You don't want to live there . . .

THE NYT has a report on the sad state of Illinois: "PAYBACK TIME Illinois Stops Paying Its Bills, but Can’t Stop Digging Hole". Not good:

CHICAGO — Even by the standards of this deficit-ridden state, Illinois’s comptroller, Daniel W. Hynes, faces an ugly balance sheet. Precisely how ugly becomes clear when he beckons you into his office to examine his daily briefing memo.

He picks the papers off his desk and points to a figure in red: $5.01 billion.

“This is what the state owes right now to schools, rehabilitation centers, child care, the state university — and it’s getting worse every single day,” he says in his downtown office.

Mr. Hynes shakes his head. “This is not some esoteric budget issue; we are not paying bills for absolutely essential services,” he says. “That is obscene.”

For the last few years, California stood more or less unchallenged as a symbol of the fiscal collapse of states during the recession. Now Illinois has shouldered to the fore, as its dysfunctional political class refuses to pay the state’s bills and refuses to take the painful steps — cuts and tax increases — to close a deficit of at least $12 billion, equal to nearly half the state’s budget.

Illinois is not alone. What happens when the wheels fall off? How does this affect US federal politics? How will it affect the GOP? The Tea Party?

Agora Agony

Last Rites: Even with God's help, this shopping center in Pahrump, Nevada, probably cannot be revived.

THE DESIGN OBSERVER is one of the more thoughtful web sites dedicated to the appreciation of design of all kinds. Mark Dery has an article, titled "Dawn of the Dead Mall", where he proclaims "The landscape is littered with the giant carcasses of failed retail emporia. Ideas for what's next are no less visionary. But are they any more practical?"

The multitiered, fully enclosed mall (as opposed to the strip mall) has been the Vatican of shiny, happy consumerism since it staked its claim on the crabgrass frontier — and the public mind — in postwar America. The nation’s first enclosed shopping mall, the Southdale Center, opened its doors in Edina, outside Minneapolis, in 1956. Southdale was the brainchild of the Los Angeles– based architect (and Viennese refugee from the Anschluss) Victor Gruen. A socialist and former student of the modernist designer Peter Behrens, Gruen saw in the covered mall a Vision of Things to Come.

But it wasn’t Gruen’s Mad Men take on the Viennese plazas he remembered so fondly that made his Ur-mall go viral. Developers liked the way Gruen used architecture to socially engineer our patterns of consumption. His goal, he said, was to design an environment in which “shoppers will be so bedazzled by a store’s surroundings that they will be drawn — unconsciously, continually — to shop.” (Remember, Gruen was from Freud’s Vienna, where psychoanalysis was a growth industry.)

Unfortunately, Gruen made the fatal mistake — fatal for an arm-waving futurist visionary, anyway — of living long enough to see American consumer culture embrace his idea with a vengeance. In a 1978 speech, he recalled visiting one of his old malls, where he swooned in horror at “the ugliness...of the land-wasting seas of parking” around it, and the soul-killing sprawl beyond.

Good thing he didn’t survive to see the undeath of the American mall. Most economic commentators attribute its dire state to the epic fail of the American economy. In April of this year, one of the country’s biggest mall operators — General Growth Properties, owner and/or manager of over 200 properties in 44 states — filed for bankruptcy, mortally wounded by the exodus of retail tenants.

Anyway, Mark has lots to say. Along the way, check out DEAD MALLS.COM, an eponymous web site with interesting stuff, including a Dead Mall Dictionary, with situationally-relevant entries like

Labelscar: Fading or dirt left behind from a sign on or in a mall. Labelscars leave a readable marking, which is very helpful when identifying former stores.

It is also interesting to see how Europeans look upon the situation. DER SPIEGEL has a great piece with some neat photos, like the one at the top. Originally published in German, you sure have to love that Google Translation.

Blowback! Be careful what you wish for.

Heh. Northman's Fury picked up on a good one.

It seems the Bush administration's new (and grossly punitive) bankruptcy laws are having an effect the US banks never counted on.

``Be careful what you wish for,'' Westbrook said. ``They wanted to make sure that people kept paying their credit cards, and what they're getting is more foreclosures.''

Washington Mutual, Bank of America Corp., JPMorgan Chase & Co. and Citigroup Inc. spent $25 million in 2004 and 2005 lobbying for a legislative agenda that included changes in bankruptcy laws to protect credit card profits, according to the Center for Responsive Politics, a non-partisan Washington group that tracks political donations.

The banks are still paying for that decision. The surge in foreclosures has cut the value of securities backed by mortgages and led to more than $40 billion of writedowns for U.S. financial institutions. It also reached to the top echelons of the financial services industry.

Compassionate conservatism gets a bite on its greedy ass.

On the road to national bankruptcy

Remember when the Bush administration, specifically then deputy Secretary of Defense Paul Wolfowitz said invading Iraq would "pay for itself"?

That was around the same time that one of Bush's economic advisors, Lawrence Lindsay, in a September 2002 interview with the Wall Street Journal, suggested an invasion of Iraq would cost, at the upper limits of somewhere between $100 billion and $200 billion.

The Bush administration didn't like that much so they had Mitch Daniels, Director of the Office of Budget and Management publicly declare that Lindsay's estimates were "very, very high". Then Donald Rumsfeld jumped in by saying that the OBM had provided an estimate of under $50 billion for the total cost of the war.

They then fired Lindsay.

On Wednesday, this appeared.

The war in Iraq could ultimately cost well over a trillion dollars -- at least double what has already been spent -- including the long-term costs of replacing damaged equipment, caring for wounded troops, and aiding the Iraqi government, according to a new government analysis.

The United States has already allocated more than $500 billion on the day-to-day combat operations of what are now 190,000 troops and a variety of reconstruction efforts.

In a report to lawmakers yesterday, the nonpartisan Congressional Budget Office estimated that even under the rosiest scenario -- an immediate and substantial reduction of troops -- American taxpayers will feel the financial consequences of the war for at least a decade.

The calculations include the estimated cost to leave some US forces behind for at least several years to support the Iraqi government, but they also predict other long-term costs, such as extended medical care and disability compensation for wounded soldiers and survivor's benefits for the families of the thousands of combat-zone fatalities.

The percentage of total revenue taken in by the US government which is being spent on the Iraq war:

The cost of the war in Iraq and other military operations has soared to the point where "we are now spending on these activities more than 10 percent of all the government's annually appropriated funds," said Robert A. Sunshine, the budget office's assistant director for budget analysis.

Unlike the figures first produced by the Bush administration, most of which they pulled out of their asses, these ones are extrapolated from known expenses over the past five years.

And then there's the "surge" which was the subject of a lot of bandied-about figures.

Representative James P. McGovern, a Worcester Democrat and a member of the budget panel, said that [Gordon] England [deputy secretary of defense] couldn't give a firm answer when asked how much the Pentagon needed to pay for Bush's decision to dispatch 30,000 more troops to secure Iraq earlier this year. England said the costs the Pentagon anticipated a few months ago for military operations in fiscal year 2008 -- about $142 billion -- will no longer be enough.

Just haul out the credit card and pay for it.

But McGovern said he is worried about the long-term financial impact of the war, adding that his primary concern is that the United States is borrowing money to pay for it. Some leading economists have predicted that, depending on how long troops remain in Iraq, the endeavor could reach several trillion dollars as a result of more "hidden" costs -- including recruiting expenses to replenish the ranks and the lifelong benefits the government pays to veterans.

"It is being paid for on the national credit card," McGovern said. "It is being put on their backs of our kids and grandkids. That is indefensible."

McGovern said he is considering proposing that a "war tax" be levied on all Americans to cover the ballooning expenses.

"We should find a way to pay for it so that when this war is over we are not bankrupt," he said.

Right! A war tax. Why didn't the "war president" think of that?

In case you're having trouble sorting out the massive scale of a trillion dollars, this was written over a year and a half ago.

And where have the players who brushed off any thought of the Iraq war costing anything more than a few billion dollars?

Paul Wolfowitz - Left his post as Deputy Secretary of Defense in January 2005 to become the president of the World Bank. Resigned under a cloud having made particularly outlandish arrangements for his girlfriend, also an employee of the World Bank, to receive a highly paid job working for the State Department while still on the World Bank's books. Now a visiting scholar at the American Enterprise Institute, a right-wing think tank.

Mitch "The Blade" Daniels - Resigned as Director of the Office of Management and Budget under the cloud of an investigation into "insider trading" relating to issues with Eli Lilly pharmaceuticals, a company of which he had been a senior vice-president. Ran for and won the governorship of Indiana. Tried to raise taxes on individuals and corporations earning over $100,00 annually and tried to raise taxes on cigarettes by 25 cents per pack. This confused conservatives everywhere. Bush quit calling him "My man Mitch".

Lawrence Lindsey - CEO of the Lindsey Group, writes for the Wall Street Journal and the Weekly Standard. Also a visiting scholar at the American Enterprise Institute. Had a history of disagreeing with people on economic issues. He was usually right.