Why Arizona can’t ‘retool’ its economy

Even under the ownership of Gannett, with a publisher whose command to the newsroom is to "say something positive about the community" and a huge loss of talent and institutional knowledge, the Arizona Republic — er, Information Center — still does its occasional "let's do the right thing" stories. The latest appeared Sunday.

This is not investigative, "put-em-in-jail" journalism. Rather, it represents a white paper on the things the "community" needs to do to get better. The Republic has been doing this at least since the 1980s, when it became clear that Phoenix was headed for a trainwreck. I certainly wrote my share. And nothing ever happens. Now I read them, as the real power brokers must do, for entertainment value.

Editors must have been on vacation to allow Chad Graham, one of the small cadre of real reporters, to write:

The Valley's economy could start to recover in 2010. That is when some economists believe the glut of excess homes will be absorbed and new residents will spark new construction.But if history is a guide, metropolitan Phoenix will only seem to rebound. Despite decades of real- estate run-ups, quality-of-life measures for the region continue to fall.

That's the truth. But, then, the paper sometimes allows such unpleasantness on its pages. After all nothing will happen. Then the usual-suspect "experts" talking about "wake-up calls" and "initiatives" for biotech or solar power. There's just one problem with all of this:

The people who actually wield power in the state don't want anything to change. They may be vaguely aware that the world is changing at warp speed, and not in Arizona's favor. But they are still profiting. In any event, they lack the imagination, curiosity, intellect or love of place to change their ways.

We're talking about two broad groups: the Real Estate Industrial Complex that controls most of the real economy and the Kookocracy that controls the Legislature. They draw their power not from reinventing the state economy or making investments for the future, but from old-fashioned exploitation industries. Exploiting abundant land (though not water) to keep building sprawl. Exploiting hate, ignorance and tribalism for political gain.

As a reader commented on the story: "How do you retool people who thinks gay marriage is bad or they can't
accept a Mexican name for a high school or a state that supported Bush
twice? This state is so backwards. My parent company has said they will
not make a major investment in this state."

The people who pontificate on retooling the state economy can't deploy capital. They can't knock heads to gain consensus. They have no political power. Rather, they hold staff jobs in think tanks and economic development organizations, and walk on egg shells so they can occasionally peep the truth. Janet Napolitano, Phil Gordon, Michael Crow? — all public employees who ultimately must bow to the will of the real power. Hence, the Legislature cuts university funding and sits on construction money, keeps trying to eliminate the Department of Environmental Quality (with clear intimidation for the Department of Water Resources), and stymies infrastructure investment.

You rarely hear about the people with real economic power in Arizona; you probably don't know more than one or two of their names. They are fatally (for the future of the state) wedded to the status quo. It's been too good for their bottom lines.

Unfortunately, even the smartest of them is unprepared for the new age of discontinuity. We have only begun to feel a worldwide disruption that is historic in nature. It will remake Wall Street and threaten social unrest in China. But it will hit a place like Arizona is a special way.

Arizona and Phoenix face not only a recession — or depression, if you've actually been on the ground there — but an economic and social dislocation unprecedented in nature. The old growth machine may never come back. If it does, it will sputter along as it dies. The old model, the old assumptions — they're gone.

Why? Too much has changed as "the Valley" desperately sought to avoid change. The state faces a looming water crisis — not a question of "if" but "when." A future of higher energy costs also bodes ill for a place dependent on air conditioning and long, single-occupancy car driving. Global warming and widespread local environmental degradation will make the state less desirable, particularly for the affluent.

The same goes for the climate of racism and willful ignorance — being another Mississippi is not a viable 21st century model. The creep of social woes and economic underperformance have become a self-reinforcing cycle. In a place that desperately resisted reinvention, the dwindling "tech" economy is vulnerable to continued shift of jobs offshore. The loss of so much wealth in the financial meltdown will not only hurt retiree spending power, but change the plans of many who might have retired to Arizona, even the Boobs from the Midwest who will put up with any dystopia so long as the weather is hot.

And other cities, states and world competitors spent the years Arizona wasted building crappy subdivisions attracting talent and capital, gaining unassailable positions in the industries of the 21st century.

Things didn't have to turn out this way. But now it's too late.