Disruption

For the last six months or so of the two years that I drove nights, I often began my shift by driving Tito, who had been driving cab for more than thirty years, to his home in an apartment building on Bush at Stockton.  The beginning of my day and the end of his was a twenty minute conversation while driving downtown from the Luxor yard.  I asked him questions about the business, and he generously gave me some advice.  He also paid me $20 at the end of each ride, another bit of generosity, one that embarrassed me but which I could not afford to refuse.

Most often we spent the time talking about politics in the broadest sense, that is, about whatever affects the life of the polis.  We talked about the declining quality of life in San Francisco, the declining value of the dollar, the declining earnings of cabbies, and about the corruption rampant in the City's current administration.  I always talked too much, blabbing on with no editorial filters about the inhumanity of capitalism's drive for individual accumulation of wealth and about my longing for a shared sense that we are all in this together and must rely on one another.

As he got to know me, Tito asked the scheduler to assign me to his cab every night that I worked.  He appreciated the care I took to keep the cab clean and to monitor its performance in case it needed maintenance.  I think (or hope) that he appreciated other qualities in me, too.  I remember an off-hand comment he made one day:  "I like your politics, Howard."  As for me, I just plain liked Tito.

Tito suffers intense back pain constantly, a condition that has been aggravated (if not in fact caused) by the decades he spent sitting in a car for ten to twelve hours a day.  I have watched Tito take five minutes or more just unfolding himself from the driver's seat and trying to rise to his feet.  Still, he never complains, and even on days when I could see that the pain was cutting deep, Tito always had a smiling greeting for everyone he encountered.  He seemed to know everyone at Luxor and to have a bit of repartee ready for each.

I no longer drive nights.  I switched to driving what is called a "ramp van," a cab fitted with equipment allowing it to carry a person in a wheelchair.  I miss my conversations with Tito.  So I was excited when, a couple of weeks ago, Tito pulled up next to me as I was walking from the bus stop to the yard.  He offered to give me a ride the rest of the way.  He was ending his shift early just as I was beginning mine late.

I got in the cab and asked Tito how he was doing.  "Not too well," he said.  Then he told me why.

Tito is what's called a "medallion holder."  Any vehicle used to transport passengers for a fee (called a "commercial livery vehicle") used to have to display a medallion, which looks like a miniature license plate, on the dashboard of the car, making it visible from the front of the car through the windshield.  By limiting the number of medallions issued, the city was able to control the number of livery vehicles on the streets, to limit traffic congestion, and to enable the quick identification of any cab and its driver should the cab be involved in an accident or be the scene of a crime.

The medallion was a license to operate a transportation business and hence a license to make money.  They were valuable.  Every cabbie had to own one or rent one when its owner was not using it himself.  Cabbies put their names on the waiting list for medallions the minute they were hired and waited twenty years or more to get to the top of the list.  Then they were able to buy a medallion from the city for prices that eventually reached two hundred and fifty or three hundred thousand dollars.  The medallion system is still the law, and every day that I work, part of the gate fee I pay to use a particular cab goes to the person who owns its medallion.  So when I was driving nights using Tito's medallion, he received part of my gate fee.

When Tito gave me a lift to work that day he told me that he used to get a check for $2400 from Luxor each month for the use of his medallion by other drivers.  At some point last autumn, the check was cut to $1900.  Now it has been cut to $1000.

Tito has worked hard for thirty years and invested $300,000 in his medallion, expecting the income from it to provide for his retirement.  He played by the rules, paid with his health and his life savings for a position in the business that should have taken care of him in his old age.  His body is broken.  He has neither the youthful energy nor the time to start over.

This is what the Tech enthusiasts gleefully call "disruption."  I call it an injustice, and I curse the lives and the fortunes of those who have brought it about.  The lesson is clear:  you can take all that crap about playing by the rules, obeying the law, working hard, and being loyal and toss it all out the window.  None of it has any place in the new millennium.

Another Cup of Coffee

A few days ago I sat down in the mid-afternoon to have coffee with a recent acquaintance, G.  I met G at my friend J's house.  G and J are old friends, and G, who has lived in New York for the past ten years, has been staying with J while he looks for work here in the Bay Area.  G has been here looking for work for over six months now.  In that time he has interviewed for over fifty positions, one of which encouraged powerful hopes as he had sixteen interviews with that company.  In the end, they hired internally, and except for a couple of short-term contract jobs, G has not been able to find work.  G is 49 years old.

As we sip coffee, and stir it, and sip a little more, we get to talking about the current job market, the economy in general, and our personal experiences in trying to find work.  What strikes me about G's story is that he has done everything right.  I look back at my own long slide into poverty and see the errors of my ways:  bad relationships, procrastination, laziness, magical thinking, over-confidence, and spendthrift habits.  G, however, has managed to support his wife and daughter as the family's sole breadwinner, to save money, to buy a house in Warwick, New York, and to build a sizable retirement nest-egg, all at the same time.

G graduated from college with a degree in design and went into marketing.  When computers first entered the business arena, he immediately devoted himself to mastering the new way of doing things, and he has stayed current with technology for over two decades. At the height of his fortunes, during the period from 2005 to 2009, G was Executive Creative Director for a digital marketing firm in Greenwich, Connecticut.

At the beginning of this period, in December of 2004, G suffered a massive heart attack.  Luckily, he did so in front of a cardiologist who saved his life.  Luckily, too, he had just purchased a 20-year life insurance policy which he has managed to keep in effect to this day.  So even despite that huge piece of bad luck, G had every reason to believe that he was managing his destiny responsibly.  Although the heart attack in December might have led him to worry about the fact that he had purchased his house just two months earlier, in October, G did have unemployment insurance and health coverage to see him through the six months that it took him to recover.  Soon thereafter, the job in Greenwich came through, and G was once again sailing along a rational, responsible, and honorable course.

*

Not far from Greenwich and Warwick, and some 25 years earlier, I began my first full year of teaching at Union College in Schenectady, New York.  In the first term, I taught, among other things, a course in the foundational literary works of Western Civilization.  I vividly remember teaching Sophocles's play "Oedipus", a work with which I thought I had been familiar for a decade by then.  But it was only then that I understood the heroic virtue of Oedipus.  Like everyone else, I knew that he had saved the city of Thebes from the ravages of the Sphinx and that he had ruled the city-state as a good king.  But on that reading I realized how hard he had struggled to be good.

Having heard as a young man a prophecy that he would kill his father and marry his mother, he ran away from home, not knowing that the father and mother he left were his adoptive parents.  It is in sacrificing his home and family and position in society in order to be a good man and avoid his terrible destiny that he finds himself at a cross-roads killing a stranger with whom he has quarreled and proceeding to save the city of Thebes and marry that stranger's widow.  It is in the very effort to remain good that Oedipus sets out on the path that leads him to kill his father and marry his mother.  The tragedy of Oedipus is that right action, undertaken for the best of motives, with true moral integrity and a heroic heart, leads the best of all men to the most horrible loss and suffering.  As Shakespeare's Gloucester says in "King Lear", "As flies to wanton boys are we to the gods.  They kill us for their sport."

*

And so my friend had done everything right, and yet 2008 came along, and the financial system imploded, and the company in Greenwich lost its major clients, and in 2009 G lost his job.  Half of the men living in G's neighborhood in Warwick lost their jobs too.  So G knew that it was not a matter of personal failure.

*

I heard Hillary Clinton say, after Bernie Sanders had criticized a capitalist system in which the rich suffer no penalties for their misdeeds and only grow richer while the majority of citizens descend deeper and deeper into poverty, that she celebrates small business entrepreneurs, who have created most of the new jobs in our country for the past few decades.  This bit of proverbial nonsense is the nostrum offered up by the quacks of both parties:  it relieves the government and the society at large of having any responsibility for the economic well-being of us citizens.  What la Clinton is saying is "Let the little people take care of finding employment for one another."

*

A couple of years into his ordeal, G sank a good piece of his savings into starting up a new marketing company.  He developed an app which would allow those who had food to sell that was near or at its "sell by" date to offer it at hugely discounted prices to nearby buyers who could make use of it before it spoiled.  Realizing that much of this food ended up, at the time, in the pantries of various charities and non-profits that feed the poor, G built in an automatic donation of cash from the sale of this food to those charities.  Despite great enthusiasm from all sectors that would potentially be affected, the business failed to take off.  G did not have and could not get access to the capital necessary to develop this business to a point where it could survive and succeed on its own merits.

And so G went into debt for the first time in his life.  He has had to draw down nearly all of his retirement savings.  He was able to refinance his house, lowering his monthly payments by getting a new mortgage at a lower rate, but the length of the mortgage was extended from thirty years to forty years.  As G pointed out, the banks lose nothing.  G has lost his savings, his retirement, and, by the way, his marriage as well.  He has not lost his house -- yet.  But unless something changes soon, even that will go.

*

Jamie Diamond remains at the head of J.P. Morgan/Chase and continues to rake in hundreds of millions in "compensation" annually.  He has become big buddy-buddies with President Obama.  Alan Greenspan, Henry Paulsen, Tim Geitner, and Ben Bernanke remain at large.

*

                                    "Everybody knows the fight is fixed:

                                    The poor stay poor, the rich get rich.

                                    That's how it goes.

                                    And everybody knows."

*

"What really gets to me," G says, "is having to wake up in the morning and do another round of applications and interviews, to smile and act enthusiastic and energetic about these prospects that remain only prospects.  Sixteen interviews -- sixteen interviews -- and they hire someone else.  Or they decide not to fill the position.  Or most often they don't even tell you what they are doing.  You go to interviews -- I had one with the CFO of a company, supposed to be the final green-light moment, and she seemed to really like me, we were scheduled for a half-hour and she kept me there for over a full hour, and then you hear nothing.  These companies don't even have the courtesy to let you know that they are not going to hire you.

"And if you are hired, they expect you to work for them 24/7 but there's no loyalty from them in return.  I remember when I was just starting out and I was working at a big corporation in New York, a global marketing firm, and at one point they let all these senior people go.  I saw these guys who had given thirty years of their lives to this company filling cardboard boxes with all the personal stuff from their desks and crying.  I saw that and right then I knew that you couldn't trust any of them.  They'll throw you out like trash any time they want.

"But harder than that -- let me tell you a story.  So my marriage has fallen apart, and I'm out here dealing with all this stress, and I've already had a massive heart attack.  So I just don't know how long I can take it.  I can stay on J's floor on his air mattress, or I can stay at my sister-in-law's apartment when she's out of town, and J's a great guy but I need some more human contact than just that.

"So I go on a date with this woman, really beautiful woman.  I met her on Match.  And she's going through a similar thing where she and her husband are separated but they're still living in the same house because real estate is so crazy out here.  And on her profile are pictures of the house which is really big and beautiful, and she's wearing beautiful clothes that are obviously really expensive, and she's driving a Lexus.

"And we had great conversation, really connected, talked about all kinds of things, but, you know, I took her out for drinks at this place in the Mission -- and she offered to pay but I'm old fashioned and insisted on paying for us both -- and we had two drinks each and the bill was $60.  When it ended. she offered to give me a ride home.  I tried being evasive but she insisted.  So I had her drop me at J's place and, you know, the front door is under the stairs to the flat above, the original house.

"We got together again and had a good time, but I could tell she was wondering about my situation.  She knows that I'm not currently working and she was asking about J's place.  She wanted to know if that was the basement or something.  I told her that it was a ground-level flat, but still I could tell.  And she knows that I don't have a car and I'm staying with a friend.  So at the end of that date I said something about getting together during the week and she said that she was busy.

"I said, 'I know, I know, I get it.  Listen, you're a very attractive woman, and I enjoyed our time together a lot . . .' and I said goodnight and I'll never see her again.  I've always supported my wife and daughter, just a one- income family.  But people don't know that.  That's not what they see.  And I get so depressed and even suicidal . . . ."

G's eyes looked wet.  We were silent for some minutes.  I don't know what banalities I muttered then, to bring our conversation to a close.  I felt honored by his honesty, by the trust in me it evidenced.  And I felt moved to share his story, or rather this ragged approximation of it, with you here.

Listening to G, I felt my rage at the moral bankruptcy of this America in which we live.  I thought of the hordes of young people who have no idea what is going on as they order their Uber cars, condemning hundreds of thousands of good men all across this country to fates like G's.  I thought of the politicians and the pundits who assert that the solution to such woes is to provide educational opportunities so that the unemployed can learn new skills and find work in the information economy.  All of which is not just bullshit but elephantshit.  I can see in my mind's eye the lines of men and women who enroll in and complete the re-training courses offered by county services and non-profits filled with utterly false hopes and coming face to face with those disappointments when they enter a job market where even those with decades of experience and up-to-date knowledge, intricate expertise, in technology cannot get work.  I shudder to think how, when they have been sold false dreams by callous civic leaders, their inevitable disillusionment may break their spirits and even end their lives.

And then I think too of those hordes of young people who believe that they sit atop the world and that they have earned the tremendous sums they are paid, who believe that the labor market that pays them so handsomely is proof of their worth, and who believe that they will always be worth -- and be paid -- what they are receiving now.  I think of their disdain for unions and their refusal to identify with their elders, like G.  He understood, all those years ago, that one day he might be cast aside as were the men older than he who were clearing out their desks on that sad morning in New York.  I have doubts that the present crop of (blissfully unaware) wage-slaves understand their position at all.  I suspect that they believe in their cohort, the Millennials, as a highly aware, highly creative force that is giving birth to a whole new world, the digital world, which will itself bear fruit as a whole new way for human communities to flourish.

Their generation is likely to be brought up short by the cruelty of America's deified market economy at an even earlier age than my generation has been.  Despite having studied "Death of a Salesman" and "Grapes of Wrath" in school, we failed to understand our own lives as re-enactments of those stories.  We thought that organized labor was irrelevant to the shiny and brave new world that we were building.  We thought that Apple was liberating us from Big Brother when in fact Apple has developed even more effective means of totalitarian control than any that Orwell imagined.  In a culture that reveres youth and the new, the wisdom of age goes unheard.  The generations repeat the same mistakes just as the generations of a dysfunctional family repeat the same abuses endlessly.

And a dark corner of my heart is gladdened to imagine the Millenials suffering when their companies and their technologies and their children abandon them in turn.  Such is the solace of schadenfreude.

The Housing Crisis

Why has the real estate market failed to serve the people of San Francisco?

The chattering classes proclaim that the San Francisco real estate market is "excellent," "healthy," and "strong" because the market has enriched owners of real estate.  Yet it has also failed the majority of San Franciscans, who must pay exorbitant rents that are currently the highest in the country.  More significantly, the real estate market has failed an alarming number of San Franciscans whom it has left many without any place in which to live at all.

One can hardly take seriously the idea that free markets provide goods and services efficiently, balancing demand and supply automatically, in the face of this failure to supply one of the most fundamental -- and universal -- of demands:  shelter.  The reality for most of us is that this particular "free market" is infecting the whole life of the city with envy, rancor, rage, resentment, and an explosive degree of social tension.

Driving a cab, I hear or over-hear the opinions of people from almost all segments of our society.  Riding buses, living in an SRO Hotel, shopping at thrift stores, and walking the streets, I hear or over-hear the rest.  I have heard an attorney complain that she and her architect husband, both hardworking and fully employed, cannot find an apartment that they can afford.  People who have service jobs, such as bartenders, retail clerks, house painters, mechanics, and hair stylists, share their homes with roommates not always to their liking.  And the rich say, "Don't blame me.  My taxes pay for all the poor people's social services, and I'm the one creating jobs anyway!"

I certainly cannot blame any person or group of people.  The enemy here is clearly institutional, historic in origin, and susceptible to remedy only through legislation.  I cite these examples of discontent to make the point that what many consider to be an economic problem is in fact the source of dangerous animosities, among individuals.  People are feeling pressured at every level and are increasingly angry at other people, those "above" them on the social scale and those "below."  Their anger frequently erupts in little sparks of violence, verbal and physical, and it is building so rapidly that it may erupt in large scale mayhem before long.  If the real estate market functioned efficiently and supplied housing that met the demand, most of what San Franciscans find wrong with their city would disappear overnight.

These animosities bear no relation to the healthy competition among athletes or among rival businesses that may spur each on to greater achievements by adding the secondary motivation of pride to the original motivation to perform the task well.  No, these animosities are the beginnings of hatred, of class warfare, and potentially of violence.  The social friction caused by the failure of the real estate market is wholly destructive.

The ideology of "Free Market" capitalism must be seen for what it is:  a myth.  While the markets for ordinary consumer goods function adequately, such is not the case in markets for the most important aspects of our economic life:  employment, housing, and medical care.  In functioning markets, one finds a range of goods of the same type.  Some people buy Porsches and Mercedes, others buy Camrys or Passats, and still others buy Kias and Fiestas.  At the supermarket one finds luxury brands, name brands, store brands, and generics.  In San Francisco, however, the real estate market is creating only "high end", i.e., extremely expensive luxury housing.

As recently as the 1960s and 1970s, people like John Daly John Foster were mass-producing housing priced for blue-collar workers.  Fifty years later, no one is developing supply to meet similar demand.  So what has gone wrong?  [Note:  Although Daly and Foster built their eponymous cities outside of the city limits of San Francisco itself, most of the people who bought those houses were the middle and lower-middle class people who worked in San Francisco and regarded themselves as San Franciscans.]

Is it a matter of space?  Daly and Foster, and the Stone family as well, were able to purchase large tracts of land that had been in agricultural use and convert them to neighborhoods (or "subdivisions") so that they realized economies of scale in producing hundreds and thousands of homes at once.  Mass production brought down the cost of construction as surely as it had the cost of an automobile.  Now, since everything but the rightly-preserved parks and open spaces that dot the cityscape, the entire northern end of the peninsula is developed.  Are housing costs high because mass production is no longer possible?

I think not.  First and foremost, while the last agricultural enterprises disappeared from the city and its environs in the 1960s and 1970s, the same period saw the collapse of the Port of San Francisco and of the light industry and warehouse services that had surrounded the waterfront, resulting in acres of unused industrial and warehouse structures comprising South of Market area.  This is surely enough land for a Daly or Foster City.  Instead, the vast railroad yars that stretched from Mission Bay to Potrero Hill have become the China Basin and Mission bay developments -- luxury housing.  So the question remains:  why does the real estate market not supply the demand for lower cost housing?

*

For a time in the 1960s and 1970s, when the wealthy had not yet decided that they wanted to own the inner cities once again, an ad hoc real-estate market whose legality was sketchy did develop organically, meeting the needs of people who wanted to live in the urban core and who made homes and neighborhoods and communities of their own without attracting much attention from government and the press.  As in every other major urban center at that time, the decaying buildings of the inner city were occupied by squatters, musicians, homosexuals, artists, sex workers, and other marginalized people and businesses.  Dance clubs, gay bars and sex clubs, and inexpensive living quarters were created by people to meet their own demand for affordable spaces in which to live and work.  These marginalized people made use of a decaying but nevertheless existing infrastructure.  Theirs was a truly free market response to the demand for housing and not a matter of banks and developers chasing profits for the purpose of their own enrichment.

Eventually the city government, like the governments of London, New York, and other major cities, tried to prevent the squatters from taking over these unused resources, and even after the squatters had fixed the up the empty buildings tried to take the homes they had made from them by legal force.

I remember living in New York in the late 1970s and hearing about the "fixture fees" that people paid when they moved into a loft in SoHo.  The landlords who owned the empty buildings, which they had neglected entirely, leaving them to fill up with garbage, rats, used needles and filthy mattresses, went to court fighting to evict the squatters who had rehabilitated these buildings, installed kitchens and bathrooms, cleaned and painted and created huge, light-filled interiors in which to live.  While the legal battles went on, any squatter who decided to move out of the home that she or he had created charged the person who wanted to move in for the improvements, the "fixtures," such as electrical wiring, plumbing, toilets, tubs, sinks, and kitchen appliances.  They could not sell the real estate because they did not hold title, nor could they transfer a lease because none existed.  But in a fair, orderly, and reasonable way these people developed a civilized real-estate market without benefit of courts, police, or any of the other apparatus of control exercised by governments.  In the end, the courts for the most part sided with the squatters and "legalized their property rights, because the law recognized that the landlords, in neglecting to maintain the property, had forfeited their right to claim ownership.

Again, these were marginalized people to begin with.  And at the time, people of the upper middle and upper classes had no interest in living in the inner cities.  Content in their far-flung suburbs, untroubled by the poor, the "colored", and the immigrants, the well-to-do were happy to let the cities decay, burn in race riots, and, as in the case of New York, go bankrupt.

The history of the period is interesting, but the creative efforts of those who took possession of those properties did not amount to the production of a housing supply such as that which is needed today.  We are talking about the ad hoc appropriation of abandoned resources by people unable to afford participation in the regular market.

*

At the same time, individual builders were producing housing on a small scale in many parts of the city.  For example, you can find this house  

all over the Mission and in Bernal Heights.  Apparently a General Contractor found that he could buy run-down houses, demolish them, and build a new house on the property and sell it at a profit.  He saved the expense of an architect by reusing the plans he had already paid for, building the same house again and again in these neighborhoods.  Since he may in fact have built fewer units than he demolished, I cannot cite the houses as a proof of the market efficiently providing supply, but I can point to them as proof that demand, i.e. buyers, did exist even in the midst of the white middle-class exodus to suburbia.

*

The brave souls residing in the no-man's land beneath the elevated roadways that braid Bayshore Boulevard, Potrero Avenue, Cesar Chavez Street, and U.S. Highway 101 were lodging, until about a month ago, in lean-tos constructed of cardboard, plastic sheeting, and shopping carts, or they took their rest in sleeping bags under -- well, not the starry sky -- under those elevated streams of roaring traffic, of tons of steel and glass hurtling along at lethal speeds, spewing noxious fumes.

You may remember my description of this wasteland, for it is where the rats used to come out of the ivy and run alongside my bike when I pedaled through in the dark of the early morning.  In the year or so since I last rode through "La Calle de Raton", I have noticed that the police came through and cleared out the encampment.  That is, they rousted the people living there and then swept those people's homes and possessions into garbage trucks and took it all away from them.  The few things that these people owned were stolen from them ("stolen" is not a strong enough word) by the state which, no doubt, justifies this outrage with sanitary and aesthetic reasons.  Rage is the only humane reaction one can have to this injustice.

Lately, however, I have noticed that the residents of this neighborhood are returning, and this time they have tents.  Well over a dozen large, attractive, and clean tents are spread across the site.  I grin and practically laugh aloud each time I pass those tents, for to me they are proof that in the darkest and most powerless corners of this city's life, the human spirit remains indomitable.

If the City cannot or will not (the latter being, I believe, the case) provide real housing for these folks, then why not let them live in peace in the place that they have chosen, a place that is not anybody else's neighborhood, not "my back yard" or yours.  And as for public health "concerns", why not truck in a dozen portable toilets and have one of those trucks with showers come round three times a week.

The land itself must be property of the state since it is a freeway right-of-way, and if it belongs to the state, doesn't it belong to all her citizens?  Doesn't that land belong to those urban campers as much as to anyone -- and more so by right of possession.

I say that if a building stands empty, people who need homes should move into it and make it their own.  If land stands empty -- those vacant lots surrounded by cyclone fencing or old parking lots similarly fenced -- people should build on it.

Title to land is nothing but a monopoly for use granted by the state to an individual it favors.  If that individual is not making use of this government handout, then the title should be considered forfeit and the land be free to anyone who will use it.

Shame on those who would dispossess the poor of what little they have.  Shame on those who would drive them from their homes.

And to hell with those who hold land unused in hopes of selling it later for a higher price without making any use of it for the benefit of the community.

Read Henry George!  Read Tolstoy's last novel, "Resurrection"!  Awake!

Mission Heats Up

Spotted on light poles near the intersection of 16th and Mission: