An Essay: On the First Day of Christmas ... by gimleteye

(Part 12. With this installment, The Twelve Days of Christmas comes to an end though the manuscript may have a further life. Thanks to readers who are paying attention, if somewhat quietly. For new readers, scroll down for the earlier twelve installments. Thanks to my co-blogger, Genius Of Despair. This essay is based on twenty years experience and observation of the Growth Machine, its relation to the public, and the outcome: the worst economic crisis-- and despair and trauma for millions of Americans and families--since the Great Depression. My New Year's resolution? Embrace brevity.) The massive failure of the economic model tying suburban sprawl and condo canyons, from the smallest cogs in the machine to the biggest—the drive for Wall Street billions—have fundamentally deformed democracy. We can never legislate or regulate either hubris or greed, the fatal flaws that masquerade as virtue.

But there is a key to unlock for reformers; the perception of power is power.

Where power does not grow from the barrel of a gun, it will grow from the perception of who has the means to wield influence. From Jack Abramoff to Scott Rothstein to R. Allen Stanford, just a few of the Ponzi schemers who famously tied their fortunes to Florida, or in the case of Alan Greenspan—former chairman of the Federal Reserve—his reputation, there are clear outcomes that delineate exactly why and where reform needs to be imposed by public choice.

We just have to elect to public office candidates who are smart enough to reject the Karl Rove effect; no small consideration in age where education has been relentlessly devalued. Neither of the two important movements of our time—The Tea Party and Occupy Wall Street—seem to have found the right targets. The Tea Party is wed to the notion of limited government, without understanding how it has been coopted by the same strain of virulent corporatism represented by the Rove wing of the Republican Party. Occupy Wall Street—that spanned a much wider cultural and societal demographic—has yet to coalesce around a program or to support political candidates.

There are only two paths, no third way, between the public choices how to address the failures of judgment that caused the real estate bust and now demand policy tools to de-couple local governance from the Wall Street profit machine linking, in key respects, local operators of the Growth Machine. Maintain the status quo or embrace reform.

From a purely business model perspective, the housing boom and so much of Florida’s development history relied on “speed of execution”. The response by banks to the financial crisis they substantially helped to trigger has not in any meaningful way altered the formulas perfected through mortgage securitization and shifting of risk across the board to taxpayers. Speed of execution was the great sin that wraps up so much economic harm and financial disasters and black holes into which millions of Americans are falling.

Business needs fair and predictable regulations; but it is not for business to determine or have the last word in legislative forums.

Banks, that survive thanks to taxpayer largesse expressed through the White House and Congress, are attempting to ride out the vast deflation of housing values. Their initial effort—to use robo rocket techniques to resolve foreclosures, failed. For the most part, the economic forecasts omit the millions of homeowners who are now facing years of waiting. On the one hand, they are not required to mark-to-market dead wood on their balance sheets. On the other hand, they are attempting to heal their balance sheets by sharply redlining loan requirements.

It is, therefore, no stretch of imagination to predict that banks will continue to exert outsized influence in Congress; thwarting consumer protection wherever possible and raising consumer fees whenever possible to make-up for the dramatic collapse of revenue sources that fed off the housing market boom but now only exist as fond memories. Banks whose directors substantially aided and assisted the worst practices of the housing boom—the 12 Days of Christmas named some of the local operators, here in South Florida—should be shut down and reorganized by the FDIC. US Century Bank in Miami, for example.

With the status quo unchanged, it is no wonder that Americans—a big majority—believe the nation is drifting, that Congress is ineffective, and that whatever choice voters face in 2012, it is the least worst alternative. So, then, what alternatives could emerge to prevent a Miami from turning into an unmanageable metropolis? Use as a guide the principles of “perception is power”.

Campaign finance reform. It is simply impossible to ignore the fact that money in politics drove the economy into the ground. For the ties to Fannie Mae and Freddie Mac, Gretchen Morgensen’s book, “Reckless Endangerment”, is indispensible reading. Published in 2011, the book demands scrutiny.

An in-depth review of the performance standards of bond rating agencies and their corporate governance. I have long believed and argued (to little effect!) that current technologies like GIS mapping could play a vital role in changing how landscapes are shaped by construction and development. As long as the status quo maintains the absolute linkage between demographics and the market supply of financial derivatives tied to mortgages (and bonds, tied to government based on those connections), the U.S. economy will default to the lowest common denominators.

Ethics standards and a more professionalized civil service. There are some common sense measures that should be at the forefront of local and state government reform. Enforceable and criminal penalties with bite, to staunch the flood of public corruption in states like Florida. The revolving door between legislators and lobbyists must closed shut, with clear provisions barring family members from acting as substitutes for former elected or highly placed staff. Political appointments at the federal and state level have been highly damaging. There should be no litmus test for appointments to government service other than clear academic qualifications and high achievement at respected universities.  A civil service—if not free from unions at least incorporating leadership and high performance standards-- that clearly understands its rights and responsibilities to the public, would have sent up red warning signs and flares far in advance of the housing boom and bust.

A strong and empowered land use management agency at the state level, supported by federal permitting agencies and clear financial incentives and penalties where federal funding is tied to local organization of land use regulations. In their excellent 2010 book, “Florida’s Vanishing Wetlands”, St. Pete Times writers Craig Pittman and Matthew Waite detailed the extraordinarily bad performance of the US Army Corps of Engineers in Florida. Because of constant political pressure but the Growth Machine, the other agency with federal responsibilities in Florida, the U.S. EPA has had a similarly dismal record with respect to preventing wetland destruction, including the substantial loss of the Everglades to exploitation by polluters like Big Sugar.

Florida Governor Rick Scott took a hatchet to environmental protections and to growth management in Florida, setting back the state forty years. For that, alone, Scott should be retired from government service. The state land use agency, the Florida Department of Community Affairs, was “consolidated” and the same occurred at the local level. In Miami-Dade, the state’s largest and politically influential county, the Department of Environmental Protection was folded into a more business-friendly confection. On this front, the public interest has been sliding in the wrong direction.

There is no shortage of either good ideas or forceful proponents of smaller scale community and urban development that leave less impact on the built landscape and environment, that also serve the need to sustain job growth and provide for healthy opportunities for civic engagement. To make metropolitan areas like Miami and South Florida work, with respect to development and goals of land speculators, there has to be more stick than carrot.

During the building boom and in its aftermath, the mantra of pro-growthers has been “one size does not fit all”, arguing for the displacement of regulatory authority from the federal and state government to local jurisdictions that are presumably better able to judge the needs of communities.

Listen to the scammers who played such a central role in disbursing the currency of power. Jack Abramoff said recently, “Well, I think the great tragedy in American politics is what is legal, not what is illegal. The truth is, there are not a lot of Jack Abramoffs who are pushing the envelope so far that they go over the line. They're very few, frankly. The problem is what's legal, and that's what I write about in the book. The thing that people should be upset about, and they are upset about, is that all of these kind of little deals are legal. And that's what America's got to start focusing on.… I started getting off course by small degrees."

“I started getting off course by small degrees.” Consider just the example of the Everglades: here, billions of dollars and decades of litigation have proven one point above all else: local government is most susceptible to the Growth Machine’s efforts to edge away from responsibility and accountability. But not just Miami-Dade county commissioners. They take their cue from the Governor’s Office, from legions of attorneys in state agencies and “out-sourced” components of government defendants in complex litigation—powerful lawyers who have significant private practices and become de facto enforcers of the dysfunctional status quo. If the Everglades represents anything well and casts back to us a reflection of any aspect of human behavior, it is that greed and hubris win.

The built landscape speaks for itself. The horrors of ghost suburbs, crappy subdivisions with no way out of social anomie and alienation, were sold as “what the market wants”. It is not just that the perception of power is power. Demand, too, is shaped by perception. We know in our hearts the difference between right and wrong. We can change. Yes we can.

The Second Coming

William Butler Yeats, 1916 Easter

Turning and turning in the widening gyre


The falcon cannot hear the falconer;


Things fall apart; the centre cannot hold;


Mere anarchy is loosed upon the world,


The blood-dimmed tide is loosed, and everywhere


The ceremony of innocence is drowned;


The best lack all conviction, while the worst


Are full of passionate intensity.

Surely some revelation is at hand;


Surely the Second Coming is at hand.


The Second Coming! Hardly are those words out


When a vast image out of Spiritus Mundi


Troubles my sight: somewhere in sands of the desert


A shape with lion body and the head of a man,

A gaze blank and pitiless as the sun,

Is moving its slow thighs, while all about it


Reel shadows of the indignant desert birds.


The darkness drops again; but now I know


That twenty centuries of stony sleep


Were vexed to nightmare by a rocking cradle,


And what rough beast, its hour come round at last,


Slouches towards Bethlehem to be born?