With the stock market seesawing wildly in response to cryptic statements by Federal Reserve officials about the future of the central bank's massive bailout program, we are reminded daily that the financial crisis never found resolution but instead gravitated for a time to the Fed's balance sheet.
One impact of the Fed's blank check policy for finance is that the bankster paradigm of economic growth remains intact. In recent months, the big banks have been able to write their own regulatory rules and fend off calls for accountability.
The New Deal teaches us that overcoming a financial crisis is not about giving the keys to the kingdom to the speculator class, as we have done, but instead requires investing heavily in public infrastructure and other productive sectors.
While the austerity frame adopted by politicians from both parties at the behest of corporate-funded think-tanks impedes conversation on a national infrastructure program, a vital movement dedicated to building smart cities with quality public transportation, green affordable housing and cleaner waterways is gaining steam at the regional level. New rail systems are under construction in places like Cincinnati, Denver and Phoenix. Cities as varied as Nashville and Portland are implementing regional sustainability plans to limit sprawl and build vital neighborhoods.
Cleveland, thanks to the Evergreen network of co-operatives, recently saw the opening of the largest urban farm in the country, producing 3 million heads of lettuce annually. And in Baltimore, Milwaukee and Buffalo, community-based partnerships have led to a dramatic expansion of the green building retrofit sector.
Among the smart city sectors, urban water conservation projects, including the removal of industrial-age contaminants, the reduction of raw sewage flowing into lakes and rivers and the expansion of public access along waterways, rank high both in terms of the potential to create jobs and the transformative impact that clean water and publicly accessible waterfronts can have on city life.
The Blue Economy is particularly ascendant in older industrial cities along the Great Lakes, where miles of formerly industrialized waterfront are being returned to recreational access and large investments in combating combined sewer overflow (CSO), which results when storm water overwhelms antiquated sewer systems, have begun to improve water quality. In many cities, CSO-related investment was initially prompted by EPA enforcement actions related to the Clean Water Act. From Milwaukee to Buffalo, Blue Economy movement leaders are making the case for ensuring that the greatest freshwater resource in the world is restored as a public good for generations to come.
According to a report by Green for All, sewer overflows contaminate U.S. waters with 860 billion gallons of untreated sewage annually, an amount that could fill 1.3 million Olympic size swimming pools. The EPA estimates the need for investment of $188.4 billion to manage stormwater and preserve water quality. More than 1.9 million jobs could be created in the process.
Given the scale of the urban infrastructure market, finance is angling to get a piece of the action with new infrastructure finance products and a range of public-private partnerships. But, as a Brookings Institution report showed, the devil is in the details. While private capital may add value to some infrastructure projects, it has also led to waste, excessive costs to taxpayers and loss of local control, most famously in the case of the Chicago parking meter privatization debacle. Rahm Emanuel's plan to launch an infrastructure trust in Chicago has been met with widespread skepticism as experts question whether the new partnership structures are any more cost-effective than tried-and-true municipal bonds.
Strategic investment by cities and municipal sewer authorities in green infrastructure measures such as rain gardens and bioswales, which can be installed on vacant urban land to divert massive quantities of rainwater from the sewer drain, can create jobs accessible to urban residents, forge new community-based partnerships. and measurably impact water quality. Rain gardens, when designed with aesthetics in mind, can also beautify neighborhoods with vast swathes of vacant land and expand public access to green space.
In Philadelphia, city agencies and community organizations have partnered on an integrated approach to combating sewer overflow which includes a range of next generation infrastructure investments. The city's "Green City, Clean Waters" plan will result in $1.6 billion in green infrastructure and approximately 15,000 jobs.
In Pittsburgh, the 3 Rivers Wet Weather Demonstration Project, led by a nonprofit organization that pioneered community-based strategies to reduce sewer overflow, is employing a range of interventions, including porous pavement, rain gardens, green roofs and improved tree maintenance.
Here in Buffalo, Buffalo Niagara Riverkeeper has already generated more than $50 million in Blue Economy activity through major investments in river dredging, stormwater management and waterfront access projects. A new Blue Economy Initiative, which seeks to drive economic revitalization through the restoration of the health and integrity of the Great Lakes watershed, envisions expanded cooperation on green infrastructure projects in neighborhoods through partnership with community organizations like the Center for Employment Opportunities and PUSH, which I direct, and the Buffalo Sewer Authority.
And in Syracuse, a training program aimed at developing career pathways for new refugee residents in the Blue Economy has been established at the state university. Students learn the basics of rain garden installation and sustainable landscaping in 10-week modules and then do internships with private firms in the growing Blue Economy sector.
Green infrastructure has also jump-started several growing social enterprises with roots in low-income communities. In Portland, OR the nonprofit Verde advocates for increased investment in green infrastructure and has founded nursery and landscaping companies employing low-income residents, who work on a range of urban water management projects.
Intelligent green infrastructure planning can save money for sewer authorities by reducing the volume of water treated at municipal facilities. With projected savings on the balance sheet, sewer authorities can float bonds to pay for needed improvements.
By investing in tangible projects that conserve precious water resources, create jobs in low-income neighborhoods, and make cities more livable, the green infrastructure movement, offers a powerful alternative to austerity economics and speculation-based growth models. With its strong roots in communities devastated by deindustrialization and its triple-bottom-line impacts, the movement could help awaken policymakers and elected officials to the reality that relying on financial speculation for growth does not offer a viable path to prosperity.