November May Determine Regional Winners
As the recovery begins, albeit fitfully, where can we expect growth
in jobs, incomes and, most importantly, middle class opportunities? In
the US there are two emerging "new" economies, one largely promoted by
the Administration and the other more grounded in longer-term market
and demographic forces.
The November election and its subsequent massive expansion of
federal power may have determined which regions win the post-bust
economy, but the stakes in November are particularly acute for some
prime beneficiaries of what could be called the Obama economy: the
education lobby, Silicon Valley venture firms, Wall Street, urban land
interests and the public sector. All backers of his 2008 campaign,
these groups have either reaped significant benefits from the stimulus
or have used it to bolster themselves from the worst impact of the
recession.
In a sense the Obama policies are designed to overturn the pattern
of economic dispersion -towards the exurbs, the south, the
intermountain West, and more recently the Plains – that has defined the
last half century. The biggest winner, in regional terms, is the
Washington area. Even as local governments cut back, the federal
establishment continues to swell. Federal employment, excluding the
postal service, remains roughly 200,000 larger than in 2008.
America’s 21st-Century Business Model
Cross-posted with NewGeography.com
Current attitudes aren’t too kind to the old American way of doing
business. In our globalized economy, the most enthusiastically touted
approaches are those adopted by centralized, state-dominated economies
such as China, Brazil and Russia as well as–somewhat less
oppressively–those of the major E.U. states.
Yet the U.S. may well be constructing the best sustainable business
model for the 21st Century. It is an approach built on the country’s
greatest enduring strength–an innovative business culture driven
increasingly by a diverse pool of immigrants.
This model, of course, lacks the kind of centralized control beloved
by many pundits. Yet its virtues are also missing from statist-oriented
European or East Asian capitalism. These other regions’ systems may be
more disciplined in their thinking, but they do not draw as well on the
diversity of human experience and connections that drive America’s
post-racial economy.
Urban Legends: Why Suburbs, Not Dense Cities, are the Future
Cross posted on NewGeography.com
The human world is
fast becoming an urban world — and according to many, the faster that
happens and the bigger the cities get, the better off we all will be.
The old suburban model, with families enjoying their own space in
detached houses, is increasingly behind us; we’re heading toward
heavier reliance on public transit, greater density, and far less
personal space.
Global cities, even colossal ones like Mumbai and
Mexico City, represent our cosmopolitan future, we’re now told; they
will be nerve centers of international commerce and technological
innovation just like the great metropolises of the past — only with
the Internet and smart phones.
According to Columbia University’s Saskia Sassen, megacities will
inevitably occupy what Vladimir Lenin called the "commanding heights"
of the global economy, though instead of making things they’ll
apparently be specializing in high-end "producer services" —
advertising, law, accounting, and so forth — for worldwide clients.
Other scholars, such as Harvard University’s Edward Glaeser, envision
universities helping to power the new "skilled city," where high wages
and social amenities attract enough talent to enable even higher-cost
urban meccas to compete.
The Golden State’s War on Itself (Part 2 of 2)
Cross-posted on NewGeography.com. Read Part 1 here.
The second engine that could supposedly keep California humming was
the so-called green economy. Michael Grunwald recently wrote in Time,
for example, that venture capital, high tech, and, above all, "green"
technology were already laying the foundation of a miraculous economic
turnaround in California.
Though there are certainly opportunities in
new energy-saving technologies, this is an enthusiasm that requires
some serious curbing. One recent study hailing the new industry found
that California was creating some 10,000 green jobs annually before the
recession. But that won’t heal a state that has lost 700,000 jobs since
then.
The Golden States War on Itself (Part 1 of 2)
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.
A New War Between The States
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.
How Obama Lost Small Business
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.
L.A.’s Economy Is Not Dead Yet
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.
The Worst Cities For Jobs
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.
Forced March to the Cities
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.