Author: Joel Kotkin

Cross-posted at NewGeography.

In the next two years, America’s large cities will face the greatest existential crisis in a generation. Municipal bonds are in the tank, having just suffered the worst quarterly performance in more than 16 years, a sign of flagging interest in urban debt.

Things may get worse. The website Business Insider calculates that as many as 16 major cities — including New York, Los Angeles, Chicago and San Francisco — could face bankruptcy in the next year without major revenue increases or drastic budget cuts. JPMorgan Chase’s Jamie Dimon notes that there have already been six municipal bankruptcies and predicts that we “will see more.”

Big cities face particularly steep challenges. Many, notes the Manhattan Institute’s Steve Malanga, have extraordinarily generous compensation systems for their public employees. New York City, for example, owes nearly $65 billion in municipal debt, as well as a remarkable $122 billion for unfunded pension obligations.  President Barack Obama’s hometown of Chicago has it even worse: Its total public pension liability adds up to roughly $42,000 per household.

Cross-posted at NewGeography.

Jerry Brown’s no-frills inauguration yesterday as California governor will make headlines, but the meager celebration also marks the restoration of one of the country’s most illustrious political families. Save the Kennedys of Massachusetts no clan has dominated the political life of a major state in modern times than the Browns of California. A member of this old California Irish clan has been in statewide office for most of the past half century; by the end of Jerry Brown’s new term, his third, the family will have inhabited the California chief executive office for a remarkable two full decades since 1958.

Cross-posted at NewGeography.

In his headier and hunkier days, Arnold Schwarzenegger spoke boldly about how “failure is not an option.” This kind of bravado worked well in the gym–and in a remarkable career that saw an inarticulate Austrian body-builder rise to the apex of Hollywood and California politics.

But Schwarzenegger’s soon-to-be-ended seven-year reign as California’s governor can be best described in just that one simple world: failure.  It has been so bad that one even looks forward to having a pro, the eccentric Machiavellian master, Jerry Brown, replace him.

Schwarzenegger never grew beyond the role of a clueless political narcissist. As the state sank into an ever deeper fiscal crisis, he continued to expend his energy on the grandiose and beyond the point: establishing a Californian policy for combating climate change, boosting an unaffordable High-Speed Rail system, and even eliminating plastic bags. These may be great issues of import, but they are far less pressing than a state’s descent into insolvency.

Demography favors Democrats, as the influence of Latinos and millennials grows. Geography favors the GOP, as the fastest-growing states are solid red. A look at America’s political horizon.

In the crushing wave that flattened much of the Democratic Party last month, two left-leaning states survived not only intact but in some ways bluer than before. New York and California, long-time rivals for supremacy, may both have seen better days; but for Democrats, at least, the prospects there seem better than ever.

That these two states became such outliers from the rest of the United States reflects both changing economics and demographics. Over the past decade, New York and California underperformed in terms of job creation across a broad array of industries. Although still great repositories of wealth, their dominant metropolitan areas increasingly bifurcated between the affluent and poor. The middle class continues to ebb away for more opportune climes.

Cross-posted at NewGeography.com.

In the future, historians may likely mark the 2010 midterm elections as the end of the California era and the beginning of the Texas one. In one stunning stroke, amid a national conservative tide, California voters essentially ratified a political and regulatory regime that has left much of the state unemployed and many others looking for the exits.

Cross posted at NewGeography.com.

Two years ago I hailed Barack Obama’s election as “the triumph of the creative class.” On election day everything reversed, as middle-class Americans smacked down their putative new ruling class of highly educated urbanistas and college town denizens.

More than anything, this election marked a shift in American class dynamics. In 2008 President Obama managed to win enough middle-class, suburban voters to win an impressive victory. This year, those same voters deserted, rejecting policies more geared to the “creative class” than mainstream America.

A term coined by urban guru Richard Florida, “the creative class” also covers what David Brooks more cunningly calls “bourgeois bohemians”–socially liberal, well-educated, predominately white, upper middle-class voters. They are clustered largely in expensive urban centers, along the coasts, around universities and high-tech regions. To this base, Obama can add the welfare dependents, virtually all African-Americans, and the well-organized legions of public employees.

Cross Posted on NewGeography.com.

Given the awful state of the economy, it’s no surprise that Democrats are losing some support among Latinos. But they can still consider the ethnic group to be in their pocket. Though Latinos have not displayed the lock-step party loyalty of African-Americans, they still favor President Barack Obama by 57 percent, according to one Gallup Poll — down just 10 percentage points from his high number early in the administration.

This support is particularly unusual, given that probably no large ethnic group in America has suffered more than Latinos from the Great Recession. This is true, in large part, because Latino employment is heavily concentrated in manufacturing, and even more so in construction.

A half-million Latino workers in the construction sector — in which their share of the work force is double what it is in the broader economy — have lost their jobs since the start of the recession.

Unfortunately, the Obama stimulus plan was light on physical infrastructure. It favored Wall Street, public-sector unions and large research universities. Big winners included education and health services — in which Latinos are under-represented.

Cross-posted with Newgeography.com

The good news? Like
most rock or movie stars, there’s nothing fundamentally wrong with
California. It’s still talented, and retains great physical gifts. Our
climate, fertility and location remain without parallel. The state
remains pre-eminent in a host of critical fields from agriculture to
technology, entertainment to Pacific Rim trade.

California can come back only if it takes a 12-step program to jettison
its delusions. This requires, perhaps more than anything, a return to
adult supervision. Most legislators, in both parties, appear to be
hacks, ideologues and time-servers. This time, when the danger is even
greater, we see no such sense of urgency. Instead we have a government
that reminds one more of the brutally childish anarchy of William
Golding’s 1954 novel "Lord of the Flies."

Arnold Schwarzenegger has not turned out to be that supervision. Rather
than the "post-partisan" leader hailed by the East Coast press, he has
proven to be the political equivalent of the multi-personality Sybil.
One day he’s a tough pro-business fiscal conservative; next he’s the
Jolly Green Giant who seems determined to push the green agenda to a
point of making California ever more uncompetitive.

Since the beginnings of civilization, cities have been crucibles of
progress both for societies and individuals. A great city, wrote Rene
Descartes in the seventeenth century, represented "an inventory of the
possible," a place where people could create their own futures and lift
up their families.

What characterized great cities such as Amsterdam-and, later, places
such as London, New York , Chicago, and Tokyo-was the size of their
property-owning middle class. This was a class whose roots, for the
most part, lay in the peasantry or artisan class, and later among
industrial workers. Their ascension into the ranks of the bourgeoisie, petit or haute, epitomized the opportunities for social advancement created uniquely by cities.

In the twenty-first century-the first in which the majority of
people will live in cities-this unique link between urbanism and upward
mobility is under threat. Urban boosters still maintain that big cities
remain unique centers for social uplift, but evidence suggests this is
increasingly no longer the case.