The Jail System Master Plan

Jail System Master Plan
© by Mark Dempsey

Sacramento County is debating what to do with its jail and the accompanying staff–the punishment bureaucracy. One of the motivations for this inquiry is that the County lost the “Mays Decision,” a court case that requires the jail to stop mistreating prisoners.

Meanwhile, 60-80% of the prisoners in County Jail now are not convicted of anything, except being unable to pay bail. In Sacramento County, you’re not innocent until proven guilty; you’re guilty until proven wealthy.

So…is the County’s Master Plan discussing alternatives to incarceration like no cash bail, like Washington, D.C. and Illinois already have? Like the rest of the world (except the Philippines)? Not much, unless the public mentions these alternatives. It’s worth remembering that the recent California Kowalczyk court decision says setting unaffordable bail as a means of detaining prisoners for longer is illegal. Oddly, the Master Planners dismissed that decision as insignificant when mentioned, even though implementing it might reduce the jail population significantly, and free up the space the planners say is in short supply.

The “summary” document–58 pages, a truly exhausting “summary”--provided, as the footer of each page says, “On Advice of Counsel”--begins with acknowledgements of the existing punishment bureaucracy’s contribution to the debate, and continues, discussing a physical expansion of the main jail, stating that their study “reflected significant gaps in space needs for programs and support.”

Could freeing 60-80% of the space in the jail by releasing those incarcerated with unaffordable bail fill those “gaps in space needs”? Even the Master Plan acknowledges facility improvements are secondary (“Although improved facilities are important, the primary measure of compliance with the Consent Decree remains the ability to provide timely, clinically responsive services through effective staffing, operations, policies, and procedures.”) Yet architecture and new construction remain prominent topics of conversation in this public outreach.

Sacramento is not really an outlier in the US. The US incarcerates at roughly five times the world’s per-capita average, seven times more than Canada. Canada also has lower crime rates than the US.

Meanwhile, the US has more than half a million medical bankruptcies annually, and Canada has Medicare for all. Could expanding social programs reduce crime more effectively and cheaply than building more cages? After all, Canada’s Medicare-for-all is roughly half as expensive as the US’ healthcare system, and provides better outcomes. A World Health Organization study comparing different countries’ healthcare systems (life expectancy, infant mortality, patient satisfaction, etc.) ranks the US 37th, between Costa Rica and Slovenia. The Sacramento Bee said it’s as though we have the healthcare of Costa Rica and pay six times more for the privilege.

The Mays decision supposedly compelling this conversation does not request a jail expansion. Yet, the relentless focus of this “Master Plan” is to expand facilities in the most expensive possible location (downtown Sacramento), not the cheaper-to-expand Los Rios location. The summary seldom talks about changing policies or personnel–although it does mention the difficulty in hiring mental health staff.

Not mentioned at all: architectural firms specializing in jail construction tend to increase their business by sponsoring studies recommending expansions. Says one article, “All over the country, architecture firms make the case for bigger jails — then get hired to design them.” This kind of self-dealing is the hallmark of big projects that are poorly done and over budget, says Bent Flyvbjerg, one of the world’s leading experts on such construction.

The Plan’s summary mentions that there is a chance for public input in their process. The first (virtual) meeting allowed live questions for the assembled panel. These apparently proved inconvenient, so the next virtual meeting only allows questions typed in the Zoom meeting’s chat–a way to limit participation, or spontaneity, but given the County’s intransigence in responding to popular requests, and its willingness to suppress dissent generally, it’s not a big surprise.

The County enjoys its share of the largest homeless population since the Great Depression, and isn’t above criminalizing homelessness, either, which studies show worsens conditions for the poor. That’s right, civic leaders will tell you the homeless are “mentally ill,” and there’s some understandable PTSD that accompanies homelessness, but studies say the majority of homeless are just too poor to afford rent. In one survey, 85% of the unhoused questioned said they would rent a place if they could afford it.

The next public input session is scheduled for November 19, 2026, at 5 PM. Here is the link to register. Meanwhile, the state of prisoners remains deplorable. One editorial example about US prisons generally: It’s Halloween, But the Real Horror Is the US Prison System. 

In this writer’s opinion, the real point of our current incarceration policies isn’t justice; it’s “labor discipline.” Labor discipline sends the message that “You had better take whatever crappy job is on offer, or suffer the indignities of poverty, even homelessness or starvation, and if you’re rebellious, we’ll put you in a cage.” That’s a message as old as capitalism.

---

Update: From the Sacramento News & Review / Sacramento Observer: Nov. 4:
Sacramento delays police reforms for audit that won’t examine discipline

Like the Pentagon, local police resist audits.
 

Canadian Police Admit the Obvious

 

SHOCKING! Winnipeg police acknowledged that enforcement doesn't address poverty, homelessness, mental health challenges or addiction. Resources do. You can arrest people, seize drugs and clear encampments, but you can't police away the conditions driving these crises. Housing, treatment, harm reduction and community support are essential to lasting public safety. We will never arrest our way out of problems that require investment in people. https://t.co/pCaxvm8w0K

— guyfelicella🇨🇦🍁 (@guyfelicella) November 8, 2026

Is Aid to Israel Cut? (Hint: It's politics as usual)

 

US is NOT cutting aid to Israel. Plan is to move it from State's budget--where the $ is formally classified as aid--to the Pentagon, where the $ is "cooperative" (but functions as aid). This is why $500M/yr for Israeli missile programs doesn't appear on foreignassistance dot gov

— Stephen Semler (@stephensemler) November 3, 2026

Economics, Climate ... & ... Learning from the Great Depression

 

William Nordhaus: Growth & Climate

The successor to Paul Samuelson’s text is (co-author) Nordhaus’s update. Samuelson's is the economics text I read in Econ 101. Nordhaus is a (Riksbank) Nobel winner for his work on the economic effects of climate change.

Excerpt:
 

But the business-as-usual baseline, against which costs of [climate related] action are measured, conveys a misleading message to policymakers that fossil fuels can be consumed in ever greater quantities without any negative consequences to growth itself.
 

Steve Keen, a heterodox economist, produced a blistering critique of IAMs and how they understate hugely the impact on global warming on economies and the planet. Keen says the IAM “assumed that empirical relationships derived from data on change in temperature and GDP between 1960 and 2014 can be extrapolated out to 2100—thus assuming that 3.2°C more of global warming won’t alter the climate! They have assumed that tipping points—critical features of the Earth’s climate such as the Greenland and West Antarctic icesheets, the Amazon rainforest, and the “Atlantic Meridional Overturning Circulation” which keeps Europe warm today—can be tipped with only minimal additional damage to GDP.”

The great merit of Nordhaus’ work is that he always tried to use empirical evidence to support his models; he was not just an arcane neoclassical micro theorist. However, what seriously weakened his contributions was his commitment to the unrealistic assumptions of neoclassical theory.


James Galbraith: What Can the Last Great Crash Say About the Next One? Oil, AI, and the Perils of Technological Revolution

This is a terrific article well worth reading in full. A few excerpts:

All life requires resources, which must be extracted from the environment, with a sufficient surplus so as to make it possible to work, develop, grow and reproduce. And this is no less true of any mechanical system, or of any economy. Access to resources requires energy, which comes in the first instance from sunlight, or from its stored forms, including wood, coal, oil, natural gas – as well as the nuclei of certain very heavy atoms. To get at the energy requires tools, which are built according to plans, and at increasing levels of complexity as technologies advance. But complexity is a two-edged sword. It permits ever-greater efficiency in the use of resources, thus ever-greater levels of production and the improvement in human life – but it induces fragility in the system as a whole. Once a system is built, it functions in a certain, predictable and predetermined way, so long as the conditions for which it was designed hold good. But those conditions may change. Simple systems are robust; complex ones are prone to major breakdowns and disasters.

Economic value arises because that which is necessary, or desired, is often scarce. And this is particularly true of goods or services that are newly created, imagined, or packaged in such a way as to appear to be new. Innovation is by definition recent, and by definition has a single originator. Innovation is usually achieved by introducing a new level of complexity, as well as other improvements of design or recombination of existing technical forms. During the window, however brief, when imitations are few, the originator enjoys a degree of market and monopoly power, enhancing the economic value associated with the scarcity of the innovation. This is the moment when fortunes can be made. And economic life is dominated by the search for fortune, arising from producing that which is new, better, or made more cheaply but just as well, than that which already exists.

These are the basic elements of what Jing Chen and I, in a small book published in 2025, have called “entropy economics.” Our goal was (and is) to bring economics into alignment with the understanding, now prevalent in every other field of human inquiry, of the second law of thermodynamics – the entropy law – which is the most fundamental law of nature. We believe that this is the key to understanding that there was, in fact, a precipitating technological event behind both the Great Crash and the Depression.

For mainstream (neoclassical) economics, technological change is a largely continuous process, with phases of acceleration and deceleration. It cannot make things worse. That is why mainstream economists are relentless techno-enthusiasts – they see the dynamism of capitalism as its principal justification, in the face of inequalities, environmental degradation, and the working population’s native suspicion of the capitalist class. Joseph Schumpeter, a conservative but definitely non-mainstream observer of the 1930s, took a much colder and more clear-eyed view, summed up in the phrase “creative destruction.” Schumpeter’s insight was that new technologies destroy older civilizations and ways of life, leading (he argued) to improvements for the survivors but not without severe costs for those invested in the previous systems and methods. Indeed for this reason peasant farmers and medieval guilds were by nature technologically conservative: they wanted to keep what they had and were not concerned about the great gains accruing later on to someone else. Schumpeter however, so far as I’m aware, did not specifically identify a new technology bridging the crucial moment in this story.

We believe that the precipitating event, in this instance, was the announcement of the discovery, in Texas, Oklahoma and California, of vast reserves of oil.

[My addition: Which triggered a destruction of the old economy based on coal. Also helpful in making things worse: Coolidge and Hoover made national debt significantly smaller.]

 

 

 

Who controls bond interest?

 

Esto es rotundamente falso: el coste de la deuda pública no depende de los mercados, sino del banco central. Datos, no relatos. https://t.co/Mf6K8wij1O

— Eduardo Garzón (@edugaresp) November 2, 2026

English:
This is flatly false: the cost of public debt does not depend on the markets, but on the central bank. Data, not stories.
From the quoted Tweet: Escrivá warns of excessive public debt: "Markets may start to doubt and the situation could get complicated"

The domination of banks (UK edition)

 

Central banks have been handed independence and used it to become the unaccountable core of the system. This is what banking tyranny looks like , the literally domination of power by the banking elites taken to the point the country literally collapses . Liz Truss is right: they have grown megalomaniacal. The governor of the Bank of England can’t be sacked; a prime minister can. That is not a technical detail. It is the actual power arrangement. The mechanism and motivation is financialisation. It’s the core purpose of banking and in its current form it threatens the states existence . Basel rules force banks to hold far more capital against a factory loan than against a mortgage. Inflation targets treat rising house and land prices as “asset transfers,” not inflation, so rates never cool the boom. Credit is therefore created against the existing housing stock and financial assets, the renter class, while industrial capacity is starved. Bankers literally live in ivory towers so they don’t notice till late in the cycle . Workers’ wages are financialised into rents, mortgages and debt service. The West has been deindustrialised to the point it can no longer make what it needs. Bankers add no productive capacity to the society at all other than pulling forward production or asset inflation through debt . This is the Tindale Trap conceit : maintaining financial dominance together with a material conversion failure. This bifurcation literally leaves the state with no productive capacity to to maintain sovereign existence . Like draining blood you eventually get to weak to respond . Truss tried a growth agenda that cut against the orthodoxy. The Bank’s timing of gilt sales, the LDI structures it regulated, and the narrative that followed removed her. Independence was sold as insulation from politics. It has instead insulated a credit-allocation regime that privileges financialisation over production and protects itself against elected challenge. The direction of credit is the mechanism, and the political outcome is exactly what Truss is pointing to. We live under a global banking dictatorship

— 🇦🇺Craig Tindale (@ctindale) October 29, 2026

Who is really to blame?

 

“Russian interference” is thisclose to topping French pop charts! https://t.co/F1i3VuicmF

— Margarita Simonyan (@M_Simonyan) October 30, 2026

Productive and Unproductive "Lending" (Banks don't lend!!!)

 

🚨Brilliant interview! 💸💰💸💰💸💰💸 🚨How do banks create money ? 💸💰💸💰💸💰💸 🚨Prof Werner is incomparable. In the 5000 yr history of banking no-one has ever done an imperical study of banking to show where the money comes from- until now. Step up the rock star economist Professor Richard Werner. His amazing qualifications and held positions makes the eye water. He is truly the authority on this subject. Banks are thought of as deposit taking entities who lend money - but that is just wrong. His assessment - Banks dont lend money but they misrepresent (lie) to their customers and say that they do.

— Ignorance, the root and stem of all evil (@ivan_8848) October 26, 2026

Debunking "More Cops is Safer" / And Sacramento Fails to Hold Police Accountable

Alec Karakatsanis debunks Malcolm Gladwell’s plea for even more police.

Why is Everyone Lying?

Excerpt:

Promoting ineffective policies that expand corporate-government surveillance and violence—and then telling people it’s good for them—falls well outside the bounds of reasonable massaging of “messaging.” Because once people on the left start repeating the fascist mantra that 2+2=5—in this case that more authoritarian policies, profitable surveillance, militarized policing, targeting of immigrants, etc. will create a safer and better society—it will become difficult or impossible to dislodge that framework in the future. That’s true not only from a communications perspective, but also because that same police and surveillance infrastructure will be used to hobble or eliminate the left in the meantime. 

Update: Lee Fang debunks Gladwell too...

Excerpt:

And then his final point is that he says preventing violence matters more than responding after. Well, that is true. But all the studies that have been done on preventing violence have shown that what prevents violence the most is the things that mostly police don’t do. It’s things like keeping youth in school or, when they’re out of school, giving them programs to do—all of those things that are not policing.  

 

...and locally: 

Sacramento Decreases its Police Oversight/Accountability 

Excerpt:

When the county grand jury concluded in June that the Sacramento Community Police Review Commission had become largely “window dressing” and recommended reforms to strengthen civilian oversight, City Hall rejected or disputed most findings when approving Mayor Kevin McCarty’s response Sept. 15. The response treated grand jury recommendations no differently than those of the review commission itself.

Of 178 recommendations submitted by the commission since 2016, the Sacramento Police Department voluntarily implemented 10 and the council formally approved one, according to the grand jury.

Nothing has prevented the city from taking up a recommendation from its own police review commission, voting on it or explaining publicly why it would not.

The grand jury report arrived nearly two years into McCarty’s tenure amid a systematic dismantling of Sacramento’s police oversight infrastructure.

The mayor was asked for his vision of police accountability and his response to critics who say civilian oversight has moved in the wrong direction during his time as mayor.

McCarty instead detailed the commission’s current authority and stressed that it operates with transparency.

“We are working to continue improving the committee’s efficacy, to strengthen commissioner training, and to better leverage existing public engagement tools,” McCarty finished. He did not acknowledge changes to both the Office of Policy Safety Accountability (OPSA) and the commission since he took office.


Half of the commission’s members have been replaced over the past two years. One persistent police critic was replaced by the mother of an officer, and McCarty proposed allowing former law enforcement officers to serve on the civilian panel.

Meanwhile, Dr. LaTesha Watson, longtime director of the OPSA, departed under a roughly $271,000 separation agreement, and the office has since lost critical positions to budget cuts.

OPSA provides independent civilian oversight of the Sacramento Police Department and Sacramento Fire Department, investigating officer-involved shootings and reviewing misconduct complaints.

....

[Conclusion]

Since 2025, key leaders have been replaced, oversight staff eliminated, and major findings by the grand jury rejected or disputed.

Sacramento spent years building a civilian police accountability system. Under McCarty and this City Council, much of what was built has been systematically dismantled.

 

 

Why Apartments Deteriorate When Interest Rates Rise

If your landlord keeps ignoring a leak in your apartment, there's a decent chance it's on purpose. For a lot of owners right now, paying to fix it just hands money to their bank. An exec who oversees 150,000 apartments says buildings are falling apart fast because of it. Here's how a landlord ends up there. Back in 2021, investors were paying crazy prices for apartments. A $100 million building might only bring in about $3.8 million a year after expenses, and people paid it anyway because money was basically free. The buyer puts down $30 million, borrows $70 million at around 3% on a loan whose rate moves with the Fed, and pays about $2.1 million a year in interest. The building covers that almost twice over and everybody feels like a genius. Then the Fed jacked rates up more than 5 points in about a year and a half. Now buyers want something like a 5.5% return on that same building. Same $3.8 million in income, but at 5.5% the building's only worth about $69 million. And the owner still owes $70 million. So the $30 million they put in is gone, and not one tenant moved out. It gets worse because the loan floats. The interest bill is now over $4 million a year on $3.8 million of income, and rents in Phoenix, Denver and Austin are down 5 to 6% since 2023. Every month the owner has to pick. Write a check out of pocket to cover the hole, or stop spending money on the building. Economists have had a name for this since 1977. Stewart Myers called it debt overhang. When you owe more than something is worth, any money you put into it makes it more valuable for whoever ends up owning it, and if the bank forecloses, that's the bank. Spend $500,000 on a new roof and you've basically handed the bank $500,000. So a lot of owners just sit on their cash and let the leak become water damage, then mold, then a building nobody can live in. The bank is doing the same math from the other side. If it forecloses, it gets a $69 million building with mold in the walls and has to eat the loss right now. If it extends the loan, it can keep carrying it near full value and hope rates come down. Lenders extended a record $384 billion in commercial real estate loans heading into 2025. The exec says some big-name funds haven't paid their mortgages in two or three years and their banks still haven't foreclosed. The official numbers are finally starting to show it. Freddie Mac's apartment loan delinquency rate is higher than it was at the 2011 peak, the worst in over 20 years. Apartment loans in commercial mortgage bonds hit 8.04% delinquent in September, up from 6.59% a year ago. Then on September 16 the Fed raised rates for the first time since 2023, and every one of those floating-rate loans got more expensive the next month. Asked how this all ends, the exec said there's a chance it's just "a decade of tolerable pain," and they're praying for that. Honestly, I get why. A slow decade lets the owner and the bank put off the loss for as long as they want. The people living in those buildings are stuck waiting it out, and the roof keeps leaking the whole time.

— Aakash Gupta (@aakashgupta) October 23, 2026

Here's the whole Tweet so you don't have to expand it:

 

If your landlord keeps ignoring a leak in your apartment, there's a decent chance it's on purpose. For a lot of owners right now, paying to fix it just hands money to their bank. An exec who oversees 150,000 apartments says buildings are falling apart fast because of it.

Here's how a landlord ends up there.

Back in 2021, investors were paying crazy prices for apartments. A $100 million building might only bring in about $3.8 million a year after expenses, and people paid it anyway because money was basically free. The buyer puts down $30 million, borrows $70 million at around 3% on a loan whose rate moves with the Fed, and pays about $2.1 million a year in interest. The building covers that almost twice over and everybody feels like a genius.



Then the Fed jacked rates up more than 5 points in about a year and a half. Now buyers want something like a 5.5% return on that same building. Same $3.8 million in income, but at 5.5% the building's only worth about $69 million. And the owner still owes $70 million.

So the $30 million they put in is gone, and not one tenant moved out. It gets worse because the loan floats. The interest bill is now over $4 million a year on $3.8 million of income, and rents in Phoenix, Denver and Austin are down 5 to 6% since 2023. Every month the owner has to pick. Write a check out of pocket to cover the hole, or stop spending money on the building.

Economists have had a name for this since 1977. Stewart Myers called it debt overhang. When you owe more than something is worth, any money you put into it makes it more valuable for whoever ends up owning it, and if the bank forecloses, that's the bank. Spend $500,000 on a new roof and you've basically handed the bank $500,000. So a lot of owners just sit on their cash and let the leak become water damage, then mold, then a building nobody can live in.

The bank is doing the same math from the other side. If it forecloses, it gets a $69 million building with mold in the walls and has to eat the loss right now. If it extends the loan, it can keep carrying it near full value and hope rates come down. Lenders extended a record $384 billion in commercial real estate loans heading into 2025. The exec says some big-name funds haven't paid their mortgages in two or three years and their banks still haven't foreclosed.

The official numbers are finally starting to show it. Freddie Mac's apartment loan delinquency rate is higher than it was at the 2011 peak, the worst in over 20 years. Apartment loans in commercial mortgage bonds hit 8.04% delinquent in September, up from 6.59% a year ago. Then on September 16 the Fed raised rates for the first time since 2023, and every one of those floating-rate loans got more expensive the next month.

Asked how this all ends, the exec said there's a chance it's just "a decade of tolerable pain," and they're praying for that. Honestly, I get why. A slow decade lets the owner and the bank put off the loss for as long as they want. The people living in those buildings are stuck waiting it out, and the roof keeps leaking the whole time.

Is Paris Safe?

 

After weeks of rioting in Paris no one was killed. Which technically means your child is safer attending a riot in Paris than a school in America.

— 𐙚𝒪𝓂𝑒𝓃𝒶♡💗 (@Debonperc) October 20, 2026

The Courtyard Urbanist Reminds Us Sprawl Costs Us All

(c) by Mark Dempsey 

The Courtyard Urbanist, blogger Alicia Pederson, decries the supposed savings of big-box retail with a detailed cost breakdown of how much storage space and delivery expense customers of big-box stores like Costco need to add when they live and shop in suburban sprawl. After all, Costco sells in such large quantities that buyers couldn't possibly consume them all right away, so they need storage space and must drive to pick up the goods.

Ms. Pederson compares the expenses demanded by sprawl big-box shopping to the city experience of walking to smaller stores. "In a city, you can live with a smaller kitchen, pantry, and refrigerator because the neighborhood itself functions as your pantry. Multiple grocers, bakeries, pharmacies, etc are storing things nearby until you need them. In the burbs, the stores are farther away, so households have to buy in bulk and store things at home."

A car is not optional in sprawl, either.  Sprawl dwellers must own, maintain, store and insure an automobile--typically one for each driving-age adult. Never mind shopping at the big box store, if people living in sprawl want to work, or go to school, or even go to the park, they typically must drive. 

Owning a car amounts to a regressive tax. How much? "Owning and operating a new vehicle costs $11,577 a year. A pickup costs about $6,402 a year more than a small sedan, and a medium SUV about $4,200 more (AAA, 2025)."

In addition to the vehicle and extra garage space for that second freezer, other costs include:

"1. The time. The average American shopping trip is 8 miles, as of 2017 (NHTS). People who shop for groceries on a given day spend 46 minutes in the store, not counting the drive (USDA ERS). [The fastest-growing demographic in the US is the over-85 set so one could add the assisted living bill to this figure because our elders are less able to drive, and cannot age in place.]

"2. The public bill. Across 17 studies, compact development costs 38 percent less than conventional suburban development in upfront roads, sewers, and water lines (Smart Growth America). Someone pays the difference, usually through local taxes and fees.

"3. What nobody prices. Social isolation, sedentary days, and a sparse community life. I won’t put numbers on these, but these social and health effects add color to the picture here."

I'd add that the US's epidemic of obesity, heart disease and diabetes could be connected to that sedentary lifestyle in which what passes for exercise is pressing the gas pedal and brake.

Unfortunately, Ms. Pederson believes "Land use (zoning) shapes ALL of this." 

If only that were true! True, zoning is part of what shapes land use, but the kind of development approved by local governments still typically needs construction and permanent financing. Banks are reluctant to lend on projects outside sprawl norms.

Sprawl itself has its roots in "white flight" from a racially integrated central city, and has been blessed by the government agencies that guide home loans--FNMA, GNMA, FHA, etc. As one planner says, "It's not 'Form follows function,' it's 'Form follows finance.'"

Another omission in Ms. Pederson's account is the enormous profit available from land speculation. When the speculators can buy outlying agricultural land for a few thousand dollars an acre, then increase that land's value 50 to 100 times more by persuading local government to permit development, then the incentive is to avoid compact, infill development, and try to make more edge city sprawl. The fact that the speculators get huge tax breaks on that profit--1031 exchanges--only adds to their fortunes.

In Germany, the developers must sell that outlying land to the local government at the ag land price, then repurchase it at the upzoned price. All of the egregious profit--the "unearned increment"--accrues to the public rather than some speculator's private fortune. And it shows, too. The arts budget for just the City of Berlin exceeds the National Endowment for the Arts for the entire US. 

In fairness, there are land speculators who have tried to benefit the County. Former State Treasurer Phil Angiledes had an approved sprawl map for his Laguna West development and he courageously set that aside for a pedestrian-friendly, mixed-use development designed by Peter Calthorpe. 

Such designs require density if they are to be financially viable. According to UC Berkeley planner Robert Cervero, they must build at least 11 units per acre to provide enough customers for neighborhood commerce and transit to become financially viable. 

Predictably, Calthorpe's design had some lower-density neighborhoods surrounding twenty-unit-per-acre two-story apartments at the development's core. Unfortunately, construction financing for apartments was not available when it was time to build, so the subtle sabotage of seven-to-the-acre homes prevailed. Commerce and transit limp along in Laguna West as a consequence.

As for zoning: in practice it often fails. In California, it's typically "use-based," and decided years before any building occurs. Designating parcels as residential, apartments, industrial or commercial relies on the best guess of what the market will demand years before that demand arrives. This means there's a cottage industry of attorneys and other consultants lobbying to change those premature zoning designations, and a host of land speculators ready to hire them.

We could have form-based rather than use-based zoning that simply designates building sizes, but that would upset too many well-funded apple carts, so it's ignored even by professional planners. 

Finally, in fairness to Costco, they have built a store in Los Angeles with apartments above it. Adding apartments to existing shopping centers would create built-in customers and transit hubs. Some reports say such "lifestyle centers" that combine commerce and residences even show higher per-square-foot sales than single-use malls.

As malls fail because of online competition, there are signs such mixed-use plans are in the works, but precious few have been built in the US. 

_____

The author was a real estate broker, appraiser and loan officer for nearly two decades, and sat on a Sacramento County Planning Advisory Council (CPAC) for nearly one decade. Local residents may recognize that there's a two year term limit for CPAC members, but, says the author, no one else was dumb enough to apply.

 

 

 

Why isn't Brazil as productive as Switzerland?

 

The problem with this argument is it rests entirely on the widely misunderstood concept of labor productivity. Many people, especially non-economists, hear calls to "increase the average labor productivity of Brazilian workers" and think that means the reason Brazil is so much poorer than Switzerland is because Brazilian workers are supposedly lazy and don't work as hard as Swiss workers. But that is false and absurd. Labor productivity is simply defined as worker contribution to real GDP per hour of labor. The reason labor productivity is low in Brazil, and in the periphery in general, is because of the productive structure of the economy. Brazil, like most of Latin America (and the periphery as a whole), has an economy centered on exports of agricultural goods, minerals, energy, and other commodities. These are very low value-added, labor-intensive sectors with lots of international competition (and therefore low profit margins). The reason Switzerland's labor productivity is so high is because it has monopolistic "moats" in some very high value-added sectors like specialized financial services (ie, banking for global oligarchs) and advanced manufacturing. A Swiss banker working on a computer in an air-conditioned office will have an exponentially higher labor productivity than a Brazilian farmer or miner (or even a Brazilian banker), not because the Swiss banker works harder (they objectively don't), but because they work in specialized high value-added services and can simply charge exponentially more for their labor. These high value-added industries can't just be magically recreated in the periphery. Every country in Latin America and Africa would love to be the next Singapore (and many have tried), but you can't skip stages of development. Not everyone in the world can just work in the high value-added service sector -- especially when the high labor productivity in the advanced economies fundamentally depends on cheap energy, food, and minerals produced by workers in the periphery. When we talk about the global value chain, we're really talking about a highly stratified global division of labor. And it is very, very difficult to move up it. That takes years of careful planning, investment, education, training, infrastructure build-out, technology transfer, etc. -- which in turn requires political stability and the ability of the state to implement long-term planning without significant disruption. Neoliberalism was never as simple as "the government must spend less". It was about the state giving power to markets and the investor class to decide what the priorities of political-economy policymaking would be. This investor class (consisting of both foreign investors and the domestic compradores) prioritizes maximizing return on investment, not developing the productive capacity of the local economy. That's why it primarily invests in the extractive commodity export sector. This also explains why Brazil (and most of Latin America) significantly deindustrialized during the neoliberal period, and has become even more dependent on the low value-added export of commodities.

— Ben Norton (@BenjaminNorton) October 17, 2026

Whither Interest Rate Hikes?

 

A more useful observation is that rate hikes now have a large, direct fiscal price tag. This does not reduce "fiscal capacity" (which is about the ability to meet payment obligations of any size) but "fiscal space" (which is about inflation risk associated with making those payments). The right question: Is the stream of interest payments inflationary, given who receives the interest as income?

— Stephanie Kelton (@StephanieKelton) October 17, 2026

Funny how there is never a lack of money available to pay for killing other people & socializing the losses of financiers. No wonder Woodford & Co. had to omit the stock of money in interest rate determination (& i is the price of the use of money over time in terms of money)

— Robert Parenteau,CFA until CFAI CMO fraud revealed (@MacroEdge1) October 17, 2026

Conventional and Unconventional Economics

(c) by Mark Dempsey

1. The Conventional Economics Narrative 

The conventional story says national debt is a (growing) problem. The bigger it gets, the worse it is for the economy. The cost to pay it off, in higher taxes or lower spending--probably Social Security benefits and Medicare--would crush the economy. To top it off, the interest bill is compounding the problem, finally exceeding military spending.

This narrative is so ingrained in conventional economics that two respected, conventional economists--Reinhart and Rogoff--have even theorized about when such debt becomes too much of a burden for any economy to bear. They normalized the comparison of different currencies and historical periods by comparing economic performance with the ratio of debt to GDP.

Their conclusion? When a nation's debt exceeds 90% of GDP, the economy suffers in its wake. The constantly cited example is Greece, whose debt was roughly 125% of GDP. This led to bond markets demanding higher and higher yields (35!) until the European Central Bank stepped in and backstopped the Greeks' debt. The Greek economy suffered a worse downturn than the Great Depression.

So...is that an accurate story? Short answer: No.

2. Debunking the Conventional Narrative 

First, the assumption behind the debt panic in the US is that dollars grow on billionaires. This is obviously untrue; the government makes all the legal dollars any time it needs them. This is called monetary sovereignty, and the US has it. Greece does not.

That's right, Reinhart and Rogoff were comparing apples to oranges, not separating monetary sovereigns (US, UK, Japan) from non-sovereigns (Greece and the rest of the EU). Not only that, the spreadsheet on which they based their conclusions had a mistake in its formulas, pointed out by a graduate student. Their work is so slopping, I wouldn't let them mop my kitchen.

Perhaps the most convincing refutation of their 90% figure, however, is Japan. For decades, Japan has had debt that is roughly 240% of GDP. Conventional economists would say the bond markets would treat this as a sign Japan is a risky borrower, and predict those markets would demand a risk premium to fund BOJ (Bank of Japan) debt. Would the bond vigilantes demand more than 35%?

The truth is that the BOJ debt sold, until recently, for nearly 0% yield. That rate has increased to near 5% in recent months, but it's still nowhere near the Greek experience. The BOJ can issue yen at will, and there is no risk BOJ bonds will become unpayable.

3. What is National Debt, Really? 

So, what is national debt, really? It's like bank debt. Your bank account is your asset, but to the bank, it's a liability, a debt the bank owes you. You can ask the bank to reduce its debt because you hate the word "debt," but they would just make your account smaller. Not exactly sensible.

National debt is the mirror image of the private sector's surplus. That's not exotic economics, it's double-entry bookkeeping.

The conventional economic narrative obscures two other significant facts. First: monetary sovereigns do not need to borrow the money they make literally without limit. This means no interest payments are necessary. Such payments are "welfare for rich people" says one heterodox economist (Warren Mosler).

4. Inflation Limits Debt Issuance, but only in theory 

An entirely theoretical argument says that the central bank issuing too much currency is what causes inflation. Its most eloquent advocate was Milton Friedman ("Inflation is always and everywhere a monetary phenomenon"). 

But a study of 56 historical hyperinflations published by the libertarian, right-wing Cato Institute demonstrates that those were initiated by central banks run amok, printing too much money, exactly zero times. That's zero!

This is the final conventional  objection to the unconventional narrative that sovereign currency issuers can pay any debt, no matter how large. Why that would cause [hyper] inflation! Except the historical hyperinflations always begin with a shortage of goods, not a surplus of currency. This is true of Zimbabwe (food) and Weimar Germany (manufactures). Even the US inflation of the '70s began when OPEC restricted its shipments of that critical commodity, oil. 

Steve Keen on Government Debt

 

The conventional wisdom is that excessive government debt, and large government deficits, are the roots of all economic evil. When you see the financial dynamics of the economy in an integrated way, the conventional wisdom is conventional stupidity. 

The mainstream textbook view that a government deficit is negative public saving, reduces total saving, crowds out private investment, and slows economic growth, is the exact opposite of the accounting truth. 

Using double-entry bookkeeping, I show a government deficit is a CRITICAL step in creating fiat-based money, and it actually increases the money available to the private sector, not reducing it as textbooks argue. 

Government bonds do not take money from the public, as textbooks assert, and of the three ways in which they could be sold–to the central bank, to private banks, or the non-bank private sector–the current system is the worst choice. 

I use simulations in Ravel [software] to compare these three bond-sale arrangements using the same government deficit. I conclude that government debt and deficits need to be understood as part of the broader financial system rather than through a household-debt analogy, and from this perspective, they are not a “bug” of the system, they are a feature

...

See also "How Economists Will Destroy Capitalism" from Keen 

Homelessness

 

More than 10% of housing owned by billionaires is empty, more than enough to house every homeless person in the Western World. They don't care, it is about maximum profit, not providing housing.

— BladeoftheSun (@BladeoftheS) October 10, 2026

Accountability

 

The West has ZERO accountability for delayed, failed or over budget government projects... Here's why 👇 🇺🇸 The Western model The public gets told that elections, media scrutiny and audits keep governments accountable. So what happens when projects run years late and billions over budget? - California's High Speed Rail project was approved in 2008, with a 2020 completion and a $33 billion cost. What's f*king insane, is the latest estimate puts the cost at $126 billion, and full operations coming in 2040. - Auditors (apparently) expose waste. Politicians blame contractors. Contractors blame the government. Consultants blame the planning. The buck gets passed until the the f*ck up falls into the ether, along with all the others, and you as the tax payer foot the bill. At worst, if they're unlucky, the politician might lose an election a few years later. But still likely carrying on in another public position. 🇨🇳 The Chinese model China fixes this severe lack of oversight with, you guessed it, accountability and actual consequences. - Officials stay responsible during and after the project. Even if they've already change positions, been promoted or retired. Serious budget overruns, reckless planning or project failures bring strong penalties including demotion, dismissal, forced reassignment, disciplinary action, or criminal charges. - Auditors and development regulators monitor budgets and timelines during construction. Severe delays or reckless overspending can freeze funding, revoke project approvals and blacklist construction firms from future government contracts. - Builders and other contractors face fines, loss of qualifications and blacklisted from future government contracts for serious violations or poor performance. -- A possible slap on the wrist vs criminal charges. What are we doing here? 🤦‍♂️

— Chris M (@ChrisinLiuzhou) October 10, 2026

 

So you don't have to expand the tweet:

 

over budget? - California's High Speed Rail project was approved in 2008, with a 2020 completion and a $33 billion cost. What's f*king insane, is the latest estimate puts the cost at $126 billion, and full operations coming in 2040. - Auditors (apparently) expose waste. Politicians blame contractors. Contractors blame the government. Consultants blame the planning. The buck gets passed until the the f*ck up falls into the ether, along with all the others, and you as the tax payer foot the bill. At worst, if they're unlucky, the politician might lose an election a few years later. But still likely carrying on in another public position. 🇨🇳 The Chinese model China fixes this severe lack of oversight with, you guessed it, accountability and actual consequences. - Officials stay responsible during and after the project. Even if they've already change positions, been promoted or retired. Serious budget overruns, reckless planning or project failures bring strong penalties including demotion, dismissal, forced reassignment, disciplinary action, or criminal charges. - Auditors and development regulators monitor budgets and timelines during construction. Severe delays or reckless overspending can freeze funding, revoke project approvals and blacklist construction firms from future government contracts. - Builders and other contractors face fines, loss of qualifications and blacklisted from future government contracts for serious violations or poor performance. -- A possible slap on the wrist vs criminal charges. What are we doing here? 🤦‍♂️ 

A Review of "Tony" the Anthony Bourdain bio flick

 "I was -- to be frank -- a spoiled, miserable, narcissistic, self-destructive and thoughtless young lout and badly in need of a good ass-kicking". - Anthony Bourdain describing himself at the age he was during the time portrayed in the film.

The movie Tony is about Anthony Bourdain's adolescent life before he became a famous chef, author and travel guide. The film portrays him exactly as he describes, a miserable character who lied, manipulated and thieved his way in pursuit, he says, of success as a writer. True to form, although he repeatedly claims he's a writer and recipient of a fellowship, he doesn't write a word in the film and was turned down for the fellowship.

He ran away from home while still a teen--not to the circus, but to Provincetown, MA, pursuing a girl. There, he was robbed of the money he stole from his parents, penniless, and started working for a restaurant as a dishwasher. Bordain might be the protagonist of this film, but the chef who took him in--played masterfully by Antonio Banderas--is the hero.

The chef takes the eminently unlovable Tony under his wing, letting the homeless Bourdain sleep in a hammock on his porch, giving him the dishwashing job, waking him by dousing him with water (until he starts waking up on his own), taking him to church and eventually showing him what it means to be a chef.

When going to church, Bourdain protests that he doesn't believe in God. "What!? You don't believe in air, too? Yet you're still breathing!" replies the chef. 

So the Bourdain character stumbles his cringe-worthy way through the ass-kickings he gets while actually growing up, experimenting with lies, manipulation and thievery until he finds they are dead ends. And finally does something noble to make amends for the damage he's done, and honors the chef's contribution to his life, even in his choice of careers.

So the film does portray redemption, even for the young "lout." Yet most people know Bourdain hanged himself after having achieved success as a chef, writer, and media personality. Why the suicide? Curiosity? Impulsiveness? The ultimate ass-kicking? 

Bourdain himself was pretty sympathetic during the years of his success. He defended women from Harvey Weinstein, and highlighted the cooking of poor chefs too. That he was redeemed during the part of his life described by the film is ennobling, but like most of us he could have done more. Perhaps it was the idea that he was part of the matrix that enabled sexual and economic predators that discouraged him enough to hang himself. 

Meanwhile, the film is one you'll seldom see, showing adolescence as the embarassing mess it often is, and yes, delivering a happier, more authentic ending than we see from most Hollywood teens. 

This week's links: Keynes Twisted, Japanese decluttering, the China Challenge

 

How Economics Manufactured the Household State Part II — They Kept Keynes’s Name and Removed His Threat

The point is not that every heterodox proposition is correct or that mainstream economics contains no useful tools. The point is that a science becomes intellectually fraudulent when it calls one school “economics” and treats rival premises as optional politics. No serious discipline would remove competing explanations from the curriculum, then announce that the surviving explanation has won. 

…

The household state is therefore not a natural fact waiting to be discovered by economists. It is the political product of a discipline that narrowed its own vision, then handed the resulting fiction to governments as scientific necessity. 

11 Japanese Decluttering Lessons

Global Imbalances and the China Challenge

China has a distinct model of growth and integration into the global economy. When China joined the WTO in 2001, Western governments assumed that economic integration would gradually produce convergence. China would embrace the liberal understanding that underpinned the global trading system; market forces would play a larger role, and its priorities would come to resemble those of other major trading nations.

China has indeed become much richer – a major achievement. But convergence has not followed. On the contrary, since 2015, its approach to international economic relations has increasingly diverged from that of the rest of the world. Western countries trade because they want their consumers to access cheaper goods. China trades to put its producers and technology in a dominant position. Its objective is first to achieve greater self-sufficiency and then to establish lasting industrial and technological superiority in as many sectors as possible. This was already clear in 2015 with the adoption of the “Made in China 2025” objectives, and it has since been confirmed and expanded in the recent 15th plan. Industrial capacity is not simply there to meet demand. It is an asset in its own right: a source of technological capability, national resilience, and geopolitical influence.