On the Real Estate Bubble, Never-Ending Traffic, The Dollar & The Possibilities

So last week, two articles came out that pretty much confirmed that post-2008 is going to look a lot like post-Nixonian America. The first, which was widely reported (but not really read,) involved the current state of transportation in the country. It’s pretty crappy, all things considered. The numbers from the official report tell the story: a $78 billion dollar drain in the form of 2.9 billion gallons of fuel and 4.2 billion hours of wasted time.

Now, for a nation living on credit, that’s quite a heavy charge. Granted, it’s not the $720 million we waste per day in Iraq, but it’s a lot, no? It essentially means that we, the people, are about $80 billion dollars in debt before we go to work to try to pay off the rest of the debt (who am I kidding? Nobody is talking about absurdities like eliminating the endless samolians helping to devalue our currency!)

The other article was in Time, and it demonstrated that the real estate market implosion could very well trigger a recession. Duh. If you take a marketplace commodity like homes (which is kind of a ‘standard,’ unlike ‘internet,’ or ‘Starbucks,’) and you inflate and imagine value that’s not there…you’ll get a crash that leaves shards. Tons of agents are out of work, as well as contracters and architects and crews and flippers galore. Foreclosure is going to become a very common term as people hoping to invest and sell are going to destroy their credit AND lose their homes. Good times.

The funny thing is…nobody has put these two stories together and seen the opportunity ahead. Which is…of course, a transit-oriented infrastructure overhaul of our entire country. Think about it: the real estate bubble is the result of future speculation on the value of real estate…and in most places, nothing was really done to improve the conditions of the land: a $100,000 house in the ‘burbs in 2001 is still a $100,000 house in the ‘burbs in 2007…it’s just that somebody paid $250,000 for it. What’s the way to make that $150,000 become actual worth (instead of falling in value back to $100K?)

Transit. Offer people another method of getting around, of traveling from work to shop to home, and you’ll see the real value of property rise with improvements in the infrastructure. It’s not an accident that the most valuable and expensive real estate in the country is located in New York City: it’s a spider’s web of subways and rail cars.

Sadly, New York is one of the few places in the country to actually use mass transit…if other regions even have it. Check out this page if you don’t believe me. Now…I live in Washington DC, so we’re actually using “The Metro” here (indeed, I’ve sold my car and I’m entirely bus, train and cab reliant.) But Chicago is a HUGE city…and only about 600,000 people are using the ‘L?’ How about Miami? 5.5 million people in the urban area with only 61,000 people using the “Metrofail?” That really sucks.

So let’s have a national transit moment and really get connected here. Aside from the obvious oil price/global warming stuff associated with using trains instead of automobiles to move use forward, there’s the tangible real estate moment here: if your home is located a mile or less from a mass transit hub (which then connects you to shopping, commerce and culture,) the inflated value of your home becomes the tangible value of your home.

From a personal standpoint, I’ve lived in a car-centric city with and without one, and in a real city with and without one. In the former, it was simply awful to not have a car with no real way to get around…and it really wasn’t much better with the car for many reasons, most notably the traffic and expense of ownership. Life in a real city without a car has a few drawbacks…you need to plan more before you go out, and you need to recognize that you can’t just hop in a car and go for a joyride. But other than that…it’s been pretty damn awesome to not have a car. I’m saving about $500 a month in car payments, insurance and gas. And once I hit the Metro…I don’t have to worry about traffic at all (at least not car traffic.)

Moreover, aside from the environment, oil dependency and lost time, money and dignity in traffic, there are at least two other reasons to begin the American Transit Project. The first is this terrifying reality: the dollar’s value is in free-fall, mostly because we’ve been selling our debt to finance our debt to finance our country. We are, at some point, going to have to raise the value of the currency, and pay back all of those people/countries/etc that have been financing our credit field day.

Good thing for us, Americans are the most productive workforce on the entire planet. (I know! How damn surprising is that?) However one feels about the United States’ work week and benefits as compared to other countries, since we’re all about to have to pay off some debt (or start trading in the ‘stable’ peso,) it’s comforting that we, the people, are the most productive people around. So let’s eliminate the billions lost in oil and traffic by getting those productive citizens to work.

It’s pretty clear that America is at the edge of another great precipice in our country’s evolution. We’re aching for the New New Deal. But in this instance, we shouldn’t wait until it’s too late to begin the project to reform and remake ourselves for the 21st century. The mass transit component is just the tip of the iceberg we’re melting…imagine an America linked by high-speed trains (which…you know, can’t be flown into buildings.) Or one where ‘traffic’ is decidedly of the human variety. Imagine a drop in the obesity epidemic because people actually have to get up and walk somewhere! (Frankly, I have very little sympathy for the fat. Eat less, move more and you’ll be less fat.) Imagine how many actual ‘places’ we’ll create out of nameless, shapeless, faceless malls and parking lots. Imagine the drop in buying and financial power of the OPEC nations (and their not-so-clandestine support of terrorism.)

We’re Americans. We don’t have to imagine. Others dream…we, the people…do.

Aaron Michael Gordon is an award-winning advertising writer. Working in South Florida, Aaron has written and produced countless television, radio, print and web-based advertising. In addition, Aaron is a freelance writer and a playwright. Read other articles by Aaron Michael, or visit Aaron Michael's website.

3 comments on this article so far ...

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  1. Donald Hawkins said on October 2nd, 2007 at 10:54am #

    Good one and very true but what about the share holders wait don’t tell me sell the company’s that live in makebelieveland and buy the ones that don’t.

  2. iyamwutiam said on October 4th, 2007 at 9:55pm #

    Umm- I do understand that with dollar hegemony and controlling the most of the oil producing countries in the world give American’s a LOT of leeway in ignorig the national debt – which is now at close to 10 TRILLION by the federal government , not counting the states (who have I think close to 20 TRILLION) .

    So we invest in a transit system – is like a guy who has just taken on a million dollars of mortgage debt, earns a 100,000 a year, and is in debt by 20K a year every year for the last 5 years – no wonder everyone wants to immigrate here 🙂

    The point is the clock has started ticking thanks to Reagan. the two Bushes – and yes even Clinton – because although he never actually balanced the budget – he just devised an accounting trick where they TOOK money from the Social Security fund to make it ‘appear’ that he did (Thanks Bill – Luv U for taking away any safety net for me and my kids).

    The WAR/s are a desperate attempt to have the rest of the world continue to hold on to increasingly worthless dollars – because they need them to buy oil – because the US has made SURE – that most of the important oil producers are owned by the US military.

    I am not sure if complete oil hegemony and requiring dollars as a reserve currency will continue to be effective- because at some point – it will be more than Iran/Syria/Russia and Venezuela -who refuses to accept US dollars for oil and more importantly – at some point people may not be accepting US dollars for other things .

  3. Aaron (the writer) said on October 5th, 2007 at 7:08am #

    …and this is EXACTLY why we need to build a transit future now, while they still take our money, and to help us increase the value of our money, our work and our competitiveness abroad. I’ve read “The Trap,” and I fully understand how conservative policies have utterly decimated our economy. That’s not the point of the post.

    At some point, the oil prices are going to skyrocket, either through peak, or through deflating value of our currency…or simply because of increased competition for the oil. That doesn’t stop the need for us to get to and from things…and its a lot less expensive and easier than doing it in a car.

    One of the reasons we don’t have mass transit in this country is the perceived ‘cheapness’ of the car. That’s a massive fallacy. It costs each car owner a ton of money to buy, gas and insure their vehicles, and a ton more to tax us for highways and roads. If one factored in the increased price for goods and services that pay for free parking at the malls, etc, the true value of the car-centric culture would be made apparent.

    The reason most people don’t take transit in the United States is that it either doesn’t exist or doesn’t go anywhere you need it to go (and of course, our insane ‘subways are for poor people’ mentality.) However, in the places it does exist and does go to useful places, people use it…both saving the environment, saving some money (I save $300 per month…PER MONTH,) and getting to where they need to go without having to play in traffic.

    You changed the subject here…to the highly politicized war-for-oil context. Not that it’s not important, and not that it’s not an issue, but that’s not the subject!

    You also do what a ton of people love: complain and bitch about something without proposing a solution. It’s much easier to bitch about Reaganomics and policy descisions than it is to actually suggest an alternative. Mine is mass transit, is to attempt to build a new box to house the free market economy. Others have been progressive taxation, green building…or complete ‘survival of the fittest’ independence [i.e…NO public works, which sounds pretty damn Victorian, no?]

    What’s yours? To complain and do nothing is to be just as much a part of the problem as to continue to do the wrong thing, is it not?

    Finally, to suggest that “The WAR/s are a desperate attempt to have the rest of the world continue to hold on to increasingly worthless dollars – because they need them to buy oil – because the US has made SURE – that most of the important oil producers are owned by the US military,” seems to suggest that you want the American economy to crash hard when it does falter, instead of landing lightly and transitioning with order.

    That’s both foolish and unjust to the rest of the world. Like it or not, the current global system of economic organization makes every country and state coming up to bat at the plate a vassal of the USA. Some people like this arrangement and others don’t, but that’s the system. To crash the American economy is to crash the global economy. And that’s the reason people have been propping it up. It’s no accident that China and Japan buy most of our debt: they are incredibly dependent on our continued purchase of their goods…but the EU is no less dependent. Germany would be much less of a powerhouse if we all couldn’t afford a new VW.

    So instead of suggesting a hard and fast fall, and global hardship (well, more hardship,) why not make the economy work? The first step is infrastructure…

    …actually, the first step is to STOP bitching and actually DO something productive.