Warning: highly digressive post ahead. It starts talking about suburbia
and ends up in the more familiar realm of meta-media. Feel free to dip in and
No posts for the past week – I was away on a work trip to the Midwest.
My days were spent in a cubicle in a bland office building by the side of the
highway; my nights were spent at the Homewood Suites in Chesterfied,
MO. It was an eye-opening view into suburban life in flyover country, and
I learned a lot.
Naturally, the main point of concern was the food situation. My office building
had nothing like a cafeteria: the closest that it comes is vending machines
selling salty and sugary snacks. So one’s lunch options are limited: you
can either bring in your own food from home, or you get in your car and drive
along the highway to the shopping mall, which has a typical shopping-mall food
court. There are a couple of restaurants which are open for lunch as well: I
tried Aquavin, which
despite its name and general nautical theme seemed to have little if any fish
on the menu. Which might be just as well given its location.
If the selection of restaurants in a midwestern suburb is unsurprisingly unexciting,
the selection of foods in a midwestern supermarket is superb. I love US supermarkets
(not the ones in New York, of course), and I think that places like Missouri
might be home to the very best. Schnuck’s,
where I shopped, is by all accounts nothing special by local standards, but
I was very impressed by the fresh food and the wide range of (admittedly nearly
exclusively Californian) wines.
There’s even genuinely local food if you look hard enough: I found a
barbecue place called Smokin’
Al’s where I ordered snoot (that’s pig snout, to you). Crispy,
crunchy, a little bit bitter, very interesting. Great local beer, too.
But the vast majority of anything retail-oriented, from restaurants to shops
to hotels, is part of a national chain. I suppose there must be huge economies
of scale somewhere which allow these chains to make more money than a mom-and-pop
operation might be able to make on their own. But I also suspect that most midwesterners
simply don’t share the New Yorker’s native mistrust of any chain.
Given the choice between Starbucks and a locally-operated coffee shop, they’ll
choose Starbucks because in places like Missouri Starbucks is nearly always
better than the locally-owned coffee shop.
And the Homewood Suites was a revelation: an enormous two-room suite, complete
with two (!) televisions, friendly staff, free breakfast, and even free dinner
(which might not have been very good, but hell, it was free). With
a corporate discount, I paid $79 per night. Normally when I stay in deeply-discounted
hotels, it’s clear that they make money on the extras: room service, spa service,
the minibar, restaurants, bars, internet service, phone calls, that sort of
thing. But the only food service at the Homewood Suites is free, the internet
is free, there is no minibar, and everybody uses their cellphone if they want
to make a call. Even the beer at dinner is free, if confined to Bud and Bud
Light. And there’s certainly no spa, although there is a (free) pool which is
open in the summer. When you pay the bill, it’s the room rate plus taxes: that’s
it. So how they make money off me I have no idea. After all, they have 24-hour
staffing, full maid service, a fully-functional kitchen, the whole bit. No wonder
all the hotels are chains: I just can’t see how any independent hotel could
compete with that.
The Homewood Suites’ amenities also helped me to understand why the broad
mass of Americans always seem to be so ill-informed whenever surveys are done
on what they think they know. The Homewood Suites helpfully provided me with
a copy of USA Today every morning, and I rapidly came to the conclusion that
it’s the only newspaper in the world about which it can be said that reading
it makes you know less than you did before.
I didn’t read much of USA Today: basically just the front page while
wolfing down a quick buffet breakfast before heading off to work. But the weird
thing was that every story I read seemed to be fundamentally wrong. There was
the one which said that the best way to understand the IMF is to think about
it as a global central bank: huh? (And no, IMF was not a misprint for BIS.)
And then there was the lead
front-page story on petrol prices: that was a doozy.
The headline was "Drivers curb use as gas goes up;" the lede was
Americans have cut back gasoline use in apparent response to increasing prices,
separate surveys by the government and a petroleum trade organization showed
But then you looked at the accompanying chart, which showed US gasoline consumption
of 9.1 million barrels per day last year, and, um, 9.1 million barrels per day
now. Not much drop there. Indeed, reading on, we were told that
Gas use last month was 0.6% less than a year ago, the American Petroleum
Institute reported… The U.S. Energy Information Administration (EIA) said
gasoline use the past four weeks was up a slight 0.8% vs.
a year ago.
Yes, up. One survey said consumption was down a little bit, one survey said
consumption was up by a slightly greater amount. And so USA Today leads with
a front-page story saying that gasoline use is down.
We then got this priceless quote, presented without any skepticism:
"If everyone decided to drive 3% less the next 30 days, prices would
crash," says Tom Kloza, senior analyst at the Oil Price Information Service.
‘Cos of course that would be enough to normalise relations with Iran and Saudi
Arabia and Venezuela, and bring full Iraqi capacity back on stream, and create
access to Mexican oil reserves, and basically bring oil back down to $35 a barrel.
I suppose. I have no idea.
And USA Today, I’m afraid, is what passes for news in Chesterfield. This New
Yorker might have made it out there, but The New Yorker certainly doesn’t. When
I was flying out to St Louis from La Guardia on Monday morning I reminded myself
to buy a New Yorker in the airport, but I never got the opportunity. And indeed,
once I got to Chesterfield there was no sign of the New Yorker in the huge magazine
rack at Schnuck’s. More surprisingly, when I went back to St Louis airport
on Friday, the CNBC Newsstand (one would think its sponsor would want to be
seen as delivering up-to-the-minute information) still had the previous week’s
New Yorker on display – the one with the Sy Hersh story that people were
talking about two weeks ago.
I suspect that national distribution of a weekly magazine is a very expensive
business, and that the New Yorker is the only nationally-distributed Condé
Nast weekly, and that its newsstand sales are very low in any case compared
to its subscription sales, and that therefore Condé doesn’t put
much effort or money into getting it to big cities and airports on a timely
basis. Every time I’ve tried to buy the New Yorker outside New York, I
always find a week-old issue for sale. Most distressing.
So instead of being able to read a good magazine on the flight back, I had
to make do with Harper’s instead. The May issue still lists Lewis Lapham
atop the masthead: why does this dreadful man refuse to go away? After the embarassment
of the March issue, which led with a long
essay by one of those nutjobs who refuses to accept that HIV causes AIDS,
one hoped that Roger Hodge, the new editor, would get rid of Lapham and his
atrocious column entirely. But evidently Lapham held on for at least two more
gruesome months. The May issue leads with a bad story bearing a very apocalyptic
headline: The New Road To Serfdom. Subhed: "An Illustrated Guide to the
Coming Real Estate Collapse".
In fact, there’s nothing in the article to make anybody think that housing
prices are going to collapse, and everything to make the reader mistrustful
of what he reads. The first illustration, for instance, shows a big house representing
Mortgage Loans 90%, next to a small box representing all other loans 10%. Do
mortgage loans now really make up 90% of all outstanding loans? Of course not.
The text in fact gives us a different statistic: “Since 2003, mortgages
have made up more than half of the total bank loans in America” –
by which the author, Michael Hudson, means not that mortgages became half of
the total loans in America in 2003 and have stayed at more than half ever since,
but just that mortgages made up more than half of new loans in 2003 and onwards.
This is not surprising. After the stock market collapsed in 2000, US companies
found themselves with wildly unbalanced balance sheets: too much debt and not
enough equity. So they stopped borrowing money from banks. At the same time,
banks discovered that they made much more money from their credit card operations
than they did loaning money directly to their customers, so they stopped loaning
money to consumers. In other words, mortgage loans were pretty much the only
type of loans that banks were still interested in making – so it’s
hardly surprising that they made up an increasing proportion of total loans.
Nowhere does Hudson give us the numbers on total mortgage lending, in dollar
terms, because that would look far less apocalyptic. He does say that total
mortgage debt will surpass national GDP by the end of the decade, but that’s
a silly ratio: GDP is a measure of annual production, while a mortgage lasts
for 30 years. Maybe increase in mortgage debt to GDP would be a useful ratio,
but Hudson doesn’t give us that.
And we still haven’t worked out where the 90% number comes from. Looking
more closely, we’re told that “Mortgages account for 90% of the
net growth in debt since 2000”, in a statistic attributed vaguely enough
to the Federal Reserve.
This could mean anything. On the face of it it simply can’t be true:
think about the total increase in debt by the federal government alone in that
time (Something over $2.5 trillion, according to this
page). If mortgage debt really outpaced the growth in federal government
debt by a factor of nine to one, then some $22.5 trillion in new mortgages would
have to have been written since 2000 – which I’m pretty sure is more than
the value of all US residential real estate combined.
So I suspect that Hudson was being incredibly sneaky, and used some measure
of debt which didn’t increase very much from 2000 to date – one
which excluded the federal government, say. In that time, some types of debt
would have increased in size (mortgages, for instance), while other types would
have decreased (like, say, unsecured personal lines of credit). Then it’s easy
to imagine that the total increase in mortgage lending might be 90% of the total
increase in whatever measure Hudson was looking at. Could that be what he means?
I hope not, because of that box saying that “all other loans” make
up 10% of the increase. But that’s only after subtracting all
the loan types which shrank in size. Hudson would be comparing the gross
increase in mortgage lending to the net increase in all other lending,
which seems very misleading. But since his footnotes are so weak, we have no
idea what the truth is.
In any case, I certainly read nothing in the May issue of Harper’s to make
me regret my decision to cancel my subscription. Roger Hodge, the incoming editor
of Harper’s, said
in New York magazine that magazines like his are "sort of the anti-blogs".
He’s right: all my favourite blogs are much more accountable to their readers,
and much more interesting to read, than anything in Harper’s.