Decade of delusion

The Information Center formerly known as the Arizona Republic prominently offers up a breezy feature on how the decade now ending "upturned our touchstones, left us suspended in a mixed-up, flip-flopped, name-swapping, upside-down place." Why, even the FBR Open (the huh?) is now sponsored by Waste Management. The feature quotes, yet again, Elliott Pollack and, yet again, declines to mention that he makes his money as a developer, as well as an economist in the service of developers. " 'Every place we were strong,' he says, such as commercial real estate and the semiconductor industry, has crumbled…. Waste management, indeed." So much for what Jacques Brel would term, "Cute, cute, cute, in a stupid ass way."

As someone who was in the heart of the battle in Arizona for most of the decade, I would describe it in more sober terms, for it represents lost opportunities that the state, and particularly the city of Phoenix, may never get again. Call it the Decade of Delusion. Admittedly a strong term for a place built on a history of boosterism, glasses half full and always, like the Roadrunner, seeming to escape disaster at the last second. Those escapes, in reality, were opportunities tossed aside and hard choices pushed into a future that has now arrived. They were decades spent devouring and profaning the last best place, arriving in 2000 with one more chance to get it right. Instead, delusion prevailed. Now state and city are Wile E. Coyote, standing on air, still not realizing it's a long way down.

I arrived back in Arizona literally just in time to attend a debate between Sandy Bahr of the Sierra Club and real-estate lawyer Grady Gammage over Prop 202. It was September of 2000 and the initiative, which would have placed limits on sprawl and leapfrog development, was leading in polls. What happened next was a remarkable turnaround, as the real-estate interests mustered a well-funded scare campaign against 202. I recall Pollack saying the state would collapse into recession if the measure passed. That was my first red flag: 202 was hardly radical, indeed could have been criticized for not going far enough. It would have made infill profitable and left huge swaths to develop elsewhere. But if its passage meant recession, here was a state too dependent on one sector, despite all the boosterism about Arizona's "vibrant, diverse" economy. Prop 202 was crushed. The land barons set about platting everything from Yavapai County to beyond Tucson. The Decade of Delusion had begun.

The 202 defeat was instructive as to where power really lay. I wrote two open-minded columns examining the pluses and minuses of the measure — and back in those days, I was much more naive about the intentions and "achievements" of the Growth Machine. The abuse I took, combined with the bully tactics and massive spending used to defeat the preservationists, began cracking all my illusions about my home state. I coined the term Real Estate Industrial Complex to define the community of powerful economic interests grounded in one strategy: sprawl. It was threatened by any other strategy, even those that would have complemented it or helped sustain it.

Phoenix became America's last and largest factory town, churning out huge "master planned communities," malls, shopping strips, spec offices and tilt-up warehouses. Its business model was dependent on a huge workforce of illegal aliens and cities scrapping for minimal development fees and sales taxes. Freeways, flood control and other government subsidies made distant desert land profitable, as business, tax dollars and affluent residents were sucked out of the central core and older neighborhoods. "Growth pays for itself," we were told. In fact, it was a Ponzi scheme, dependent on 120,000 newcomers a year. The welfare of people actually living in the state was always secondary to the people who would come, and those who would profit from them.

It was, we now know, part of a huge national Ponzi scheme of easy credit from the Fed, borrowing from China, subprime and derivative swindles and sprawl development as America's last major industry that hadn't been offshored. But in Phoenix it was taken to mammoth extremes. "Where do the people who live in all those new houses work?" I was asked over and over. It was a good question. Mostly they worked in the sectors dependent on adding population: retail, house building and improvement, real estate, mortgages, etc.

While civic boosters bragged about "growth," the facts simply weren't on their side once one got beyond raw population increases or housing starts. The tech sector was in decline, still clinging to semiconductor production that had little future in America. The major leader companies had all been lost in the 1990s and no new ones replaced them. "Bagging" back-office jobs from USAA was presented as a routine coup for Phoenix, when in reality it was a one-off. Eco-devo types finally had to concede that incomes were lagging — had been since the 1980s — while Phoenix had many more low-wage jobs than comparable metros. The facts showed that the cluster strategy of the 1990s had failed, due to neglect. Other states got major economic assets; we got Ted Williams' head. The largest employer: Wal-Mart. "People will come here no matter what," we were told. But if one had the temerity to suggest raising taxes to pay for all the urban solutions such a populous place needed, we were scolded: "It will kill growth!" So the decade went by, to the sounds of nail guns and the musical Spanish conversations of the framing crews. Every nail was setting up the Depression that would fall like a collapsing house, but few imagined it was possible. "Growth" was salvation. Being first or second among "fastest-growing" metros or "boomburbs" trumped any other measure — even though the state had not even caught up with the huge costs of a 40 percent population increase in the 1990s.

The election of Janet Napolitano seemed to mark a new day. In reality, she had barely won, thanks to a weak opponent and the sudden swoon of the economy (even with the defeat of Prop 202). In fact, as I have written before, Napolitano never took on the Real Estate Industrial Complex, water or taxes. She played defense against Legislators who would be sick comic characters in fiction, but were poison in reality. Then she left for Washington, probably at just the right moment to preserve a misty good memory. Her replacement, a Mechamite Republican, ended up having to play adult and reign in the worst excesses of her party.

Yet some good things seemed to be happening. Light rail was built over vicious opposition (mostly from the exurbs); TGen was won and it was to anchor a vibrant biosciences campus; ASU got an energetic new president and established a downtown Phoenix campus, and the convention center arose larger and stunning. Lavish renderings promised a new skyline. Roosevelt Row might actually become a row. After all, Phoenix had become America's fifth largest city! Alas, it was mostly not to be. Central Phoenix sagged, despite heroic efforts of individuals, as
businesses left for cheaper new buildings on the beltways. The core
showed how little actual new business, not connected with "growth," was
coming to Arizona — how little of the real productive investment, assets and employment that
should be the precursor to real estate development was there. Linear slums proliferated all over the metro area, along with blighted empty lots and abandoned big box stores. Mesa continued to act like a small town. Tempe continued to screw up Mill Avenue. Meanwhile, the once-promising Mayor Phil Gordon joined the delusional, as inward-looking Phoenix reached out to…Dubai. In the Asian century, in a city that so desperately needs trade, high-wage jobs and foreign direct investment, when even businesses in LA could be easy pickings…Dubai?

Sheryl Sculley went on to better things, leaving the boys at City Hall feeling more secure. The legendary Alan Brunacini retired as Phoenix Fire Chief. City Manager Frank Fairbanks also finally retired, reportedly murmuring, "Après moi le gravel." ASU's Michael Crow built an empire, including the Biodesign Institute, with a strong hand. His early savior-like status has given way to many enemies, if mostly soto voce. Jerry Colangelo, who did so much for Phoenix and downtown, got tired and went into exurban real-estate development. The great John J. Rhodes, Sam Goddard and John F. Long passed over. 

This was the decade when state and city had the means and, thanks to a few leaders, the clear articulation of the urgency to act. To improve every school, for some child will attend your worst performing public school, so it had better be pretty damned good. To build public transportation to support such a huge metro area and implement commuter rail between Phoenix and Tucson. To race ahead with the "meds and eds" strategy to establish a wide-ranging biomedical economy. To execute an economic development strategy that goes beyond "cheap" and "sunny." To begin to conserve the wild, improve air quality and, finally, get serious about water. All these initiatives were possible, and got jolting emphasis in everything from the latest competitiveness report to scary interruptions of gasoline and power in High Summer.

But not in the Decade of Delusion.

Arizona was "business friendly" with its low taxes and light regulation. Of course the congressional delegation shouldn't bring home "pork" (even though it had built what infrastructure the state depended upon). And the decade passed to the sound of reactionary legislation and rhetoric at the Capitol. It turned out that Arizona was not friendly to leading edge, high-wage industries that value an educated workforce, strong research and university infrastructure, tolerance and diversity. It can't even compete against Southern states that aggressively court business. On almost every measure of social and economic well-being, Arizona ranked poorly. Arizona ended the decade with the narrowest economy in memory — and for the first time was not growing, even if more slowly, during a national downturn. It was at dead stop. It ended with a huge underclass and no way of bringing it into the mainstream — or a clue as to why it must do so. The "conservative" purists, like the developers, had been shown for the delusional liars that they are.

All that was left was to ramp up the vicious war against the working poor, in the guise of "what part of illegal don't you understand!!?!" The sheriff made his sweeps. The angry old white people rooted for him. "Conservative" nihilism has found even more fertile ground in a Depression as they have now turned on each other, still oblivious to the huge challenges facing state and city, and the enormous cost of this lost decade. Arizonans who retired there or play at a faux "resort lifestyle" just wanted to be left alone. But the world would not leave them alone, and it is changing ever faster now. The decade ends to the somber sound of desperate dinner-table conversations and the wind passing through rotting, unfinished exurban houses and the ghosts of the Hohokam reminding us, "the desert will reclaim its own, repay its despoilers."

The decade ends with the 50th anniversary of the Phoenix Art Museum. We pretty much grew up together. The museum's early years were modest indeed and it seemed destined to be an afterthought to the Heard, especially in a go-go town where the old stewards were dying off. But it has been built into a distinguished institution, a gem of the city, especially through the tireless work of my friend, Director Jim Ballinger. It shows individuals do matter. No fate is preordained. Place and pride matter. Phoenix still matters and is worth fighting for.