The U.S. hasn’t been making much of the possibilities brought by the downturn—but most other countries have been doing even less.

Question: Why did you write “The Great Reset?” 

Richardrn Florida: When the economic crises hit in September, a rnyear-and-a-half ago, my long-time editor at the Atlantic Monthly, a rnfellow named Don Peck, called me up and said, “We want to do something rnon the crisis, can you write about how New York has been hit: The rnfinancial markets, job loss, Wall Street, and all the spillover rneffects.” And I said, “Sure,” but as soon as I looked at that, it becamern clear to me that in fact, New York wasn’t the place, ironically, that rnwas being decimated by the economic crisis. It was other parts of the rnUnited States, which I, then I wrote an essay for the Atlantic, called rn“How the Crash is Reshaping America.” And the article got a great deal rnof excitement and people said, “Why don’t you write a book on it?” With rnall that interest, I had to write a book. 

So what I decided to rndo was, in the United States, in fact, in economics or in business, we rnkind of have a good sense of where economic crises, financial crises, rnpanics, great economists have written on this, where depressions come rnfrom. The interesting part is we really don’t understand recoveries thatrn well. So what I tried to do was write a book about, not just the rnshort-term nature of recovery, about looking back historically and then rninto the future, what motivates economic recoveries? And so I looked rnback at the Great Depression, and then I looked back at the crisis rnbefore that, the long depression that was initiated in 1873. 

Whatrn I found out was something, I think, and hopefully you guys think, is rninteresting. That the way we typically think countries and cities and rncommunities escape economic crisis is either they have a wave of rntechnological innovation—this is what great economists, Joseph rnSchumpeter, wrote about. And it’s true, the 1880s and the 1930s were rnfabulously innovative at that case. The 1930s were much more innovative rnthan the 1990s or 2000s. 

We also think sometimes that governmentrn spending, Franklin Roosevelt, The New Deal; John Maynard Keynes, rnKeynesian, public spending is what gets you out of crisis. 

And rnthen we had this notion that after the Depression it was World War II rnthat saved us. When I looked at it actually—those things are very rnimportant—but what really recasts our economy or resets it or leads to rnthese great resets, are what really you can think of as a new way of rnliving and working. What saved the US or what propelled the U.S. out of rnrecession and depression in the 1940s and ‘50s and ‘60s was rnsuburbanization. And geographers, and I’m an urban planner, geographer, rnwe have a word for this, we call it a "spacial fix." This new way of rnliving and working and shaping our economic landscape propels us out of rncrisis. And so then I said, “Oh, my, it’s important that public rnpolicymakers, the president, the cabinet, the decision makers, the rncongress understands this,” and then I also wanted to look at what this rnnext great reset, so a good part of the book is looking backward, but rnthen the preponderance of the book is looking forward. What would this rnnew great reset or new special fix or new economic landscape, what wouldrn this new way of life potentially be like, looking forward? 

Question:rn Why is a crisis a terrible thing to waste? 

Richard rnFlorida: Rahm Emanuel, the president’s chief of staff, is often rnthought of as saying, you know, it’s a terrible thing to waste a crisis.rn But the quote actually comes from a fabulous economist, who actually isrn now working on cities, a fellow named Paul Romer, who was at Stanford rnUniversity and had a thing called the Charter Cities Institute, a reallyrn terrific organization. 

And the idea being that crises are timesrn when you, if a company is in crisis, an organization in crisis... but rnif a country’s economy is in crisis, you can do things that will help rnyou recover and regenerate and go past the normal. Yeah, I think we’ve rnbeen wasting the crisis. 

But, that said, most other countries rnhave been doing less. But I think, and I think we’re starting to get it rnnow, but what really got me going was that what it seemed to be doing inrn the very early stages of this crisis was we were either bailing out rnbanks, it turns out we’re going to get some of that money back, but I rnstill think it was a mistake. I still think, and I think people are rnrealizing we’re going to have to do something new and different on that rnfront and every reset has seen us reform the way our banks and financialrn institutions operate.

And the second thing that was really rntragic to me is our attempt to bail out these old industries and people rnare apologizing for that and saying, “Yeah, GM and Ford, and they all rnlook better,” but I think what’s made America great was the ability not rnto just bail out the old, but to really focus on making investments in rnthe new. And one of the big arguments in the book is, "Boy, we have to rndo that again." We can’t just bail out the past, we can’t let this rncrisis be a wasted opportunity, but it’s really interesting, you know, Irn do think now, the United States is starting to collectively get it. Andrn the recovery may or may not hold, that’s not what I’m talking about, rnand many people, Robert Schiller, and others, think it looks a little rnbit false.. and Roubini.

But I think what’s really interesting: rnmy dad, when I was kid, always told me, “Richard, when I was a young rnboy, you know, we struggled with the Depression”—my dad was eight when rnthe Depression hit, and then he joined up for the American Army when rnPearl Harbor was attacked, he was infantry soldier, he stormed the rnbeaches at Normandy—he said, “But it’s amazing how fast America re-made rnitself.” To him, it was remarkable how a country that had no war rnmobilization, military mobilization, kind of stoked up this industrial rnengine and made tanks and jeeps and ships and planes and armaments, and rnhe used to tell me, “You know, when the Germans saw that stuff coming, rnit must have just demoralized them.” When our opponents—I do think that rnwe’re starting to get this again. I live in Canada now, I love Canada, rnbut they’ve been spared this crisis. And somehow... not that times are rngreat in Canada, but they’ve been spared the crisis, somehow when a rncrisis hits the United States, it forces the country to wake up, and I rnhope—we’re still very early on in this—I hope now we’re beginning to seern the signs that our business leaders, our political leaders, our rncountry, is really waking up and beginning to rethink some of the core rnthings that we used to think of as the cornerstones of American way of rnlife, or the American dream. And I hope that book contributes to that rnongoing rethinking conversation.