SEVERAL MONTHS ago, my wife and I retired and left Riverside for Pasadena, California. We have been struck by the similarities and differences between the impact of the current economic crisis on the two cities, which are only fifty five miles apart.
Evidence of the current economic crisis is highly visible in Riverside with its burgeoning Mexican population and substantial working and lower middle-class populations. The city currently has over 288,000 residents, nearly double what it was in 1980. Sub-prime loans have resulted in significant bankruptcies and foreclosures. With a new mall built around it, the oldest department store in Riverside–Gottschalks–is currently having a “going out of business” sale. The best restaurant in the city no longer serves lunch, although it is situated in the lively city center, where young lawyers and financial officers work and where opulent tourists fill the Mission Inn, the city’s circa 1890 hotel.
What startled me between December and February are several experiences that appear to be related. When I called my local Honda dealer to arrange a major servicing of my car, I was taken aback at the request, “Can you bring it in now?” In the past, my dealer was booked for two or three days ahead. My incredulity at his request elicited his comment that “business was terrible, down 35 percent in sales and repairs.” When he learned that I was a historian he pondered aloud, “Was the current situation similar to what brought the Roman Empire down?”
Two weeks later, I went to my optician to arrange a check-up in response to a card he had sent. His nurse replied that the eye doctor was not busy at the moment, and if I had the time, he could examine me immediately. This had not happened before in my ten years of seeing this doctor. Shortly after my eye-doctor visit, I called the local moving company, a subsidiary of North American Van Lines, to inquire about some details of the move that was going to take place in two days. The receptionist who took my call asked me, “Can you move today? Are you ready?” I knew that the moving business was down 17 percent nationally, but I was incredulous at his query. All of this was very disturbing and led me to conclude that this was the most serious “recession” that I had experienced in my sixty nine years. The public had responded to the crisis by postponing all expenses that were not essential. This was confirmed by a masseuse I knew, who said 33 percent of her clients had disappeared.
IN PASEDENA, with a population of 146,000, up from 113,000 twenty years ago, the “recession” hit just as the city was going through a boom in condos and multi-story commercial buildings. In our search for a condo, we discovered that the prices were declining slowly, and each weekend we noticed more “For Sale” signs banged into the well-watered green lawns. After several months, we were in a decent but not attractive condo, and I asked what the asking price was. The reply was $399.000. “What did he say?” my wife asked. She had not thought the prices in Pasadena could fall below $400,000, and as she later explained, she had not heard the three because she did not consider that number possible.
On the other hand, the city’s upscale expensive restaurants are booming. On weekday nights we had to wait about twenty minutes to secure a table. In contrast, shops catering to young parents were disappearing as were antique shops. While only 14 percent of Pasadena’s shops had closed, the closed shops were highly visible. Pasadena is a magnet for young ambitious men and women who seek a career in finance and banking. Countrywide Mortgage Company had owned a large building in the city that is now vacant, but the sign on one of the higher floors is still visible. IndyMac, another pioneer in the “sub-prime market” had its beginnings and ending in Pasadena. And so it goes.
My tale-of-two-cities experiences convinced me that the working and lower middle families in Riverside are suffering the most , particularly if they purchased a home in Riverside in the past twenty years in one of the series of enormous developments in the Greater Riverside area. To delay a normal eye exam or car servicing indicates to me that even those with jobs are hesitant to spend money that might be necessary down the road.
In Pasadena, those hit hardest are the builders and lenders who did not foresee a terrible market for commercial and condo construction. Looking at a glistening but deserted five story building is something new for Americans, but in Pasadena people are getting used to it. The crowded upscale restaurants show the fear of the future has not spread to the whole generations in their twenties and thirties, who still shop in Whole Foods and Bristol Farms. Nonetheless, the people who have been laid off by banks, legal firms, and mortgage companies are abandoning the city rapidly. As their flight shows, this crisis has hit the college-educated, upwardly mobile hard. Nobody is immune.
One last point, which may or may not be coincidental. My wife and I have recently experienced three near-serious accidents on the California freeways between Riverside and Pasadena. They all came about from a driver drifting into our lane. We have not been in any car accidents for decades, and these accidents made us wonder if in today’s California, drivers are so distracted by the economy that they cannot keep their focus on the road because they have so many other concerns.
Kenneth Barkin is a retired history professor at the University of California, Riverside. He is currently writing about W.E.B. DuBois’s years in Germany.