations, it made material omissions, and it did so willfully and with specific intent, consciously ignoring warnings from inside the firm and out.
She’d like to see something done about it, emphasizing that there still is time. The statute of limitations for wire fraud, for instance, has not run out, and she strongly believes there’s a case there, against the bank’s executives. She has no financial interest in any of this, no motive other than wanting the truth out. But more than anything, she wants it to be over.
In today’s America, someone like Fleischmann â€“ an honest person caught for a little while in the wrong place at the wrong time â€“ has to be willing to live through an epic ordeal just to get to the point of being able to open her mouth and tell a truth or two. And when she finally gets there, she still has to risk everything to take that last step. “The assumption they make is that I won’t blow up my life to do it,” Fleischmann says. “But they’re wrong about that.”
Good for her, and great for her that it’s finally out. But the big-picture ending still stings. She hopes otherwise, but the likely final verdict is a Pyrrhic victory.
Because after all this activity, all these court actions, all these penalties (both real and abortive), even after a fair amount of noise in the press, the target companies remain more ascendant than ever. The people who stole all those billions are still in place. And the bank is more untouchable than ever â€“ former Debevoise & Plimpton hotshots Mary Jo White and Andrew Ceresny, who represented Chase for some of this case, have since been named to the two top jobs at the SEC. As for the bank itself, its stock price has gone up since the settlement and flirts weekly with five-year highs. They may lose the odd battle, but the markets clearly believe the banks won the war. Truth is one thing, and if the right people fight hard enough, you might get to hear it from time to time. But justice is different, and still far enough away.
Writers will be paid advances around $100,000 to produce stories that will be longer than long magazine articles but shorter than books, she said. There will be â€œone perfect whale of a storyâ€ each month and it will be available by subscription.
Four of its 12 casinos have closed in the last year, including the Revel, the newest and glitziest, despite a $260 million, taxpayer-funded gift courtesy of Gov. Chris Christie. A fifth, the Trump Taj Mahal, is on the brink. The gaming industryâ€”proponents never call it gamblingâ€”has lost nearly 8,000 jobs since the beginning of the year and its revenue, which hit a high of $5.2 billion in 2006, is down nearly 50 percent. Add to that the cityâ€™s $65 million budget shortfall, pending layoffs of as many as 300 city workers and a tax base in free fall.
Sure, the still-sluggish U.S. economy is a factor. The loss of the East Coast gambling monopoly that Atlantic City enjoyed for nearly 20 years is another. Poor planning, lack of foresight and the failure to expand the cityâ€™s attractions beyond casinos are part of the mix. Even acts of God played a role: Though the city wasnâ€™t devastated in 2012 by Hurricane Sandy the way other Jersey Shore towns were, tourism plunged in the immediate aftermath at a time when the city could least afford it.
But there is something else at play, something in the cityâ€™s DNA that is painfully obvious to anyone whoâ€™s lived or worked there.
Even during its halcyon days, Atlantic City was an enterprise built around blue smoke and mirrors. Think, Nucky Johnson, the inspiration for HBOâ€™s Boardwalk Empire, and the wide-open rackets of gambling, booze and prostitution during Prohibition.
It was all about grabbing whatever you could, whenever you could from whomever you could. The city worked on a 12-week economy, Memorial Day to Labor Day. Get the tourists and vacationers into town. Sell them the beach and the Boardwalk and then send them home broke. The Miss America Pageant, held in Atlantic City for most of its years, was part of that con. It was the 1920s brainchild of a city huckster looking for a way to extend the summer season for another week. The city was born as a come-on, a fugazy.
Wonder why Atlantic City is failing? The better question, the one asked by people who know the town: Why did anyone think it would ever succeed?
The president of the Pacific atoll nation of Kiribati, which averages only about 2 meters above sea level, has already spent millions of dollars to buy land in Fiji as a potential new home for his 100,000 people. As sea levels rise, the Intergovernmental Panel on Climate Change suggests, large ocean waves will increasingly taint the countryâ€™s groundwater and threaten its agriculture; Kiribati can expect to become at least partly uninhabitable long before seas rise enough to submerge it. Other island nations like the Maldives and Tuvalu face the same plight.
So far, the worldâ€™s attention has rightly focused on how much these places have to lose: their homes, their communities, their cultures, their vistas. But these countries have another, less visible set of assets at stake as they consider their survivalâ€”assets that wonâ€™t necessarily be lost, but which raise substantial questions. These are their large and valuable maritime zones.
Kiribati, like other island nations, controls hundreds of thousands of square miles of the ocean that surrounds it. Kiribatiâ€™s land area is about that of Kansas City, while the ocean territory it controls is larger than India. Within these â€œexclusive economic zones,â€ to use the UN term, island nations possess the power to regulate, tax, or disallow any economic activity, including mining or drilling for oil. The tuna fishing alone in the domain of Pacific island nations is worth an estimated $4 billion a year.
No, that wasnâ€™t Elizabeth Warren, or the editor of the Nation, or Paul Krugman (or even me) banging on about how the rich are getting richer and most everybody else is struggling to keep up. It was Janet Yellen, the chairwoman of the Federal Reserve, addressing a conference in Boston on Friday morning. Itâ€™s not unheard of for a Fed chief to discuss rising inequality: Ben Bernanke addressed it in a 2007 speech. But Yellenâ€™s speech is surely the first time a Fed chief has pointed out that rising inequality threatens Americaâ€™s sense of itself.
Here is what she said.
Since the top five per cent of households own almost two-thirds of the wealth, it stands to reason that most American households donâ€™t own very much at all. But the figures that Yellen presented are still shocking. In 1989, the bottom half of the distribution owned just three per cent of all wealth. By 2013, that figure had fallen to one per cent. No, thatâ€™s not a typo: half the country owns one per cent of its wealth.
These numbers confirm an old but rarely stated truth. Many, if not most, individual American households possess next to nothing. In 2013, the average net worth of the sixty-two million households in the bottom half of the distribution was eleven thousand dollars. (To get net worth, you add up the value of all the assets a family owns and subtract its debts, including mortgage debts.)
And itâ€™s not just that most households donâ€™t have much wealth. According to this measure, anyway, they have been getting poorerâ€”a point that is often vigorously contested. In 1989, the average net worth of families in the bottom fifty per cent was twenty-two thousand dollars. Twenty-four years later, the average net worth had fallen by half. (These figures are adjusted for inflation.) At the top of the distribution, of course, history has proceeded along very different lines. In 1989, the average net worth of families in the top five per cent was $3.6 million. By 2013, that figure had risen to $6.8 million.