Counterpunch: The view from the construction crane

June 14, 2007

Miami developers, whose condominiums are nearly completed, could tap into a new source of revenue based on a news report from the Florida coastal town, Punta Gorda.

There, police arrested a couple having sex atop a 100 foot high construction crane. “The man, who worked at the site and had keys to the crane, told officers he was photographing the city skyline.”

For the foreseeable future, renting out crane cabs for sex would generate a higher percentage profit than selling condominiums in unfinished buildings.

What is happening to Miami real estate markets and its skyline dotted with cranes atop unfinished condominiums is both predictable and terrifying.

And because it is terrifying, not a single elected official is copping to responsibility in the unfolding collapse, spurred by their blind enthusiasm for zoning and permitting decisions and the influence of campaign contributors and the bill-by-the-hour development lobby.

Today’s Miami Herald documents the pain felt especially in some of Miami’s poorer neighborhoods where increasing numbers of homeowners are facing foreclosure.

The poor are always hit the hardest by corruption and fraud: the landmarks of the housing boom as with all sorts of pollution.

They are also hit, first, on the bottom step. But the entire economic ladder is being shaken hard and under-reported by the mainstream media.

Lots of people in high places (measured not by construction crane height) are praying that the mortgage fiasco resolves itself quiety. Elected officials who presided over the mess have their game faces on.

Government officials—in Congress and the White House—are scrambling to come up with plans to stage-manage the fallout (urging “cooperative” efforts of financial institutions to work out billions of loans generated in the enthusiasm of the “ownership society”—remember that?).

The Florida legislature has been engaged in a highly publicized effort to “jump start” the Growth Machine by slashing property taxes. But when all is said and done, the proposed relief of 7 percent is mired in delusion.

Over the last year revenue that Florida collects from real estate transactions dipped 25 percent, “causing overall tax revenue to fall for the first time since the 1970’s.” (New York Times, June 15, 2007)

So, at the same time that damage in Miami’s condominium, mid-price and upper price housing markets is just beginning, cuts in tax revenue piled atop declining tax base are setting the stage for recession and social unrest.

The billion-dollar Boca Development—that focused on coastal condos—is trying to shed hundreds of millions of assets. Production home builders are burning cash under conditions of tighening credit and balooning inventory.

The NY Times reports, today, that a Bear Stearns “set of hedge funds” tied to leveraged mortgage portfolios is down 23 percent “and recently suspended redemptions, prohibiting investors from getting their money back.”

If you own shares in a hedge fund, you will never know if its managers have been buying Miami condominiums until it is too late to do anything about it.

One is tempted to say, speculation is an individual and personal choice. But not when the societal outcomes are so severe.

The notion that what is happening in real estate markets is inconsequential is reinforced, almost like a mantra, by the financial elite.

According to the NY Times, “None of the finance officials at the banks expressed concern about the recent spike in interest rates, suggesting that the market’s adverse reaction passed quickly and that spikes occur every year. ‘As long as we continue to see that kind of benign environment—good availability of economic liquidity—I don’t think it will have much of an effect on our business,” Mr. Viniar (chief financial officer of Goldman Sachs) said.”

In markets like Miami, governed primarily by speculators, thousands of investors are not facing the future with the same equanimity.

In the next six months as Miami condominiums obtain certificates of occupancy the real Miami will begin to hurl, showing what was achieved by politicians in Tallahassee and Washington who promoted the “ownership society” as the replacement for the boom.

The stories are yet to be told of ordinary people who leveraged hard earned dollars into properties their ordinary incomes cannot afford.

But of communities in Florida, and developers who got their way by zoning changes and building permits in wetlands and farmland—suburban sprawl that should never have been allowed—every single taxpayer will be paying for terrible decisions made by their elected officials for a long, long time to come.

Those at the top of the Ponzi scheme, and the politicians they subsidized, will be on easy street—no matter how bad inflation gets or how many police officers scour crane cabs for couples engaged in free expression.


Of Elvis and Rachel — and turning points

June 3, 2007

May 27 marked the 100th birthday of Rachel Carson, who died at a young 56. And soon enough, the August week will arrive to mark the passing of Elvis Presley who died 30 years ago and at an even younger age, 42.

Granted, on the surface there’s not much to connect these two characters.

Elvis, with his open hips, made teen girls think about biology. Rachel, with her award-winning writing on the environment, made the whole chemistry industry hopping mad.

At the same time Rachel was putting the final touches on Silent Spring, Elvis was in Florida shooting a movie in Yankeetown, north of Tampa, where he paid a visit to one of Florida’s most famous springs, Weeki Wachee.

Under the surface is where the spring waters join Rachel, Elvis and us.

In 1941, Rachel Carson published her first book, Under the Sea, establishing her reputation as a prescient writer able to connect for a popular audience how we are connected, ourselves, to nature that shapes us. Elvis was just a child.

Twenty years later, Weeki Wachee, on U.S. Highway 19, was one of Florida’s premier tourist attractions. Elvis was at the height of his career and television had just started casting its net wide into the world of color.

Weeki Wachee was one of the most magical sights nature had to offer within easy distance of a broadcast station. A few years before Elvis’ visit, ABC Broadcasting purchased the spring and its attractions. Not too long after, Disney would make U.S. 19 and its attractions obsolete. (In the 1990s, Disney purchased ABC.)

Today Weeki Wachee lives on, in memories as splendid and youthful as the young Elvis. But in 1961, nothing could have been further from the mass culture fermenting at Weeki Wachee than Rachel Carson’s dire warnings.

Carson had already won a National Book Award for The Sea Around Us. Were she alive today, she would have been equally captivated by what has happened to Weeki Wachee.

The spring and its waters are murky with algae, a symbol of both Florida’s past and present: the entire peninsula of Florida is swimming in a sea of nitrogen pollution, measured in parts per billion.

In Time magazine’s portrait of the 100 most influential Americans of the 20th century, Peter Mathiessen (a writer who brilliantly chronicled Florida’s natural past) wrote about the hostility Carson faced with the publication of Silent Spring: “A huge counterattack was organized and led by Monsanto, Velsicol, American Cyanamid — indeed the whole chemical industry — duly supported by the Agricultural Department as well as the more cautious in the media (Time’s reviewer deplored Carson’s ‘oversimplifications and downright errors’.)”

Elvis lives on, at Graceland and in the hearts of millions of aging baby boomers, and also in “sightings” that may have more to do with recapturing what we have lost in ourselves than Elvis, himself.

Today we can look back from Elvis, Rachel and Weeki Wachee and understand that the nature of commerce that pollutes the environment is grounded in changeable ownership.

The same motivation that compelled bitter hostility against Rachel Carson, despite her broad popular appeal, is just as evident in the corporations organized to oppose mandatory measures to combat global warming.

And that is no different than our own state’s failure to impose measures to stop nitrogen pollution — from lawn fertilizers, from dairies and farms, from cesspits and stormwater runoff from roadways.

The publication of Silent Spring was a turning point in public awareness and demand for change in federal laws protecting the environment.

Today, the Bush White House is attempting damage control in advance of a summit of world leaders on climate change. Some of our allies, Germany in particular, have a big head start on adapting energy policies to a new economy.

Is it any wonder that much of the world views America as a nation that is king, mostly, in its own imagination?

We still love Elvis for what he was, but Rachel Carson gave us a glimpse of what we must become: caretakers for what our careless touch can ruin.

In Congress, a Republican senator from Oklahoma has effectively blocked a measure to honor Rachel Carson, on the 100th anniversary of her birth.

If Congress won’t, then there would be nothing more timely than for the chemical industry to reverse course and acknowledge the contribution Rachel Carson made when it was youthful and filled with promise.