I am just finishing reading a new book available from Collingwood's library titled The Great Reset written by Richard Florida, a leading author, economist and recognized intellectual. The book summarizes the numerous economic downturns that have taken place during the past 100+ years and the economic "resets" that take place after each one. Florida regards recessions a periods of "creative destruction" which in turn serve to create periods of innovation, invention and economic risk taking that propels economies into new periods of growth and prosperity. Amongst his many assertions, Florida claims that America's love affair with the automobile are over, with an increasing number of people choosing to live closer to where they work thus enabling them to walk, bike or take public transit to their place of employment. Further, technology and an increased number of people seeking self employment etc. will no doubt have people working increasingly fropm home. Florida asserts that charging people to use roads is the only way die hard car advocates with give up their vehicle in favour or alternate forms of transportation. This sounds familiar with the City of Toronto recently talking about toll roads an idea that Mayor Rob Ford calls "nonsense."
The Great Reset is a good read for anyone interested in obtaining insight into the causes of our past economic downturns while examining the trends that will come about as the result of our most recent recession. The U.S. economy continues to struggle and will for some time. It was an economy built on over-leveraged real estate and as Florida points out, after the depression of the 1920's and 30's, it took almost 25 years for the U.S. real estate market to return to a pre-depression level of activity. Anyone thinking about buying U.S. real estate on the pretence that it about to go up in value better think again. With a lagging economy and tens of thousands of foreclosed properties on the market, except for a few select markets, value appreciation in U.S. real estate isn't likely to happen anytime soon.
1 comment:
While he has many detractors, I agree with Florida's assertions. He also talks about the importance of culture and creativity as pillars of sustainability; a concept only now gaining acceptance.
I was just talking with folks yesterday about the US market and have to also agree with you that it is a long way from any solid recovery and I would fear, the worst may be yet to come for them. How very sad but in hindsight, not surprising.
Rick, have you read The Shock Doctrine? I'd highly recommend it.!
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