The Golden States War on Itself (Part 1 of 2)

Joel Kotkin
Editor of NewGeography.com and Presidential fellow in urban futures at Chapman University

Cross-posted on NewGeography.com

California has long been a destination for those seeking a better place to live. For most of its history, the state enacted sensible policies that created one of the wealthiest and most innovative economies in human history. California realized the American dream but better, fostering a huge middle class that, for the most part, owned their homes, sent their kids to public schools, and found meaningful work connected to the state’s amazingly diverse, innovative economy.

Recently, though, the dream has been evaporating. Between 2003 and 2007, California state and local government spending grew 31 percent, even as the state’s population grew just 5 percent. The overall tax burden as a percentage of state income, once middling among the states, has risen to the sixth-highest in the nation, says the Tax Foundation. Since 1990, according to an analysis by California Lutheran University, the state’s share of overall U.S. employment has dropped a remarkable 10 percent.

When the state economy has done well, it has usually been the result of asset inflation-first during the dot-com bubble of the late 1990s, and then during the housing boom, which was responsible for nearly half of all jobs created earlier in this decade.

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A New War Between The States

Joel Kotkin
Editor of NewGeography.com and Presidential fellow in urban futures at Chapman University

Cross posted with NewGeography.com

Nearly a century and
half since the United States last divided, a new "irrepressible
conflict" is brewing between the states. It revolves around the
expansion of federal power at the expense of state and local
prerogatives. It also reflects a growing economic divide, arguably more
important than the much discussed ideological one, between very
different regional economies.

This conflict could grow in the coming years, particularly as the Obama
administration seeks to impose a singular federal will against a
generally more conservative set of state governments. The likely
election of a more center-right Congress will exacerbate the problem.
We may enter a  golden age of critical court decisions over the true
extent of federal or executive power.  

Some states are already challenging the constitutionality  of  the
Obama health care program. Indiana, North Dakota, Mississippi, Nevada
and Arizona joined a suit on March 23 by Florida Attorney General Bill McCollum to overturn the
law. And Arizona’s right to make its own pre-immigration regulations
has gained support from nine other states: Texas, Alabama, Florida, Nebraska, Pennsylvania, South Carolina, South Dakota, Michigan and Virginia.

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How Obama Lost Small Business

Joel Kotkin
Editor of NewGeography.com and Presidential fellow in urban futures at Chapman University

Cross posted at NewGeography.com

Financial reform might irk Wall Street, but the president’s real
problem is with small businesses-the engine of any serious recovery.
Joel Kotkin on what he could have done differently.

The stock market, with some fits and starts, has surged since he’s
taken office. Wall Street grandees and the big banks have enjoyed
record profits. He’s pushed through a namby-pamby reform bill-which
even it’s authors acknowledge is "not perfect"-that is more a threat to
Main Street than the mega-banks. And yet why is Barack Obama losing the
business community, even among those who bankrolled his campaign?

Obama’s big problems with business did not start, and are not
deepest, among the corporate elite. Instead, the driver here has been
what you might call a bottom-up opposition. The business move against
Obama started not in the corporate suites, but among smaller
businesses. In the media, this opposition has been linked to Tea
Parties, led by people who in any case would have opposed any
Democratic administration. But the phenomenon is much broader than that.

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L.A.’s Economy Is Not Dead Yet

Joel Kotkin
Editor of NewGeography.com and Presidential fellow in urban futures at Chapman University

Cross posted at NewGeography.com

"This is the city," ran the famous introduction to the popular crime drama Dragnet.
"Los Angeles, Calif. I work here." Of course, unlike Det. Sgt. Joe
Friday, who spoke those words every episode, I am not a cop, but Los
Angeles has been my home for over 35 years.

To Sgt. Friday, L.A. was a place full of opportunities to solve
crimes, but for me Los Angeles has been an ideal barometer for the city
of the future. For the better part of the last century, Los Angeles has
been, as one architect once put it, "the original in the Xerox
machine." It largely invented the blueprint of the modern American
city: the car-oriented suburban way of life, the multi-polar metropolis
around a largely unremarkable downtown, the sprawling jumble of ethnic
and cultural enclaves of a Latin- and Asian-flavored mestizo society.

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The Worst Cities For Jobs

Joel Kotkin
Editor of NewGeography.com and Presidential fellow in urban futures at Chapman University

Cross-posted at NewGeography.com

In this least good year in decades, someone has to sit at the
bottom. For the most part, the denizens are made up of "usual suspects"
from the long-devastated rust belt region around the Great Lakes. But
as in last year’s survey, there’s also a fair-sized contingent of former hot spots that now seem to resemble something closer to black holes.

Two sectors have particularly suffered worst from the recession, according to a recent study
by the New America Foundation: construction, where employment has
dropped by nearly 25%, and manufacturing, which has suffered a 15%
decline. The decline in construction jobs has hit the Sunbelt states
hardest; the manufacturing rollback has pummeled industrial areas such
as the Great Lakes as well as large swaths of the more recently
industrialized parts of the Southeast.

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Forced March to the Cities

Joel Kotkin
Editor of NewGeography.com and Presidential fellow in urban futures at Chapman University

Cross-posted on NewGeography.com.

California is in trouble: Unemployment is over 13%, the state is broke and hundreds of thousands of people, many of them middle-class families, are streaming for the exits. But to some politicians, like Sen. Alan Lowenthal, the real challenge for California "progressives" is not to fix the economy but to reengineer the way people live.

In Lowenthal’s case the clarion call is to take steps to ban free parking. This way, the Long Beach Democrat reasons, Californians would have to give up their cars and either take the bus or walk to their local shops. "Free parking has significant social, economic and environmental costs," Lowenthal told the Los Angeles Times. "It increases congestion and greenhouse gas emissions."

Scarily, his proposal actually passed the State Senate.

One would hope that the mania for changing how people live and work could be dismissed as just local Californian lunacy. Yet across the country, and within the Obama Administration, there is a growing predilection to endorse policies that steer the bulk of new development into our already most-crowded urban areas.

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Machiavelli or Torquemada?

Joel Kotkin
Editor of NewGeography.com and Presidential fellow in urban futures at Chapman University

Cross-posted at NewGeography.com.

For more than one-third of a century Jerry Brown has proved one of the most interesting and original figures in American politics–and the 71-year-old former wunderkind might be back in office in 2010. If he indeed wins California’s gubernatorial election, the results could range from somewhat positive to positively disastrous.

Brown is a multi-faceted man, but in political terms he has a dual personality, split between two very different Catholic figures from the 15th century: Machiavelli and Tomas de Torquemada. For the sake of California, we better hope that he follows the pragmatism espoused by the Italian author more than the stern visage of the Grand Inquisitor.

Like a good Jesuit, Brown certainly can be flexible. Back in 1978, for example, he worked against Howard Jarvis’ Proposition 13, which capped real estate taxes. But once the measure was passed, Brown embraced it as his own. Indeed, he was so enthusiastic about the tax-cutting measure that Jarvis actually voted for Brown’s re-election late that same year. A month after the vote a Los Angeles Times poll revealed most Californians thought Brown actually supported 13.

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Purple Politics: Is California Moving Toward the Center?

Joel Kotkin
Editor of NewGeography.com and Presidential fellow in urban futures at Chapman University

You don’t have to be a genius, or a conservative, to recognize that California’s experiment with ultra-progressive politics has gone terribly wrong. Although much of the country has suffered during the recession, California’s decline has been particularly precipitous–and may have important political consequences.

Outside Michigan, California now suffers the highest rate of unemployment of all the major states, with a post-World War II record of 12.2%. This statistic does not really touch the depth of the pain being felt, particularly among the middle and working classes, many of whom have become discouraged and are no longer counted in the job market.

Even worse, there seems little prospect of an immediate recovery. The most recent projections by California Lutheran University suggest that next year the state’s economy will lag well behind the nation’s. Unemployment may peak at close to 14% by late 2010. Retail sales, housing and commercial building permits are not expected to rise until the following year.

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Green Jobs Can’t Save The Economy

Joel Kotkin
Editor of NewGeography.com and Presidential fellow in urban futures at Chapman University

Nothing is perhaps more pathetic than the exertions of economic developers and politicians grasping at straws, particularly during hard times. Over the past decade, we have turned from one panacea to another, from the onset of the information age to the creative class to the boom in biotech, nanotech and now the "green economy."

This latest economic fad is supported by an enormous industry comprising nonprofits, investment banks, venture capitalists and their cheerleaders in the media. Their song: that "green" jobs will rescue our still weak economy while saving the planet. Ironically, what they all fail to recognize is that the thing that would spur green jobs most is economic growth.

All told, green jobs constitute barely 700,000 positions across the country – less than 0.5% of total employment. That’s about how many jobs the economy lost in January this year. Indeed a recent study by Sam Sherraden at the center-left New America Foundation finds that, for the most part, green jobs constitute a negligible factor in employment – and will continue to do so for the foreseeable future. Policymakers, he warns, should avoid "overpromising about the jobs and investment we can expect from government spending to support the green economy."

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