I keep looking at what's happening in Camden, NJ and I just can't believe what I'm seeing there. Or maybe I do believe it and I knew it was coming, but I can't believe it was allowed to reach this point.
For those of you who haven't been following the apocalyptic tale of Camden, you can find a lot of the reports on Drudge. They just laid off something like half the police force and firefighters there, in a town run by criminals, and the actual totals almost don't matter. Half of the city lives below the poverty line, all the manufacturing jobs that used to form the pillars of what Camden was have left for parts South and East, or at least elsewhere, and the violent crime rate is already 5 times the national average. Before the layoffs.
You're seriously talking about a place in America - right on the East Coast - where the illegal immigrants currently in the city should be thinking hard about going back to Juarez voluntarily (nobody is going to kick them out, not in Camden) -- because it's safer and the jobs and life expectancy are better there.
It's fair to say that Camden is a city being lived in by people who cannot afford to leave, lorded over by thugs running drugs, with a political class that is clinging to life by the thinnest of reeds. It's a city that was kept on life support by the taxpayers of New Jersey for many years, while everything worthwhile about living there got up and was lost hell and gone. And now the money has run out - all of New Jersey's money has run out (the casinos there have sucked wind for the past 3 years) and Camden is facing an implosion and it could be a very violent implosion.
I look at Camden and I don't see an outlying phenomenon, though. I see it as becoming much more mainstream for a lot of places in America. Where would the people in Camden go if it wasn't for Camden? Some of them might like to leave, but how? What will they build there? Another casino? What jobs will they get to finance their exodus? What surrounding town is willing to absorb the blight of Camden and take on the burdens of a failed city within what until recently was called one of the most prosperous states in America?
We've got the rot eating away at us right in the middle of some of the most prosperous areas in our country, and nobody seems to know what to do about it. Our best answers so far seem to be to try and find jobs in casinos (which is what they mean by "hospitality") or health care. So...we're going to be working to lose money to the State or try to maintain people in increasingly poor health, at greater and greater expense.
These things don't sound to me like a recipe for a society that can rebound from the bust of the housing market bubble. I really don't think there's anything in America left to replace that last one: you were talking about a massive failure of the market in the realest of the real property - people's homes. Everyone who knows seems to say that we won't see significant unemployment declines for something like 5 years or more, if ever. How can a city like Camden ever rebound if that's true? How can America? What will happen to all the people there?
Everyone is watching Camden right now in a kind of morbid fascination about how far and quickly the cancer will spread, how many other cities around the country will go the same way, and what the aftermath of it will be, like some kind of necromantic curiosity. But there are real people there. Some of them are still alive. Many of them were victims of circumstance and are good people. What will happen if the rest of the country goes this way?