Suburban Sprawl, another cause of economic distress
Suburban sprawl was a boon to the industrial economy stimulating consumption of just abput everything that comes of the assembly line - cars, washing machines, kitchen appliances and home electronics (all sold at the local strip mall). But as Brad DeLong points out, sprawl is not only an environmental issue, it's one of a half-dozen key factors behind the current, worsening financial mess (h/t: Alison Kemper).
The filling-up of America so that you can no longer build a detached
single-family house within half-an-hour's driving time of the interesting places
people want to be, and the consequent rise both in current location premia and
expected future location premia.
DeLong is essentially right about this. However, he and many others have gotten extremely negative about future US economic prospects. Let me butt in with my proverbial two cents. There remains tremendous productive potential in America's real economy. The strength of the is, as it has always has been, diversity and innovation. The focus on finance, resources, and
war are terribly unproductive and horribly damaging distractions. The idea that the US can secure hegemony using its military machine and financial shenanigans is an unmitigated disaster. Time to get back to the basics. But who will take us there?