Saturday, March 28, 2020

COVID-19 News

Green Jobs Are the Answer to the Coronavirus Recession
[New Republic, Naked Capitalism 3-19-20]
Franklin Roosevelt used the Public Works Administration, Civilian Conservation Corps and Works Progress Administration, so that the federal government directly hired millions of people to give them a steady paycheck. Today, the federal government should be hiring millions of people and begin teaching them how to care for people that are ill with COVID19, or how to manufacture medical equipment, or how to operate emergency food distribution.

Why is there no discussion of the federal government building new emergency hospitals, or building new manufacturing plants to make ventilators, face masks, and other medical equipment? Why is there no discussion of the federal government seizing control of any drug company or medical device manufacturer or producer or seller of handiwipes that tries to take advantage of this crisis to price gouge? Because people have been indoctrinated with the idea that such a direct government role in the economy is bad. What we’re about to find out is, that idea is what’s bad. Another example of how our unquestioned economic ideology limits our options.


This Slate article documents a number of the changes which have been made just in America, like how for people being thrown in jail for minor offenses, “San Antonio is one of many jurisdictions to announce that, to keep jails from being crowded with sick citizens, they’ll stop doing that. Why were they doing it in the first place?” Or how “Trump has instructed government agencies who administer loans to waive interest accrual for the duration of the crisis. But why on earth is our government charging its own citizens interest anyway?”


Sunday, March 22, 2020

The Fairness Insanity

When Micheal Hudson advises a debt jubilee as a remedy for our economic troubles in, one commenter says this:

Where’s the justice in that? I have been living frugally and avoiding debt. So essentially I would (and should?) lose out because I was not willing to join the debt-fuelled spending and bubble creation?

Stadist succinctly states an all-too-human reaction: any debt forgiveness is not just. It's not fair that those who behaved well, staying out of debt, get no special accommodation, while the (profligate, lazy, incompetent, etc.) debtors get the bailout.

The demand for fairness and/or balance haunts humanity throughout its history. "An eye for an eye and a tooth for a tooth" is the human notion of justice. It's almost economic in its balance. This is in the Code of Hammurabi, and predates its repetition in Leviticus.

Yet, as Gandhi used to say "An eye for an eye makes the whole world blind." So fairness can lead us to cut of our noses to spite our faces. In fact I've read about one man declining treatment even though he was eligible for Medicare to cure what ailed him. Why? Because some of the undeserving might get Medicare too. Eminently fair, but at what cost!

And it turns out "fairness" as we conceive It is just part of a larger narrative in which we calculate our just desserts for our actions and is part of a very old conversation that plagued Jesus, for one example.  Jesus condemned the Pharisees for their "salvation by works" approach to good behavior ("Salvation by grace [gift]" is orthodox Christianity).

Taking credit for works let the Pharisees justify their social position, but it also encouraged arrogance and trivialized genuine fairness or justice. Jesus condemned the Pharisees for debating about whether to tithe kitchen herbs while ignoring larger matters. "Straining at a gnat while swallowing a camel" is the description he uses (Matthew 23).

Following the rules as a standard for deserving good things, while a natural inclination, does not necessarily lead to sensible conclusions, or even better behavior, either. For example, those who are wealthy were often "born on third base," but just as often want to act as though they hit a triple. Having good things, even as a birthright, does not mean they were deserved. After all, did you deserve your state of health when you were born?

The world's religious traditions often counsel getting outside the standard narrative we use to guide our path in this world, including our sense of fairness. Meditation is one way to step outside such narratives.

To get their followers to think outside the box, the Zen Buddhists have "koans"...riddles that are nonsense in conventional terms. "What is the sound of one hand clapping?" is one example. Or "What color is the wind?" Or "Not that! Not that!" (and believe me, it's not "Not that!").

In the spirit of koans, Jesus had parables about how the undeserving were rewarded. Perhaps the most famous is the prodigal son. The good brother, who stayed home, followed the rules, and didn't squander his fortune on partying didn't get the feast, the profligate prodigal did. In another parable, the workmen who toiled in the vineyard all day got the same pay as those who worked only the last bit of the day.

The message: compassion does not respect fairness. Be compassionate.

I'll add that fairness is among the weakest links in the human software we use to navigate our path in this world. There are other weak links too. For example refined sugar never triggers the "I'm full" sensation when you consume it. Never! You can suck on "Big Gulp" drinks all day and never feel the moment you have consumed too many calories--and the soda companies take advantage of that.

Sugar takes advantage of something called "supernormal stimulus." Humans and other species have bottomless pits of tolerance for these things. Apparently peahens are so intoxicated by the peacock's large tail feather display that they will cozy up to artificial displays that are much larger than real birds can produce, even when real peacocks are present.

One might even say this supernormal toleration extends to all fo the seven deadly "sins" (pride, wrath, greed, gluttony, envy, sloth, lust), and forms one of the foundations of addictive behavior. So...can we have too much "fairness," or "justice"? Perhaps.

In its pursuit of "fairness," the U.S. currently incarcerates more people than any other nation. This is true in absolute or per-capita numbers. Per-capita, the U.S. incarcerates five times the world average, roughly seven times more than the demographically identical Canadians. So is Canadian crime much higher than U.S. crime? No. About the same. If fairness worked in this instance, Canadians would be overrun with criminals.

But doesn't incarceration at least "scare addicts straight." No. Medical treatment ("rehab") has far better outcomes, and is about one seventh as expensive as incarceration.

Criminalizing things does not solve crimes, either. Roughly 80% of crime in the U.S. is unsolved. It's better, cheaper, and more effective to make a sympathetic society. That's the point of the social safety nets.

Yet when it comes to spending money, social safety nets that might make society more sympathetic are the first proposed for cuts. Why? "Labor discipline." Draconian "justice" reminds people that they had better take those crappy jobs, or suffer the indignities of poverty, perhaps even homelessness or starvation. And if you're extra ornery, we'll incarcerate you.

So that's the story of fairness. Like most superstimuli, fairness is appealing, even attractive, just as the ancient portrait of evil describes. Lucifer was the most beautiful of angels. Satan was the father of lies, so deception is the default. Evil doesn't appear as some little red demon with a pitchfork. It's far more likely to be a respectable thought ("fairness!") or a respected member of the community, say a priest with a taste for little boys or girls. Evil is not repulsive. It's seductive.

We won't get out of our current social situation until enough of the human race realizes that.

Saturday, March 14, 2020

Hospital Bed Count

Thursday, March 12, 2020

The Last Heterodox Economics Class

CSUS Renaissance has canceled what would be the last class of Heterodox Economics (Modern Money Theory, or MMT), and just about all their other activities, at least for the time being. Some good news: heat, like Sacramento's apparently interferes with the corona we have summer to look forward to.

What follows is the presentation for that last class.

In previous classes, we learned that sovereign, fiat currency creators with a floating exchange rate are not fiscally constrained. Theoretically, [hyper]inflation might constrain such money creators, but hyperinflation historically originates with shortages rather than central banks printing too much currency. This is often true even for milder inflationary episodes; the U.S. inflation of the '70s began after oil shortages.

MMT also reminds us that your bank account is your asset, but to the bank, it's a liability. That's more double-entry bookkeeping than economics, really. Checks essentially assign a portion of the bank's liability to the payee.

Dollars are just checks drawn on the Federal Reserve ("The Fed," our central bank) made out to cash in fixed amounts, and they appear on the Fed's books as a liability. Dollars, not just bonds or T-Bills, are part of national 'debt.' Reducing that debt would impair the dollar financial assets, or savings, of the economy. Reducing national 'debt' significantly always lead to waves of asset forfeitures and foreclosures. So the Clinton surplus was followed by the Great Recession, in which eight million people lost their homes. The Hoover surplus of 1929 was followed by the Great Depression. When Andrew Jackson's administration paid off all national 'debt' in 1835 we got the Panic of 1837.

If dollars are really IOUs, assigning the Fed's liability, what are we owed for our dollars? Answer: A dollar's worth of relief from taxes. MMT economists say "taxes drive money," making it valuable.

However, tax revenue does not provision government programs. Ask yourself: Where would people get the money to pay taxes if government didn't spend the dollars out into the economy first. A monetary sovereign government with a fiat currency and a floating exchange rate doesn't have to wait for tax revenue to spend; in fact it can't, it must spend before it can expect dollars to return to it in tax revenue.

Since the U.S. makes a fiat currency, has a floating exchange rate, and is a monetary sovereign, Social Security, or any other government program, won't "run out" of money any more than the scorekeeper at the ballgame can run out of points. You may have heard Trump is entertaining the idea of a payroll tax reduction. If conventional, orthodox economics explanations win the "debate," this will be an excuse for an entirely unnecessary move to cut benefits--and even Trump's "opponents" are concerned the U.S. will run out of money. Just remember: taxes do not provision federal government programs, and you'll accept no excuses.

Ralph Nader reports conversation with his father in which he was trying to persuade his father to promote a third party. His father replied: "I'd settle for a second." As long as the "debate" is between two sides that essentially agree taxes pay for federal programs, the outcome is certain: austerity.

So...joining the hue and cry to reduce national 'debt' is roughly like joining a mob confronting your bank manager to demand that he reduce the bank's debt (i.e. the size of your account). It's not very sensible, yet it's promoted with quasi-religious devotion all over the media landscape. It's supposedly "Fiscal Responsibility" and it excuses all kinds of cutbacks.

MMT's description of (private) banking points out that banks are not constrained by deposits when they make loans. They are not, as orthodox economics says, financial intermediaries between patient and impatient consumers--savers and borrowers, respectively. The Bank of England published a report validating the MMT description, too. When banks extend credit with loans they create deposits, in effect creating money.

By permitting credit creation from private banks, the Fed outsources a large part of currency production. That this is so also makes obvious how the Fed must regulate banks.  Among other things, if they were unregulated, banks might issue money to inflate the value of their own stock, entering into the realm of Ponzi capitalism.

Here's a specific example of a bank creating money with a loan: When a home buyer borrows to buy a house, the IOU (the note) the buyer gives the lender lets the lender open a checking account for the amount borrowed, creating the money. Opening a checking account is a computer transaction, and the bank simply types an amount in its bookkeeping record.

Then the buyer writes a check to the house seller--actually to the title company, who passes the check on after deducting expenses associated with the sale--and buys the house. If the seller banks at the same bank, the bank's computers move the balance from the buyer's checking account to the seller's when the seller cashes the check.

The checking account is the bank's liability, while the IOU (note) is the bank's asset (vice-versa for the buyer). Notice that this loan transaction never mentions the depositors' bank's deposits, or the bank reserves on deposit with the Fed.

If the seller banks elsewhere, then the Fed adjusts balances between banks, lending reserves to whichever bank comes up short (and meets the Fed's regulatory/underwriting standards). So banks are not financial intermediaries, and government spending doesn't "crowd out" alternative, private sector financing.

About recent news:

To me, this class is about practical solutions to down-to-earth practical problems. It is not a discussion of abstract principles that have no current application. One prominent feature of orthodox economics is the way it justifies austerity by asserting government spending "crowds out" financing or resources otherwise available to the private sector. Now, with the coronavirus problem, we can see things promoting austerity produces. For example: Trump fired the CDC pandemic team to “save money.” if the Fed could actually run out of dollars.

What was the stock exchange's reaction to such policies? Answer: the market downturn triggered a down-limit halt to trading for the first time in two decades.

(From here): “The US is still in Keystone Kops mode. We don’t have remotely enough coronavirus tests being done. We have no idea when we will have enough test kits ready. No one is even talking about how to implement a system like the drive by tests in South Korea which is not only efficient but even more important, greatly reduces risks to patients and doctors versus having to show up in a waiting room.”

“The long-term outlook is now of drawn-out deflationary stagnation. We can see this from another amazing development — the drop in the 30-year yield to a negative level in real terms. In other words, its yield is less than the average inflation rate that can be derived from the inflation-linked bond market. Nothing like this has ever happened before."

Orthodox, neoclassical economics also promotes monetarist (interest rate) solutions to such problems, rather than the fiscal solutions (spending money) recommended by MMT--although even spending money is not going to instantly reconstitute impaired global supply chains, or instantly produce coronavirus test kits.

Government's monetarist interest manipulations are trying to encourage the market to keep bond prices high (meaning lower interest rates), and make plenty of reserves available to banks. This saves the financial sector, but does precious little to make people healthier. Banks who have lots of reserves will not make good borrowers appear. It's more like "pushing a  string"--an ineffective solution.

These guys appear to actually believe the symbols of wealth (dollars) are actual wealth (real options). Perhaps they think it's OK to risk lives because people can take those dollars with them, post-mortem. You may remember Reverend Ike, a southern preacher of the gospel of prosperity, who told his television audience that he would guarantee they could take 10% of any donations with them when they died.

Meanwhile, in practical terms, the U.S. is in unprecedented times, and the policies recommended by orthodox, conventional economics will not likely solve these problems.

Now to resume the class powerpoint with a discussion of public banking.

[Slide 58]

Public Banking

What could we do with the money if a public bank made more for … the public realm?

An estimated 97% of our money comes from banks extending credit. Public Banks could make money for entities that are otherwise currency users (rather than currency creators).

This could conserve local resources--the cost of infrastructure is typically half financing--and recycle money into worthy local projects that do not offer the private profit private banks demand. Some examples:

  • Infrastructure: half the cost of large projects (Bay Bridge, etc.) is financing.
  • Laguna West - Transit-Oriented Development crippled by restricted lending
  • Housing First (Homes for the homeless)
  • Renewables for Public Offices
  • World War II - 50% of the economy. Green New Deal - 5% of the economy.

Note: MMT founder, Warren Mosler, is not enthusiastic about public banks - they are not a panacea

Now that we know banks can create money to lend, why not employ them for public purpose? There's a long history of doing just that in the U.S. FDR used Herbert Hoover's Reconstruction Finance Corporation (RFC) to fund infrastructure investments like the Tennessee Valley Authority, and the first Bay Bridge. Unfortunately, Eisenhower terminated the RFC, and even public works projects like the Bay Bridge earthquake retrofit are currently underwritten by private banks--in the case of the Bay Bridge, and the Kings' stadium subsidy, both were underwritten  by Goldman Sachs.

The state of North Dakota has had a state bank for more than a century. It helped the state weather the Global Financial Crisis in much better shape than many others. Its profits contribute to the North Dakota budget, and its recent rate of profit exceed even Goldman Sachs'.

The public realm, potentially financed by public banks, has been under attack for generations now, so such financing might help it recover. Even the design of our cities demonstrates this. Suburbia omits public squares now, substituting private malls for the gathering places that once dignfied our landscape. Parks used to be important, central properties. Now the suburbs puts them in leftover floodplain. See McKinley Park, the most valuable (per square foot) real estate in the region that reminds us of the power of the public realm to create value.

Developer Phil Angiledes courageously attempted to duplicate the success of that McKinley Park neighborhood with his Laguna West development. I say "courageous" because he already had the entitlements to develop conventional suburban sprawl when he applied to change the design--a big risk.

Pedestrian-friendly, mixed use (commerce and offices among the residences) neighborhoods like Laguna West require enough people to patronize neighborhood commerce and transit, otherwise those things are not economically viable. Thanks to (private) bank underwriting restrictions at the time, builders in Laguna West could not get construction loans to build the apartments that appeared in the original design, and were forced to build lower-density housing. So Laguna West remains a half-baked attempt at reviving traditional neighborhood design like McKinley Park, with not quite enough people to make neighborhood commerce, transit and offices thrive economically.

Land use is also an important part of transit success. Cities that stress the public realm, providing usable public sidewalks encourage the pedestrian patrons of transit to wak to the stops. Suburbia often has inadequate, interrupted sidewalks and wide intersections that discourage pedestrians from even crossing the street, much less going to the bus stop. (You can read more about this, and see illustrations of suburb's transit here.)

In addition to sidewalk design, density counts. A study of East Bay neighborhoods says 11 dwelling units per acre (a little more than duplexes) is the minimum residential density for economically successful transit or neighborhood commerce. Sacramento's sprawl forecloses the possibility of viable transit when it is (as typical) less compact.

One bit of good news: California now requires "Complete Streets" for new development, and requires development studies for planning that focus on vehicle miles traveled, rather than the previous objective: smooth traffic flow. The "Complete" street design should give pedestrians better access to whatever is within a walk. Mixed use would provide destinations. Studies disclose neighborhoods with both pedestrian friendly streets and mixed use typically cut vehicle miles traveled in half compared to conventional suburban development ("sprawl").

The Housing First principles discovered that police and emergency room time is actually more expensive than providing the homeless with shelter. California actually does have a public infrastructure bank, and could fund homeless solutions, with the right kind of underwriting.

After hearing about Housing First, I called the California infrastructure bank to see whether they would make loans based on savings in police and emergency room time. They replied that their underwriting would not let them make loans based on savings. Their board already turned down public agencies' requests to build solar over their parking based on the utility savings. For some reason, the California Infrastructure bank could not underwrite the Bay Bridge revamp, so Goldman Sachs got that loan, and Wall Street got the interest.

Public banks could solve Laguna West's apartment loan problem, provide the funding for Housing First, and revitalize the public realm. Such a bank could even provide lines of credit that would eliminate the need for the reserves the state keeps for emergencies.

With public banking, the interest expense for infrastructure spending might even be recycled rather than being sent to Wall Street. Currently several states throughout the U.S. and several communities throughout California are planning to start public banks.

As far as I know, no Sacramento public bank is in the works. In fact, in my experience, local public meetings seldom mention costs and consequences when requesting public input about policy options, so the critical "follow the money" step remains to be taken.

[Slide 59]

Course Quiz

1. Just as bank’s debt is the same as the assets of the depositors, so National ‘Debt’ is … [a] Zero [b] a bad thing [c] the dollar financial assets of the population.
2. How about getting rid of FICA taxes altogether? Would that impair government’s ability to pay Social Security? T/F
3. Would a job guarantee cause inflation? Deflation? No change?
4. Is the money printing the source of inflation, or does inflation typically stem from some shortage?

(Note: the U.S. economy is roughly at 77.5% of capacity - says our central bank, the Federal Reserve)

5. If Yoshi wants to triple the purchases of dog toys, and the resources are there to fulfill that increased demand, would Yoshiland have to raise taxes?
6. How could we pay for student debt forgiveness, or Medicare for all?
7. Is Nancy Pelosi’s “PayGo” policy (all new programs require more taxes) founded on real concerns, or is it misdirection?
8. Who profits from austerity? (Hint: see the illustration in the top right corner of this slide)
9. If private debts inevitably exceed the real economy’s means of payment, how should we treat debtors who can’t pay?
(Debt peonage? Bankruptcy? Jubilees? Something else? - and which answer impairs the economy least?)
10. The government decides to reduce national debt. Is it a good time to invest in the stock market?

1. c,
2. F,
3. No inflation. Who else is bidding up the price of the unemployed? By definition no one.
4. Inflation typically originates with a shortage. Immediately after peak oil production in 1971 the Arabs used the "oil weapon" and reduced their production (1973), and the U.S. was unable to produce its way out of the shortfall. The 1971 price of oil: $1.75/bbl. It went all the way to $42/bbl in 1982--about the high range of current oil prices, after you adjust for inflation. In the '80s, the price of oil came down as Alaska's North Slope production came online.
5. No.
6. A trick question: How would we pay for a healthcare system half as expensive as what we're already paying? As for student debt: Taxes are unnecessary even when student debt is what needs to be paid. Just removing the student loan liability from the public (and the asset from government) would increase national 'debt,' but not bring it to even approximately the level of Japanese debt's ratio to its GDP.
7. Misdirection
8. Vultures can pick up assets on the cheap!
9. Jubilees impair the economy least. Note: Modern debt jubilees were declared for the defeated Axis nations after World War II. Unfortunately, the Allies also kept the debts in place for in our allies in Vietnam...which is why the Vietnamese continued to fight after the U.S. did not keep its treaty obligation to hold a plebiscite to unify the country.
   Incidentally, Warren Mosler (an MMT founder) consults with the Italian government, in fact he has filled stadiums in Italy, and this is today's Reuters headline: Payments on mortgages to be suspended across Italy after coronavirus outbreak. Coincidence?
10. No! Any solutions above are all going to require larger national debt, no matter if they are less-than-optimum solutions. Incidentally, Trump is entertaining a payroll tax cut (finally!). The downside: orthodox economics may provide the excuse that this would make Social Security less financially viable, even though we know MMT would strongly deny that.

[Slide 60]

Changing the Narrative

Make no mistake, maintaining narrative control is the single highest priority of the establishment. Not keeping taxes down, not keeping Bernie out of office, not even keeping the wars going. Without narrative control, their entire empire will crumble. Never lose sight of this….
If you can control what happens, you’ll have power until the public gets sick of your bullshit and removes you. If you can control what the public thinks about what happens, you’ll have
power forever
- Caitlin Johnstone.

This statement makes sense of the extremely harsh treatment for those who interrupt the narrative like Julian Assange and Chelsea Manning.

George Monbiot's TED talk (above) covers this very well, and offers a positive alternative narrative.

To me, MMT is critical path information if we want to understand what is going on, and perhaps revise the narrative to get effective public policy to address systemic problems. Remember the 10 dogs sent to retrieve only 9 bones? Individual action is at least limited in providing solutions to systemic problems, if not entirely ineffective.

We cannot solve many of society's systemic problems--and public health is one--without collective action. The opponents of collective action are spending their time and energy opposing collective action, and certainly MMT. (See MMT is a Political Problem for a nice summary). In fact, the Kochs explicitly reject any "collectivism" (their word).

The alternative they offer is the libertarian philosophy that only individuals can do anything, and it's "every man for himself." They may even deny a collective even exists. Margaret Thatcher once said "There is no such thing as 'society,' only individuals and families." Roughly like saying you have no body, only cells and organs. My bet is that the Kochs do not even sew their own clothes. So...denial is not just a river in Egypt.

Libertarians like to say they want as little regulation and government meddling in markets as possible. All true...until it comes to property rights. Then strict enforcement of the absolute rights of property owners is what libertarians demand. The hundreds of millions the Kochs have paid in EPA fines testifies to their belief that they can dump anything toxic on their refinery property, even if it floats downstream, or seeps into the water table. It's their property, so they have the right!

Notice how the myth that barter evolved into money and credit economies plays into this narrative, too. No state is necessary when Robinson Crusoe and Friday managed their "market." Historically, however, states are essential for credit, money and economic markets, even from the period of prehistory that predates writing the temple/palace complex managed credit, and those clay tablets the archaeologists dug up validate that. Historically, there are plenty of non-state societies, but they never have economic markets.

So when it comes ot markets, government isn't "meddling"-- although there's certainly room for disagreement about how much and what kind of regulation it must do. States are essential creators and managers of markets, if only to regulate what constitutes counterfeit currency, and what kind of contracts are enforceable.

How do states make markets? Suppose King Yoshi wants to employ a thousand soldiers. Housing, feeding, training, arming etc. all these men is an enormous logistical problem. To do this, and create a market, King Yoshi pays them in $Yoshibucks, then taxes the entire population--payable only in $Yoshibucks. Now people try to serve the needs of the soldiers so they can get the means to pay the taxes, making a market that serves both soldiers and themselves.

Historically, there has never been a libertarian state or even a libertarian market, but the recent invention of the "Dark Internet" makes a virtual libertarian market possible. The Dark Internet does this by encrypting all communication so thoroughly no one can identify parties to a transaction. As you might imagine, criminals gravitated to buying and selling on the Dark Internet. Apparently, you could buy anything from drugs to assassinations there.

Also, unsurprisingly, the criminals would cheat each other, paying with counterfeit, or selling shoddy goods. So one inevitable libertarian outcome was the emergence of websites with "brands" who reassured customers they sold goods that were genuine. One such website was "The Silk Road" run by Ross Ulbricht (AKA "Dread Pirate Roberts"). The FBI arrested Ulbricht for attempting to purchase the assassination of a supplier who cheated him. Before that, he was apparently making $40 million a year. Ulbricht said his belief in libertarianism permitted this kind of enterprise, and his $40 million  demonstrated that he was doing the right thing.

To me, this story means libertarianism inevitably leads to a kind of feudalism. The King, or Ulbricht, or even Don Corleone (the Godfather), doesn't require due process to execute someone who offends them. It's primitive, vengeful, and, given how even our jury trials have jailed innocent men, far more prone to error. (See this for the story of Ulbricht and the Dark Internet.)

OK, that's enough for now. Thanks for attending. The class has taught me something too. I hope it awakened some interest in some less-publicized public policy options, and has provided you with an alterantive narrative about how money can serve mankind, rather than the vice-versa.

Tuesday, March 10, 2020

Curitiba Stories

As troubling as present problems are, it's encouraging to hear people with much greater limitations than the U.S. are handling them gracefully and well. The following are some stories about just such a place: Curitiba Brazil, a city of nearly two million south and west of Sao Paulo.

Curitiba's mayor, Jaime Lerner, was educated as an architect, and really took the position only because a professional politician in his family couldn't by accident!


Curitiba is poor, and has nearby favelas that house the poorest of its citizens. These are like permanent homeless encampments where the poor settle. As is true in the U.S, sanitation is difficult for the favelas. The access roads and footpaths are too narrow to permit truck access, so the detritus of these communities often makes them unsafe and unsanitary.

In the U.S. the public policy solution is to evict the homeless, and send them walking down the road without their meager possessions, which are often discarded.

Lerner's solution: Sending trucks with bags of food and transit passes. The favela dwellers trade a bag of garbage for a transit pass or bag of food, and the favela gets cleaner.


Poor Curitibans can count on the City to provide job training and apprenticeship programs.

Parks and Flooding

Rather than develop floodplain, Curitiba bought it and turned it into a park. Now it has among the world's highest per-capita parkland acreage. 

Curitiba is too poor to afford mowing this area, however. Enter the municipal sheep. The city sells their wool to fund childrens' programs.


Despite having favelas, Curitiba is a big city...
...and transportation was a problem. The City is big enough that Brazil's federal government gave Curitiba a grant to implement a subway.

Subways are very expensive, though. They cost about ten times more than light rail, which, in turn, costs about ten times more than bus service, even with dedicated busways.

Lerner's team decided to get one hundred times as much transportation as subways would offer for their money. The problem with bus transit, however, is that you need a driver for each bus. Rail lets you add cars without that driver's salary.

Enter Speedybus, "bus rapid transit"... dedicated busways oversized buses...
Notice that the bus stop/station is an enclosed area, like you might encounter with rail transportation. The bus itself is three buses long, attached with accordion-folded material, so one driver can transport nearly 300 people. The design capacity is 270, but Lerner says Curitibans are "can do" people.

The bus stops are owned by the City, and the City regulates fares, but the buses are privately owned. This system carries millions of passengers, and needs no subsidy.

The passenger-mile cost for fully used bus transit is about one-eighth the cost of single-occupant autos. Curitiba's is one of the most successful mass transit solutions in the world.

Harbor Cleanup

Curitiba is near a harbor which was full of dumped junk. Cleaning it up (so fishing fleets could fish) was going to be very expensive. Instead, the city employed the fishermen in the off season to cast their nets in the harbor and pull up the junk. They got paid per pound, like they did for fish.

Jaime Lerner appeared in Sacramento a few years ago, a guest of "Valley Vision," where he told some of these stories. You can also read them in Natural Capitalism by Amory Lovins and Paul Hawken, and in Bill McGibbon's Hope, Human and Wild.

After he was mayor for a few terms, Lerner became governor of the state (Parana) where Curitiba is located. 

Wednesday, March 4, 2020

The correct election response

COVID-19 News

Green Jobs Are the Answer to the Coronavirus Recession [New Republic, Naked Capitalism 3-19-20] Franklin Roosevelt used the Public Works ...