Traffic is one of the terrible daily afflictions people suffer around the world. Congested sidewalks, dirt roads, and highways are common feature of any densely populated area. Every major roadway in the Norristown area gets choked full of traffic – Route 202, Main Street, Germantown Pike. These snarled intersections resemble larger entanglements that occur on the New Jersey Turnpike, US 101 in Los Angeles, and Interstate-610 in Houston. Many of the worst stoppages come from construction zones. Local reporters like NBC-10’s Jillian Mele announce the long-term projects so that commuters can make planned adjustments to their daily routines. Still, many people miss the most important impact of these traffic jams.
The Interstate Highway System cost nearly 450 billion USD to build. It was an investment in the commercial infrastructure of the United States. Perhaps even more importantly, it was the skeleton of the international consumer economy because it enabled the rapid transportation of goods and services throughout North America. The global economy could now serve the most voracious consumers with speed and efficiency. It became the story of the late twentieth century. In the last 25 years, the Eurozone, Russia, China, Japan, and Brazil have raced to develop the defining economic infrastructure for the next century. American highways are probably least valuable for their existence, and most valuable for the recurring investment they require – the roads and highways need continual maintenance. This new construction is a huge factor in employment, income stability, and wealth creation.
Institutional investment relies on this understanding of capital assets. As a senior finance manager once explained to me, people are expenses. Roads, buildings, and new technology need capital maintenance. My research team discovered that the most valuable, commercial areas of Manhattan were worth the following amounts: Barclays-Brooklyn (250 million USD); Silicon Alley [center] (290 million USD); Fashion Center (330 million USD); and Wall Street (1.2billion USD). A similar 8-block area in Jamaica, Queens, is worth approximately 88 million USD. The average area in Norristown is worth 45 million USD. These assets, like the highway system, require systemic reinvestment.
The financially stable households described over the last two weeks in this column are the foundation for local, regional, and national economic growth. By abandoning reckless spending and practicing effective saving, a family can go from a life in debt to solid, middle class, economic standing. The next step is a more aggressive investment strategy that recognizes the global asset ceiling. A million dollar nest egg is insufficient for long-term stability in the twenty-first century. Growing 5 million USD to 100 million USD to a billion USD requires as much care and attention as escaping poverty. Strong, banking relationships are essential parts of this process. The creative investor, however, watches the behavior of construction companies and commercial real estate firms. Construction, most often seen as traffic jams, signifies expansive growth. The fastest-growing commercial section of Philadelphia is University City, underwritten by the expansion plans at the University of Pennsylvania and Drexel University. Rehabilitating buildings and transforming neighborhoods is the business of global enterprise.
Racist and xenophobic policies like the Home Owners’ Loan Corporation’s guidelines have written discrimination and inequality into the core principles of economic growth. Sprawl and suburban poverty have become the result as municipalities like Norristown struggle to compete with their more prosperous (and relatively homogenous) neighbors. Household financial stability and steady growth of small enterprises are the keys to re-writing the rules of local and regional prosperity. Middle-class, professional engagement with these principles must combine public finance, private investment, and community discipline to create a wave of new business owners among the graduates ofNorristown, Methacton, MCCC, and Temple Ambler.
It is a 50 billion USD windfall for the region, and the results will be apparent before Markley Street re-opens.
Dr. Walter Greason is the Executive Director of the International Center for Metropolitan Growth and the author of Suburban Erasure: How the Suburbs Ended the Civil Rights Movement in New Jersey. His work is available on LinkedIn, Facebook, Twitter, or by email (firstname.lastname@example.org).