Detroit loses power, literally.

Detroit — A widespread power outage Tuesday that caused evacuations of buildings throughout downtown is “another reminder of how much work we still have to do to rebuild the city,” Mayor Mike Duggan said.

Duggan, speaking at an afternoon press conference, said Detroit is in the early stages of a four-year, $200 million plan to upgrade the city’s electrical grid, which has not been modernized in decades.

The outage, which started around 10:30 a.m., darkened traffic lights and buildings on the city’s municipal power grid, including hospitals and fire stations. Nine hundred “customer locations” and 740 traffic signals were affected, the city said. The city did not lose 911 dispatch service.

All outages should be restored by late tonight, DTE officials said. They said the cable failure that caused Tuesday’s outages are not uncommon in large urban centers like Detroit.

“This situation is not going to slow down our efforts to … restore the city,” council President Brenda Jones said.

City officials said the city’s public lighting grid suffered a “major cable failure” that caused power to be lost at Joe Louis Arena, Coleman A. Young Municipal Center, the Frank Murphy Hall of Justice, the Detroit Institute of Arts and some buildings at Wayne State University.

Power has since been restored in many areas, including City Hall and Detroit Receiving Hospital. Hospitals, that lost power operated on backup generators, city officials said.

Read: Duggan on power outage: City still has work to do.

News of the unsurprising: tax cuts lead to budget deficits

November 18, 2014 – RALEIGH, N.C.

North Carolina lawmakers are likely enjoying some downtime after the legislative session and midterm election, but experts predict a tough session waiting for them on their return to Raleigh. A report from the Office of the State Controller indicates tax revenues are down by almost $400 million compared with this same time last year – a six percent drop in revenue. Alexandra Sirota, director of the North Carolina Budget and Tax Center, says it’s not a problem the State Assembly will be able to ignore in January.

“This is a serious issue,” she says. “It’s self imposed in that policymakers chose to reduce our revenue. Now they’re going to have to make choices about some pretty deep cuts.”

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Kansas cuts taxes, guess what happens next?

There may be even bigger challenges coming. In addition to the likelihood the state will face another unpleasant revenue surprise in the spring, a pending court decision could obligate the legislature to add hundreds of millions of dollars a year to state aid to school districts. And bond rating agencies, which already downgraded the state’s debt this year, could be expected to react negatively to both of those events.

The tax cuts were the leading issue in the Kansas governor’s race this year, and in addition to re-electing Governor Brownback, voters expanded the Republican supermajority in the state’s House of Representatives. This was a clear mandate for the policy of deep tax cuts. What remains to be seen is how the legislature, once the rainy-day fund is exhausted, will deal with the spending pressures they have created.

Read: Kansas Announces Big Budget Gap; True Gap May Be Even Larger – NYTimes.com.

IMF critiqued internally for austerity response

BY ANNA YUKHANANOVWASHINGTON Tue Nov 4, 2014

Reuters – The International Monetary Fund ignored its own research and pushed too early for richer countries to trim budgets after the global financial crisis, the IMFs internal auditor said on Tuesday.

The Washington-based multilateral lender, concerned about high debt levels and large fiscal deficits, urged countries like Germany, the United States and Japan to pursue austerity in 2010-11 before their economies had fully recovered from the crisis.

At the same time, the IMF advocated loose monetary policies to sustain growth and boost demand in advanced economies, initially ignoring the possible spillover risks of such policies for emerging market countries, the Independent Evaluation Office, or IEO, said in a report that analyzed the IMFs crisis response.

“This policy mix was less than fully effective in promoting recovery and exacerbated adverse spillovers,” the IEO wrote.

The IMF advises its 188 member countries on economic policy, and provides emergency financial assistance to its members on the condition they get their economies back on track.

The internal auditor said the IMF should have known that the combination of tight fiscal policy and expansionary monetary policy would be less effective in boosting growth after a crisis. Evidence showed that the private sectors focus on reducing debt made it less susceptible to monetary stimulus.

In 2012, the IMF finally admitted that it had underestimated how much budget cuts could hurt growth and recommended a slower pace for austerity policies. But its auditor said the IMFs own research showed this relationship even before the crisis.

Read: IMF gave richer countries wrong austerity advice after crisis – watchdog | Reuters.

“The Social Geographies of Recession and Austerity”

I just stumbled on this great list of resources from early this year, on a blog by Alison Stenning:

Some really great blogs have emerged over the past few years as people have tried to document their own, and others’, struggles with austerity.  There’s an article about some of these blogs here.

These are some of the most interesting and/or prolific:

http://agirlcalledjack.com – Blog by Jack Monroe who has published particularly about food and food poverty; her Guardian columns (and recipes) are available here:http://www.theguardian.com/profile/jack-monroe

http://katebelgrave.com – “Talking with people dealing with public sector cuts”. Kate Belgrave’s Guardian columns are here: http://www.theguardian.com/profile/kate-belgrave

http://mumvausterity.blogspot.co.uk – Bernadette Horton, “a mum of 4 fighting everyday battles against austerity – and hoping to win!”

Most of these bloggers also tweet; you can find them and follow them for more updates and links to other bloggers.

Many of the major newspapers have developed sub-sections on their websites in which they document the effects of austerity from a number of perspectives.

On Guardian Witness, you can find personal accounts of families living in poverty; you follow the link to Guardian Witness from this pageThe Guardian is also home to Patrick Butler’s Cuts Blog.

In 2008, The Telegraph’s went on a ‘Recession Tour‘ of a variety of UK localities.

Much of the material that ends up on the (web)pages of our national newspapers comes from a range of different projects launched by a variety of think tanks, lobby groups, charities and so on. The projects I’m highlighting here are ones which focus on the everyday experiences of recession and austerity in communities.

Real Life Reform is “an important and unique study that tracks over a period of 18 months how people are living and coping with welfare reforms across the North of England”. It has been developed by the Northern Housing Consortium with seven northern housing associations. There are two reports, one from September 2013 and another from December. A third report is due in the spring of 2014. You can follow Real Life Reform on Twitter @RealLifeReform.

The IPPR have developed a Voices of Britain website (http://voicesofbritain.com), as a ”snapshot of the condition of Britain in 2013”.

The Family and Parenting Institute’s work on Families in the Age of Austerity is another exploration of the effects of austerity on families.

The Campaign for the Elimination of Discrimination against Women (CEDAW) Working Group for the North East produced this report on the impact of austerity measures on women in the North East.

For an Irish perspective, have a look at http://irelandafternama.wordpress.com – a blog written mostly by geographers on Ireland’s experience of financial crisis and austerity.

Head to the blog for the rest of the post, which also has links to academic works on austerity: The Social Geographies of Recession and Austerity | researchingrelationships.

Also check out her own post about the costs of Austerity in Britain: https://blogs.ncl.ac.uk/alisonstenning/the-costs-of-austerity/

Looks like she isn’t writing more, but always nice to find someone with kindred interests…

What it means to privatize the justice system

Great article about the consequences of turning over parts of the criminal justice system to private, for-profit companies. How do the companies make money? By charging offenders on probation for their own monitoring, and by racking up fines and interest charges on the cost of traffic tickets and small court fines. There are already many well-documented Kafkaesque nightmares emerging from this turning over of a basic function of governance.

Collection companies and the services they offer appeal to politicians and public officials for a number of reasons: they cut government costs, reducing the need to raise taxes; they shift the burden onto offenders, who have little political influence, in part because many of them have lost the right to vote; and it pleases taxpayers who believe that the enforcement of punishment — however obtained — is a crucial dimension to the administration of justice.

As N.P.R. reported in May, services that “were once free, including those that are constitutionally required,” are now frequently billed to offenders: the cost of a public defender, room and board when jailed, probation and parole supervision, electronic monitoring devices, arrest warrants, drug and alcohol testing, and D.N.A. sampling. This can go to extraordinary lengths: in Washington state, N.P.R. found, offenders even “get charged a fee for a jury trial — with a 12-person jury costing $250, twice the fee for a six-person jury.”

Read: The Expanding World of Poverty Capitalism – NYTimes.com.

The ongoing saga of wealthy Brooklynites

(Leaving the connection between austerity and gentrification/displacement to the reader…)

This is one of the seemingly never-ending series of New York Times articles about wealthy young people having to leave uber-hip neighborhoods for new, cheaper destinations (like Queens and Jersey!). I read the Times pretty faithfully, and these articles never (1) talk about non-wealthy non-young people and how they are managing these prices and transformations; (2) express the same bewilderment that I (and many of its commentators) have about how there can be SO MANY PEOPLE with $500k +in cash; (3) hint at even the slightest sentiment of ennui or schadenfreude at the fate of these interlopers, many of whom colonized Brooklyn in the first place and who seem blissfully ignorant of the havoc they will now be wreaking on Queens and Jersey.

In my class this summer, I told my students that the term gentrification sometimes limits real understanding of the many forces at work in places like Brooklyn. Instead, when we talk about displacement, real estate pricing, bank practices, and then try to tell a story about their interaction we can identify sites of transformation and political possibilities, rather than being forced into a debate of “Gentrification: good or bad.” I would love to see the New York Times put some journalistic resources into these transformations instead of just following young wealthy (and mostly white) families around the boroughs.

Read: Moving Out of Brooklyn Because of High Prices – NYTimes.com.

Fat-Cat Administrators at the Top 25 – NYTimes.com

It’s not hard to find examples of the uneven implementation and consequences of austerity. A great study out last week by the Institute of Policy Studies looks at several indicators at public universities and finds some interesting correlations.

The student debt crisis is worse at state schools with the highest-paid presidents. The sharpest rise in student debt at the top 25 occurred when executive compensation soared the highest.

As students went deeper in debt, administrative spending outstripped scholarship spending by more than 2 to 1 at state schools with the highest-paid presidents.

At state schools with the highest-paid presidents, part-time adjunct faculty increased 22 percent faster than the national average at all universities.

At state schools with the highest-paid presidents, permanent faculty declined dramatically as a percentage of all faculty. By fall 2009, part-time and contingent faculty at the top 25 outnumbered permanent faculty for the first time.

Average executive pay at the top 25 rose to nearly $1 million by 2012 — increasing more than twice as fast as the national average at public research universities.

It’s fair to say these trends exist at all universities, so these institutions are failing an already low bar. My experience at Berkeley makes these findings all to hard to believe.

Report available here.

Even the NYT editorial board picked up the story:

The report also noted that, like executives in the banking sectors, “public university presidents weathered the immediate aftermath of the fall 2008 financial crisis with minimal or no reductions in total compensation.

Read: Fat-Cat Administrators at the Top 25 – NYTimes.com.