“Creative destruction at its best,” that’s what Moody’s chief economist Mark Zandi called the multi-billion dollar crisis that’s hitting US retail.
At issue is the crash and burn of US shopping malls. After two decades of boom, malls are closing all over the country. The New York Times reported in May, as many retail workers have been laid off since October as workers in the entire American coal industry -- almost 89,000.
“While painful for those in the middle of it, this is how we grow and wealth is created,” the man from Moody’s told The Times.
That’s the standard economists’ and stockbrokers’ line. Markets work magic, trends come and go, people miraculously wise up, adapt, and “the economy” comes out ahead in the end. That’s the way economists report the news.
But let’s take a closer look. The US has many more malls per head of population than any other place on earth. Each of us has 23.5 square feet of retail space, compared with 16.4 square feet in Canada and 11.1 square feet in Australia — our next closest competitors in the malls-per-person race.
With malls come paved earth, in the US over a million square miles of it, usually coated in black or gray concrete, heating, drying, and secreting waste into the soil and water beneath.
Shut an anchor store in a mall, as Sears and Macy’s and JC Penney’s have in the hundreds, and typically the whole mall empties, leaving masses of people out of work, mostly with skills like stocking and clerking that are rapidly getting automated, and whole swaths of the landscape sweating under impervious macadam. The paving leads to water run-off, more frequent flooding, increased acidity etc
Is change like this painful for those in the middle of it? You bet it is. But those human and environmental costs don’t have to be just the way things are, as per the economists’ brush-off.
Pain may be inevitable, but suffering is political: 89,000 miners have built enough power to make their layoffs costly, not just to them, but to society. Retail workers, on the other hand, are disproportionately female, of color, immigrant and older or young. They haven't built the same power as miners yet.
Do we actually, in this country, leave change to the market, by getting government out of it? No. We don’t leave business owners to bear the cost of dislocation, retraining, and pollution. We the people cover those, so-called “externality costs”, just as our taxes usually pay for the roads, electrification, and sewerage that made it possible to build the mall in the first place. We’ve decided those costs, just like the clean up won’t be born by private corporations, but the public corpus.
So do things have to be this way? You tell me. The rest of the world’s not facing this same mass of defunct, zombie malls, because, frankly, they and their governments made different decisions. Zombie malls are our problem. And Zombie economics.