The Looming Shit Storm

Back in 1931 when the Great Depression was becoming a fact of life, my grandfather agreed to take half pay in order to keep his job. He didn’t like it, but he had few choices. The kids needed food, and clothes, and so on.
I tend to think back on this bit of family history as I look out on the growing shit storm which is about to engulf us all. A lot of middle class people had to take half pay in the Depression to keep working, and by next year we will realize that a lot more of us are going to have to do the same thing this time around; That is if we are lucky.

Most of us can’t see this dismal prospect yet because we are still caught up in a rapidly dying consensus on the nature of our individual and collective reality. We still buy into the idea that we are simply facing a “recession” that will cause some economic pain, but then will self correct. The snake oil salesmen are saying that we have reached bottom. Life will go on as usual.

For those of you who choose to cling to that particular illusion, might I direct you to an article “tax assessors boggled by the housing dip” in the Atlanta Journal Constitution. The gist of the article is that housing values are falling so fast that tax assessors no longer know what property is worth

For less than the price of a decent used car, you can buy a home in Atlanta today.
Actually, real estate agents list a dozen choices for $10,000 or less. step up in price to $20,000 and your choices expand 10 fold.

The prices seem absurd but they are part of a real estate market suffering with rampant foreclosures, mortgage fraud, abandoned investor properties, a collapsing mortgage industry and other ills. The market is unlike anything seen in metro Atlanta in years and it has local tax assessors and appraisers as confused as anyone.
For most people, this situation is frightening at a selfish level because they see themselves losing value in their personal property. But just step back a minute and think about what this does to your town, county and state. What is that property worth in terms of its property tax? If the assessors need to massively downgrade these values then they have to lower the taxes that each home owes.

I can hear you now thinking that this might not be so bad. You can at least get a property tax abatement on your diminished value. Perhaps you can. However those lower taxes are going to cost you a lot more than you ever imagined.
The problem comes in when it is time for the town to pay the people who are supposed to care for your welfare and your posterity. If everyone in town is paying lower taxes, how much money will then be available to pay for the police, the firemen, the teachers and the road crews?

For just a moment think about what is going to happen when this speculative bubble fully deflates and nobody has much profit left? Who is going to pay the bills?

Sure construction workers and mortgage brokers are going to be out of work. But what about all those professionals who keep the “system” running? For a moment, forget about the stories about cops making two hundred thousand with extra duties. Sure some do, and that will be changed. But that is not the reality for most police officers. Public service doesn’t pay all that well. On average, the starting salary for a cop is $40,000 per year. Are the towns going to cut that meager salary in half to keep within their budgets? How will the cops react to that cut? How safe will you feel when their pay gets cut?

Are the teachers going to keep working at half pay? Do you want the people who are charged with mentoring your children coming to work hungry? How many potholes are going to be fixed? Who is going to tell the garbage man that he has a pay cut? What happens when your garbage is only picked up once a month? When you think about how much of your life is dependent on these “government representatives”, you will begin to get the idea of how bad this Depression is going to be next year.

This may be the time when we finally have to confront the idiocy of Ronnie Reagan’s lie that “government is the problem”.
All those issues with the mortgage industry, the banks and the home values are just the tip of the iceberg in this crisis. They are tearing a hole in the ship of state, but it is going to take a long dreary time for this Titanic to sink. Each of us are going to have to recognize the depth of our illusions, and come to terms with a new and greatly diminished reality.

I suspect the answer to this conundrum will involve all of us doing a bunch of things in our communities on a volunteer level, simply because they need to be done and there is not money to pay for them. Unfortunately, we are going to have to take time to do these efforts from our own jobs which will only be paying half what they are now.