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Starting to Bring Back Main Street

The expectations of life depend upon diligence; the mechanic that would perfect his work must first sharpen his tools.

Confucius

The one thing we know for sure about our recovery from the coronavirus pandemic is that things will be different. Like Yeats’ rough beast, we will slowly slouch toward a New Normal. There are things that we can reasonably predict will happen along the way, but for now we do not know what’s at path’s end. In the next few posts I’m going to look at recovery. As the title implies, I see recovery as bringing back the Main Streets in our communities; regaining some stability and control in our lives in more resilient communities.

Recently I stumbled across a definition of resilience as purposeful action to achieve positive change. When I define victory as more resilient communities, what I’m saying is that the goal should be to rebuild communities so that they are better able to make good things happen for their members. “Building back better” shouldn’t only apply to buildings and bridges but to all of the tangibles and intangibles that are a part of our communities. To do this, we will have to reestablish community capital; all kinds of community capital.

Central to rebuilding community capital is rebuilding the capital of individuals, families and neighborhoods. Over the last decade we’ve heard a lot about income inequality, but too little about wealth. It’s estimated that about 39% of Americans have sufficient savings to deal with an $1,000 emergency. When these emergencies inevitably occur, those affected must rely on others to help them make it through: they must have social capital to cope. The question becomes “how do we help them build their capital accounts so that they can better cope with emergencies?”

Because recovery means looking at all types of community capital, I’m breaking this into several parts. In this first part, like the Confucian mechanic, I’m doing my due diligence – sharpening my tools (and wits – both of them) for what’s to come: defining the goal, and trying to see where we’ll be when the fog of our war with the virus clears.

• First, time. We can’t know when this first wave will end, but my best guess – and hope that I’m too pessimistic – is that we’ll be able to really begin on the recovery by the 4th of July. If we accept the rule of thumb that full recovery will take ten times as long as the period of loss, that means five years! There is likely to be a second wave come fall; we should be much better prepared to contain the damage to our communities than we were for this first round.

• Next, the economy. Unfortunately, the recently passed “Stimulus” bill won’t stimulate the economy very much; at best, it will allow many working people to stabilize their living arrangements – mortgages or rents, keeping food on the table. Small businesses and their employees will be the most likely to suffer. A study by the JP Morgan Chase Institute found that the 50% of small businesses had only enough cash to last 27 days. The picture was even grimmer for labor-intensive, low-wage sectors of the economy (restaurants, retail, repair and maintenance, and personal services): the financial buffer of 50% of these businesses was two-three weeks. In my small city, most of the local restaurants have tried to make a go of it via take-out only service. Today’s paper headlined that two of the most popular couldn’t make a go of it. More will follow their lead.

The most fragile businesses were the ones that with the most minority- and woman-ownership. Conversely, capital-intensive, higher-wage sectors (e.g., high tech manufacturing) had over one month of cash buffer. I’m afraid that much of the money allocated for small business loans won’t be accessed – what small business-person will want to take on more debt in a very volatile economic environment? If you’re a restaurant owner, reopening while people are remembering social distancing is risky business.

And, sadly, we’re likely going to see 8-digit unemployment figures. About 20% of restaurant workers already live below the poverty line. About one-third of our workers were barely getting by as part of the gig economy. Undoubtedly the number of cost-burdened and severely cost-burdened renters – and the number of the homeless – will spike.

• Social capital. In a recent column, George Friedman wrote that Canceling social life … cuts against not only the economy but, even more, what it means to be human. Several years ago, a group supported by CARRI* walked through a Whole Community pandemic exercise. One of the things that struck us was the potentially drastic social changes that might occur. Even before the appearance of the virus, we were seeing fewer family networks and, often, almost no contact even between next door neighbors. While many families are soldiering on in this world of social distancing, the bonding and bridging ties that hold our communities together are being further stretched and unraveled; . This is coming at a time of great distrust in our institutions: see the anti-social antics of the Spring Breakers. Once the crisis is over, I foresee something like the social upheaval of the early 1920’s after the Spanish flu pandemic. I also anticipate that both births and divorces will spike! And the elites will segregate themselves further from the rest of us.

• Human capital. The impacts of the crisis on our young people may be the greatest price we will pay, in the long-term. I’ve written before about the problems of youth unemployment; automation and increases in the minimum wage are conspiring to make many of them (esp. young men of color) unemployable. The closing of schools only adds to this. While we are seeing an uptick in online education particularly for colleges and universities, the teachers unions in Pennsylvania and Oregon have used their political power to prevent cyber charter schools from accepting new students. In spite of this, “teleschool” is probably an idea whose time has come.

• Institutional capital. Many of our government institutions have been conspicuous in their incompetence. Closing our borders undoubtedly bought us some time to prepare but – without doubt – we frittered that away in bureaucratic failures. But the rot goes beyond that – our responses to so many of the crises we’ve faced in recent years demonstrates our perverse inability to take action in the absence of a crisis.

Thus, I believe that the national recovery effort will trigger one of the seminal battles in our nation’s history: pitting those who still believe in our federal system of government against those who believe that we must fundamentally change our expand federal power while limiting state and local autonomy. While I want to remain nonpolitical in this essay, our response to COVID-19 indicates that – wherever we are between these two poles – our nation needs to find an approach to crisis management that is faster and more effective.

Once we get through this initial stage of the virus, the real work will begin: rebuilding our economy and reknitting our social fabric. Undoubtedly, some – many? – of the details surrounding my projections of where we’ll be when we begin recovery planning will be proven wrong. However, I strongly believe that the goal is right: building more resilient communities; communities better able to take action to improve our lives. Whether right or wrong, the most important thing is to have a goal in mind for recovery and then to plan and above all ACT to achieve it.


* Jane Kushma, Andy Felts, Susan Kammeraad-Campbell, Charlene Milliken and I.

Pretty heavy stuff! On the lighter side, I recently stumbled across an apocryphal letter from F. Scott Fitzgerald on his approach to social isolation during the Spanish flu pandemic.

The officials have alerted us to ensure we have a month’s worth of necessities. Zelda and I have stocked up on red wine, whiskey, rum, vermouth, absinthe, white wine, sherry, gin, and lord, if we need it, brandy. Please pray for us.

Dispatchable capital … and an announcement

A defining characteristic of community resilience … is that resilience includes multiple dimensions … encompassed by six assets (or “capitals”) across a community: natural, built, financial, human, social and political. – National Academies

Recently, I had occasion to read the National Academies’ report on building and measuring community resilience ( from which the quote above was taken; the report is available here). Jennifer Adams and I are working on a paper together on the application of stress testing (as is done by financial institutions) to communities, and this report will be one of the references. Together these prompted me to rethink what it means for a community to become more resilient.

In the quote above the National Academies’ committee refers to Flora and Flora’s seven community capitals (BTW – I wonder why they didn’t include “cultural capital.”). They lament – accurately – that few (I would say “none!”) of the tools that claim to measure community resilience actually measure all of these. I think there are several reasons for this:

• We know these community capitals are important for resilience, but we really don’t have a common framework that ties them together;
• Lacking this common framework, it’s not clear what we should be measuring (e.g., the “currency” for each type of capital);
• We know they are – or at least should be – important for resilience, but we lack a detailed basis for applying that knowledge in our communities;
• Specifically, this means that we’re not exactly sure what impact increasing one or more of these capitals has on a community’s resilience.

In the following, I’m going to focus on recovery from disaster, as well as the nature of capital. I’m going to create a new phrase – dispatchable capital or assets – to try to tie these two together.

Those of you who’ve stuck with me for a while probably recognize that most of my writings on community resilience have been aimed at systematizing the concept and making it more of a scientific field of study. My motivation has been that by doing so we can build up a cohort of community resilience “technologists” who will use the science to make our communities better. As part of that effort, about two years ago, I developed what I called a practitioner’s model of community resilience.

This was based on my attempt to weave together several intellectual skeins to help me make better sense of all of the information that’s out there. I was heavily influenced by the modeling work of Scott Miles, Cimellaro, Florio and others; the “indicators” work of Cutter (and a host of others); and conversations with Liesel Ritchie and with the COPEWELL team at Johns Hopkins (This is not to tar them with my own brush – my mistakes are my own! – but merely to establish that I pay attention to what others are thinking.). The model was presented as

Functionality =
Initial Functionality + Direct Impacts + Indirect Impacts + Competence•Resources,
for each part of the community

The cartoon below is intended to illustrate what the words mean. If a disaster occurs, each of the community’s “common functions” (e.g., providing water, providing shelter) undergoes direct and indirect impacts. These give rise to a loss of functionality (denoted as L on the cartoon). The community recovers that functionality by deploying resources (R). Its competence in doing so (w) can be thought of as its efficiency in using resources.

Let me take a wild leap here – think of the resources to be deployed as community capital. Since physical damage (e.g., to infrastructure) from a natural disaster will require financial capital for recovery, I’ll look at that first and then try to generalize to other types of community capital. Liquidity is a term often used in finance which simply represents how easily a financial asset can be deployed. Cash is the most liquid asset a community may have available; land is probably the least liquid asset most communities have. Since we’re thinking in terms of recovery from a disaster, i.e., a long time – I’m going to use the term “dispatchable” capital to represent capital we can employ for recovery from a disaster (this parallels the idea of dispatchable electricity generation that can be immediately deployed to meet changes in demand). In terms of finance, this could mean a local government’s Rainy Day Fund, homeowners’ insurance and savings, and could include federal grants triggered by a Presidential declaration (depending on the time frame).

Recovery from a natural disaster will, of course, require other types of capital as well. Damage to neighborhoods will require human capital. People to prepare permits, building inspectors, construction craftsmen and other will be needed to recover from disaster. Lack of any one of these will hinder recovery. For example, one of the factors that held New Orleans back after Katrina was that the demand for construction professionals exceeded the supply. In Dan Alesch’s great little book about long-term recovery, he cites similar examples relating to permit writers. For most communities, there will be personnel who can do the job, but simply not enough of them, i.e., not enough dispatchable capital. In addition,m different sorts of disasters require a varying mix of capitals, e.g., social unrest requires less financial capital but more institutional and social. A pandemic may make higher demands on both social and built capital.

To me this implies that more resilient communities have more of the dispatchable community capital they need for the risks they face. I know this isn’t particularly profound but I think it’s useful. If a community looks at a particular risk it faces, community capitals provide a systematic way to look at what’s required for recovery. If the community wants to become more resilient, it has to ensure that the amount of dispatchable capital – financial, human, and so on that can be readily deployed – it has will meet the demand. In some cases, that may mean setting up special financial reserve funds. It may mean cross-training personnel to handle increased demand. It may mean designating areas to be used for large amounts of debris. Or, the systematic look may show that there is sufficient dispatchable capital to meet the heightened demands of a recovering community.

And what about that “systematic look?” The National Academies’ report acknowledges the need to look at community capital, but doesn’t take the next step to actually explicitly state what that really means. In a paper I wrote for a conference three years ago, I concluded that

None of them [the community resilience measurement systems] examines community finance (e.g., insurance in the private sector or creditworthiness in the public sector), yet financial resources are essential for recovery. None of them gives more than a glance at the community’s governance (how and how well decisions are made and implemented), yet the depth of the disaster, and the duration and ultimate success of the recovery directly depend on the community’s governance. Rather surprisingly, little light is shone on the vulnerability of the natural environment, primarily because of a lack of data. For the same reason, those approaches that rely on publicly available data also provide decision-makers with little information about infrastructural resilience.

If our goal is to have a resilient community, determining how much dispatchable capital it has and will need is an important step toward that goal. In this context, recovery from extreme events depends on dispatchable capital, i.e., increasing community resilience means accumulating community capital, of all types. Our measurement systems don’t address this – yet – but they should. I hope the concept of dispatchable capital can spark discussions about how to improve them.

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A head’s up…

Though all of us involved with CARRI remain active in the field, none of our work is being funded through CARRI. As a result, we are going to retire the name and – more importantly – close down the website. We appreciate the work done by the Meridian Institute to maintain the site and provide us with email and other services, even without a return on that investment. Thus, this is the last of my blogs that will be posted here. We are fortunate to have several options open to us; we’ll be making a decision early in September. I intend to continue to be an intellectual provocateur (or to clutter your inbox, if you prefer). I appreciate the time you spend with me.