Merry Christmas from Saudi Claus?

Gasoline prices across American have plummeted recently, plunging right through what I've come to call the "Gingrich threshold." (Former House Speaker Newt Gingrich promised during his 2012 campaign for the Republican presidential nomination that his policies would drop pump prices to $2.50 a gallon.) Now, even without the bumptious Pennsylvania native in the White House, some places are seeing prices 20 percent below that. I've seen some pro-Democratic sites add this to the list of achievements by President Obama, but that's reaching. The most we can say is that Obama's energy policies, such as they are, haven't prevented prices from dropping.

But we're not about politics or personalities here. We want to know: Why did this happen? Is this a good thing? And should I now buy a house in a subdivision in the cornfields?

Oil prices have been volatile since the turn of the millennium, which mostly have been due to fluctuations in supply. (An exception was the drop in prices in late 2008, when the economic slowdown caused a drop in demand.) Economic development in Asia, particularly in China and India, has increased demand, and exerted a steady upward push on prices. Once a certain price was reached, it became economical for companies to extract oil from difficult places, like shale deposits in America and the Canadian tar sands. The increased supply could exert a steady downward push on prices.

That didn't answer the question, did it? The forces I've described in the previous paragraph could explain a cycle of mild ups and downs in gasoline prices, but is not as convincing an explanation for why oil prices have fallen by 50 percent in the last six months. So, what's going on? Commentary runs to two explanations: [a] manipulation by the Saudis, who continue to control the largest amount of traditional oil reserves, and have some motives to drive supplies up and prices down; or [b] it's really markets i.e. the supply increase from American and Canadian production has generated unstoppable momentum. That one also requires Saudi involvement, however, because they could have counteracted the price drop by decreasing their own production, which they did not. They did try that during the 2008 downturn, only to have other producers make up the difference, which is probably why they're not doing it now. They're wealthy enough for the price hit they're taking not to be painful, while other oil-producing countries who are not their friends--like Iran and Russia--are hurting.

Many commentators feel American oil production is likely to be resilient, although costs of extraction costs are much higher here than in Saudi Arabia. Eric Smith of Tulane University's Energy Institute told NPR's Marketplace that American producers could keep going with prices where they are now, in the mid 50's per barrel. “You’d probably go down to $30 before somebody shuts in a well. They might not drill a new one. But they wouldn’t stop producing the old one until the price got below that cost.” The Economist notes the financial vulnerability of American oil firms, but suggests that low prices would only pause shale production. "There is always a new set of investors" said one of their sources, ready when price incentives to produce return, possibly with better technology.

So, definitely good for drivers, companies that have energy-intensive production or high transportation costs, and consumers that buy their products. Mixed news for American oil producers (and their investors), and bad for the autocratic rulers of Iran, Russia and Venezuela, as well as their client states like Cuba. Sounds like a win so far! But what are the impacts of lower gasoline prices on our common life? Here there's some good news, too: Lower energy prices stimulate the economy, which might give our four-year-old recovery the kick in the pants it needs to do some serious job creation at last. Jobs that pay well? Well, maybe.

On the other hand... until recently high energy prices were working together with changes in how people want to live, shaky government finances, and developing concerns with pollution and climate change to produce a society-wide rethink of our car-centered economy. The combination has produced, for example, the changes in American living arrangements documented by Leigh Gallagher in The End of the Suburbs. If we decide all of a sudden that cheap gasoline--relatively speaking, of course, because it was under a dollar a gallon as recently as 2001--is here to stay, those other issues aren't going to go away. But the compulsion to address them might.

If we decide all of a sudden that gasoline is going to be cheap, and then the price bounces back up--analyst John Michael Greer calls this current phase a "fracking bubble"--things might get ugly around here.

SOURCES

Historical data on oil prices from TradingCharts.com: http://futures.tradingcharts.com/chart/CO/18

Leigh Gallagher, The End of the Suburbs: Where the American Dream is Moving (New York: Portfolio/Penguin, 2013)

John Michael Greer, "Deja Vu All Over Again," The Archdruid Report, 17 December 2014, http://thearchdruidreport.blogspot.com/2014/12/deja-vu-all-over-again.html

Mitchell Hartman, "Oil Prices Scrape Bottom of the Barrel," Marketplace, 18 December 2014, http://www.marketplace.org/topics/economy/crude-economy/oil-prices-scrape-bottom-barrel

"In a Bind," Economist, 6 December 2014, 81-82

Joe Nocera, "Shale and the Falling Price of Oil," New York Times, 23 December 2014, http://www.nytimes.com/2014/12/23/opinion/joe-nocera-shale-and-the-falling-price-of-oil.html?partner=rssnyt&emc=rss&_r=0

The latest bad news and our common life

Protesting Eric Garner verdict in Chicago (ABC7 Chicago, used without permission)

Those of us who expressed loud relief at the conclusion of the late election season ought to have been careful for what we wished. We are most of us used to election-year bloviating, after all, and eventually it goes away, and we move on with our lives. The news that has replaced all the campaigning this year, however, has dealt a series of body blows to our quest for a common life. It's enough to make you nostalgic for Rep. Duncan Hunter (R-California) and his rumors of ISIS agents carrying Ebola germs over the Mexican border.

The grand jury decision not to seek indictment in the case of Eric Garner gave new life to restiveness about police treatment of blacks. The latest chapter began in August with the shooting of Michael Brown in Ferguson, Missouri, in August. Garner, like Brown, was unarmed; he died of suffocation this past July while being physically restrained by a New York City police officer, and his last words were the now-famous phrase "I can't breathe." A 42-year-old man with a wife and children, he made a more sympathetic figure than the 18-year-old Brown, who had just come from robbing a convenience store. While sorting out facts and causation in specific incidents is difficult, the two men's deaths have symbolized a broader theme of problematic relations between police departments and blacks. The National Association for the Advancement of Colored People produced a list of 76 unarmed people of color who have died in police custody since 1999. Maybe Michael Brown is easy to dislike, and maybe the 12-year-old boy in Cleveland was extremely foolish, but it's more difficult to claim that all 76 killings were justified. Or to claim that racial disparities in sentencing, or the amazing proportion of African-American men who are under control of the justice system, are all due to individual irresponsibility.

This restiveness gave rise to a series of protests throughout the fall of 2014 and into the winter, including one December 9 at Coe College, where I teach. Police response in different communities has varied, from charm offensives to bemusement to circling the wagons. The NYPD publicly asked Mayor Bill DeBlasio to stay away from officers' funerals after remarks by DeBlasio--whose wife is black and son is dark-skinned--upon the Eric Garner verdict that they considered insulting (Ruud). I certainly understand the inclination to react defensively: As a college professor, I sometimes take personally stories of student loan debt or excessive classroom ideology. But this is entirely the wrong reaction. We need effective policing, because no matter how successful we are at creating a common life there will always be some crime from which society needs protection. Policing, though, remains effective if and only if the police are seen as serving the whole community. If African-Americans perceive that the police are not there to serve and protect them, how can we live together? If white Americans rely for protection from blacks on aggressive policing--or, heaven help us, vigilantes like the delusional George Zimmerman--common life is impossible.

The same day of the Coe student protests brought the release of the Senate Intelligence Committee report on "enhanced interrogation" of terror suspects by the Central Intelligence Agency in the middle years of the last decade. The report--based on an extensive review of CIA records--details what most of us already knew, at least vaguely: that American agents practiced a variety of psychological torture techniques at secret prisons in countries like Poland and Romania. The program's defenders--including former Vice President Dick Cheney and current CIA director John Brennan--claim valuable intelligence was gained from these practices ("Cheney Defends," Baker and Mazzetti), albeit details of the benefits aren't forthcoming and the report itself debunks some of those claims. More than 20 percent of these prisoners were found to have no links to terrorism at all, and many others were not connected to 9/11, which ought to give people pause before arguing what "they" did to us justified whatever our agents did to "them."

Remarkably, national Republicans have closed ranks around the program, to the extent of refusing even to participate in the preparation of the report. This is too bad. President Obama, a Democrat, while anti-waterboarding, has hardly been out front on the issue. But the most eloquent, moving contribution to this debate came from U.S. Senator John McCain (R-Arizona), who knows a thing or two about torture from his long years in Vietnamese prisons:

Sen McCain, swiped from nytimes.com

I have long believed some of these practices amounted to torture, as a reasonable person would define it, especially, but not only the practice of waterboarding, which is a mock execution and an exquisite form of torture. Its use was shameful and unnecessary; and, contrary to assertions made by some of its defenders and as the Committee's report makes clear, it produced little useful intelligence to help us track down the perpetrators of 9/11 or prevent new attacks and atrocities.

I know from personal experience that the abuse of prisoners will produce more bad than good intelligence. I know that victims of torture will offer intentionally misleading information if they think their captors will believe it. I know they will say whatever they think their torturers want them to say if they believe it will stop their suffering. Most of all, I know the use of torture compromises that which most distinguishes us from our enemies, our belief that all people, even captured enemies, possess basic human rights, which are protected by international conventions the U.S. not only joined, but for the most part authored. (McCain; see also Rosenthal)

Outgoing U.S. Senator Mark Udall (D-Colorado) has also been forcefully articulate.

The debate on torture tends to conflate two distinct aspects of the issue: effectiveness (was this the best way of getting good information?) and morality (were these torture techniques good or evil?). The CIA itself had concluded as long ago as 1989 that the techniques were not very useful, and there has been an impressive pile of evidence to that effect. But even if some usable intelligence was obtained, should the U.S. have tortured? From early settlers looking to build a "city on a hill" to international leadership on human rights since the 1970s, the United States of America has always had a moral component to it. If we treat people in our custody cruelly, if we use the actions of terrorists as the standard by which to judge our own actions, we are nothing more than any other country, except for being more powerful. If right makes might, the CIA actions have made us less powerful as well as less exemplary. (Now I'm conflating, aren't I?) I'm reminded of a pivotal moment in the play "A Man for All Seasons" by Robert Bolt about Sir Thomas More, the 16th century English chancellor who defied King Henry VIII:

ROPER. So now you'd give the Devil benefit of law!

MORE. Yes. What would you do? Cut a great road through the law to get after the Devil?

 ROPER. I'd cut down every law in England to do that!

MORE.  Oh? And when the last law was down, and the Devil turned round on you--where would you hide, Roper, the laws all being flat? This country's planted thick with laws from coast to coast--man's laws, not God's--and if you cut them down--and you're just the man to do it--d'you really think you could stand upright in the winds that would blow then? Yes, I'd give the Devil benefit of law, for my own safety's sake. (p. 66)

Paul Scofield (left) as Sir Thomas More; swiped from theguardian.com

Finally, and less violently, Congress and the President agreed on a continuing resolution to keep the government (excepting the Department of Homeland Security, due to controversy over Obama's executive order on immigration) open through September. This is good, because we need the national government, at least for some things, but some of the riders needed to pass the resolution were obscene. Some were out-and-out giveaways to the well-connected: weaker regulation of financial services, environmental reporting exemptions for agribusiness, a travel promotion program for Las Vegas (cf. Pear). If anyone wants to make the unfortunate case that the government in Washington is about the powerful helping themselves at the expense of ordinary people, this budget deal provides plenty of grist for their mill.

How to respond to all this, to defend the notion of a common life? Well, maybe after seven paragraphs of lamentation I feel my work here is done. Beyond that, have the widespread protests any value? I argue they do. As a middle-class white American male, I am chagrined to admit that much of what I've described above has been done on my behalf. So, like it or not, I own these messes, so it behooves me to cry out against them: "Not in my name!" [The only time I've ever brought up something political in a church service was back in the bad old days of the Northern Irish troubles, to complain about a particularly egregious action by Protestant militants. Not that Catholics didn't have egregious militants of their own, but as a Protestant I felt more responsible for Protestant violence.]

 

Protest at Coe (from Coe College Facebook page)

So, protest is not a bad first step. But it doesn't repair the breach in our common life. What then is step two?

EARLIER POSTS:
"Are We All Ferguson?," 19 August 2014
"Race Matters, Damn It," 16 April 2013

SOURCES

Peter Baker and Mark Mazzetti, "Brennan Draws on Bond With Obama in Backing C.I.A.," New York Times, 15 December 2014, A1

Robert Bolt, A Man for All Seasons: A Play in Two Acts (New York: Random House, 1962)

"Cheney Defends CIA Interrogation Techniques, Calls Senate Report 'Deeply Flawed,'" FOX News, 11 December 2014, http://www.foxnews.com/politics/2014/12/11/cheney-defends-cia-interrogation-techniques-calls-senate-report-flawed/

John S. McCain, "Sen. McCain's Full Statement on the CIA Torture Report," USA Today, 9 December 2014, http://www.usatoday.com/story/news/politics/2014/12/09/john-mccain-statement-cia-terror-report/20144015/

Robert Pear, "In Final Spending Bill, Salty Food and Belching Cows Are Winners," New York Times, 15 December 2014, A1, A15

Andrew Rosenthal, "John McCain: The Anti-Cheney on Torture," Taking Note, 16 December 2014, http://takingnote.blogs.nytimes.com/2014/12/16/john-mccain-the-anti-cheney-on-torture/

Candice Ruud, "NYPD Union Asks Mayor de Blasio Not to Attend Officers' Funerals," Newsday, 12 December 2014, http://www.newsday.com/news/new-york/nypd-union-asks-nyc-mayor-bill-de-blasio-not-to-attend-fallen-officers-funerals-1.9709927

Obstacles to gentle gentrification

Can the MedQuarter...

...and New Wellington attract needed investment without pricing out current residents?

The week-long series of reports on gentrification by the excellent public radio program "Marketplace" makes at least three things abundantly clear: [a] gentrification is occurring all over the country; [b] gentrification rarely if ever occurs without clear winners and losers, not to mention a lot of bad feelings; and [c] the reputation of gentrification is so broadly negative that the word itself carries a negative connotation. (It's what the rhetoric scholar S.I. Hayakawa called a "snarl word.")

Yet I maintain that the future of America, particularly urban America, requires gentrification. We need a little gentrification, right this very minute. Granted, it must be done right. It must be done gently. But it must be done.

Gentrification means the resettlement of the middle class in urban areas. It means the undoing of two generations of moving to suburbs ever farther away from the city center, leaving urban areas filled with working class and poor people, with fading economic prospects and crumbling infrastructure, and with historic connections slashed apart by interstate highways and commercial "stroads." Gentrification is essential because:

1. Society cannot afford to maintain urban sprawl. A spread out population requires a lot of roads, pipes and other infrastructure that look great when they're new, but costs more to maintain than most state and local governments can afford. To be fiscally sustainable, metropolitan areas need to contract, an urgency reinforced by the impact of all that driving on the environment, public health and energy supplies.
2. Urban areas need investment. You can't eat character, and you can't eat history. Middle class people and businesses bring badly-needed investments into communities that have for a long time suffered a lack of jobs, crime and struggling schools.
3. We must hang together, or we shall hang separately. This quote, attributed to Benjamin Franklin during the U.S. War of Independence, applies to the various challenges of the 21st century. America can't face those challenges if Americans are variously huddled in enclaves based on similarity of race and class.

Urban gentrification is particularly urgent in our metropolitan areas that are physically large, like Atlanta, Los Angeles and Phoenix; and those centered on older industrial cities like Cleveland and Detroit. But to some degree it's needed everywhere, even in smaller cities like Cedar Rapids. Just because we're neither as physically large nor as populous as Atlanta doesn't mean we can afford to keep spreading out. The keys to the future of Cedar Rapids lie in our core neighborhoods and our downtown, not with the super-suburb that will supposedly be created by the extension of Highway 100.

Gentle gentrification means infusing urban neighborhoods without pushing out long-time residents. It means adding to the historic character of the neighborhood instead over overturning it. And there are very few examples of gentrification occurring gently--certainly not the Highland Park area of Los Angeles profiled by "Marketplace," or the Mission District of San Francisco, or... you name it. There are a number of reasons why gentrification is so hard to do gently. I hope you will be so impressed by the power of my analysis that you will overlook the fact that I don't have the slightest clue how to address them.

1. There are no effective mechanisms to bring this about. Gently gentrifying a neighborhood requires a great deal of nuance and balance. Economic markets can be good at nuance, but lately supply seems to work in a binary fashion: high-end goods aimed at the well-off, or cheap goods aimed at the not-well-off. You're either Bloomingdale's or Wal-Mart, but not a mix of both, nor anything in between. Government tools, whether incentives or regulations, are of necessity based on uniformity and hence are terrible at nuance.
2. Difference makes us terribly uncomfortable. There are a lot of facets to the recent tragedies involving Eric Garner, Michael Brown and others, but this one theme clearly emerges from the national discussion. Some feel guilty or frustrated with the lingering divisions, a few are proud of being unlike the other. More broadly, people who can afford it are willing to pay a premium to live away from people who can't. A truly diverse neighborhood begins with many points of tension. This is unfortunately exacerbated by...
3. Lack of confidence in our political and economic institutions. Wage growth has not responded to four years of economic growth. It's about the last indicator to respond anyway, but the future of employment is far from certain, and everyone knows that. Public lack of confidence in our public officials could not have been helped by the disgraceful campaign of 2014. I don't have data on local officials, but my hunch is that they're less exempt from this attitude than in previous years. Bottom line: there's widespread feeling that the economic deck is stacked against "us" (whoever "we" are), and that government is only responsive to a faction that isn't us, either.

Gentle gentrification means neighborhood diversity in every possible respect, instead of the "come heres" outbidding and then pushing out the "been heres." It's a tall order, a very tall order indeed, but maybe possible once more people realize that sprawl and enclaves are unaffordable luxuries. Spread the word.

SEE ALSO:
"Issues of Privilege in Walkable Cities," 23 June 2014, http://brucefnesmith.blogspot.com/2014/06/issues-of-privilege-in-walkable-cities.html
"The Gentrification Conundrum (II)," 21 March 2014, http://brucefnesmith.blogspot.com/2014/03/the-gentrification-conundrum-ii.html
"Gentrification in the Mission District," 4 December 2013, http://brucefnesmith.blogspot.com/2013/12/gentrification-in-mission-district.html
"Downtown, Where All the Lights Are Bright?," 10 November 2013, http://brucefnesmith.blogspot.com/2013/11/downtown-where-all-lights-are-bright.html