One of the more striking aspects of the economic downturn in the Washington area is the contradictory tableau of hardship and prosperity that continues to emerge. The country may be in a recession, as White House officials now seem willing to concede, but you'd never guess that from observing the actions of a good many local residents or from an examination of certain key indicators.
For certain, there is a real estate recession in the Washington area. That much is indisputable. In fact, it's safe to say that the sector of the economy often referred to as FIRE (for finance, insurance and real estate) has been hardest hit in the current economic downturn. No banker with a sizable real estate loan portfolio will dispute that.
Beyond that, however, metropolitan Washington is suffering more from a recession in confidence than anything. Consumers, local government officials and a fair number of business executives all have lost confidence in what was supposed to be a recession-resistant economy. Most are reluctant to spend, allocate, hire or appropriate, not wanting to take a risk amid so much uncertainty.
These are difficult times, we're told. People are unable to get as much as they would like for their homes, the values of which were overly inflated in the first place. The recession, we're told, is to blame for their misfortune in not being able to pocket the huge profits they might have gotten five years ago. Before the recession, many of the working homeless -- unable to pay for decent housing -- were forced, as they are now, to take refuge in public shelters. The hardships they face, however, are hardly the subjects of dinner-party conversations and news stories about the effects of the recession. But then, the lot of the poor is hardly worth noting at a time when middle- and upper-class associates are losing their jobs and companies are in an economic downturn.
Economic hardship for those who enjoyed the riches of the boom years is only temporary. We have come to accept economic hardship as a lifestyle of choice for the less fortunate, however. That's not just a contradiction in what are supposed to be human values; it is a fact of life in good times and bad.
For many in the Washington area, there is no such thing as an economic downturn. Some luxury automobile dealers in the area report brisk to fantastic business while the typical buyers of more moderately priced family-type autos continue to squeeze their pennies as the psychology and reality of an economic downturn spread.
Those may or may not be typical of the many contradictions that stand out against a backdrop of economic decline and hardship. But there is something terribly inconsistent about tales of economic hardship and belt-tightening when there are so many examples of prosperity and affluence being flouted as though the economy never skipped a beat in the last growth cycle.
Take the campaign to bring baseball back to Washington. People are worried about a recession, but a group of businessmen -- some of them from the depressed real estate and banking industries -- are leading the charge to obtain a major league baseball franchise for Washington. Conditions obviously dictate the need for something to jump-start the economy, but baseball is hardly the answer. Baseball franchises in other cities haven't exactly been deterrents to economic downturns.
Beating the drum for major league baseball seems a bit incongruous at a time when businesses are failing, employees are being laid off, job growth is declining and consumer spending is down significantly. Every red-blooded sports fan would like to have a major league franchise in his or her backyard but now is the time to think about building a broader economic base with new businesses that can provide jobs for professionals as well as unskilled workers.
To be sure, major league baseball franchises have some spinoff effects in local economies. Nonetheless, they don't produce goods and services or create large numbers of meaningful jobs that contribute to economic growth in a way that a manufacturing concern, an industrial park or a major corporate headquarters would. How many jobs, in addition to those held by vendors, groundskeepers and ushers, will a major league baseball team add to the local economy?
Retailers complain of not being able to attract customers to their stores because consumers either lack confidence or have seen their disposable incomes shrink. That's OK. They're reluctant to spend for food, clothing and shelter but they'll shell out money to see millionaire baseball players make more money.
Never mind that building owners can't give away space in the scores of empty office buildings in the area. The franchise boosters will fill the Robert F. Kennedy Memorial Stadium with baseball-starved fans even as the latter seek to recover from the economic downturn a year or two from now.
But then maybe the baseball entrepreneurs with deep pockets and lingering dreams of summer games know something that we don't about human nature. They probably understand better than most why hordes of consumers crowded area liquor stores in the final days of 1990 even though many of those same consumers have been reluctant to part with their money at supermarkets and department stores. The increase in taxes on alcoholic beverages on Tuesday and the desire to toast the new year apparently were far more important than any concerns about job security, income levels or the health of the overall economy.
Of course, there's always the possibility that the state of the local economy may not be as bad as it seems. Notwithstanding a significant decline in population and job growth the past couple of years, there were more people employed in the area in September 1990 than there were a year earlier -- 5,200 more, to be precise.