WaPo
has columnists who often see the world as it is: Warren Brown in one. Another is Steven Pearlstein who appears in the Business section. Today – 14 November – Pearlstein tosses a touchdown pass in overtime with “Toward a new International Capitalism.”
For anyone interested in the 20 nation-state “summit” about to launch in the Federal District or the future of Virginia’s economy needs to understand Pearlstein’s perspective.
For EMR the most important thought is buried in the next to last paragraph:
“While product and labor markets work remarkably well when they are left open and lightly-regulated, experience has now demonstrate that a different approach needs to be taken toward financial markets, which suffer from imperfect information, and abundance of moral hazard and a tendency toward herd behavior and speculative excess.”
Wait a minute!
While those comments are on target with respect to “financial” markets what about land markets, built environment markets and infrastructure markets? Taken together these three can be called “the settlement pattern market” because they shape human settlement patterns.
No one with hands on experience in these markets could claim they do not “suffer from imperfect information, and abundance of moral hazard and a tendency toward herd behavior and speculative excess.”
Is the real estate market just a side light? Is it not the mortgage sector of this market that is driving the Global financial meltdown?
What about Autonomobiles? Are they just “products” or are they right behind “Wrong Size House in Wrong Location” as a driver of settlement pattern dysfunction?
What a huge blind spot Pearlstein has exposed! We explore this blind spot that is common among economist in The Shape of the Future.
Pearlstein provides a useful context with which come to understand the importance and topography of the complex market that most directly impacts human settlement patterns.
At the federal, state and municipal levels Agencies have done an terrible job of managing the settlement pattern market. See “The Role of Municipal Planning in the Creation of Dysfunctional Human Settlement Patterns,” 23 January 2002.
Housing and Autonomobiles have been subsidized by Agencies to jump start the economy with every recession since the Great Depression. And every time the settlement pattern has become more dysfunctional as documented by the Mobility and Access Crisis and the Affordable and Accessible Housing Crisis.
Why not evolve intelligent management of four markets: Labor, Goods and Services, Finance and Settlement Pattern? That will be important at the Global and continental scales but even more important at the Regional scale. The nation-state has a role to play but it is the Region where the rubber needs to meet the road. That has been the focus in the EU.
The folks governance practitioners that Jim Bacon calls Euro Weenies have been reluctant to harp on the dysfunctional settlement patterns in the US of A because the more sustainable patterns and densities of land use give the Euro’s a competitive advantage.
Perhaps in the context that Pearlstein outlines they will speak up over the weekend.
EMR