I shuffled out to the living room and found my boyfriend on the couch watching the Weather Channel, with the logo-ized phrase WINTER MEGA STORM APPROACHING ominously onscreen. “Is that for us?” I asked.
“Yes. Tomorrow. I made coffee,” he said.
“That sucks. And thanks.”
I downed some coffee and went online for a quick perusal of the usual blogs and news sites. Summary of what I read: the economy is going to hell, American civil liberties are eroding and celebrities are having romantic entanglements.
Gloomy stuff. Especially with the weather. Perhaps that’s why I pondered this: One day last week I attended an early-morning economic forum held by the charitable foundation that’s a major donor to many groups I cover as part of my “arts and entertainment reporter” job description. If not for the lack of details and quotes I could’ve written and filed the story the night before it happened: “The foundation has less money, so they won’t be giving as much away this year. Grant recipients aren’t happy.”
But there was more to it than that. Here’s something the foundation president said at one point, after mentioning the 28 percent decrease in the foundation’s endowment:
It feels like, from everything I’m reading — and I assume everyone’s seen the same stuff — we’re in a time where things are being reset. We’re not in a temporary cycle where we’re just going to emerge, just weather the storm, sweat it out and in six months to a year we’ll be back to where we were a year-plus ago. That’s not what’s happening.I’ve been feeling the same way, but that’s to be expected for a print journalist in 2009. I know I’m spectacularly lucky to have a job at all. But hearing such pessimism from endowment-manager types is another matter. Just how bad will this economy get? And if we’re in reset mode, what will we reset to?
I can’t find a nuanced answer and am uninterested in one-word labels like “socialism.” I have seen optimistic reports the recession will surely end in a year or so, but their tone reminds me of the “Buy now or be priced out forever!” hype that inflated the housing bubble. Too quirky, and impossible to believe unless you want to bad enough to ignore economic realities.
The stimulus package is supposed to pay for some road widenings and new police stations in my area, though. We'll go deep into debt to pay for this.
Even without the stimulus bill, there’s something seriously unsustainable about the status quo. Speaking on a provincial level: I’ve observed, both as a journalist and as on ordinary citizen, an impossible status quo in my own state of Connecticut. I’d guess the specifics aren’t much different in the rest of America, either. Here’s just a few examples to consider:
1. “Snob zoning” and other laws which essentially mandate a middle-class existence for all; if you can’t afford or don’t want a middle-class lifestyle, too bad.
Warped-but-true anecdote: one night about 18 months ago, I attended a local town council meeting in hope of writing a story about two of the 15 or so items on the night’s agenda. Item one: a proposal to tighten zoning codes, so that anyone who wished to build new houses in town would be required to build a very large house on a very large plot of land. No more small, compact neighborhoods allowed. Naturally, this drives up the cost of new housing.
Item two: a proposal to form a task force on “Why can’t poor people afford to live in town anymore? And how much tax money should we set aside to subsidize housing for them?”
I never wrote the story, since the council tabled one of the issues for another night. No matter what the council eventually “does” about the problem, it’s a safe bet that “rescind the laws keeping poor people out of the market” won’t be it.
2. As a lifelong renter (thanks in no small part to government policy), I paid little attention to homeowners’ property-tax matters until I started working as a journalist and saw what a huge issue it was during budget time every year. And with reason: tax rates have risen higher than inflation every year for at least a decade or so.
These annual tax hikes were viewed mostly as annoyances while people’s wealth grew (at least on paper, as their house values increased). Now that the economy – and the real estate market – is contracting, folks are starting to realize “Having taxes consume a larger percentage of our income each year can’t go on forever.”
Unfortunately, the folks realizing this generally aren’t the ones who run for office and get the power to set tax rates for people in my state. Here, we’ve got city councils expecting fiscal-responsibility awards because they “only” raised taxes a percentage point or two above the rate of inflation.
In fairness to the politicos, many of those costs are mandated by state law or contractual obligations. When the town council is legally obligated to spend X dollars on every schoolchild labeled “special-needs” and Y dollars on health insurance for each pensioner, plus minimum costs for cops, firefighters, streetlights and other unavoidable expenses, and those mandated costs go up every year, the council can’t refuse to pay those bills anymore than homeowners can refuse to pay their property taxes. Not if they want to keep their house.
What happens when an irresistible force meets an immovable object? It’s a meaningless question; in a universe where one exists, the other cannot. So which is the stronger in our economic universe: an irresistible force in rising costs of government, or an immovable object in the amount people can shell out in taxes before they simply can’t?
Either way, it won’t be pretty when they collide. What predictions do you have for the nation’s near-term future? Bonus points if you can produce something cheerful that isn’t pure bullshit.