wait till the can't pay for the Rose Parade...
Posted on 04/26/2009 1:33:13 PM PDT by WayneLusvardi
How might the following seemingly unrelated events have anything to do with the City of Pasadena becoming poorer, and doing so faster?
* City acquisition of 20-acres of open lands zoned for 24 housing units in Annandale Canyon for open space preservation
* State Assemblyman Anthony Portantino's usurpation of local single family zoning by cto re-designating the homes along the future surface route of the Long Beach Freeway Extension to low income multi-family housing
* The continued decrease in enrollment in Pasadena's public schools and continued failure rate
* The closure of new car dealerships along Colorado Boulevard
* The outrage at the removal of ficus trees in commercial districts during a drought by the "tree people"
* The adoption of the City's Housing Element calling for more affordable housing, especially inclusionary housing
* The closure of Pacific Oaks College and financial stress on the Pasadena Symphony and POPS orchestras
Isn't the recent collapse of our national financial system and the slowdown of our economy due to the greed of Wall Street, the politicization of mortgages and mortgage bonds, the creation of derivatives, and the incompetence of the former Bush administration? What does anything local have to do with Pasadena becoming poorer? Our present economic depression is beyond local control, isn't it? Think again.
Pasadena's economy and the viability of its city budget is significantly dependent on what is called its "economic culture." But just what do we mean when we use the word "culture," especially in highly cultured Pasadena? Culture, here, does not mean the tastes in art or architecture of certain community elites. Neither does it mean to be a refined and cultured person. Nor is it an environment in which things are grown in a lab at Cal Tech. Nor does it mean to be a cultural and historical preservationist. And it definitely does not refer to what is often called "the Pasadena Way." By economic culture is not meant what the art community generates in business and taxes to the local community. Or the corporate "culture" or strategy of its business persons or cultural elites.
What is meant by culture is "the power to name reality" as sociologist James David Hunter puts it. Law is not the opposite of culture but a powerful justifier and sacralizer. What the law names as reality can have a powerful influence on not only social things such as what is "marriage," but on material things like local economies. And in our modern society what is legally considered a "family" and our local economy and city budget are interconnected in ways that neither side in the recent California "gay marriage" controversy or the State Supreme Court or Pasadena's political and religious elites want to see.
David Goldman writing in the May 2009 issue of First Things Magazine convincingly advances the proposition that America’s banking crisis is merely a surface manifestation of a deeper problem. The United States failed to produce a new generation large enough to buy the existing housing stock, or fund existing pension programs, or maintain the wealth that the West thought it had. That is why we are poorer. And Pasadena is poorer for concurrently embracing social policies which have undercut the percentage of intact nuclear families and technologically educated young people able to re-generate the economy. Put differently, our financial system collapsed because we lost the demographic culture wars even while social conservatives were barely prevailing in the same-sex marriage wars - link: http://www.firstthings.com/article.php3?id_article=6564
Goldman is a former research analyst for Bear Stearns, Credit Suisse and Bank of America. Goldman accurately describes what happened with our financial meltdown as follows:
[start quote] Think of it this way: Credit markets derive from the cycle of human life. Young people need to borrow capital to start families and businesses; old people need to earn income on the capital they have saved. We invest our retirement savings in the formation of new households. All the armamentarium of modern capital markets boils down to investing in a new generation so that they will provide for us when we are old.
To understand the bleeding in the housing market, then, we need to examine the population of prospective homebuyers whose millions of individual decisions determine whether the economy will recover. Families with children are the fulcrum of the housing market. Because single-parent families tend to be poor, the buying power is concentrated in two-parent families with children.
Now, consider this fact: America’s population has risen from 200 million to 300 million since 1970, while the total number of two-parent families with children is the same today as it was when Richard Nixon took office, at 25 million. In 1973, the United States had 36 million housing units with three or more bedrooms, not many more than the number of two-parent families with children—which means that the supply of family homes was roughly in line with the number of families. By 2005, the number of housing units with three or more bedrooms had doubled to 72 million, though America had the same number of two-parent families with children.
The number of two-parent families with children, the kind of household that requires and can afford a large home, has remained essentially stagnant since 1963, according to the Census Bureau. Between 1963 and 2005, to be sure, the total number of what the Census Bureau categorizes as families grew from 47 million to 77 million. But most of the increase is due to families without children, including what are sometimes rather strangely called “one-person families.”
In place of traditional two-parent families with children, America has seen enormous growth in one-parent families and childless families. The number of one-parent families with children has tripled. Dependent children formed half the U.S. population in 1960, and they add up to only 30 percent today. The dependent elderly doubled as a proportion of the population, from 15 percent in 1960 to 30 percent today.
If capital markets derive from the cycle of human life, what happens if the cycle goes wrong? Investors may be unreasonably panicked about the future, and governments can allay this panic by guaranteeing bank deposits, increasing incentives to invest, and so forth. But something different is in play when investors are reasonably panicked. What if there really is something wrong with our future—if the next generation fails to appear in sufficient numbers? The answer is that we get poorer.
The declining demographics of the traditional American family raise a dismal possibility: Perhaps the world is poorer now because the present generation did not bother to rear a new generation. All else is bookkeeping and ultimately trivial...
...From 1954 to 1970, for example, half or more of households contained two parents and one or more children under the age of eighteen. In fact as well as in popular culture, the two-parent nuclear family formed the normative American household. By 1981, when Ronald Reagan took office, two-parent households had fallen to just over two-fifths of the total. Today, less than a third of American households constitute a two-parent nuclear family with children [end quote].
Like the U.S., Pasadena saw a decline of intact nuclear families from 2000 to 2007, the period over which the U.S. Census Bureau maintains data online.The number of Two Parent Families with Children declined in total numbers from 14,058 in 2000 to 12,902 in 2007, an 8.2% decline. Two Parent Families with Children constituted 27.1% of all city households in 2000 and 24.8% in 2007, a 2.3% decline. Meanwhile the city's population grew by 7.0% over the same period of time.
Contrary to popular notions by some social conservatives, non-family households in California and in Pasadena did not grow significantly as a percentage of population. What apparently has grown are the number of single parent families due to divorce and out-of-wedlock births, not childless households. Unmarried partner households (same sex) only represented 1% of all city households in 2007.
Goldman forecasts future shocks to California's economy and golden housing market. Demand for large-lot single family homes will drop nationally from 56 million today to 34 million in 2025—a whopping reduction of 40 percent. California's and Pasadena's "golden" housing market will not be immune to the laws of such demographics and its housing values will deflate, and with it its huge state budget. In other words, it just isn't the short-term effects of the recent-past "housing Bubble" that is causing a temporary state budget crisis. There is a Great California Economic Earthquake to come. And the shock wave will especially hit Pasadena.
According to Goldman only some limited things, such as immigration of high skilled families and inculcating youth with a work ethic, can be done to offset the coming Great California Earthquake of real estate wealth destruction. The recent inflating of the real estate Bubble by Wall Street was only an effort to forestall the inevitable and only worsened things.
While Californians and especially Pasadena cultural elites were waging a contentious "culture war" over same-sex marriage, and our courts prevaricated about whether gay marriage was a legal "right," California was experiencing the foreshocks of the coming Great California Economic Earthquake. But there was no cultural seismometer at Pasadena's Cal Tech to detect the preliminary shock wave. Neither Pasadena's real estate brokers nor its nonprofit organizations (Pacific Oaks College, Pasadena Symphony and POPS orchestra, etc.) connected the dots between the decline of intact nuclear families and the decline in its public schools with their livelihoods and organization existence - until it was too late.
And instead of sending out messages to metaphorically earthquake proof our families, our homes, our churches, our nonprofit agencies, and our state treasury, sociologists (our cultural seismologists) in California turned into radical social engineers advocating affordable housing while working out of President Barack Obama's alma mater Occidental College.
Likewise, the local Evangelical Left in Pasadena took up the cause of "faith-based affordable (luxury) housing," under the absurd banner of Biblical justice. Presumably, "affordable" Cadillacs would be advocated next.
Local politicians rushed to embrace "Inclusionary Housing" policies to buy votes without recognizing such policies will artificially inflate housing prices in the coming falling market. And such housing policies produce more broken families.
None of them have a clue that in the future affordable housing will be a non-issue.
NIMBY's moved nimbly to politically block the development of 24 units of single family homes at Annandale Estates, even though the homes could be clustered and not harm surrounding views of the natural landscape.
On April 21, 2009, State Assemblyman Anthony Portantino introduced Assembly Bill 113 which would usurp Pasadena's single family home zoning along the future surface route of the Long Beach Freeway and replace it with low income multi-family housing.
And while Rome burned, Nero fiddled. The primary attention of Pasadenans was focused on the removal of water thirsty ficus trees along Colorado Boulevard at the start of a declared drought emergency.
The sociologist Daniel Patrick Moynihan once wrote:
The central conservative truth is that it is culture, not politics, that determines the success of a society. The central liberal truth is that politics can change a culture and save it from itself.
What California and Pasadena has to return to is the central conservative truth that only culture can save it from economic and social ruination. The misguided liberal truth that politics and the courts can social engineer marriage for those who don't procreate, raise children or form households is a cultural and economic dead end. The same could be said for misguided social and land use policies at the local level in Pasadena.
The state courts need to simply rule for civil unions for gays and preserve traditional marriage for those who can potentially bear and raise children. The legislature needs to devise more family-oriented economic measures and policies. The next Governor needs to be a champion for a new work ethic and a new family-based economy.
Local governments need to enact land use and social policies which promote the formation of intact nuclear families, or at least does not undercut them any further.
Liberal religious elites need to see that they have helped lose the "culture war" by diverting our attention from our central truths and that over-individualistic rights cannot save a society from itself.
As David Goldman writes: "Without life, there is no wealth; without families, there is no economic future. The value of future income streams traded in capital markets will fall in accordance with our impoverished demography. We cannot pursue the acquisition of wealth and the provision of upward mobility except through the reconquest of the American polity on behalf of the American family."
According to abc’s new poll, 69% of “americans” approve of this. We’ve come a long way comrades.
An absolutely superb article. This deserves to be read. Immigration policies that import poverty are killing this country.
BOOKMARK AND BUMP!
Good read ping.
It’s in California.
That poll had about 18% GOP right?? Thats gotta be it
Thanks for the ping.
hmmm, interesting read. go through pasadena a lot. lots of closed buildings lately on Colorado.
wait till the can't pay for the Rose Parade...
It is a central tenet of Communist economic theory that Capitalism requires a continuous increase in demand in order to hold together, i.e. Capitalism is itself a Ponzi or pyramid scheme.
Is this guy a communist?
If Capitalism is indeed a good theory (which I believe it is) then it should work regardless of changes in demographic trends. To suggest otherwise is to suggest that Capitalism is wrong, and that maybe Marx was right.
If most Americans starting living truly Christian lifestyles then they would live much more frugally.
I grew up with a mother and father and three other siblings in a two bedroom house. Today you would be accused of child abuse if each and every child didn't have his/her own room. Most of my life we only had one car which was purchased used. We only had one TV and entertained ourselves by imaginatively using refrigerator boxes, blankets, sticks, rocks, etc.
If the vast majority of Americans started living frugal lifestyles (i.e. no IPODs, Game Cubes, home jacuzzis, jet skis, bass boats, etc.) then even if we had scads of children the overall demand for stuff would go down.
You can't have it both ways. You can't plead for people to be more old-fashioned and have more kids, while at the same time demand that they continue buying loads of modern-aged crapola.
If it turns out that the commies are right and capitalism requires an ever-expanding pyramid of suckers to keep the Ponzi scheme going then capitalists are not going to want people to get in touch with their traditional values.
When I visited Pasadena a few years ago I got the impression that it was once a wonderful place, but now it’s expensive, crowded, and not always so attractive. Kind of like the rest of LA.
As I understand it, the person who came up with the life-cycle theory of the economy was Milton Friedman.
The need of a constantly expanding market for its products chases the bourgeoisie over the whole surface of the globe. It must nestle everywhere, settle everywhere, establish connexions everywhere.
Pasadena is so bad that nobody goes there or lives there anymore. It's too crowded.
(Apologies to Yogi Berra)
Capitalism is no more a Ponzi scheme than, say, the agricultural or agrarian economy that preceded the Industrial-Revolution and Capitalism. The farmer needed to raise enough children to support him and his wife into old age. What is apparently problematic is modernity which liberates the individual from tribe, caste, clan and even from sex roles and marriage; but at the steep price of eventually being non-sustainable. Russia has more of a population regeneration deficit after decades of Communism. Western European nations also have population regeneration deficits after decades of Socialism, although less so than Russia. The United States population is at least regenerating itself even if immigration gives it a boost. What apparently attracts intact Hispanic and Asian families to emigrate to the U.S. is capitalism. The reason China and India are growing economically is the rise of what Marxists would call the bourgeoise family.
Read Chapter 7 “Family” in The Character of Nations: How Politics Makes and Breaks Prosperity, Family and Civility by Angelo Codevilla (revised edition 2009).
If you read the literature out there the people who harp on capitalism's need for expanding markets are leftists, socialists, communists, and environmentalists. To all of them it is a fatal flaw which results in the boom/bust cycles we appear to see hit us on a regular basis.
My own feeling is that boom/bust cycles are more a result of poor human judgment allowed to run amok due to government protection of crony capitalists. Get rid of the government protection and the capitalists would have to succeed in a real market which would tend to discourage speculative booms and busts.
However, I also believe that capitalism does not need expanding markets. I seem to be in the minority. Most pro-capitalist commentators use the term "expanding markets" to describe one of the benefits of capitalism, i.e. capitalists are better business people whose businesses grow faster than state-run enterprises so they are better able to expand their markets.
Your comment that modernity "liberates the individual from tribe, etc." is right out of the Communist Manifesto. Marx actually liked capitalism for its ability to separate people from their traditional affiliations. This left them free to focus on what he considered to be their main role in the world as economic pawns that need to gain control of the means of production to avoid exploitation.
Marx may have been right on some of this stuff, but in the end he posits an impossible utopian view that has led to the deaths of more people than all other philosophies and theologies combined.
If people freely choose to have fewer kids and/or freely choose to live simpler lives then they should do so.
I believe that the capitalist system is the system which will most easily adapt to such a change.
I do not believe that we need to get people to have more kids and buy more crap just so that we can feed Marx's caricature of capitalism.
The campus of Cal Tech was nice though.
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