The End of Exurbia and Soros on Investing in Infrastructure
Posted by Stephen Lewis on October 15, 2008
In the US, as elsewhere, the mortgage and housing market collapse, skyrocketing motor fuel prices, overloaded highways, and the absence of adequate public transportation are serious enough by themselves. The compounded effects of their interaction, however, are just as serious and even more complex. One result is the threatened demise of exurbia, i.e. of residential communities located far from the cities and towns that provide employment to their residents and that were built on the economic premises of cheap land, cheap credit and cheap motor fuel. With fuel motor fuel prices in the US now reaching the levels that the rest of the world had learned to live with and plan around, residents can no longer afford to live in exurbia and, with housing prices low, they cannot afford to sell their homes and move elsewhere either. An introduction to this paradox is provided by Driven to Despair, part of Blueprint America, a series of programs on the US Public Broadcasting System treating issues facing the country’s flawed and neglected infrastructure.
Last week, investor and philanthropist George Soros was a guest on Bill Moyers Journal, also on the US Public Broadcasting system. Soros spoke out about the end of what he calls “Market Fundamentalism” and how an economy based on speculation and disinvestment rather than production and complicated inadequate regulation and government intervention led to the present financial crisis. “Market Fundamentalism” is a wonderful term. Blind faith in the corrective efficacy of markets is indeed on the same level as religious fundamentalism, in its irrationality, inhumanity, and surrender of individual and group responsibility. I’d add that belief in “markets” and the “invisible hand” is no less absurd than belief in dialect materialism. It is also a sign of people who never read Adam Smith thoroughly. Most important, especially for those who follow the “infrastructure” thread on this site, Soros suggested that our economy could be kick-started and sustained by investment in combatting global warming and in renewing infrastructure. Readers of this site will find this a familiar theme.