Eyeonmiami, one year old! The King is Dead, Long Live the King! by gimleteye

Yep. We've been blogging on Miami for a year. Here's a brief reflection on Eyeonmiami...

It's appropriate for our first birthday to be filled with Citigroup’s announced loss of $11 billion from financial derivatives tied to the housing bubble, which is manifesting first and foremost in our backyard. That's on top of nearly $9 billion from Merrill Lynch last week.

I've written a lot about the way that Miami and Florida is the center of the housing bust, tied to a failed economic model that depended on financial engineering of home mortgages into securities that are essentially worthless. It didn't take a genius to see this tsunami of bad debt, bad development, and its consequences to Miami and Florida: we were just early at Eyeonmiami.

And for being early, we get a lot of attention on the web.

Today's news is that Robert Rubin, of Miami Beach, has assumed the chairmanship of the beleaguered financial juggernaut that taught me so much. There is no one who represents the financial status quo on Wall Street and continuity so much as Mr. Rubin, former US Treasury Secretary under Clinton and an expert in bond trading on Wall Street: in other words, a principal for the rainmaking machine that used the lowly home mortgage to facilitate the creation of vast wealth for a few and unlimited liability in world credit markets.

Miami is the epicenter of crashing housing markets, it is partly because the excesses took such easy root in a place defined by the economics of production housing: whether for single-family homes or condos.

The culture of Miami is defined by a fraternity of interests arrayed around real estate industries, from cement manufacturers in Everglades wetlands to laws firms like Greenberg Traurig built on zoning practices to the fortunes of Cuban émigrés who reconstituted their power and authority as the Latin Builders Association by developing farmland into tract housing, paving over wetlands, building political fortresses in places like Hialeah, and trashing opposition, whether in the form of community activists, conservation organizations, or neighbors.

The Miami Herald, the city’s newspaper, has been part and parcel of the real-estate development based culture. It is largely in the vacuum of the Herald—chasing the bouncing ball of quarterly profits to satisfy stockholders and option holders among its executive ranks—that Eyeonmiami emerged as an unpaid, unsolicited source of opinions and underreported facts, especially related to land ownership and development interests of the Growth Machine.

A little less than ten years ago, I worked for a major financial institution managing private equity during the run-up to the dot.com bust. Everything about the dot.com bubble defied what I had learned about sound fiscal prudence. And everything about the housing bubble that manifested afterwards has been 100 times more dangerous, based on my understanding of credit markets.

In the office where I worked, there was a small group that was patiently exploring the real estate sector. None of us knew at the time, that Alan Greenspan would respond to the burst bubble of the internet by lowering interest rates to historic, low levels—a measure no doubt encouraged by Florida builders who promoted the political fortunes of Jeb Bush in 1998 and George W Bush in 2000. What a decade it turned into, until the unravelling.

At the same time, I was also engaged in an area that captures so much of the betrayal of fiscal prudence and conservative values: efforts to protect Florida’s unique natural resources and environment. For decades, it has been clear that destroying the quality of life and natural resources that drew so many to Florida in the first place, was fiscal irresponsibility of the first order.

This is the underlying theme of Eyeonmiami: how local zoning decisions (scarcely reported and even avoided by The Miami Herald) are the foundation of a smash and grab fiscal model— rampant overdevelopment based on mortgage securitization—a chain of responsibility that stretches from land speculators/lobbyists at County and City Hall, to local bankers in places like Homestead, to local legislatures straight through the political system to Wall Street, where hundreds of billions in losses are now, finally, piling up.

This reality is toxic to the mainstream media that depends on paid advertisement extracted from a bad economic model: Eyeonmiami hasn’t shied from saying so, day after day, in posts having to do with the housing crash, with political corruption, with the costs imposed on the poor, on the middle class, on Miami’s quality of life, infrastructure deficits, and the environment.

Eyeonmiami doesn’t write much about Ocean Drive or the celebrity culture, except perhaps as reflected in such symbols as the Carniverous Center for the Performing Arts. But what we do care about is how our way of life in Miami is dysfunctional and in pointing that out clearly—even when the facts are unremittingly bad—that momentum will build for change. Maybe it is in the heart of a 17 year old high school reader. Or, in a neighborhood activist in Little Haiti or Liberty City.

You can never know for sure, but if you believe in change you have to believe that there are some readers, some voters, some people who are desperate to know more, to learn and to understand how things get to be the way they are in a place we love for its potential and for qualities we embrace.

No one pays us for the time we spend writing, here. And that makes us either suckers, saints or just plain human. One observer wrote to us that Eyeonmiami has become an urban legend. That's good.

My only regret is that the ease of blogging without a good editor, when a large audience is reading, means that typos and awkwardness and poor writing slip through. To those readers who have notices, my apologies!