Bonds. Municipal Bonds.

The post title puts the case as Sean Connery, the original celluloid Bond, might have put it. By coupling the latest news out of Birmingham, Alabama (the Pittsburgh of the South, as some would have it), with the New York Times' summary of Pittsburgh's natural population decline, Chris Briem finally has hooked me on the story of the public finance disaster that looms over Pittsburgh. To recap, briefly: The City of Pittsburgh owes roughly $1 billion in general obligation debt, i.e., municipal bonds. The City of Pittsburgh also has roughly $500 million outstanding in unfunded pension liabilities. On a per capita basis, the City of Pittsburgh owes more money than Jefferson County, Alabama, in which Birmingham is the largest city. "Jeffco" has roughly $3 billion in bonds outstanding. The county has been toying all Spring with the possibility of filing for federal bankruptcy protection. Just the other day, however, its bondholders and related creditors agreed to extend a forebearance agreement -- again staying the day of reckoning for the county and raising the possibility that Jefferson County may be too big to fail. Is Pittsburgh any better off? There are no revenue windfalls in the offing, and if the per capita debt measure matters, then things are only going to get worse. Municipal bankruptcies are not like "ordinary" corporate bankruptcies. Chapter 9 of the bankruptcy code, which would apply to both Jefferson County and Pittsburgh, includes certain special rules governing the classification of creditors; the bankruptcy trustee in a Chapter 9 case does not have the power to step in and run the municipality, as a Chapter 11 trustee might in a corporate proceeding. Among other things, that means, I think, that a bankruptcy court would have relatively few tools with which to manage the expected conflict in Pittsburgh between its bondholder and bond insurer (and reinsurer) creditors, on the one hand, and its pension obligee creditors, on the other hand. If and when forebearance agreements become topics of local discussion, there's no assurance that all of Pittsburgh's creditors can be made to get on the same page. Jefferson County may be too big to fail -- but is Pittsburgh? Meanwhile, out in California, the Bay Area city of Vallejo filed its own Chapter 9 bankruptcy petition the other day. Residents quoted in The New York Times claimed to be excited by the prospect of municipal financial restructuring. I drove through Vallejo right after this happened and can safely report: uncertain though it may be, life goes on. Out in California, municipal fiscal disasters are localized; poor towns subsidize the wealthy. All do not suffer jointly. Only sixty miles from Vallejo, in the Silicon Valley Eden called Menlo Park, the (re)building boom continues unabated, with teardowns and new McMansions to the left and teardowns and new McMansions to the right. Both before and after traversing Vallejo, in Menlo Park I saw the usual: Moms walking dogs. Nannies strolling babies. Men steering bicycles with one hand and cradling cell phones in the other. A Safeway store more palatial than the East Liberty Whole Foods and a Giant Eagle Market District combined. Latino day laborers with red baseball caps waiting idly at the side of the boulevard, waiting for a ride and a day's wage. Pittsburgh's wealthier suburbs seem to care not about the city's public finance disaster because they imagine themselves to be more or less like Menlo Park, that is, essentially immune from what's happening on the other side of the bridge. But the Pittsburgh region is unlike the Bay Area in many, many ways, and this is one of them. If Pittsburgh goes completely in the financial tank, it seems likely to me that much of the region is so intertwined with the City economically that many of those suburbs will go with it. Commuter tax, anyone?

CEOs for Cities Coming to Pittsburgh

The next national meeting of CEOs for Cities, "a cross sector network of urban leaders dedicated to speeding innovation in cities," comes to Pittsburgh in two weeks. This is a nice opportunity for the region to participate in a progressive dialogue. I worry, though, that some of the conversation will be framed badly. Here's a link to the meeting agenda. What looks like an anchoring event, a public discussion, is described this way: The Power of One Connected In a time where the ultimate resources are ideas, connections and innovation, how can we facilitate these very things? How can creativity be used to bolster the sociocultural, knowledge and creative capital of a city? This session will look at the power of creativity to engender selforganizing, self-generating means of exchange among citizens. The problem here is that the directional arrow may be pointed in the wrong direction. Can creativity "bolster" the sociocultural capital of a city? I'm not sure that I even know what that means, once the question is run through a jargon-neutralizing filter. But assuming that the question has some content, why not turn the arrow around and ask instead: "How can existing regional sociocultural networks and practices be energized and supported to bolster the production and distribution of creativity and innovation, leading to growth and prosperity, and how can new networks and practices be constructed and sustained?" I'm not certain that my extended question survives the jargon-neutralizing filter, but I like it a lot better than the question in the program. Creativity and innovation, and ideas and connections (that's a very odd list, by the way) don't simply exist, waiting to be found and deployed; they are constructed and emerge from specific contexts, which have to be understood before they can be inputs into anything else.

Confessions of a News Junky

I'm something of a journalism junkie, raised as I was by parents who met while editing their college newspaper. My grandfather got into the newspapering business in the 1920s. I'm print-based and mostly analog. I still read two papers every morning; I read a couple of news magazines per week. I rarely watch news shows on television or listen to news on the radio, and I check cnn.com or msnbc.com more for "breaking news" -- like Miley Cyrus's Vanity Fair photos -- than to keep up in the world. So, between that history and my professional curiosity about the internet and e-commerce, I enjoy the occasional public conversation about what Pittsburgh's leading print daily is up to. As part of the NewsHour's coverage of last week's Pennsylvania primary, Jeffrey Brown put together this interesting segment featuring David Schribman, executive editor of the Post-Gazette, who talked about print and web. To put that conversation in broader context, take a look at the agenda and speakers' lineup for a "Future of News" workshop coming up in two weeks at Princeton University. My takeaway: Even with aggressive attention to web-based distribution of content, and even in a market that, like Pittsburgh, skews to an older population that relies on traditional, local sources, the "future of [traditional] news" seems . . . shaky.

The Riverhounds Return

Professional and semi-pro soccer in Pittsburgh has a long history, much of it distinguished (long-time fans will remember the late Nicholas "Nick" DiOrio) and most of it under the Steelers-, Pirates-, and Penguins-dominated radar. The most recent entry in Pittsburgh's pro soccer history is the Riverhounds, which began play in 1999 as an A-League entry but struggled financially, finally going on hiatus altogether while reorganization proceeded. And now they're back, no longer part of the A-League -- now the USL (United Soccer Leagues) First Division, but viable and competing in the USL Second Division. Pittsburgh deserves better than third division pro soccer, but it's the pro soccer we have. Welcome back, 'Hounds! The team will be playing its home games at the Chartiers Valley High School Stadium, which is in Bridgeville just off of I-79 near the Kirwan Heights exit. The home opener is this Saturday night at 7:05 p.m. The club has a "Steel Army" supporters group, which has its own website.

Mt. Lebanon's Denis Theatre to Reopen

Fans of independent film in Pittsburgh mourned the closing of Mt. Lebanon's Denis Theatre four years ago. Lebo residents have rallied, and the theatre will be renovated and reopened. The press release arrived today. Details at Blog-Lebo.

A Primary Pittsburgh Post: Pittsburgh as Place

Lindsay Patross at iheartpgh.com suggested posts on the good things that are happening in Pittsburgh, to be collected at The Primary Pittsburgh Project. Here goes: The great strength of the Pittsburgh region -- and its great weakness -- isn't the people, or the neighborhoods, or families, or working class traditions, or Steelers football. I can't point to one best example of a good thing happening right now that locals, and politicians, and the media should latch on to as distinctly positive or good. Instead, I point to a good thing that was here before we were, and that will be here after we're gone. The great strength of the Pittsburgh region -- and its great weakness -- is its profound and overwhelming sense of place. Great cities are great in large part because their citizens invest in the wealth of place. Pittsburgh was founded 250 years ago at an aquatic confluence that gives it enduring and uncommon wealth. If Pittsburgh has been a great city, that's because those who have lived here and those who visited were stewards of that wealth. They drank deeply of Pittsburgh's hills and valleys and rivers, molding their lives to the land and the water rather than molding the land and water to their lives. Pittsburgh hasn't always followed that formula. At times, the region has squandered the wealth of place. But if Pittsburgh is going to be a great city again, it needs to rebuild that wealth and reinvest in it -- and it needs to do that metaphorically as well as literally: If a City/County merger proceeds, then planners need to revive and restore local communities at the same time that they integrate and streamline public services and taxation. The City of Pittsburgh needs to do even more to promote and sustain the city's neighborhoods. The institutions in Oakland -- Pitt, UPMC, and CMU -- have displaced the institutions of Downtown as economic motors for the region, which means that the region has to acknowledge and build on the distribution of technological capital, financial capital, and labor across wide areas, where they were once concentrated in a few. The Pittsburgh Diaspora can thrive, if continues to thrive, by building on the metaphor of Pittsburgh-as-place that Burgh ex-pats carry with them everywhere. Pittsburgh 2.0 can thrive, if it will thrive, by reversing the polarity of the Diaspora and using the metaphor of Pittsburgh-as-place to attract new in-migrants as well as rebounding natives. The risk inherent in this -- the region's great weakness -- is that place and our metaphors of place can be fixed and inflexible. The hills and valleys and rivers don't change, or don't change much. Attachment to place often means attachment to the past. I love and hate the images of molten steel that flow through Monday Night Football broadcasts; those images are intense reminders of Pittsburgh's past but only modestly representative of its present -- let alone its future. If Pittsburgh uses the wealth of place as a foundation for growth, rather than as a ceiling imposed by history (block that metaphor, as The New Yorker sometimes writes!), then Pittsburgh can turn weakness into strength. The Detroit Free Press quoted me last week: "People love this city like no other city in the world." To borrow and adapt a phrase that I've heard in other contexts, Pittburghers need to turn the best of Pittsburgh -- themselves -- into the best for Pittsburgh -- the place.

Jon Stewart Does Western PA

Western Pennsylvanians should start paying attention around minute 2:20.

It's the Food, Mars

Whither the bakers who lead Pittsburgh's Cupcake Class? My occasional interest in food as a barometer of economic development is validated, in part, by this recent note in The Economist: The most telling indicator of the prospects of Silicon Valley's technology firms is now clear. It is the cooks. The insightful few on Wall Street who understood this in 1999 are now rich. That year, Google, which had just 40 employees at the time, held a cook-off to anoint its “chief food officer”. Charlie Ayers, who had once fed the Grateful Dead, won. Over the next six years, he led Google, which was also dabbling in web searches and online advertising, to dominance in its core competency: ample, free, organic and exotic food. Mr Ayers eventually left to write a book, “Food 2.0”. But his replacements kept serving burgers made from grass-fed beef, clams sautéed with discs of handmade Chinese sausage, crispy tofu slaw and shots of emerald-green wheat grass. Being not only Californian but Googley, which is to say world-saving, the firm claims to source the overwhelming majority of its ingredients from local farmers. Genetically modified food, needless to say, is out the question. Despite this nourishing regime, Google has recently experienced a few setbacks. At a virile 23, the founder of Facebook, Mark Zuckerberg, makes Google's co-founders, Sergey Brin and Larry Page, both in their thirties, look almost decrepit. The young and hip social network has trounced Google twice on the ultimate-frisbee pitch. Google's archenemy, Microsoft, has invested in Facebook, and Google's executives have started defecting to it. But by all measures gastronomic, Google was still the dominant firm—until now. One of Google's current chefs is Josef Desimone, who is admired chiefly for the kombucha tea that he ferments from scratch and that gets the employees' creative juices flowing. Now however, Mr Desimone is smelling the coffee. He has given notice to Google, and will soon start work at Facebook. On Wall Street, no doubt, the short sellers have taken note.

Barack Obama and Southwest PA

A lot of foolish ink has been spilled in the last few days over Barack Obama's comments on guns and religion and their roles in small towns in Pennsylvania. Some of the wiser words that I've read recently, by contrast, are in this blog post by The New Yorker's George Packer: The real problem with what Obama said is that it’s basically untrue. In southwestern Pennsylvania, religion, hunting, and insularity predate the post-industrial era. They’ve have become politically manipulable points in part because of economic decline, but to confuse wedge issues with traditional values is the mark of the high-minded reformer or the political junkie, or both. It’s the kind of mistake one could make only from a great distance, once those voters had become almost entirely abstract—and, again, no one wants to be an abstraction. This is far from the only thing Obama believes about religion and small-town America, as his 2004 interview with Charlie Rose and much else in his career show. Conservative propagandists like Kristol are predictably and unfairly wrapping Obama’s disastrous sentence around his neck and garroting him with it. So is Hillary Clinton, and the spectacle of her swallowing a boilermaker in a Pennsylvania bar is crass opportunism that will antagonize more voters than it charms. These days the winner is always McCain. But Obama’s devotees, who have an unattractively worshipful tendency to blame his mistakes on everyone but him, would do their candidate and the Democratic Party a favor by acknowledging the damage he’s done to both. It wasn’t accidental. Obama betrayed his own and his Party’s essential weakness, and in the process handed the opposition a great gift. He won’t be able to turn this weakness into the kind of strength that ends eras and wins elections until he understands what happened over the past few days. I don't do politics on this blog, much, and I'm linking to this post and quoting from it less to make a point about Barack Obama or presidential election politics (though I guess a point is unavoidable) and more to make a point about what's authentic and what's manipulable in understanding this region and others like it. In both short and long run, communities and the people who serve them are better off acknowledging the complexities of culture, even while it's cheaper and easier to play off simplified abstractions. Local politics and development economics aren't immune to the problem; policies and positions here are regularly manufactured to suit an abstraction of the "true Pittsburgher" rather than the million-plus people with diverse interests and needs who inhabit Allegheny and its surrounding counties. Like me, George Packer is a suburban liberal raised in the shadow of San Francisco and educated at an Ivy League university (the same one that I attended, in fact). If he can figure out what's what while sitting in Brooklyn, and I think that he has, surely people closer to Pittsburgh can do the same.

Something for Everybody

A few weeks back, I spent a while on the phone with a thoughtful reporter from the Detroit Free Press; she was researching a story on what Detroit (a seriously struggling city) might learn from Pittsburgh (a city that's put its past behind us). Her story appeared today. (And folks who criticize the backward-looking, detail-obsessed political leadership of Pittsburgh should read the comments: Pittsburgh is a shining city on a river (or two) compared to Detroit.) I have one quote in the story: Below the bullet point: "Don't underestimate the power of community spirit and pride," addressed to Detroit leaders looking for lessons, the story notes: More than anything else, Pittsburghers' devotion to their city seems to have kept it from becoming a wasteland. Those who didn't leave town when the mills closed have formed an emotional attachment to the area on par with the fierce loyalty exhibited by Pittsburgh Steelers fans across the nation. "People love this city like no other city in the world," said Michael Madison, a University of Pittsburgh law professor who writes Pittsblog, a blog about the area. Absolutely true, and absolutely inoffensive and meaningless, in one fell swoop.

Why Bother With Immigration?

Harold Miller hit the nail on the head in this morning's P-G, running down statistics on how is coming to Pittsburgh and who is not. He posted a longer version of the piece at his blog. Meanwhile, the P-G ran a companion piece about H1-B visas, and the struggles by local employers -- notably new arrival Sycor -- to lift caps on their number, so that they can hire more of the skilled employees -- immigrants! -- that they want to. Harold Miller has the statistics and the argument exactly right: Pittsburgh runs woefully short by national standards when it comes to attracting immigrants of all skill levels and colors. Although our current rate of in-migration is still too low, at least it’s moving us in the right direction – attracting young people, highly educated individuals, and a somewhat more diverse population than we have today. Our challenge is to make them feel welcome, and to provide the job opportunities they need to stay and build roots here. Harold ends there; he doesn't detail the end of the argument: Why, exactly, is low immigration a problem for the region? As one commenter at his blog notes, low immigration is a symptom, not a problem. The problem is the economy. People go where the jobs are, and Pittsburgh isn't creating enough new jobs -- Sycor notwithstanding -- to generate the in-bound migration that other regions see. "Spin-off" and start-up development based near Pitt and CMU is important and useful, but it's not a jobs-generating sector, at least not in the short term. Moreover, there are sizable communities in the Pittsburgh region that see potential increases in immigration rates as undesirable -- either because immigration of lower-skilled workers threatens existing blue-collar employment and depresses wages, or because in-bound higher-skilled workers compete for positions with people who already live here, or both. Somewhere in Pittsburgh, someone is asking why Sycor wants to raise the H1-B visa cap rather than hire skilled people who already live in Pittsburgh. The problem, in other words, is that immigration is perceived by many as a threat to the pie that we already have, rather than as part of a process of growing the pie. Chris Schultz reprises some concrete ideas for breaking out of this cycle and growing the pie -- I'm especially partial to transit-oriented development, and to growing Pittsburgh's green energy economy. But who will lead? I think that Sycor's leadership is also on the right track. Part of the solution here has to be in-migrants themselves seizing positions as opinion leaders, making the case that they are Pittsburgh's future, just as immigrants created Pittsburgh's past. Left to its own devices, the region may lack the rhetorical or political will to escape the mentality that prioritizes conserving wages and jobs over expanding them. Is this the ultimate immigration irony? That only immigrants themselves, with sufficient numbers and visibility, can lift Pittsburgh out of the doldrums? If only we could attract them and give them a platform . . . .

Division and Unity

The powers-that-would-be issued a report on City of Pittsburgh/Allegheny County consolidation the other day. Chris Briem has context; Bram Reichbaum collects political notes. Lots of generalities; not so much on specifics. As Elvis once sang: A little less conversation, a little more action? For my money, the far more interesting recent news item was buried (as it so often is) at the bottom of an otherwise innocuous P-G feature. "Heinz Endowments boss sets new tone" profiled the new head of the Heinz Endowments, the very impressive sounding Robert Vagt. Here's the last graf: When asked about the issues most in need of attention, Mr. Vagt mentioned three: local school reform, proper planning and development, and a third topic that he acknowledged was more sensitive. "If I were politically correct, I wouldn't bring this up; but not since I was a freshman from Connecticut in North Carolina in the fall of 1965 have I been as slapped by the black-white issue as I have been in Pittsburgh," he said. "It slaps you. It's there and visible and obvious, and it seems to be, in one way shape or form, embedded in many of the issues we talk about, whether it's the arena or public education or development .... I guess I am surprised that it is not talked about more." And, "as a newcomer, this is the one piece I was not prepared for." It seems to me that this topic is part and parcel of City/Council consolidation, but the consolidation report bypasses it almost entirely. I noted only two places in the report where problems of race and urban poverty in Allegheny County are mentioned. At page four, the report notes that the African American community here is disproportionately poor: "Of course, the impact of regional economic decline is not felt equally by all groups, and its disproportionate impact has been felt throughout the region. For example, African American poverty rates are four times higher than White poverty rates in Allegheny County, three times higher in the Pittsburgh Metropolitan Statistical Area, and 2.5 times higher in the City of Pittsburgh." And at page 17, the report notes, "A fundamental goal in effecting any change to the existing structure of local government must be ensuring that minority groups are not unfairly disadvantaged by that change." Sure, fragmented government is an expensive, frustrating annoyance. But the goal here has to be more than more "efficient" administration of a shrinking pie; consolidation may streamline the infrastructure, but consolidation is not a goal in itself. Just because the least well-off won't be made worse off is no reason to pursue the plan (whatever the plan may be). If consolidation is worth pursuing, it's because all of Pittsburgh can be made better off. [Updated 4/08: As Ed rightly points out, the City/Council reference above is a slip -- but I'll leave it uncorrected. I changed the link to Bram's blog, and otherwise fixed typos!]

Reputation Management

The good folks at the Great Lakes Urban Exchange -- GLUE -- take as part of their mission composing a new narrative for recovering Rust Belt cities, including Pittsburgh. It's a fine idea, but actions drive words, rather than the other way around. If we build it, you might say, they will write it. Over at our law school, we've had some sobering lessons recently in reputation management. If you paid very close attention to this morning's Post-Gazette, you read that Pitt's law school fell 16 places in last week's 2009 USNews ranking of all US law schools. (There's a silver lining for me: Pitt's intellectual property law program held on to to its place in the top 30 nationally. I was the original Director of that program; this year, I'm its Acting Director.) I won't belabor the data (there were some changes in the reporting methodology), and I won't argue that the rankings don't matter (though they matter less than many people think, and differently, too). Rankings should be taken seriously; the question is how. The biggest drivers of a given school's standing for USNews purposes are two reputation numbers: reputation among academic peers (determined by a survey that doesn't actually measure reputation among peers), and reputation among practicing lawyers and judges (likewise). The first measure is notoriously difficult to move. Among law professors, once a middle-tier law school, almost assuredly always a middle-tier school -- regardless of changes in faculty composition, quality of students, success on the bar exam, or alumni skill in the courtroom. The second measure fluctuates a bit, because the range of practicing lawyers and judges that receives the survey in the first place is pretty narrow, because the number of lawyers and judges who return the survey is relatively small, and because the level of information that a given lawyer or judge has about a given law school -- outside of the top-level national schools -- is pretty slim. So, small changes in the raw data can add up to larger changes in the reputation ranking. Since middle-tier law schools are very tightly clustered in the overall rankings, a little swing here or there in an underlying data point can move a school up or down in what seems like dramatic fashion. This year, Pitt's lawyer/judge reputation number dropped. Why? Who knows; right now, we don't, though we're thinking about it. It didn't fall below the range established over the last 15 or so years that the magazine has been producing the rankings, but it fell, and along with a couple of other little data points, that hurt the school's place on the list. Back to Pittsburgh: Is the region's reputation more like our law school's academic reputation -- essentially immovable from its historic baseline? Or is it more variable, like our law school's reputation among lawyers and judges, and