In the wake of the recession, cities and suburbs are being knit into giant city-states, with millions of people and billions -- even trillions -- of dollars of business

A year ago, I published a book that argued that, for all the privations and dislocations of the economic crisis, it also provides us with the opportunity to make fundamental changes in our economy and society. I characterized these changes as a Great Reset, and I found similar moments in American history when new economic orders arose from the ashes of old ones, ushering in new eras of growth and prosperity.

Since writing the book, I've been able to see for myself what I've long suspected: that Great Resets unfold not from top-down policies and programs but gradually, as millions upon millions of people respond to challenging economic times by changing the ways that they live. The economic crisis has taught us the hard way that we need to live within our means, to forestall debt; it's made us understand that we don't have to define ourselves in terms of material goods, that we can achieve a more meaningful and sustainable way of life.

Watching the Reset unfold, it's been fascinating to see how quickly the once great divide between our cities and suburbs has been shrinking. The most desirable neighborhoods look increasingly similar, no matter where they are. The best urban neighborhoods are safe and have good schools; they are becoming strollervilles and toddler-towns, filled with families as well as singles. The best suburban neighborhoods have great commercial districts with restaurants, movie theaters, and all manner of amenities.

As many of our cities and older inner-ring suburbs are being renovated and revitalized, the great challenge of our time -- far bigger than urban renewal was in decades past -- is to remake our many shoddily-built, far-off exurbs into denser, more- connected, more livable communities. Some of them -- the ones that were built as much to keep the building boom going as because people needed to live in them -- might be fated to shrink back into small towns or disappear altogether.

In my travels across the country, I've heard from people who are in the process of resetting their lives. Young people just out of college tell me that they don't want their parents' suburban lifestyle; they'd prefer to find an affordable rental apartment in a city they love where economic opportunities are better. They don't want to go into hock buying a big house and a big car, just so they can endure a long commute.

Young parents tell me they've had to defer their dream of buying a bigger house with a backyard, either because they can't afford it or don't qualify for a mortgage. Instead, they've decided to stay put and renovate their city apartment or fix up their small house in an older, closer-in suburb. Empty nesters tell me they've decided to sell the big house, sometimes for a lot less than they could have gotten for it a few years ago, and buy a smaller condo or house closer to their kids in the city.

These shifts, brought on by economic exigencies, are already adding up to a gradual but enduring change in the way we live -- one that will prove every bit as consequential as the move towards suburban living was in the 1950s and 1960s.

Gradually, our great complexes of cities and suburbs are being knit into mega-regions -- giant city-states that are home to millions upon millions of people and generate billions and in some cases trillions of dollars of economic activity. Driving this is not just our individual choices and preferences but the very logic of economic development. Geographic concentration and clustering speeds the transmission of new ideas, increases the underlying productivity of people and firms, and generates powerful economies of scale.

This new economic landscape and emerging way of life won't come together completely on their own. All of this must be underpinned and supported by new kinds of infrastructure -- from more efficient living patterns to more effective, less car-dependent transportation systems that run the gamut from more bicycle paths and sidewalks to improved mass transit and high speed rail. Just as government programs and policies underpinned the rise of suburbia in the 1950s and 1960s (think of all those subsidized highways), new public policies toward rental and affordable housing, alternative transport, and more sustainable energy will help encourage this shift today.

But while individual Americans have already begun resetting their lives, our political and business leaders continue to look backwards, wasting precious time and resources on futile attempts to resuscitate the same dysfunctional system of banks, sprawl, and inefficient and energy-wasting ways of life that brought about the crisis in the first place. .

According to Bureau of Labor Statistics projections, the US economy remains on track to generate 15 million new jobs over the next decade. 6.8 million of them will be high-skill, high-wage work in the knowledge, professional, and technical sectors of the economy. The other half will be much lower-paying, low-skill work in the routine service sector of the economy. More than 45 percent of the US workforce -- 60 million workers -- already do this kind of work, and they earn just half of what factory workers make -- and only a third of what professional, technical and knowledge workers are paid.

If we're serious about creating good, family-supporting jobs, we have no choice but to upgrade those service jobs and turn them into adequate replacements for the blue-collar jobs that have been wiped out. We did it 70 or 80 years ago when we transformed manufacturing jobs from low-paid, dangerous work into high-paid jobs; we must do it again.

Henry Ford long ago said that we needed to pay factory workers better so they could buy the cars they made. If each of us pays just a little more for services, we can ensure millions of service workers a family wage and spur the broad-based demand that will help the economy recover. Don't the people who prepare our food, take care of our kids and aging parents, and maintain our homes deserve decent wages? Can't we spend a little more to ensure a more equitable and prosperous society? It's not a matter of charity. Motivated workers are more productive; they're also more creative and innovative.

Easy credit, limited bailouts, and targeted stimulus have simply created the illusion of growth, without beginning to address the structural nature of the crisis. And much of what the Tea Partiers have been calling for -- slashing taxes and cutting critical public investments -- will only make things worse. Our leaders just aren't getting it; their mental models are so determined by the old order that they can't acknowledge that it has already passed.

We need to break with the past and engage with the future that is already upon us. There is no stopping this ongoing Great Reset. But left to its own devices it will unfold in a stop-and-start, trial-and- error fashion over the course of the next two, maybe three decades. My hope is that we can move more quickly down the path to real recovery, minimizing the pain and suffering faced by too many, and ushering in a new era of sustainable prosperity for everyone.

This article was adapted from the preface The Great Reset. The paperback edition is available July 5th. You can get a copy online here.