Bad Ideas And Bad Companies Do Not Need Your Defense

I was out for happy hour the other night with a transportation group. In spite of its legendarily bad public transit system, Detroit’s accompanying scene is expansive enough to boast sub-niches: There is a transit justice and organizing group, a transit justice and advocacy group, a scene of techy “mobility” nerds who just love autonomous vehicles, and, in this case, there is a group of, well, vaguely defined transportation professionals at large but with a vaguely more public focus.” It was a diverse group– something I’m always glad to see in a city that has a mysteriously high number of highly educated white guys “representing” the interests of a majority black city.

DDOT’s Mikki Taylor-Hendrix at Pao on Grand Circus in downtown Detroit talks mobility.

I biked from home in Southwest to the Detroit Shipping Company– and back when I realized I had forgotten my keys- and back again in time for the 5:30 departure, only minimally sweaty (Verily I say unto thee– it is great having an eBike, though I really wish there was such a thing as a biometric bike lock– get on it, Kickstarter!). We bussed downtown on the FAST (SMART), sipped and supped at a hopelessly trendy sake bistro— with tiki inclinations, no less- and then bussed back on the Dexter (DDOT), all using the same farecard (what a time to be alive!). Represented were Detroit’s own General Motor Carriage Corporation, HNTB, AECOM, AAATA, DDOT, the city’s mobility office, and the Center for Automotive Research (a.k.a. CAR– you see what they did there, of course).

The conversation invariably turned to The Future. I toasted a tiki drink to regional cooperation, on which we are all betting through hopes on a new, less awful Oakland County executive (one of the wealthiest counties in the country, led for years by a drunk racist who staunchly opposed regional transit expansion or cooperation with Detroit and who has gone the way of the Koch). 


So, we all agree that we like buses and that we need more buses, more trains, and better infrastructure for things that aren’t cars. What we don’t agree on is the role of autonomous vehicles or the future of the automakers. I’ve always called AV’s a conceptual tour de force in an intellectual desert, borrowing a phrase from one of my heroes, who used the term to describe genetically modified crops. It’s not that the technology is a bad idea or fundamentally flawed, he argued, it’s that it’s not rooted in a robust context. This is especially true in the case of AVs given how little we have invested in comparison into transit systems– and how studies increasingly show that “innovative” services like Lyft and Uber actually increase traffic. Companies like GM have spent billions on AV’s with no strategy for profitable exit or, indeed, commercialization at all, on any sort of horizon.

Most experts agree that within a few decades, many fewer people will own their own cars. And yet, in spite of how little money we have invested in public transit as a society, one of the arguments that always comes up is that of apologism for the automotive industry, which is, by any estimate, in decline. This is especially true in Michigan, where we simply cannot let go of the obsession with the monumentalism of the Big Two and a Half.

The Ford F250 Super Duty, the state animal of Michigan. With a curb weight of over 7,000 lbs (3000+kg), the F250 can tow up to 35,000 lbs (15900kg) or hold about 2600 lbs of cargo* and boasts a fuel economy of about 16mpg. * – 3.3 times more than my Honda Civic!

Truck apologism was an important part of the conversation. “Trucks,” the apology goes, “are highly profitable, so it’s important to sell as many of them as possible in order to fund cool things like divisions working on autonomous vehicles and emergent mobility solutions.”

One of my colleagues who worked for such a division of one of the Big Two and a Half before, well, that company started downsizing that division and she quit, insisted this to me as well for many moons. Get a six figure salaried, white collar GM employee drunk and they will tell you about how much they hate their jobs and how much they hate selling trucks. But complain about the truck-dependent paradigm to that same person and they will push back with ineffable vitriol. How can trucks be The One True Way if truck sales are at an all-time high and these companies are still downsizing alternative product lines Perhaps because growth is finite but greed is not?

One gentleman dug in and went so far as to argue that trucks are a “recession-proof” product, because business owners can write off the cost of a truck. This, of course, isn’t backed up by any evidence. So, I’ll just ask: Why do people feel the need to defend these companies? We could rehash the age-old debates about how they’ve been terrible corporate actors– thinking about the debacle that was the GM Poletown project, or the auto bailout and the golden parachutes that said bailout mysteriously did not prevent. I don’t want to rehash that, ’cause that’s another rabbit hole. These companies suck by a number of metrics. And what’s more than that, they don’t need you to defend their virtue over happy hour.

But, to quote Levar Burton, don’t take my word for it.

Let’s look at some math: GM spent north of $1 billion to acquire Cruise and invested $500 million in Lyft. Neither company makes money (though I’ve always maintained that Lyft would make money if they downsized their exorbitant white collar workforce owing to the high marginal profit per ride, a.k.a. infinitesimal variable cost). It is unclear how much money GM-owned Maven makes, and Ford and other automakers are relatively quiet about their side hustles because they aren’t trucks, and we’ve gotta sell trucks, because trucks! $1.5 billion on those two investments alone is a lot of sales of pickups.

The last recession proved that truck sales are indeed not recession-proof because the last recession nearly destroyed the automakers on sales declines alone. In 2007, they were banking on selling giant SUVs. Rather, when the shit hit the fan, people actually started riding the bus. Imagine.


So, I made a little table to compare the Big Two and a Half based on their corporate fundamentals. In the simplest terms, quick ratio refers to the short-term solvency of the company in its ability to meet its short-term debts while “current” refers to overall solvency of the balance sheet (which is, in effect, not balanced). Price-to-earnings multiples reflect how excited the market is in a company and, controlling for other factors, whether it is cheap or overvalued (useful in choosing stocks to invest in). A company that has beaucoup cash flow but a quick below 1.00 might refinance that debt. But if there is a credit crunch and corporate bonds are downgraded and suddenly a company can’t borrow as much cheap money, a low quick ratio will turn into some bad news rull quick. (2008?)


Quick Ratio

Current Ratio

P/E* (MRY)

(P/E) / S&P 500 Average
  F 1.1 1.2 7.3 34.3%
GM 0.8 0.96 6.58 30.94%
FCAU 0.60 0.81 3.74 17.58%

* Price to Earnings ratio calculated from the most recent year normalized to include “extraordinary items,” which, mysteriously and through a trick of accounting wizardry, seem to appear about every year.

 This chart tells us a few things:

First: Record truck sales or not, the market is simply not excited about the automakers. The average price to earnings ratio on the S&P is 21x. These companies are trading at a third or, in FCA’s case, as little as 18% of that number. That means investors perceive one or a combination of things including high risk, low growth potential, or general unsexiness (“sexy” sells, and if you don’t think that’s a technical metric, just look at Beyond Meat, whose stock has gone on a rollercoaster ride based on dubious revenue projections that cannot possibly reflect the realities of the market for substitute meat products). For comparison, Netflix trades at 121x price to earnings with the a current ratio just above FCA’s– this means that while the video streaming giant is no more solvent than one of the largest automakers, investors think it has a lot more growth potential. For kicks, consider that Netflix’s market cap puts it at about $130 billion, while $FCAU lags at a paltry $20 billion. Yes, really– no one cares about Jeeps, but they sure care about Stranger Things.

Second: Any downturn in sales is going to hammer these guys. Ford may be okay with a stronger balance sheet. Its stock already took a hit amid a 9-figure cost of restructuring aimed at saving, well, a nine figure sum. The transportation sector is already considered a bellwether of economic activity, and freight rail began to slow down about a year ago back when everyone was still riding the truck wave– around the time the Big Two and a Half announced their restructuring. Automotive is part of this. In Detroit’s case, there are a bazillion suppliers that are also affected. Metro Detroit’s economy remains relatively undiversified.

Third: This isn’t directly reflected in the chart but rather something we can deduce, and that’s the idea that autonomous vehicles are costing billions of dollars but haven’t produced any inkling of revenue, even on the horizon. Pharma companies invest big bucks in crazy drugs thinking they’ll be able to capitalize those expenses and sell them for bigger bucks– autonomous vehicle technology promised this and more, but no one is even thinking about what this will look like. Regulation is even more elusive. The result? This is money thrown into the corporate sandbox, but Wall Street isn’t seeing revenue potential. (Here’s a very long, very boring, but very comprehensive assessment of the market.)


I’m not entirely in the business of gloom and doom, so I’ll try and turn this into a positive spin: I’m not saying there isn’t hope. Far from it– there is plenty of energy for better things than this broke-ass paradigm. In Metro Detroit, the new Oakland County executive is interested in getting transit on the ballot. Transit expansion could well save Detroiters thousands of dollars a year on transportation costs, a revenue-positive equivalent to a massive cash handout per household, and that could have wild and crazy implications for the city’s beleaguered economy. Broader than Metro Detroit, General Motors is even investing in the development of all-electric vehicles, while companies like Tesla, in spite of rocky finances and douchemaster CEOs, are blazing trails in microgrid power solutions that ten years ago would have been unheard of.

It’s time to embrace the coming change and what that might mean for cities like Detroit: cleaner air, more affordable ways to get around, and, invariably, downsizing of giant corporations too large to understand the writing on the wall. But no one should ever feel the need to defend these companies, nor the need to defend bad business models. These business models haven’t served Detroit for years, but they also haven’t served Americans. Trucks pollute more, cost more to operate, and are more likely to kill pedestrians. And the companies that make them aren’t virtuous corporate actors. The market will likely kill demand anyway as we hurtle toward a global credit crunch and people stop buying $60,000 cars, and closing the taps of Saudi oil from either geopolitical pressure or cartel machinations will make 15mpg far less attractive.  In the mean time, let’s think beyond the truck and think into what a “triple zero” tomorrow might actually look like.

Also, get thee to Pao and let me know what you think of their food.

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Well, World, We Had A Good Run

I guess this is it. The Amazon, the globe’s largest carbon sink, is burning, the yield curve has inverted, there are trillions of dollars of negative interest debt on global markets and even in corporate bonds, and the US government is projected to run a trillion dollar deficit for the next forever. The media is maintaining false equivalencies between the “far left” protesting white supremacists, because we’ve normalized the far right, who apparently want everyone dead in planned mass shootings. Oh, and they’re still putting children in concentration camps at the US-Mexico border, because I guess that’s a good use of taxpayer money that we seem to not have any of. But, hey, my 401(k) is doing great, eh, libturds? This seems to be the dominant rhetoric from the Right on the state of things.

Nothing can shake the longest bull market in US history. Until, of course, something does shake it– perhaps someone blowing someone else up, or perhaps another tweetstorm aimed at derailing a sold half century of diplomacy with NATO allies– and then we’re up a certain crick, as it were. Honestly? I kind of can’t wait. I mean, can’t be that bad, right? It’ll be ugly. But a substantial disruption of neoliberal market capitalism might be the best way to, well, disrupt the idea that neoliberal market capitalism is the only way to do things.

Going to get into bed now, debating whether I should read about marketing management for my business degree (hey, if you can’t beat ’em, right?) or my book on austerity.

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Happy Canada Day!

This Canada Day, I drove all the way from Detroit to celebrate in a foreign country (a.k.a. “across the river”)– to buy gas in a province where that gas is subjected to a carbon tax. This is admittedly mostly so I could tweet about it to Premier Doug Ford, who has spent millions of Ontario taxpayer dollars fighting the carbon tax as “the worst tax ever.” Ford’s administration, currently beleaguered by a series of scandals over nepotism, disinformation, and an inability to close a budget deficit that it ran on the promise of fixing, suffered a major defeat last week when a second court sided with the Trudeau government, upholding the constitutionality of the tax.

But as the Pittsburgh Post-Gazette’s Tracie Mauriello points out: by most estimations, the tax has proven pretty progressive, directly returning a stream of tax revenue back into the pockets of taxpayers and disproportionately taxing more carbon-intensive businesses and the wealthy, who typically consume more. Mauriello points out that British Columbia’s economy has grown by a double-digit percentage while emissions have dropped.

Me in festive garb, wearing, what I am told, is not a “hockey jersey” but rather a “sweater.”

Skeptics remain, of course– that is, self-styled economists who believe that any form of taxation is theft (an assertion with which even disagrees) and who don’t believe that it is valuable to internalize the “social costs” of carbon. Critics also lament that China and India contribute more to pollution than the United States does, even though this is somewhat misleading. Those countries largely lack environmental protections, on the one hand, but, on the other, carbon footprint is largely tied more to wealth through consumption than anything else (see Naomi Klein), so any attempt to an create a lower-carbon economy would disproportionately penalize heavy consumers– and the poor ain’t that.

But I trust we’ll get there, one record-breaking heat wave, one tank of gas at a time.

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Detroiters Grapple With Questions of Energy Future

Yesterday evening, concerned citizens, activists, and energy professionals packed a lecture room at Wayne County Community College in downtown Detroit to offer public comment to the Michigan Public Service Commission. The hearing was on utility DTE’s proposed Integrated Resource Plan, which it is required to submit to the MPSC, a proposal outlining– you guessed it- its unflagging affinity for fossil fuels.

While a few supporters showed up to cheer DTE doing a great job of investing in communities and something something, the majority speakers complained about the company’s failure to commit to meaningful efforts to curb climate change, the issue of widespread pollution resulting from reliance on fossil fuels, and the need to provide safe, reliable, clean power for future generations. Power equity as well as reliability was an issue raised, as ratepayers in the hood often struggle with frequent blackouts, bizarre billing issues, and shutoffs. Remember that time DTE CEO Gerard Anderson was so offended by accusations of unreliability that he took to Crain’s to defend the virtues of his company (Anderson, in the process, inadvertently self-owned when he conceded that a major storm that had knocked out power for six hundred thousand customers had knocked down twenty times more power lines than was expected).

The last time I was in WCCCD was actually to attend the IRP forum, where a large, bearded man identifying himself as a DTE engineer in charge of implementing large capital projects, told me about how climate change is a liberal lie and we desperately need natural gas to fulfill our needs. Fracking? Concerns about safety are overblown, he told me. Carbon dioxide? Not as big a deal as the doomsayers are making it out to be. But let me tell you about how the one winter, it was so cold that we almost ran out of natural gas, which is why we need to invest in better natural gas infrastructure. In addition to uttering a number of flat-out untruths, the dude was mostly just kind of, well, unimaginative.

This is how DTE operates as a company– unimaginatively. Is it their fault, though?

Well, yes, mostly– but not entirely.

In terms of their place in the market, investor-owned utilities, or IOU’s, are odd beasts indeed. Investors view them as safe, stable, long-term bets owing to their uniquely monopolistic nature and the relative inelasticity of demand for their services. Everyone’s gotta turn on the lights at night and everyone has to heat their homes in the winter. Utilities have predictable balance sheets: their capital expenditures, though massive, are limited in number and frequency and planned out years in advance, utility rates are set by public mandate, and demand is predicted with reasonable accuracy based on weather patterns and population growth rates. The major risks to a utility are commodity prices for gas and coal, which can spike tremendously during a cold snap or a heat wave.

Utilities begrudgingly accept relatively limited regulation in exchange for this monopoly; if true “deregulation” were to occur and, say, microgrid and distributed generation solutions were to crop up on every corner, large IOU’s might well lose a double-digit percentage of their revenue potential overnight. But their continued existence, at least in the short term, is necessary for one reason and one reason only:

Baseload generation– the electricity that must be generated 24 hours a day to ensure that the grid is stable and can meet demand as peak demand fluctuates- cannot at this time be provided by renewable resources in most geographies. Solar panels produce power during the day and wind power produces more at night, and demand is, inconveniently, configured in opposition to this, a trend utility nerds call the Duck Chart. While there are multifarious ways to normalize demand over the day (realtime pricing and a lot of complicated stuff I don’t need to get into), we aren’t quite at the stage of being able to economically store enough power. It’s coming, don’t worry (the Tesla Powerwall is perhaps the best known example). This is the only reason why we still have massive coal power plants and nuclear power plants, which can produce a ton of power at a very low marginal (per kilowatt hour) cost.

Being able to do one thing very well and have a customer for it leads to predictability. But while predictability may inspire suits in banks to offer favorable rates to finance massive capital improvements, it is at odds with innovation or dynamism. Simply put, utility companies are, to the stock market, well, boring. They’re viewed as a safe bet to the point that equity outflows from risky companies like Amazon or Netflix go into companies like DTE as “safer” investments before they go into lower-yield treasury bonds, considered to be the safest investment. To give an extreme comparison, if DTE were valued at the same price-to-sales ratio as Beyond Meat, the new fake meat startup and darling of the IPO market right now, it would be worth more than Amazon, Microsoft, or Apple. Such is the folly of investment logic– safe is boring, and exciting is a great way to lose your ass.

Investors believe that because cash flow from operations is limited by regulated rates that their companies are intrinsically limited, too, in what they can profitably achieve, and the utilities have come to believe this as well.

But while the heavy tethers that keep DTE close to the ground spell stability for a risk-averse investor, they don’t mean that the company isn’t wildly profitable. Especially as we enter an increasingly unpredictable era of climate– not to mention a highly risk-prone global energy market, where oil is both on the wane and also threatened by geopolitical upheaval– it is time to get creative about what companies like DTE can do with that money.

But while a utility isn’t a charitable foundation, which is mandated to spend a specific number of dollars per year on philanthropy, neither is it governed by the same manic growth fever as exciting startups like Netflix or Amazon.


Embedded in the security of a utility’s economic might is the implied, but rarely realized, ability to do interesting, profitable things with that extra money.

DTE paid no taxes last year on a record-breaking, more than billion dollars in profit. Through its IRP, it’s pushing natural gas expansion. Its commitments to energy efficiency (or “waste reduction” as One Tough Nerd once called it), are gestural.

What could that money be used for? Some ideas:

  • Photovoltaics to power tens– if not hundreds- of thousands of Michigan homes
  • Improving the electrical grid so that it is more resilient and better suited to handle distributed generation, microgrid solutions, and electric vehicles for the next generation
  • Develop EV charging infrastructure
  • Developing platforms to scalably retrofit existing housing stock, multifamily buildings, and commercial buildings with better building envelopes, more efficient heating equipment (eliminates the need to plan and finance multi-million dollar capex years down the line for the utility, improves health of workers, increases free cash flow for residents and businesses alike)
  • Developing territory-wide renewable generation to supplant the eventual closure of the old-school Fermi nuclear plant near Detroit
  • Developing next generation nuclear technology to provide reliable baseload generation for future generations (don’t @ me, I’m just saying)

If they didn’t want to do these things themselves, they could also invest in companies pioneering new solar technology (or other energy solutions). Excepting Tesla, purveyor of Powerwalls and solar shingles, supposedly (NASDAQ:TSLA), solar companies typically trade at a heavy discount, because investors think they are risky (this article kind of covers it). Utilities are not risky. There are only a few dozen– but not a few hundred- in the entire country. So, companies aren’t really competing with each other for market share, they’re just doing their thing to stay afloat and happen to make a bunch of money in the process.

What if utilities invested in solar companies to develop next generation solutions for carbon-free power grids? Indeed, what if pigs sprouted wings?

Coulda but did’n’a– and likely will not. What DTE did do instead was up its dividend payout to investors— a decision made just before it petitioned the MPSC to raise electricity rates. Because they lack the imagination to revolutionize the wild world of energy. Of course, the MPSC’s hands are largely tied, because, though it is responsible for hosting events like last night’s public comment session, any demands placed on the utility could elicit pushback in saying that “higher rates would be required to achieve [x].” Because that would either be demonstrably false or, at the very least, horribly disingenuous, changes would have to come via legislative or executive mandate.

Michigan Governor Democrat Gretchen Whitmer’s current deadlock with a Republican legislature is evidence that any changes would necessitate a great deal of headbutting.

This critique is not to demand that a company stop making money– that is, quite explicitly, its only purpose- it’s rather to suggest that maybe the company just stop being, well, so boring.

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The End Of Coal: A War Without Belligerents

News broke last week that coal producer Wyoming-based Cloud Peak Energy is filing for bankruptcy. Let’s face it: the future of the dirty power source hasn’t looked bright for a solid decade now. Marcellus Shale natural gas drilling through “fracking” went from virtually nonexistent in 2008, coming online at the peak of an oil bubble, to more than 18 billion cubic feet per day extracted last year. The meteoric rise of relatively novel extraction techniques in previously unexplored domestic geographies was accompanied by a president interested in ramping up restrictions on major carbon polluters.

Coal producer Cloud Peak Energy, Inc. plummeted from a price of 19.55 on June 20, 2014 to a price today of 0.061 per share, a loss of 99.7%, during a time in which the S&P 500 gained about 40%. It announced plans last Friday to file for bankruptcy.

Sure, those things weren’t good for coal.

But coal’s slow demise– its share of national power generation will soon dip below a quarter- is more a matter of obsolescence than The Big Bad Socialist Gubmint. (Fox News Contributor Daniel Turner apparently wasn’t tracking commodity prices and the connections between coal, natural gas, and the stock market crash in 2008.) It isn’t just Cloud Peak. Coal as a market segment has been struggling for years, and many experts have pointed out that it wasn’t even a growth industry without the Clean Power Plan. Decades prior, as Charles Herrick points out, a major impediment to eastern coal, was deregulation under Democratic President Jimmy Carter that allowed increased consumer choice in public utilities and increased competition from western mines, which were more efficient per ton. Environmental regulation under George H. W. Bush further limited emissions as a matter of curbing acid rain.

A series of catwalks surrounds the old furnaces of the former “Rheinische Stahlwerke zu Meiderich bei Ruhrort,” which translates to something like the “Rhenish Steel Works at Meiderich At The Ruhr Spot,” or, as it is colloquially known, Landschaftspark Duisburg-Nord (Landscape Park Duisburg North).

But, contrary to the Scotts Pruitt of the world, there isn’t any war on coal– not in the way oil industry interest groups want you to think, and certainly not in the way a traditional war has belligerents, just as there is no real war on cars. There are just alternatives. That’s how markets work– even Crain’s thinks so. Between the reforms of Carter and Bush, we’ve also seen plummeting prices-per-watt of solar power, and, over a decade since 2008, we’ve seen solar generation more than triple in generating capacity, natural gas increase by 50%, and coal decline. Solar is even growing in rural America where it pits traditionally conservative skepticism over climate change against the benefit of self-sufficiency.

What’s next for when we move on beyond dirty fossil fuel generation? As I follow with bated breath the proposed redevelopment of Detroit’s own Conner’s Creek site, I think back to my trip to the Duisburg-Nord park in Germany, a massive project to redevelop a former steel mill into an expansive, public park. DTE’s own solar farms in Detroit are unimpressive in their intentional isolation, gated off with massive, chain-link fences, and only gestural toward a renewable energy future within the company’s coal-chugging generation mix. But Detroit’s got enough space that there is plenty of opportunity to consider better contexts for future projects.

And in the mean time, we can always think about better investment opportunities than dirty rocks.

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When Capital Speaks Louder Than, Well, Human Rights

Much ado was made about the so-called “bathroom bills” in North Carolina. Remember that story? Complacent Republican governor Pat McCrory signed into law a Republican legislative bill, the Public Facilities Privacy & Security Act, that would effectively force transgender citizens to use bathroom facilities associated with their gender assigned at birth. The bill also preëmpted local control of minimum wage laws, because local control is okay until local Democrats electeds push back against Republican legislators. So intense was the backlash that it was estimated to have cost the state points on its total GDP, and the law was later repealed under the tenure of Democrat Roy Cooper. A similar story is playing out in Georgia at the moment with the so-called “heartbeat bill” (N.b.: abortion ban) signed into law yesterday by Governor Brian Kemp, but the response from the business world at the tail end of the longest bull market in US history is basically a shrug at this point.

I reached out to the largest corporations in the state of Georgia, including Delta Airlines, Coca-Cola, UPS, Home Depot, and a few others that you’ve probably never heard of. I received a response from one company. This isn’t shocking, as most megacorporations have a lousy media apparatus for dealing with smaller media players (even when I am writing for my local newspaper). Matthew O’Connor, spokesperson for UPS, said the following in a statement: “We respect our employees’ different viewpoints on this deeply personal topic, and encourage them to share their views with their elected officials.”

I ran this through Google Translate from Corporate-Late-Capitalism-Speak and came up with something to the effect of, “We respect our employees’ different viewpoints, which may include the right that they would like to criminalize the right to abortion and make access to women’s healthcare punishable by death.

In addition to the heaviest-hitters in the publicly traded realm, which represent the better part of a trillion dollars in market capitalization (mostly from Coca Cola and Home Depot), Georgia also has a billion-plus dollar film industry. Walking Dead, Stranger Things, Ozark— big name stuff. I was curious to know if any representatives of that industry had a response to the bill: it seems that some do and some have been quieter, and it depends on whom you ask, as the media has already characterized the responses in both ways. Netflix declined to comment and directed me to the MPAA, which released a statement basically saying that the film industry is very significant and large in Georgia and no, they’re not prepared to publicly condemn the law, but someone else is likely to challenge it in court. Seems like a pretty good metaphor for liberalism in 2019– “hey, let someone else do it.

To be clear, this law is unlikely to hold up in court. But I am assuming that Republicans are interested in pushing it to the Supreme Court, ever on their quest to overturn Roe v. Wade, that destroyer of worlds. Meanwhile, the civilized remainder of the country, including some folks down south, even (solidarity, y’all), wait with bated breath to see how quickly the backlash will effect a resolution that preserves and improves access to healthcare for women. The tepid response from the biggest capital players suggests that maybe in late capitalism, we’re in deeper doo-doo than most of us want to admit.

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The Somewhat Unsurprising Struggle of Detroit’s Streetcar

Figures out this week show that Detroit’s QLINE streetcar, once heralded as a bringer of progress to our struggling city, show that ridership is a fraction of what it was projected to be, as reported this week by Detroit Metro Times. Only 250 people– count ’em- have purchased annual passes, a testament to the unreliability of the system, whose six trains travel 3.3 miles at an average clip of just over 8 miles per hour. I am not sure, but I have a hunch that the city of Detroit sells more monthly transit passes to its employees!

Anemic ridership numbers are coupled with a slew of technical problems including what works out to about an accident per week. In sunny Ilitchville, where suburban property owners and suburban patrons of sportsball events alike couldn’t care less about transit accessibility and actually patronize Kid Rock’s restaurant, buses and streetcars alike are often stopped curbside waiting for Lyfts and Ubers to let out in front of the Pizzarena.


Possibly– just possibly- some of the folks who had been tirelessly advocating for a well-planned and well-connected transit system. Kate Lowe and Joe Grengs’ scathing 2018 report on the QLINE pointed out the unusual and overwhelming public opposition to the design insisted upon by the largely private M1 committee– but noted, on the flip side, their ability to actually get the thing done through nimble private sector cleverness. (More on this second bit in a minute.) Connectivity, transit advocates have argued, would include universal farecards, which we finally got this month, but just for buses. We are unclear on whether the QLINE is so much as working toward unification of their fare system with the complementary transit agencies, and the QLINE did not immediately respond for comment.

Detroit July 2018 (QLine).jpg
In a curb-running section of the 3.3 mile loop, the QLINE passes by the Parc Shelton near the Detroit Institute of the Arts and the central branch of the public library on Woodward Avenue. Photo by Michael Barera (Creative Commons, July 2018).

In duplicating the routes of the Woodward Bus, the most heavily used transit route in the state, and the various SMART and FAST buses to Oakland County (because why would we ever have a unified system across county borders? Oh, wait.), the QLINE will be acting as what an economist might call an inferior substitute rather than a superior substitute or a complement (wherein bus ridership is good for QLINE ridership and vice versa). In other words, given the opportunity to take the express SMART bus or even the local DDOT bus, people have no good reason to take the QLINE instead. Its low farebox recovery ratio of about 10% puts it below the effectiveness of both DDOT or GCRTA. But rather than complaining about it, I think it’s worth considering what the QLINE can do.

Prospects for a Hamstrung System?

To be clear, I’m a fan of trains and transit in most formats. Presented with the choice, I’d always pick a streetcar over a bus. Unless sufficiently antihistamined, I can get pretty bus-sick (not “sick sick,” but I get super dizzy and sleepy and slightly nauseous)– this was a major issue for me when I ditched my car for a year and a half. But the problem with the QLINE is that no one bothered to develop a system that worked in tandem with the existing infrastructure.

A few outcomes could “save” the QLINE. A couple are macroenvironmental: If oil prices return to the $100/bbl price range that they held fairly steadily from 2008-2014, rising gas prices will effect a strong increase in transit ridership. Restrictions on oil from Iran and Venezuela have already driven up prices and may continue to do so, though it’s yet not entirely clear what effect the global economic slowdown will have on oil production or demand. If Michigan Governor Gretchen Whitmer gets her 45-cent gas tax increase— which, of course, she won’t, Michigan being Michigan and being flat-out obsessed with both austerity and the sanctity of the automobile- this could be a boon to transit.

Another is 1) if the RTA proposal is revisited in 2020 and passes and 2) if, in the mean time, the QLINE can join the One Farecard To Rule Them All party that SMART and DDOT have been throwing. This would improve the connectivity with other modes of transit and would invariably increase ridership (especially if the QLINE could figure out how to successfully complement the Woodward bus route).

Increased public pressure on the Ilitch regime about the likes of their frankly illegal street closures, parking signage, and interference with the Woodward transit corridor could create a tremendous incentive to shift car-driven LCA attendance to DDOT and the QLINE, both of which provide connections to giant parking garages that could easily benefit from disrupting the Ilitch stranglehold on parking– say, a promo deal to park in a non-Ilitch garage and get a free QLINE pass for half or a third of the price of a Midtown parking lot near the LCA. Isn’t that how competition is supposed to work? To drive down prices and try and bust up monopolies?

Finally, going back to Lowe and Grengs’ report, the QLINE’s existence is, as in the case of many new streetcars and many monumental public projects in the austerity era, a testament to the good, the bad, and the mixed bag of public-private partnership. As evidenced in the tweet from TRU above, there is ample opportunity for connectivity with proximal employers within the Woodward transit corridor who wield an overwhelming amount of power in influencing development, and who represent hundreds of thousands of jobs within the 7.2 (and hundreds of thousands of commuters). While Dan Gilbert and players from the Quicken Family of Companies were instrumental in the development of the QLINE, they have been quiet RTA advocacy.

If the QLINE is going to survive– and move Detroit into a new era replete with successful mobility options- it’s going to require partnerships between the likes of the private M1 Rail folks, major institutions and employers, and a city government and DDOT interested in playing together. Another option might include returning to the free fare model that it explored when it first started and had much higher ridership numbers (something that has been explored for entire municipal systems in certain countries), though the subsidization of duplicated transit routes (when DDOT is still running on this same stretch with superior reliability) makes it a dubious pitch. In the mean time, you’ll see me out there riding my bike in that great protected bike line of the QLINE tracks!

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April Showers Bring May Combined Sewer Overflows

I woke up several times last night to the sound of torrential rain drumming on the roof. The attic roof provides pretty good sound insulation, with about four inches of foam and what will eventually be a few more inches of blown cellulose insulation. 47 mils of rain overnight in some areas and more than 60 in others (over two inches). I just completed a sort of not-quite French drain– a Belgian drain, let’s say- in the front yard to channel water away from the house. It worked, sort of– but it wasn’t meant to handle as much rain as we got, so there remains some standing water in the basement. Our house– 3,000 square feet with a huge and annoyingly hardscaped back yard- also gets dumped on from the massive duplex to the north, so I’m frankly surprised that it isn’t worse.

This homeowner stuff is what I’m working on in my offtime, and it’s thus far limited to digging trenches, lining them with geotex, and filling them with a variety of pebbles. It’s experimental and it’s cheap. But, ideally, I can demonstrate at some point the viability of doing this stuff at a larger scale as a matter of reducing strain on our stormwater infrastructure. Hopefully, this will be a way to rethink our approach to nature in building cities– we should be focusing on how to contend with and work with nature rather than on conquering it with technology and machines.

Here a one-third-finished, not-French drain, moving water through a mixture of gravel approximately 12 feet though a trench about a foot deep. I opted against a perforated pipe because there isn’t really enough volume to justify it here, but I will install a couple elsewhere on site.

While I was working on scattered-site residential redevelopment in Detroit, we ran into frequent problems of basements flooding. The response of the Powers That Be was to provide some perfunctory attention to site grading– that which one could pay a vagrant to do in an afternoon, so, really not very involved. My proposal– summarily rejected, as was often the outcome of such cases as Young Whippersnapper v. Banker- was to develop a structure for financing green stormwater improvements and incorporate this into the project financing.

The math was pretty basic: I figured that there was a probability of 1 in 10 that the basement would flood to the point of doing substantial damage, any time between installing finishes and actually turning over the keys to the buyer. If a furnace was damaged– which it usually would be, since most furnaces in these homes sat on the basement floor (which is, incidentally, another idiotic planning idea in an area that floods frequently)- this could represent thousands of dollars of damages, because HVAC techs. If you amortize the cost of a few instances of flooding over the life of a loan, you quickly account for tens of thousands of dollars of damages that should justify thousands of dollars of expenditure in superior site infrastructure to manage stormwater.

But the bankers and the managers did not agree. These were quick-and-dirty fix-and-flips! “Get these freaking houses done, I’m not interested in your organic sunshine tubes,” my director told me.

Nor did the idea go over particularly well with the contractors.

“Oh, that California stuff?” one amused, but charitable, contractor asked. “Boy, you been watchin’ too much tee-vee!”

Jimmie and I sat down to work out the numbers and figured out that it would be not only expensive but also technically challenging to achieve pervious paving on such tight lots. You can’t excavate a narrow driveway on a small residential lot straight down 19-24″ (48-61cm) to provide the absorptive aggregate layers for pervious paving, so you’d have to slope the whole mess, meaning that you’d substantially reduce the rainwater volume. It’d likely be enough volume, but the takeaway is that you lose an economy of scale, and, in a renovation budget that tops out at $75,000 or $100,000, spending $25,000 on a driveway isn’t exactly what the bosses like to see (nor does it come out in the wash unless you’re directly subsidizing that cost). Gravel is also, really, really expensive when you’re using that much of it.

The more “proper” you want to do it– see below for what I think is a system somewhat overengineered (or perhaps simply unnecessarily technical) for our climate- the more expensive it is. And then prohibitive, given that you usually can’t just cop extra financing for this stuff.

Drawing of a fairly intensive pervious installation from Houston-based Paver Connection that includes graded soil, an outfall pipe and perforated pipe to supply that pipe, plus several layers of stone and gravel.

Socioeconomic Effects of Ailing Infrastructure

As I often point out when standing on a soapbox about these issues, my basement filling up with a couple of drops of water isn’t a big deal– in my worst case scenario, I could rack up a few grand on a credit card to pay someone to do an emergency boiler replacement or some cleanup. Lower-income homeowners probably don’t have that option, and renters are, for the most part, shit out of luck entirely. A colleague of mine in Legal Aid says that the problem of sewage backup in Detroit’s rental homes is so ubiquitous– in no small part the fault of ailing, old combined sewers not built to handle sewage mixed with massive amounts of stormwater- that judges in eviction cases almost universally refuse to honor rental escrow in these cases. In other words, so many basements are filled with raw sewage that if a judge honored one escrow case, they’d have to honor all of them, and landlords would simply stop making money, and justice wouldn’t be served. (God forbid, right? Happy freakin’ May Day, people!)

Given no incentive, no one expects Bloomfield Hills-based slumlords on the west side of Detroit to incorporate GSI into their rental properties. A much lower-hanging fruit than what I’d call “intensive” GSI would be to provide superior site drainage that can incorporate stormwater retention or, better yet, to incorporate GSI into public rights-of-way, as has been done in Detroit perhaps once. An old story, but one that can still be told– in the hopes that maybe we can do it again. There is evidence that this is not only good for infrastructure, saving beaucoup bucks for cash-strapped municipal governments, and makes things prettier– but also makes communities safer.

As the incidence of intense storms increases and we are increasingly woken up in the wee small hours by the dulcet tones of the Emergency Alert System, it would behoove us to ask tougher questions about how we can affordably improve the properties we own– and the public rights-of-way that belong to all of us, in a way that will help mitigate disaster.

Posted in Cities & Urban Planning, Climate adaptation, Climate Resilience, Environment, Stormwater | Tagged , , , , , , , , , , , , , | Leave a comment

The Ilitch Perfidy Makes It To The Media Majors– Now What?

With HBO now coming after Detroit’s second-favorite billionaire family in the city’s Holy Trinity– comprising the Ilitches, Dan Gilbert, and Matty Moroun- a city waits with bated breath to figure out what’s next.

The Time Warner subsidiary, which is known more for its smash hits like Game of Thrones than for dabbling in what the Ilitch machine decried as “sensationalized” and “inaccurate” journalism, produced a segment covering what has been called a series of broken promises to deliver substantive development activities beyond the bowl of the Little Caesar’s Arena, where the Red Wings lose for a mostly empty stadium of unaffordable red– wait, they’re actually black– seats.

Ah, the vibrant urban core! There it is!

The Crain’s article and others point out that the Ilitches didn’t materially challenge specifics in the HBO segment. Aaron Mondry called the District “mostly a sea of parking lots.” That’s not incorrect, if the above photo is any indication. Prime real estate and they want to use it for parking lots. I speculate that they don’t have the internal staff or management capacity to actually handle the redevelopment of an entire district, seeing as how much of the process of engineering and design for the LCA was actually contracted out but limited to basically a single site, versus the more nuanced, complex process of redeveloping a substantial area of the downtown core.

But what’s next? Will the city actually hold the Ilitches accountable? Will the taxpayers hold elected officials accountable for failing to hold the Ilitches accountable, in turn? Will Steve Yzerman End Up Being The Guy Who Saves The District?

It seems to me that the major discourse around the District from These Macomb County Types is “oh, parking is so expensive, but I could never take a bus with Those People!” or, more unctously, “But Downtown’s Really Coming Back! You People Need To Be Grateful For What That Great Man Did For That Horrible City!”

Certainly the Detroit Building Department is unlikely to hold them accountable. As I periodically have a wee bit of downtime when I haven’t been buried in textbooks in that whole graduate school life, I plan on digging into this a little bit more when I can get some face time with the good people in BSEED. In March, I flagged one of their buildings on Temple Street as substantially in violation of the Vacant Property Ordinance, and was working off a list of a few dozen properties, of which I think about one or two were actually registered in accordance with the law. I would be curious to see if anything has been done with it, and why not. Seems like now’s the right time to start paying attention and demanding some accountability, right?

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Environment, Epidemiology, and Economy

Just in time for Earth Day, I just finished Dan Fagin’s 2013 book, Tom’s River: A Story of Science and Salvation, which I picked up in advance of a trip to the coastal hinterlands of New Jersey for a wedding a couple of weeks ago.

The book covers the life and death of the chemical industry in Tom’s River, New Jersey, beginning in the postwar economic boom of the 1950’s, when men were men, women were women, and progress was suburban sprawl and Good Jobs. Fagin traces the history of dyemaking and chemical production in the United States through the development of industry along sources of freshwater. New Jersey, hitherto a mostly rural landscape, was the perfect venue for such development to supply industrial powerhouses of New York, Philadelphia, Trenton, Newark, and elsewhere. The Tom’s River Chemical Company, owned and operated by the Swiss Ciba-Geigy corporation, set up shop in the town in 1952, providing hundreds of jobs over decades of operation, and was more or less the entire genesis of the town we now know (which isn’t really a “place” but more a patchwork of strip malls and housing). The book chronicles the origins of the town into the demise of its lifeblood chemical industry and eventual attainment of Superfund status.

Fagin’s book is excellent journalism, but it also covers the rich and sordid history of the topic of environmental health or, as he refers to it in one section, environmental medicine. Beginning with Hippocrates and the dubious science of yore, Fagin continues into 15th century with the cantankerous Swiss physician Paracelsus, who is widely credited as the father of toxicology, and onward to the origins of epidemiology in 19th century London, coincidentally around the same time modern dyemaking was invented.

While the toxicity of dyes has long been known, Fagin points out that throughout both the 19th and 20th centuries, reluctance to challenge the economic supremacy of manufacturing seemed to trump concerns about things like the widespread incidence of bladder cancer known to be correlated strongly with the dye manufacturing process. The toxicity seems totally logical to even a reader completely unfamiliar with aniline chemistry: You’re basically distilling chemicals out of coal tar or oil and they become vivid purples or pinks. In the 19th century, this was the bee’s knees, because dyes used to be crazy expensive, and now could be produced at industrial scale. Unfortunately, this not only put to use a bunch of pretty hideously toxic chemicals like benzene, toluene, nitric acid, and sulfuric acid, it also produces a large amount of waste materials– like pyridine, a foul-smelling, hazardous byproduct of coal tar. Stories in the book chronicle workers who shoveled substances like pyridine without masks. This occurred in Swiss-owned factories in Cincinnati before they relocated to Tom’s River.

A rainbow assortment of food dyes. (Wikimedia.)

The massive amount of waste created an incentive to spawn what Fagin essentially notes as an industry cluster of waste disposal. Ciba-Geigy had begun storing drums of material in unlined, open pits, but these began to leak and were absorbed into a porous, sandy soil, eventually contaminating groundwater. More waste still– millions of gallons, over decades- was diluted with potable water and pumped out to sea. At the same time, Fagin paints a portrait of a motley crew of waste disposal characters, named only as Sharkey and Colombo, who worked for the town dump in 1971 and made a deal with one Nick Fernicola, a waste hauler working for Union Carbide, to dump that company’s waste from a nearby plastics plant on land leased from a local farmer. Chemicals started to leak into the soft, sandy soil, further contaminating a number of the wells in Tom’s River’s decentralized water pumping system. This site, the Reich Farm, later became its own Superfund site.

Fagin does a great job of chronicling both the enormously challenging, technical work of the epidemiology that went on to figure out whether Tom’s River did indeed indicate the presence of a cancer cluster, but also the human impact that resulted from the environmental contamination. I don’t want to give too much of it away, but it raises a lot of interesting questions about the role of the State in managing the balance between economic development and environmental protection.

It also raises questions about the layers of alienation or anonymization in the process of business. If Union Carbide contracts with a waste hauler like Mr. Fernicola, it’s clear that the latter cannot bear the financial liability when millions of dollars of damages are done. But it is too easy for a company like Union Carbide to disclaim responsibility, as they tried in Bhopal in 1984, arguing that the owners of the plant were a subsidiary and therefore a separate company. Think about things like the US Sarbanes-Oxley Act, which require a CEO directly to sign off on financial statements– should we not have the same regulation for things like, say, a companywide environmental report that indicates disposal of highly toxic waste?

The sites were eventually shut down and remediation efforts begun, but not without dozens of some-yet-unexplained illnesses including tragic, terminal cancers in young and infant children, cancers in adult workers, birth defects and fertility issues. Ciba-Geigy got out of the chemical business, for the most part, as globalization has shifted production to parts of the world that lack protections for environment and workers, and was subsumed into a series of corporate mergers and rebrandings that ended up as part of, variously, Sandoz (1996), Novartis (its successor company, essentially), and BASF (2009). Union Carbide was bought by Dow (2001), the latter inevitably trying to erase the name of the former from its brand following the years of litigation and furor over the Bhopal atrocity in December 1984. Similar litigation drew in the likes of the subject of A Civil Action, lawyer Jan Schlichtman– this book is also worth a read (I kind of hate John Travolta because I think he’s creepy or I would suggest the film, too). Cleanup continues to this day, and the Reich Farm site, off Route 9, is currently being debated for proposed new development.

There isn’t much left of the Tom’s River Chemical site. You can still go there, though– it’s tucked away off a windy road through the pines. Once you get away from the strip malls and tract homes, it’s a beautiful landscape, where you can still see sunsets over the marshes and lakes (as pictured in the book’s cover), and you can almost forget that things like this happen in a modernized country. But it’s essential for us to remember how such a complete mess of bad decision-making and a refusal to demand accountability– from corporate actors and governments alike at local, state, and federal levels- led to the unnecessary tragedies in this ordinary American town.

Jetty at Barnegat Light (facing north across Barnegat Bay), twenty-some miles south of Tom’s River.
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