NEW URBANISM. Matt brilliantly defends new urbanism from the tautological rightwing criticisms of pundits like Ross Douthat and Joel Kotkin (they argue that people move to suburbs because inner-cities are too expensive, we argue that we're well aware of that, which is why we seek to change the government incentive structure to make urban living more affordable and suburban living more expensive.)
I just want to add one area of public policy to the transportation issues Matt discusses to this debate: public schools. A major reason the middle-class flees to the suburbs is the decrepit condition of inner-city public schools. Suburban triumphalists like Douthat and Kotkin pretend that the middle-class flight to the burbs proves that everyone wants a lawn, a garage and to have to drive anywhere to buy anything. In fact, a large minority of those people would have been happy to live in an apartment and take the subway to work, but their local school district would be too under-funded and they couldn't afford private school so they reluctantly moved to the suburbs for their kids. Thus, one essential part of any plan to re-urbanize America must include an agenda to improve inner-city public schools and equalize funding between them and their suburban counterparts. You can get at this problem from a number of angles such as a federal plan to subsidize city schools or creating regional governing bodies that distribute school funding from a common pool instead of financing through unequal local property taxes. The point is that we currently incentivize moving to the suburbs in a variety of ways, and we will have to undo all of them to let the free market work its magic and re-create the urban vitality of pre-war America.