It is a challenge for me to speak on traffic congestion in the New York region. It is a bit presumptuous for me to do so, given the size and complexity of your transportation networks. Therefore, I will only set forth some thoughts on this subject.

I would like to begin with some basic perspectives about congestion and how it should be perceived. These are set forth in more detail in my book, STILL STUCK IN TRAFFIC.

Most people view traffic congestion as the fundamental problem of mobility. But I believe congestion is in fact the only feasible solution to our basic mobility problem.

Our society is organized so that large numbers of people have to move at the same times each day. Why? Because we want most people to be at work during the same hours so they can interact efficiently to make our economy work well. We also want children to be in school during the same hours so many can be taught by the same teachers. These structural elements of our society mean thousands of people must be moving at the same time each day. How to cope with them simultaneously is our basic mobility problem.

There are only four ways to cope with this problem without restructuring our society.

The first way to cope is to build enough roads so that everyone who wants to move at once can do so at high speed. But there are so many people involved we would have to turn each metropolitan area into one giant cement slab. That would require us to tear down thousands of structures and trees at enormous expense. And then much of this slab would stand unused most of each day. So that method is completely impractical for every metropolitan area in the world.

The second method is to charge money for driving during peak hours and set the tolls so that enough people would be kept off the roads so those who used them could drive fast. This is what economists have long recommended. If we did it, we could move more people during each peak hour than we do now.

But most Americans are against this method. If we put peak-hour tolls on all lanes in each expressway, that would force people with low incomes off roads during peak hours. That is not only unfair, but most people think they would be among those unable to drive when most convenient. So no politicians have had the guts to carry this out. We could use tolls on just a few lanes in each road - HOT LANES - but that would not end congestion.

The third way is to expand off-road public transit so it takes enough people off the roads so that those left could move rapidly. But outside of New York City, very few Americans commute by transit. Only 4.7% did so in 2000, and if we remove those in New York City, it would be 3.5%. Why so few? Too many people live in low-density settlements that cannot be efficiently served by transit.

About 75% of Americans live in densities less than 4,000 persons per square mile, compared to New York's 26,000 per square mile. Also, driving is usually faster, more convenient, more private, more comfortable, and easier to adapt to doing several errands on one trip than public transit. Expanding our small-scale transit systems to take enough people off of roads so all could travel fast in peak hours is too expensive and impractical.

The only remaining method of coping is forcing people to wait in line to use the roads during peak hours. That can be defined as traffic congestion. So that is what we have to do, and so do people in every other large metropolitan region in the world. Congestion is the only feasible solution to our basic mobility problem.

There are several other aspects of traffic congestion that you should understand.

The first one concerns the costs of congestion. When you are stuck in traffic, you think of the cost as the time and gas you are losing while not moving much. But this is misleading. The Texas Transportation Institute provides the best measures of congestion in 75 metropolitan areas, but their cost measure is erroneous. The Institute compares the time it takes to travel from A to B during peak hours with the time it takes when there is no congestion at all. They declare this difference, multiplied by the number of people driving, measures the cost of congestion. It turns out to be many billions of dollars per year, using half the hourly wage as the cost of "time lost."

This assumes all time spent in congestion is "wasted." But it is false to assume that, if only we had proper policies, you could drive as fast during peak hours as when there is no congestion. It is impossible to conceive of any arrangements that would allow us to do that. Under the best possible arrangement, we would still have some congestion in peak hours, so the time lost in that "best" congestion is not wasted but a necessary cost of living in a modern society. There is no way to estimate that "necessary cost" reliably. Yet TTI's guess that congestion costs each NY driver 50 hrs. per year - 6.25 min. per trip - is too high.

Another aspect is the a region's loss of competitiveness if it is experiencing heavy traffic congestion. Regional leaders complain to me that the congestion makes their area less competitive with other areas as a place to do business. But then I ran regressions with the rate of population gain in each region - a measure of positive growth - as the dependent variable, and many independent variables. Then I added congestion variables. The results were surprising.

When I added the TTI travel time index - a measure of congestion - to the basic growth regression, the adjusted r-squared rose sharply. That means, the more congested a region had, the faster its population grew, and vice versa.

In addition, intensity of congestion is highly correlated with regional and city density - the greater the density, the worse the congestion. But cities with high densities also have the highest economic productivity measures.

These analyses suggest that traffic congestion is a result of prosperity, not a cause of decline. This conclusion is borne out by experience in the Bay Area before and after the Internet Bubble burst in 2000. Before the bubble burst, the Bay Area was booming, and traffic congestion was the worst ever. After the bubble burst, a recession set in, and traffic congestion fell sharply.

I concluded that intense traffic congestion is a sign of regional growth and prosperity rather than a competitive handicap. I believe rising congestion is an inescapable result of living in a large, modern metropolitan area anywhere in the world. And the more prosperous a region becomes, the more likely it is to have worsening traffic congestion. People crowd in most where they most want to be.

A corollary of this conclusion is that traffic congestion is sure to get worse in most regions as they gain in population and wealth. As people's incomes rise, they want to move faster in life, so they shift to faster means of movement. That means from walking to bikes, from bikes to buses, from buses to motorcycles and motorbikes, and from them to private cars and trucks. Finally, we'll all fly!

You can see this today throughout Asia. That area has rapidly gained in wealth, and the use of cars has intensified wherever people are allowed to make their own movement choices. Only in Singapore, which is not a democracy, has the use of private vehicles been stalled by public policies that make driving costly.

One reason congestion gets worse there is that private vehicles are both built and bought within the private sector. But roads are built and run in the public sector, where collective decisions determine how many roads are built and where. In all relatively free societies, private decisions are more dynamic and volatile than public ones, and private wealth increases faster than public wealth. So China is in for huge increases in congestion as millions move to cities and get wealthier.

You should think about these aspects the next time you are stuck in traffic. You should recognize that congestion is a price we pay for having an immense range of choices about where to work, live, and visit, and for having the freedom to choose where and when we will move. That may not make you feel much better about being stuck in traffic, and it will not make the other drivers who don't realize these truths feel good either. But it is the truth. So relax and enjoy life! As I say in the last sentence of my book, learn to enjoy the time you are stuck in traffic. Get an air-conditioned car or truck with a stereo radio, a tape deck and CD player, a hands-free telephone, and commute with someone you really like!

Now let me talk about another aspect of traffic congestion that also does not seem likely to get much better in the future, though in theory it could. I am referring to the connection between transportation decisions and land-use decisions.

It is obvious to all who give the merest thought to transportation requirements in a region that they are directly related to the land uses in that region. But land-use decisions are made by relatively small and fragmented governments at the local level; whereas transportation decisions are made by larger agencies with much broader jurisdictions. These two sets of agencies are almost entirely unrelated. Even the transportation agencies in this region are fragmented among three states.

This problem is not confined to transportation. In California where I am now living for six months, high housing prices are a critical issue that has caused a shortage of affordable housing. Yet nearly every local government is opposed to the creation of more affordable housing within its borders because the majority of its voters are also homeowners. So they want to protect the values of their homes from any possibility of being reduced by permitting lower-cost housing nearby. So every local government adopts regulations that make it very difficult to build lower-cost housing. This issue is not confined to California; shortages of affordable housing exist in this region too.

In my opinion, as long as we leave all decisions about building housing entirely to local governments, we cannot overcome this problem. The same conclusion applies to urban development generally. As long as we leave all powers over what kinds of land uses are planned and built solely to local governments, we will not be able coordinate those land uses with transportation facilities.

This leads to the radical conclusion that state governments must take on active roles in influencing what kinds of housing and other land uses are adopted with their local governments. States need to adopt overall land-use planning goals and overall land-use planning procedures that their local governments must follow.

Moreover, states must create agencies to review the land-use plans that local governments develop and be sure that those plans are consistent with means of transportation being planned by regional bodies like the MPOs in each metropolitan area. That is the only way to establish rational relationships among land-use and transportation planning activities in any region.

I realize that this conclusion flies in the face of those who believe local home rule or local sovereignty are bedrock elements of American government and must not be changed. But that principle was based on life in the past when each locality was not so technologically interdependent with all the others in the same region. Those days are gone forever. Interdependence in a region in terms of housing needs, transportation needs, and economic forces is now a basic fact.

At present, each locality decides what population and development density it wants, regardless of the transportation implications, and goes ahead with that density. This is true regardless of what all the other localities around it want or do. The result is a cacophony of different transportation needs within each region. Hence the transportation agencies cannot plan for or influence land uses to be consistent with their ability to create facilities.

Few states have been willing to confront these realities. Yet only at the state level is there a broad enough territorial jurisdiction and perspective to avoid the great local parochialism of all local government decision-making. Only at the state level are the decision-makers supposed to take account of the overall impacts of all actions, not just the local impacts with some one community with relatively few residents.

That is why the quality and courage of state government leadership - especially that of the governor and his or her staff and department heads - are the single most important elements in determining whether future government decision-making will be effective, or will remain an uncoordinated chaos.

One of the central future planning issues facing our nation is whether our regions should continue to expand outward indefinitely in various forms of low-density sprawl, or change to a deliberately more spatially confined and higher-density form of growth. At present, this fundamental decision is being made through the disjointed incrementalism of fragmented individual localities, so their unrelated choices sets the overall regional result.

Another vital factor I want to discuss is related to the need for more money to pay for our future transportation needs, which was already mentioned by an earlier speaker. This raises the more general reality that we Americans are now living beyond our means because we are not willing to pay for what we are consuming. We are running a huge federal deficit and a huge international trade deficit because we will neither save enough nor tax ourselves enough to pay our own way.

This situation will get far worse soon because of enormous increases in social security and medicare spending as the Baby Boomers retire. Yet neither party is willing even to discuss how to avoid financial disaster by saving more or taxing ourselves more. In the recent election, both parties refused to talk about this for fear of offending the electorate - that is, us! But we have to stop passing enormous debts onto our children if we want to keep enjoying the mobility services we have been talking about today.

It is time that we in this room - the leaders of our society - start confronting our need to raise more money to provide the very things we are asking for more of today, and a lot of other public services we want the government to provide in the future. We will not be able to get more funds for transportation unless we face up to the need to raise a lot more money for public services generally in all parts of our society. That is part of the leadership that we must begin exerting in all of our future actions.

In summary, my conclusions may surprise you. On one hand, I don't think traffic congestion is nearly as bad as most people do; in fact, I think it is a sign of economic and other success in a region. And I recommend your getting used to it, since I believe it will get worse in the future no matter what we do, as long as we keep growing and get richer.

On the other hand, I do not think our current method of planning land-use and transportation facilities - which I believe most Americans like - is anywhere nearly the most rational and effective method we ought to have. Yet political prospects for changing it are not very promising. Yet I believe we should not quit trying to improve

And finally, I believe we cannot expect to raise more money to meet our mobility requirements without confronting our overall social need to start saving more and taxing ourselves more, rather than continuing to live off the sacrifices of foreign savers and future taxes on our own children. That thought may not be popular, but we who are leaders have to start getting it across to the entire citizenry - and soon.

Thus, I am simultaneously both an optimist and a pessimist about future regional planning, the future quality of life in our regions, and our future willingness to pay for what we ourselves consume. We have blundered through such difficulties in the past, and I hope we will continue to do so, but in a much more rational way.