The Bacon-Wrapped Bay Area Economy (6,300 words)
Source: East Bay Express
... "The money here is obscene," Nick Bilton wrote in a now-infamous July 2012 post for The New York Times' tech blog, Bits. "The newly minted rich are obsessed with outperforming their rivals. One industry party I attended had a jungle theme. This included a real, 600-pound tiger in a cage and a monkey that would pose for Instagram photos. A prominent Googler's Christmas party in Palo Alto had mounds of snow in the yard to round out the festive spirit. It was 70 degrees outside. Sean Parker, a founder of Airtime, threw a lavish, $1 million party that included models he hired to roam the room and a performance by Snoop Dogg." Bilton's examples are arresting, but his point is that none of this is all that uncommon in a region that's seen a massive influx of money in a very short time.
You don't need to look hard to see the effects of tech money everywhere in the Bay Area. The housing market is the most obvious and immediate: As Rebecca Solnit succinctly put it in a February essay for the London Review of Books, "young people routinely make six-figure salaries, not necessarily beginning with a 1, and they have enormous clout in the housing market." According to a March 11 report by the National Low Income Housing Coalition, four of the ten most expensive housing markets in the country — San Francisco, San Mateo, Santa Clara, and Marin counties — were located in the greater Bay Area. Even Oakland, long considered a cheaper alternative to the city, saw an 11 percent spike in average rent between fiscal year 2011-12 and the previous year; all told, San Francisco and Oakland were the two American cities with the greatest increases in rent. Parts of San Francisco that were previously desolate, dangerous, or both are now home to gleaming office towers, new condos, and well-scrubbed people.
More young people have more money in a more concentrated place than perhaps ever before. Old money is being replaced by new, but it's a new kind of new, one that has different values, different habits, and different interests than the previous generation. The very rich have always, to a greater or lesser degree, been guilty of excess, but what's changed is that the Bay Area's new wealth doesn't necessarily have the perspective, the experience, or the commitments of the group it's replacing.
And that brings with it a whole host of disparate side effects: The arts economy, already unstable, has been forced to contend with the twin challenges of changing tastes and new funding models. Entire industries that didn't exist ten years ago are either thriving on venture capital, or thriving on companies that are thriving on it. It is now possible to find a $6 bottle of Miller High Life, a $48 plate of fried chicken, or a $20 BLT in parts of the city that used to be known for their dive bars and taco stands. If, after all, money has always been a means of effecting the world we want to bring about, when a region is flooded with uncommonly rich and uncommonly young people, that world begins to look very different. And we're all living in it, whether we like it or not.
Read more: http://www.eastbayexpress.com/oakland/the-bacon-wrapped-economy/Content?oid=3494301&showFullText=true
= new reply since forum marked as read
It's fascinating...a long, long read...but the gems are towards the end.
This part, I thought, was worth posting so that folks who think this is a Puff Piece "Lauding Bay Era Tech Wealth Jocks" understand that the article get's into the "nitty gritty" of what this means down towards the end for some of them...not all...but some who are flying high.
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Here's a Snip:
"The idea, essentially, is that the market will settle itself, and the consumer, aided with the right information (preferably with a clean design and user-friendly interface), will be able to make the right choice. The idea is that the good projects will rise to the top, that the Execs with the best star-rating will get hired for more jobs, that the Kickstarters with the most compelling sells will meet their goals, that the people with money will spend it on the right things. But you don't need to see a tiger at a party or attend an electronics show to know that consumers don't always spend their money rationally, and you don't need to be a far-left liberal to understand that regulation exists in order to protect the most vulnerable members of society. (A couple weeks ago, the AP reported that Silicon Valley's poverty rate is on the rise, even as its companies continue to rake in millions. "Simply put," the article said, "while the ultra-rich are getting richer, record numbers of Silicon Valley residents are slipping into poverty."
Companies like Google and Facebook have grown so big that they've effectively become utilities, and they, we, and the people who work for them are all invested in the idea that the world is a better place because of them. This may be true on balance, and it certainly is in some ways, but the danger in thinking that way is we ask fewer questions. When Yahoo! conspired with the Chinese government to hack into activists' email accounts, it was acting in its business interest, even though those actions have geopolitical consequences that extend far beyond Yahoo, and far beyond China. When a 24-year-old rents a $3,000 studio or funds a watch on Kickstarter or hires another 24-year-old to iron his T-shirts at minimum wage, these actions drive up rent and drive down wages, help some businesses while hurting others, essentially carry with them economic and political and social consequences that extend far beyond the transactions themselves.
