excerpt 1/4 from

Life Inc.

How The World Became A Corporation
And How To Take It Back

by Douglas Rushkoff

Copyright (c) 2009 by Douglas Rushkoff. Published in the United States by Random House, an imprint of The Random House Publishing Group, a division of Random House, Inc., New York.

Your Money Your Life
A Lesson on the Front Stoop

I got mugged on Christmas Eve.
    I was in front of my Brooklyn apartment house taking out the trash when a man pulled a gun and told me to empty my pockets. I gave him my money, wallet, and cell phone. But then – remembering something I’d seen in a movie about a hostage negotiator – I begged him to let me keep my medical-insurance card. If I could humanize myself in his perception, I figured, he’d be less likely to kill me.
    He accepted my argument about how hard it would be for me to get “care” without it, and handed me back the card. Now it was us two against the establishment, and we made something of a deal: in exchange for his mercy, I wasn’t to report him – even though I had plainly seen his face. I agreed, and he ran off down the street. I foolishly but steadfastly stood by my side of the bargain, however coerced it may have been, for a few hours. As if I could have actually entered into a binding contract at gunpoint.
    In the meantime, I posted a note about my strange and frightening experience to the Park Slope Parents list – a rather crunchy Internet community of moms, food co-op members, and other leftie types dedicated to the health and well-being of their families and their decidedly progressive, gentrifying neighborhood. It seemed the responsible thing to do, and I suppose I also expected some expression of sympathy and support.
    Amazingly, the very first two emails I received were from people angry that I had posted the name of the street on which the crime had occurred. Didn’t I realize that this publicity could adversely affect all of our property values? The “sellers’ market” was already difficult enough! With a famous actor reportedly leaving the area for Manhattan, does Brooklyn’s real-estate market need more bad press? And this was before the real-estate crash.
    I was stunned. Had it really come to this? Did people care more about the market value of their neighborhood than what was actually taking place within it? Besides, it didn’t even make good business sense to bury the issue. In the long run, an open and honest conversation about crime and how to prevent it should make the neighborhood safer. Property values would go up in the end, not down. So these homeowners were more concerned about the immediate liquidity of their town houses than their long-term asset value – not to mention the actual experience of living in them. And these were amongst the wealthiest people in New York, who shouldn’t have to be worrying about such things. What had happened to make them behave this way?
    It stopped me cold, and forced me to reassess my own long-held desire to elevate myself from renter to owner. I stopped to think – which, in the midst of an irrational real-estate craze, may not have been the safest thing to do. Why, I wondered aloud on my blog, was I struggling to make $4,500-per-month rent on a two bed-room, fourth-floor walk-up in this supposedly “hip” section of Brooklyn, when I could just as easily get mugged somewhere else for a lot less per month? Was my willingness to participate in this runaway market part of the problem?
    The detectives who took my report drove the point home. One of them drew a circle on a map of Brooklyn. “Inside this circle is where the rich white people from Manhattan are moving. That’s the target area. Hunting ground. Think about it from your mugger’s point of view: quiet, tree-lined streets of row houses, each worth a million or two, and inhabited by the rich people who displaced your family. Now, you live in or around the projects just outside the circle. Where would you go to mug someone?”
    Back on the World Wide Web, a friend of mine – another Park Slope writer – made an open appeal for my family to stay in Brooklyn. He saw “the Slope” as a mixed-use neighborhood now reaching the “peak of livability” that the legendary urban anthropologist Jane Jacobs idealized. He explained how all great neighborhoods go through the same basic process: Some artists move into the only area they can afford – a poor area with nothing to speak of. Eventually, there are enough of them to open a gallery. People start coming to the gallery in the evenings, creating demand for a coffeehouse nearby, and so on. Slowly but surely, an artsy store or two and a clique of hipsters “pioneer” the neighborhood until there’s significant sidewalk activity late into the night, making it safer for successive waves of incoming businesses and residents.
    Of course, after the city’s newspaper “discovers” the new trendy neighborhood, the artists are joined and eventually replaced by increasingly wealthy but decidedly less hip young professionals, lawyers, and businesspeople – but hopefully not so many that the district completely loses its “flavor.” Investment increases, the district grows bigger, and everyone is happier and wealthier.
    Still, what happens to the people who lived there from the beginning – the ones whom the police detective was talking about? The “natives”? This process of gentrification does not occur ex nihilo. No, when property values go up, so do the rents, displacing anyone whose monthly living charges aren’t regulated by the government. The residents of the neighborhood do not actually participate in the renaissance, because they are not owners. They move to outlying areas. Sure, their kids still go to John Jay High School in the middle of Park Slope. But none of the Park Slope’s own wealthy residents send their kids there.
    Our online conversation was picked up by the New York magazine in a column entitled “Are the Writers Leaving Brooklyn?” The article focused entirely on the way a crime against an author could threaten the Brooklyn real-estate bubble. National Public Radio called to interview me about the story – not the mugging itself, but whether I would leave Brooklyn over it, and if doing so publicly might not be irresponsibly hurting other people’s property values. A week or two of blog insanity later, a second New York piece asked why we should even care about whether the writers are leaving Brooklyn – seemingly oblivious of the fact that this was the very same column space that told us to care in the first place.
    It was an interesting fifteen minutes. What was going on had less to do with crime or authors, though, than it did with a market in its final, most vaporous phase. I simply couldn’t afford to buy in – and getting mugged freed me from the hype treadmill for long enough to accept it. Or, more accurately, it’s not that I couldn’t afford it so much as that I wouldn’t afford it. There were mortgage brokers willing to lend me the other 90 percent of the money I’d need to purchase a home on the block where I was renting. “We can get you in,” they’d say. And at that moment in real-estate history, putting even 10 percent down would have made me a very qualified buyer. “What about when the mortgage readjusts?” I remember asking. “Then you refinance at a better rate,” they assured me. Of course, that would be happening just about the same time Park Slope’s artificially low property-tax rate (an exemption secured by real-estate developers) would be raised to the levels of the poorer areas of the borough. “Don’t worry. Everyone with your financials is doing it,” one broker explained with a wink. “And the banks aren’t going to just let everyone lose their homes, now, are they?”
    As long as people refused to look at the real social and financial costs, the market could keep going up – buoyed in part by the bonuses paid to investment bankers whose job it was to promote all this asset inflation in the first place. Heck, we were restoring a historic borough to its former glory. All we had to do was to avoid the uncomfortable truth that we were busy converting what were being used as multifamily dwellings by poor black and Hispanic people back into stately town houses for use by rich white ones. And we had to overlook that this frenzy of real-estate activity was operating on borrowed time and, more significantly, borrowed money.

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