Ben Bernanke, March 28, 2007:
Although the turmoil in the subprime mortgage market has created severe financial problems for many individuals and families, the implications of these developments for the housing market as a whole are less clear. ... At this juncture, however, the impact on the broader economy and financial markets of the problems in the subprime market seems likely to be contained.
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A sage comment from the Freakonomicsblog at NYTimes.com
ReplyDeleteAugust 13th,
2008
3:02 pm
Where to start ….
I’ve lived in Manhattan (too noisy). I’ve lived in Washington, DC (downtown, before it was ‘trendy’, when it was REALLY trendy). I’ve lived in Brooklyn. I grew up in a rural area (hated it). Currently, I live in ‘Suburbialand, Virginia’).
I don’t hate suburbialand, I DO hate driving and driving is inescapeable. Three minutes behind the wheel and here is the bad behavior! Everyone is in god-awful rush to noplace … this must be ‘having fun driving’. People drive on the sidewalk to pass, through private property, over people’s front lawns! There is the tailgating, the crossing three lanes of traffic to exit. the yakking on the cellphone, the drunken driving. This is continuous, every day, every time on the highway.
40-some thousand people died on the highway last year; the price of suburbialand.
Suburbialand is one of the ugliest places I can possibly imagine! Wires dangle everywhere, poles are everywhere, weeds and stunted trees, burned out lawns and whatnot; the buildings are cheap, falling apart and surrounded by autos. Some of the autos are junkers. The signs are plastic, orange and purple. The restaurants are ‘Wendy’s’ and ‘McDonanlds’. There IS a taco place … nobody could have possibly ‘planned’ this, at least, not a competent person.
Every suburbia si built around ’strips’ like this and they are all the same.
Suburbia is an experiment in the ‘auto- friendly’ way of life. It is beginning to hollow out right now and this has little to do with energy. The credit system that enabled suburbia (and urban development) for the past fifty years is broken, ruined. The exurbs are being vacated now; these were the flimsiest and the least desireable. When these are emptied out, the closer- in suburbs will follow. Then will follow the next ring and the next. Out of the remainder will evolve some nice cities and towns. The suburbs that survive will be based on subsistence and small-cash-flow agriculture, not ‘yuppie jobs’ where people send emails back and forth.
In most poor parts of the world, cities are where the rich live and the poor struggle in suburbs. This is the future as our country becomes poorer. Our country is becoming poorer because of untrammeled immigration and ‘telecommuting’ … er, outsourcing. Capital flight is starting to happen, too.
This is the real issue with suburbia, not fuel use or autos. We are simply not as wealthy as we would wish ourselves to be. Our ‘wealth’ is actually debt, we must either repay it or default. Right this second, it is fifty-fifty; with default having a razor edge.
Suburbs, the 21st century slum.
:)
— Posted by steve from virginia
More from the Freakonomics blog:
ReplyDeleteAugust 13th,
2008
6:58 pm
Sad to say, Kunstler is the closest to the truth.
The looming energy crisis means more than the end of ‘happy motoring’. Power outages will increase to the point of making most cheap oil -era housing [both in suburban mcmansions and in urban apartments] unbearable summer [unless you have a basement?] and winter [unless you have south facing windows?] death traps for millions. I’d bet on the suburban dwellers that are lucky enough to have both.
Unless they are mortgaged:
The economic liquidity crisis will eventually mean worse-than -depression -era job losses. City and suburban homeowners won’t be worrying about driving versus telecommuting versus walk/biking to city or suburban employment. They’ll be worried about the bank taking the house/apartment. [In fact the banks will ensure Kunstler’s scenario. Suburban mortgagees won’t be allowed to make other suburbia-centered arrangements.]
And the tax base and government bond selling will dry up, ending the fantasy about mass transit saving the day. Look for infrastructure failures also in water, sewage, fire & ambulance, and road maintenance. After a while you can’t drive or bike on unmaintained roads.
Our self-centered politicians and business ‘leaders’ have guaranteed that our future is not what it used to be. If you are under age thirty living in city or suburb, invest in a good pair of shoes and some camping gear. Because nobody in power is doing what it takes to avert the coming meltdown.
— Posted by urbangardener