Camelot

Steve,

I just got back from a short stay in Naples (FL) with my dad and stepmother. They have a small but very nice condo on the sixth floor of a complex just opposite the beach on Gulf Shore Boulevard. The view on the back terrace of that condo takes in hundreds, perhaps thousands, of condos in similar high rises which line the beach from north to south. Mixed in with these and further off the beach are a host of small neighborhoods with homes ranging from the small and neat to the huge and ghastly - the least expensive of which start in the upper six figures and can easily top out in the tens of millions.

Everybody here drives a nice car and you don't see any pick-up trucks. The main drag is usually jam up with Volvo's, Infinities, and Acuras - here and there a Bently or some European exotic, not to mention at least one Rolls. There's no waiting lines at the hospitals and clinics, of which there are many. Everyone's fully insured and the health care is beyond excellent. Neither is it hard to get a tee time at a first class golf course or a table at a fine restaurant. Steve, everything a person who favors a life of ease and comfort would want is here in Naples. Just be sure to bring your pocketbook.

Sitting on the terrace one evening I got to thinking about the economic model which produced places like Naples. I'm sure every story is different but most typical I think would be that of a man who went to college and got a Masters in Business Management, went to work at a corporation, bought a house, raised a family, earned a pension - then sold the house, bought a place in Naples and now lives off his combined income of pension and social security. More often than not his retirement from the corporation would include some form of extended health care, which, combined with Medicare, provides him with all the extra care a person over 65 requires. This would include that man's wife, who, again more often than not, spent most of her life in that now practically vanished occupation of "homemaker".

There's still some construction going on in Naples. The really, really rich are buying up a few choice properties, demolishing the homes and putting up obscenely extravagant mansions: places where the landscaping in the back yard costs more than any home I myself will ever live in (though of course to a man of your virtually unlimited wealth it would be mere petty cash). However the building boom of high rise condominiums has pretty much come to a screeching halt. To be sustained, this boom required a steady, strengthening supply of retirees entering the market with sufficient cash to pay for them - and that supply now scarcely covers the sales of existing units made available by simple attrition. It doesn't take a genius to realize that sooner or later, the supply of new buyers won't even cover that - if in fact this point has not already been reached.

When that happens, prices fall - slowly at first, then sharply. And with each precipitous drop in real estate values, come new buyers who are very different from the group who built this place. They won't be driving Infinities or SAAB's - more like Corollas and Civics. They won't have the pensions or the private health insurance, and can't afford to play golf or dine out more than once or twice a month. Many of them will work part time jobs - not to stay busy - but to pay for a life in what remains of Camelot.

Why, you ask? The fictional Camelot is changeless: a timeless ideal in an evergreen world. Our Camelots however, like Naples, are firmly attached to real life. They are the top layers of a pyramid - and their vitality depends on whatever is happening on every level beneath them. True - while suffering near the bottom of the pyramid involves doing without food or shelter whereas suffering near the top involves driving a Camry rather than a Cadillac, still - the effect of an economy in a state of gradual collapse is making itself felt everywhere.

Everywhere that is, except for two places: among the very rich and the desperately poor. This economy of ours has a big head and big feet, but a steadily shrinking waistline. Manufacture, the bread and butter of a strong, assertive middle class has all but disappeared. Take an afternoon and drive around some of the industrial parks around Atlanta, where each one seems more depressing than the last. Now the average man or woman, working 45 hours a week in one of those now abandoned factories would never have made it to Camelot. But their income would have supported some white collar guy or small business owner who could. In one way or another, the very rich in this country have learned to make their money from the labors of people in the third world and growing economies like China and India. Their capital - their resources - are not confined by national borders anymore. But what's left of the middle class is stuck.

Steve, it took a hundred years to build Camelot. And who knows? Maybe a hundred more to rebuild it after it falls. Let's hope they do a better job than we did.

-Chris