Day: June 29, 2015

by William Skink

Last February, when the Mayor’s Downtown Advisory Commission was examining how to reduce access to cheap alcohol for those with the most frequent contacts with law enforcement, Dan Brooks wrote a cute little piece of snark about Charming the Snake. And though I agree with the subtitle of his piece–a downtown ban on cheap booze avoids the real issue–I wonder if Brooks truly understands the scope of the problem. From the link:

People drinking on the street is a problem, but I’m not sure the problem is drinking. If the city wants to discourage us from getting wasted downtown, it should ensure that more of us have the opportunity to get wasted at home.

To that end, I draw your attention to the other big story in where to drink King Cobra this week: the opening of eight new units in the John Lynn Apartments. Intended for people who have been homeless and suffer from disabilities, the apartments rent for $250 a month and attracted 55 applicants in three days.

Many of those applicants were living in cars or at the Poverello Center. Chances are some of the money they weren’t spending on rent went to tall boys and pint vodka. According to the U.S. Department of Housing and Urban Development’s Annual Homeless Assessment Report, 35 percent of people who lived in shelters in 2010 had chronic substance abuse problems.

Maybe those people would stop drinking if they had apartments. Maybe they would just pound tall boys and yell in the comfort of their own homes. Either way, they would not be drunk downtown.

What Brooks is trying cleverly to bring into this conversation is the housing first model, exemplified by the efforts in Salt Lake City. While I appreciate and totally support that approach to homelessness, the issue of alcohol abuse and the resulting carnage it produces is a much bigger issue than how the unsheltered self-medicate with cheap booze.

To drive home this point, here are three headlines posted in just the past 4 hours at the Missoulian:

Man accused of stabbing woman at Missoula Hotel

Mother pleads guilty to endangering kids at Missoula hotel

Missoula man allegedly dragged, kicked, strangled mother of his children

These are three headlines posted in one day in Missoula. And if you sit in Municipal Court watching arraignments (which I do sometimes) you will see crime after crime where alcohol was a significant factor.

The effort to remove certain products that Dan Brooks may or may not consume (you can get berry-flavored Steel Reserve at the Food Farm for 69 cents a can, Dan) quickly failed. Why? Because lots of money is made selling this nasty swill to poor people.

This article from the Missoula Independent last April featured a casino actually willing to share some sales figures that would have been impacted by this voluntary removal of cheap booze:

At first, Becki Hamilton wasn’t sure what to think. A few weeks ago, two members of the Mayor’s Downtown Advisory Commission presented Hamilton, manager of the Magic Diamond Casino on West Broadway, with proposals designed to curb problems stemming from alcohol abuse. One idea called for alcohol retailers to voluntarily stop selling certain low-cost beverages with high alcohol content, such as pints of cheap vodka and single cans of malt liquor. The other involved the commission creating a list of people who downtown retailers would all agree to stop selling alcohol to, due to their persistently bad behavior while intoxicated.

The first proposal immediately struck Hamilton as unrealistic.

“I just took the things they listed on the draft [proposal], which was about five items, and over a six-month period it was about $100,000 that we would be missing out in sales,” Hamilton says. “And I explained that a lot of the people who buy the single-serve cans and the smaller portioned beers and vodkas and whiskeys aren’t all bums.”

Clearly the business of profiting from alcohol abuse is doing just fine. Four years ago this July, Forbes ran a piece about the recession-resistent sales of booze:

With the holiday weekend approaching and plans for barbeques and parties on the horizon, you are probably packing your cooler with drinks. With the way sales have been trending, it seems most Americans are.

During the recession, alcohol-related industries were some of the few seeing continued growth, proving alcohol to be a frequent purchase for many Americans. Likewise, over the last 12 months, alcohol manufacturing has grown almost 10 percent, and alcohol retailers and wholesalers have seen growth of over 6%. So is alcohol recession-proof? Not necessarily, but it does seem to be recession-resistant. Despite our uncertain economy, alcohol sales continue to rise. In all four of the alcohol-related industries outlined below- beverage manufacturers, wholesalers, retailers, and bars- revenue growth is at the highest level it’s been since 2007.

If there’s money to be made, why care about the societal cost? And, as Dan Brooks points out, alcohol can provide a temporary respite from the depressing reality of being poor and/or homeless. So why not?

I wrote a post about alcohol abuse back in January of 2013 at the blog I’m now banned from contributing to, which you can read here. In that post I shared some numbers from a study that put the annual cost of Montana’s alcohol abuse problem at a staggering 642 million dollars. Here’s the breakdown:

Alcohol induced medical care: 100.7 million
Criminal justice system: 49.1 million
Early mortality/lost earnings; disease/vehicle accidents: 296.8 million
Lost productivity: 53.3 million
Treatment costs: 10.7 million

That study was done years ago. Since everything seems to go up (except wages) I can only assume the annual cost to Montana is nearing 3/4 of a billion dollars. That is insane.

Alcohol abuse is a huge problem. I struggle myself with drinking too much too often. My grandpa was an alcoholic and verbally abusive to my grandma. Some of the ugliest moments in my own marriage have come from getting drunk and losing control.

I wish we had better treatment options, better recovery models, but we don’t. Instead we have a stagnant economy teetering on the edge of another collapse with the resultant desire to temporarily escape this harsh reality with booze.

And so it goes.

by William Skink

After writing yesterday’s post about the lack of affordable housing in Missoula and the economic mess in Greece, I ran across at least a half-dozen other articles I could have added.

An article at Counterpunch about The Rent Crunch unpacks what seems like the obvious solution to a lack of affordable housing: building more affordable housing. Too bad it doesn’t work that way. From the link:

Policy experts explain that the rent explosion is caused by a rental housing supply shortage and failure to keep up with demand. But if this is true, wouldn’t the solution be to simply build more housing? There is no shortage of building materials or construction workers. So why isn’t more housing built? The owners of housing respond to changes in supply and demand in a different way. They raise rents. If new housing units are built for the long term, then its to get in on the currently high and rising rents.

The change in market conditions is the lever for the owners of land and housing to extract more money from anyone who needs a roof over their head. This basic need is a means of enrichment. Many people have no land, some have a little, and a few own a lot.

When people can’t afford to live inside, they become homeless. If you happen to be one of the tens of thousands of homeless people in LA, it’s not just surviving you need to worry about. This Pando article about Google moving into town and hiring private security to harass the homeless is a good example of what municipalities probably wish they could do, but can’t (remember, just a few years ago Missoula’s City Council attempted to ban sitting on sidewalks to keep unsightly homeless people from scaring away tourist dollars).

In Hong Kong, many McDonalds become de facto homeless shelters at night because the food is cheap, employees aren’t allowed to throw people out, and 20% of people in Hong Kong live below the poverty line.

While the situation in Greece will get a lot of attention this week, Zerohedge takes a look at the worsening situation in China:

While Greece has understandably been the focal news event over the weekend – after all it has been 5 years in the making – let’s not forget that in another massive move, one geared squarely to prevent a market collapse and to avoid even further panic, the Chinese central bank cut both its policy rate and the reserve rate in a dramatic push to calm down markets after a 10% crash in just two trading days.

Which, incidentally, shows that after the Fed, the BOE, the SNB, the BOJ and the ECB, the PBOC is the latest bank to have cornered itself in a world where it must inflate the bubble at all costs or face the dire consequences. What consequences? Nomura explains:

The policy easing should be viewed as a measure to contain the risk of a hard landing or systemic crisis rather than one to achieve faster growth. In this case, the stronger-than-expected monetary easing may help stem the decline in the equity market following a 10.6% drop over the past two trading days. The positive wealth effect of the equity market on consumption or aggregate demand is limited in China, but an equity market collapse would hurt millions of mid-class households and pose great danger to the economy and social stability.

In Ukraine, a default on its debt could happen at the end of July. At least that is what Goldman Sachs is expecting:

“Ukraine will not make the July 24 coupon payment and, as a result, will enter into default at that point,” Bloomberg quotes Goldman Sachs analyst Andrew Matheny as writing in his research note on Ukraine.

The analyst also warned that Kiev will likely issue a moratorium on its foreign debt repayment plan, as it will fail to settle the disagreement with its creditors.

“We do not expect the ad hoc committee to accept Ukraine’s latest restructuring proposal.”

While Ukraine sinks deeper into civil war and fiscal insolvency, a recent deal between Russia and Germany has dealt a major blow to America’s wedge policy of preventing further Russian economic integration with Europe. Michael Whitney writes about that reality:

Here’s the scoop: Two days before the swaggering Sec-Def touched down in Germany, Gazprom announced that it was putting the finishing touches on a massive deal that would double the amount of Russian gas flowing to Germany via a second Nord Stream pipeline. The shocking announcement made it look like the clueless Carter had no idea what was going on and that his efforts to isolate Russia were a complete flop. And, make no mistake; the deal is huge, big enough to change the geopolitical calculus of the entire region.

Closer to home, Puerto Rico just announced it can’t repay its debt. The implications are significant, especially for cities and states across the US that utilize bonds to improve their communities (like Missoula did with it’s 42 million dollar parks and trails bond last year). Puerto Rico is on the hook for 70 billions dollars. From the link:

The governor of Puerto Rico has decided that the island cannot pay back more than $70 billion in debt, setting up an unprecedented financial crisis that could rock the municipal bond market and lead to higher borrowing costs for governments across the United States.

Puerto Rico’s move could roil financial markets already dealing with the turmoil of the renewed debt crisis in Greece. It also raises questions about the once-staid municipal bond market, which states and cities count on to pay upfront costs for public improvements such as roads, parks and hospitals.

For many years, those bonds were considered safe investments — but those assumptions have been shifting in recent years as a small but steady string of U.S. municipalities, including Detroit, as well as Stockton and Vallejo in California, have tumbled into bankruptcy.

The wheels are coming off the bus. Do the passengers realize a crash is imminent? When they do, it will be a mad scramble for the exits.