In Georgia, more banks have failed than in any other state. There is a reason.
Basically, they're getting a lesson in unsustainability and market irrationality because they built far, far too many subdivisions. Too many banks never met a developer they didn't like, and threw money around without thinking of consequences. They chopped down untold square miles of forest and had the county governments subsidize millions in infrastructure to these remote settlements. They built so many houses and opened up so many lots, that they oversupplied the market and swamped demand. What happened next is that billions of dollars of supposed value just vanished, and the banks along with them. The house of cards came a-tumbilin' down.
(But remember, this is all Fannie Mae, Freddie Mac, and Barney Frank's fault....)
If a tree falls in a ghostdivision, and no one is around to hear it, does it make a sound? What is the sound of an invisible hand slapping your face?
Though it was a joy to play golf at one of these developments down on the coast back in June, in the quiet of the wilderness. It is a joy to walk past my parent's house down to the park-like area that was planned to be filled with 17 individual million dollar homes. The gate to that gated community is always open.
But I cannot enjoy those things, because I know too many people out of work or underemployed or who can't sell their houses now. I think of all the wasted space and money and time and economic dynamism that was thrown away at the altar of bad planning, easy money, and speculation.