David Harvey on 2009

Reshaping Economic Geography: The World Development Report 2009

David Harvey

Dec 15 2009 4:15AM
Development and Change 40(6):1269–1277 (2009). Institute of Social Studies, The Hague. Published by Blackwell Publishing. Download article as PDF

(excerpt)

World Development Report 2009: Reshaping Economic Geography. Washington, DC: The World Bank, 2009. xvii + 383 pp. $26 paperback.

Something ominous began to happen in 2006. The rate of foreclosures in low-income areas of older US cities began to increase. Officialdom and the media took very little notice because, as had happened many years before in the early stages of the HIV/AIDS pandemic, the communities affected were low-income, mainly African-American or immigrant (Hispanics), in cities like Cleveland and Detroit that were in any case already blighted and deteriorated. It was only in mid-2007, when the foreclosure wave had spread to white middle class areas as well as to the US South (Florida in particular) and Southwest (California), where new housing tract developments, often in peripheral areas, were becoming vulnerable, that officialdom started to take notice and the mainstream press began to comment. By the end of that year, nearly 2 million people had lost their homes and estimates began to emerge that another 4 or perhaps 6 million more might be lost before it was all over. By the autumn of 2008, the phenomenon of the ‘sub-prime mortgage crisis’ had led to the demise of all the major Wall Street Investment Banks, either through change of status or through forced mergers, and the outright bankruptcy of Lehman that triggered a worldwide collapse of confidence in financial institutions. The contagion then spread outwards from banking to the major holders of mortgage debt (Fannie Mae and Freddie Mac) along with insurance giants like AIG, before hitting the rest of the economy big- time towards the end of 2008. By early 2009 the export-led industrialization model that had generated such spectacular growth in East and Southeast Asia was contracting at an alarming rate; at the same time, many icons of American capitalism, such as General Motors, were moving closer to bankruptcy....

....The so-called sub-prime foreclosure crisis was in fact an urban crisis....