Peak Delusion of the Long Emergency

Last week, Strong Towns president Chuck Marohn spoke at the International Conference of City Managers in Baltimore. He described the reaction in the room as a mixture of “Yes, that describes my situation,” and “That might describe other places, but under my leadership, things here are under control.”

In other words: a very standard reaction from a group of professionals.

The Strong Towns message can be really difficult for professionals, people whose job it is to manage the day-to-day operations of cities and make recommendations to public officials. The Upton Sinclair quote comes to mind:

It is difficult to get a man to understand something when his salary depends upon his not understanding it.

This is human nature. One gentleman stood up during the ICMA Q&A and explained how his city directly charges road maintenance costs to impacted property owners, so they don’t have the problem Chuck described. Is that all roads? No, just new ones. Does that include collector and arterial roads? No, just local ones. Well, okay then…. Problem solved, I guess????

In this episode of the Strong Towns Podcast, Chuck describes a point of “peak delusion” where professionals all kind of see how the status-quo development approach isn’t working, and increasingly see that it isn’t viable over even the short term—yet persist in the faith that continuing on the current path will somehow resolve things. Their mantra: we just have to do more (of what hasn’t been working).

Strong Towns' tone on municipal insolvency runs counter to actual data from ratings agencies, and present trends.

Cities rarely go bankrupt or default (1 in 1,600 during recession). And when they do, it's not b/c of overstretched infrastructure, but unfunded pension liabilities. https://t.co/lzqpRQnWv3

— Market Urbanism Report (@sbcrosscountry) September 25, 2018

And it’s not hard for those who want to avoid difficult thoughts to find affirmation. Our friends at the Market Urbanism Report like to point out that municipal bankruptcies are quite rare (since the Great Depression, when we entered the Suburban Experiment) and all the data, agencies and trends suggest they will remain rare.

Yet, there are signs that change may be coming. Companies are buying back their own stocks at a record pace, yet senior executives are dumping their stock at even greater rates. Companies like McDonald’s, with seriously declining revenues, rising levels of debt and narrowing profit margins, are able to experience large share value increases, mostly due to buybacks.

Interest rates are rising, as are budget deficits (in a booming economy, no less) to the point where the United States will soon spend more on interest than on the military.

A company like Tesla, which loses billions of dollars annually while making only 80,000 cars per year, is now worth more than BMW, a leader in high-end automobile production that not only manufactured 2 million cars last year, but made 8.7 billion euros in profit doing so. BMW is full of smart people who continually do innovative things, yet somehow they are going to be out-innovated by a company led by a serial Tweeter building cars out of tents, yet still losing money. It’s kind of a crazy world.

Yet, this is what Jim Kunstler predicted in his book The Long Emergency: a period of gimmicks and swindles designed to give the illusion that everything is fine, that it will all keep functioning like normal–or better–as far into the future as any of us can imagine.

That’s a narrative Strong Towns advocates know to be false. That’s why we need to stay calm amid the craziness, keep working at making our places stronger, and be there when things go bad and we’re most needed.

Get more of this conversation on this week’s podcast.