Yes, Smart Growth Caused the Mortgage Meltdown

Wendell Cox, one of the Antiplanner’s faithful allies, argues in a new paper that “smart growth exacerbated the international financial crisis.” Of course, the Antiplanner has said this at least since last December (and The Best-Laid Plans predicts such an outcome), while some of the Antiplanner’s loyal opposition remains skeptical.

Skeptics probably won’t be persuaded by Cox, simply because his arguments are similar to those previously made here. “Excessive land-use regulation,” says Cox, led to artificial housing scarcities. This drove up prices and led people who would otherwise have been able to afford a mortgage at prime rates to turn to subprime loans. Of course, the loosening of the credit market contributed, but without smart growth, we would currently have a “subprime mortgage problem” rather than a full-blown international economic crisis.

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No Wimpy Transportation Bill Next Year

Vying to become the new Don Young (he of the bridge to nowhere), House Transportation Committee chair James Oberstar promises that the next transportation reauthorization will cost $450 billion over six years. Don Young wanted to spend $350 billion in the 2005 reauthorization, but hardliners in the Bush Administration forced him to keep it to $286 billion.

“We’re not going to do a wimpy bill” like in 2005, Oberstar promised. Notably, he was not talking to transportation users, but to U.S. steel makers, and he pointedly added that, “We’re talking about a lot of steel.”

Increasing spending to $450 billion will require either about a 9-cent-per-gallon increase in the gas tax or deficit spending at a level never before contemplated in federal transportation measures. We know from previous statements that Oberstar supports at least a 5-cent increase in federal gas taxes.

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