Wednesday, March 25, 2009

Is This Our Future?

From the Global Economic Analysis blog comes this commentary about abandoned homes in Flint Michigan and a possible solution.


The North Coast said...

I don't believe this HAS to be our future, and I do believe that the cities that have taken the worst beating in recent decades might be the very places that have the most hopeful future.

Detroit, Cincinnati, Cleveland, and to some extent, St. Louis, have all been destroyed by the trends of the past 50 years, mainly the buildout of suburban sprawl and the destruction of our manufacturing sector in the service of a specious "globalization".

These two major trends are about to reverse themselves, and with a vengeance, because they are simply no longer sustainable. Further hikes in energy prices along with increasing scarcity are inevitable, and the reversal of the movement from cities outward is already in progress- just look at house prices in our outer suburbs vs those in the city.

Detroit, Cleveland, and other similar cities that have been totally destroyed are in a position to rebuild on a different template. They have failed so badly that there's no use pretending that the current models will work for them, and the sooner they get over the past, the better. This is the reason I wouldn't mind seeing the old Detroit automakers fail utterly. They are already shedding workers in large enough numbers to totally decimate their home city.

Now, Detroit's leaders need only to get their heads out of 1965. That is all so OVER. The domestic car industry is reconstituting itself along different lines no matter what GM and Ford want.

Cincinnati, another failing midwestern burg, is coming to terms with new realities in its own way. Its leaders have passed an ordinance permitting city householders to keep certain farm animals, perhaps in recognition that economically marginal people are going to have to develop the ability to produce at least some of their own food, and that anything that helps its citizens toward self-sufficiency is good for the city.

I really fear much more for the cities that are now rich and successful, like Chicago. We are very smug in our success here, and are very unlikely to recognize it when our particular model proves unworkable, which it well might down the road. Will we be able to get over our skyscraper fixation when it becomes obvious that 100-story buildings just won't work in an energy short future? I'm encouraged by the urban agricultural efforts here, and by the efforts of some alderman to restyle their neighborhoods along the lines of New Urbanism. But we have about 5400 square miles of sprawl-burbs and their denizens to deal with here, and these mostly middle-class or better people will not make a swift or happy adjustment to a much different, and more constrained, lifestyle.

Kheris said...

I am visiting South Carolina right now, where sprawl is a fact of life. The area I am in has a large rural population surrounding a very small city (or large small town?), although it is hard to tell just what they are doing. I have seen a couple of cattle ranches (beef I believe). I understand cotton is still grown, and other crops. SC used to provide 40% of the nation's rice, but no longer. That feat was accomplished on the backs of slaves. The cities may be able to reinvent themsleves, but I don't know about a place like SC where so much has changed. Hopefully, the folks here won't decide Charleston or Charlotte hold the answer and start migrating. Neither of those cities could handle a sudden influx.

Poverty is endemic here, so although I recognize that the middle class will have issues, money will still soften the blow, unless we undergo total financial collapse, in which case all bets are off.

The North Coast said...

Thing about the middle class is that about 70% of it could quickly and abrubtly cease to BE middle class, inasmuch as most of these people are dependent upon "fluff" white collar occupations that are subject to very swift reversals in income.

For example, a substantial portion are people who sell mortgages, securities, and other financial products, or who work in support of these functions. I work in this field as a brokerage compliance officer and can tell you that this industry is due to contract substantially, as half the people in it are redundant. There are just too many people walking around peddling this stuff, and they no longer can pull the substantial incomes that were the norm in the 80s and 90s. I have watched commissions drop through the floor to the point where you could run 1000 securities transactions a week for customers and barely scratch a living, so vicious is the competition in commissions.

Same thing goes for retail, advertising, and many other sales, managerial and professional occupations.

These people only LOOK like they have money, because they live very lavish lifestyles. Look close, and you'll see that 90% of them are debt dependent and the minute their incomes drop, they're had. Add to this the deteriorating values in houses whose appreciation fueled the binge-spending to begin with, and you have the ticket for the sudden and permanent impoverishment of a broad swath of the formerly affluent middle class.

I expect this cohort of the population to cause a lot of trouble in rough times to come. These people already don't know what hit them,as they scramble to replace lost income and are hit with the realization that they won't come close to replacing their old incomes. They are going to be a massive political problem, and their pain is going to be very difficult for any sitting president to bear. They feel very entitled and they are the people who are going to make the worst adjustment to new circumstances.

I just hope that when the auto suburbs become at last totally non-negotiable, and when millions of these people have to move somewhere where they don't have to drive 3 miles just to buy food, that they will head for the small towns and not come flooding into the city. God knows we'll have problems enough without them.

Roger P said...

Kheris said...

@Roger -- what was your point?