Don't worry about whether Seattle's amazing run can continue. Think instead about the many ways it can stumble and end.
The only question is how much time. Apartments will get overbuilt, capital will dry up for tech companies that will get disrupted by rivals, stocks will fall, airplane demand will be satisfied, Amazon.com shareholders might rebel, Wall Street might go to war against Microsoft, sea level will rise, our fishing industry will face poisoned, warming oceans. Disruption is our future.
A reminder of the vicissitudes can be found at the Exchange Building, an Art Deco beauty at 821 Second Avenue. The 22-story masterpiece was completed in 1929 — just in time for the Roaring Twenties to turn into stock crash, contraction and Great Depression. An information display in the tastefully restored lobby says that it was 30 years before another skyscraper was built in Seattle.
According to Wikipedia, the Exchange Building was designed by John Graham, the architect behind Frederick & Nelson (now Nordstrom’s flagship store), the Bon Marche (now downtown Macy’s) and the Dexter Horton Building. Thank god he came before the era of endless, soulless sheets of glass. The building’s name came because it housed commodity market exchanges, as well as the offices of numerous major companies.
Like the Great Recession, the Depression came after massive speculative bubbles popped, as well as at a time of vast structural change in the economy and high inequality. Unlike 2008, the Federal Reserve made the wrong moves, the United States was harmed by the gold standard and an antiquated banking system. The tragic Herbert Hoover was unwilling to be activist enough to ease individual suffering and experiment on intelligent responses (although he did much, including establishing some entities that were successful in the New Deal).
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Now the national economy is healing, although demand remains relatively weak and many working people are still struggling. Seattle is one of the stars of the recovery — so much so that it can be argued it is no longer affordable for the middle class.
But don’t be fooled. Nobody has repealed the business cycle, much less dangerous banksters, tensions in Asia, political dysfunction, or the growing costs and surprises from climate change. Plenty of people in Seattle and Washington state are struggling, even now.
If you need reminding, look at the majestic Exchange Building, still in operation with a new generation of businesses. Wonder how many people thought, at the time it was finished, “this boom will go on for years!”?
Today’s Econ Haiku:
Dimon says, “Why me?”
Sorry for the cancer, man
But welcome to life