Friday rant, cont. by gimleteye

No we haven’t calmed down, after this morning’s post. No. We drove to Miami Beach for the Boat Show mid-morning and spent forty minutes looking for a parking space within walking distance.

Driving around, we had lots of company. The lots were full. We hunted and pecked for an empty space, more like drifted in a slow trickle of autos all seeking the same thing: parking. Nothing.

We didn’t feel like walking from 1st Street to the Convention Center (couple of miles away), so we headed back to the Causeway and the drive home. Which took another hour. A little frustrated? You could say so.

Miami is saturated with traffic. We look up at the condo canyon and shake our head: if all those units were occupied (which they won’t be, because most of them are going into foreclosure or default as soon as their construction financing completes), you could never move except by walking or biking. Cars would be out of the question.

So what we spent time, in the car, thinking about on the way from the Boat Show we never did get to see was this: it is time for us to state simply and convincingly why the Federal Reserve—that would be Alan Greenspan, the past chief, and current chief, Ben Bernanke—responsible what has happened to Miami (and other Florida cities overwhelmed by too much development).

In the late 1990's Greenspan and Federal Reserve policies allowed the stock market bubble to blow up, through easy credit and lax oversight of financial institutions more than happy to allow customers to leverage their assets into the stratosphere. He talked “irrational exuberance” of the equity markets, but he allowed the card players to overrun the house bank.

Once it was clear the equity markets were pfft, the Federal Reserve panicked, fearing a meltdown of financial institutions. It initiated an historic series of cuts in the federal funds rate to stimulate housing and construction, fanning the economy into flames with easy credit.

Six years later, and the economy is on the verge of a major bust in housing markets that will drag down the whole economy.

What the Federal Reserve and the markets say, is that the chief goal of federal interest policy is to manage for inflation. What it has really been managing for is not inflation, but to protect the massive piles of liquidity pushed into the financial system in a fool's errand of trying to prevent cyclic contraction of the economy.

Inflation has been soaring, despite all the formulas and numbers trotted out to persuade consumers to remain calm.

As we remarked this morning—the visible demonstration of miscalibrated core inflation statistics was the example of Associate Supreme Court Justice Anthony Kennedy who this week appealed to the US Senate for pay increased for federal judges. Judges can't compete with salaries in the private sector, which have rapidly escaled to keep pace with what is necessary to maintain a middle class standard of living.

Federal Reserve policies, allowing the hyper growth of suburban construction in Florida, gave room for local and state government to run like a massive bulldozer over the quality of life, the environment, and attributes that make Florida an attractive place to live, in the first place.

For six years, advocates for sound planning, for environmental protection, for safe and affordable communities have been trounced and beaten down by interests desperate to plant more houses in green fields, or condos in downtown waterfront cities, as quickly and as soon as possible.

The price includes families stressed out beyond belief by the difficulty of commuting to work from distant suburbs, a corrupt housing agency—neglected while county commissioners did the bidding of production home builders in outlying areas, tens of thousands of acres of wetlands lost in Florida despite a “no net loss” of wetlands policy, a public made apathetic by the suburban crises of too much development and too little concern for how to build communities, fear and intimidation of government staff in charge of regulatory matters relating to development, inadequate school infrastructure, clogged highways everywhere, and other deficits totaling many, many billions of dollars.

If we could we’d lay the strands of this list like a wreath at the step of the Federal Reserve.