Living in economic downturn has become the new normal

Modesto (Calif.) BeeApril 4, 2010 

MODESTO, Calif. -- Vacant storefronts, abandoned homes and shuttered schools tell the story of the economy in the Northern San Joaquin Valley: This is the new normal.

People are beginning to look at the 3-year-old economic downturn as a permanent condition rather than a storm to be weathered.

Modesto is looking at $8 million in cuts this year from its $106 million general fund, the money that pays for essential services such as police, fire and parks, Mayor Jim Ridenour said. That number is down from the city's $130 million general fund of its 2006-07 budget year.

School districts around the region are feeling the pain, as well, with declining enrollment and the steep drop in tax revenues leading to layoffs, pay cuts and campus closures.

Businesses have closed or cut back drastically.

"For lease" signs line commercial strips and office complexes. Important tenants such as Gottschalk's, Mervyn's and Circuit City left gaping holes in shopping centers that, as a result, get less traffic.

Often the nation's car theft capital, the region earned another dubious title when it led the country in foreclosure rates. Weeds overtake

lawns at homes abandoned by people who could no longer afford to pay for them.

Kelvin Jasek-Rysdahl, professor of economics at California State University, Stanislaus, and co-director of the university's Center for Public Policy Studies, recalled a presentation he gave in November 2008. It was just before the government officially recognized the country had been in a recession for more than a year.

'Hindsight is 20-20'

"The projections then among several groups of economists were that this might last through the first quarter of 2009," he said. "Hindsight is 20-20, but obviously nobody predicted this."

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