America's Most Miserable Cities

Cleveland leads a slew of Midwestern towns on our annual list, but thanks to high taxes New York and Chicago make it too.

In Pictures: America's Most Miserable Cities

The city of Cleveland has had a colorful history. The Cuyahoga River, which runs through the city, famously caught fire in 1969 thanks to rampant pollution, and it wasn't the first time. In 1978 it became the first U.S. city to default on its debts since the Great Depression. Cleveland sports fans have had to endure more anguish than those in any other city. The city has been dubbed with a less than endearing nickname: the Mistake by the Lake.

This year Cleveland takes the top spot in our third annual ranking of America's Most Miserable Cities. Cleveland secured the position thanks to its high unemployment, high taxes, lousy weather, corruption by public officials and crummy sports teams (Cavaliers of the NBA excepted).

Misery was on the rise around the country last year. Sure the stock market was up big, but so were unemployment, foreclosures and bankruptcy filings. Meanwhile housing prices, the U.S. dollar and approval ratings for Congress continued their downward spiral.

The widely tracked Misery Index initiated by economist Arthur Okun, which combines unemployment and inflation rates started 2009 at 7.3 and rose to 12.7 by the end of the year thanks to soaring joblessness. That is the highest level since 1983.

Our Misery Measure takes into account unemployment, as well as eight other issues that cause people anguish. The metrics include taxes (both sales and income), commute times, violent crime and how its pro sports teams have fared over the past two years. We also factored in two indexes put together by Portland, Ore., researcher Bert Sperling that gauge weather and Superfund pollution sites. Lastly we considered corruption based on convictions of public officials in each area as tracked by the Public Integrity Section of the U.S. Department of Justice.

We expanded the list of cities under consideration this year to include the 200 largest metropolitan statistical areas (in years past we've examined 150), which led to a shuffling in the ranks. Any area with a population of more than 245,000 was eligible.

Cleveland nabbed the top spot as a result of poor ratings across the board. It was the only city that fell in the bottom half of the rankings in all nine categories. Many residents are heading for greener pastures. There has been a net migration out of the Cleveland metro area of 71,000 people over the past five years. Population for the city itself has been on a steady decline and is now less than half of it what it was 50 years ago.

Cleveland ranked near the bottom when looking at corruption. Northern Ohio has seen 309 public officials convicted of crimes over the past 10 years according to the Justice Department. A current FBI investigation of public officials in Cuyahoga County (where Cleveland is located) has ensnared more than two dozen government employees and businessmen on charges including bribery, fraud and tax evasion.

In good times and bad, Skadden's lawyers make money on upheavals in global capitalism.

From left, Joe Flom, Eric Friedman and Robert Sheenan

Don't throw away that old tag. It might be worth thousands of dollars.

In Pictures: America's Most Expensive License Plates

The deal went down in a Wendy's parking lot in Biddeford, Maine, nearly eight years ago. Huddled between a Subaru station wagon and a 1961 Cadillac Coupe de Ville, two men made a seemingly lopsided exchange: One left with $40,000, the other with an old license plate.

It wasn't just any piece of metal, but a 1921 Alaska plate. One of only four known to exist, it is the holy grail of a little-known hobby: license plate collecting. These vintage plates aren't street-legal, though some states allow them to be used on classic cars of corresponding years. But the rarest ones are nearly priceless to thousands of license plate collectors around the country. Tim Stentiford, editor of PLATES magazine, estimates that the 1921 Alaska tag is worth $60,000 today.

In Pictures: America's Most Expensive License Plates

"These plates are so rare that people who own them like to keep it fairly low-profile," says Stentiford, who has over 17,000 plates of his own. "They don't want the paparazzi and the other plate collectors beating down their doors."

The 1921 Alaska isn't the only plate worth more than a new car. Two others include the 1912 and 1913 Mississippi plates, worth an estimated $35,000 and $50,000, respectively. Collectors didn't even know that the 1913 Mississippi plate existed until 1985, when Dr. Roy Klotz, Jr. unearthed it after someone responded to a classified ad he'd placed in a Jackson newspaper looking for old Mississippi plates. Only two are known to exist, making the 1913 plate more valuable than its 1912 predecessor.

In the years since Paris issued the first license plate in 1893, tens of billions of tags have been produced and discarded. Like postage stamps or baseball cards, they've become a niche commodity. Countless groups, formal and informal, have sprung up to link collectors.

The world's largest is the U.S.-based Automobile License Plate Collectors Association (ALPCA) with 3,000 active members, established in 1954. Smaller groups like the Netherlands' De Nummerplaat and France's Francoplat exist abroad. Some countries allow individuals to trade street-legal plates; these fetch obscene amounts of money in places like Abu Dhabi (Click here for the most expensive.)

American hobbyists usually focus on collecting an entire "run" of plates. Some try to get a plate from every state, but with a unifying theme. Most typical is the "birth year run," where a collector casts about for plates from all 50 states issued in his or her birth year. A handful hunt special designation plates like Livery, Truck, Wrecker, Dealer and the like.

World's most valuable resource, a curse for most Nigerians

PORT HARCOURT, Nigeria (CNN) -- Trash litters its cities. Electricity is sporadic at best. There is no clean water. Medical and educational services are limited. Basic infrastructure is severely lacking.

"Planet in Peril" met in a secret location with members of the Movement for the Emancipation of the Niger Delta.

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These are not conditions that should plague one of the richest oil states in the world. Hundreds of billions of dollars has been made from the Niger Delta's oil reserves and many people have gotten very rich. Conversely, the average Nigerian has suffered as a result of the country's oil prosperity. The United States Agency for International Development says more than 70 percent of the country lives on less than a dollar a day -- the population is among the 20 poorest in the world.

Oil companies are only part of the equation. The other is the Nigerian government. Transparency International, a global organization intent on stamping out corruption, has consistently rated Nigeria's government one of the most corrupt in the world.

Nigeria's federal government and oil companies split oil profits roughly 60-40. The money is then supposed to make its way down to the local governments to fund various projects. Somehow, little money actually reaches its intended destination. Nigeria's own corruption agency estimates between $300 billion to $400 billion has been stolen or wasted over the last 50 years. Lisa Ling travels to secret location to meet notorious Nigerian militant group »

Gov. Rotimi Amaechi of Rivers state, one of the largest oil producers of Nigeria's 36 states, acknowledges past problems with corruption, but thinks progress is being made.

"There's a lot of improvement," Amaechi said. "The work being done by the corruption agency and the federal government has somehow been able to control the level of corruption in government."

Over the last few years, a culture of militancy and violence has arisen in the absence of jobs and services. Kidnappings for ransom, robberies and even murder happen with regularity.

The biggest and most powerful armed group is the Movement for the Emancipation of the Niger Delta, or MEND. They say they are at war against the Nigerian military and the oil companies operating there.

MEND, formed in 2005, said it has more than 30 camps throughout Nigeria. Members are armed with high-tech weaponry they said was obtained from "foreign sources." Hundreds of people have been killed on both sides and countless oil workers have been kidnapped.

Over the years, MEND's attacks on oil pipelines have halted oil production and, therefore, raised the price of oil around the world. They demand oil profits be distributed to average Nigerians of the Niger Delta and said they will not stop their attacks until their objectives have been fulfilled. See environmental battle lines for "Planet in Peril" »

The battle is over oil -- one of the world's most valuable resources. But to most Nigerians -- oil is a curse.

Communities along the Niger Delta have lived off subsistence fishing and agriculture for decades. Collecting food becomes impossible when a spill happens, like one that occurred in August. The waterways and mangroves are blanketed in thick brown oil sludge that goes on for miles. Toxicity overpowers the air and a sense of lifelessness pervades the landscape. Many say it will take 10-15 years for the area to be free of contamination -- if the cleanup effort commences in a timely manner.

The August spill was a result of a leak from an old pipeline that had corroded. It took the oil company three months to clamp the leak, but the company said it wasn't reported for a full month after it began. Once the leak was reported, the company said it was denied access to the site by the community. Leaders of the village deny that, and the finger-pointing between the two sides is nothing new -- there is no love lost here.

Who is telling the truth? Who knows? Either way, the creeks are blackened. This is life in the Niger Delta.

According to the most recent data, as many as one in 10 mortgages in the U.S. are delinquent or in foreclosure. The continued decline in housing prices has been exacerbated by the decline in the economy. The housing sector is caught in a continued downward spiral.

Foreclosure is a slow and costly process and represents significant dead weight loss for the economy. Estimates are that the cost of foreclosure is 30% to 35% of the value of a house. Moreover, there are externalities that are associated with properties that do foreclose in that they contaminate the value of neighboring properties. This issue is also critical because reducing losses to default and foreclosure will help stabilize the financial system by reducing the actual losses--and the uncertainty about them--that are passed through the financial system to the holders of the mortgages and mortgage-backed securities. Default losses are concentrated in the "first loss" and mezzanine tranches of collateralized debt obligations, which has made them highly toxic to the financial institutions holding them.

Here is the question: Given the attention that has been devoted to the problem of troubled mortgages and the number of programs that have been put forward to address them, why so little impact? The simple answer is that the programs are badly designed.

Some examples: Hope for Homeowners is a Federal Housing Administration program designed to modify existing loans by writing down the principal, offering insurance against further default and introducing shared appreciation on the property. Fannie Mae and Freddie Mac laid out plans for restructuring mortgages that lower payments but extend the term on the loan or involve balloon payments. The Federal Deposit Insurance Corporation (FDIC) has proposed to restructure troubled mortgages by lowering payments, but with no write-down of principal and with a balloon payment due at the end. So far, the response to these programs has been minor. Why?

First, they start with lousy incentives. Both Hope for Homeowners and the FDIC programs are available to homeowners who are delinquent by several months in their payments. If you want to restructure your mortgage, what does this tell you? Stop making payments! Sensibly, most bank restructuring programs require borrowers to show good faith by keeping payments current before they will consider restructuring.

Another problem is that restructuring per se is not a great solution. For the most part, it simply kicks the can down the road. Lowering current payments but requiring either a balloon payment or an extended payback term postpones the problem without solving it. Moreover, since it does nothing to address the negative equity of the homeowner, it increases the probability of secondary default if prices or owners' incomes continue to fall. For all of these reasons, owners become essentially like renters, with all of the adverse incentives that may imply.

The existing approaches to loan modification do not balance the incentives of the borrowers and the lenders. Shared-appreciation mortgages (which are a component of the FHA plan) do this well. Shared-appreciation restructurings offer a debt for equity swap whereby, in return for modifying the loan, the borrower must give up some of the future appreciation in the value of the property. Designed properly, this would discourage borrowers from seeking modifications if they can continue to pay their mortgage.

Gas prices are still well above $2 a gallon across most of the country and, with the economy hurting, fuel efficiency should be a determining factor for any car buyer. It's only natural that consumers would first consider Japanese cars, with their proven track record for delivering high gas mileage.

"Honda, over the breadth of its line and history, has generally led in fuel mileage," says Karl Brauer, editor-in-chief of Edmunds.com. "Toyota has done well, too."

Actually, it's the German manufacturers that are leading the most market segments in terms of fuel efficiency on 2009 models. Across the new model year, six from Daimler AG and Volkswagen AG (other-otc: VLKAF.PK - news - people ) rank among the most fuel-efficient, beating every new model in five classes and tying in one. Japanese models placed at the top of only one category (but tied in two); one South Korean model was the best in its category, and one category and one tie went to American cars.

Behind The Numbers
To find the most fuel-efficient cars of 2009, we looked at each model's combined city and highway gas mileage provided by Environmental Protection Agency site fueleconomy.gov (or Edmunds.com, if the EPA didn't yet have the information), and checked those findings against the manufacturers' gas-mileage claims. The figures were compared in 10 market segments, with the best in each making our list. In the case of a tie, both vehicles are included.

Of no surprise is the presence of the popular Toyota Prius, which gets an EPA combined fuel economy of 46 mpg. The only vehicle that approaches its gas mileage is the Honda Civic hybrid, which delivers a highly respectable 42 mpg.

Where the German automakers top vehicle segments, most interestingly, is with diesel models: The Volkswagen Jetta TDI tops the hatchback class, while the Mercedes-Benz E320 Bluetec is the most fuel-efficient luxury sedan.

"Diesel models feature simpler engine design, less energy lost to heat and a more efficient way to utilize fuel," says Brauer. "They're poised for more success today because of the price of fuel, because of clean diesel technology, and because diesel models are great to drive. There has been a huge stigma on diesel from the past, but the truth is that if you put anyone into a modern diesel vehicle, they'll have to redefine their perspective of what diesels are like."

Hyundai Elantra (Family Sedan)

Base MSRP: $15,120

Gas Mileage: 28 (25 city, 33 highway)

Horsepower: 138

For more Forbes.com autos coverage, see:

Best Hybrids For The Buck

Ten Diesel Cars We'll Soon Be Driving

Most Fuel-Efficient American Cars

Tie: Audi A4 (Upscale Sedan)

Base MSRP: $30,700

Gas Mileage: 25 mpg

Horsepower: 211

For more Forbes.com autos coverage, see:

Best Hybrids For The Buck

Ten Diesel Cars We'll Soon Be Driving

Most Fuel-Efficient American Cars