Dead town walking

Do even the most sober-minded Phoenicians realize how deep a hole they're in? The depression caused by the housing collapse is undeniable. So the answer is merely to reinflate the housing bubble and happy days are here again, right? More "master planned communities." More paving over Pinal and Yavapai counties and rolling over Wickenburg with lookalike tract houses. More boobs from the Midwest who will put up with anything as long as they don't have to shovel snow.

Indeed, a major effort will be made to craft the Obama stimulus to do just this. Sustainability has no powerful political base. Sprawl does. Even the nominally progressive radio talker Ed Schultz is pushing for a bailout of the house builders — and no wonder: he also owns a small construction company and drives 50 miles each way to work from his suburban home. With progressives like these, who can understand that the old sprawl model is hopelessly broken? Trying to revive it will only increase and lengthen the pain of transition — or leave the country too bankrupt to even get there. Reviving it in Arizona will only hasten the inevitable water emergency.

But Phoenix faces crises beyond the housing depression. As one of America's least literate and most poorly educated big cities — if it can even be called a city — it's not surprising that no one is talking about them. And even the "smart people" assume the growth machine will revive, simply because it always has. Call them the road kill of the Great Disruption, the new era of discontinuity.

The fraud-based devastation of the stock market has knocked away one of the few remaining underpinnings of the local economy: retirees. With portfolios losing an average 40 to 50 percent of their values, retirees already living in metro Phoenix have much less disposable income. It was this spending that helped produce years of seemingly magical levitation of Phoenix's service economy. With a higher-than-average retiree population, metro Phoenix will feel this pullback hard. The very rich may be somewhat less rich — but this isn't most of the population there. Metro Phoenix was historically a lower-cost haven for the middle-class retired (although costs have been rising for years). So this is very bad news.

It gets worse: Where will the future denizens of Sun City, etc. come from? I don't mean aesthetic choice, although that it an issue — it's hard to imagine so many Baby Boomers wanting golf and suburban ennui in their sunset years. But the future retirees are much less likely to have the pensions and secure jobs that created stable wealth for the current cohort of seniors. They were conned into 401(k)s that have been decimated in the stock market casino. For millions, retirement has been deferred, if not altogether eliminated. The pensions remaining face a $409 billion shortfall. As a result, people who had that dream of endless Arizona sunshine may not be able to afford the move as the Great Disruption slows mobility and forces families to live together again.

Another crisis is the lack of a real economy in metro Phoenix. The city built in the 1950s and 1960s had leaders who brought in industries. That stewardship was gradually abandoned starting in the 1980s and the old aerospace/tech backbone has badly eroded. The economy stubbornly resisted reinvention — it was so easy to make money on sprawl. Thus what little non-housing, non-retail, non-tourism (all low-wage sectors) exists is far too small to support a metro area so populous. The economy was based on building houses in the middle of nowhere, staffing the shopping strips, catering to the rich, mowing lawns…all backed by a badly paid labor force with little economic mobility and a huge army of illegal aliens. Worse, it was based on unsustainable levels of population growth. While developers pocketed the profits, the huge public costs were pushed forward in a giant Ponzi scheme economy. None of these drivers will return to the status quo ante, including the illegals who maintained the economy that allowed the Anglos the leisure to hate them.

The New York Times had an interesting, although ultimately misleading, story about the reinvention of Pittsburgh. It survived the collapse of the steel industry and reinvented itself with education and health care — and has seen much less fallout from the economic downturn than other cities. The Times wondered if it could be a model for other Rust Belt cities, especially Detroit. Yet another apt (unmentioned) candidate would be Phoenix, which was America's last factory town, turning out houses.

The short answer is that Pittsburgh's success won't translate to either Detroit or Phoenix. Pittsburgh had good bones: a longtime corporate headquarters center, with the capital and talent that attracts; a major banking center; the wealth of its manufacturing barons was for decades poured into building world-class universities and other community enriching institutions; it's a real city with plenty of urban areas ripe to be reclaimed; it avoided the worst of racial and income polarization that destroyed Detroit and lurks in wait for Phoenix. Perhaps most importantly, it was never a metro area dependent on heavy population growth. The wealth it created came from real things, not the artifice of more Wal-Mart jobs serving more transplants from Minnesota and inland Southern California.

Unfortunately metro Phoenix is saddled with sprawl barons who won't give back to the community. It wasted its prosperous years. The few progressive initiatives had to fight against Kookocracy opposition so they remain far too weak or incomplete to lead reinvention. The old bastions of private capital that cared about building a great city died out or were merged away. The old boosterism is all that remains, now clouding serious thinking about the future.

I know: a tax cut and a roundup of all brown-skinned people will fix everything. In fact, very hard times are ahead.