US ECONOMY 102: DIGGING DEEPER

After I posted US Economy 101, there was an interesting question raised which had me digging for some more information; and what I found is not only interesting but also somewhat contrary to public opinion/perception. After reviewing the deficit that the nation is burdened with, one question that cropped up several times was: how much of this is related to the tax-cuts implemented by President Bush and how much of this is related to the cost of wars waged in Afghanistan and Iraq?

This is a very valid question and one that has probably been raised a few times before in the past decade.  I was surprised, if not shocked, to find that while the question is fairly obvious, the data related to the answer was not readily available.  One note of particular interest was that the Joint Committee on Taxation (JCT) - a congressional non-partisan body who scored the original tax-cut proposal under certain assumptions about future tax laws - has not taken a hindsight look on what the tax-cuts have cost so far.  This would lead me to believe that Congress is not willing to take an impartial look at the decisions it took a decade ago.  This reeks of complicity more than anything else.

After digging around a little bit, I was able to find some data regarding the annual costs of the tax-cuts published by CTJ.org from a research organization called Institute on Taxation and Economic Policy (www.itepnet.org).  Here is what I found:  (click to enlarge)

Looking at the last decade, there is a clear correlation between the annual deficit and the impact of the tax-cuts as well as the cost of the wars.  For clarity, the cost of wars shown above represents the appropriations (government spending) requested by the Department of Defense from the Congress each year.  Over the 10-year period, the Bush tax-cuts have cost about $2.1 trillion in lost receipts.  The wars have cost about another $1 trillion.  But the key spike in the deficit came in 2008, as a result of the economic crisis caused by the housing market meltdown.  So while the Bush tax-cuts did not deliver the economic stimulus they were intended to, we would still have found ourselves in a serious problem on account of the economic crisis.

The economic crisis is a whole other issue but if you can spare a couple of hours, Inside Job does a fine job of explaining the origins, cause and culprits of the financial meltdown.  (Spoiler alert: there's nobody innocent here.)  For the time being, let's just focus on the tax-cuts alone and see how they break down between the different groups of tax payers. (click to enlarge)

 

The chart above shows the estimated taxes that would have been paid by the different tax payer groups.  On average, the government would have collected over $200 billion in additional taxes if the Bush tax-cuts would not have been implemented.  About half of that comes from the top 5% of tax payers.  This is not really a surprise.  Those who pay higher taxes benefit the most under the Bush tax-cuts.  Keep in mind that these numbers are estimates and one cannot predict the changes in earning and spending patterns over the years.  Also, the spike in the early years indicates that income tax collections went up.  This, in turn, means that income went up.  One may attribute that to the tax cuts which may have led to increased spending and hence increased earnings by small business owners and perhaps even salary increases. 

The distribution is not at all unexpected.  This is completely in line with share of total income tax paid. The chart below shows the share of income tax paid by top tax payers in the US: (click to enlarge)

You will note that prior to this century, the top tax group was limited to the top 1%.  Since 2001, the tax collection was broken out by the top 0.1% and the rest of the top 1%.   About 10% of the total tax collected comes from the top 0.1% of the tax payers.  The top 10% of the tax payers provide the government with over half of the total tax collected.  (This data refers to the tax payers, not the entire population which includes non-payers.)  After all, this is the mark of a true capitalist society.  A small select segment of the society will earn most of the rewards and therefore will pay most of the taxes.  This is what drives the American dream chaser: one keeps striving to get into that small top bracket, either by labor, luck or lawlessness.

So the bottom line is that yes, the top earners or ultra-rich certainly got a huge benefit out of the tax cuts.  But that is mainly because they are the ones who pay most of the taxes anyway.  Like it or not, that is the American way.  The biggest culprit for the current predicament is the one that nobody is mentioning: the 2008 financial crisis.  The global impact of this crisis was around $20 trillion and to this date, there has been nobody held accountable for this.  The catastrophic crisis was undoubtedly a result of neglect and irresponsibility by several governments and other government and non-government bodies.  But I don't think I can do a better job of explaining this than Inside Job.

US ECONOMY 101: DEFICIT, DEBT & DOUBT

As we approach the 2012 election season, all voices will converge on a single issue and this time that issue will undoubtedly be the economy.  All candidates (regardless of party affiliation) will tout their ability/plan to fix what is broken and make it stronger than ever before.   But what are we really talking about here?  It might be a good time to understand (albeit at an elementary level) the magnitude of numbers and the implication they may have.

Let’s start off with some basic definitions:

Receipts: Our government earns its revenue by collecting various taxes.  These include individual taxes that you and I file, corporate taxes from companies, payroll taxes from employers, excise taxes which are paid on goods sold or made for sale and other miscellaneous taxes.  Collectively, this income for the government is referred to as Receipts.

Outlays: Once they collect the receipts, the government is obliged to put it to good use on behalf of its people, in other words, spend the money.  In our case, this is spent in four large categories: Mandatory Spending viz. Social Security, Medicare/Medicaid, Federal disability programs, etc.; Defense Expenditures; Non-Defense Spending which is discretionary; and Interest Payments on borrowings.  This spending is referred to as Outlays.  (Discretionary spending is expenses that are determined by Congress each year.  Mandatory spending is authorized by permanent laws and the amount depends on participation rather than Congress.)

National Debt: In case you were wondering how our government would spend more than it earns, the answer is quite simple.  Like the rest of us, our government goes to a bank of sorts and borrows money with a promise to pay interest annually and the principal back at some point of time.  This loan or borrowing is our national debt.

It is important to note the link between deficits and debt.  Not unlike any average household, when you have a deficit you are forced to borrow and create a debt.  Now, as each year goes by, any further deficit you might have will lead to a further borrowing or, in other words, will increase the debt.  In our case, this has been a cycle of enormous proportions and the current debt is about $15 trillion ($15,000,000,000,000).  How much is this really?  Look at it this way.  Every single person in the US owes about $5 million each!!

The Office of Management and Budget (OMB) at the White House maintains historical records of a lot of statistics.  I have used some of their data to create some historical charts which help us understand the changes that have taken place over the past few decades.  The data is from the 2012 proposed budget and provides the current government's estimates for the next 5 years.

Looking at Receipts over the last 50-plus years, the following picture emerges: (click to enlarge)

There was a time when the bulk of the government's income came from corporation and excise taxes. This means that during that period, American companies were doing quite well and paid taxes on their earnings.  Also, the excise tax indicates that a lot of the production was domestic.  As we look down the time-line, production gets outsourced and excise taxes shrink as a percentage of total.  As companies set up off-shore tax shelters, the corporate income taxes shrink as well.  Currently, the largest portion of the government's income is from the taxes that you and I file, along with the payroll taxes our employers file on our behalf.  It is interesting to note the dramatic decrease in corporate taxes.  Over the years, corporations have lobbied with politicians to claim and retain tax breaks and the impact is evident in the chart above.

A similar snapshot of outlays shows the following: (click to enlarge)

So, where does this money that is collected go?  The general impression that an average layperson carries is that the government spends most of the money collected on defense to protect our interests.  This was true about 50 years ago when most of the spending was indeed on defense.  However, in the recent past, this spending pattern has shifted.  The largest draw on the receipts is no longer defense but mandatory spending such as Social Security, Medicare/Medicaid.  As the economy sputters, this spending increases further as more and more people seek government aid.  The other portion that is projected to increase in the coming years is Net interest.  Remember the Debt that we talked about?  Well, we have to pay it back, at least the interest on it.  As the deficit grows, we borrow more.  As we borrow more, we have to pay more in annual interest payments.

Speaking of deficits, let's look at the annual deficit over the past couple decades.  The bars show the annual change in deficit i.e. the year-on-year change in deficit. (A positive change means the deficit was less than the previous year, not necessarily a surplus.) (click to enlarge)

The US has always operated with a deficit, as it is seen in the chart.  However this deficit, or shortfall between receipts and outlays, has been relatively small.  In fact, during the late 90s, US enjoyed a surplus for a few years.  But in the recent past, the spending has increased drastically in relation to the receipts.  In the last 5 years, the deficit has more than doubled.  To put it in perspective, the "war on terror" had a smaller impact on the deficit compared to the housing crisis of 2008.  As of today, the deficit is around $15 trillion.  I remain doubtful about the current government's projection of the deficit being reduced to half in the next 3 years.  I am sure it is a noble intention but unfortunately not very realistic.

In a very basic sense, what you spend in excess of your income will be your debt. The chart below shows the growth of our national debt over the years. (click to enlarge)

Originally, I had tried to look at the debt over a longer period but in that chart, the debt line looked like a hockey stick!  I have added the annual income (or receipts) to put the debt in perspective.  Currently our debt is running about 7 times our annual income.  While this sounds bad enough, let's try to put this in perspective.  If this were a housing loan (mortgage) at 5%, then the $15 trillion house would need an annual payment of $1B.  Or in other words, 45% of your annual income would need to go towards your house payment.  And if you were committed and able to do so then in 30 years, you would own your house.  Unfortunately, this house seems out of reach right now.

Well, what can be done about this now?  Obviously, the two fundamental courses of action are reducing outlays or spending and increasing receipts.  Both are easier said than done given that this lifestyle has become a habit.  Reducing expenses would mean some sort of austerity measure on mandatory programs such as Social Security and Medicare.  Increasing receipts would mean an increase in taxes in some form: individual, corporate or both.  None of these choices is easy to swallow but this ailment will not be cured without strong medicine.

So, as we prepare for the onslaught of perfect solutions from candidates (incumbent and aspiring alike), it might be worth our while to keep in mind the severity of the problem and how important it is for our future to solve this issue.  After all, if the deficit is not curbed then we need to keep borrowing more and increase the debt.  At some point of time, the debt grows so large that you cannot afford to pay back the debt.  There is a term for this situation: bankruptcy.

eBOOKS AND pBOOKS

It goes back to when I started taking the bus to work and pretty soon got tired of checking Facebook on my phone. I decided to use this time to do some reading and began carrying a book with me to read. However I immediately ran into some practical problems trying to read a 500-page hardback book on a crowded bus, in winter no less. So I began considering some alternatives and discovered that I could download the same 500-page book in an electronic format (eBook) and read it on my iPhone. And to top it all, I was borrowing the eBook from my public library free of charge. At the risk of revealing myself as an übergeek, I decided to give it a try.

While it was a little disconcerting at first, reading small passages on the little screen was perfect for the bus ride and extremely convenient. It didn't take long for me to become a convert. I put my name on the wait-list for several books at the library and started crossing them off my list. With the addition of an iPad at home, this only made it easier still. Surprisingly, I was reading more than I used to when I only read in a paper book format (pBook). It was more convenient and because I was reading more often, I was more engaged in the book and kept on reading at home rather than watch some television. As I looked around me on the bus, I began noticing more and more people reading books on an electronic reader. This got me thinking: is this some slight change I am noticing now or is this a shift in the general perspective for books? But, before we go there it might be helpful to understand some basics.

So, what is an eBook? It is a published work that is presented to the audience in an electronic format (PDF, ePub, HTML, etc.) and can be accessed/read by the audience via a device such as Kindle, Nook, Sony Reader, iPad, PC, etc. The traditional printed paper book now is often referred to as pBook.

Now, let’s consider how significant is the eBook market. Looking at some of the published numbers for 2010 only (not considering the activity prior to that) , the sales of significant eBook devices are as follows:

(From various sources on the internet; "good enough for government work")

In the table above, I have included the iPad with dedicated book readers since most iPad owners are using their units to access printed media. Given that, while about 24 million new dedicated units were added to the eBook audience in 2010 alone, this number could be substantially larger if some of the other compatible but non-dedicated units were used for eBook access. If we assume that about 25 million new members were added to the eBook club last year and if each one accessed (not purchased since there are many free books available) only 5 books in 2010, we are looking at 125 million eBooks. And keep in mind that we are not considering existing members of the eBook audience from prior years. It is safe to say that the eBook market is significant and, more importantly, growing... rapidly.

Just how rapidly? Consider this: in Feb-2011, eBook sales in the US increased over 200% over Feb-2010 while most of the print formats showed a decline in sales. (eBook sales were $90M while pBook sales were around $215M.) It is important to note that eBooks are priced below their printed counter-parts (especially hardbacks) which means that in number of units, fewer pBooks need to be sold to arrive at the same sales figure in dollars. Overall, eBooks sales were about 8-10% of total book sales in 2010. So it is still a small segment but at the growth rate that we have seen, this will be a much larger segment in the near future. Amazon has recently announced that it sells 180 eBooks per 100 pBooks. Obviously, since we are only looking at sales here, we have not considered the widespread growth of eBook access in public libraries.

According to a recent announcement from The American Library Association (ALA), virtually all academic libraries in the US as well as two thirds of US public libraries offer eBooks. Most libraries provide free Wifi and a third of school libraries lend eReaders. For a public library, eBooks offer a number of advantages both from a cost as well as efficiency perspective (as listed in the pros and cons below). However, one leading publisher has announced that it will not allow a copy of one eBook to be checked out more than 26 times. Following which, the library will be forced to purchase another copy i.e. license. This obviously goes against the grain of fundamental library principles and also threatens to set a dangerous precedent for financially strapped libraries. It remains to be seen where this will end up.

Pros of eBooks:

• Ease of use: with small, light, easy to handle devices, it is ergonomically easier to manage eBooks.
• It is easier to navigate and search eBooks which is a particular benefit to students dealing with text books. (No more lost/dropped bookmarks!)
• Font sizes can be adjusted as can the brightness of the screen. (particularly beneficial to visually impaired readers)

The following are particularly beneficial to libraries:

• eBooks do not wear out, face no physical damage and do not need to be replaced like pBooks do.
• eBooks cannot be misplaced by careless readers.
• eBooks do not require physical storage space like pBooks.
• eBooks can serve remote (and handicapped) users more readily with minimal cost.
• eBooks offer a lower carbon footprint. (no physical transportation, manufacturing, etc.)

Cons of eBooks:

• Feel: this remains the primary objection raised by most readers. The sensory experience of handling a book, its pages, original colors (in many cases), texture and even smell is stripped from eBooks.
• There are several mutually incompatible software formats with different DRM (digital rights management) schemes. This could lead to a format war scenario akin to the infamous VHS - Betamax clash.
• There are multiple reading devices with different, unique hardware that cannot easily share eBooks.
• Requires the use of power and ultimately, fossil fuels.
• Initial expense related to buying a reading device viz. Kindle, iPad, etc.
• Reduction of jobs related to manufacturing, logistics and retail aspect of the publishing industry.

So what does all this mean?  For starters, eBooks are not going away.  Time will tell if eBooks will completely or even significantly take over the pBooks domain.  But it is certain that eBooks will play a major role in the reading world going forward.  I used to think of myself as a purist who could never adapt to reading books in an electronic format but I have found the switch not only easy but also certainly rewarding as I find myself reading a little bit more.  All in all, if eBooks will help a few more people to develop (or re-develop) their reading habits, how can that be a bad thing?

WHAT’S REALLY ON YOUR PLATE?

The Omnivore's Dilemma by Michael Pollan

Ever wonder what exactly is on your plate as you sit down to eat a meal and perhaps ponder where in the world did it come from? Sometimes we ignore or suppress certain questions simply because we have an inkling about what the answer is and don’t really want to acknowledge that. Here is a book that is delightfully easy-to-read and provides several answers that you should know without being judgmental in any way. More importantly, it prepares you to raise intelligent questions and make your own decisions as you go along your merry way.

The premise is pretty simple: Pollan sets out to trace the roots of four different meals and understand how the food ended up on his plate. The four meals serve as samples from four different food channels:

• Industrial food (Fast-food meal)
• Industrial Organic food (organic meal from select supermarkets)
• Local Organic food (organic meal from a local sustainable farm)
• Ultimate Local food (meal from food collected via hunting/gathering)

As he traces backwards on the food supply chain, it is surprising to discover how tremendous a role corn plays in our daily diet. Just about everything we eat from a traditional supermarket (grocery chain stores) is corn-based. Meat is largely derived from corn.  Even a serving of soda is mostly corn in the form of High Fructose Corn Syrup aka HFCS.  Pollan meets with corn farmers to understand how the corn industry has an overpowering stronghold on the American food chain.  Unfortunately the benefit of this market dominance (monopoly, even) is limited to a couple of giant corporations who declined any access to Pollan in his research.  Corn farmers survive largely due to government subsidies and do not enjoy an enviable position.

For me, what was revealing is the manner in which most of the meat available is "manufactured". Cattle and Poultry are not intended by nature to be raised on corn. When cattle is raised on corn alone, their bodies cannot handle it and they get sick. This, in turn, leads to them being treated with antibiotics. To maximize the profitability of the product (beef), they are injected with hormones which will reduce the time to processing i.e. slaughtering. In the early to mid 20th century, the cattle was slaughtered at over 24 months. In the 60s and 70s, this age dropped down to around 18 months and nowadays cattle is considered ready for processing around 14-15 months. The amount of beef consumed in the US is staggering and it needs a lot of cattle to support this consumption.

Pollan purchased one head of steer to follow it through the commercial supply chain but once it reached the slaughter-house, he was denied access to the proceedings inside. It is commonly accepted that if the public knew how beef is packaged and stocked in the meat aisle then it would be difficult for one to eat that. And this is after the intervention by Temple Grandin who changed the beef industry procedures to more humane handling of cattle.

This is not limited to cattle but also extends to chickens and pigs that are commercially raised for consumption. Chickens perhaps have it worst because it is a true assembly line and most chickens end up in a package after spending their entire lives in a crammed cage. Pollan investigates the truth behind labels such as "cage-free", "organic", "free-range" etc. and makes some interesting discoveries. Like almost everything else, it is not quite what it seems. In CAFOs (Concentrated Animal Feeding Operation), animals such as pigs and chickens have been observed to display suicidal tendencies.

But the book is not an assault on industrial food chain or even our conscience. There is this other channel of the food chain that departs from the “corn” path, if you will. Pollan tracks down the roots of organic foods available in select grocery chains (such as Whole Foods) and discovers that while these are organic and free of chemical fertilizers, there is a huge impact on the carbon imprint because of the shorter shelf life and market demands across thousands of miles. So he further refines his search to a local organic source and discovers a whole new segment: local organic but sustainable farms.

Pollan works for a week at one such farm (Polyface Farms) run by Joel Salatin in Virginia. The practices on this farm were a revelation to me. They raise cattle and poultry on the farm using environmentally sustainable techniques that allow them to maintain the soil nutrients without any artificial fertilizers or pesticides and still operate a profitable business. They use a rotation method for animals on the farm which serves almost as an ecological system. The cows feed on the grass in a section of the field for a few days and then are moved to another section. The chickens then feed in the cows' previous spot eating worms and droppings from the manure. They, in turn, fertilize the section with their manure and move on to the next section. The compost on the farm is aerated by the pigs on the farm which also graze in the pasture. The chickens are processed (slaughtered) on the farm in an open shed and packaged for sale. They would like to process their own beef but USDA will not permit them so it gets processed in a facility away from the farm. The farm sells only locally and will not ship its products because it is counter to their philosophy. What is comforting is that Polyface is not the only one of its kind. There is a plethora of such farms across the nation and we have access to these, if we so choose. (More information is available at Eatwild.com about farms in the US.)

The final section of the book refers to Pollan's efforts to create a meal entirely out of ingredients either hunted or gathered by himself. While this is interesting, it is certainly not a practical alternative. But it makes for interesting reading and introduces us to some colorful characters that Pollan comes across.

What I particularly like about this book is that it is not judgmental about one's eating preferences and practices. This is not a plea to convert you to vegetarianism. It would be a separate debate if there would be enough (nutritious) food available for everyone if nobody ate meat. This is primarily an education regarding what goes on behind the scenes when you pick up a package of food from the grocery store to feed yourself and your loved ones. Once one understands the different channels and sources, one can choose as one wishes. I think that the key issue is that most people (like myself) just don't know much about the food sources and channels. At the very least, we owe it to ourselves to know a little bit more about what we put in our bodies.

BLUE VALENTINE

Director: Derek Cianfrance

Cast: RYAN GOSLING, MICHELLE WILLIAMS

Screenplay: Derek Cianfrance, CAMI DELAVIGNE & JOEY CURTIS

Music: GRIZZLY BEAR

Run Time: 112 min.

(2010)

Raw, devastating and poignant.

In 2006, more than 550 screenplays competed to win the prize of $1M of funding in the Chrysler Film Project. Derek Cianfrance's Blue Valentine was the winner of the contest. While not entirely a labor of love, it certainly depicts love's labor.

The film follows a young couple's relationship at two stages: the conception of early love and the decay of exhausted affection. Dean and Cindy are the two halves of a working-class Pennsylvania couple with a daughter who is about 6 years old. She is a nurse and he is a house painter. The movie alternates between the events of early courtship and the fractured marriage of the present. Dean is a blue-collared worker who has this goofy romanticism that is hard to dislike. Cindy is a college student pursuing medicine, full of hope for the future and eager to separate herself from a dysfunctional family. They meet, fall in love and seem to be destined for a “happily ever after”. But as we see the current day, six years have taken their toll. Love has faded into the background of responsibility and bickering. One sees the marriage as a journey to a destination not yet defined while the other sees it as a destination where one has arrived. One hopes that the best is yet to come while the other thinks that things are fine as they are.

Dean and Cindy are likeable but flawed characters, each in their own right. We cannot fault one or the other entirely. What makes matters more difficult is the fact that there is no physical abuse, addiction, infidelity or financial secret that is corrupting the relationship. The film is a study in juxtaposition: past versus present, man versus woman, love versus hate, youth versus maturity, beginning versus end. The film sits squarely on the shoulders of its two leads played remarkably by Ryan Gosling and Michelle Williams. Williams plays Cindy as a hopeful student who turns into a skeptic who is on the verge of giving up on herself and everything. Gosling embodies Dean who is unflinchingly honest with himself but still far from perfect. A story like this has to have some autobiographical roots. After seeing a couple of pictures of Derek Cianfrance, one can see why Gosling was chosen for this role and why his looks are modeled the way they are. His Dean fits right in amongst the populace in the area known as NEPA (North Eastern Pennsylvania).

Since the story does not follow a linear format, it has to rely on the leads to connect with the audience and they certainly shine. It is disappointing to note that Gosling was not nominated in the Best Actor category for the Oscars. It is a remarkable achievement that these two actors can successfully portray the changes between early 20s and late 20s because the physical differences are quite subtle but the personalities and emotional states have come a long way in 6 years. The film ends on a somewhat bitter note that leaves room for the audience to form their opinions about the outcome and future. The film was initially given a NC-17 rating due to some racy scenes but was eventually reversed on appeal. Rightfully so, as it has nothing to deserve a restrictive rating.

The title is derived from an old Tom Waits song called “Blue Valentines”. If you check out the lyrics, you will see why it is such an apt title for this story set in eastern Pennsylvania. (If there ever was a song ripe for a good cover version, this is one.)

It is easy to identify with Dean and Cindy as two people that we know in the world around us and it is a little frightening how sympathetic we are to the breakdown of this marriage. At first, I was a little frustrated with the movie because there was no clear cause for where this relationship ends up. I wanted to be told what exactly went wrong. I decided, at the time, that I didn’t like the movie so much. About ten days later, I found myself still thinking about the movie, the characters and the possibilities. That is when I reluctantly admitted to myself: does one really know what exactly went wrong in any relationship? I certainly don’t. But if this little indie gem makes me connect with its characters after so long, then it is just that, a gem.

Download this: All the compositions by Grizzly Bear, especially “Lullaby”. Ryan Gosling’s version of “You always hurt the ones you love” in a goofy voice. “You and me” by Penny & The Quarters.

THE GREENEST CITY IN AMERICA

Green Metropolis by David Owen

A friend of mine once told me that the airplane passenger sitting next to him on a business trip to Los Angeles offered him a dollar for every swimmer, of any age, that he spotted in any of the hundreds of backyard pools that came into view as they approached LAX. My friend saw none, and the man said he had made the same offer on other flights and had never had to pay off.(page 63)

David Owen's Green Metropolis initially focuses on the author's move from the traffic and congestion of Manhattan to a presumed idyllic country setting in Connecticut to a 100-year old house across from a nature preserve. The move, which was supposed to be an effort to be more environmentally conscious, ended up being (in his own words) an ecological catastrophe. The Owen family's electricity consumption went from 4,000 kilowatt-hours to 30,000 kilowatt-hours. They went from zero to two cars shortly after the move and started driving instead of walking or bicycling for almost any activity away from home. This obvious change in their lifestyle led him to reexamine the premise of the big bad city and its atrocities against nature. Generally speaking, any place with lots of tall buildings and heavy traffic is considered an environmental disaster. Except that it is not. In fact, he goes on to make the case (quite successfully) that New York is the greenest city in the nation.

For starters, let's clarify that green means environmentally sustainable and efficient in terms of fossil fuels usage. Green should not construe lush forests with gushing streams and mountain ranges. On a per capita basis, New York uses a limited amount of energy. The average New Yorker generates 7.1 metric tons of greenhouse gases compared to the national average of 24.5 MT. Manhattanites generate even less. So-called "eco-friendly" cities viz. Portland, OR and Boulder, CO pale in comparison. And it all boils down to to one key factor: population density.

Manhattan's density is about 67,000 per sq. mile, which is over 800 times that of the nation.  The sheer density sharply reduces the opportunities to be wasteful as well as possibilities for reckless consumption.  Most of its inhabitants can get by without owning a car.  Over 80% of employed Manhattan residents commute to work by either public transport, bicycle or foot.   Most live in some of the most inherently energy-efficient residential structures i.e. apartments.  The heat escaping one apartment helps heat the one above it, whereas most single family homes lose a portion of their heat through the roof.

The book explores this novel approach to sustainability and notes that New York’s remarkable population density is not a result of conscientious planning but due to a series of serendipitous accidents.  The foremost accident is the geographic location of Manhattan in particular.  It is a seaport turned inside out – a city with a harbor around it rather than a harbor with a city along the edge.  This drove all early development inward and upward.  Another accident was that the street plan was designed by  merchants interested in economic efficiency rather than in boulevards or empty spaces between buildings.  A third accident was that residential and commercial development was more mixed in New York than what would be allowed later in most other parts of the US.  The subsequent zoning laws in the US would not have allowed for such development.  Also, by the early 1900s, most of Manhattan had already developed such that it was difficult to make changes to accommodate the automobile. 

Any meaningful discussion regarding the environment must ultimately be about fossil fuels, mainly oil.  The book spends a good portion on the “oil culture” that has grasped civilization today.  Everything we buy or do includes the cost of fossil fuels; even reading this blog, either electronically or on paper, would not be possible without fossil fuels (the computer, the power running the computer, the making of the paper, transportation and even the chair one is sitting on will have oil-based coatings; not to mention the eyewear used, if any).

This is a very easy-to-read book on a subject deemed by some to be somewhat dry and cumbersome.  Owen manages to start from a pin-point observation of New York City and then expands the scope to the rest of the world, especially emerging countries.  There are certainly lessons for developing urban areas.  While New York’s evolution was largely organic, spontaneous and accidental, we have the opportunity to replicate the benefits in other cities to come.  There are innumerable bits of trivia scattered all over the book which provide insight and perspective viz. What is the threshold for public transit in a neighborhood?  Seven dwellings per acre. With that or more, one can have enough passengers to support a reasonable frequency of service.

To those that deem densely populated cities as environmental crisis zones, consider this:  On a per square foot basis, New York City generates more greenhouse gases, uses more energy and produces more solid waste than any other comparable American region.  On any map showing negative environmental impacts, Manhattan will stick out like a red dot amongst green surroundings.  However, on a per capita basis, these statistics are completely reversed.  Therein lies the rub.  Once we change our way of thinking, a profound environmental truth reveals itself.  Density is good… and green.

After all, it comes down to how we think about different approaches.  Henry Ford called the city a “ pestiferous growth” and thought of his cars as tools for liberating humanity.  I wonder if he would reconsider that today.

TO CINEMA WITH LOVE

My love affair with cinema began quite early. Coming from India, the land of the world’s largest film producer (yes, they make more movies than Hollywood out there), it was practically impossible that I would not be lured by the silver screen. While I had been attracted to and entertained by cinema since I was a child, I fell in love with the medium a little later. I was probably in my early teens when my father encouraged me to play hooky from school and go see To Sir With Love.

In my hometown, most cinema houses screened Hindi (or other Indian) language movies. There was one theater that was dedicated to showing English movies but those would only be current releases. There was this one theater that screened older English movies in the morning slot: the 10 am screening prior to the matinee. To Sir With Love was playing at this theater and like most of the older films, was likely to end its run by the weekend. Now, you have to understand that, in my family, skipping school was akin to committing armed robbery… or worse. You could skip lunch and dinner before you skipped school. So when my father urged me to skip school and see this film, I was certainly intrigued.

So off I went, one weekday morning, to see this little gem of a movie from 1967. I sat there mesmerized by a solid script, wonderful depiction of London and the powerful presence of Sir Sidney Poitier. Well, let’s just say that my perception of cinema changed that day. I think it was then that I realized the true power of storytelling and the impact it could have. The story of a black London engineer, Mark Thackeray, who turns to teaching a rowdy bunch of white kids as he searches for a “proper” job imparts many lessons for a young mind. Sidney Poitier, in the performance of a lifetime, personifies dignity and wins over the hearts of his students and audience alike. Often imitated but never duplicated, it remains a classic and one of my favorite movies. A random sampling of quotes from this movie gives you some idea of what it is all about.

Student: “What are we going to talk about, Sir?”

Mark Thackeray: “About life... survival... love... death, sex, marriage... rebellion, anything you want.”

Mark Thackeray: “I believe one should fight for what one believes. Provided one is absolutely sure one is absolutely right.”

Mark Thackeray: ”If you apologize because you are afraid, then you're a child, not a man.”

Mark Thackeray: ”Marriage is no way of life for the weak, the selfish, or the insecure.”

There was one other time when my father (not too long ago after the first instance) encouraged me to watch a movie even though it meant skipping school again. This time, it was an epic movie from 1962 about the real-life story of a British Officer in the Middle East during World War I, Lawrence of Arabia. It was my introduction to “big” movies, one made by the master of grand films, Sir David Lean. It is a big movie in every sense: grand locations, impressive landscapes, huge cast, heavyweight performances and even a very big runtime at over 3 hours. It made me appreciate the grandeur that can be brushed on the silver screen. Unlike some of the other “big” films that I saw later on, (Ben-Hur, Cleopatra, Spartacus and so on) huge landscapes are juxtaposed with close-ups of characters.

It is the kind of movie that you start watching and realize before it is over that it has made it to the top 5 list of the Academy Awards. At its heart though, it remains a brilliant character study and Peter O’Toole as T. E. Lawrence established himself as a heavyweight in the field in spite of his slight, almost delicate, frame. Good as he was, O’Toole did not take home the Oscar that year as he lost to a slightly more powerful performance by Gregory Peck in To Kill A Mockingbird.

For the record, my father did not sanction any truancies following these and I will never admit to having skipped school to see a movie any other time. But this set me on a course to appreciating good cinema and looking forward to the next good film, be it grand in scale or a small independent movie trying to make its voice heard. And all along, while being entertained, thrilled, pleased or humored, hopefully I have learned a little as well.