One of the economists I enjoy listening to propounded an interesting idea last week; low interest rates not only encourage malinvestment in the economy but also take capital away from the important investments that need to be made. As I had surveyed NIRP and ZIRP and QE and NotQE I had thought of it more as a flood of money which, more or less, spread the cash out in such a way that “the good, the bad, and the ugly”, however one wants to define them, got their share of liquidity and that the next crash would wash out the bad and the ugly.
It’s nothing more than one man’s faint notion but it has informed my view of what I’m seeing in my little corner of the world quite a bit. For years and years, perhaps decades, I have wandered my neighborhood imagining what “should” be in each empty lot and parking lot and yet, not surprisingly, empty lots they remain; the tidal flows of cars filling one lot and emptying another in perfect synchronization all the while never filling more than 1/3 of the spaces. Spaces. Empty spaces too small for this and too large for that, but just the right size to sit, fester, and deaden everything that surrounds them.
Now choose your definition of malinvestment as you will; I see fresh food delivery of the Blue Apron, Hello Fresh, Splendid Spoon variety as classic examples. I’ve kept all of the insulation to complete a solar heater project involving a fairly large window space, Liz reuses the freezeable gel packs in lunch boxes and coolers. It’s been fun using special deals and such to give 13 year old Luna some independence when it’s her turn to prepare a meal and, quite honestly, their various recipe idea have expanded “the repertoire” of meals, as we call it, but I can’t imagine these things being sustainably profitable at scale for an extended period of time. Others say the same about Tesla, Uber, Lyft, WeWork…just name any one of yesterday’s favorite “market disrupters”; imagine all of the housing, the public transit, or the below ground infrastructure which could have been improved with the billions and billions of dollars that these projects have burned through.
At this festive time of year nearly all of our family traditions involve walking through our half empty hell hole of a neighborhood, except, it’s quite remarkably wonderful in its capacity to give quite a return on emotional investment even in its current state of impoverishment. Take our Christmas Eve traditions of distributing baked goods to our friends and neighbors along with hitting up our favorite Italian cafe for cappuccino and treats: We leave the house with enough fresh baked bread to deliver to the homes of nearby friends plus 3 extra loaves just in case. By the time we leave La Fiorentina, having made none of our deliveries, we need to return straight home for more bread. Luna’s former teacher, a parent from Drama Studio, two acquaintances from the world of historic preservation and we don’t have any left for a neighbor we pass as we leave Mom and Rico’s with a bottle of wine as Rico serenades Miss Luna over his sidewalk loudspeaker.
We pick up more bread, wander past some amazing structures, old and new, lose another loaf of bread to a neighbor Luna and I met at a charrette about improvements to the Apremont Triangle: “What’s happening with that?” We don’t know either. After making our appointed rounds we wander down to the skating rink at MGM where Lu takes some laps and Liz and I grab a Kahlua infused coffee and prepare to head home where we’ll sit in front of the fire and read our favorite parts of A Christmas Carol.
I read aloud this tour de force of Dickensian description:
My little chunk of horribly flawed urbanity doesn’t rise to those levels of cohesion, but it’s hard to imagine more than a handful of places in this region of 3/4 of a million people which could match it. Yet there they are; acres and acres of undeveloped and underdeveloped emptiness available at half, a third, a tenth the price of places without anything nearing the resonance of this moldering casque of the region.