Getting Started

We're in the midst of a severe financial crisis and some very basic economic concepts are being debated in one of the most serious national conversations of my lifetime.

I've evolved from hearing, in Eco. 101, that the national debt is no big deal: "We owe the money to ourselves", to openly worrying how my children and grandchildren will pay (or not) the "birth tax" of over $45,000+ in publicly accumulated debt. I'm also wondering whether they've been denied the opportunity to live, as I have, in a nation of rising prospects and expectations.

I suspect when my life is over, their lives will be a bit harder and more challenging. Will foreigners want to lend us money and if not, what does this portend for America's future prosperity?

I've been involved in directing public investments toward preserving the affordable housing stock of New Bedford, Massachusetts (my home town) for nearly twenty years. By my quick summary count, it's involved well over $100,000,000 during that time. New construction and renovation have been roughly split 15%/85%...there's not much emphasis on new affordable housing construction this past generation. (More on that another time.)

I was also, in another lifetime, New Bedford's City Planner and placed a great emphasis on bolstering its "economic base" to the extent that it could be strengthened. Back in the 1970's, this "Gritty City's" base was comprised of a hefty dose of manufacturing (rubber products, textiles, electronic components, cardboard goods, marine components) as well as the extractive industries of fishing and, to a much lesser extent, extractive sand, gravel and specialized stone.

The service sector was in proportion to the needs of a small metropolitan area; retail had recently emigrated to the suburbs and no longer contributed to the downtown's stability. This trauma reverberated in local governmental circles for another generation before new and better ideas emerged (more on that later).

Government was a small but important adjunct to economic activity. The county seat is in nearby Taunton, but New Bedford has a fair share of courts and public records, making it an important local governmental center. As such, specialized legal, accounting and settlement services had a strong foothold in the old downtown.

The city also had a roving base of skilled tradesmen and laborers who plied their work at various construction sites throughout Southeastern New England. (My father was one of them, having joined the steamfitters' union in the early 1960's.)

We bolstered the base by investing in piers and bulkheads, the airport, the harbor, the rail heads and by expanding public works to service industrially zoned land. Zoning, land use and subdivision issues were of far lesser importance to our staff. Working as the planner was very basic and satisfying. Planning morphed into improving "public works"...infrastructure was an MBA/business school/financier word that I would never grow to like. The young Robert Moses introduced to me by Robert Caro was a heroic force of nature.

I'm certainly no national expert, but I think through inductive reasoning, I might be able to discuss some of the lessons I've learned and apply them to the national landscape.

At this moment, I can only think back to Galbraith and wonder what he'd say about the public vs. private debate raging in the halls of Congress. It seems that a whole generation of Americans have soured on public spending; the kernel of that idea--the preference for tax cuts first, last and always---seems to have paralyzed us at a most critical juncture.

As I write we discover that "moderate" Senators feel investing in energy efficiency in public buildings is somehow a frill? Or that investments in electronic medical record keeping and transfer not worth the expense; broadband access in rural areas not a worthy goal? Could it be that the art of public works in America has devolved into a more basic, less disciplined cold-blooded urge for bloated, uncontrollable spending symbolized by the "Big Dig"? Were the "best and the brightest" of that project over-rated and, at their core, feckless?

As I write I've not yet heard that the $5 billion for affordable housing initiatives has been scrapped. I hope it hasn't. We're already gearing up to spend an additional $3-5 million that may come our way. New construction of handicapped housing for families and individuals, repaving and repair of existing parking areas built thirty years ago, reinvesting in our electric "energy grid" and producing a "legacy" electric co-generation project(s) are among our plans. We're already hiring architects and advertising for engineers. This is a "Robert Moses moment", I keep saying.

And I'm rather upset at my colleagues who, when confronted by an opportunity to eliminate a national disinvestment in public housing, chose instead to aim low and worry about their "incapacity" to spend the funds fast enough! Public housing reportedly has a $30,000,000,000 backlog of deferred maintenance and repair nationally (In New Bedford that back-log was once over $75,000,000: today it's approximately $30,000,000 according to our latest analysis). We've been under-funded by HUD for at least a generation and while we've made some progress in improving the nation's stock of public housing, we're still dreadfully short of our goals for renewal and revitalization. And we've lost over 100,000 units in the last 15 years. As if the New York City Housing Authority ceased to exist in less than a generation: a devastating development!

In light of this, what motivates today's caretakers and fiduciaries of the nation's public housing stock to be timid? Have we not lost our credibility by failing to be bold enough to advocate for total elimination of the deferred problems? I don't know.

Nationally, there's a feeling that public housing represents up to a $200,000,000,000 investment in housing. There's also evidence to suggest that its construction or renovation generates $2 of economic activity for every $1 invested. Personally, I believe this to be low, as the secondary and tertiary affects must be followed as they ripple through a local economy. Moreover, there's scant research on the economic impact of operating public housing. The last five years have witnessed a bitter argument among practitioner and regulators over the true costs of operating a decent, safe and sanitary unit of public housing. What I see are hundreds of thousands of dollars of goods, services and supplies being acquired throughout the year; many of these purchases are in the local economy, suggesting an ongoing economic ripple affect that becomes an almost organic part of the local fisc. I want to explore what this means specifically to my city and share my findings. Maybe we can begin to understand how this reviled investment called public housing is, or can actually be a prime generator of urban or neighborhood revitalization.

Does public housing qualify as a public work? I'd have to say "yes" as it has the same basic elements of brick and mortar, wood and steel with a very utilitarian feel requiring constant attention, preventive maintenance and repair. (Wikipedia disagrees.) Many of our developments, as we call them, have lasted at least as long as 30-50 years and provide the basic human service of protection, warmth and privacy. And they are where our tenants encounter society's other public works: the sewers, water supplies, electrical and gas grids and the parking that leads ultimately to the nation's road and bridge network of mobility. Clearly, public housing is a public work, no less so than the legacy projects of the WPA, or the roads, highways, bridges and airports that dot the nation's landscape and continue to serve basic needs.

This suggests a sort of hierarchical "ranking" of public works that aid basic activities of human life. It seems that "our" end of the ranking is the upper tier, we yet refer to our housing as a foundation for living, or the manifestation of a social safety net. Perhaps we ought to revisit this and suggest quite the opposite: public housing as an apex, where a complex varietal web of "ADL's" ("activities of daily living") take place constantly.

Other public works might aid one or even two activities of daily living and we call them successful. Public housing is a rich mixture and might be the nation's most utilitarian, highest aspirational and purest manifestation of public works we can imagine. As such it deserves special and constant societal attention. But it hasn't received the attention it deserves, nor the accolades for serving its purpose. Quite the opposite.

We are its current caretakers, but generations have preceded us and many more will, hopefully, be able to use this element of the national investment in times of personal need. This is why I work.

And this is why I write Capital Idea$.