As Merced goes into the holiday shopping season starting next Friday, all economic indicators are thumbs down.
Official unemployment crept up a point from last month to 16.4 percent, with an increase expected for November. This means that actual unemployment is over 20 percent now and will rise toward 30 percent as the winter wears on.
In October 361 Merced homes received notices of default, down 33 from September; there were 459 trustee sales, up 61 from September; 273 homes went back to banks, 36 more than in September; and 50 homes were sold to third persons, up slightly from September and greatly from October 2008, when only nine homes were sold to third parties.
Citing unemployment as the driving force, the Los Angeles Times reported last week: "One in seven U.S. home loans was past due or in foreclosure as of Sept. 30, putting that quarterly delinquency measure at its highest level since 1972, when the Mortgage Bankers Assn. began reporting it. At the beginning of this year, 1 in 10 loans was past due or in foreclosure."
UC Merced continues its largely speculative existence, have anchored the speculative real estate boom that busted. UC announced last week that it would receive more construction funds for new buildings, but, it turned out, only if a state construction bond passed. The bond is slated to be voted on next November, along with the 11.1-billion water bond. On Nov. 7, Rep. Dennis Cardoza informed the press that he voted for the House healthcare reform bill because it included $500 million for medical schools in rural areas, "including UC Merced.
"I worked with the House Leadership and President Obama’s Administration. I was able to secure their commitments that they would support funding for the UC Merced Medical School and its establishment would be a high priority for both the President and House leaders," Cardoza added.
In other words, he held out for pork (a medical school would presumably be good for region real estate development) and claimed he got some. However, his clout with the administration, at least as far as the administration is said to influence the Senate, does not appear to be strong. "The Senate bill lacks this language," McClatchy's Washingto bureau reported.
The New York Timesreported today that UC is losing faculty to other, more intellectually stimulating institutions with less severely wounded budgets and is losing the fight to retain the real hotshot academics on which its prestige and grant funding relies. UC President Mark Yudof said he rejects "suggestions to retrench, like adopting a two-tiered system in which the Santa Cruz, Riverside and Merced campuses would be teaching institutions and no longer focus on research."
A one-third increase in student tuition, bitterly opposed by students that will now be paying more than $10,000 a year in tuition, has not apparently turned the tide.
It is reported that three-quarters of the students at UC Merced receive some kind of student aid, the highest percentage in the UC system. It will be interesting to see UC's commitment to a campus in the Valley will long survive the system's desperate need for funding for prestige research. UC violated ethical environmental law and regulatory standards and laws and regulation of public process to build the Merced campus. Will it now allow UC Merced to drag the "greatest public research university" down into a "two-tiered system" when the Central Valley already has state universities in Bakersfield, Fresno, Turlock, Sacramento and Chico and a UC campus at Davis, world-renowned for scientific research, also possessing a medical school that serves rural areas? UCSF, another UC medical school, has had a growing institutional presence in Fresno for 40 years. Nor should we forget numerous community colleges that have grown up -- some for several generations -- in our communities, grown with towns that became cities.
The collapse of Merced-based County Bank this year has drawn more criticism from federal bank regulators. The Merced Sun-Star reported:
A federal report blames senior County Bank executives for seeing too much blue sky while fiscal storm clouds gathered over their customer base.
County's former chairman disagrees with the report.
Federal Reserve regulators met in July 2007 with County Bank CEO Thomas Hawker and other managers to "stress the importance of 'getting ahead' of market conditions."
Armed with data showing the declining real estate market, they suggested that the bank brace for tough times. Ultimately, the examiners came away believing their warnings were dismissed.
"County's management did not respond to these early indicators because they expected the real estate market to recover and were continuing to focus on the bank's growth prospects," according to a federal report released in the fall that chronicles County Bank's failure.
The Office of Inspector General's "Material Loss Review of County Bank" concludes the bank collapsed because of a steep decline in the local real estate market and because the managers and board of directors failed to fully address the impact bad loans were having on its balance sheet.
In other words, the bank managers were drunk on the local koolaide.
The catastrophic collapse of milk prices brought down a lot of dairies in Merced County, second largest dairy producer in the nation. with the loss of the dairies and the slaughter of cow herds, many dairy employees lost their steady agricultural jobs.
The local homeless population is exploding and despite fine work done, much of it voluntary, to house them, there is not enough money or available space.
Meanwhile, our congressman, who now lives in Annapolis, MD, continues to raise money for his own PAC, the "Moderate Democrats," and is receiving hefty contributions from the Florida Cuban-emigre set to continue voting for abnormal relations with Cuba. He spent much of the summer as a crude advocate for Westlands Water District yet did not have the grace to hold one public meeting on healthcare reform in his district.
When the homeless man in the grips of Tourette's Syndrome wanders through the neighborhood at night cursing the world, he is not as alone as he might think. Less voluble individuals tighten their lips, try to keep their own positive thought alive, and keep their distance from the misfortunes of others. So many have been affected that those who once blamed the victims cannot, in good conscience and awareness of the facts, do it anymore. Lacking the usual targets, they fall silent, confused, their political compasses spinning wildly. Mostly, people are fatigued, anxious and sad as they feel their town being sucked down by the consequences of their own blindness and the greed of unkind strangers.