A working class person who lives in the countryside may feel frustrated conveying to a better off city dweller the economic stagnation outside cities since the Great Recession (or Lesser Depression) of 2008. If that working class person has had his or her rural homestead on the market for over a year, a not uncommon length of time to sell real estate in rural working class areas, particularly since 2008, the city dweller might have a hard time understanding why that should be when places in the city sell well within a year if they are reasonably priced. For people in the cities, recovery from the Great Recession has progressed to pre-recession levels since the low point in 2009. For people in the countryside, where the economy has been on a downward trend for decades, there has been little to no recovery in jobs or in the housing market since 2008.
A Family Dollar store in Lenox, Georgia. Photo by Michael Rivera. Dollar stores have become a ubiquitous sign of the times in rural and small town America over the past 20 years.
Living in a middle class or upper middle class urban bubble can make it hard to understand how divided the country has become along class lines delineated between the city and the countryside. Those lines have always existed, but never more clearly than now. It’s little wonder many city dwellers, especially those living on either coast, were blindsided by the result of the 2016 election. Because their own economic situation has rebounded since 2008, they failed to notice there was no similar rebound for their country cousins, for whom things have only gotten worse. Beyond economics there is also a growing social and cultural divide between city and country. Again that is nothing new, but again it is a chasm that has opened wider than ever before.
The president elected in 2016 by the weight given to rural votes in the Electoral College has not delivered on any economic improvements to rural life he promised, such as infrastructure jobs, nor will he ever deliver on his promises. Rather than implementing policies meant to improve the lives of many of the people who voted him into office, the current president is primarily interested in stoking their anger and resentment over social and cultural issues while working toward their further economic exploitation by the corporations he really represents. To the extent those voters refuse to recognize their fleecing, they deserve contempt. The difficulty for rural voters who are not true believers in the current president’s cult of vile invective has been that corporate Democrats have forced them into a corner by not offering them a decent alternative.
A clip from “Bailey’s Bad Boy”, a 1962 episode of The Andy Griffith Show, with Bill Bixby and Don Knotts. The Andy Griffith Show ceased production in 1968 while still at the top of the ratings for CBS. Its successor, Mayberry R.F.D., fell to the axe of the Rural Purge a few years later, in which CBS and the other networks got rid of programs targeted at older, rural audiences, and replaced them with programs aimed at younger, urban viewers.
When there are only two substantial political parties, which in their allegiance to corporate donors over all other constituencies have come to resemble each other almost as closely as Tweedledum and Tweedledee, ordinary voters feel powerless and ignored by the system. Social and cultural policy differences remain between the two parties, but ultimately both parties serve their corporate masters before all else. Democrats, most of whom appear to live in urban bubbles on the coasts, would do well to recognize the dissatisfaction of those in the countryside, in fly over country, or the presidential election of 2020 could be a repeat of 2016. Recognition starts from understanding problems unique to rural America, and perhaps then people in cities won’t be surprised to learn not everyone has access to unlimited broadband, as well as many other things they have come to take for granted in wealthier urban centers. A little respect flowing both ways, between city and country, can seem hard to come by in these polarized times, this Cold Civil War, but it can go a long way toward healing divisions.
— Ed.
Editor’s note: This post was scheduled to appear yesterday, April 15, but a severe weather outbreak in the eastern part of the country knocked out internet service in our vicinity, delaying it’s appearance until today.
Sales of recreational vehicles have been setting records in the past several years as the economy continues to rebound from the Great Recession of 2008, and as Baby Boomers retire and adopt the RV lifestyle either full or part time. It is considered a lifestyle by the people who live it, people who read magazines and websites devoted to their concerns, and who share information with each other concerning their rigs and travels, both in person when they meet at campsites and on internet forums. Really it has developed beyond a lifestyle to a subculture, ever since Wally Byam introduced the Airstream trailer in the 1930s, and especially so since after World War II.
The subculture of RVers should not be confused with people who dwell in mobile homes, the majority of which are mobile in name only. Recreational vehicles as a category include teardrop trailers, pop-up campers, and self-contained vehicles with all the amenities of a complete home except a permanent yard. They range in price from $10,000 to $1 million. Most of all, unlike their cousins the mobile homes, recreational vehicles stay on the move. RVers tour the country and stop for visits that are only temporary, even if they may stretch to months.
A modern teardrop camper trailer. Photo by PPILLON.
One rather surprising statistic about the recent boom in RV sales is how many of the vehicles are being bought by Millennials, the generation now in its teens, twenties, and thirties. RV ownership has typically been associated with retirees with a desire to travel, and it’s therefore not surprising that RV sales have increased as Baby Boomers, the largest generational share of the population, have reached retirement age since about 2010. There appears to be a different dynamic driving RV sales among Millennials, perhaps relating to the new fluidity in the service and internet economy, where jobs either are low paying and do not generate loyalty one way or the other, or the jobs are better paying in the technology sector and the workers can work from home, wherever that may be, whether near or far from corporate offices. In either case, for young people starting out and without a lot of funds, an inexpensive RV is adaptive to the modern economy while allowing them to travel and explore before settling down, if indeed they ever find the need to do so in the traditional sense of a house with a mortgage.
A montage of highlights from the 1953 film The Long, Long Trailer, directed by Vincente Minnelli and starring Lucille Ball and Desi Arnaz, with music for the montage provided by Perry Como singing “Breezin’ Along with the Breeze”.
There are RVers, young and old, who pick up extra income by traveling to seasonal work such as at Amazon.com warehouses, and that kind of thing will probably increase as more people take to the lifestyle and require some funds beyond Social Security, pensions, or other temporary service sector work. The employers like the arrangement, particularly as applications outnumber positions, allowing them to keep wages low, and because they are typically hiring responsible individuals with a good work ethic, even if they are in many cases unprepared for extended physical labor. Once the work is ended, both parties cut loose from each other without any further commitments, and in this case that is probably salutary for all concerned. One last thing the curious may wonder about the RV lifestyle, and that is about the relative safety of being in a RV during a lightning storm, and the answer is that a recreational vehicle constructed largely of metal top to bottom will most likely conduct a lightning strike safely to ground, though it is perhaps not wise to invite disaster by parking on the highest, loneliest spot in the countryside, or near a tree that qualifies.
— Ed.
“Gypsy”, a 1982 song by Fleetwood Mac, written and sung by Stevie Nicks, may represent different things to Baby Boomers as they age. It certainly represented several things to Ms. Nicks over the years as she progressed from initial idea to performance.
Sears, once the largest retailer by sales volume in the country, has been in decline for the last twenty years and is on its way out of business. Some of its competitors in the brick and mortar and catalog sides of retail merchandising have either already gone out of business or are also on their way out. Sears failed to keep up with the online retail revolution, and a look around its sales website indicates that the company still doesn’t have a handle on it. Sears closed up its famous catalog in 1993, and since it never established itself online, it was left with brick and mortar stores which are not doing well.
The Amtrak train The Cardinal departs Chicago in May, 2009, for points east. The Sears Tower, the tallest building in the skyline, was renamed the Willis Tower in 2009 by the Willis Group as part of its lease agreement. Photo by Russell Sekeet.
Throughout the first two thirds of the twentieth century, Sears was such a huge merchandiser that it accounted for about one percent of all retail sales nationwide. It was the Amazon.com of that time, which was no small feat considering the supply chain difficulties imposed by an infrastructure that would not become truly nationwide until the 1950s with the building of the interstate highway system. Sears made its name by using its catalogs to reach under served rural customers at a time when the majority of people lived outside of cities. Now online retailers can reach anyone with an internet connection, and shippers deliver directly to the consumer’s doorstep.
It was at this time of year, late summer or early autumn, that Sears used to issue its Wish Book, a shortened version of its catalog, with an emphasis on Christmas gift items. One of Sears’ competitors, Macy’s, still kicks off the Christmas shopping season by sponsoring a Thanksgiving Day parade in New York City, though it has also been closing stores around the country. The 2008 recession accelerated the decline of the big nationwide department stores after a slow slip in sales since the 1990s. Specialty stores with a national or regional presence, like Radio Shack and Circuit City, have also either shut down or are close to doing so. What’s most often left then for Christmas shoppers visiting a physical store are the big box retailers like Walmart and Target.
Or people could patronize locally owned shops. The prices may be higher because the small shops don’t have the supply chain advantages of their much larger competitors, but the local small business gives back to its community. In that sense, the two types of stores should not even be considered competitors. Over there are the big box retailers selling goods cheaply, but also taking advantage of communities with unethical employment and supply chain practices. And over here are small businesses that are answerable to the community, because without local support and good word of mouth they are doomed to fail.
Left to right: Adam Gimbel, Frederic Gimbel, and Bernard Gimbel looking at a Luca della Robbia (1400-1482) statue of Madonna and Child, from the art collection of William Randolph Hearst. Parts of Hearst’s collection were sold at the Gimbels department store in 1939-1940. Gimbels had stores in the northeast and the midwest, and a prized location next door to Macy’s in Herald Square in New York City. Photo by Edward Lynch of the New York World Telegram & Sun.
Edmund Gwenn stars as Santa Claus in the 1947 version of Miracle on 34th Street. The film’s setting is Macy’s department store in New York City.
It could be that the failure of the old retail giants like Sears will prompt renewed interest in shopping at local stores. Online retailers and a few big box retailers have already usurped much of Sears’ more than one century old business model. Sears and J.C. Penney and a few other large department stores have anchored enclosed suburban shopping malls since they first started appearing in the 1950s and 1960s. Now that those stores are declining, perhaps small, locally owned shops will pick up more business. That would be a welcome development, and it might eventually boost Small Business Saturday to a level competitive with Black Friday (it’s antithesis is Buy Nothing Day) and Cyber Monday. Like it or not, Christmas has been a commercial proposition in America for a long time now, and if small businesses can bloom from the ashes of the old retail giants, then at least some good will have come from that mercantile aspect of the year end holidays.
― Vita
Paying off a mortgage is a wonderful thing, and something that is more remarkable now than it was forty or fifty years ago. Tighter lending standards since the burst of the housing bubble in 2008, and the Great Recession that followed, mean fewer people are qualifying for mortgages now, but the people who currently have mortgages are less likely to ever pay them off because low interest rates mean they will refinance at least once, resetting the clock.
Until the 1930s, mortgages were an uncommon way to purchase a house, and mortgages with 15 or 30 year terms were unheard of. House buyers put as much as 50% down, and the mortgage was for three to five years, all of it interest. At the end of the term, a balloon payment for the remaining principal was due, and it’s not surprising there was a high default rate. The federal government changed the mortgage market in the 1930s by stepping in and insuring lenders against the risk of default on certain approved loans, and later by buying those loans to sell as securities in financial markets.
Mortgage burning party of the Antelope Club of Indianapolis, Indiana, in June 1977; photo by Sheariner.
The modern mortgage market followed from those New Deal policies and the establishment of the Federal Housing Administration (FHA). After World War II, the Veterans Administration (VA) gave another boost to home ownership rates by insuring mortgage loans to veterans with no down payment. The demand for new housing was so great that mass production methods came to house construction and the firm of Levitt & Sons built what would be called Levittown on Long Island, New York, a planned community of over 17,000 houses they built between 1947 and 1951.
The window sign of a mortgage lender in July 2008, offering subprime mortgages; photo by The Truth About.
Housing and mortgage markets stayed healthy through the 1970s, but by the 1980s they turned down when interest rates spiked past 10% nearly to 20%, and wages for middle and working class people started stagnating, as measured against inflation. As home ownership rates slipped, the federal government in the 1980s and 1990s deregulated the financial sector of the economy, loosening restrictions on lending, and especially on the financial instruments related to mortgages. For Wall Street, the doors to the candy store had been flung open.
Home ownership rates hit an all time high by 2005, when the bubble was inflated to its biggest extent. That’s not surprising considering all the shady wheeling and dealing going on at the time. What’s also not surprising was what happened next, when the bubble burst – millions of new homeowners defaulting on their mortgages and the housing market tanking; while the Wall Street financiers, and the federal legislators and regulators who were supposed to keep a watchful eye on them, all walked away with hardly a scratch.
Tennessee Ernie Ford sings his number one hit “Sixteen Tons” in this 1955 television appearance.
The Wall Street people and their media mouthpieces tried to blame the homeowners for taking on more debt than they could afford. Meanwhile, the taxpayer bailout of Wall Street in 2008 and 2009 did almost nothing to help those homeowners. They weren’t bailed out. No trickle down economics for them. Through all that, the wages of middle and working class people that started stagnating in the 1980s have stayed flat. People who acquired a 30 year mortgage in the 1990s, when the market was turning up, still have to make their payments each month.
From the Monty Python’s Flying Circus television show on the BBC in the late 1960s and early 1970s.
Meanwhile, their other costs of living have gone up, such as the student debt for their children who may now be, in the 2010s, graduating from college. That’s assuming they can help their children pay for college; if not, the children will be saddled with such an onerous debt upon graduation they may not feel ready for a mortgage of their own until they are in their 40s. Who can blame current homeowners (in name only, and not in deed), these indentured servants, these wage slaves, for continually turning to their homes as a source of funds by refinancing again and again, to the point they will never have a mortgage burning party? The only economic positives they see are the low interest rates that make refinancing an attractive, and maybe a sole, option for clinging to the American Dream.
― Vita
The passage of the 1933 Glass-Steagall Act separated commercial banking from investment banking, and for 75 years there were no enormous financial meltdowns in the United States originating from the banking sector of the economy. In 1999, the Gramm-Leach-Bliley Act repealed the main provisions of Glass-Steagall and, in the view of critics of the repeal, the countdown to financial meltdown began, culminating in the Great Recession which began in 2008. The meltdown, like the Great Depression which gave birth to Glass-Steagall, had worldwide repercussions, but in the aftermath there have been only watered down reforms of the banking industry in the US such as the Dodd-Frank Act, and no high level banking executives have gone to jail, been taken to court, or even been indicted. It’s only a matter of time therefore before a similar financial crisis strikes the US, particularly since the new presidential administration is talking about dismantling Dodd-Frank.
Crowd gathering on Wall Street after the stock market crash on October 25, 1929.
Like other European nations, Iceland was swallowed up in the 2008 financial crisis. Like the United States, it had its own unruly banking sector contributing to the crisis – casino banks, in the sense that they used the money from depositors in their commercial operations to gamble on dubious investments, always passing along losses to customers while reaping the profits mostly for themselves. As in casinos, the house rarely loses, and in the case of casino banks when it appears they might lose the government will be there to bail them out. That’s the deal banks have come to count on, particularly if they are “too big to fail.” Unlike other European nations and definitely unlike the United States, Iceland allowed its casino banks to fail and then vigorously investigated and prosecuted the casino bankers responsible. In Iceland, 26 top bankers have gone to jail since 2008, and moreover their economy has rebounded robustly. In the US, 0 top bankers are wearing orange jumpsuits as a consequence of causing the 2008 financial meltdown, and the economy has limped slowly toward recovery ever since.
It’s interesting to note that the 2016 Republican Party platform included a plank about reinstating Glass-Steagall. Wall Streeters were alarmed at first, but then everyone realized it was merely politics as usual and that the incoming Republican administration and Congress had no intention of taking the idea seriously. They have been proven correct. Democrats make rumbling noises occasionally about reinstating Glass-Steagall, but even if they had the will, they don’t have the votes. It’s all just politics at this point, since Wall Street money has long since turned heads in both major parties.
“Let them eat cake!”
There is only one party in the United States, the Property Party … and it has two right wings: Republican and Democrat. Republicans are a bit stupider, more rigid, more doctrinaire in their laissez-faire capitalism than the Democrats, who are cuter, prettier, a bit more corrupt – until recently … and more willing than the Republicans to make small adjustments when the poor, the black, the anti-imperialists get out of hand. But, essentially, there is no difference between the two parties.
― Gore Vidal, from his 1975 essay “The State of the Union”.
Social reforms wrought from identity politics are all to the good, but as always in our culture the primary fixation should be on the money. Martin Luther King, Jr., understood this when he traveled to Memphis, Tennessee, in 1968 to speak to striking African-American sanitation workers. Without work and the personal dignity that comes from a living wage, people cannot begin to address their social situation and have the energy to improve their lot within society as a whole. For the poor and the middle class it all starts with money, and for the rich it ends there as well. The oligarchic elite take advantage of social issues like gay marriage to divide and distract the majority while they continue to concentrate wealth and power in their own hands. There are two financial reforms which would go a long way toward stemming the rising power of the corporate oligarchy and restoring power to the majority of Americans: reinstatement of Glass-Steagall or something very much like it, and the legislative or constitutional rescission of the Supreme Court’s Citizens United decision of 2010.
― Vita
