Sometimes, We Get Lucky

Public investment in infrastructure is to be a cornerstone of Bill Clinton's presidency. The hope is for short term economic stimulus, and that in the long run an improved physical plant will help overall productivity.

It's a neat idea, but it's already been done (though not quite paid for).

In the 1980's, one government program spent more money on infrastructure than the cost of the interstate highway system, more than the cost of the Marshall Plan, more than Desert Storm, more even than the New Deal of the Depression era.

For a total cost of only about $250 billion, this program resulted in the construction of over a half a trillion dollars of homes, apartments, and commercial buildings in every community in America.

Referring to this expenditure as a "program" implies rather more planning than really was the case. The whole thing was actually an accident.

The Savings and Loan Infrastructure Investment Program is still widely referred to as a disaster. Other often-used descriptions are collapse, bailout, and debacle.

Most people also think that all the money was "lost," or wound up in the pocket of some Dallas dude in a leisure suit. Or that the CIA ran off with the money, or "developers and speculators" stole it all. Or that Neil Bush is set for life.

In reality, the maximum gain to these villains was a few years of high living. Their paper winnings were tied up in the S&Ls and related developments; when the thrifts and deals went down, so did the crooked money.

So where did the lost $250 billion go?

Into buildings. Oh, there were deals on empty land, and minor flirtations with junk securities. But the real money went into brick, mortar, two-by-fours, concrete, carpets, appliances, attractive offices. Also paid for were jobs for every conceivable tradesperson and contractor. We got twice the $250 billion in buildings and jobs because of leverage: there are still loans (most now performing) on all but a few of these structures.

These buildings are in use. Tens of thousands of businesses are doing better because they are in more, larger, or better space than they could otherwise have afforded. The population of the U.S. grew by 25 million in the 1980's, and newcomers would be ill-housed, indeed, were it not for the S&L infrastructure investments.

Some of these buildings are right here in Boulder, not just in Texas and New England, or Colorado Springs. A short list of Boulder buildings variously foreclosed, worked out, or temporary wards of FDIC, FSLIC, FADA, or RTC: Sienna Square, part of Center Green, the Exeter Building, the Registry, part of Wilderness Place, Boulder Business Commons, 1002 Walnut, and Crossroads Gardens. Apartments and condominiums include Kings Ridge, Kimberly Court, Glenbrook and Glenlake.

Without the assistance of S&Ls, probably none of these buildings would have been built. All of their current tenants would be paying higher rent somewhere else, or making do in a one bedroom.

In the 1950's, as a child visiting grandparents in Oklahoma, I can remember asking my Dad what the letters "WPA" on all the sidewalks meant. He explained that in a bad time, when people needed work, the government hired them to build sidewalks, and the bridge over there, and the Federal Building downtown.

I expect that Mr. Clinton's program will be more directed than the S&L accident, and certainly hope that there will be less need than there was for the Works Progress Administration in 1934.

However, it would be nice if the city would recognize the contribution of the nearly extinct S&L industry to life and economic health in Boulder. Dignified plaques could be placed on certain buildings with the initials of the appropriate bailout agency, or original lending institution.

Lest we forget Silverado.