Phoenix recovery? Part II
The data and just driving around town make it clear that the Phoenix economy is not recovering. That the news snippets and economic forecasts desperately trying to spin things otherwise are almost exclusively focused on real estate is telling. Metro Phoenix so narrowed its economy that it was America's last big factory town, building houses. When this unsustainable game of risk crashed, the region was devastated. But like a dying rattler, it is still snapping its fangs, wildly hanging onto the hope that the Growth Machine can be started up again. It's always worked in the past! This is the forlorn cry of so many caught in past depressions and economic turning points. Buffalo… Youngstown…Detroit…
The old housing economy is not returning. The one based on large-scale output of tract houses built by national builders on a foundation of liar loans, high leverage and vast government subsidies for the suburban or exurban "American dream." Now that dream is a nightmare. The nation is much poorer after the Great Recession, yet the imbalances and high debt remain. Incomes and living standards for average people are in deep trouble. Millions of houses remain to be sold, with many more in the private "shadow inventory" as well as in the toxic "assets" taken off the hands of the banks by the Federal Reserve. Nowhere do these realities operate with more ruinous consequences than Phoenix. Any "new normal" will provide little relief for a regional economy whose business plans were based on an unsustainable profligacy of building and population increases. That little blip that might mean "the bottom" or "stabilization." So?
What's astonishing is the lack of realistic or imaginative thinking on the part of what passes for Arizona leaders faced with this harsh future. Or faced with the mounting evidence of how distorting, costly and damaging to the earnings of average people the real-estate monster had become. Metro Phoenix has never been so dependent on real estate, yet no one seriously wants to break the jones. To understand the future of discontinuity. Pinal County, a national ground zero of exurban crisis, sees only one way out: More sprawl. In fact, Pinal should be returning to agriculture as fast as it can; Arizona needs the exports to a growing Asia, as well as the capacity to feed itself in a high-cost energy future. But the self-destructive hits just keep coming:
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