Musings: Riches to Rags

Imagine a massive sunrise shell of sweeping silver clouds arrayed over a pasture so deep in mist it appears as thick snow in the moonlight.

Meanwhile, on the other side of the sky, sheets and jagged bolts of lightning illuminate a towering, stationary cumulus pillar that slowly turns pink in anticipation of the dawn.

That was the world that Koko and I traveled through on our walk this morning. And to think we almost slept through that rich pageant.

I’ve been thinking about the rich, ever since reading an article in The New Yorker, which itself has grown slim without the usual glut of luxury goods advertising, about how things have gotten so bad for some of them that they’re selling off the family jewels.

Imagine, having to hock your nine-carat diamond, just to pay the bills, or go through the humiliation of an upscale sort of garage sale attended solely by a woman from a jewelry-buying store.

“Just visualize a dining-room table with everything laid out in rows,” [Palm Springs buyer Tracy] Sherman said. “They’ve taken the jewelry out of the safety-deposit box and laid it out—all the earrings, and then come the bracelets and the suites of things that go together.” Often, the house is for sale, too. “And there’s all the inherited jewelry: things from the twenties that are from the great-grandmother. And then the grandmother’s things are from the forties and fifties, and now Mom is selling her things that are from the seventies.” Sherman helps them prioritize: “I always say, ‘Well, now, have you worn any of it? Or is there anything you’re still emotionally tied to?’ ” She does a bit of therapy: “Most of them never thought about having to come up with money to pay regular expenses. I look upon it positively and say, ‘Be glad you had these things, and be glad you had great taste, so now you can sell it in order to continue.’”

If there’s anything good to come out of this economic downturn, it’s jolting those at the top of the socio-economic ladder into the hard world of having to come up with money to pay regular expenses.

As for the rest of us, the question is how to keep it all together. Democracy Now! broadcast a troubling interview yesterday with Professor James Galbraith, economist and professor of public affairs and government at University of Texas. Amy Goodman noted that conservatives continually say “it was not the New Deal that ended the Depression, it was World War II,” and Galbraith responded:

It is true that the war made a major transformation in the economy. It drove unemployment to zero. But it also did something else. It gave the American family, the American household, a financial cushion, which was the war bonds that people accumulated during the war that formed the basis for the financial prosperity of the 1950s and 1960s. And that is what made the—made it possible for the private financial system, which collapsed in 1929, to recover in the 1950s and ’60s. And I think that point is very important, because what it shows you is that when the financial system goes down, as it seems to have gone down in the last couple of years, recovery requires a long time. And the precondition for recovery is not fixing the banks; it’s fixing the balance sheets of the households, the creditworthiness of the American family.

So what does lie ahead for our economy when so many Americans have no war bonds or savings of any kind, only extensive credit card debt, nearly worthless stock portfolios and greatly overvalued houses, many of them with mortgages that are worth much more than the house? It certainly doesn’t look pretty.

And neither does Coco Palms, which has been steadily deteriorating since Iniki trashed it in 1992. Proposals to redevelop the property continually fail to pencil out, including the most recent one, which is why the developer was back before the planning commission yesterday asking for a three-year extension of his permits.

The commission deferred the matter, but what it really needs to do is say no. For years commissioners have made like they’ve been forced to allow all that resort development in the Wailua-Kapaa corridor because of zoning and permit decisions made years ago. To do anything but slam dunk ‘em with the most minimal of infrastructure improvements would constitute a dreaded “taking.” So now that they have the chance to stop that cycle, why don’t they?

It’s time to drop the sentimentality and face the facts about Coco Palms. Like the hedge fund traders in Manhattan, its glory days are over.