The consequence of greed in Tampa
The February 9 issue of The New Yorker spotlights the Tampa Bay area as “ground zero of the foreclosure crisis,” and exposes us nationally as a prime example of the political and corporate greed and utter wrongheadedness that has ruined America’s economy and laid waste to Florida.
In “The Ponzi State, Florida’s Foreclosure Disaster,” George Packer describes how greedy political and corporate leaders collaborated in a Ponzi-like racket that led to economic collapse right here in our own county — much like national political and corporate leaders selfishly led the country into the current debacle — leaving legions of families stuck paying the bill.
What The New Yorker doesn’t get to, is that just like our national leaders, our county commissioners and state legislators are now looking for ways for us to bail out the development industry — the very industry whose greedy excesses contributed to our current mess. But locally it’s even worse, because our state and local leaders are calling for deregulation! (More on this coming soon.)
Before we get to that, let’s look at The New Yorker. Below, I give you an annotated digest:
Packer drives around our newest subdivisions, or “boomburgs,” with a friend from Tampa who calls them “ghost subdivisions,” describing our leadership’s failure to his national audience:
“The pine trees and palmettos and orange groves have been cleared to make way for new developments. … look-alike two-story beige and yellow houses. … nobody on the gently curving streets … one house had been for sale for almost two years … streets whose pavement stopped a few feet from where it began … streets with signs and street lamps but no houses, and streets with houses but no occupants. … Dozens of houses had “For Sale” signs … house after house appeared to be waiting for inhabitants … deserted. …The grass outside was overgrown …
“To the south, on a rural road off U.S. 301 in Hillsborough County, I turned in to a subdivision called Tanglewood Preserve. The sales center was shuttered and construction had been arrested: thirty-two lonely houses were scattered around three hundred and sixty-six lots, with patchy fields for back yards. … the subdivision’s common areas were not tended, and the open fields had become dumping grounds.”
Our leaders are supposed to manage growth, and our economy, for the benefit of all of us. Instead, they benefited themselves and their cronies by going along with this Ponzi scheme:
The state’s economy depends almost entirely on growth—that is, on new arrivals and the wealth they generate in construction and real estate. Gary Mormino, a professor of History at the University of South Florida … [said] “Florida, in some ways, resembles a modern Ponzi scheme. Everything is fine for me if a thousand newcomers come tomorrow. The problem is… no one knew what would happen if they stopped coming.”
Our local growth-based economy is like a Ponzi scheme in another way: growth costs Hillsborough taxpayers thousands of dollars in infrastructure costs for each new house built. The Ponzi-promise has been that we’d keep on growing, and so we could keep on roping in more taxpayers to help shoulder those costs. But like any stupid pyramid scheme, it inevitably crashed.
The astronomical growth projections that were used to justify way too much development, over the constant protests of citizens, were promises as empty as the vacant lots and unoccupied houses that now blight our communities.
The New Yorker author poignantly introduces his readers to some of the local people affected by this fiasco, revealing that while unrestrained growth benefited a privileged few at the top of the pyramid, the consequences have been gruesome for the many people on the bottom. People are losing their homes, jobs and businesses.
Searching for an explanation, the author interviews some familiar names. Kathy Castor lays the blame squarely on the political power of developers at the state & county levels:
“Kathy Castor, Tampa’s representative in Congress, told me, “Florida was particularly lax when it comes to mortgage regulation.” She connected the mortgage crisis and the lack of oversight with state politics and the political power of developers. “We were hit by two Bushes, George and Jeb”—Florida’s governor from 1998 to 2006—“and there was very loose growth management. Because Jeb was aligned with the development industry, it was a speculator’s paradise.” Before running for Congress, in 2006, Castor was a commissioner in Hillsborough County. She said that developers held sway there, benefitting from “a very costly urban-sprawl model.” The county sold off agricultural land “in places that are miles from the jobs.””
When Castor calls urban sprawl “very costly,” she means it is costing us — Hillsborough County taxpayers.
Alex Sink talks about the irresponsibility of banks—even scolding her colleagues at Bank of America in Florida, where she was that bank’s president before becoming state treasurer; and the article also points out the irresponsibility of homebuyers and speculators who played their role in the Ponzi scheme. Still, the author agrees with these men at the St. Petersburg Times:
“[Times journalist, Michael] Van Sickler was right: the diagram of moral responsibility looked like an inverted pyramid, with the lion’s share belonging to the banks, mortgage lenders, regulators, and politicians at the top.”
… “It’s Florida,” Doug Bennett, the chief of the Riverview bureau of the St. Petersburg Times, in eastern Hillsborough County, said. “Most of the governors never saw a developer they didn’t like.” …“This is the epicenter of everything that’s bad in America.”
Casting about for solutions, the writer is impressed by Pam Iorio:
“Iorio is determined to have mass transit approved before her term ends, in 2011. “We are twenty years behind the rest of the country, in terms of light rail,” she said. “It will put us at a huge economic disadvantage without it.” In Iorio’s view, the industries of the future won’t come to an area without mass transit. The project interested me, because it cut directly against the way people around Tampa Bay lived. It would get them out of their cars, lure them back to the city, and develop the metropolitan area with taxes and services, rather than depend on endless growth.
… “Iorio had been described to me as a competent, unimaginative public servant, but in our conversation she sounded almost visionary. “If there can be any good from this economic calamity, that is occurring, it is causing us to reassess ourselves as a country, as a state, as a city,” she said. “We have to reassess the institutions that we trusted and can’t trust anymore. We have to reassess the role of government in the private sector. And, locally and as a state, we have to reassess the basis of our economy. A state that is so dependent on the ebb and flow of construction does not have a strong foundation for its economic future.” … “We can’t continue to build four-thousand-square-foot houses miles outside cities.””
The “almost visionary” Iorio stands out like a ray of hope around here because so many of our local politicians refuse to give up on the business-as-usual that has so utterly failed us. The author finds another glimmer of hope in our changing political climate. As the country rejected the old failed policies of the past administration, our local voters did, too:
“During the era of George and Jeb Bush, places like Pasco County and Cape Coral voted heavily Republican, and became the political center of gravity in Florida. But in 2008 a right-wing former professional wrestler lost his seat on the Hillsborough County Commission to a gay ex-cop who supports mass transit. … When, in his Inaugural Address, Obama called for “a new era of responsibility,” he was speaking about Wall Street and Washington, but he was surely also speaking about Florida …”
Packer takes a last, grim look around our “ghost subdivisions”:
“half the driveways are sprouting weeds … garbage piles up in the bushes … it’s already possible to see the slums of the future. … more and more residents… will be renters … vacant houses … will be boarded up … grass in the front yards … will grow three feet high … The open fields with street lights but no houses will become dumps.”
The story ends with the author’s amazement at the pervasive expectation that we’ll all go right back to business as usual. If we let them, our county commissioners and our state legislators will continue the failed policies that are drowning us in debt and ruining our communities. In my next post, I’ll talk about their “solutions” to this mess.
hat tip to Wayne Garcia.
