Miami-Dade is the most populous county in Florida, a state that has proven its electoral importance in presidential races. So, what happens in Miami bears scrutiny, in particular in respect to how voters assess responsibility for the nation's economic ills.
Both presidential candidates, Barack Obama and John McCain, are attempting to focus the electorate's inchoate anger through high gasoline prices and failed energy policies of the Bush White House. In Florida, the issue is manifesting in a decidedly desultory and misdirected way: proposals for offshore oil drilling.
For its part, Wall Street would be perfectly happy to keep the nation's attention on gasoline prices, but the real affliction of the United States economy is debt and insolvency. Both have their roots in the housing bust ("Florida's real estate bust cost: $153 billion", Miami Herald, August 5, 2008).
The political origins of the housing bust began in Miami, through local political campaigns that flexed the issue of Cuba foreign policy with block voters in Hispanic districts in order to mask other distortions of public policy in service of private developers; from Section 8 housing to subdivisions in farmland.
Parochial, ward politics have been practiced to perfection throughout America. But the defining feature of ward politics in most cases is leveraged in political patronage and union contracts. The Miami model had both with the addition of a new element: government in service of real estate speculation.
To be sure, millions were being made in Florida real estate long before the waves of immigration, but it was the Latin Builders who perfected a scalable model, a model that not just used local ward politics to direct public infrastructure in service of private development but also depended on suppressing dissent, privately funding radio talk show hosts for whom hatred of Castro corralled voters into electoral cattle chutes.
Both Wall Street and the building industry grasped how the Miami model of development could proliferate throughout the fastest growing areas of the nation whose citizens didn't care about Castro. Of the political parties, Republicans-- and especially Karl Rove-- understood how rapid growth of suburbs in farmland, facilitated by free market ideology that demonized "regulation" (ascribed by Miami Cuban politicians as "the hand of communism"), dovetailed with national political ambitions.
The ascendancy of two-term former governor Jeb Bush, a Miami developer before his political career materialized, and then President Bush depended on campaign contributions aggregated through builders, exemplified by Miami's Latin Builders Association, and the supply chain maximizing profits based on platted subdivisions in farmland.
In Miami-Dade, all farmland was once Everglades wetlands. The scalability of an economic model based on real estate speculation--the one that pushed both Bush brothers to power-- required a radical shift of power and authority from federal laws to the states and local regulations. During the housing boom in Florida and in Washington, DC, under control of Republican majorities, a virtual holy war was waged against rules and regulations protecting the public interest. Intense resources were applied to messaging the virtues of self-regulation, privatization, and shrinking the size of government so it could fit in a bathtub, presumably to be drowned.
In Miami-Dade and in Florida, the last phase of the housing boom added a fourth feature: new laws raising impossibly high barriers to the ability of citizens to petition their own government.
The "democracy" the Bush White House has tried to export needs to be understood through the Florida viewfinder, where law denied more than 10,000 felons denied the right to vote yet permitted them to work in the mortgage industry.
Today, US newspapers are struggling for ways to report the worst real estate crisis since the Great Depression. For the most part, news stories-- filed by economic writers uncomfortable with reporting politics, or political writers uncomfortable making connections to powerful newspaper advertisers-- rely on the sources and interests that caused the asset bubble and bust in the first place-- production homebuilders and condo kings linked to bankers and local city and county commissioners and economists.
The Miami model of development-- that steam-rollered the region's quality of life, the environment, and sound planning for infrastructure-- was built on "what the market wants" without challenge by the mainstream press. Critics received minimal coverage, as though the media were frightened off by the intensity of charges of "elitism" by developers and advertisers.
We don't hear that, anymore. What we hear is how trillion dollars has been drained down the rathole of toxic debt from the housing bust, now backed by the US taxpayer. We don't hear how these financial events already rained billions in fees and commissions to Wall Street bankers and will rain more, as the sale of new "rescue" packages generate more commissions and fees.
In specific, what we read today is what the blogs like eyeonmiami.blogspot.com said a year ago: that the subprime crisis had to be just the tip of an iceberg, the leading edge of an economic tsunami. "The first wave of Americans to default on their home mortgages appears to be cresting, but a second, far larger one is quickly building." (NY Times, "Housing Lenders Fear Bigger Wave of Defaults", August 4, 2008)
What we read today, in reports like the front page of the Miami Herald today, is the consequence of so much misplaced public priority in the service of real estate speculators: massive budget deficits in state and local government tied to a $153 billion loss of real estate values in Florida.
What we read are the effects: like Rudy Crew, Miami-Dade's school superintendent--one of the top educators in the nation--, being chewed like a dog bone by school board members as though Crew himself was to blame for the $150 million shortfall in the county school budget; declining income that is the direct result of horrendous growth policies whose past profits funded political campaigns for those very same school board members who want Crew's head.
The Herald story on the crash of real estate values quotes Broward County Property Appraiser Lori Parrish "pinning much of the blame 'on really unscrupulous mortgage brokers'". But blaming mortgage brokers is like blaming street corner drug runners for demand. It's like blaming public schools for the diversion of tax dollars to school vouchers. Its like blaming gays for everything else.
What newspaper reports have failed to do is to link the whole bust to systemic corruption and greed wrapping up fiscal and monetary policies of the federal government with local developers who control local government. It is easy enough to see that blame starts with Wall Street bankers and firms like Merrill Lynch, whose debt has just been sold for pennies on the dollar; pennies it had to finance to boot.
But the real target of blame should be campaign contributors whose quid pro quo with elected officials was enabling real estate speculation to sound economic policies and fiduciary responsibility to taxpayers.
Consider key Bush and McCain fund raiser Al Hoffman, a central cog of the housing bust wheel, whose former company-- WCI Communities-- yesterday declared bankrupcy along with more than 120 subsidiaries; partnerships to aggregate, zone, and subdivide land for production homes for which a real market never existed. It was Hoffman who claimed, in 2003, that suburban sprawl was an unstoppable force.
The Herald's penultimate word is given to Robert Parrish, president of the Florida Home Builders Association, who told Governor Charlie Crist at a business round table discussion: "We're not getting any better... We could be getting sicker. We're looking for the doctor."
What Parrish means are further bailouts by taxpayers whose budgets are already stretched to the limit. With friends like Florida's building industry, who needs enemies?
10 comments:
Congratulations! You managed to blame all the key culprits in your post.
President Bush
Karl Rove
Jeb Bush
Charlie Crist
John McCain
Wall Street
Latin Builders
Republican majorities
I am amazed at the fact that you missed Cheney.
The fire fighter and secretary making $80K a year and buying a house in Coral Gables with zero down and 1% ARM had nothing to do with it.
August 2008
Harpers Magaze
"The Wrecking Crew", by Thomas Frank
excerpt: "Fantastic misgovernment is not an accident, nor is it the work of a few bad individuals. It is the consequence of triumph by a particular philosophy of government, by a movement that understands the liberal state as a perversion and considers the market the ideal nexus of human society. This movement is friendly to industry not just by force of campaign contributions but by conviction; it believes in entrepreneurship not merely in commerce but in politics; and the inevitable results of its ascendance are, first, the capture of the state by business and, second, what follows from that: incompetence, graft, and all the other wretched flotsam that we've come to expect from Washington.
The correct diagnosis is the "bad apple" thesis turned upside down. There are plenty of good conservative individuals, honorable folks who would never participate in the sort of corruption we have watched unfold over the past few years. Hang around with grassroots conservative voters in Kansas, and in the main you will find them to be honest, hardworking people.
But put conservatism in charge of the state, and it behaves very differently. Now the "values" that rightist politicians eulogize on the stump disappear, and in their place we can discern an entirely different set of priorities—priorities that reveal more about the unchanging historical essence of American conservatism than do its fleeting campaigns against gay marriage or secular humanism. The conservatism that speaks to us through its actions in Washington is institutionally opposed to those baseline good intentions we learned about in elementary school. Its leaders laugh off the idea of the public interest as airy-fairy nonsense; they caution against bringing topnotch talent into government service; they declare war on public workers. They have made a cult of outsourcing and privatizing, they have wrecked established federal operations because they disagree with them, and they have deliberately piled up an Everest of debt in order to force the government into crisis. The ruination they have wrought has been thorough; it has been a professional job. Repairing it will require years of political action."
Read the entire article, here:
http://www.newheadnews.com/harper.frank.html
So True:
The "democracy" the Bush White House has tried to export needs to be understood through the Florida viewfinder, where law denied more than 10,000 felons denied the right to vote yet permitted them to work in the mortgage industry.
Very good, analysis.
First Anonymous: You are too far down the food chain. Get up there a little further. Try to think bigger...smarter. When you blame the little guy taking advantage you are missing the point. Like the medicare fraud reported this week in the Herald...don't blame the guy claiming he is getting the aids treatment, or even the clinic supplying it...go up the food chain to the broken system that lets our tax dollars flow to an obsolete treatment given to a phantom patient.
Why can't people see the bigger picture? Because it is too hard to blame something that is not easily identified.
Great post.
The thought for the day:
A turtle can't get anywhere unless he sticks his neck out.
It is a random thought, but you know what?
Life is full of random thoughts, and some people like Gimmey and GoD are very good at finding the needle in the hay stack.
So, think about this:
You start at the top and work down. The buck stops up the top, and the caca slides down, so I would always paint my picture from the top down.
Otherwise, the caca would ruin your chances of getting to the person responsible for the mess created as it dribbles over and contaminates the line upward to the real source of the issue.
From Wikipedia
Thomas Frank (born 1965) is an American historian who writes about what he calls "cultural politics". His writings, which draw heavily on the theory of the Frankfurt School, tend to analyze both the political and cultural economy of the modern American culture wars from a LEFT PERSPECTIVE.
It's so easy to prey on even the most educated of people when it comes to large money transactions, like buying a car or a piece of real estate you're going to call home. To repeat the talking points of those who would rather have you look away from what they've done is taking the bait. Every time I hear the rant about "it's the fault of the little guy who overreached" I want to puke. The housing bubble was allowed to happen and alot of the folks at the top are flying off to their large offshore bank acocunts in their private jets while the little people are literally being pushed out into the streets. Geez, it's like the old days, when the Reagan government moved all those crazy people out of their funded facilities and they had no where to go but the streets. History repeats everytime the grip of Republicanism descends on D.C.; enough already.
I am amazed at the fact that you missed Cheney.
Well, no waterboarding was going on in FL real estate, or else you would see his name there.
Mr. Wikipedia, next time you look, or make an effort... you'll find Thomas Frank is a regular contributor to The Wall Street Journal opinion page... which must make the Journal a leftist media organization in your Trilateral Commission view of the world.
Al Hunt wrote for the Wall Street Journal for 35 years. He was also the guy on the left for the CNN show Crossfire.
Because a guy contributes to the WSJ does not mean he has to be conservative. Is Alan Colmes conservative because he works for the "evil" also Murdocch owned Fox News???
I know it is probably inconceivable in your worldview that a conservative newspaper would allow another perspective, but maybe the editors and columnist are confident in their own ideas and not afraid to have them challenged by opposing thought.
This is why the left is proposing to revive the fairness doctrine. They are not confident in their ideas and it is annoying when someone from another perspective challenges them.
Now I need to get some sleep becaue I have a Tri-lateral commission meeting tomorrow after I take my son to summer camp.
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