CSpec

Raw primary sources.

In Indianapolis, It's Autoworkers versus Autoworkers The Atlantic GM's bankruptcy was structured as something called a 363 sale, in which you create a new company which buys the assets you want the reorganized firm to keep, and leave the remaining assets in the old company, which then tries to sell them for whatever they're worth and gives creditors the money. Needless to say, the assets left inside the old company are often not as valuable as the ones the company keeps--they may have little value at all. So when "Old GM" found a buyer for its Indianapolis stamping plant, that was a happy piece of news; if it's not sold, the plant will be shut down in September of next year. Unfortunately, it's not quite that easy. The new buyer, JD Norman, says it can't afford prevailing GM wage rates, and wants the local to agree to lower pay scales. Thanks to "successor clauses" in the contract, the local has to agree to reopen the contract; otherwise, the successor has to abide by the UAW contract. JD Norman says it will not buy the plant if the successor clause is in effect. A faction within the union consists of what are known as "GM Gypsies"--workers who have transferred to this plant from other GM plants that were shut down. They're trying to put in enough time to retire on full benefits, which means they don't want to take permanent jobs at JD Norman; they feel that unless they can get something very close to what GM pays, they seem to think they're better off with a plant shutdown, which makes everyone eligible for transfer. However, there are workers in the plant who don't want to transfer. Indianapolis is their home. They're angry at the gypsies for trying to shut down a plant that is good for the local community, and good for them. I've heard that these folks are disproportionately close to retirement, in which case they're eligible to take their GM pension, and then go to work for JD Norman at reduced wages. As you can see from the link above, JD Norman is taking it's case to the web, hoping to persuade workers that they'll be better off if they agree to a new contract. But though the company is making hopeful noises, other observers seem skeptical. The gypsies may win the day, in which case everyone else is out of a job that would still have paid pretty well.

balthazar, Inner Harbor underwent an incredible transformation in the 80s. I was there on Sunday night and had a lovely dinner on the water. However, once you get a few blocks north of Hopkins (medical campus), you're in some serious trouble.

Baltimore is definitely a tough city. It has nicer parts, but while cheaper than DC, it's still not really a bargain. It's also not as close to DC as you would think given the distance on a map (the traffic is impenetrable on weekdays). That said, Baltimore is definitely a city in its own right and has plenty to do. BWI is the home of the discount carrier, and the city has a cruise terminal. As long as you're sure you can afford whatever you end up buying, and also that it's not in a rough neighborhood, Baltimore is a fine destination.

Boston Globe IN THE market for a used car? Good luck finding a bargain: The price of “pre-owned’’ vehicles has climbed considerably over the past year. According to Edmunds.com, a website for car buyers, a three-year-old automobile today will set you back, on average, close to $20,000 — a spike of more than 10 percent since last summer. For some popular models, the increase has been much steeper. In July, a used Cadillac Escalade was going for around $35,000, or nearly 36 percent over last July’s price. Why are used-car prices rocketing? Part of the answer is that demand is up: With unemployment high and the economy uncertain, some car buyers who might otherwise be looking for a new truck or SUV are instead shopping for a used vehicle as a way to save money. But an even bigger part of the answer is that the supply of used cars is artificially low, because your Uncle Sam decided last year to destroy hundreds of thousands of perfectly good automobiles as part of its hare-brained Car Allowance Rebate System — or, as most of us called it, Cash for Clunkers. That was the program under which the government paid consumers up to $4,500 when they traded in an old car and bought a new one with better gas mileage. The traded-in cars — which had to be in drivable condition to qualify for the rebate — were then demolished: Dealers were required to chemically wreck each car’s engine, and send the car to be crushed or shredded. Congress and the Obama administration trumpeted Cash for Clunkers as a triumph — the president pronounced it “successful beyond anybody’s imagination.’’ Which it was, if you define success as getting people to take “free’’ money to make a purchase most of them are going to make anyway, while simultaneously wiping out productive assets that could provide value to many other consumers for years to come. By any rational standard, however, this program was sheer folly. No great insight was needed to realize that Cash for Clunkers would work a hardship on people unable to afford a new car. “All this program did for them,’’ I wrote last August, “was guarantee that used cars will become more expensive. Poorer drivers will be penalized to subsidize new cars for wealthier drivers.’’ Alec Gutierrez, a senior analyst for Kelley Blue Book, predicted that used-car prices would surge by up to 10 percent. “It’s going to drive prices up on some of the most affordable vehicles we have on the road,’’ he told USA Today. In short, Washington spent nearly $3 billion to raise the price of mobility for drivers on a budget. To be sure, Cash for Clunkers gave a powerful jolt to car sales in July and August of 2009. But it did so mostly by delaying sales that would otherwise have occurred in April, May, and June, or by accelerating those that would have taken place in September, October, or later. “Influencing the timing of consumers’ durable purchases is easy,’’ Edmunds CEO Jeremy Anwyl wrote a few days ago in a blog post looking back at the program. “Creating new purchases is not.’’ Of the 700,000 cars purchased during the clunkers frenzy, the estimated net increase in sales was only 125,000. Each incremental sale thus ended up costing the taxpayers a profligate $24,000. Even on environmental grounds, Cash for Clunkers was an exorbitant dud. Researchers at the University of California-Davis calculated that the reduction of carbon dioxide attributable to the program cost no less than $237 per ton. In contrast, carbon emissions credits cost about $20 per ton in international markets. Using Department of Transportation figures, the Associated Press calculated that replacing inefficient clunkers with new cars getting higher mileage would reduce CO2 emissions by around 700,000 tons a year — less than Americans emit in a single hour. Likewise, the projected reduction in gasoline use amounted to about as much as Americans go through in 4 hours. (And that’s only if you assume — contrary to historical experience — that fuel consumption decreases when fuel efficiency rises.) When all is said and done, Cash for Clunkers was a deplorable exercise in budgetary wastefulness, asset destruction, environmental irrelevance, and economic idiocy. Other than that, it was a screaming success.

How to feed the world: Brazil's agricultural miracle Economist THE world is planting a vigorous new crop: “agro-pessimism”, or fear that mankind will not be able to feed itself except by wrecking the environment. The current harvest of this variety of whine will be a bumper one. Natural disasters—fire in Russia and flood in Pakistan, which are the world’s fifth- and eighth-largest wheat producers respectively—have added a Biblical colouring to an unfolding fear of famine. By 2050 world grain output will have to rise by half and meat production must double to meet demand. And that cannot easily happen because growth in grain yields is flattening out, there is little extra farmland and renewable water is running short. The world has been here before. In 1967 Paul Ehrlich, a Malthusian, wrote that “the battle to feed all of humanity is over… In the 1970s and 1980s hundreds of millions of people will starve to death.” Five years later, in “The Limits to Growth”, the Club of Rome (a group of business people and academics) argued that the world was running out of raw materials and that societies would probably collapse in the 21st century. A year after “The Limits to Growth” appeared, however, and at a time when soaring oil prices seemed to confirm the Club of Rome’s worst fears, a country which was then a large net food importer decided to change the way it farmed. Driven partly by fear that it would not be able to import enough food, it decided to expand domestic production through scientific research, not subsidies. Instead of trying to protect farmers from international competition—as much of the world still does—it opened up to trade and let inefficient farms go to the wall. This was all the more remarkable because most of the country was then regarded as unfit for agricultural production. The country was Brazil. In the four decades since, it has become the first tropical agricultural giant and the first to challenge the dominance of the “big five” food exporters (America, Canada, Australia, Argentina and the European Union). Even more striking than the fact of its success has been the manner of it. Brazil has followed more or less the opposite of the agro-pessimists’ prescription. For them, sustainability is the greatest virtue and is best achieved by encouraging small farms and organic practices. They frown on monocultures and chemical fertilisers. They like agricultural research but loathe genetically modified (GM) plants. They think it is more important for food to be sold on local than on international markets. Brazil’s farms are sustainable, too, thanks to abundant land and water. But they are many times the size even of American ones. Farmers buy inputs and sell crops on a scale that makes sense only if there are world markets for them. And they depend critically on new technology. As the briefing explains, Brazil’s progress has been underpinned by the state agricultural-research company and pushed forward by GM crops. Brazil represents a clear alternative to the growing belief that, in farming, small and organic are beautiful. That alternative commands respect for three reasons. First, it is magnificently productive. It is not too much to talk about a miracle, and one that has been achieved without the huge state subsidies that prop up farmers in Europe and America. Second, the Brazilian way of farming is more likely to do good in the poorest countries of Africa and Asia. Brazil’s climate is tropical, like theirs. Its success was built partly on improving grasses from Africa and cattle from India. Of course there are myriad reasons why its way of farming will not translate easily, notably that its success was achieved at a time when the climate was relatively stable whereas now uncertainty looms. Still, the basic ingredients of Brazil’s success—agricultural research, capital-intensive large farms, openness to trade and to new farming techniques—should work elsewhere. Third, Brazil shows a different way of striking a balance between farming and the environment. The country is accused of promoting agriculture by razing the Amazon forest. And it is true that there has been too much destructive farming there. But most of the revolution of the past 40 years has taken place in the cerrado, hundreds of miles away. Norman Borlaug, who is often called the father of the Green Revolution, said the best way to save the world’s imperilled ecosystems would be to grow so much food elsewhere that nobody would need to touch the natural wonders. Brazil shows that can be done. It also shows that change will not come about by itself. Four decades ago, the country faced a farm crisis and responded with decisive boldness. The world is facing a slow-motion food crisis now. It should learn from Brazil.

Government Motors no more An apology is due to Barack Obama: his takeover of GM could have gone horribly wrong, but it has not AMERICANS expect much from their president, but they do not think he should run car companies. Fortunately, Barack Obama agrees. This week the American government moved closer to getting rid of its stake in General Motors (GM) when the recently ex-bankrupt firm filed to offer its shares once more to the public. Once a symbol of American prosperity, GM collapsed into the government’s arms last summer. Years of poor management and grabby unions had left it in wretched shape. Efforts to reform came too late. When the recession hit, demand for cars plummeted. GM was on the verge of running out of cash when Uncle Sam intervened, throwing the firm a lifeline of $50 billion in exchange for 61% of its shares. Many people thought this bail-out (and a smaller one involving Chrysler, an even sicker firm) unwise. Governments have historically been lousy stewards of industry. Lovers of free markets (including The Economist) feared that Mr Obama might use GM as a political tool: perhaps favouring the unions who donate to Democrats or forcing the firm to build smaller, greener cars than consumers want to buy. The label “Government Motors” quickly stuck, evoking images of clunky committee-built cars that burned banknotes instead of petrol—all run by what Sarah Palin might call the socialist-in-chief. Yet the doomsayers were wrong. Unlike, say, France’s President Nicolas Sarkozy, who used public funds to support Renault and Peugeot-Citroën on condition that they did not close factories in France, Mr Obama has been tough from the start. GM had to promise to slim down dramatically—cutting jobs, shuttering factories and shedding brands—to win its lifeline. The firm was forced to declare bankruptcy. Shareholders were wiped out. Top managers were swept aside. Unions did win some special favours: when Chrysler was divided among its creditors, for example, a union health fund did far better than secured bondholders whose claims should have been senior. Congress has put pressure on GM to build new models in America rather than Asia, and to keep open dealerships in certain electoral districts. But by and large Mr Obama has not used his stakes in GM and Chrysler for political ends. On the contrary, his goal has been to restore both firms to health and then get out as quickly as possible. GM is now profitable again and Chrysler, managed by Fiat, is making progress. Taxpayers might even turn a profit when GM is sold. So was the auto bail-out a success? It is hard to be sure. Had the government not stepped in, GM might have restructured under normal bankruptcy procedures, without putting public money at risk. Many observers think this unlikely, however. Given the panic that gripped private purse-strings last year, it is more likely that GM would have been liquidated, sending a cascade of destruction through the supply chain on which its rivals, too, depended. As for moral hazard, the expectation of future bail-outs may prompt managers and unions in other industries to behave rashly. But all the stakeholders suffered during GM’s bankruptcy, so this effect may be small. That does not mean, however, that bail-outs are always or often justified. Straightforward bankruptcy is usually the most efficient way to allow floundering firms to restructure or fail. The state should step in only when a firm’s collapse poses a systemic risk. Propping up the financial system in 2008 clearly qualified. Saving GM was a harder call, but, with the benefit of hindsight, the right one. The lesson for governments is that for a bail-out to work, it must be brutal and temporary. The lesson for American voters is that their president, for all his flaws, has no desire to own the commanding heights of industry. A gambler, yes. An interventionist, yes. A socialist, no.

Modern take on the Johnson House, built in 1949?

The shortfall in highway funding is mainly because Congress in its wisdom started siphoning off gas tax revenue to fund urban transit construction projects. Even if it's not being used as it should be to improve roads, the gas tax is still collected. The rest of the shortfall comes from local and state governments. I agree that the subsidies are bad, but highway subsidies are trivial when you take into account how many people use them (less than a penny per passenger-mile). Regarding air travel, yes there are some subsidies (unfortunately), but again given the popularity of planes and the distances they travel, the subsidies are very very small compared to trains: The project in CA is starting to collapse, which thankfully could spare the rest of us: http://www.mercurynews.com/top-stories/ci_15746975?nclick_check=1

The Economist examines passenger rail travel in Britain: But that improvement has been bought with great gobs of public money (see chart). At £5.2 billion last year, government spending on rail travel cost around £87 for every person in the country. Yet rail travel is a niche interest. It accounts for just 7% of all journeys (cars and vans, in contrast, make up 84%). Those trips are made mainly by the relatively well-off: households with income of £35,000 or more (the top three-sevenths) account for 46% of all rail users, and households with income of up to £17,500 (the bottom three-sevenths) for just 24% ... Only a fifth of the population use trains more than once or twice a week. Almost half use them once a year at most. Aware of the peculiarities of having taxpayers subsidise a form of transport favoured by the well-off, and worried by the ballooning subsidies, the previous Labour government tried in its second and third terms to shift more of the burden of paying for the railways from taxpayers to farepayers. Green ambitions blunted the shift: trains full of passengers pump out less carbon dioxide than cars, and if they cost much more they risk being less used.

A dramatic change from Summer 2008 when people were desperate to get rid of gas guzzlers!

Cheaper from whose perspective? Taxpayers all paying for the few who ride the rails? Or the few who take advantage of this largesse? Explain how interstates are subsidized. All the capital and operating expenditures are funded directly out of user fees (taxes on gas, etc). That is, people who drive pay to use the roads. How is that a subsidy? A subsidy is politicians taking a general pot of income tax revenue and directing it to pet projects. Users paying for the goods they use is how rail used to be, and the formerly gigantic private rail companies failed spectacularly decades ago. Your impassioned pleas for choice don't stack up--it's very analogous to the public option debate of last year. Setting up a government entity with massive taxpayer subsidies to "compete" against very efficient private options doesn't make sense. I would have no problem at all with a private company competing with existing modes of transportation on the merits, not suckling at the teat of the taxpayer. Also, rail advocates contend that very little of the (inflated) projected ridership of rail projects will be the result of increased mobility--around 4% is their estimate. The rest are projected to switch from another mode of transportation directly. I am all for increased mobility, not statist central planners commanding that people conform to their preferred mode of mobility. What? The questionable Chinatown buses of a few years ago have given way to a sleek network of posh coach buses ferrying people from affluent neighborhoods in the DC area. The fact that you don't understand how they do it for the money (I don't either) does not automatically imply that they should be shut down to stop being such annoying cheap, efficient competition to Amtrak. I think you're confused--Reagan is probably the most convenient airport in the country, a few stops away from downtown on the subway. Dulles is the onerous one to get to from downtown, and there's no rail connection. However Dulles is much more convenient for the folks in the sprawling Virginia suburbs. I think that gets to another point here, that often rail advocates detest the fact that people can afford to have their own land and live in the suburbs. I agree with O'Toole that the "city center to city center" argument isn't that significant, where even in the New York City area a very small percentage of people/jobs are downtown. No.. airlines have every incentive to increase fuel efficiency. Remember the great lengths they took in Summer 2008 to eek every last mile out of the fuel? New planes are indeed more fuel efficient and the fleet getting newer reflects that. Trains haven't and aren't expected to become any more efficient in the past few decades.

This is for inside France, excluding air travel. I believe the TGV has caused a number of intra-France air routes to shut down, but that's not very surprising considering how heavily subsidized the system is. Regarding your Paris-Rome comment, that's 897 miles by road, not terribly far out from your 800 mile radius. One of the reasons the CA HSR project is so incredibly expensive is because of the significant tunneling required for the terrain. Do you think that would play out any differently here? Why do you think Amtrak runs all those loss-making lines to nowhere? Keep in mind that LaHood recently rescinded cost effectiveness requirements for urban transit construction. Once you put something in the hands of the government, rent seeking unions and developers crawl out of the woodwork to get their fair share of the loot. And how many people do those interstates carry? Look at the chart on page 33 of O'Tooles presentation. Ignoring the insane official California ridership projections, interstates dwarf rail lines with just a single lane!. On top of that, interstate construction and maintenance is not subsidized. I agree with you here. However a 180 mph train here probably won't ever happen and we'll get spot improvements to bring speeds up to where they were in the 30s. I believe the Northeast corridor is basically the only place in the country where Amtrak owns the tracks. Also Acela service is very very expensive--the recent crush of super cheap NYC-DC buses is testament to that, and they in fact cover more passenger-miles from DC to NYC than Amtrak does. Same with airports, no? Doesn't this hurt your wheel-up wheel-down complaint? California themselves assume 2.4 people/car: http://www.cahighspeedrail.ca.gov/images/chsr/20080130155550_app_2f.pdf Airline efficiency is in regards to fuel economy. I'm not sure where he got his 51% number.

An Amtrak report: http://www.amtrakoig.gov/%28S%28fidfyt4540ncfh45r1celpfy%29%29/Reports/E-08-02-042208.PDF "There have been numerous claims made about the relative financial performance of European Passenger Train Operations and the amount of Public Funding they require to remain operationally viable. This review examines the Public Subsidies that have been provided for European Passenger Train Operations and then compares these funding levels to that of Amtrak. Overall Conclusions After examining a representative sample of European Passenger Train Operations over a multi-year period, we found that: a) When all revenues and expenses for the entire passenger train system are taken into consideration, European Passenger Train Operations operate at a financial loss and consequently require significant Public Subsidies, and b) The average annual subsidies for European Passenger Train Operations are much higher than those for comparable Amtrak services."

I'll also mention that the US has one of the most efficient rail networks in the world--you just don't see it because it's mostly used for freight. Private freight companies after Carter's deregulation have crafted a lean and efficient network without state subsidies, which we can thank for transporting goods across the country cheaply and quickly. European rail networks, used as personal toy train sets by politicians, mostly carry passengers (and not very many at that) and little freight, with very large state subsidies.

I'll throw this in for good measure: http://ti.org/antiplanner/?p=2967 "High-speed rail is expected to cost 4 to 5 times as much per passenger mile as flying, driving, or bus travel. On average, public transit also costs around 4 times as much as driving, and many new rail transit lines cost far more than that. So, unlike earlier transportation innovations, which reduced the cost of travel, rail transit and high-speed rail promise to increase it. Subsidies are required, of course, to make these systems attractive to any potential riders. Imagine if a light-rail trip cost $10 a ride, or if a high-speed rail trip from Los Angeles to San Francisco cost twice as much as flying. They wouldn’t get too many takers. Even with the subsidies, rails are so inconvenient, relative to driving, and so slow, relative to flying, that they won’t ever be a major form of passenger travel again. Of course, it is no surprise that this “innovation” will fail, since high-speed rail and light-rail technology both date to the 1930s."

http://ti.org/HSRtoHF.pdf Good stuff starts on page 13.

Because it's hopelessly expensive and no one will take it. California's project is slowly imploding after taxpayers realized what fares will be. Rail reached what Obama calls "high speed rail" (around 110 mph) in the 1920s, and trains were already dead in the water in the 30s. I will NEVER understand why people screech for massive subsidies for an outdated Victorian relic.

I'll add to Croc's links: http://www.slate.com/id/2164257

Keep in mind that Shoup (and consequently, Cowen, the author of this piece and a libertarian powerhouse) is not arguing for punitive taxation on the automobile. That is a completely distinct topic and one that I do not favor in the slightest. What they are arguing is that current government mandates and land use policies in many cities force private developers to use a certain amount of their own land for free parking spaces. This is clearly not the ideal use of that land if governments have to coerce people to use their own land that way. This article favors eliminating such regulations and implicit subsidies. This would result in fewer trips by car most likely, but it would free up a lot of capital for more useful projects. I'll quote the article again for good measure: "If developers were allowed to face directly the high land costs of providing so much parking, the number of spaces would be a result of a careful economic calculation rather than a matter of satisfying a legal requirement. Parking would be scarcer, and more likely to have a price — or a higher one than it does now — and people would be more careful about when and where they drove."

Free Parking Comes at a Price NY Times IN our society, cars receive considerable attention and study — whether the subject is buying and selling them, the traffic congestion they cause or the dangerous things we do in them, like texting and talking on cellphones while driving. But we haven’t devoted nearly enough thought to how cars are usually deployed — namely, by sitting in parking spaces. Is this a serious economic issue? In fact, it’s a classic tale of how subsidies, use restrictions, and price controls can steer an economy in wrong directions. Car owners may not want to hear this, but we have way too much free parking. Higher charges for parking spaces would limit our trips by car. That would cut emissions, alleviate congestion and, as a side effect, improve land use. Donald C. Shoup, professor of urban planning at the University of California, Los Angeles, has made this idea a cause, as presented in his 733-page book, “The High Cost of Free Parking.” Many suburbanites take free parking for granted, whether it’s in the lot of a big-box store or at home in the driveway. Yet the presence of so many parking spaces is an artifact of regulation and serves as a powerful subsidy to cars and car trips. Legally mandated parking lowers the market price of parking spaces, often to zero. Zoning and development restrictions often require a large number of parking spaces attached to a store or a smaller number of spaces attached to a house or apartment block. If developers were allowed to face directly the high land costs of providing so much parking, the number of spaces would be a result of a careful economic calculation rather than a matter of satisfying a legal requirement. Parking would be scarcer, and more likely to have a price — or a higher one than it does now — and people would be more careful about when and where they drove. The subsidies are largely invisible to drivers who park their cars — and thus free or cheap parking spaces feel like natural outcomes of the market, or perhaps even an entitlement. Yet the law is allocating this land rather than letting market prices adjudicate whether we need more parking, and whether that parking should be free. We end up overusing land for cars — and overusing cars too. You don’t have to hate sprawl, or automobiles, to want to stop subsidizing that way of life. As Professor Shoup wrote, “Minimum parking requirements act like a fertility drug for cars.” Under a more sensible policy, a parking space that is currently free could cost at least $100 a month — and maybe much more — in many American cities and suburbs. At the bottom end of that estimate, if a commuter drives to work 20 days a month, current parking policy offers a subsidy of $5 a day — which is more than the gas and wear-and-tear costs of many round-trip commutes. In essence, the parking subsidy outweighs many of the other costs of driving, including the gasoline tax. In densely populated cities like New York, people are accustomed to paying high prices for parking, which has helped to encourage a relatively efficient, high-density use of space. Yet even New York is reluctant to enact the full social cost of the automobile into policy. Proposals to impose congestion fees have failed politically, and on-street parking is priced artificially low. Manhattan streets are full of cars cruising around, looking for cheaper on-street parking, rather than pulling into a lot. The waste includes drivers’ lost time and the costs of running those engines. By contrast, San Francisco has just instituted a pioneering program to connect parking meter prices to supply and demand, with prices being adjusted, over time, within a general range of 25 cents to $6 an hour. Another common practice in many cities is to restrict on-street parking to residents or to short-term parkers by imposing a limit of, say, two hours for transients. That makes parking artificially easy for residents and for people who are running quick errands. Higher fees and permit prices would help shore up the ailing budgets of local governments. Many parking spaces are extremely valuable, even if that’s not reflected in current market prices. In fact, Professor Shoup estimates that many American parking spaces have a higher economic value than the cars sitting in them. For instance, after including construction and land costs, he measures the value of a Los Angeles parking space at over $31,000 — much more than the worth of many cars, especially when considering their rapid depreciation. If we don’t give away cars, why give away parking spaces? Yet 99 percent of all automobile trips in the United States end in a free parking space, rather than a parking space with a market price. In his book, Professor Shoup estimated that the value of the free-parking subsidy to cars was at least $127 billion in 2002, and possibly much more. Perhaps most important, if we’re going to wean ourselves away from excess use of fossil fuels, we need to remove current subsidies to energy-unfriendly ways of life. Imposing a cap-and-trade system or a direct carbon tax doesn’t seem politically acceptable right now. But we can start on alternative paths that may take us far. Imposing higher fees for parking may make further changes more palatable by helping to promote higher residential density and support for mass transit. As Professor Shoup puts it: “Who pays for free parking? Everyone but the motorist.”

Missing centenarians cause angst in aging Japan Japan prides itself on the world's longest life expectancy but is struggling with a disturbing footnote to that statistic - revelations that hundreds of people listed as its oldest citizens are either long dead or haven't been heard from for decades. The mystery of the missing centenarians has captured the attention of this rapidly graying nation with reports of scamming relatives and overworked social workers and sad tales of old people, isolated and forgotten, simply slipping out of touch with society. The story unfolded in late July when police discovered that Sogen Kato, who would have been 111 and was thought to be Tokyo's oldest man, had actually been dead for 32 years, his decayed and partially mummified body still in his home. Police are investigating his family for possible abandonment and pension fraud. That discovery led officials around the country to check up on the centenarians in their own districts, and what they found has been shocking. The woman listed as Tokyo's oldest, Fusa Furuya, born in July 1897, is also missing. Her last registered residence was long ago converted into a vacant lot. In the western city of Kobe alone, officials are trying to track down more than 100 unaccounted-for centenarians, including a woman who, if still alive, would be 125. That case and three others of 120-plus residents in Kobe are almost certainly examples of lax bookkeeping. According to the Gerontology Research Group, which tracks individuals of extremely old age, the oldest person is 114-year-old Eugenie Blanchard, a French woman born on Feb. 16, 1896. She became the oldest after Japan's Kama Chinen died in May a week before her 115th birthday. The confusion over Japan's centenarians has hit a sensitive nerve at a time when a growing number of people are living their last years alone. Japan has 40,399 people aged 100 or older, according to last year's annual health ministry report marking Respect for the Aged Day, a national holiday on Sept. 21 - though that total now may be a few hundred lower. "The families who are supposed to be closest to these elderly people don't know where they are and, in many cases, have not even taken the trouble to ask the police to search for them," the Asahi, a major newspaper, said in an editorial. "The situation shows the existence of lonely people who have no family to turn to and whose ties with those around them have been severed." The Asahi also noted a sinister side to the problem. Unless death notices are filed with authorities, pension payments tend to keep coming, prompting some relatives managing older peoples' finances to keep deaths a secret. The share of the population aged 65 and older hit a record high of 22.7 percent last year, while that aged 14 and younger has fallen to 13.3 percent - the lowest among 27 countries with more than 40 million people. Japanese women can expect to live 86 years, the longest in the world, and men nearly 80. The graying of society and the low birth rate have brought an increasing number of social problems, strained government services and pension programs and raised worries about expected labor shortages in the near future. Crime, alcoholism and suicide among the elderly are rising because of low incomes, unstable employment and poor living conditions. Before World War II, about 90 percent of older parents lived with their children, a figure that has fallen below 50 percent today, said Katsuya Inoue, professor emeritus of psychology at Tsukuba University. While that remains higher than in many Western countries, the rapid change has left many older people with few social ties and a porous support network. "People used to take care of their aging parents. But with rapid changes in lifestyles, the very idea of taking care of one's parents seems to be waning," Inoue said. The problem is exacerbated by a shortage of nursing homes. The government has introduced a health insurance system to deal with ballooning medical costs for people over the age of 75, stepped up programs that encourage older citizens to stay active and is gradually extending the retirement age to 65 from 60. But the recent revelations about the centenarians underscore how easy it can be to fall through the cracks. Each centenarian receives a letter and a gift from a local government office, usually by mail. Little is done to confirm their circumstances, however. Fewer than half of the country's 47 prefectures (states) regularly keep track of centenarians in person. Stung by the growing reports of unaccounted-for centenarians, Health and Welfare Minister Akira Nagatsuma has urged officials to find a better way to monitor the elderly. "Many people have doubts whether the government properly keeps track of senior citizens' whereabouts," he said. "It is important for public offices to check up on them - where and how they are - and follow through all the way." Nagatsuma suggested face-to-face meetings between local officials and all citizens over 110 years old to prove they are alive and well. Fewer than 100 people are believed to be in that category.

I'm a bit nervous re: Akerson's lack of manufacturing experience, as this piece mentions. The fact that he comes from a Wall St private equity shop reminds me of Cerberus' disastrous Chrysler foray, but perhaps Chrysler was already a lost cause before they got there.

GM prepares its getaway The Economist ED WHITACRE, a former head of AT&T who took over the reins at General Motors last December and who yesterday announced his own imminent departure, deserves a small round of applause for what he has achieved. Just over a year ago, GM was taking its first faltering steps on the road to recovery, as it emerged from its government-orchestrated “quick-rinse” bankruptcy. But despite shedding debt, dropping several brands, shrinking its bloated dealer network, cutting jobs and securing concessions from those workers who remained, there were still plenty of sceptics. Could a company that had lost $88 billion in the four years to 2009, had only been kept afloat with $60 billion from American and Canadian taxpayers and which had become known as “Government Motors” really shuffle off its culture of failure so easily? However, after reporting net earnings of $1.3 billion for the three months to the end of June yesterday—the carmaker’s second profitable quarter in a row and its best since 2004—the evidence that “New GM”, as it likes to call itself, is a different business is mounting. So much so that later today or early next week, the company is expected to file an S-1 registration document with the Securities and Exchange Commission, paving the way for an initial public offering before the end of the year. Mr Whitacre sensibly decided that given his 68 years, questions about succession would be a drag on the IPO’s potential success. To that end, he has picked a fellow GM board member, Dan Akerson, to take over from him as chief executive next month and as chairman by December. Mr Akerson, 61, is another former telecoms executive who has worked in recent years for Carlyle, a big New York-based private-equity group. That Mr Akerson has no prior knowledge of the car industry is not necessarily a disadvantage: Alan Mulally, who came to Ford from Boeing in 2006, is given credit for turning round GM’s cross-town rival. But Mr Mulally had wide experience of running a highly complex manufacturing organisation, something Mr Akerson lacks. Obstacles on the road ahead And although the purgative effects of bankruptcy and the shake-up that Mr Whitacre administered to GM’s ponderously bureaucratic culture—he replaced or shifted 12 of the firm’s top 13 executives—has left it a much leaner, faster-moving organisation, there is still much work to be done. There are some signs of a product-led revival at GM, but the competition is unrelenting. According to the latest North American consumer surveys, GM models’ quality still lags the best, while that Government Motors tag contributes to GM’s need to discount more heavily than the industry average. Having decided to hang on to Opel/Vauxhall and restructure it without government loan guarantees, it is still racking up big losses in Europe ($160m in the last quarter). Even in China, the jewel in GM’s crown in recent years, there are concerns. Although sales are still growing, market share is down and pricing is softening as the hectic pace of growth slackens and new capacity comes on stream. The IPO, which will probably be the first of several, is expected to raise around $16 billion. For GM, it will be a signal to car buyers that the stigma of government ownership should soon be lifted and for the White House it will be claimed as vindication of its highly controversial decision to ride to Detroit’s rescue last year. But despite the support of banks that were also bailed out by the government, it will not be a walk in the park. In particular, the shabby treatment of GM’s bondholders has left a bitter residue. More fundamental will be whether investors can be persuaded that GM’s recovery is real and lasting. The signs are encouraging, but with the economy teetering on the brink of a second dip and with GM having a lot still to prove, a degree of wariness may be the order of the day.

This guy is a genius--he has a blog and Twitter to solicit donations to help him and his family move "out of the hood". I bet he's cleaning up.