The Road Runner’s Appetite
I meant no harm. I most truly did not. But I had to grow bigger. So bigger I got. I biggered my factory. I biggered my roads. I biggered my wagons. I biggered the loads. … And I biggered my money, which everyone needs.
— Dr. Seuss, The Lorax
Political and business leaders know that their defects and blunders will be excused if they turn in a respectable growth performance: the quarterly or annual gains in corporate revenue or GDP are really all that matters. But how did these raw metrics come to surpass all other indicators of well-being? Growth is often seen as integral to any capitalist system, but its recognition as a society’s only relevant standard of worth is largely a postwar development. 1 Four-fifths of growth in the United States has occurred in just the last 50 years, driven in part by Cold War competition to prove the superiority of a market economy. The consensus mood that developed after 1945 — which historians have called “growth liberalism” — presided over an expansionist boom in the industrialized world that did not contract until the 1970s. 2 Subsequent doctrines — the supply-side gospel of the Reagan era, the high-tech evangelism of the 1990s, and the asset ownership creed of the 2000s — were all aimed at reviving and boosting the high growth rates that managers of a consumer society had come to expect.
Growthmanship spread abroad, too, along with the internationalization of production, and soon growth in GDP became the most important yardstick for nations in the advanced or developing world. Slowing growth rates provoked concern, while falling numbers indicated that something was awry and that close scrutiny, even intervention, from the World Bank or the International Monetary Fund was in the offing. Those who believed otherwise were not wrong; they were simply treated as dropouts from modernity. So entrenched was this orthodoxy that The Limits to Growth, the momentous 1972 Club of Rome report that concluded that current rates of industrial growth could not be sustained ecologically in the long term, was received among business and policy elites as a genuinely heretical document that had to be publicly pilloried.
Subsequent surveys, drawing upon a wider range of experts and a more comprehensive collection of scientific data, amplified the 1972 warning about the ruinous impact of unrestrained growth. In 2002, the Limits to Growth team reprised their study, confirming the original predictions of economic and civilizational collapse in the course of the 21st century. In the meantime, in 1992, 1,700 leading figures had issued the World Scientists’ Warning to Humanity, calling on developed nations to drastically curb the overconsumption of resources. These estimates of eco-collapse were reinforced by the UN’s Millennium Ecosystem Assessment, released in 2005, which had deployed more than 1,500 international scientists for four years to analyze the latest data. Last but not least, there came the influential testimony of the Nobel Prize-winning Intergovernmental Panel on Climate Change. Since its first report in 1990, which supported the thesis of anthropogenic global warming, it has issued periodic assessments, each one more confident about the ability to model and calculate climate change and its calamitous impact.
Top-level resistance to absorbing and acting on this information has been profound, and is often compared, with some reason, to the force of religious dogma. Looking back on decades of widely publicized and verified warnings, Dennis Meadows (one of the authors of Limits to Growth) reflected on why they “did not prompt any fundamental changes in the policies that govern growth in population or industrial activity and that are driving this planet to major ecological disruptions.” Breaking with the growth gospel, he concluded, has been equivalent to overturning a deeply rooted belief system: “Think of the Catholic Church condemning Galileo to life imprisonment for his suggestion that the universe does not revolve around the earth.” 3
No doubt typical of this fundamentalist response were the views of Lawrence Summers (a leading economist in both the Clinton and Obama administrations), when he was a kingpin at the World Bank in 1991. “There are no limits on the planet’s capacity for absorption likely to hold us back in the foreseeable future,” he wrote in a notorious memo that also advocated outsourcing dirty industries to developing, or “underpolluted,” countries. “The danger of an apocalypse due to global warming or anything else is non-existent,” he continued, concluding that “the idea that the world is heading into the abyss is profoundly wrong. The idea that we should place limits on growth because of natural limitations is a serious error.” It is possible in the intervening years that Summers heeded John Maynard Keynes’s dictum — “When the facts change, I change my mind” — but there has been no evidence of such a conversion.
Nor, despite the improvements in environmental policymaking it introduced, did the Obama administration come close to pushing an alternative to carbon-based GDP growth as the lodestone of economic policymaking. Larger federal investments in clean energy, mass transit and smart grids were dwarfed by the subsidies handed out to high-carbon industries; nor was climate change legislation accorded priority attention, not even during the long nightmare of British Petroleum’s oil spill in the Gulf of Mexico — surely an optimal moment for any president to sue for divorce from fossil-fuel dependency. The time could not have been riper to reset industrial policy, but the will to do so was up against the stronger (and easier) belief that a return to positive short-term growth figures would be the panacea for the recession’s ills. And feeding the GDP beast meant turning away from the dictates of healthy living — good health actually equates with negative GDP because it does not lead to medical expenditures that show up as monetary exchanges. 4
Those seeking insights into how to crack the seemingly unassailable growth dogma have had to look beyond the ranks of the alpha economists who cultivate and polish indicators like the GDP or the Consumer Price Index. Cities, where a new generation of urban managers is now riding the sustainability bandwagon, have been the obvious place to turn. Their predecessors had contracted a bad case of the postwar growth bug, and it would take powerful medicine to flush the effects out of the system. Harvey Molotch’s classic 1976 study of the “urban growth machine” explained how easily city institutions can come to support the consensus that growth is good. Developers, newspapers, unions, utilities, universities, arts organizations, big retailers, small businesses and sports franchises — all stand to profit from expanding populations and markets. Because growth appears to “benefit everyone,” it is cheered by boosters and enabled by politicians and planners. But honest fiscal analyses show that most forms of urban growth are not beneficial. Molotch argued that the costs of servicing the additional population with infrastructure and municipal resources can be exponentially expensive and that these costs exceed the public benefit that accrues from an increased tax base. 5 And the costs of the corresponding increase in environmental degradation, if properly accounted for, would surely break every municipal budget.
One paradoxical result of this mismatch is that urban managers often encourage faster growth simply to stay ahead of the cost curve. Growth A does not pay for itself, so it begets Growth B to cover the costs of A, and so on and on. This method of deferring a final reckoning (some have compared it to a Ponzi scheme) has no horizon beyond the next crash — during the most recent credit bubble, for instance, the debts simply got restructured, repackaged and sold as derivatives. Most American boomtowns fit this profile of growth machines that shift into overdrive when the times are ripe — but no city in the postwar era had accepted growth as its very reason for being with such equanimity as the spreading metropolis of Phoenix. But today, with construction at a standstill for the first time in more than 60 years, and almost half of Arizona homeowners holding negative equity, and an alarming number out of work, there’s been talk around the city about ditching the dependency on growth. The efforts to legislate effective responses to the new realities, and the forces that have resisted change, make for a revealing tale — one with relevance far beyond the Sonoran Desert.
Building Houses for People Who are Building Houses
Long before the emergence of the specter of climate change, no one would have faulted the managers of a desert city like Phoenix for setting limits to the urban population — limits determined by available water resources. Yet never during the region’s 60 years of postwar expansion has that been a politically feasible option: so much local pride and municipal revenue were tied to the prize of being the fastest-growing city in the United States (and one of the most populous — Phoenix nosed into fifth place in the mid-2000s). Even in the trough of the Great Recession, and confronted with evidence of a stationary or even shrinking population (the 2010 census saw Philadelphia regain fifth place), boosters stuck tenaciously to estimates of steady, long-term growth to the point when the region would be “built-out.” No doubt this blithe optimism was a resilient part of the culture of the Valley of the Sun, but it was a clear obstacle to becoming what green advocates define as a resilient city.
Nationally, the 1980s and ’90s witnessed rising public concern about the environmental costs of runaway suburban growth, feeding the anti-sprawl movement and its policy offshoot, “smart growth.” These sentiments did not bypass the Sonoran Valley, and as the new millennium approached, urban liberals’ burgeoning interest in local quality of life prompted calls for growth management legislation. In a 1998 study commissioned by the state legislature, the Morrison Institute, a think tank at Arizona State University which reliably mirrors the concerns of policy elites, noted that “the historic pro-growth posture is being seriously questioned.” The study explained why growth does not pay for itself, and it issued a roster of recommendations; none were heeded by a legislature under the sway of the homebuilders lobby. 6 Yet the issue persisted and, in 2000, the Citizens for Growth Management, a coalition spearheaded by the Sierra Club, placed a proposition on the state ballot. Proposition 202 was the nation’s first-ever proposal to impose strict growth controls over an entire state; it called for the adoption of urban growth boundaries by every Arizona county, city and town with over 2,500 inhabitants, and early polls showed the initiative had around 70 percent voter support. But ultimately the growth lobby spent copiously to reverse those numbers (70 percent ended up voting against), delivering a crystal-clear warning that no legislation would be permitted that spoiled the appetite for expansion on an ever-enlarging urban fringe.
Grady Gammage, Jr., was among the prominent figures who opposed Proposition 202. A land-use attorney who doubled as a public policy advocate at the Morrison Institute, his shrewd reasoning and widely cited views had made him one of the Valley’s most influential opinion makers. (To be taken seriously as a public voice in Phoenix, it’s been almost de rigueur to participate in the land-development industry. Gammage’s father had been president of ASU for three decades, but, like almost everyone else, had dabbled in land development as if it were a hobby, like playing cards; “He was always getting together with a bunch of other college professors and buying a little bit of land here or there. He always sold it too early. He never made very much money on it but he thought it was fun.” 7) Proposition 202 supporters had hoped to win over Gammage; but throwing his support behind the initiative, as he explained, “would have been politically very dangerous for me.” As someone who earned his livelihood representing big developers at City Hall, he “skated the thin edge of advocating for things my clients already don’t like,” and Proposition 202 would have been “over my edge.” Gammage also believed the initiative to be an “insufficiently thought-out solution” to the problems of the region’s hypergrowth, one better suited to cities “at risk of running out of land,” which clearly was not the case in Central Arizona….
The year before Proposition 202 was defeated, Gammage published a lively book, subtitled “Reflections on Developing the Desert,” where he offered his own proposal for growth regulation. Estimates of the region’s water supply, he argued, should be used to project a sustainable population and that figure should serve as a growth cap by consensus. By Gammage’s own calculation (he had once served as president of the board of the Central Arizona Project), the assured water supply would comfortably support a “future city of seven million, built in a pattern much like our current metropolis — a community of detached single-family homes at a relatively uniform density of between 2,500 and 3,000 citizens per square mile.” 8 On the face of it, there was not much in the proposal to offend even Gammage’s toughest clients. His estimated population limit was double the size of Metro Phoenix at the time of the 2000 Census; the projected density faithfully reflected what he called “our current values,” meaning a preference for the low-density housing that the development industry held sacrosanct. Even so, the proposal aroused alarm at a time when many believed that region’s water supply could support 10 to 12 million. “People thought that I had lost my mind,” Gammage recalled. “‘You are going to have population police turning people away?’ I had to explain that I was not talking about a hard limit, but rather [asking] how do we think about a mature Phoenix that is no longer growing fast?” As Gammage noted, “All of our policies are built on fast growth — it is the goal of Phoenix as an enterprise….”
Gammage had earned a reputation as an articulate defender of Phoenix’s historical development patterns against its most clamorous anti-sprawl critics. Indeed, he has argued (and not wryly) that “what others see as sprawl we see as our heritage” and has insisted that Phoenicians fully embrace this legacy: “mass-produced suburban ranch homes are to Phoenix what Victorians are to San Francisco, brownstones to Philadelphia or bungalows to Los Angeles — a signature of the lifestyle heritage upon which a city is built.” 9 Like other urbanists who warn against judging the 20th-century Sunbelt by the standards of the 19th-century Northeast and Midwest, Gammage believed that Phoenix stacked up well against its pro-sprawl peers. Contrary to the common understanding of sprawl, Metro Phoenix had, he argued, a fairly “clean edge.” Because water provision required forethought, it had acted as “liquid glue,” producing a settlement pattern with a much narrower range of density — between two and six units per acre — than other postwar boomtowns. Commuting times and per-capita energy consumption were at or below the national average, and trends were running against the extravagant use of water. The fashion for desert xeriscaping was dislodging the taste for ash and maple trees, thereby coaxing a more ecologically appropriate “brown city” from the wasteful green patchwork of suburban lawns.
Despite these indicators, the abrupt collapse of the region’s economy after 2007 underscored the degree to which Phoenix’s buoyancy relied on population growth. By the end of 2009, the rate of job loss in Arizona outran all other states, and unemployment exceeded ten percent of the workforce. Central Arizona’s production homebuilders — Pulte, Centex, KB, Morrison — had gone silent, or, like Fulton Homes, were filing for Chapter 11 bankruptcy. Lenders had foreclosed on 70,000 homes, housing values had fallen 50 percent, half of the state’s homeowners were “underwater,” and realty brokers reported that more than 60 million square feet of commercial space was vacant. 10 A year later, the home foreclosure rate was still rising; almost 66,000 Arizona homeowners lost their houses to the mortgage holder in 2010, 12 percent more than in 2009. 11
Worst of all for the region’s self-image, people had stopped moving to Phoenix. When a 2009 Urban Land Institute survey reported that population levels had been flat for two years, the news actually cheered those who had expected worse — even though the estimate concealed the fact that many Valley residents were so deep in housing debt they could no longer afford to move. Nor did the numbers reflect the departure of undocumented immigrants who had fled when construction jobs dried up, or when the anti-immigrant mood turned ugly. The Department of Homeland Security estimated that the undocumented population had dropped by 100,000 (18 percent of the state’s total) in 2008 alone. 12 These figures were a comfort to nativists, of course, who were happy to see that particular group shrinking.
The crash took a heavy toll on the booster psychology that had so reliably drawn wave after wave of in-migrants from the Midwest, “equity refugees” from California, and “Alzheimer’s buyers,” as one developer described his retiree clientele to me. Even so, some government agencies continued to predict rosy growth; in a fall 2009 survey, planners at the Maricopa Association of Governments projected 400 miles of new highways (double the current number), and 320 miles of new rail by 2050, to support future population expansion. But such estimates were based on long-term migration data, or on existing land-development rights; they assumed that jobs aplenty would somehow materialize. Nobody I interviewed could see a favorable job-creation climate in the near future, however, and most agreed that Phoenix was a “one-industry town,” overly dependent on land development for employment and revenue.
This was a long-running diagnosis. Two decades earlier, after the last big real estate crash, a much-cited 1988 article in Barron’s magazine estimated that 20 percent of jobs, and one out of three of the regional economy’s dollars, were tied to land development. 13 In response, business, government and academic elites launched a public-private initiative to diversify the regional economy with high-tech clusters. But the housing sector recovered quickly, which proved too lucrative to ignore; home building reasserted its dominance over the workforce and the economy. When Arizona Republic editorial writer Katherine Ingley moved from California, she was informed that the business of Phoenix was growth. “It struck me as weird,” she told me. “You are building houses for people who are building houses? How is this possible?”
Developers I interviewed readily acknowledged the excesses of the real estate industry during the 15-year housing boom that followed. “The party was so good for so long,” conceded John Graham, CEO of SunBelt Holdings (a developer of golf courses and master-planned communities) and president of the local Urban Land Institute chapter. “Then it was as if someone hit the light switch,” he added, “and things deteriorated overnight.” Graham, who had endured several boom-and-busts, described the current recession as “structurally different” and shared his hope that “it would break the cycle of bad judgment and bad policy, and improve the pace and quality of development.” A former board chair of Arizona’s Nature Conservancy affiliate, Graham was on the “ethical” end of his industry, favoring land preservation and what the ULI called “balanced development.” And yet he could not envisage anything other than a warm return to housing growth, albeit at a slower rate. Even if economic diversification efforts were successful, he expected that metro Phoenix would “always be a growth-driven economy.” What rate of growth would the development industry consider sustainable? In his view, that would be 25,000 units per year, rather than the 60,000 to 70,000 annual units built at the peak of the bubble, many on a purely speculative basis.
Randolph Birrell, an executive at one of the city’s largest merchant builders, was less repentant. “Growth will be always be the business of this town, and that makes sense, because we have some of the best people in that business right here.” In this view, it was the developer who “created” growth, rather than responded to demand. Previous growth estimates, he pointed out, “have always fallen short, and people obviously love to move out here for the lifestyle and freedom. There are no real limits to the land we can build on.” Birrell’s firm was currently looking into infill opportunities, but he had no doubt it would return to outlying tract development when the growth machine cranked up again. “It’s a big speed bump right now,” he acknowledged, “but it’s still just a speed bump and our industry will lead Phoenix over it.”
Not everyone saw home building as the primary driver of growth. Elliott Pollack, an economic consultant frequently featured in the city’s media, warned me: “Don’t let anyone tell you that land development runs this place. It is an effect and not a cause. If jobs were not created, people would not move here, and there would be no reason to develop one stick in the ground. Land development is a domestic and not a base sector item, and people get confused about the difference.”… Still, Pollack agreed that something had to change: “Phoenix is at an economic crossroads. We’ve been living off the same economic base for about 50 years, and that base [electronics, semiconductors, and aerospace] has run its course.” The “high road,” he reasoned, would be tied “to some form of manufacturing, software, or export-related industry. If this creates high-wage jobs and a demand for higher quality housing, then the growth will continue, and there will be more pressure for infill and high-rise housing.” As for the low road: “If we continue to become a population-based economy, then per capita income declines, and it becomes a relatively poor place, dependent on retirees and tourists, and most housing will be of moderate quality and on the periphery.”
Pollack’s forecasts had comfortably guided the developers who rode the boom, and so, when the 2010 legislative session began, GOP lawmakers turned to him to devise tax incentives to attract these new, high-road employers. Pollack clearly believed that government actions can help foster economic resilience; and indeed, his proposal to the legislature focused on cutting business taxes, even though Arizona’s were already low (41st among all states). Environmental sustainability, however, was best left to the market. “People will not do it because it is perceived as the right thing to do,” he asserted, “but when they see an economic benefit from doing it, and that is the great thing about the capitalist system.” About global warming and climate change, he echoed the denialist view prevalent among Republicans. “These are the same scientists that said we were going to go into another ice age, over 40 years ago, and had ideas on how we could warm the planet.” Even if anthropogenic global warming were a reality, Pollack believed that “the jury is still out on whether or not we can do anything, because it may be too late.” Indeed, as an economist, he was intrigued by the prospect that “it would be cheaper ultimately to deal with the fallout.” He mentioned a Wharton School study that “ran some models of what would happen if the seas rose two feet and if you had a major shift in the population” from climate change. “The conclusion,” he recalled, “was that, however expensive, it would still be cheaper to deal with it than trying to prevent it.” Economists, he suggested, could probably cost it out, although they had rarely factored ecological impacts into their forecasting models.
Later that week, at the state Capitol, I quizzed Chuck Gray, a top-ranking Republican senator from East Mesa, on how he and his colleagues approachedt the topic of climate change. “I don’t think the American public is being properly educated about what CO2 is,” he told me. “When they say greenhouse emissions, it sounds evil, but it’s not — ‘greenhouse’ means flourishment of life. If you look at what a greenhouse is, it is a place where life can grow, and it’s great for plants, and plants need humans, and humans need plants.” Pressed to elaborate, he recalled being “taught that plants took the CO2 we produce and turned it into oxygen,” and that “in CO2-enriched environments, plants do better, so, as the climate gets a little warmer you have more food for more people, which means that we can ship more food to the poor because of CO2.” Gray was no less dismissive of the “cap and trade” proposal for reducing emissions, although it was a market-based mechanism. “It’s based on the fallacy that CO2 is somehow a bad gas. CO2 is what you and I exhale every time we breathe and somehow now that is poisonous? I don’t understand that.” I can vouch that my second-grader, who tagged along on some of my interviews, has a more accurate understanding of greenhouse gases than does the majority leader of the Arizona Senate. Nor was Gray a particularly extreme member of the “Kookocracy,” a term used by Jon Talton, former columnist for the Arizona Republic, to scold Arizona’s political class.
Contenders for most kooky would include state senator Sylvia Allen, a Republican from Snowflake, who rewrote Geology 101 while arguing for a 2009 bill to allow more uranium mining. “This earth,” she declared, “has been here for 6,000 years, long before anyone had any environmental laws, and somehow it hasn’t been done away with. We need to get the uranium here in Arizona so that this state can get the revenue from it, which can be done safely, and you will never even know the mine was there when they are gone.” Allen’s assurances gave little comfort to the many Arizonans (including the mine workers, many of whom are Navajo) living near abandoned uranium mines and suffering from cancer, organ damage, miscarriages and birth defects. Leaving aside her creationist views (the population of Snowflake is largely Mormon), Allen’s interest in uranium was part of a Republican push to steer public monies away from renewable energy toward the state’s nuclear portfolio. If this initiative is successful — John McCain, Jon Kyl, and the GOP establishment all support it — Arizona will be the first state to build a new nuclear plant since 1977.
Kookiness was not the only reason why so many of my interviewees complained about the vacuum of political leadership in Arizona. As in California, the increasing role of voter propositions has meant that more and more political decisions are made by ballot, and many propositions (which were often poorly drafted and resulted in unintended consequences) had drastically limited the power of legislators to make good or effective policy. Consequently, in a budget crisis, there were few options available to politicians; they were further constrained by the fact that many in the Republic majority (38 of Arizona’s 90 lawmakers — the largest percentage of any state legislature), including Governor Jan Brewer, had signed Grover Norquist’s Taxpayer Protection Pledge to “oppose and vote against any and all efforts to increase taxes.” First in line to remind legislators that their job was to reduce taxes was the homebuilders association, which in September 2009 won its members a controversial freeze on all development impact fees.
So severe was the fiscal shortfall (sales taxes accounted for more than 50 percent of state revenue) that Brewer approved a plan for the State Capitol and both legislative chambers to be auctioned off in a sale-leaseback arrangement. 14 In a sense the sell-off was just another real estate deal in Phoenix, but you would be challenged to match it for high symbolism. As government at every level shrank, and as ranking politicians lined up behind the boisterous anti-government pledges of the Tea Party, it was hard not to recall Barry Goldwater’s plea, in his manifesto, Conscience of a Conservative, “to entrust the conduct of our affairs to men who understand that their first duty as public officials is to divest themselves of the power they have been given.”
Federally Insured Libertarians
There was a good deal of daylight between Goldwater’s strict libertarianism and the varieties of social conservatism that energized the GOP of today. Yet on economic issues, at least, the Arizona conservatives I interviewed saw themselves in a clear line of descent from the postwar coup staged by Goldwater’s circle to establish Republican rule over what had been a Democratic stronghold. But what exactly was the basis of Goldwater’s legacy in Arizona? The standard GOP view is that he and other members of the business elite unshackled the state’s economy from the harness of the New Deal, whose agencies had been active in Phoenix during the 1930s. In so doing, the story goes, they liberated the region from a dependency that dated to pre-statehood days, when the Arizona Territory was little more than a federal army outpost — the Goldwater family store, no less, got its start from contracts for army provisioning. This dependency had been revived during World War II by the heavy military presence in the region. And in the interim, Washington had lavishly backed the railroads and mining enterprises that dug gold, silver and copper out of the badlands; and, of course, U.S. Reclamation dollars flowed into the big dams and other hydroelectric projects.
In the heroic GOP narrative, Goldwater and his close allies — Walter Bimson, bank kingpin and president of the American Banking Association, Frank Snell, the city’s most powerful lawyer, and Eugene Pulliam, the exemplary press baron — stood Phoenix on its own feet. They did so by breaking the back of labor (in 1946, Arizona became the first right-to-work state in the West), curtailing the reach of government regulation, and turning the metro region into a free enterprise champion that attracted several hundred top companies in the key industries — electronics, aerospace, finance — that would drive postwar growth throughout the Sunbelt. A region that had long been treated as a colony for East Coast financiers to quarry for their own advantage created a homegrown alternative to Wall Street in the form of Bimson’s Valley National Bank. Pro-growth boosters nurtured a business climate that challenged and outbid the influence of the Yankee corporate establishment by unleashing entrepreneurs and offering opportunities for all comers.
In truth, and as many historians have noted, the free enterprises continued to rely on federal funding. 15 The money just flowed less directly, and, most importantly, it was channeled into and through the large corporations that used Phoenix’s secure federal ties to make it a profitable branch town. The major firms that built plants in Phoenix in the postwar era — Motorola, Honeywell, Sperry Rand, General Electric, Kaiser, Unidynamics, and AiResearch — subsisted on Cold War defense contracts, and their decisions to locate in the region were shaped by the Pentagon’s policy of decentralizing military production away from the more vulnerable East Coast population centers. In this respect, their arrival was simply an extension of the wartime production programs that had drawn Goodyear, Alcoa, and others to Phoenix’s arsenals, ordnance plants and flight training facilities in the 1940s. These firms were pillars of the military-industrial complex, and the Sunbelt, or “Gunbelt” as Ann Markusen labeled it, became its homeland. 16 At the height of the Cold War, federal income for Arizona amounted to between 16 percent and 24 percent of the state’s economy, after which there were sizable upswings during the Vietnam War and the rearmament of the Reagan years. 17
Everyone remembers Eisenhower’s famous warning about the growing power over government policy of the military-industrial complex, but few recall Harry Truman’s more persistent caveats about the influence of the real estate lobby. At its height, this was a formidable coalition, consisting of the trade associations of petroleum producers, auto manufacturers, road builders, homebuilders, land developers, real estate brokers, tire makers, and other industrial players. 18 Its lobbying power ensured that the conversion of cheap farmland into suburban subdivisions would dependably drive consumption, year in and year out. Practically every aspect of the real estate growth engine was underwritten by the federal government — the FHA-backed mortgages, homeowners’ tax credits, oil subsidies, roads, highways, bridges, and other costly infrastructure. Even more than the defense contracts, the federal momentum behind homebuilding spurred Phoenix’s phenomenal growth. Bimson’s Valley National Bank built its lending reputation, and its reserves, on the back of FHA and Reconstruction Finance Corporation loans. By the end of the 1930s, Del Webb, the construction magnate and future builder of Sun City, saw the benefits to be reaped from federal support and declared that “construction is no longer a private enterprise, it is a subsidiary of the national government.” 19 …
Thomas Sheridan, ethnographer and Arizona historian, once quipped that “behind every rugged individual is a government agency.” 20 How did Goldwater’s followers reconcile their godfather’s claim of independence from big government with the record of federal largesse? Byron Schlomach, director of the Center for Economic Prosperity at the Goldwater Institute, agreed “that if it were not for the federal government, Phoenix would not and probably should not exist, certainly not at the size that it exists today.” That said, he affirmed that the Goldwater Institute was against “compounding that record with even more government projects aimed at creating artificial wealth.” “Individuals,” he declared, “are in a better position to determine what’s good for them than government.”…
Yet even today it would be a mistake to take the libertarian rhetoric at face value. After all, the original Goldwaterites needed a strong state to realize their vision of free enterprise in Phoenix. Without government backing, they would not have been able to maintain the business climate — an antiunion environment with low taxes, cheap land and lax regulation — that was their hallmark. That is why they strove to create a state that would make these goals its chief priority. Elizabeth Shermer has recently argued that Goldwater’s postwar Phoenix was the birthplace of the doctrine of deregulation and privatization that much later came to be called neoliberalism. 21 Many commentators believe that neoliberalism originated in the response of financial elites to New York City’s 1975 fiscal crisis and then spread throughout the nation and the globe over the next three decades. 22 Shermer shows how Goldwater and his allies stopped the advance of the New Deal by using the Chamber of Commerce to seize control of local and state government, while using their federal ties to consolidate the takeover. Then the new political class, taking orders from the Chamber, installed deregulation and regressive taxation at the heart of their policymaking. …
The Goldwaterites’ success at remaking government was emulated in other Sunbelt cities, and the template of their pro-growth policies is visible today in those parts of the world where governments promote a business-friendly climate to attract off-shore investors. When local officials in coastal Chinese provinces lure foreign corporations with lavish tax incentives, discount labor and various legal exemptions, they are using a playbook largely written by the businessmen-politicians of Phoenix in their Cold War heyday. …
Eco-Apartheid and Ghost Acreage
Investors, then and now, are attracted by the promise of cheap labor and lax regulation, but their executives and top employees are also looking for a healthy residential setting. So a very particular kind of environmental promotion is required to reel them in. On the one hand, it’s communicated that enforcement of industrial waste regulations will be weak, and so a degree of industrial befouling is both expected and tolerated in production zones. On the other hand, officials are assured that air and water quality will not be compromised in the desirable precincts where high-wage employees will be likely to live.
In their prime, the powerbrokers of the Phoenix Chamber of Commerce preached this dual gospel. They promoted the glories of Arizona’s sunshine, mountains, open spaces and clear air to prospective investors, and used the celebrated landscape photography in the iconic magazine Arizona Highways to do so. But they were also pushing urban industrialization and well understood its dirty side effects. The more polluting industrial plants were channeled to the poorer, non-Anglo sections of south Phoenix, or to the newer working-class suburbs at the western edge. In striking contrast, North Phoenix, which sloped up toward the mountains, developed as a pristine preserve for outdoors-minded elites, epitomized in the aptly named Paradise Valley, its most exclusive enclave. …
Although the Valley has since then grown explosively in all directions, its social geography remains shaped by this environmental division. Initiatives to preserve aesthetically pleasing landscapes or mountain vistas have long been popular with politicians, as well as developers, and since the state owns 11 percent of the land, these initiatives could be enacted with little public pain and without impinging on the sanctity of property rights. 23 But citizens’ complaints about dirty industries or LULUs — Locally Unwanted Land Uses— in their neighborhoods were likely to go unanswered. The Arizona Department of Environmental Quality had a record of shutting down polluting factories only after disastrous explosions or fires caused deaths and made headlines. Until recently, this Janus-like response to environmental issues has been the norm. Indeed, open space in the desert or mountains, where people could breathe free, was part of the Arizonan birthright extolled by the nature-loving Goldwater, who once wrote: “[W]hile I am a great believer in the free enterprise system and all that it entails, I am an even stronger believer in the right of our people to live in a clean and pollution-free environment.” 24 Goldwater may not have seen these twin ideals as mutually exclusive, but the antiregulatory growth machine that he and his associates bequeathed proved otherwise. …
Longtime critics of sprawl argue that some of the conditions for what activist Van Jones describes as “eco-apartheid” are rooted in the continued relocation to the urban fringe of investment, employment, commercial retail, and services. The reduced circumstances of central-city populations — fewer job opportunities, longer work commutes, diminished consumer options — are directly connected to the centrifugal push of the growth machine. No less equitable is the tax burden on those who foot the bill for the costly infrastructure of sprawl; urban residents pay more than their share for the roads, utilities, and business-relocation tax breaks that disproportionately benefit suburbanites. In the face of these inequities, analysts find little evidence that “growth pays for itself.” And when the environmental impacts are factored in, the long-running debate about the costs of sprawl looks more and more lopsided. …
Nineteenth-century agrarianists popularized the theory that making cheap land available beyond the Mississippi would act as a safety valve to ease employment pressure in the industrial East. Historians since then have suggested that the expansion of Anglo-American capitalism demanded the territorial conquest of the Southwest to resolve its need for surplus space. In more recent decades, the dramatic shift of private and public resources to the Sunbelt has been seen as a strategic move to boost corporate profits. Whatever the explanation, the result has been that for more than a century, Western urbanization hosted not only the most visible geographic spread of U.S. growth but also its most intensive escalation. It was fitting that this wave would break most forcefully in Phoenix, which had long been one of its most dependable vehicles.
No one, to my knowledge, has estimated the ecological footprint of the city or the region, but since virtually all its goods, food and energy have been imported from far afield, including all the construction materials that have filled out the Phoenix Basin, the desert metropolis necessarily depends on vast amounts of “ghost acreage” elsewhere to sustain the daily needs of its population. 25 In this regard, it long ago surpassed its ecological limits. Those who view the region through a local lens have been inclined to conclude that the growth machine has not yet reached its economic limits — surely there is time for one last housing boom! — but the severity of the crash has bolstered the belief that the moment of reckoning is fast approaching, and that the message should be passed on to the Home Builders Association of Central Arizona.