Here is a rant I need to get off my chest. It is not completely thought out but you will get the point. The bailout is a big F-you to Buffalo and places like it.
So I was looking at some mortgage meltdown maps recently and reading a little about state bailouts by the federal government, when I found myself getting more and more agitated. Why you ask? Well the maps show that much of the current mortgage mess is concentrated in just a few states, and within those states it is concentrated within just a few counties. The states are Florida, California, Nevada, Colorado, Arizona, and a few others. All of them just happen to be places that have experienced explosive economic growth over the last few decades. Over the last 10 years these places have seen real estate prices soar beyond anyone’s wildest dreams. The problem with these places is that people living there thought they could actually live their wildest dreams, and now that our economy has been wrecked they are looking for everyone else to clean up the problem they created. With the economic crisis in full swing, our government has jumped into action. Federal money is flowing in to shore up banks that loaned money irresponsibly and to keep people in houses for which they paid too much. No one can say for sure that anything being done now to remediate the problem will be successful or not.
Meanwhile, in more terrestrially oriented places like Buffalo, people have been living pretty much within their means for decades in an economy that has pretty much resembled what the rest of the country is now experiencing. Places like Buffalo will now be coughing up cash to help bailout places like high-flying Phoenix. Poor old high-taxed Buffalo saw its fortunes dwindle as its young and educated left for sunny, low-taxed places. Places that in many cases were made habitable by massive federal spending in generations past. Places that attracted wealth and prosperity with low costs while leaving the high costs of poverty and aging infrastructure behind for places like Buffalo to deal with. It reminds me of the bully that beats up the weak kid and is now giving him an extra few good kicks for good measure.
In all the decades of decline and foreclosure and emptying out in the cores of Buffalo, Pittsburgh, Cleveland, etc., the federal government has done little more than apply a band-aid to a severed limb. Now we see empty, decaying houses in America’s new sprawling cities on the news–and we must do something. We see decay in the cities that should not have decay, and we jump to action. Sure, I understand that these cities have put the world economy in jeopardy and that something must be done, but are we asking enough of the people that are at the root of the crisis? Should we not be asking for sacrifice from these foreclosure states before the federal government pitches in?
Of the approximately 3 million foreclosure filings in 2008, about 1/3 were concentrated in just 25 metro areas. 20 of these top 25 foreclosure cities are in Florida, California, Nevada, Arizona, and Colorado. Only two cities of the top 25 are in the traditionally low-growth cities of Ohio and Michigan. Two states hit very hard in the current crisis are California and Florida. Both of these states are run by Republican governors who have bucked the trend in their party, and have supported the Obama administration bailout bill. Both coincidentally stand to gain massive air to their states from the federal bailout bill and both have failed to raise their own state taxes to cover their budget deficits. Both states also benefited greatly from the housing bubble when it was going full steam. Of these five states, all of them except California are extremely low-taxed states, and even California caps real estate taxes. To the best of my knowledge, none of these states have done anything of substance to stem the foreclosure crisis inside their boundaries. Yeah, I am mad. Desperately needed projects and programs in Buffalo will go unfunded now because the federal government will need to spend trillions keeping us out of a depression, the origins of which are centered in places that spent their good fortune of the recent past on frivolity.
Denver Foreclosure maps are from USA Today. Click on the link for an interactive version: http://www.usatoday.com/news/graphics/foreclosure_map/foreclose.htm