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Catalyst
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At a high level of abstraction, the current period of globalisation is defined by a trilogy of ideal-typical economies: superindustrial (coastal East Asia), financial/tertiary (North Atlantic), and hyperurbanizing/extractive (West Africa). "Jobless growth" is incipient in the first, chronic in the second, and absolute in the third. We might add a fourth ideal-type of disintegrating society whose chief trend is the export of refugees and migrant labor. [...]
Labor’s forward march in Los Angeles, and with it the future of the urban region, depends, in my opinion, upon further consolidation of a programmatic vision, built around a human needs agenda, that is not hostage to any individual campaign or political personality. Los Angeles needs, in short, a more, not less, ideological politics. I find nothing praiseworthy in current calls for more ‘centrism’ or ‘pragmatism’: euphemisms for the continual process of incremental adjustment to the rightward drift of the Democratic Party. In contrast, conservative Christian groups have built impressive political bases in local suburban politics largely through unyielding, programmatic tenacity. Odd to say, but many conservatives seem to have a better grasp of Gramsci than many on the Left. Above all, they understand the principle that a hegemonic politics must represent a consistent continuum of values: it must embody a morally coherent way of life.
But, then again, we do not stand at the gates of Socialism’s New Jerusalem, but at the hard edge of the developers’ millennium. Llano itself is owned by an absentee speculator in Chicago who awaits an offer he cannot refuse from Kaufman and Broad. Setting aside an apocalyptic awakening of the neighboring San Andreas Fault, it is all too easy to envision Los Angeles reproducing itself endlessly across the desert with the assistance of pilfered water, cheap immigrant labor, Asian capital and desperate homebuyers willing to trade lifetimes on the freeway in exchange for $500,000 ‘dream homes’ in the middle of Death Valley.
Is this the world-historic victory of Capitalism that everyone is talking about?
Where did the money to buy such power come from? Although some of the new wealth on the Westside arose from the military aerospace boom of the later 1950s, the locus of power, as in previous generations, remained real-estate speculation. But, as we have stressed, the game was now played within the new rules of Keynesian suburbanization set by the FHA and Fannie Mae. Two rising groups of entrepreneurs dominated the 1950s building boom from their Westside headquarters outside the radius of Downtown power. First were the merchant builders, mostly 1940s newcomers, like Nate Shapell, Larry Weinberg, Louis Boyar, Ray Watt, Bill Lyon, and (later) Eli Broad. Secondly were the savings-and-loan empires that funneled mortgage capital from all over the country to Southern California homebuilders. In the 1950s this was an extraordinarily dynamic industry with a deposit base growing 21 per cent per annum. The preeminent local firms were Ahmanson’s Home Federal Savings (number one in the USA) and Mark Taper’s First Charter Corporation (number three). Moreover the building and savings-and-loan sectors were complexly integrated by strategic combinations (for instance, Taper’s alliance with Boyar and Weinberg to mass-produce the suburb of Lakewood) as well as by the massive reinvestment of builders’ profits in the thrift industry.
a useful reminder/detailing of the power that real estate capital is able to accumulate during particular boom periods
As we shall see in more detail in the next chapter, all this started changing during the Vietnam boom as developable coastal land – the raw material of the Southern California dream – began to disappear. Resulting land inflation, which went ballistic in the late 1970s and again in the late 1980s, profoundly reshaped the distribution of wealth and opportunity. Relative land scarcity also led to a rapid decline of ‘mom and pop’ builders, soon followed by the middle strata of developers. Control over land conversion has been increasingly centralized in huge companies capable of banking scarce remaining blocs of coastal plain, or financing whole new residential or industrial cities in distant interior basins.
what happens when land becomes scarce -> centralization of companies
The second factor, helping define the mode of recycling, has been the differential in land prices across the Pacific. If land inflation in Los Angeles has radically transformed the economics of local urbanization, it remains yet minuscule compared to the neutron-star densities of property values in Tokyo. In face of the refusal of the ruling Liberal-Democrats to plow Japan’s trade windfalls into higher wages and a Keynesian housing reflation (as demanded by the Socialist opposition), trade-generated surplus capital has instead flooded into stock and real-estate speculations reminiscent of Coolidge’s America. What the Japanese call zaitech, the strategy of using diverse financial technologies to shift cashflow from production to speculation, began to be internationalized in the mid 1980s with a special orientation toward Southern California. In particular, the ‘super-yen’ put the skyscrapers along Downtown’s new Gold Coast at rummage-sale discounts vis-à-vis their most dowdy Tokyo equivalents.
a factor in the 'Nipponization' of the socal economy
An obvious result of growing financial integration is that control over the Los Angeles economy is being alienated, with incalculable consequences, to power centers six thousand miles away. The Downtown ‘renaissance’, after all, is only a perverse monument to US losses in the global trade war. When the Japanese economy seemed invincible and its supply of exportable capital infinite, this deficitary dialectic did not trouble local elites. But 1980s blind faith in the ‘Pacific Century’ began to buckle at the knees following the kamikaze dive of the Tokyo stock market in early 1990. Los Angeles’s leaders were rudely awoken for the first time to the real nature of colonial subservience upon the inscrutable workings of a Japanese economy bloated with fictional capital. For example, when the Bank of Japan recently decided to raise its discount rate, it drove Tokyo investors to desert Disney Corporation stocks en masse for domestic bonds. The result was unexpected distress and confusion in Burbank. This was an infinitesimal foretaste of what a general real-estate slump in Tokyo or a Japan-centered recession might do to those sectors of the Los Angeles economy – like Downtown or Hollywood – hopelessly addicted to ever-increasing fixes of recycled debt.
In the fall of 1973 home prices in Southern California were $1000 below the national average; six years later they were $42,400 higher (fifteen years later, $143,000 higher). If in the flatlands of the Valley home values only doubled, they tripled or quadrupled in the hills or near the beach. In Beverly Hills, median home values increased $200,000 in a single year. Averaged over all of Southern California, homeowners were reported to be earning 30–40 per cent on their equity per annum, in adjusted terms, in the late 1970s, and home values increased almost three times faster than income. As ‘the purpose of housing units came to be perceived more as investment and speculation than as shelter’, house trading became a mass mania. In the course of the decade 164,000 new realtors’ licenses were issued (bringing the total to nearly 400,000 by 1981), and homeowners were reported to be mining billions of dollars from their equity (via second trust deeds) to pay for grander lifestyles.63
At first it seemed that Los Angeles could save itself simply by sticking a gilded finger in the dike at Hyperion: a $2.3 billion renovation. But anxious engineering reports to the Mayor, immediately leaked to the press, revealed that the entire system was on the verge of collapse. As the Times caustically observed, ‘planning procedures have been so slack that nobody made that most basic connection between population growth and the carrying capacity of a sewage system’. Although the old trunk sewers were large enough to accommodate the ten million gallons of new flow added each year by urbanization, the treatment plants had exhausted their capacity. The Mayor’s attempt to abate the crisis through voluntary water conservation was ignored, especially in affluent, ‘slow-growth’ Westside and Valley neighborhoods with their swimming pools and acre-sized lawns.
lol. idea for something in the background of pano? feeds into the idea of this being an unplanned system with externalities that threaten to undo everything
Possibly there is a significant internal divide in non-Anglo communities between renters and homeowners, with the latter more inclined toward slow growth. But the crucial point is that the polls themselves, by the exclusive way they frame questions (pro and contra economic development, for instance), simply reproduce the distorted dichotomies of growth war ideology. It is not surprising that poor people, especially renters, will choose jobs over environmental quality when the two are artificially counterposed. If it were the only choice offered, most people would also opt to cut their toe off rather than their leg. Such dubious, but ubiquitous survey methods only reveal people’s relative anxieties, not their substantive opinions.