New Geography

Author: Joel Kotkin

  • Our Father, Who Art In The Apple Store: The Decline Of Christmas And The Looming Tech Nightmare

    In the past, this season was marked by a greater interest in divinity, the family hearth and the joy of children. Increasingly our society has been turning away from such simple human pleasures, replacing them with those of technology.

    Despite the annual holiday pageantry, in the West religion is on the decline, along with our society’s emphasis on human relationships. Atheism seems to be getting stronger, estimated at around 13 percent worldwide but much higher in such countries as Japan, Germany and China. “The world is going secular,” claims author Nigel Barber. “Nothing short of an ice age can stop it.”

    In contrast, the religion of technology is gaining adherents. In a poll in the U.K., about as many said they believe Google to have their best interests at heart as God. Religious disbelief has been rising particularly among U.S. millennials, a group that, according to Pew, largely eschews traditional religion and embraces technology as a primary value. Some 26 percent profess no religious affiliation, twice the level of their boomer parents; they are twice as irreligious at their age as any previous generation.

    For millennials, religion is increasingly a matter of personalized “self knowledge” that need not be pursued in church, or as part of their community. Computer scientist Allen Downey has done interesting research that shows that Internet use is a primary driver of declining interest in religion.

    Not surprisingly, religious organizations are in a digital panic. In recent months, some have bemoaned how companies like Google or Apple have replaced churches as creators of the ultimate values. Apple, in particular, notes Brett Robinson, author of “Appletopia,” has adherents who back their products with “fanatical fervor.” Tech products feed into “a celebration of the self” that contradicts most religious teachings, he argues. Even the protocols for using our phones or computers emulate those found in religious services, writes Robinson.

    Our growing digital fixation has also impacted human relationships. Social media has some great positives, particularly for helping potentially isolated groups such as the mentally ill  and seniors. And it is an effective way to keep in touch with far-flung friends and relatives. However, as social media consultant Jay Baer notes, avid users of social media tend to have lots of “friends” but the fewest personal ties.

    As a people, we are becoming digitally detached, argues De Paul professor Paul Booth. Many particularly millennials, increasingly prefer “mediated communication” over face-to-face interaction, also preferring to text than talk on the phone. “Friends,” as defined by Facebook, has little to do with friendship as understood down the centuries: people to talk to and spend time with in a social setting.

    Perhaps most disturbing, reliance on social media tends to work against forming intimate ties, which rest on such real-world factors as proximity and shared experiences, says Rachna Jain, a psychologist who specializes in marriage and divorce. Many millennials have delayed marriage and family formation, in part due to the economy, but it’s possible that technology-enabled distancing is also playing a role.

    Technology As Religion

    Technology’s emergence as a secular religion has been with us since the 19th century. Saint Simon and later Marx identified it as capable of replacing God in creating an earthly paradise. Industrial entrepreneurs like Thomas Edison also believed they were laying the foundation for a new millennium; he prophesied electricity would reduce the need for sleep, help improve the senses and promote the equality of women.

    This notion grew after World War II, which launched a period of rapid technological changes — jet aircraft, missile technology and nuclear power. The growing interest in technology, predicted Daniel Bell in his landmark 1973 The Coming of Post-Industrial Society, would foster the “preeminence of the professional and technical class.” This emergent new “priesthood of power” would eventually overturn the traditional hierarchies and industries and, in process, create the rational “ordering of mass society.”

    Despite the threat of thermonuclear war, the 1950s and 1960s were suffused with a spirit of technological optimism. In his classic 1967 book “The Technological Society,” French philosopher Jacques Ellul drew a contemporary picture of the world of 2000, complete with regular shuttle service to the moon, synthetic foods and an end to hunger and poverty.

    Tech Dreams, Tech Nightmares

    Today technological change may be slower, but its effects on society are more profound, and threatening basic social institutions. Like Marx or Saint Simon, the new tech “gods,” epitomized by Steve Jobs, have pointedly dismissed religion and held themselves as the ultimate “disrupters” of the existing civilization. Techno-evangelist Nicholas Negroponte has even suggested that “digital technology” could turn into “a natural force drawing people into greater world harmony.”

    So we continue to make the mistake of conflating technology, which does bring many blessings, with the improvement of society. As computer industry pioneer Willis Ware warned almost four decades ago, new communication technology, rather than simply making information more universally available, could also increase the “intensive and personal surveillance” of individuals. This has resulted not so much in the creation of a surveillance state” as whatDavid Lyons has referred to as a “surveillance society,” where those who control information include not only state players but certain well-positioned private ones.

    Far from being liberating and diffusing wealth, the emerging information economy serves “a new tiny class of people,” the tech visionary Jaron Lanier argues, particularly at companies like Google, Facebook and Apple that are repeatedly accused of abusing private information. As Google’s Eric Schmidt put it: “We know where you are. We know where you’ve been. We can more or less know what you’re thinking about.”

    In the coming years Google and other digital heavyweights hope to involve themselves ever more in our most mundane activities, whether by monitoring our physical functions or figuring out ways to profit from our inner-most thoughts. Yet the vision at places like Google goes well beyond the mundane, aspiring to powers once believed to be the province of divinities.

    Entrepreneur and inventor Ray Kurzweil, now the director of engineering at Google, sees information technology developing to the point that our biological intelligence will be merged, even subsumed, into that of intelligent machines. Freed from the constraints of life and death by imprinting our brain patterns on software, he predicts, “the entire universe will become saturated by our intelligence.”

    This “transhumanist” vision reflects Kurzweil’s almost obsessive concern with aging – he takes around 150 vitamin supplements a day in hopes of delaying his own demise. This cannot be dismissed as the whimsies of a lone inventor – Kurzweil is an enormously influential figure at the pinnacle of one of the world’s most important technology and media companies, one that is exploring “biological computing,” which seeks to duplicate the brain’s functions in machine language.

    Such research could have powerful and positive impacts, but the insistence on seeing information technology as the solution to basic human problems rests on a new vision that we are machines that can be infinitely improved. This suggests the growth of an ever greater chasm, according to Kurzweil, between those who refuse or are incapable of cybernetically augmenting themselves — what he labels MOSHs or Mostly Original Substrate Humans — and those who do. “Humans who do not utilize such implants are unable to meaningfully participate in dialogues with those who do,” writes Kurzweil.

    Bill Joy, a founder of Sun Microsystems, warns that some in Silicon Valley envision a society where human labor is largely replaced by automatons operated by Bell’s “ priests of the machine.” The current decline in labor force participation, particularly among the young, could just be the beginning. All one can hope, Joy suggests, is that they serve as “good shepherds to the rest of the human race.” But under any circumstance, he predicts, the mass of humanity “will have been reduced to the status of domestic animals.”

    Whatever the advantages that we can derive from technology, this vision of the future violates the basic moral principles of both civil society and religious faith. Before we plug ourselves in for eternity, we might consider, this holiday season, to take a non-digital path to reviving our soils, whether by reading your bible, enjoying Shakespeare, tossing a football with your kids, or simply taking a walk in the woods. Technology might help shape what humanity can do, but it cannot make us any more human. That’s up to us.

    This piece first appeared at Forbes.

    Joel Kotkin is executive editor of NewGeography.com and Roger Hobbs Distinguished Fellow in Urban Studies at Chapman University, and a member of the editorial board of the Orange County Register. His newest book, The New Class Conflict is now available at Amazon and Telos Press. He is author of The City: A Global History and The Next Hundred Million: America in 2050. His most recent study, The Rise of Postfamilialism, has been widely discussed and distributed internationally. He lives in Los Angeles, CA.

    Steve Jobs photo by Justdoit709 (Own work) [CC BY-SA 3.0], via Wikimedia Commons

  • What will our Latino Future Look Like?

    President Obama’s amnesty edict, likely to be the first of other such measures, all but guarantees California’s increasingly Latino future. But, sadly, for all the celebration among progressives, the media, Democratic politicans and in the Latino political community, there has been precious little consideration about the future of the newly legalized immigrants, as well as future generations of Latinos, in the state.

    Although some publications, notably the New York Times, regard California as something of a model for the integration of the undocumented, the reality on the ground is far less attractive. Even as Latinos, now the state’s largest ethnic group, gain greater influence culturally and politically, many are falling into a kind of racial caste system.

    California has roughly one-third of the country’s undocumented immigrants and, in some locales – notably, Los Angeles – they constitute roughly one in 10 residents – or some 1 million people – 85 percent of them from either Mexico or Central America. As of now, these residents, longtimers and recent arrivals, pose, among other things, a potential challenge to local governments trying to serve a new base of largely poor, and generally poorly educated, migrants.

    Today, public agencies in Los Angeles County, notes former county supervisor Pete Schabarum, are facing a “an already impossible fiscal dilemma” and now will need to spend an additional $190 million, without hope of federal compensation, on the newly legalized population. The stress on other key institutions, such as schools and hospitals, will also grow, particularly if more foreign nationals, suspecting the likelihood of amnesty, are encouraged to come here.

    In the past, we could have looked with confidence at this new population as a net plus. But that may no longer be so much the case, given the current economic direction of California. It has become increasingly difficult in the state for many industries – such as agriculture, manufacturing, construction and logistics – that traditionally have employed Latino immigrants. In contrast, the one industry favored by Sacramento’s political class – the technology firms synonymous with Silicon Valley – has not engendered much progress for Latinos, whose incomes there have dropped while those of whites and Asians have grown.

    Perhaps most alarming, few among California’s Latino politicians have a strategy to reverse these trends. Rising Latino figures, such as newly elected Senate President Pro Tem Kevin de Leon, have chosen to link themselves with gentry liberals, such as billionaire environmentalist Tom Steyer. They have embraced the gentry’s regulatory and energy agenda – cap and trade, subsidies for “renewable” energy and hostility toward suburban housing – which conflicts directly with the economic interests of Latino voters, particularly those benefiting from President Obama’s immigration directives.

    This stance may make de Leon the toast of the town in San Francisco, Marin County, Malibu and other white gentry havens. He recently celebrated his elevation to the Senate’s top post with an opulent party at the Disney Concert Hall in Downtown Los Angeles, an event derided by the liberal Sacramento Beeas an “ostentatious display” and a “special interests ball.” Not so worthy of celebration are the economic conditions facing many of his constituents. Large swaths of his district, such as East Los Angeles, suffer high rates of unemployment.

    One key here has been the decline of manufacturing – down 34 percent statewide the past 15 years – as Latino politicians seem to barely shrug as employers flee ever-higher taxes, regulatory constraints and higher electricity prices. Manufacturing, which accounts for a larger share than any other sector of the region’s economic output, has lost more than 300,000 jobs in the Los Angeles area since 2001.

    Another key blue-collar sector, construction, is up 12 percent, but is far from recovering the 40 percent of jobs it lost statewide during the recession.

    These losses have taken away many of the traditional avenues for upward mobility. As a result, some predominately Latino communities, from the Central Valley to Compton, suffer double-digit unemployment. Overall, the Latino unemployment in California is above 10 percent while the rate in pro-industry Texas is under 7 percent. Latinos in California are also considerably less likely to own their own business than their Lone Star State counterparts.

    Long-term California Latinos’ prospects are most undermined by the ailing state education system, whose reform is generally opposed by the Latino political class. The new state Senate leader, like many other Latino politicians, spent much of their careers working for, and then reaping rich support from, public-sector unions, notably the all-powerful California Teachers Association. Not surprising, de Leon proudly backed the successful CTA candidate in the recent race for state superintendent of schools.

    The unions and politicians may have gained by this association, but not so a great many Latino youngsters. A recent article in the National Journalnoted Latinos in the same San Jose neighborhood that produced Cesar Chavez still suffer terrible schools, with one-third of third-graders unable even to read. Amazingly, California’s Latinos are even underperforming their Texas counterparts, despite lower school funding in the Lone Star State.

    This belies the common assumption among progressives, here and elsewhere, that the Golden State is an exemplar of social progress while the Lone Star State is a reactionary backwater that is toxic for both immigrants covered by President Obama’s decrees and legal Latino residents. Compared with the Los Angeles Unified School District, the Houston Independent School District, faced with similar demographics, has twice won the Broad Education Prize and, in relative terms, seems a model of flexibility and innovation.

    Equally important, the newcomers face daunting challenges entering the property-owning middle class. Due in part to regulatory restraints, less than two in five Latinos in Los Angeles or San Francisco own their home, compared with large majorities of Latino homeowners in places like Phoenix and Houston.

    It now takes more than 12 times the median Latino household income to buy a home in the Bay Area and more than nine times in the Los Angeles-Orange County area. In contrast, the multiple is roughly three in metropolitan areas such as Dallas-Fort Worth, Houston, Phoenix and Atlanta.

    The rise of housing prices in the state, as well as meager income gains, have managed to reduce the percentage of Latinos getting new mortgages from almost half in 2006 to 22 percent today.

    Given these trends, one would assume that politicians representing California Latinos would favor policies that would spur growth in housing as well as other blue-collar industries. Yet, as these industries have faded, identity politics, instead, have ascended, particularly since the passage of Proposition 187 in 1994, which aimed to limit access to public services by illegal immigrants. Stanford political scientist Gary Segura suggests that upwardly California Latino voters were shifting toward the GOP until Republican Gov. Pete Wilson’s immigrant-bashing Prop. 187 campaign all but obliterated this trajectory.

    This explains how California increasingly diverges both from the experience of other immigrants over the past century, and what is occurring today in some other states. In Georgia, Kansas and Nevada, as well as Texas, upward of 40 percent of Latino voters this year supported GOP candidates, compared with more than 70 percent lockstep support for Democrats in California.

    The problem here is not party per se – traditional Democrats historically combined liberal views with a strong pro-growth economic orientation. But we now see a shift within California Latino politicians away from support for broad-based growth and toward a greater reliance on redistribution and increased dependence on government. This approach may hurt their constituents but conveniently aligns with the preferences of wealthy white liberals in Marin County, San Francisco and other gentry locales, whose interest is to restrain economic growth.

    One has to wonder, in my case as a non-Latino Californian here for over four decades, where this will all lead. One consequence could be to increase the state’s already large population living in poverty and boost California’s share of welfare recipients, roughly a third of the national total. The potential long term for a dangerous cocktail of racial and class resentment is not hard to envision.

    Latino voters, and all Californians, must demand something better. A good start would be a greater emphasis on broad-based economic growth, which could provide a ladder to the middle class for more Latinos, including the undocumented. But this requires political leaders who are focused less on appealing to San Francisco billionaires and more on the interests of ordinary Californians, many of them Latino. This could turn the presidential directive on immigration into something that builds a better future rather than becoming just another measure to institutionalize further poverty and patterns of dependence.

    This piece first appeared at the Orange County Register.

    Joel Kotkin is executive editor of NewGeography.com and Roger Hobbs Distinguished Fellow in Urban Studies at Chapman University, and a member of the editorial board of the Orange County Register. His newest book, The New Class Conflict is now available at Amazon and Telos Press. He is author of The City: A Global History and The Next Hundred Million: America in 2050. His most recent study, The Rise of Postfamilialism, has been widely discussed and distributed internationally. He lives in Los Angeles, CA.

    Photo by chadlewis76

  • Time to Bring Back the Truman Democrats

    Once giants walked this earth, and some of them were Democrats. In sharp contrast to the thin gruel that passes for leadership today, the old party of the people, with all its flaws, shaped much of the modern world, and usually for the better. Think of Franklin Roosevelt or Harry Truman, John Kennedy, or California’s Pat Brown, politicians who believed in American greatness, economic growth, and upward mobility.

    For more than 40 years, the Democratic Party has drifted far from this tradition, its policies increasingly a blend of racial and gender politics combined with a fashionable brand of environmental fanaticism. No longer does it constitute a reliable, middle class-based alternative to the corporatist mindset of the Republicans. “Today’s Democrats have no more in common with Franklin Roosevelt, Harry Truman, John F. Kennedy and Lyndon Johnson ,” notes author Michael Lind, “than today’s Republicans have in common with Abraham Lincoln or Dwight Eisenhower. “

    To regain their relevancy, Democrats need to go back to their evolutionary roots. Their clear priorities: faster economic growth and promoting upward mobility for the middle and working classes. All other issues—racial, feminine, even environmental—need to fit around this central objective. In survey after survey, economic issues such as unemployment, the economy, and the federal budget top the list of concerns while affirmative action, gay rights, and climate change barely register.

    From Obama Back to Jackson

    Democrats do not need to become Republican lite, as was true among some New Democrats (I was a fellow with the Progressive Policy Institute, the New Democrats think tank). Democrats need to respond aggressively to the crony capitalism practiced by many Republicans, particularly regarding Wall Street. But they can’t do that if all they offer in its place are policies that service instead their own cronies not only in finance, but technology and media as well.

    Right now it’s hard to make the case that the Democrats have a strategy to improve the economic prospects of the middle class. The New York Times’s Tom Edsall notes notes that after six years of Obama, voters stubbornly hold unto pessimistic views about the future. Of course, declining or stagnant wage growth started well before this president took office. Nevetheless, Democratic rule has not only failed to halt the trend, but appears to have accelerated it.

    Not surprisingly, many middle and working class voters, particularly whites, have deserted the Democrats in increasing numbers. This November, notes Gallup, support for Obama among white college graduates dropped to 41 percent while his support among those without degrees fell to a pathetic 27 percent.

    Critically, in 2014 this erosion began to extend to millennials; white millennials, particularly those without BAs (the vast majority), went Republican. This is a generation that, according to the Census, is both somewhat more educated than previous ones but far more likely to live in poverty.

    Although likely to reject Republican views on social issues, such as gay marriage, millennials may not become “permanently blue,” as imagined by some boomer progressives. Faced with the consequences of slow, and poorly distributed growth, they are already less likely to see themselves as environmentalists than the national average and particularly the generally better off boomers.

    Some progressives suggest that working class voters, particularly whites, can be lured back to the party by expanding the welfare state even further. But such an approach works against the traditional pride in self-sufficiency espoused by many in the American middle class. The old Jacksonians challenged financial power—then the Bank of the United States—but also worked to expand the economy, opening new lands to settlement, and encouraging home ownership and grassroots entrepreneurship.

    The Key Issue: Energy and Climate Change

    It would be difficult to find an issue with less resonance with the vast majority of voters than climate change. Concern over the environment has dropped since the Recession, notes Gallup, with climate change ranking near the bottom in voter concerns. In this sense, the emergence of Tom Steyer and other gentry yokes the party to a message with limited appeal once you get a few miles inland from either coast.

    This does not reflect lack of interest in a better environment. Instead, it is a rejection of the Clerisy’s “solutions” to environmental challenges—such as banning suburbs, hiking electricity rates, and opposing new pipelines. These policies don’t hurt the super-rich; they hurt middle and working class voters. Lower oil prices, a product of fracking and other new drilling technologies, represents a boon to the dispersed, largely suburban electorate. But at the same time cheap gas offends progressive writers like the New Yorker’s Michael Specter, who argues that lower oil prices simply reinforces our addiction to an “industrial form of crack.”

    In the next decade, the Obama administration’s bizarrely naïve “agreement” with China threatens to further weaken middle class interests. The South China Morning Post suggests westerners should be skeptical about prospects that China will sacrifice economic growth and, even more important, political stability in favor of planetary salvation. As one Canadian commentator put it, the Chinese deal constituted “a promise in a rented tuxedo” by a country that will cross “its coal fired heart” while the U.S. and the E.U. essentially disarm their economies with ever more draconian regulation.

    Sadly, this choice between growth and climate change may not be necessary. The development of new drilling techniques has sparked a shift from coal fired power to natural gas that has allowed the U.S. to reduce its emissions faster than any major country, far more, indeed, than the self-righteous Europeans whose expensive and inefficient green policies have left them burning more coal.

    Expanding, Not Constraining Geography

    The rapid shrinking of the party’s geographic base is one clear legacy of the Obama years. Energy policy has been key here. Democratic losses have been heavy in those parts of the country that either produce fossil fuels, such as Louisiana, Texas, Colorado, Utah, and Montana, or those, notably in the upper Midwest, that depend on cheap fossil fuels to drive their still critical manufacturing sectors.

    The losses of Democrats in states like Ohio, Michigan, and Wisconsin are arguably the most critical since these are traditionally swing states. The Steyer strategy of wiping out fossil fuels and raising energy costs might appeal to the denizens of climatically mild and highly affluent San Francisco. But people in a hardscrabble factory town in less temperate central Ohio or in greater Detroit , or even interior California, are less well-positioned to indulge green purity.

    And how about the South? As recently as 2008, Democrats held one-third of the South’s Senate seats. Now it’s down to three, two in Virginia and the other in Florida. Convinced the region is lost permanently, some suggest suggest that Democrats “dump Dixie” so as not to have to appeal to voters in what one progressive writer denounced as a “fetid place.”

    But the South accounts for almost 40 percent of the nation’s population, an impossibly large region to simply write off. But even progressives who want to take back the South, such as the New Republic’s Michael Cooper seek to build a coalition of poor whites and minorities in alliance with the growing numbers of graduate-educated professionals. This does not really address the aspirational reasons why so many Americans have been migrating to this region.

    In many ways these attitudes reflect the increasingly urban-centric focus of the party. It diverges dramatically from the approach of traditional Democrats, from Roosevelt and Truman to Clinton, himself the former governor of a poor Southern state, who looked favorably on dispersing growth, particularly to the traditionally poor South, intermountain West and Great Plains, as well to the suburban interior.

    Hostility to the non-urban regions includes a detestation of suburbia. Progressive theorists, like Salon’s Benjamin Ross, like to pin the detested “suburban sprawl” on Ronald Reagan, ignoring the basic fact that suburban growth was fostered for a half century by a Democratic controlled Congress, and was also favored by Democrats from Truman through Clinton. No surprise then that aside from wealthy coastal suburbs, the Democratic base has shrunk to the urban cores and college towns.

    Infrastructure for Growth

    Senator Charles Schumer’s retro perspective about the folly of enacting Obamacare in 2009 revealed much. Schumer rightly pointed out that Obamacare, for all the positives associated with expanding health care coverage, helped a relatively small part of the electorate, as well as the insurance companies.

    A far better move in the early years of Obama’s first term would have been to implement a updated version of the New Deal’s Works Progress Administration. A new WPA would have helped create jobs and provided some training to underemployed or unemployed youth. It could have left a legacy of improved roads, bridges, expanding port facilities, and affordable (usually bus) mass transit options that would appeal to many Americans.

    In contrast to Obamacare, a neo-WPA would have been a difficult target for the GOP. It likely would have appealed to many business people on Main Street, few of whom are free-market fundamentalists. But moves to push such a program elicited opposition from critical parts of the party base, including feminists, who feared that public works would disproportionately help “burly men.”

    Greens also were less than enthusiastic about new massive public works. Environmentalists today generally prefer to limit roads and block new water projects, even in parched California. So the Obama stimulus will be forever linked to insider deals with green energy epitomized by the Solyndra fiasco and massive loans to politically allied venture capitalists.

    Class Not Race

    The growing opposition towards Hillary Clinton’s ascension has one thing right: Democrats should not be seen as the second party of Wall Street. Obama’s recovery and Fed policy have, as Democrats like Elizabeth Warren like to point out, often favored the financial oligarchs, although their support for Democrats makes them far less keen on taking on the Silicon Valley Venture Capitalists, who have also profited under Obama. High valuations—even absurd ones—enrich the insiders who found companies, underwriters, and merger mavens, but those valuations have done precious little for the vast majority of Americans.

    Faced with the loss of middle class voters, the administration seems determined to double down on its current coalition. So to whom do they turn to determine their future political direction? Not to a successful elected official from a swing district or a Main Street businessperson but to Google’s Eric Schmidt, an oligopolist of the first order from the party’s new heartland around the San Francisco Bay Area.

    Given their cozy ties to Wall Street and oligarchs like Schmidt, the Democrats have failed to push class warfare as an issue, preferring instead to play the racial trump card. They allow issues to be dominated by such flawed emissaries as the detestable Al Sharpton, whose job seems to be the stoking of African-American ire. Similarly, the president’s executive order on undocumented residents follows this approach, by trying to appeal to Latino racial interests.

    Yet race politics has limited appeal to whites, and ultimately may not guarantee keeping many minority voters in check. After all, minorities have fared poorly under Obama: a recent Pew study found minority incomes dropped 9 percent between 2010 and 2013, while only 1 percent among whites. Hispanics, notes a recent Pew survey economic issues easily trump immigration. Texas Republicans, for example, got close to half the vote among Latinos in that state, and similar results were found in Kansas. Even in places as blue-leaning as Colorado, Latino support for pro-growth Republicans has been growing. And Asians also showed a shift toward the GOP in the mid-terms.

    Embrace Exceptionalism

    Historically Democrats, like Republicans, believed in American Exceptionalism. This sometimes spills over into messianic overkill—for example, under Woodrow Wilson and George W. Bush—but overall the ideal of a uniquely American national profile has been embraced by Democrats from Jefferson and Jackson to Roosevelt, Truman and, arguably the last of the breed, Bill Clinton.

    President Obama, in contrast, has openly rejected this notion, perhaps reflecting the world view of academics and much of the financial world that sees American Exceptionalism as some sort of patriotic nonsense. In the past the old Democrats saw the country’s broad resources and continental scale as primary sources of national greatness. Early conservationists did not oppose the expansion of industry, mining, or growth as inimical to progressive ideals; instead, they sought to restrain the abuses of the capitalist classes in order to prevent gouging as well as to preserve resources and open space for future generations.

    In sharp contrast to their modern “heirs,” both Progressives and New Dealers were builders of dams, roads, and electrical power systems. They embraced the notion of a growing America, whose economy could be expanded for the benefit of the majority.

    Is There a Messenger For Dino-Democrats?

    Hillary of the many houses, $200,000 speaking gigs, Wall Street linkages, and her aging, wealthy glitterati backers does not exactly appear the ideal messenger for a neo-Jacksonian revival. Rather than the “shot and a beer” Hillary who came back to almost save her 2008 effort, she now reflects gentry views on both economics and climate change in ways that do not significantly diverge from President Obama.

    With dissatisfaction with the economic status quo strong among many traditional Democrats, it’s likely populist candidates could emerge. Some imagine Senator Elizabeth Warren as the charismatic leader of a progressive version of the “tea party.” She has been a strong and vocal critic of Wall Street, which is to her credit, but her base lies not in middle class voters but among academia and wealthy Boston suburbs. On environmental issues, she seeks to out-green Hillary, something that might not appeal to voters in Ohio, Indiana, and a host of other key states.

    Bernie Sanders, the self-described socialist, represents an emotionally appealing alternative to the endlessly grifting Clintons and the law professor Warren. But Sanders, a representative of the Northeastern vacation state of Vermont, also opposes fossil fuel development. This approach would greatly limit his appeal beyond the Northeast and the west coast. It’s hard to envision him campaigning for votes at Great Lakes factories that depend on coal power, or appealing to construction workers who would love to see the Keystone and other pipelines built.

    Right now, former Virginia Senator James Webb may prove the best vehicle for dino-Democratic ideas. A self-conscious inheritor of the Jacksonian tradition, Webb epitomizes the individualist and populist values of his Scotch-Irish forebears. With a strong military background, he also appeals to nationalists who inhabit the South, Appalachia, and the non-coastal parts of the West. Whether his candidacy takes off is still an open question, but the ideas and spirit he embodies could revive a Democratic tradition that, although now submerged, might provide the party with a way out of its current morass. 

    This piece first appeared at The Daily Beast.

    Joel Kotkin is executive editor of NewGeography.com and Roger Hobbs Distinguished Fellow in Urban Studies at Chapman University, and a member of the editorial board of the Orange County Register. His newest book, The New Class Conflict is now available at Amazon and Telos Press. He is author of The City: A Global History and The Next Hundred Million: America in 2050. His most recent study, The Rise of Postfamilialism, has been widely discussed and distributed internationally. He lives in Los Angeles, CA.

  • Can Abe Tackle The Real Reason For Japan’s Decline? (Procreation)

    Much has been made of Japan’s latest relapse into recession. For the most part, economists have focused on the efficacy of the once much-ballyhooed “Abenomics,” the stimulus and structural reform program that was seen as the key to turning around the island nation’s torpid economy.

    While Prime Minister Shinzo Abe’s ruling coalition won a sweeping electoral victory this weekend, giving him a mandate to continue his economic policies, it is increasingly clear that the epicenter of Japan’s crisis is not its Parliament, or the factory floor, but in the bedroom. Japan has been on a procreation holiday for almost a generation now, with one of the lowest fertility rates on the planet. The damage may prove impossible to overcome.

    Japan’s working-age population (15-64) peaked in 1995, while the United States’ has grown 21% since then. The projections for Japan are alarming: its working-age population will drop from 79 million today to less than 52 million in 2050, according to the Stanford Institute on Longevity.

    Since hitting a peak of 128 million in 2010, Japan’s overall population has dropped three years in a row.

    These trends all but guarantee the long-term decline of the Japanese economy and its society. In comparison, competitors such as the United States and India are projected to continue to grow their workforces over the long term. China’s workforce, which grew rapidly over the last couple of decades, recently began to decline, as early as 2010 by one estimate, due to its one-child policy.

    Some countries, like Germany or Singapore, have tried to make up for low fertility through immigration, something that remains all but unthinkable in congenitally insular Japan. Short-term importation of workers has occurred through a “foreign trainee” program, but it has stirred controversy, with some immigrant workers claiming they are being cheated and abused.

    Aging is becoming a bigger issue, particularly due to the country’s average lifespan of 83 years, which is among the longest in the world. Perhaps if everyone would have the good sense, as one Japanese official put it, to “hurry up and die,” the shrinkage would be manageable.

    But old Japanese don’t seem to be lining up to commit suicide. So by 2020, adult diapers are projected to outsell the infant kind. By 2040, the country will have more people over 80 than under 15, according to U.N. projections. By 2060, the number of Japanese is expected to fall from 127 million today to about 87 million, of whom almost 40% will be 65 or older.

    The fiscal costs are obvious. Over the past few decades, aging has helped transform once thrifty Japan into the country with the high-income world’s highest level of government debt. The demands for more help for the elderly, notably medical care, combined with a shrinking, increasingly occasional workforce, is one reason why Abe was forced to push for a sales tax increase, one of the things that retarded Japan’s recovery.

    These trends have been developing for decades. Sociologist Muriel Jolivet noted in her 1997 work Japan: The Childless Society that many Japanese women had taken a break from motherhood, in part due to male reluctance to take responsibility for raising children. This trend accelerated in the next decade. By 2010, a third of Japanese women entering their 30s were single, as were roughly one in five of those entering their 40s. That’s roughly eight times the percentage in 1960, and twice that of 2000. By 2030, according to sociologist Mika Toyota, almost one in three Japanese males may be unmarried by age 50.

    Many young Japanese are not only eschewing marriage but a highly publicized sliver now show little sexual interest in each other. The percentage of sexually active female university students, according to the Japanese Association for Sex Education, has fallen from a high of 60% in 2005 to 47% in 2012.

    Much has been made of a subset of young Japanese men labeled as “herbivores,” who appear more interested in comics, computer games and socializing through the Internet than in seeking out the opposite sex.  And since many only work part-time, they tend to stay longer with their parents, further slowing economic growth.

    No society can thrive under such an environment, certainly not in the long run. If “animal spirits” drive entrepreneurial growth — as it did unmistakably in Japan both before and after the Second World War — those are clearly dissipating now. As prices have dropped and opportunities shriveled, fewer Japanese are interested in starting or growing families.

    In the longer run, one has to wonder what kind of country Japan may become over time, something hardly irrelevant not only due to the country’s importance, but also since other key Asian countries appear to be following the demographic path it is blazing, including including South Korea, Taiwan, Singapore and China. In China, the U.S. Census Bureau estimates, the population will peak in 2026, and will then age faster than any country in the world besides Japan.

    Of course, projecting population and fertility rates over the long run is difficult, and there remains a large margin for error. For example, the U.N. projects Japan’s 2100 population at 91 million, while Japan’s National Institute of Population and Social Security Research projects a population of 48 million, nearly one-half lower.

    Japan’s grim demography is also leading to tragic ends for some elderly. With fewer children to take care of elderly parents, there has been a rising incidence of what the Japanese call kodokushi, or “lonely deaths” among the aged, unmarried, and childless. Given the current trends, this can only become more commonplace over time.

    The Japanese “model” of low fertility still has its defenders, including those in the U.S. who point out that it allows, in the short term, for greater per capita wealth and lower carbon emissions. But most Japanese recognize that the profound morbidity of the demographic trends; 87% see an aging population as a major problem, according to a recent Pew study, compared to 57% in China and only 26% in the U.S.

    And to be sure, Japan remains a supremely civilized country, with low crime rates, a brilliant artisanal tradition, and exemplary infrastructure.But none of this can likely survive under these demographic conditions. Not surprisingly, the  Japanese government, like its counterparts in western Europe and Singapore, has attempted tomake child-rearing easier by providing cash payments for families and expanding child care.

    Yet to date, such compensation has been unable to make up for high housing costs and weaker familial bonds. As Toru Suzuki, senior researcher at the National Institute of Population and Society Security Research, put it in The Japan Times, “Under the social and economic systems of developed countries, the cost of a child outweighs the child’s usefulness.”

    Although the United States has not embarked on such a dismal course, in large part due to a greater land mass, lower housing prices and immigration, for us, too, the twin forces of lower fertility and the retirement of baby boomers is slowing our labor force growth rate.

    Ideally American fertility rates will recover with the economy, allowing us to get back to a more sustainable demography that would at least replace older people with a steady supply of young adults. What we don’t want to do is emulate Japan. There’s a price to pay for avoiding the bedroom in favor of video games, not only for individuals but societies as well.

    This piece first appeared at Forbes.com.

    Joel Kotkin is executive editor of NewGeography.com and Roger Hobbs Distinguished Fellow in Urban Studies at Chapman University, and a member of the editorial board of the Orange County Register. His newest book, The New Class Conflict is now available at Amazon and Telos Press. He is author of The City: A Global History and The Next Hundred Million: America in 2050. His most recent study, The Rise of Postfamilialism, has been widely discussed and distributed internationally. He lives in Los Angeles, CA.

    Photo by Kevin Poh: Night Life @ Shinjuku, Tokyo

  • California Business Needs to Go Small or Go Home

    Here’s the bitter reality for business in much of California: there’s no cavalry riding to rescue you from the state’s regulatory and tax vise. The voters in California have spoken, and with a definitive, distinctive twist, turned against any suggestion of reform and confirmed the continued domination of the state by public employee unions, environmental activists and their crony capitalist allies.

    You are on your own, Southern California businesses, and can count on very little help, and, likely, much mischief, from Sacramento and various lower orders of government. To find a way out of stubbornly high unemployment and anemic income growth, the Southland will need to find a novel way to restart its economic engine based almost entirely on its grass-roots business, its creative savvy and entrepreneurial culture.

    This shift poses a great challenge, both for California’s interior counties and parts of the coastal region. Unlike Silicon Valley and its hip twin, San Francisco, no one is investing much in the Southland. Among the nation’s largest metropolitan areas, the Los Angeles region has become a corporate stepchild, trailing in new office construction not only to world-beaters like Houston, but also New York, the Bay Area and even slower-growing Philadelphia or Chicago. In fact, although the second largest metro area in the country, L.A.-Orange County does not even make the top 10 regions for new building.

    Nor can we expect much in the way of residential housing growth, particularly single-family homes, as the state’s planners continue their jihad against anything smacking of suburban expansion. Traditional industries like aerospace, manufacturing and logistics face enormous regulatory barriers, ruinous taxation levels and huge energy price increases that will slow any potential growth, and could lead to yet more departures by existing large firms. Virtually all the region’s former major established aerospace companies have relocated their headquarters elsewhere, which hurts efforts to get them to expand or maintain facilities here.

    Despite all this, the Southland is not without considerable assets. Perhaps most promising is the region’s status as the nation’s No. 1 producer of engineers – almost 3,000 annually. This raw material is now being somewhat squandered, with as many as 70 percent of graduates leaving the area to find work.

    But there’s no reason for unmitigated despair; overall, Los Angeles-Orange has increased its ranks of new educated workers ages 25-34 since 2011 as much as ballyhooed New York, San Francisco and much more than Portland, Ore. For its part, the Inland Empire ranked fourth among 52 large metropolitan areas in terms of increased presence of bachelor’s degree-holders in this age group, adding almost 19,000 college-educated people since 2011.

    There’s also a case to be made for Southern California as an emerging tech hub. As venture capitalist Mark Shuster points out, the region ranks third, just behind the Bay Area and New York, for its percentage of the nation’s tech startups, and is now the fastest-growing. The overall tech base, which includes aerospace, is still the largest in the country, with more than 360,000 employees. As tech moves from basic infrastructure to application, Shuster argues, the Southland’s time may come.

    Despite producing MySpace, the region may have lost out in the social media wars, but shifts in tech trends could turn out to be far more advantageous. This relative optimism is remarkable given the losses in so many key engineering-driven industries over recent decades, from electronics and energy to aerospace.

    Southern California’s technology community could well benefit from such things as growing demand for content among tech firms, as well as attempts to reboot space exploration. Indeed, investor Peter Thiel recently suggested that the region’s technology industry is the most “underestimated” in the nation.

    “I’d definitely be short New York and long L.A.,” Thiel told the Los Angeles Times, citing both commercial space pioneer SpaceX and Oculus, the Irvine-based maker of virtual-reality headsets.

    The case for a grass-roots rebound of tech in Southern California depends heavily on one key asset – the presence of the nation’s largest community of people in the arts. Roughly half of these workers are self-employed, according to the economic forecasting firm EMSI.

    The Silicon Valley may be ideal as a place to nurture digitial technologies, but “nerds” as a whole are not cultural mavens or trend-seekers. They are better at transmitting messages than putting something worthwhile in them. In contrast, Southern California excels in filling messages with product.

    The large existing base of television, movie and commercial producers has nurtured skills that are sought worldwide. Yet at the same time, with the studio system clearly in decline, as large productions go elsewhere, digital players such as Netflix, Amazon, Apple, as well as Los Angeles-based Hulu, have become more important. Indeed, when my Chapman students, many of them film majors, discuss their futures, it is increasingly these intermediaries, not the studios, that they identify as critical to a successful career.

    This suggests a very different picture of the Southland’s industry than the one normally associated with large companies, studios and deep concentrations of talent. In the future, more production will be done by individuals, sometimes working out of their homes, scattered across the region. According to Kauffman Foundation research, the L.A. area already has the second-most entrepreneurs per 100 people in the U.S., just slightly behind the Bay Area. By necessity, Southern California’s economy will become more entrepreneurial and grass-roots; even as we have been losing large companies, our percentage growth in self-employed is among the highest in the country.

    Not surprisingly, this activity appears concentrated not in the traditional bailiwicks in the San Fernando Valley, or in the hyped Downtown-adjacent areas, but along the coastal strip from Santa Monica to Irvine that some promoters have christened “the tech coast.” This epitomizes the growing role of young individuals and startups – as opposed to veteran engineers – in shaping the Southland’s emerging tech economy.

    This pattern, however, is not just restrictive to digital entertainment. Southern California’s network of tested aerospace engineers – which, at 5,000 people, is second only to Seattle’s – is one reason why companies like SpaceX have located here. In an economy that relies more and more on individual expertise, this is a critical advantage.

    One powerful caveat: We are not likely to see much blue-collar spinoffs of tech here, due largely to high land, regulatory and energy costs. Space X, for example, may have its key brain power in Southern California, but has chosen to construct its spaceport in lower-cost, business-friendly Texas. Another aerospace firm, Firefly Systems, this year decamped entirely for Texas, moving its headquarters to the Austin area and rocket engine facilities to rural Burnett County.

    This pattern suggests that many of our emerging firms may remain somewhat limited in scope and largely focused on high-end functions, which reduces the positive impact for the region’s struggling local middle class and working class.

    But the new grass-roots economy does not apply only to tech. Los Angeles has seen a huge rise in the number of people working from home, a percentage that since 1980 has more than tripled even as transit’s ridership share has dropped. Small, home-based businesses are common not only in such fields as real estate, but also in business consulting and even trade.

    These home-based businesses, and small ones tucked into strip malls or small industrial centers – for example, in food processing – represent the last, best hope for a revived Southland economy. Our corporate community seems destined to continue shrinking, but this does not necessarily mean that the overall economy has to follow suit. Unable to rely on local officials to make things better, our best chance lies with relying on the entrepreneurial spirit and creativity of our people – the very thing that made us such an economic beacon in decades past.

    This piece first appeared at the Orange County Register.

    Joel Kotkin is executive editor of NewGeography.com and Roger Hobbs Distinguished Fellow in Urban Studies at Chapman University, and a member of the editorial board of the Orange County Register. His newest book, The New Class Conflict is now available at Amazon and Telos Press. He is author of The City: A Global History and The Next Hundred Million: America in 2050. His most recent study, The Rise of Postfamilialism, has been widely discussed and distributed internationally. He lives in Los Angeles, CA.

    Self employment photo by BigStockPhoto.com.

  • The Curious Comeback Of U.S. Downtowns

    Perhaps nothing better illustrates the notion of urban revival in America than the comeback of many downtown districts. Yet if these areas have recovered some of their vigor, they are doing so in a manner that hardly suggests a return to their glory days in the first half of the 20th Century.

    Instead what’s emerging is a very different conceptualization of downtown, as a residential alternative that appeals to the young and childless couples, and that is not so much a dominant economic hub, but one of numerous poles in the metropolitan archipelago, usually with an outsized presence of financial institutions, government offices and business service firms.

    The good news: after an era of population declines, these areas are growing again: From 2000 to 2010, the downtown cores of the nation’s 51 metropolitan areas with populations over a milliongained slightly over 200,000 residents, or 1.3% of all the growth in the nation’s major metropolitan areas. However, 80% of that growth took place in just six cities — New York, Chicago, Philadelphia, Washington, D.C., Boston and San Francisco. In 18 of the 51 downtowns populations declined. Meanwhile, the population in the outer fringe of the 51 metro areas, 10 miles beyond downtown, grew by some 15 million.

    These trends appear to have continued into the initial stages of the current economy recovery. In a survey of 2011-2012 patterns, Trulia found a similar pattern of higher growth near the center, but even stronger growth rates on the fringes. As we have noted since 2000, the slowest growth took place in the close-in neighborhoods adjacent to the urban core.

    The better numbers reflect then not a mass “back to the city” movement but an uptick in the market appeal of city centers. And it’s unlikely that the old urban cores will ever come close to recovering the economic preeminence they once enjoyed. In American Community Survey data from 2006-08, the central business district of the New York metro area was the only one across the country that accounted for over 20% of regional employment; downtown’s share topped 10% in just six other metro areas: Chicago, Boston, Washington D.C., Richmond, Chicago and Hartford. This contrasts with the kind of employment dominance seen in the 1950s when Manhattan’s commercial core accounted for more than 35% of employment in the New York area. Of course, the decline is a natural outgrowth of the massive physical expansion of the New York area during the past half century, a pattern seen in other major regions.

    From 2000 to 2010, the share of jobs dropped somewhat in the nation’s biggest urban cores, but employment declined far more in the inner ring suburbs, according to an analysis by demographerWendell Cox. In contrast the fastest job growth was in suburban and exurban areas, paralleling their gains in population. This has become clearer since the recession ended; the consultancy Costar notesbetween 2012 and 2013 office absorption grew quicker in the suburbs than the core, accounting for 87% of new office demand. Overall suburbs account for nearly 75% of all office space in our metropolitan areas.

    We can see this pattern even in two of the hottest office markets, San Francisco and Houston. Overall, despite all the blather about tech moving into the core, San Jose, Calif., has almost 50% more new office space under construction than San Francisco. San Jose, it should be remembered, is essentially a giant suburb, with a very small downtown, and very low levels of transit ridership. It may be next to San Francisco but in urban form, it represents its direct opposite.

    In Houston, easily the nation’s leader in new office construction, downtown has fared well in the boom but the vast majority of new growth is located in the ‘burbs, including the largest project — the new ExxonMobil campus, with 20 buildings that will host 10,000 employees. In both places population growth in the suburbs has been approximately four times that of the core cities between 2010 and 2013.

    These patterns can be seen even in areas where there have been strong improvements in residential growth. In 2010, Chicago’sDowntown Loop Alliance reported that private sector employment in the Loop fell 20% during the last decade. Perhaps more telling, the number of jobs and resident workers (the “jobs-housing” balance) in the city of Chicago are converging toward equality. According to American Community Survey data, there are 1.1 jobs in the city of Chicago for each working resident. In contrast, two of the three large suburban corridors have higher ratios of jobs to workers than the city of Chicago. The Interstate 88 corridor has 1.3 jobs per worker, while the North Shore has approximately 1.5 jobs per worker. The Interstate 90 corridor has slightly more jobs than workers.

    How could this be given the much hyped migration of companies such as Boeing to the Windy City? One explanation lies with the rise of what urban analyst Aaron Renn has described as the “executive headquarters.” These relocations, he notes, tend to follow CEO preferences but cover only a small number of employees. Cost pressures, particularly from Wall Street, make securing space in central cities prohibitive if it involves large numbers of employees. A small, swanky office is one thing but putting 10,000 workers in expensive towers seems less common.

    The recent move of Archer Daniels Midland’s headquarters, he notes, brought roughly 100 jobs while that of Boeing, at a cost of $63 million in incentives, was a net gain of 500. In both cases, far more employees, spanning research, development and marketing remained in the original locations. Boeing, for example, retains over 80,000 employees in its original home around Seattle.

    What seems clear from these trends is this: downtowns are back, but not as dominant business hubs. Instead we continue to see not massive construction of new offices but the continued conversion of offices to residential buildings. This is particularly true in Chicago, where developers are adapting older office towers, malls, as well as hotels for apartments. In most cases, these are rental properties designed to serve a generally younger, and childless market.

    In Manhattan, the rate of office construction is running at a multi-decade high, but some insiders worry that demand may not be there in the next four years to fill the 14 million square feet of spaceprojected to be built by 2019. The shift of jobs, particularly in financial services, to cheaper locales could have a negative effect, as does the trend of employers cramming workers into smaller spaces.

    What about the wannabes like downtown Dallas, Atlanta and Los Angeles? These central cores have failed to recover their economic base, with vacancy rates approaching 20% despite a dearth of new construction. Nor has mass transit — often sold as the “magic bullet” to turn these central cores into thriving urban hubs — succeeded in reestablishing their economic centrality. In all three metro areas, despite multibillion-dollar expenditures on new rail lines, transit ridership remains at or even slightly below the levels of a decade ago.

    None of this suggests that these cores are not important to their regions, and particularly to their often vulnerable self-esteem. The downtowns of Atlanta and Dallashave gained some residents, and there is more pedestrian traffic at night. Similarly Los Angeles, whose downtown attracted nearly half of all L.A. residents daily in the 1920s, according to Robert Fogelson, continues to fade in economic importance. Today it represents about 2% of the vastly expanded metro area’s jobs. At least four other regional job centers are as larger or larger ).

    Yet despite this, it’s legitimate to see some revival of the area, largely due to a rash of residential conversions and some new apartment building. This has brought some new life, as well as some restaurants and some shops, as the population within two miles of City rose by an impressive 23,000 since 2006. But this hardly represents a full-scale return to the center city as the population of the surrounding areas — two to five miles from City Hall — has dropped by a similar number. Almost all the new construction in downtown is either for residents or hotels; very little new office space is being produced.

    Los Angeles’ downtown recovery, notes real estate analyst David Shulman, is “more about sports and entertainment venues, restaurants and bars, loft conversions, and hotels than it is about companies that need a lot of floors in tall buildings. Nightlife and streetscapes trump florescent light and cubicles.”

    This resurgence in L.A., and elsewhere, is no mean accomplishment, but it also does not constitute sea-change in fundamental economic geography. Downtowns are back, but more as a lifestyle option than as a dominant feature of the metropolitan landscape.

    This piece originally appeared in Forbes.

    Joel Kotkin is executive editor of NewGeography.com and Distinguished Presidential Fellow in Urban Futures at Chapman University, and a member of the editorial board of the Orange County Register. His newest book, The New Class Conflict is now available at Amazon and Telos Press. He is author of The City: A Global History and The Next Hundred Million: America in 2050. His most recent study, The Rise of Postfamilialism, has been widely discussed and distributed internationally. He lives in Los Angeles, CA.

    Lead photo of 432 Park Avenue in New York by Louis B (Own work) [CC-BY-3.0 or CC-BY-4.0], via Wikimedia Commons

  • New Class Order

    In this predictably difficult year for the Democrats, the party of the people is turning, of all people, to its plutocrats. However much the party stigmatizes right-wing billionaires like the Koch brothers, a growing proportion of America’s ultra-rich have become devoted Democrats, giving them an edge in fund-raising. Indeed, an analysis of billionaire contributors this year by Politifact found that 13 supported liberals while only nine backed Republicans.

    The left plutocracy helps explain how Harry Reid’s Democratic Senatorial Campaign Committee has greatly outraised their Republican rivals. Overall, Democratic-aligned committees have achieved a lopsided edge in fundraising – $453 million opposed to $289 million, according to Politico. Overall, the top three donors to the political Super PACs this year all lean to the left.

    Democrats counter that many Republican groups, notably the Koch-funded Americans for Prosperity, generally don’t reveal their finances. But as the New York Times’ Tom Edsall notes, “Liberals do the same, and the press in large part gives them a pass.” He points particularly to the “Democracy Alliance,” a conglomerate of some 100 very rich donors who contribute some $30 million annually to progressive organizations and causes.

    All this reflects a changing class system far more nuanced than the overworked meme about the “1 percent” arrayed against the toiling masses. Instead, we have a plutocracy increasingly divided, mostly along regional and industry lines, among themselves. It’s no surprise voters, notes columnist John Kass, are confused by this recent headline in the Chicago Tribune: “Obama decries income inequality in speech after $50,000-a-person fundraiser for Quinn.”

    The Democrats’ Plutocrats

    The Democratic plutocracy is largely rooted in such industries as telecommunications, entertainment, software, legal services and, surprisingly, a large section of Wall Street. Financial firms, such as Goldman Sachs, supported the president even before his first election. Although the firm did shift towards Mitt Romney in 2012, it maintains close, even intimate, ties to the president, as spelled out in the left-leaning Huffington Post. Wall Street has been the big winner in the Obama economy due to the Federal Reserve’s policy of ultra-low interest rates, which work to force investors into stocks.

    Others sectors also have good reasons to embrace the Democrats. Lawyers often benefit from increased regulation, although that does not apply to most businesses. Overall, legal firms have contributed more than twice as much to Democrats than they have to Republicans.

    Another powerful force for the Democrats lies in the high-tech sector. The same Fed policy that helps Wall Street asset managers also boosts venture capitalists by making investment in even dodgy start-ups irresistible. Once a minor force in campaigns, the tech firms, including software, have greatly expanded their campaign spending, up three-fold since 2000, with a tilt that, in 2012, saw Democrats harvest roughly twice as much high- tech cash as their GOP rivals.

    Most of the leading tech industry figures – Yahoo’s Melissa Mayer, Google’s Sergei Brin, venture capitalist Reid Hoffman as well as Facebook’s Mark Zuckerberg and Sheryl Sandberg – strongly tilt toward the Democrats. The grassroots nerdistan may be even more bluish; 91 percent of the contributions of Apple employees in the 2012 presidential race went to President Obama.

    Concerns over climate change are a big plus for the Democrats with Silicon Valley. Mega-figures like Google’s Eric Schmidt and Tom Steyer, a former big time investor in fossil fuels, oppose all fossil fuels, including natural gas. Apple’s CEO Tim Cook, who has Al Gore on his board, has even asked that what he considers climate change “deniers” not invest in his company.

    Silicon Valley is not just content to proselytize the masses. Firms like Google and investors have been quick to exploit the Democrats’ green politics, investing heavily in highly subsidized renewable fuels. Being green has become yet another business opportunity for some of America’s wealthiest investors and companies.

    Then there’s always geography. Most of the major Democratic plutocrats live in solidly blue states such as Washington, California, Illinois and New York, where political influence means, for the most part, appealing to Democrats.

    In contrast, being a conservative Republican in Silicon Valley avails one little; you are pretty much excluded from the biggest political events and any ideological misstep, as the former head of Mozilla learned the hard way, can lead to virtual banishment.

    The Republican Residue

    None of this suggests that the Republicans have become the new de facto populist party. The GOP still gathers in millions of dollars from big businesses, but these tend to be very different industries than those of the Democrats. Particularly prominent are fossil fuel companies, caught in the crosshairs of the White House and its regulatory apparatus. In 2012, oil and gas executives doubled their federal contributions to $70 million, with some 90 percent going to Republicans.

    This year, energy firms are again making big bets on the GOP, hoping to block environmentalist-backed regulations by helping Republicans gain a majority in the Senate.

    Republicans also do well with old-line oligarchs in agribusiness firms, home builders, casino owners, commercial banks and insurance companies. Once more divided in their loyalties, these appear to becoming increasingly GOP oriented in recent years. The party’s embattled governors have been raising millions from energy moguls like the Kochs, casino magnate Sheldon Adelson and tobacco firm Reynolds American.

    There’s also a strong regional tilt here. Most strong energy, home-building and agribusiness firms are concentrated in the middle of the country, most prominently in Texas, Oklahoma, and the Dakotas. Voters in these states, particularly Republicans, tend to be more favorable, according to Gallup, to expanding natural gas and oil production than their Democratic counterparts who are generally more partial to wind and solar.

    Other players tip the scales to the Democrats.

    Traditionally, Democrats have balanced the disproportionate business support for Republicans with strong backing from unions.

    Since 1989, six of the largest political donors have come from labor. Today, business may be effectively divided, but organized labor remains rock solid in its backing for President Obama and his party.

    Some private sector unions are upset by presidential policies on such things as Keystone XL pipeline.

    But increasingly, the dominant union force behind the Democrats is not hard-hats but public employee unions, whose power in many blue states is all but incontestable.

    Looking forward: The Gentry Liberal Ascendancy

    Despite the fund-raising shortfall, Republicans could do well this November.

    Even brilliantly targeted get-out-the-vote efforts, or effective use of social media, may not be enough to save Harry Reid’s Senate majority, and certainly will not be enough to break the GOP stranglehold on the House. But this may prove only a temporary triumph, as most long-term trends in political fund-raising favor the Democrats.

    The most profound is the movement of money away from the tangible economy – oil and gas, manufacturing, home-building, logistics – to such activities as financial transactions, digital technology, media and entertainment.

    Unless the Democratic Party rediscovers its populist soul, these sectors, and those who derive their fortunes from it, will enjoy friendly treatment from Democrats, whether in mergers, as in the case of Comcast, or in evading privacy controls, which impacts much of the social media sector.

    More important will be the progressive orientation of the trustifarians, the inheritor generation, which is just emerging from Hollywood, Silicon Valley and Wall Street.

    Already the bulk of nonprofits are now solidly liberal, with roughly 70 percent of their funds going to left-of-center causes. This trend will likely increase in the future. The new gentry – like the inheritors of the fortunes of the once-reactionary Ford, MacArthur and Rockefeller families – is likely to ignore basic business concerns and instead adopt the generally leftist culture in their favored locales.

    Ultimately, the American oligarchy is transforming in ways injurious to Republicans and favorable to the Democrats. The Supreme Court has dropped restrictions on fundraising and the economy has boosted the incomes of the super-rich, but not much for anyone else.

    That may upset Democrats in principle, but, in the long run, they are likely to be the biggest beneficiaries.

    This piece originally appeared at The Orange County Register.

    Joel Kotkin is executive editor of NewGeography.com and Distinguished Presidential Fellow in Urban Futures at Chapman University, and a member of the editorial board of the Orange County Register. His newest book, The New Class Conflict is now available at Amazon and Telos Press. He is author of The City: A Global History and The Next Hundred Million: America in 2050. His most recent study, The Rise of Postfamilialism, has been widely discussed and distributed internationally. He lives in Los Angeles, CA.

  • Legal but Still Poor: The Economic Consequences of Amnesty

    With his questionably Constitutional move to protect America’s vast undocumented population, President Obama has provided at least five million immigrants, and likely many more, with new hope for the future. But at the same time, his economic policies, and those of the progressive wing of the Democratic Party, may guarantee that many of these newly legalized Americans will face huge obstacles trying to move up in a society creating too few opportunities already for its own citizens, much less millions of the largely ill-educated and unskilled newcomers.

    Democratic Party operatives, and their media allies, no doubt see in the legalization move a step not only to address legitimate human needs, but their own political future. With the bulk of the country’s white population migrating rapidly to the GOP, arguably the best insurance for the Democrats is to accelerate the racial polarization of the electorate. It might be good politics but we need to ask: what is the fate awaiting these new, and prospective, Americans?

    In previous waves of immigration, particularly during the early 20th Century, there were clear benefits for both newcomers and the economy. A nation rapidly industrializing needed labor, including the relatively unskilled, and, with the help of the New Deal and the growth of unions, many of these newcomers (including my own maternal grandparents) achieved a standard of living, which, if hardly affluent, was at least comfortable and moderately secure.

    Demand for labor remained strong during the big immigrant wave of the 1980s until the Great Recession. The country was building houses at a rapid clip, which required a large amount of immigrant labor. Service industries, particularly before the onset of digital systems, such as ipads for ordering, that replace human staff in fast-food restaurants, tend to hotels and provide personal services, although often at low wages.

    More recently, this wave of undocumented migration has diminished, as economic prospects, particularly for the low-skilled, have weakened. Yet the undocumented population remains upwards eleven million. Largely unskilled and undereducated, roughly half of adults 25 to 64 in this population have less than a high-school education compared to only 8 percent of the native born. Barely ten percent have any college, one third the national rate.

    This workforce is being legalized at a time of unusual economic distress for the working class. Well into the post-2008 recovery, the country suffers from rates of labor participation at a 36 year low. Many jobs that were once full-time are, in part due to the Affordable Care Act, now part-time, and thus unable to support families. Finally there are increasingly few well-paying positions—including in industry—that don’t require some sort of post-college accreditation.

    Sadly, the legalization of millions of new immigrants could make all these problems worse, particularly for Latinos already here and millions of African-Americans.

    African-American unemployment is now twice that of whites. The black middle class, understandably proud of Obama’s elevation, has been losing the economic gains made over the past thirty years.

    Latino-Americans have made huge strides in previous decades, but now are also falling behind, with a gradual loss of income relative to whites. Poverty among Latino children in America has risen from 27.5 percent in 2007 to 33.7 percent in 2012, an increase of 1.7 million minors.

    Logically, many Latinos and African-Americans might suspect that amnesty won’t be a great deal for them. There are occasional signs of disquiet. A recent Pew survey found that not only half of all whites, but nearly two-fifths of African Americans and roughly even a third of Hispanics approved of increased deportations of the undocumented. A Wall Street Journal-NBC poll found that well less than half of Latinos supported the President’s action.

    This ambivalence may reflect the reality that legalization of the undocumented may be felt hardest in those places, such as California, that have attracted the most newcomers, and also have highly developed welfare states. Today public agencies in Los Angeles, with an estimated one million undocumented immigrants, are bracing from large increases in the demand for state provided services.

    One LA Supervisor estimates the County, facing “an already impossible fiscal dilemma,” will need to spend an additional $190 million, without hope of federal compensation, on the newly legalized population. Ultimately, the newest migrants will be competing with existing residents—particularly poorer ones—not only for jobs but also social services.

    The President’s action on immigration requires a profound shift in economic policy, particularly in the large urban centers where most undocumented are clustered, to avoid creating a squeeze on scarce jobs and services. But Obama’s other big agenda—addressing climate change—has slowed the expansion of fossil fuel development. Meanwhile, it’s the energy sector that creates precisely the kinds of high-paying blue collar jobs, averaging upwards of $100,000 annually, that immigrants might be eager to fill and could give low unskilled workers a foothold into the middle class.

    Similarly, efforts by Obama’s allies at Federal agencies like HUD to encourage dense housing and discourage suburban growth means far less construction employment, one of the largest generators of good blue collar jobs and opportunities.

    Ironically, the places where the cry for amnesty has been the loudest—New York, San Francisco, Los Angeles, and Chicago—also tend to be those places that have created the least opportunity for the urban poor. This is in part due to the fact that these areas have tended to de-industrialize the most rapidly, discourage fledgling grassroots businesses through high taxes, environmental and housing, regulations.

    Whatever their noble intentions, these cities generally suffer the largest degree of income inequality, notes a recent Brookings study. In fact, according to an analysis by Mark Schill at the Praxis Strategy Group, African-American incomes in New York are barely half those of whites and, in San Francisco somewhat below half. In contrast, cities with broader economies like Dallas and Houston, have black populations earning sixty five percent of white incomes. Similarly, Latinos in Boston, New York, Philadelphia and San Francisco do far worse, relative to incomes, than their Sunbelt counterparts, compared to whites.

    These trends could worsen in precisely those areas with the biggest concentrations of undocumented immigrants covered by Obama’s executive order.

    Take, for example, the borough of the Bronx in New York City. The most Latino of all New York’s counties, in the Bronx, roughly one in three households live in poverty, the highest rate of any large urban county.

    In the country. It’s doubtful that legalization absent job growth will improve conditions , as it adds more potential claimants for local benefits without creating new income sources.

    For reasons that can’t be purely economic, most Latino political leaders, and much of the group’s electorate, are in favor of policies that, over time, could doom prospects for Those who receive amnesty. Of course, there are other factors that play into support for these policies, like the emotional pull to reunite families, but whatever their appeal such measures could leave the very people they are meant to help as legal paupers.

    My adopted home region of Southern California has seen an almost 14% drop in high-wage blue-collar jobs since 2007. Deindustrialization has continued, and construction employment lagged, even while the country as a whole, sparked by more secure and now cheaper energy supplies, has seen industrial production improve since 2010.

    Herein lies the great dilemma then for the advocates of amnesty. In much of the country, and particularly the blue regions, they will find very few decent jobs but often a host of programs designed to ease their poverty. The temptation to increase the rolls of the dependent—and perhaps boost Democratic turnouts—may prove irresistible for the local political class.

    So what should we do under these circumstances? Constitutional arguments aside, there do seem to be some better ways to create conditions for upward mobility among newcomers.

    Higher minimum wages may help some of the legal residents, but arguably at the cost of new jobs for others including the newly amnestied. However popular with most voters, such redistributive measures will not address the fundamental economic challenge posed by amnesty.

    Perhaps a sounder strategy would be to adopt policies that encourage broad-based economic growth, including energy, manufacturing, logistics and home construction. This would, of course, require some moderation of regulatory standards, particularly in reference to climate change.

    The President’s recent deal with China, which essentially allows the Chinese to keep boosting emissions until 2030 while we reduce ours steeply, could make things worse. In some states like California, where the global warming consensus is beheld with theological rigidity, “green,” anti-suburban policies largely guarantee that most of the urban poor will never enter the middle class. In San Francisco, Boston and New York, the percentage of Latino and black homeowners is roughly one-third to one-half that seen in redder regions like Houston, Dallas, Phoenix and Atlanta.

    In essence, the deepest blue states have created the worst of all conditions for the urban poor, and will be particularly tough on undocumented residents granted amnesty.

    All this suggests that, if we are to make new Americans economically successful, we need to concentrate not on racial redress but find ways to spark broad based economic growth. Increasing use of inexpensive natural gas, for example, would not only help continue to reduce emissions but would spark an industrial expansion that would create more blue collar jobs. Similarly, policies that allowed for affordable, energy efficient new homes could create not only more blue collar employment possibilities, but a brighter future for young families, many of whom are themselves immigrants or their children.

    The current amnesty could benefit both the country overall as well as recent immigrants if it is tacked to a broad based economic growth strategy. But that doesn’t seem to be in the cards. Instead, continuing policies that inhibit broad-based economic growth are increasing the numbers of Americans who must depend on government, not the economy, to take care of themselves and their families.

    This piece originally appeared at The Daily Beast.

    Joel Kotkin is executive editor of NewGeography.com and Distinguished Presidential Fellow in Urban Futures at Chapman University, and a member of the editorial board of the Orange County Register. His newest book, The New Class Conflict is now available at Amazon and Telos Press. He is author of The City: A Global History and The Next Hundred Million: America in 2050. His most recent study, The Rise of Postfamilialism, has been widely discussed and distributed internationally. He lives in Los Angeles, CA.

    Photo by telwink

  • The Progressives’ War on Suburbia

    You are a political party, and you want to secure the electoral majority. But what happens, as is occurring to the Democrats, when the damned electorate that just won’t live the way—in dense cities and apartments—that  you have deemed is best for them?   

    This gap between party ideology and demographic reality has led to a disconnect that not only devastated the Democrats this year, but could hurt them in the decades to come. University of Washington demographer Richard Morrill notes that the vast majority of the 153 million Americans who live in  metropolitan areas with populations of more than 500,000  live in the lower-density suburban places Democrats think they should not. Only 60 million live in core cities.      

    Despite these realities, the Democratic Party under Barack Obama has increasingly allied itself with its relatively small core urban base. Simply put, the party cannot win—certainly not in off-year elections—if it doesn’t score well with suburbanites. Indeed, Democrats, as they retreat to their coastal redoubts, have become ever more aggressively anti-suburban, particularly in deep blue states such as California.  “To minimize sprawl” has become a bedrock catchphrase of the core political ideology.   

    As will become even more obvious in the lame duck years, the political obsessions of the Obama Democrats largely mirror those of the cities: climate change, gay marriage, feminism, amnesty for the undocumented, and racial redress. These may sometimes be worthy causes, but they don’t address basic issues that effect suburbanites, such as stagnant middle class wages, poor roads, high housing prices, or underperforming schools. None of these concerns elicit much passion among the party’s true believers.

    The miscalculation is deep-rooted, and has already cost the Democrats numerous House and Senate seats and at least two governorships. Nationwide, in areas as disparate as east Texas and Maine or Colorado and Maryland, suburban voters deserted the Democrats in droves. The Democrats held on mostly to those peripheral areas that are very wealthy—such as Marin County, California or some D.C. suburban counties—or have large minority populations, particularly African-American.

    This is not surprising since the policies and predilections of President Obama and his team are based on a largely exaggerated urban mythology. Former HUD Secretary Shaun Donovan, for example, has declared the move to the suburbs is “over.” People are, he has claimed, “moving back into central cities and inner ring suburbs.” To help foster this trend, administration policies at HUD and other agencies have been designed to fulfill Donahue’s vision of getting Americans out of their suburban homes and cars and into apartments and trains. These policy initiatives include large “smart city” grants for dense development, restrictions on new building, the promotion of high-speed rail links that would supposedly reconcentrate economic activity in the urban core. The administration’s strong support for regional governments, and its attempts to force suburbs to diversify their populations (even though they are already where minorities increasingly move) are thinly disguised efforts to promote densification and put the squeeze on suburban growth.

    Yet, as census data and electoral returns demonstrate, the demographic realities are nothing like what Donahue and the administration insist. The last decennial census showed, if anything, that suburban growth accounted for something close to 90 percent of all metropolitan population increases, a number considerably higher than in the ’90s. Although core cities (urban areas within two miles of downtown) did gain more than 250,000 net residents during the first decade of the new century, surrounding inner ring suburbs actually lost 272,000 residents across the country. In contrast, areas 10 to 20 miles away from city hall gained roughly 15 million net residents.

    Since 2010, suburban growth has slowed as young people, hampered by a weak economy and tougher mortgage standards, have not been able to buy houses. But while population growth in the same time period has been roughly even between the suburbs and core cities,  the suburban population, which is so much larger to start with, has continued to expand at a faster rate . According to demographer Morrill, since 2010 the suburbs have added 4.4 million people compared to fewer than 2 million in core cities.

    The big problem here is this: the progressives’ war on suburbia is essentially an assault on the preferences of the middle class. Despite the hopes at HUD, the vast majority of Americans—even in most cities and particularly away from the coasts—actually live in single-family homes in low- to mid-density neighborhoods, and overwhelmingly commute by car. If we measure people by how they actually live, notes demographer Wendell Cox, more than 80 percent of those in metropolitan areas have what most would consider a suburban life style.

    Contrary to the conventional wisdom, there is nothing intrinsically “progressive” about hating suburbs. It was, after all, President Franklin Roosevelt who believed that dispersion and homeownership would make the country much stronger. “A nation of homeowners, of people who own a real share in their land, is unconquerable,” he maintained. This notion of favoring policies that allowed for middle-class and eventually working-class people to own their own homes and a patch of grass was shared by Harry Truman, John Kennedy, and Bill Clinton, all of whom were fairly successful in winning over suburban voters.

    Suburbanites are not intrinsically Republican. Clinton, noted political analyst Bill Schneider, shared suburban voters’ skeptical view of government’s ability to address problems, and won 47 percent of the suburban vote in 1996. Barack Obama, running as a conciliatory pragmatist in 2008, did even better with some 50 percent. This performance was aided by the growing proportion of racial minorities, including African Americans, who had moved to the suburbs.

    But as Obama’s administration took shape, suburban support began to ebb. In 2012, Obama lost the suburbs to Romney  by a two-point margin. In this year’scongressional elections the GOP edge grew to 12 points in the suburbs, which accounted for a majority of the electorate. The  Democrats won by 14 percent in the more urban areas, but these accounted for barely one-third of the total vote. The result was a thorough shellacking of the Democratic party from top to bottom.

    Yet even these numbers do not express how critical suburban voters were this year. Much of urban America, particularly in places like Phoenix, Houston, and Las Vegas, is primarily suburban. They have multiple employment centers and the vast majority of commuters take to the roads. Democrats did not do so well in these cities this year, although the party continues to dominate more traditional inner cities dominated by apartment dwellers and mass transit riders. Some hopeful conservative commentators have noted a slight increase in GOP votes in some inner cities, but the percentages are still laughably pathetic.

    This can be seen in GOP wins in the governor’s races. Michigan’s Republican Governor Rick Snyder got 6.8 percent of the vote in Detroit. Successful Illinois challenger Bruce Rauner won only 20 percent of Chicago’s take, even in the face of gross mismanagement by his Democratic opponent. And Maryland’s Larry Hogan won about 22 percent in Baltimore. In all these elections, it was the suburbs—not paltry gains in the cities—that made the difference. Rauner’s election, for example, was based largely on a 60 percent margin in Chicago’s swing “collar counties.” Boston’s suburbs, particularly in the more working class south, helped assure the gubernatorial election of GOP candidate Charles Baker in this bluest of blue states. Suburban voters also played a huge role in the Republicans’ biggest win—the Texas governorship—giving GOP candidate Greg  Abbott almost two-thirds of their votes.

     Much the same suburban swing can be seen in the critical senatorial races races where the Democrats lost seats. Iowa Republican Joni Ernst lost the city vote but won 58 percent of suburban electorate, almost equaling her show in the rural areas. In Colorado, Corey Gardner also secured a large majority among suburban voters, who accounted for roughly half the total electorate. Finally, in the upset of Senator Kay Hagan in North Carolina, successful GOP candidate Thom Tillis ran even better in the suburbs—with some 57 percent of the vote—than he did in the supposedly hardcore conservative countryside.

    But the best way to see the suburban impact is to look at the House races. Among the 12 seats that Republicans took from the Democrats, half were located in solidly suburban areas. These included districts surrounding such cities as Raleigh, N.C.; Salt Lake City, which elected black Republican Mia Love; Miami, in a predominately Latino area; Las Vegas, in a suburban district that went for Obama in 2012; and eastern Long Island. The powerful shift in suburban voting also appears to have cost the Democrats two seats in the president’s home state—one in the northern suburbs of Chicago and the other in southern Illinois communities adjacent to St. Louis, a district that has been in Democratic hands for three decades.

    So what does this mean for 2016 and beyond? To be sure, the key Democratic urban-centric constituencies—millennials, single women, minorities—likely will turn out in bigger numbers in the next election. But ultimately their numbers will be somewhat balanced by rural and small town voters, who will continue to support conservatives overwhelmingly. Ultimately there is only one truly contested piece of political turf in this country—the suburbs—and who wins there takes the whole enchilada.

    There are those, even slightly deluded Republicans, who believe the country is becoming “more urban” and that therefore the suburban edge will mean less in the years ahead. Yet since 2011 the most rapid growth in country, as noted by Trulia’s Jed Kolko, continues to be in the suburbs and exurbs. Some urban cores have recovered nicely, but most often the surrounding city areas have continued to see slow or negative growth.

    Nor is this trend likely to reverse in the near future. As Millennials head into their thirties, survey data suggests that most are looking for single family houses and most favor suburban locations where increasingly they will be joined by   immigrants and minorities. And virtually all the fastest growth urban regions—Houston, Dallas-Ft. Worth, Phoenix, Charlotte—remain largely suburban in form and character, while growth is much slower in the more traditional legacy cities such as San Francisco, New York, or Boston.

    None of this suggests that that Republicans can take suburban votes for granted. The suburbs are changing in ways that could help progressives, notably by becoming more heavily minority and Millennial. The preferences of these new arrivals will differ from those of previous suburban generations—particularly their views on immigration, the need for open space and cultural liberalism. That said, how likely is it that these new suburbanites will embrace progressive ideologues who continually diss the very places they have chosen to live?

    The  progressive “clerisy” and their developer allies may wish to destroy the suburban dream, but they will not be able to stay in office for long with such attitudes. America remains, and likely will remain, a predominately suburban nation for decades to come. This demographic reality means that whoever wins the suburban vote in 2016 and beyond will inherit the political future.

    This piece originally appeared at The Daily Beast.

    Joel Kotkin is executive editor of NewGeography.com and Roger Hobbs Distinguished Fellow in Urban Studies at Chapman University, and a member of the editorial board of the Orange County Register. His newest book, The New Class Conflict is now available at Amazon and Telos Press. He is author of The City: A Global History and The Next Hundred Million: America in 2050. His most recent study, The Rise of Postfamilialism, has been widely discussed and distributed internationally. He lives in Los Angeles, CA.

    Suburbs photo by Bigstock.

  • The Demographics That Sank The Democrats In The Midterm Elections

    Over the past five years, the Democratic Party has tried to add class warfare to its pre-existing focus on racial and gender grievances, and environmental angst. Shortly after his re-election in 2012, President Obama claimed to have “one mandate . . . to help middle-class families and families that are working hard to try to get into the middle class.”

    Yet despite the economic recovery, it is precisely these voters, particularly the white middle and working classes, who, for now, have deserted the Democrats for the GOP, the assumed party of plutocracy. The key in the 2014 mid-term elections was concern about the economy; early exit polls Tuesday night showed that seven in 10 voters viewed the economy negatively, and this did not help the Democratic cause.

    “The Democrats have committed political malpractice,” says Morley Winograd, a longtime party activist and a former top aide to Vice President Al Gore during the Clinton years. “They have not discussed the economy and have no real program. They are offering the middle class nothing.”

    Winograd believes that the depth of white middle- and working-class angst threatens the bold predictions in recent years about an “emerging Democratic majority” based on women, millennials, minorities and professionals. Non-college educated voters broke heavily for the GOP, according to the exit polling, including some 62% of white non-college voters. This reflects a growing trend: 20 years ago districts with white, working-class majorities tilted slightly Democratic; before the election they favored the GOP by a 5 to 1 margin, and several of the last white, Democratic congressional holdovers from the South, notably West Virginia’s Nick Rahall and Georgia’s John Barrow, went down to defeat Tuesday night.

    Perhaps the biggest attrition for the Democrats has been among middle-class voters employed in the private sector, particularly small property and business owners. In the 1980s and 1990s, middle- and working-class people benefited from economic expansions, garnering about half the gains; in the current recovery almost all benefits have gone to the top one percent, particularly the wealthiest sliver of that rarified group.

    Rather than the promise of “hope and change,” according to exit polls, 50% of voters said they lack confidence that their children will do better than they have, 10 points higher than in 2010. This is not surprisingly given that nearly 80% state that the recession has not ended, at least for them.

    The effectiveness of the Democrats’ class warfare message has been further undermined by the nature of the recovery; while failing most Americans, the Obama era has been very kind to plutocrats of all kinds. Low interest rates have hurt middle-income retirees while helping to send the stock market soaring. Quantitative easing has helped boost the price of assets like high-end real estate; in contrast middle and working class people, as well as small businesses, find access to capital or mortgages still very difficult.

    The Republicans made gains in states in New England and the upper Midwest where the vast majority of the population, including the working class, remains far whiter than the national norm of 64% Anglo, such as Massachusetts, where a Republican was elected governor, Michigan, Arkansas and Ohio. Anglos constitute 89% of the population in Iowa and 93% in the former working-class Democratic bastion of West Virginia, two states where the Republicans picked up Senate seats. In Colorado, another big Senate pickup for the GOP, some 80% of the electorate is white. In Kentucky, where Senator Mitch McConnell won a surprisingly easy re-election, only 11% of voters were non-white, down 4% from 2008.

    A more intriguing danger sign for Democrats has been the surprisingly strong GOP performance among the educated professionals that embraced Obama early on. This can be seen in gubernatorial victories in deep blue Massachusetts and Maryland,  and a close race in Connecticut; in all three states concerns over taxes have shifted some voters to the GOP. Voters making over $100,000 annually broke 56 to 43 for the GOP, according to NBC’s exit polls. College graduates leaned slightly toward the Republicans, but among white college graduates the GOP led by a decisive 55 to 43 margin.

    In Colorado, Senator-elect Cory Gardner, like many successful GOP candidates, also did well with middle-income voters (annual salaries between $50,000 and $100,000), who basically accounted for his margin of victory. These are voters that some Republicans are targeting to instigate a new “tax revolt,” like the one that helped catapult Ronald Reagan into the presidency. The potential may be there if the Republicans can wake up from their blind instinct to protect large corporations and big investors. Certainly Obama’s call for higher income taxes on the wealthy has alienated small business owners and professionals, though barely impacting tech oligarchs, whose wealth is taxed at far lower capital gains rates.

    It can be argued that changing demographics will make this year’s blowout a temporary setback. Among Latinos, a key constituency for the Democrats’ future, economic hardships and disappointment at the Democrats’ failure to achieve immigration reform have blunted but hardly reversed voting trends. This year, according to exit polls, Latinos remained strongly Democratic, but down from the nearly three-quarters who supported President Obama in 2012 to something slightly less than two-thirds.

    One encouraging sign for Republicans: Texas Governor-elect Abbott won 44% of the Hispanic vote.

    Perhaps the more serious may be shifts among millennials, a generation that, for the most part, stands most in danger of proleterianization. Once solidly pro-Democratic, this generation has become increasingly alienated as the economy has failed to produce notable gains. In states across the country, the Republican share of millennial votes grew considerably. According to exit polls, their deficit with voters under 30 has shrunk to 13%. The Republicans actually won among white voters under 30, 53% to 44%, even as they lost 30- to 44-year-olds, 58 to 40. If these trends hold, the generation gap that many Democrats saw as their long-term political meal ticket may prove somewhat less compelling.

    If they are losing the middle and working classes, and even some millennials, what are the Democrats left with? They did best in states like California and New York, where there is a high concentration of progressive post-graduates and non-whites, and where many of the sectors benefiting most from the recovery have thrived, notably tech, financial services, and high-end real estate.

    Yet these areas of strength could also prove a problem for the Democrats. A party increasingly dominated by progressives in New York, Los Angeles, the Bay Area and Seattle may embrace the liberal social and environmental agenda that captivates party’s loyalists but is less appealing to the middle class. Unless the Democrats develop a compelling economic policy that promises better things for the majority, they may find their core constituencies too narrow to prevent the Republicans from enjoying an unexpected, albeit largely undeserved, resurgence.

    This piece originally appeared at Forbes.

    Joel Kotkin is executive editor of NewGeography.com and Roger Hobbs Distinguished Fellow in Urban Studies at Chapman University, and a member of the editorial board of the Orange County Register. His newest book, The New Class Conflict is now available at Amazon and Telos Press. He is author of The City: A Global History and The Next Hundred Million: America in 2050. His most recent study, The Rise of Postfamilialism, has been widely discussed and distributed internationally. He lives in Los Angeles, CA.

    Illustration by Flickr user DonkeyHotey.