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This is a commentary about an article i read in the Sunday, Dec. 23 New York Times. It was an excellent article.

It describes what the onset of a resource and energy constrained way of life could very well look like. Defaulted homes, unemployment, lives in turnoil, involuntary downsizing,,,,,,,

to read the new york times article, please cut and paste the url> http://www.nytimes.com/2007/12/23/business/23house.html?hp

There are two fotos and graphic information "The ripple Effect" from the commentary below.

The Business Attitude paragraph was lifted from the Cape Coral Economic Development Office webpage.

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-Business Attitude: The City of Cape Coral’s Economic Development Office works to create a pro-business climate that helps businesses to succeed and grow in an explosive market. INC Magazine ranked Cape Coral-Fort Myers area #1 city for doing business among cities over 100,000. Milken Institute lists Cape Coral-Fort Myers 2nd in its top performing cities for job creation in its 2005 index. The MSA has ranking no lower than third over the past 4 years.

The rosy welcome above was found on Cape Coral's Economic Development Office Website.

Commentary

An article in the Sunday, Dec. 23 New York Times tells a different story. Its headline goes “This Is the Sound of a Bubble Bursting.”

This blog/comment is based on the New York Times article with additional perspectives by the author. Kudos to the Times article. It was very nicely done, a fine composition of human interest, story telling and journalism.

Cape Coral didn't even exist until 1958 when the swampy, semi tropical marshes and tidal flats were seen as a site for big real estate development. Canals were built, wet lands drained, some streets put in, a few bridges built and now it is a semi tropical suburban bedroom community to Fort Meyers and major population partner in a metro area of close to half a million.

The article starts out describing how the new mayor of Cape Coral was looking forward to cutting ribbons for a constant parade of business openings, highways, subdivisions, parks and schools. Instead, he is overseeing a local way of life in sharp contraction with a constant parade of statistics detailing its explosive market in derail along with thousands of stories of bummed out people who have been caught up in a make believe economy.

Home foreclosures are four times last year's rate. Unemployment in Lee County, where Cape Coral and Fort Meyers reside on opposite sides of the Caloosahatchee River has gone up from 2.8% to 5.3 %. Burglaries are up 33% from lst year. Bishop Verot High School's annual dinner/auction fund raiser didn't even happen this year after previous years raised as much as $200,000.

The article described the ripple effect. Luxury car dealerships' sales are sharply lower. Restaraunts are seeing decreased sales. Furniture store sales are way down. A couple years ago, the local school district had a hard time finding bus drivers because wages for the building boom were far higher than driving a bus full of screaming children. Now, the school district has 14 applicants for every bus driver opening.

Lee County is not alone with its economic pot holes although its circumstance may be more dramatic than other places. A graphic in the NY Times related to the ariticle provides a comparison of Lee County with the rest of Florida in terms of home value, trends, crime and other info. Cape Coral leads the state in residential depreciation with many other areas in Florida also losing value but not as dramatically. A couple areas actually are still appreciating. So, fair to say, Ft. Meyers/Cape Coral are struggling more than most parts of Florida.

Cape Coral has counterparts all over the country. The article points out that places that had the steepest growth rates in real estate sales and values in the past 4 or 5 years tend to have the steepest declines. One foto on the internet making the rounds, from Las Vegas, shows a new stucco and red tile roof suburban home with a big colorful sign that offers two houses for the price of one.

I have friends who live near Tampa who sell imported granite from Brazil for counter tops in high end homes. They have seen sales in the Ft. Meyers area drop more steeply than the rest of the area they sell to with tens of thousands of dollars unpaid from Lee County.

The City of Cape Coral has laid off 12 housing inspectors because there are so few houses to inspect. Thousands of people who borrowed money on the expected continued rapid appreciation of value for their homes have found themselves stuck with expensive loans to pay off along with mortgages on homes whose values have fallen precipitously.

One story in the article described a middle aged woman and her husband who bought a house four years ago for $97,000 with no payment down. The house more than doubled in value in three years. They took out a big loan based on their inflated home value. The bubble burst, the house value crashed, her husband died unexpectedly, the auto repair and landscaping businesses they bought are way in debt, $207,000 is owed on the house which is now worth only $130,000.

The woman and her single mom daughter havn't made a house payment for 4 months and havn't even heard from the bank for several months. They figure with all the foreclosures in the area, it will be 6 months before the collectors have time to give her a call. They are very worried.

Another story. A fellow from Ohio bought a place in Cape Coral in 1995. He left his job as a mental health conselor to go into hot real estate several years ago. Flush with speculation money, he bought a $700,000 home, had a Corvette, a powerboat and was fond of $100 dinners according to the article. Now, its all a bust. His severely downsized income can not come close to making payments on his properties and inflated lifestyle. His payments are months behind.

Local businesses that catered to Hispanic people are bust because all the Hispanic laborers who built the houses are all gone because there are so few houses being built. There is a 4 year over supply of homes and condos at current rates of purchase.

Burglarly, auto theft and house break ins are up sharply. With so many empty houses and so many people trying to survive, its not surprising. Lee County sales taxes are down so much that the county will need to reduce emergency response staff. A hoped for water pollution mitigation project has been cancelled. The Cape Coral School District has cancelled expansion projects which means construction will not provide the jobs many expected. Many people have simply abandoned their homes. Cape Coral has hired a landscaping business to cut the yards of the hundreds of un occupied homes. No one knows what to expect, there is no certainly how deep the economic contraction will go.

So the story goes. Its remarkable to think the entire episode fed on speculation. The houses really weren't worth any more in terms of providing shelter. There was a gold rush mentality of hitting it rich.
Many people bought with no intention other than selling for more than they paid. It was a feeding frenzy driven by prospects of something for nothing- speculation to cash in to buy expensive homes, dinners and boats. In the end, its vanity and emptiness.

What can be said about a culture that eggs people on to behave like this? How many good people would sneer at Cape Coral's condition but wouldn't cash in themselves if they had the chance?
How many good people already cash in in ways equivalent to Cape Coral, but maybe not in such news worthy fashion? $100 dollar dinners, boats, oversized homes, vanity manifested in countless different ways.

My neighbors across the street, with a couple acres of wholesale nursery open space in river Road are subdividing and selling spec houses. They look awful. They already have a trophy home and property and “cabin” in the hills. What is enough? Think of all the oversized homes up in the South Hills and all the jobs in Eugene that depend on selling products and services that go far beyond reasonable need.

Without all that vanity and conspicuous consumption to drive the national economy, the unemployment rate would go up by mulitples of 5.3 %. This economy completely depends on people buying and using far more than what they need. And as many have observed and many would admit to themselves, lots of stuff doesn't really make for happier people.

A number of social science researchers have suggested a different kind of index to measure our nation's well being. Gross domestic product is, as many have observed, is not an adequete way to measure a country's well being. Its widespread accepted use for that purpose serves to show what the priorities are of the “system”. Its all about creating wants and wealth; not compassion, peace, equity, elevating the human spirit or respecting the natural environment.

If people downsized to a level that was comfortably adequete for taking care of real needs of shelter, health care and security, the economy as we know it would come to an end. The growth economy depends on people behaving in ways that are not consistent with their own physical and psychological best interests. Certainly its one of the greatest mythologies of our way of life- the idea that bigger is better. Many will readily say there are more important things in life than lots of money and stuff- many smart, progressive, well intentioned people. But how many of them really have a modest lifestyle and stay close to home?

Stuff is seductive, especially when it is so cheap and there are multiples of billions spent every month in the US in extremely clever ways to con people into buying things they dont need. Affluence causes pollution, a militaristic foreign policy to keep it all going, political corruption and personal integrity ditched in favor of gloss and glamor. It takes courage to behave in a rational and enlightened self interested way, much less reach out to the broader community advocating perspectives for eco logical culture change.

The sub prime mortgage scam is just the latest and perhaps one of the most colorful manipulations of human shortcomings. Its far from unusual. Its just a matter of degee. Personally, I have a nice 5.75 % fixed rate over 15 years. Maybe 9 years left to pay it off. Sounds good, safe, responsible, prudent. Its really not and dont tell HBSC. My mortgage payment depends completely on business as usual. My employment, my modest socially responsible mutual funds, my housemates' rents and their incomes that allow me to live here all depend on business as usual- market capitalism doing what it does. The great majority of Americans are no different.

Virtually all of us depend for our familiar and comfortable lives, on stability- business as usual- of a system that many of us criticise, work to change and spend a fair amount of time thirsting for its coming to an end. The system is so wealthy, even people on the margins can live well and would likely have a hell of a time trying to adjust to a really local/downsized way of life many talk about.

Our overall national economy is little different from Lee County. Its only a matter of degree. Both depend on growth, buying and selling far more than what is sensible. Further, the national economy, which Lee County is a small part of, depends completely on degrading the environment to the extent that the climate is changing, untold species are going extinct and public health suffers in countless ways.

These misfortunes and many others occur so corporations can make enormous profits, dictate politics at nearly all civic levels, fabricate popular culture for their own profit and pay its top officers even more than pro sports figures. The US military and the foreign policy doctrines that guide it are heavily focused on access and control of vital resources all over the world in a fantastically expensive effort to preserve “the American way of life.”

Lee County, Las Vegas, Phoenix and who knows how many others out of mortgage whack are the vanguards of lifestyle and economic shocks likely to come for many of the rest of us. The issue is far more than scam mortgages. Its about an irresponsible globalized economy along with the resource intensive and socially debilitated way of life it imposes. Its about many tens of millions of jobs in the USA and the lifestyles they support that ultimtaely are contrary to peace on earth, uplifted people and a healthy environment.

Cape Coral may be affected by the sub prime drama more than most towns and cities but its story illustrates in dramatic fashion, what happens when a way of doing business and a way of life is not grounded to the real world. Even the fantasy system that created the sub prime scam has decided the scheme is a huge mistake.

Eventually, the real world of resource depletion and climate change will show how the globalized capital, free market economy was a mistake incomparably larger. The jobs lost and lifes disrupted in Cape Coral will be multiplied by hundreds of thousands as these other trends mature.

When people fifty years from now reflect back on this period of time, the junk mortgage episode will be noted, if at all, as a minor preview of a far more dramatic and widespread economic and lifestyle adjustment. Rather than the sub prime fiasco, the defining issues, emerging in the early 21st Century will be seen as climate change, energy depletion, environmental degradation, resource conflict, religious zealots and truly remarkable numbers of people who slept through so much of it.

Join us January 23, 7 PM, at the River Road Park District Recreation Center on Lake Drive for “Environment and Culture- Greening the Neighborhood”. From January into May, we will see several thought provoking films, make new friends, engage in fascinating discussions and learn new strategies for living closer to home in far more eco logical ways. All sessions are free and open to the public.

For more information, call Jan at 686 6761 or for the schedule, punch here.

The foto shows the woman and daughter mentioned in the article.

For sale in south Florida