Dying malls and the local tax base

It’s no secret that the retail industry is dying a slow (or maybe not-so-slow) death. As CNN Money notes:

Stores are closing at an epic pace. In fact, the retail industry could suffer far more store closures this year than ever.

Brokerage firm Credit Suisse said in a research report released earlier this month that it’s possible more than 8,600 brick-and-mortar stores will close their doors in 2017.

For comparison, the report says 2,056 stores closed down in 2016 and 5,077 were shuttered in 2015. The worst year on record is 2008, when 6,163 stores shut down.

“Barely a quarter into 2017, year-to-date retail store closings have already surpassed those of 2008,” the report says.

If stores do close at the rate Credit Suisse is projecting, it could mean America will lose more than 147 million square feet of retail space this year.

The reasons are many, from the increase in online sales to the decline in disposable income. But regardless of the causes, the effects are being felt in local and state government tax collection offices, which both rely heavily on sales taxes from these establishments.

 

According to The Atlantic’s Citylab, states rely on sales taxes for around a third of their income, while local governments depend on them for around 12% of their revenues. What happens when those funds stall or decline?

The closures raise the question of what state and local governments will do if retail continues to evaporate. Already, many local governments are attempting to raise taxes to make up for budget shortfalls. Springfield asked voters to approve an income tax in November; the measure failed. The sales-tax rate at both the local and state levels has been creeping up in Ohio as governments try to raise taxes to make up for declines, according to Jon Honeck, the acting director of the Greater Ohio Policy Center, a local think tank. Ohio has also cut back on revenue-sharing between states and local governments since the election of Governor John Kasich in 2010, making it more difficult for local governments to make ends meet. “Some have just cut services, since the state is not going to help them out,” Honeck said.

The decline of brick-and-mortar retail creates social challenges in addition to financial ones. When people aren’t going to stores to shop, and are instead shopping online, the vibrancy of local communities that once depended on foot traffic fades.

Online shopping is great: It offers easy access to a wide selection of goods, often at better prices than stores with physical locations. And it’s almost certainly going to continue increasing its share of the retail market, meaning state and local governments are going to see ongoing challenges in supporting their spending plans.

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The corporate food system

Until recently – maybe 100 years ago or less – food was an intensely local and personal endeavor. With the exception of some dry goods, which could be transported and stored, most foods were locally sourced. Most fruits and vegetables were sold based on what was locally grown and in season – and depending on where you lived, some or most of them came out of your own backyard. Meats were butchered and sold fresh. And in the majority of cases, the farms where those foods came from were small and local.

Today, corporations dominate every element of the food production process, from the point at which food is produced (and even before) to the point at which it ends up on your table at home or in a restaurant:

Of course, corporate dominance in the food industry is not automatically a bad thing: Corporations can offer efficiencies and economies of scales that make food more affordable and available. But in reality, as in other industries, big business’ relentless pursuit of profits over principle have resulted in an unsafe and unhealthy system – one that consumers should learn about and avoid to the extent possible.

 

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Fighting the last (intellectual) war

Originally posted 10/21/16 at The Burning Platform

Long ago, when I was younger and very impressed with my own intellect (a conceit that life has since beaten out of me), I made an effort to dive into philosophy, both historic and contemporary. One of the people whose work I studied was Marshall McLuhan, who most people know through his epic appearance in Annie Hall as an expert on himself.

I felt that I had grasped a lot of what he proposed, but in reality I didn’t really “get” it in a way that mattered – I could parrot it back but not in any practical way. Age has allowed me to better process his thinking and find connections in reality. And as a result I realize that most of us are pissing in the wind when it comes to arguing our points of view.

We spend so much time – myself included – working to lay out intellectual arguments for the things we believe, with sophisticated words and unassailable logic. And we all, within our little virtual circle, agree with each other, and wonder why our eminent correctness is not getting wider play.

Marshall McLuhan can tell you why.

McLuhan was an English professor in name only: He was actually the preeminent guru on the effects of media. Most people who study media look at the details – how do you communicate better via radio or TV, for example. McLuhan instead looked at the effects of media and how they changed the people who used them. In metaphorical terms, it’s the difference between studying how you make trains run faster, versus how do the lives of people in an isolated village change when you start to provide train service.

And what he tells us is that the creation of the alphabet, and of written language, was one of the most important developments in history – it allowed us to evolve from being superstitious tribal beings into people who could think in terms of the individual, independent of the tribe, and construct rational lines of thinking. In The Medium is the Massage, he writes:

Until writing was invented, man lived in acoustic space: boundless, directionless, horizonless, in the dark of the mind, in the world of emotion, by primordial intuition, by terror. Speech is a social chart of this bog.

The goose quill put an end to talk. It abolished mystery; it gave architecture and towns; it brought roads and armies, bureaucracy. It was the basic metaphor with which the cycle of civilization began, the step from the dark into the light of the mind. The hand that filled the parchment page built a city.

The effects of the written word brought forth an unprecedented rate of innovation that has given us the world of advanced technology and sophisticated systems of modern living that we enjoy today. But McLuhan saw, even back in the 1960s, that the advent of television and electronic communication would inevitably change who we are. And interestingly, his writing (in which he refers to television and radio as “electronic circuitry”) applies exactly to the impact of the internet as well.

He writes:

Ours is a brand-new world of allatonceness. “Time” has ceased, “space” has vanished. We now live in a global village … a simultaneous happening. We are back in acoustic space. We have begun again to structure the primordial feeling, the tribal emotions from which a few centuries of literacy divorced us.

We have had to shift our stress of attention from action to reaction. We must now know in advance the consequences of any policy or action, since the results are experienced without delay. Because of electronic speed, we can no longer wait and see. George Washington once remarked, “We haven’t heard from Benj. Franklin in Paris this year. We should write him a letter.”

At the high speeds of electronic communication, purely visual means of apprehending the world are no longer possible: They are just too slow to be relevant or effective.

In short, we are becoming (have become?) a postliterate society, one that is abandoning the logic and sequential thinking of a print-based society. Some examples:

  • Our education system is the ultimate model of a print-literacy based information distribution system: Information segmented into standalone categories (math is separate from English which is separate from social studies which is separate from science) and knowledge is doled out in a sequential model to individual passive student “vessels.” Is it any wonder that there is a huge challenge engaging multimedia-driven, all-at-once tribal students?
  • Our political system hasn’t been the same since television came onto the scene: Today we have politicians becoming celebrities (thanks C-SPAN!) and celebrities becoming politicians, and sound bites and vacuous slogans have replaced any real discussion or detailing of policy. Today, a stylized poster of a candidate with the word “Hope” under it is all you need to stake your position.
  • To a literate, sequential thinker, saving money and delayed gratification make sense. But in our immediate environment, we want it NOW – there is no later. It’s no coincidence that the rise in debt coincided with the rise in television.

In essence:

Print technology created the public. Electric technology created the mass. The public consists of separate individuals walking around with separate, fixed points of view. The new technology demands that we abandon the luxury of this posture, the fragmentary outlook.

We are in a new world – a “global village” to use another of McLuhan’s concepts. And, just as the military always prepares to fight the last war, we are using yesterday’s tools to deal with today’s environment.

Those of us who relish, and use, logical arguments are going to lose debates with the new tribalists. We may be right, but that doesn’t matter anymore. They won’t debate, they’ll just disengage and do what they want to do, which will be exactly what their peer group or mass media encouraged them to do. And I shudder to think what that means for our country, and world, going forward.

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Terrorism? Or blowback?

Terror attacks are happening with increasing frequency, both in Europe (with an attack every nine days this year) and in the US. We get all sorts of explanations, ranging from the idea that Islam is inherently violent to the idea that the terrorists “hate us for our freedoms.”

Ron Paul offers a different motivation: Retribution for the terror that we, the Western world, have already inflicted on Muslim nations:

Beginning with the 1993 attack on the World Trade Center and continuing with the attack on the USS Cole, the attack on the US Embassies in East Africa, the 9/11 attacks, the Boston Marathon attack, the Ft. Hood attack, the San Bernardino attack, and others, the terrorists have made it clear that they are retaliating for the death and destruction that the US government has wreaked on people in the Middle East or Afghanistan, including countless people of the Muslim faith.

Nonetheless, so many Americans, especially the US mainstream press, do everything they can to avoid confronting that basic fact — that all the Americans who died in those attacks died at the hands of terrorists who were retaliating for what the US government had done to people over there.

In other words, they’re not instigating it for no good reason. It’s retaliation. It’s blowback, to use Dr. Paul’s word.

John Perkins, author of Confessions of an Economic Hitman, provides a similar view through this two minute cartoon:

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Sustainable?

Charles Hugh Smith of OfTwoMinds is a brilliant guy, one who often writes for Chris Martenson’s Peak Prosperity. In one of his more recent posts, he brings some data to the table that makes it crystal clear how artificial and unsustainable our economy is. A few charts from his post:

The growth in debt across the US (all sectors, public and private) over time:

How much money central banks are pumping into the economy to keep it afloat (you can call this “liquidity” or you can call it “buying financial assets”):

Meantime, our actual earning power is declining:

So think about the juxtaposition of those three charts. We’re taking on tremendous debt – that’s both people and government. We have unaccountable central banks pumping in trillions of dollars to keep the system alive. And our earning power – the thing that’s supposed to pay for all this – is declining.

Can anyone possibly argue that this is sustainable?

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America meddled in Russia’s election?

For those who see Russians behind every rock, working to subvert the 2016 US presidential election and causing every problem short of our dogs pooping on the carpet, you might want to consider the fact that America meddled in Russia’s elections long before there was any controversy in our country.

Time Magazine’s July 15, 1996 edition carried a fascinating story called “Rescuing Boris: The secret story of how four US advisers used polls, focus groups, negative ads and all the other techniques of American campaigning to help Boris Yeltsin win.”

Reporter Michael Kramer clearly lays out how Boris Yeltsin, the candidate most favorable to US interests, was headed for certain defeat, until he secretly hired a team of US political gurus who used modern methods to pull him from the brink and put him back into the president’s seat. Yeltsin’s people used connections to the California GOP to recruit the consultants. And, using Dick Morris as an intermediary, the Clinton White house specifically helped to make Yeltsin viable:

Communicating in code – Clinton was called the Governor of California, Yeltsin the Governor of Texas – the Americans sought Morris’ help. They had earlier worked together to script Clinton’s summit meeting with Yeltsin in mid-April. The main goal then was to have Clinton swallow hard and say nothing as Yeltsin lectured him about Russia’s great-power prerogatives. “The idea was to have Yeltsin stand up to the West, just like the Communists insisted they would do if Zyuganov won, says a Clinton Administration official. “By having Yeltsin posture during that summit without Clinton’s getting bent out of shape, Yeltsin portrayed himself as a leader to be reckoned with. That helped Yeltsin in Russia, and we were for Yeltsin.

The American team wanted Clinton to call Yeltsin to urge that he appear in his ads. The request reached Clinton – that much is known – but no one will say whether the call was made. Yet it was not long before Yeltsin finally appeared on the tube.

While that was at the behest of the Russian president (we’ve also interfered in at least 80 elections without such an invitation), can you imagine how heads would explode in the US if the situation were reversed? What would CNN say if they found that Trump hired Russian campaign advisors, or that Putin had been asked to “take one for the team” and do something to make Trump look more presidential?

Welcome to America, where our cheap exports are weapons and hypocrisy.

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Trump, already owned

I voted for Trump, not because I like the man, but because of the positions he consistently put forth. Nonintervention. Border security. Restructuring trade deals. Less than four months in, he’s either abandoned or reversed every position on his platform.

After talking repeatedly about nonintervention, he’s staffed up with neocons, bombed Syria, threatened North Korea, is exploring major buildups in Syria and Afghanistan, and is about to push through one of the biggest arms sales deals in history to an autocracy that beheads more people each year than ISIS (ie Saudi Arabia). His olive branch to Russia is gone. His proposed budget has a huge boost to military spending.

During the campaign, he said the UN and NATO are obsolete; now they’re fine.

He put forth a nationalist economic vision as a candidate, then staffed his administration with globalist Goldman bankers who are ready to gut our regulations in the banks’ favor.

Legislatively he failed to come through on pushing a real alternative to Obamacare (the current bill is spectacularly weak sauce, and has not even made it to the Senate yet). The first continuing resolution to go through Congress has no funds for his much-vaunted wall.

I don’t regret my vote, in the sense that I had no choice: Either vote for the person who says they’re going to create change, even if there’s a 90% chance they’re either lying or incompetent, or vote for the person who advocates for the status quo, when there’s a 100% chance they’re going to succeed.

But to me, this was the final proof that change is impossible on the political front. If things are going to change, they’ll have to change despite – not because of – politicians.

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