The mood on Main St. as midterm elections loom
Eagle, Colorado, a town struggling to surmount recession, offers a window into why America seems so sullen heading into what could be a hinge moment in politics.
(Page 4 of 7)
Fewer Range RoversSkip to next paragraph
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You listen to these stories and maybe you think, "Well, that's life." The people who bought those homes that made Eagle boom took a chance and got burned. That's the inherent gamble of real estate. But the boom did more than line the pockets of a few people; it fed and sustained an entire economy. Masons and carpenters, HVAC installers and real estate agents – all made good money and invested in more expensive homes. They went out to eat more. They purchased all the items that filled those homes – furniture and flat-screen TVs. They hired landscapers. They went on expensive vacations.
As their income dried up, so did the money going into Range Rovers and Viking stoves. Angelino, the expensive Italian restaurant in town, has become Luigi's Pastahouse, a moderately priced family restaurant where kids eat free of charge. The Starbucks closed. The streets look tidy, but "for lease" signs hang from many cinnamon-brick storefronts. More than 300 homes in Eagle County languish in some state of foreclosure.
It's a narrative that has been repeated in hundreds of communities around the country. Other places we call "Boom Towns" in Patchwork Nation that felt the full rush of the housing boom are now reeling. Look at ones in Clark County in Nevada or Riverside County in California. Even beyond "Boom Towns," there is reason for some angst. On average, US home prices are still 31 percent lower than they were at the peak of the housing boom in 2006. And while Patchwork Nation likes to point out the subtle difference between communities, few places have escaped the housing slide.
In very tangible ways, people have less money than they used to. They have less to spend and debt to pay off. And there are long-term economic effects to all of this. In towns like Eagle, without good-paying construction jobs as an economic driver, what will move the US economy? It won't be manufacturing, which once made up more than 28 percent of gross domestic product (GDP) and now represents 13 percent.
The real growth area in the economy is not technology or alternative energy; it is services. The service sector makes up about three-quarters of the US GDP today – it was less than 50 percent in 1959. And while there are certainly good-paying jobs in many parts of the service economy – wouldn't we all like a Goldman Sachs salary – plenty of low-paying, low-benefit ones exist as well, in areas like retail and food service.