Rogue Columnist

Not like Ike

The nut baggers are right. Socialism has come to America. It is here, now. The government owns the "commanding heights" of this economy, as is the case in classic socialist doctrine. Citizens of this American socialism get free medical care, housing, food, clothing, even travel. They have abundant educational opportunities, including college. It promises and actually delivers both diversity and social mobility. It also has elements of fascism, just as the nut baggers have warned in their rallies attended by hundreds: The socialism has a heavy corporate component, with giant companies moving in lockstep with the regime's demands yet also holding strong political sway within the regime. In exchange for its benefits, members of the society give up certain freedoms -- yet they keep joining enthusiastically.

I'm writing about the military, of course, and not just to show the absurdity of the nut baggers' claims. In a nation where six people are chasing every job, where college is increasingly out of reach, the only advanced nation in the world where people go without health insurance -- in today's America, the military is often the only option open. It made news last month when a man who couldn't get insurance joined the Army so his cancer-stricken wife could get help. (When I Googled "joined Army to get health care," the second and third hits out of 53 million were Army recruiting sites). Military recruiters have more than met their targets -- ones raised for the Army -- since the economic meltdown. Even with the danger of war, many Americans just don't see another way.

Elements of this have long happened. There's the classic case of the directionless kid from high school who joins the military -- sometimes under a parent or even judge's threat -- and becomes an adult. I went to high school with young men who joined up, served honorably and succeeded as civilians -- I doubt most of them ever would have chosen the military as a first option. And we honor their service. But the Great Disruption's first act -- the crash and its resulting unemployment, combined with two wars seemingly without end -- is creating something new. New and unsettling.

Phoenix 101: Minorities

Thanks to Joe Arpaio and the Legislature of Russell Pearce, Phoenix has gained a global reputation as the Birmingham, Alabama, of the new century. I wish I could tell you that things were better in the past, but alas the racist and exclusionary roots of my hometown are deep. Far from being seen as a leap forward, the appointment of David Cavazos as Phoenix's first Latino city manager will be confirmation in the eyes of the elites that, as one smugly told me, "Phoenix is the Hispanic Detroit."

Phoenix was settled largely by Southerners and ex-Confederates, and it kept that Southern sensibility well into the 1960s. The Chicagoans who started coming in the 1930s brought their own prejudices that for decades tore that city apart. Phoenix was heavily segregated, including in the schools. To be fair, it didn't usually extend to such apartheid as a "colored waiting room" at Union Station. But the race and class lines were drawn hard. Phoenix saw itself as an Anglo city, unlike old Tucson, with its proud Spanish and Mexican traditions.

The Salt River Valley, of course, had once been part of Mexico. Before Columbus, it was the site of the most advanced irrigation-based civilization north of Mesoamerica before being abandoned by the Hohokam. By the time white families such as mine began arriving in the 1890s, Hispanics and Pimas were living there, too. With large-scale cotton farming, African-Americans also migrated to Phoenix creating what became a relatively large black community. Many were recruited by the farm interests seeking cheap labor and promising a better place than the racist South. Chinese immigrants came from California. Phoenix was never Des Moines on the Salt River. By the turn of the 20th century, Phoenix was a multi-racial society.

The vision thing

It's good to know that one sector in Phoenix has escaped the recession: the "visioning" industry. Meetings led by consultants and officials can still be held to get "public input" that will lead to...nothing. I remember such a farce that the "city" of Buckeye paid god-knows-how-much-for in the mid-2000s: Respondents most wanted commuter rail to Phoenix. Where are the trains?

The city of Phoenix's Planning Department has been going around to the assorted "urban villages" of this 500-square-mile collection of real-estate ventures asking citizens to "imagine Phoenix the best it can be in 2050." This is all part of updating the holy General Plan, which supposedly guides all development. As the city presentation puts it, "a General Plan is a comprehensive guide for all physical aspects of a city, but also addresses issues such as building neighborhoods and creating community." Like that General Plan of the 1970s that said Bell Road would absolutely, positively be the permanent northern boundary of Phoenix.

If I'm reading the information from the Downtown Voices Coalition correctly, the attendees at the central Phoenix meeting wanted higher density to support mixed use, downtown and transit. Alas, Ahwatukee's top vision for 2050 was "safety," although it wants light rail. The swells of Camelback East want something called "the village concept" (inbred people with pitchforks hiding a local monster?) -- no mention of a downtown at all, certainly not light rail (it might bring "those people"). Far-off Desert View wants most a "small town, large city" feel. Maryvale at least ranks downtown and "proper public transit."

So much for imagining a great city.

Dogfight over Luke

We may know as early as today if Luke Air Force Base will be chosen as a training base for the F-35 Joint Strike Fighter. The decision would give Luke further life once its primary tenant, the F-16 fighters, are phased out. Not surprisingly, the western suburbs of Phoenix are ambivalent, even if many support Luke publicly. Built up long after the base had been in operations, its residents are outraged at the jet noise. (Shoulda checked that out before you thought you were getting so much house for the money in that crapola lookalike subdivision). Encroaching sprawl, meanwhile, has had the base on a razor's edge of closing for years.

The group Luke Forward supports the base's continued existence. But Luke faces the mos powerful enemy: the Real Estate Industrial Complex. In other words, these economic elites — including, according to some sources, the Mormon Church, which owns land nearby — want the base to go away so they can continue building on the same sprawl model as the past 50 years. It's a big leap of faith: the old Growth Machine may not regain its health for years, if ever. But the Real Estate Industrial Complex is a simple-minded dinosaur. It feeds (builds tract houses, pockets quick profits). Its brain doesn't even realize its tail is on fire from economic, environmental and social tectonic shifts.

If Luke closes, to be replaced by more subdivisions and shopping strips, it will once again represent the colossal lack of imagination that keeps the Arizona economy backward (but highly profitable for the status quo).

Hard landing

When you think about the prison-like atmosphere in which we're forced to travel -- lacking the high-speed rail transforming the advanced nations of the world -- and the five-mile-high coffins in which we're locked for a cramped, nasty trip, who can argue with the punishments already meted out and yet to come for two Northwest Airlines pilots? They flew 150 miles past Minneapolis while distracted by their laptop computers. On second and third glance, they represent much more than two jokers in the cockpit.

Am I the only one who thinks America is much like these pilots? Off-course, befuddled by the latest merger and its consequences, living in a world where your pay has been cut in half already, enchanted by technology and believing it can save you (those laptops -- or the electric car), while the airship cruises along, on autopilot, past its destination. The difference is that America is not going to get a call from the flight attendant asking "what the hell is happening?" We're so adept at ignoring such questions even if they were to arise.

Delta and Northwest is a merger that never should have happened. It hasn't lessened the airlines' financial troubles -- for no transportation system really "pays for itself" (so why the hell do we expect that from Amtrak?). It has taken away one more competitor, consolidated an industry even further -- which means not only fewer choices and jobs, but fewer competitive ideas. Consider, for example that we are some 40 years into the era of widespread use of "jetways" to board aircraft -- and yet there's still only one way on or off, adding much time to boarding. That's what happens with groupthink. These cartelized airlines send much of the maintenance work to Third World countries, where managers order the cheapest fixes to airplanes, whether they are safe or not. Hundreds of thousands of jobs have been eliminated. All to appease the free-market gods. And the wayward pilots will be appropriately punished, banged down so hard they will have a hard time getting a minimum-wage job at the local Lowe's. And its two more jobs that Delta can check off its list, throwing the two into the worst labor market since the Great Depression. Christian America loves Old Testament retribution.

Citizens and 'shareholders'

What does Goldman Sachs do, exactly? How does it make its money?

You can and should read Matt Taibbi's take on the investment bank, but let me simplify. These days, Goldman Sachs makes money by moving money from Spot A to Spot B to Spot C, all across the securities world, and at every point skimming something off the top. It creates and trades securities so complex that they are incomprehensible to the leading minds on Wall Street; these derivatives are ultimately worth no more than Confederate money and pose continuing systemic risk to the economy. But while the band plays on, Goldman makes its fees. With the general economy still deeply wounded, the firm made $12 billion in revenue in the most recent quarter for a profit of $3 billion. Goldman has so far set aside $16 billion -- that's with a B -- for executive bonuses. Of course all this has been made possible by the massive taxpayer rescue of a financial system whose collapse Goldman helped create, along with the Fed's zero interest rates and opaque lending "facilities" that have been a gift to Wall Street.

Something is so sick in America. The "healthy" sector of the economy makes nothing at all. Gone are the days when the capital markets were primarily concerned with marshaling capital to fund productive work. They now make money off of money in a colossal Ponzi scheme that cannot have a good ending. Take the case of Simmons Bedding, being forced into bankruptcy after being flipped seven times by private equity hucksters. Each deal was done with borrowed money. Each new owner would try to squeeze more out of the company. The long-term health of the company was sacrificed for short-term profits that went to a few. Top executives were lavishly compensated while average worker wages stagnated. Now a thousand Simmons workers and counting have lost their jobs. This has been happened at thousands of companies across the economy for years. And the cause was not merely private equity or neo-Michael Milkens -- it is the way the markets work now.

The men who would be Frank

Four finalists have reportedly emerged to replace retiring Phoenix City Manager Frank Fairbanks. All are current City of Phoenix employees. They're good men, and David Krietor and Ed Zuercher especially hold promise. Still, the finalist lineup reinforces the sense of Phoenix's parochialism and inward-looking mindset. It's a problem that extends far beyond City Hall. But it's significant given government's huge footprint in a city with no major corporate headquarters, influential civic stewards or powerful business interests beyond building more sprawl (which apparently extends to self-dealing city council members). There is, simply, no other major American city as limited as Phoenix in its economy or centers of power -- or its lack of self-awareness. So something that elsewhere might seem routine, carries big weight and risk here.

This is also a portentous moment for a changing of the guard. When Fairbanks became city manager in 1990, Phoenix was in a nasty real-estate recession but otherwise still on a sunny trajectory it had enjoyed since the end of World War II. City Hall's reputation for clean government and efficiency earned it the Bertelsmann Prize as one of the two best-run cities in the world. In the early '90s, the city still had corporate leaders such as Dial and Valley National Bank. Chastened by the real-estate bust, leaders established the Greater Phoenix Economic Council and worked to diversify the economy. Phoenix was the uncontested regional leader; the suburbs were still relatively small. Its population was much more middle class.

Fairbanks' successor will inherit a far different city, and not merely one that has grown to 1.5 million from 983,000 in 1990.

Cincinnati, USA

"Cincinnati USA" is the cloying marketing term one sees around the airport. It also recognizes not only that the Cincinnati metro area stretches into northern Kentucky and southeastern Indiana, but that sprawl has taken its toll on the famous city in Ohio. This is a slow-growing metro in slow-growing states, but the city gained 0.3 percent population from 2000 to 2006, while suburban Butler County grew 8.4 percent and northern Kentucky's Boone County added 34 percent (through 2008). In 1900, Cincinnati was the 10th largest city in America and it topped out at 502,000 in 1960, dropping to around 332,000 now. In so many ways it is sui generis, but in other critical areas it is indeed the USA. Unfortunately, those areas are gloomy.

Winston Churchill called Cincinnati America's most beautiful inland city, and it's an observation that's hard to argue with even now. The city sits on wooded hills along gentle, wide bends of the storied Ohio River. The skyline pops up like a jewel box when you come down "death hill" on the freeway from the airport. Cincinnati is an architectural feast, filled with enchanting neighborhoods, lovely parks and deep history. This was the Miami country before the arrival of the whites, the richest hunting ground of the Iroquois Confederacy. Cincinnati was settled by Revolutionary War veterans, many members of the Society of the Cincinnati, and named after the self-denying Roman general who Americans likened to George Washington. Founded in 1788, it was the Queen City of the West, the gateway for generations of migrants and the haven for Germans who fled the crushing of the liberal revolutions of 1848 in Europe.

This city was so good to me when I was business editor of the Cincinnati Enquirer in the 1990s. Armed with one of the best staffs of financial writers I was ever honored to lead, we shook up the old-guard companies that weren't used to the prying eyes of journalists or transparency. Now I am using it as the setting for a new mystery series, The Cincinnati Casebooks, of which The Pain Nurse is the first. Seeing it again this month, after being away for 13 years, I was reminded of Mark Twain's witticism about wanting to be in Cincinnati when the world ends, because it's always behind the times. On the surface, the city seemed little changed. And thank God, for that slow pace has preserved so much good architecture. But beneath that veneer, the story was, as is always the case here, much more complicated.