New Geography

Author: Joel Kotkin

  • The other California: A flyover state within a state

    California may never secede, or divide into different states, but it has effectively split into entities that could not be more different. On one side is the much-celebrated, post-industrial, coastal California, beneficiary of both the Tech Boom 2.0 and a relentlessly inflating property market. The other California, located in the state’s interior, is still tied to basic industries like homebuilding, manufacturing, energy and agriculture. It is populated largely by working- and middle-class people who, overall, earn roughly half that of those on the coast.

    Over the past decade or two, interior California has lost virtually all influence, as Silicon Valley and Bay Area progressives have come to dominate both state politics and state policy. “We don’t have seats at the table,” laments Richard Chapman, president and CEO of the Kern Economic Development Corporation. “We are a flyover state within a state.”

    Virtually all the polices now embraced by Sacramento — from water and energy regulations to the embrace of sanctuary status and a $15-an-hour minimum wage — come right out of San Francisco central casting. Little consideration is given to the needs of the interior, and little respect is given to their economies.

    San Francisco, for example, recently decided to not pump oil from land owned by the city in Kern County, although one wonders what the new rich in that region use to fill the tanks of their BMWs. California’s “enlightened” green policies help boost energy prices 50 percent above those of neighboring states, which makes a bigger difference in the less temperate interior, where many face longer commutes than workers in more compact coastal areas.

    The new Bantustans

    Fresno, Bakersfield, Ontario and San Bernardino are rapidly becoming the Bantustans — the impoverished areas designed for Africans under the racist South African regime — in California’s geographic apartheid. Poverty rates in the Central Valley and Inland Empire reach over a third of the population, well above the share in the Bay Area. By some estimates, rural California counties suffer the highest unemployment rate in the country; six of the 10 metropolitan areas in the country with the highest percentage of jobless are located in the central and eastern parts of the state. The interior counties — from San Bernardino to Merced — also suffer the worst health conditions in the state.

    This disparity has worsened in recent years. Until the 2008 housing crash, the interior counties served, as the Kern EDC’s Chapman puts it, as “an incubator for mobility.” These areas were places that Californians of modest means, and companies no longer able to afford coastal prices, could get a second shot.

    But state policies, notably those tied to Gov. Jerry Brown’s climate jihad, suggests Inland Empire economist John Husing, have placed California “at war” with blue-collar industries like homebuilding, energy, agriculture and manufacturing. These kinds of jobs are critical for regions where almost half the workforce has a high school education or less.

    Read the entire piece at The Orange County Register.

    Joel Kotkin is executive editor of NewGeography.com. He is the Roger Hobbs Distinguished Fellow in Urban Studies at Chapman University and executive director of the Houston-based Center for Opportunity Urbanism. His newest book, The Human City: Urbanism for the rest of us, was published in April by Agate. He is also author of The New Class Conflict, The City: A Global History, and The Next Hundred Million: America in 2050. He lives in Orange County, CA.

    Photo: Michael Patrick, CC License.

  • The End of the Asian Era

    For the past 40 years, the Pacific Rim has been, if you will, California’s trump card. But now, in the age of President Donald Trump and decelerating globalization, the Asian ascendency may be changing in ways that could be beneficial to our state.

    Rather than President Barack Obama’s famous “pivot to Asia,” it now might be more accurate to speak of Asians’ pivot to America. Once feared as a fierce competitor, East Asia is facing an end to its period of relentless growth, and now many interests appear to find that the United States offers a more secure, and potentially lucrative, alternative.

    This era reflects profound changes in East Asia’s prospects. They increasingly are coping with many of the demographic, social and economic challenges that have bedeviled the West since the 1970s — competition from cheaper countries, technological obsolescence, a demoralized workforce and diminishing upward mobility. The verve of the late 20th century is being supplanted by the anxieties of the early 21st.

    Demographic decline

    Forty years ago, overpopulation constituted the big issue facing East Asia. Governments from Singapore to Korea and, most importantly, China, imposed anti-natalist policies, fearing that their economic success would be overcome by a tide of new citizens. Today, East Asia confronts the world’s most stagnant demography.

    By 2030, according to the United Nations, Japan, still the world’s third-largest economy, will have more people over 80 than under 15, and, by 2050, it is expected to see its population fall by 15 percent. Many of the other Asian “tigers,” which followed Japan’s model, are saddled with a fertility rate so low that, over the next 35 years, they will join the island nation among the most elderly nations on earth.

    East Asia’s demographic crisis will hit critical mass once China, the planet’s second-largest and most dynamic large economy, feels the full impact of its super-low fertility rate. By 2050, China’s population will have a demographic look like ultraold Japan’s today — but without the higher affluence levels of its Asian neighbor to pay for all of the retirees.

    Technology and the challenge of Trumpism

    The rise of the Pacific Rim was driven, in large part, by manufacturing growth. Following the model of Japan, Asian countries grew by keeping imports out and building enormous surpluses of manufactured goods. The resulting imbalances were accepted by American administrations even when exacerbated by mercantilist policies directed against our own producers.

    The acceptance of such an arrangement ended in 2016 with the election of economic nationalist Donald Trump. But the new trade environment also includes the effective capture of the Democratic Party by elements close to Vermont’s Sen. Bernie Sanders, now America’s most popular politician. Sanders is fiercely skeptical on free trade, and his candidacy even forced Hillary Clinton, a long-time globalist, to back protectionist policies.

    Trump’s proposals to match China’s import fees and to hector companies into keeping jobs in the United States represent a huge threat to the mercantilist Asian economic model. This, at a time when new automation technology, cheaper energy and rising wage rates also are persuading Asian producers to shift production to the United States.

    Read the entire piece at The Orange County Register.

    Joel Kotkin is executive editor of NewGeography.com. He is the Roger Hobbs Distinguished Fellow in Urban Studies at Chapman University and executive director of the Houston-based Center for Opportunity Urbanism. His newest book, The Human City: Urbanism for the rest of us, was published in April by Agate. He is also author of The New Class Conflict, The City: A Global History, and The Next Hundred Million: America in 2050. He lives in Orange County, CA.

    Photo: Gage Skidmore from Peoria, AZ, United States of America (Donald Trump) [CC BY-SA 2.0], via Wikimedia Commons

  • California: The Republic of Climate

    To some progressives, California’s huge endorsement for the losing side for president reflects our state’s moral superiority. Some even embrace the notion that California should secede so that we don’t have to associate with the “deplorables” who tilted less enlightened places to President-elect Donald Trump. One can imagine our political leaders even inviting President Barack Obama, who reportedly now plans to move to our state, to serve as the California Republic’s first chief executive.

    As a standalone country, California could accelerate its ongoing emergence as what could be called “the Republic of Climate.” This would be true in two ways. Dominated by climate concerns, California’s political leaders will produce policies that discourage blue-collar growth and keep energy and housing prices high. This is ideal for the state’s wealthier, mostly white, coastal ruling classes. Yet, at the same time, the California gentry can enjoy what, for the most part, remains a temperate climate. Due to our open borders policies, they can also enjoy an inexhaustible supply of cheap service workers.

    Of course, most Californians, particularly in the interior, will not do so well. They will continue to experience a climate of declining social mobility due to rising costs, and businesses, particularly those employing blue-collar and middle-income workers, will continue to flee to more hospitable, if less idyllic, climes.

    California in the Trump era

    Barring a rush to independence, Californians now must adapt to a new regime in Washington that does not owe anything to the state, much less its policy agenda. Under the new regime, our high tax rates and ever-intensifying regulatory regime will become even more distinct from national norms.

    President Obama saw California’s regulatory program, particularly its obsession with climate change, as a role model leading the rest of the nation — and even the world. Trump’s victory turns this amicable situation on its head. California now must compete with other states, which can only salivate at the growing gap in costs.

    At the same time, foreign competitors, such as the Chinese, courted by Gov. Jerry Brown and others to follow its climate agenda, will be more than happy to take energy-dependent business off our hands. They will make gestures to impress what Vladimir Lenin labeled “useful idiots” in our ruling circles, but will continue to add coal-fired plants to power their job-sapping export industries.

    Read the entire piece at The Orange County Register.

    Joel Kotkin is executive editor of NewGeography.com. He is the Roger Hobbs Distinguished Fellow in Urban Studies at Chapman University and executive director of the Houston-based Center for Opportunity Urbanism. His newest book, The Human City: Urbanism for the rest of us, was published in April by Agate. He is also author of The New Class Conflict, The City: A Global History, and The Next Hundred Million: America in 2050. He lives in Orange County, CA.

    Photo: By User “Neon Tommy” (https://www.flickr.com/photos/neontommy/8117052872) [CC BY-SA 2.0], via Wikimedia Commons

  • Gen Xers Mark the Spot in California

    Generation X, the group between the boomers and the millennials, has been largely cast aside in the media and marketing world, victims of their generation’s small size and lack of identity. In contrast to the much-discussed boomers and millennials, few have recognized the critical importance of this group to the future of politics, economics, technology and business.

    Gen Xers — defined as aged between 35 and 49 in 2015 — matter because they will be the generation that will run our companies and governments as the boomers, albeit slowly, fade from their long-standing dominance. As millennials struggle to “launch,” the Xers are the group that will be critical to local housing markets, tech development and, perhaps most important, the creation of the next generation of children.

    Far more entrepreneurial than their millennial successors, they also will have the money to shape the economy. An analysis by the Deloitte Center for Financial Services finds that they hold 14 percent of the nation’s wealth, compared to just 4 percent for millennials and 50 percent for the boomers. But by 2030, as the boomers finally start to fade from the picture, Xers increasingly will vie with boomers, accounting for 31 percent of the nation’s wealth, twice the percentage for the millennials.

    Southern California’s Xer challenge

    Southern California needs to focus more on Xers. Unlike the millennials, whose share has been dropping below national norms, our region still retains a higher percentage of Xers than the rest of the country. Yet, their population is being eroded by factors such as high housing prices and weak high-end job creation.

    Read the entire piece at The Orange County Register.

    Joel Kotkin is executive editor of NewGeography.com. He is the Roger Hobbs Distinguished Fellow in Urban Studies at Chapman University and executive director of the Houston-based Center for Opportunity Urbanism. His newest book, The Human City: Urbanism for the rest of us, was published in April by Agate. He is also author of The New Class Conflict, The City: A Global History, and The Next Hundred Million: America in 2050. He lives in Orange County, CA.

    OK Soda photo by Derek Bruff via Flickr.

  • Hollywood’s Self-Inflicted Wounds

    No industry is more identified with Southern California than entertainment. Yet, in the past, the industry’s appeal has lain in identifying with the always-changing values and mythos of American society. But, today, that connection is being undermined, not just by technology, but also by a seemingly self-conscious decision to sever the industry’s links with roughly half of the population.

    This was painfully obvious during the Oscars — the penultimate event of the seemingly endless award season — when speaker after speaker decided to spend their moments of fame denouncing President Donald Trump. For all his personal failings, and often misguided policies, most Republicans and independents disapprove of the relentless Trump bashing in the media.

    Hollywood’s decision to make itself part of the anti-Trump resistance would make for wonderful satire, if you could get it on film. Imagine feminist icon Emma Watson fighting for “women’s empowerment” while baring her breasts in Vanity Fair. Or a host of social justice warriors, like Meryl Streep, demanding justice for the dispossessed, then returning to their estates where these victims of Trumpism are not likely to be found outside the servants’ quarters.

    The results also have a hard side: dismal ratings, down from a traditional viewership of 40 million to a mere 32 million, following a pattern that has seen it slide badly the last three years. Most Trump voters turned off the political speeches, notes one survey. But the Academy had other ways to show its contempt for its customers: None of the 10 largest grossing movies, notes USA Today’s Mitch Albom, got nominated for best picture, best actor or actress, or for supporting roles.

    The everyman era

    The preference of sophisticated opinion may be quintessential to Europe’s boutique film industry, but the blending of popular tastes with art has long propelled Hollywood’s historical success. This separation between audience and the Academy was not always the case. Films like “Gone with the Wind” (1939), “Around the World in 80 Days” (1956), “Ben-Hur” (1959), “The Sound of Music” (1965), “The Godfather” (1972), “Forest Gump” (1994) and “Titanic” (1997) all managed to be both blockbusters and best picture winners.

    Hollywood, wrote author Leo Rosten in 1940, was “the very embodiment” of “magic success,” allowing a truck driver to dream of being a hero, or a small-town waitress “to compare herself to a movie queen.” Hollywood was Middle American to the core, which appealed not just to our own audiences, but also to those around the world.

    In a political sense, Hollywood connected with Americans across the ideological spectrum. During the contentious 1930s, Hollywood could accommodate both the conservative myth of the loner — Gary Cooper and John Wayne — and also produce powerful dramas that touched on issues of class and inequality, such as “Our Daily Bread” (1934), “How Green Was My Valley” (1941) and “The Grapes of Wrath” (1940).

    Some progressive-leaning films were written by people who were later “blacklisted” during the McCarthy era, a tragedy that deprived the industry of some of its greatest talents. The industry instead favored biblical epochs like “Quo Vadis” (1951) as well as innocuous comedies starring the likes of Doris Day.

    “It was boy meets girl, lives happily ever after,” recalled former Los Angeles and Orange County Republican Congressman Bob Dornan, who grew up during this time. “There were clear-cut heroes and villains. Nazis torturing little old ladies, John Wayne landing on the beaches. … America was the bearer, the hope of the world.”

    Read the entire piece at The Orange County Register.

    Joel Kotkin is executive editor of NewGeography.com. He is the Roger Hobbs Distinguished Fellow in Urban Studies at Chapman University and executive director of the Houston-based Center for Opportunity Urbanism. His newest book, The Human City: Urbanism for the rest of us, was published in April by Agate. He is also author of The New Class Conflict, The City: A Global History, and The Next Hundred Million: America in 2050. He lives in Orange County, CA.

    Photo: BDS2006 [CC BY-SA 3.0 or GFDL], via Wikimedia Commons 

  • Can Tech Oligarchs Thrive Under Trump?

    With the first billionaire in the White House, Wall Street booming and, for the first time in almost a decade, very solid and broad based job growth, one would think America’s business elite would be beaming. But that’s not so because the country’s moguls are more divided than at any time in recent history.

    This conflict stems largely from divergent interests among rival factions of the putative ruling class. Trump’s backers tend to have links with the “real” economy, that is, those people who make things, such as energy producers, domestic manufacturers, agribusiness, suburban home-builders, and aerospace firms. These interests are increasingly concentrated in parts of America Trump painted “red”—the South, the Midwest, the Great Plains, and Appalachia.

    On the other side lies the “ascendant” ephemeral economy, based in such industries as media, entertainment, software, and social media, as well as their financial backers. These industries are less affected by environmental regulations than those in more tangible lines of business. They are also concentrated in the deep blue slivers along the coasts and in college towns, the very places where the progressive social and environmental agenda is most deeply entrenched.

    Obama’s Legacy: A New Post-industrial ruling class

    Barack Obama’s most “transformative” achievement was the consolidation of this potentially hegemonic, post-industrial ruling class. They reaped high returns from the Obama era embrace of ultra-low interest rates, nudging billions into risky tech ventures and speculative urban real estate. These increasingly oligopolistic interests  also benefited  from a Justice Department that eschewed anti-trust inquiries in such areas as smartphone operating systems, search, and social media, where the main players often control  80 and even 90 percent share globally. IT, telecommunications, and media now compose America’s most concentrated sector and is consolidating somewhat faster than older industries, such as manufacturing, property. and wholesale trade.

    In the past, Democrats received some support from business, but the GOP ruled the corporate mainstream. As William Domhoff  illustrated in his classic study Fat Cats and Democrats, Democrats drew support from outsiders, some of them less than savory, in industries from energy,  real estate, and gambling (Trump himself was a long-time Democrat). They also drew on diverse industries. As recently as the Bill Clinton years, Bill White, a savvy oil and gas attorney from Houston, served as chairman of the Democratic Party. It is doubtful now that someone with that background, even with White’s prodigious skills, will again be allowed into the party’s inner sanctum.

    Obama’s post-industrial corporate elite emerged in his first 2008 election, with Google, Microsoft, Time Warner, IBM, and General Electric (NBC) ranking among the largest business donors. During his time in office, companies like Google enjoyed unprecedented access to the White House: More than 250 people moved between jobs at Google or related firms, the federal government, and Democratic political campaigns.

    In the process,  the technology and media oligarchies became core funders of the  Democratic Party. This could prove more important in the future, as six of the ten and eight of the top 15 richest people on the planet, according to Forbes, derive their fortunes from these businesses. And this could just be the beginning: All of the 12 richest entrepreneurs under 40 come from the tech industry.

    Even Hillary Clinton, a far less appealing figure than Obama, garnered most of the big money from tech oligarchs and their employees. Open Secrets notes that among private firms the largest business donors to her campaign included tech media establishments, including Alphabet (Google’s parent company), Microsoft, Apple, Time Warner, and Comcast.

    Trump’s victory shocked this cozy alliance, and placed them in opposition. Silicon Valley, along with its idiot aunt, Hollywood, are now the most likely business constituencies to go into hysterics over the most recent inane Trump tweet, with some CEOs active participants in the anti-Trump “resistance.” Those few in Silicon Valley who backed Trump, like Peter Thiel, are now subject to campaigns to drive them from prominent boards. Uber’s Travis Kalanick, himself a rather unpleasant character, has been forced by such pressure to remove himself from any association with the current White House.

    Ideology here mixes with self-interest. Mark Zuckerberg, whose $50 billion net worth makes him easily the wealthiest American under 40, recently issued a pronunciamiento that places his company’s objective as far from Trumpian nationalism as possible. He wants to create “a global community” even though his industry has helped foster the most social isolation since people discovered caves. His vision of the future, notes Bloomberg’s Leonid Bershidsky, offers something of a “social dystopia” run by Facebook’s management, with terms of discussion powered by computer algorithms.  

    It’s clear what won’t make the cut in Zuckerberg’s “community”: Facebook is  increasingly hostile to any dissenting opinions from the right. The traditional media now wholly or partially  owned by the “ephemeral” economy oligarchs—Jeff Bezos’s Washington Post, Microsoft’s MSNBC and Carlos Slim’s New York Times—have also joined the anti-Trump “resistance,” having just previously served as claques for Obama and Hillary Clinton. Newsrooms may always have tilted somewhat to the left, but today they seem about as objective as those in Putin’s Russia or, for that matter, Fox News.

    Immigration may be the biggest hot button issue separating the oligarchs from a   White House that has fanned nativist flames. But for them, embracing immigration—most notably the odious HIB visa program—does not mean adhering to legal norms or American traditions. Instead, their immigration vision fits that of companies seeking indentured tech servants as well as a cheap and inexhaustible supply of undocumented cheap dog-walkers, toenail painters, and nannies.

    For this constituency, neither Trump’s proposed infrastructure program nor his moves to deregulate the economy have much appeal. After all, the Bay Area oligarchs seem perfectly fine with California’s regulatory insanity, and the piteously poor condition of the state’s infrastructure. Who needs roads and bridges when you have the cloud?

    Of course, not all the new ruling class can dismiss Trump so haughtily. Elon Musk, a Hillary supporter who still sits on the new president’s economic council, needs skilled tradespeople and reasonable regulation to build electric cars and rockets. He yearns to play a role in Trump’s “lunar gold rush.” Caught in the middle, Musk is trying to make nice even in the face of assaults sent to him from the “resistance.”

    Trump’s Oligarchs: Old School and Middle Class Friendly

    The Obama oligarchs, like establishmentarians everywhere, clearly missed what the Chicago sociologist Richard Longworth predicted two decades ago: that rapid globalization,   now known as Davos capitalism,  would cause a full scale “social crisis.” The middle and working classes, as the Guardian has correctly noted, have little reason to love “superstar” oligarchs who employ few of them and, according to a recent paper by the Bureau of Economic Research, are a primary reason for the growth of inequality.

    Trump’s oligarchs, for their part, reflect interests that jibe more closely with those of many middle and working class families. Trump’s so called  “cabinet of billionaires”—their  net worth is estimated at $14 billion—rightly has elicited criticism from   the Guardian and Mother Jones, which predictably also labeled them a bit too pro-Russian. And to be sure, Wall Street’s hoary hand, notably the ubiquitous Goldman Sachs, has secured  top posts at both the Treasury and the head of the National Economic Council.

    Nonetheless, these billionaires have embraced a president who trolls corporations sending jobs overseas and bullies foreign firms, like Softbank, into committing themselves to major employment in the states. Obama and his academic coterie might dismiss such behavior as unseemly, darkly nationalistic and even ahistorical, but there may well be political gold there.

    Of course, self-interest is a guiding factor, something particularly evident in the energy industry. The Trump cabinet features Rex Tillerson, former CEO of Exxon Mobil, as its secretary of State,   Rick Perry, former governor of Texas, as Energy secretary, and Oklahoma’s former attorney general, Scott Pruitt, as director of the EPA. David Wolff, one of the Houston’s largest land owners, notes  the change of administration has sparked renewed optimism across the energy belt. “It is nice to have a president who doesn’t hate your major industry,” Wolff quips.    

    Many manufacturers—at least those who build products  here—also have reason to celebrate the Trump ascension. A lot of firms felt threatened by the Democrats’ regulatory regime, which threatened to boost their energy and other costs. They also were the primary victims of globalist trading polices embraced by the grandees of both parties. The 79-year-old billionaire Wilbur Ross, the new Commerce secretary, made his fortune by buying and selling companies in such trade-impacted sectors as steel, textiles, and coal. Trade advisor Peter Navarro is well-known for pushing neo-protectionist and nationalist policies abhorred by the new oligarchs but popular in large parts of the country.

    Interregnum or Change of Direction?

    To the increasingly disconnected and increasingly concentrated blue state media, Ross and his ilk may epitomize an unhealthy attraction to “backward” sectors that need to be “disrupted” by the geniuses of Silicon Valley. Given their sense of historical inevitably, the tech oligarchs may feel that this shift is just a temporary halt in their drive, as notes Newsweek’s Michael Wolff,  to create “a more careful, regulated, and corrected world.”

    Yet many more Americans—particularly blue collar Americans—may prefer the Trump approach. Manufacturing employs some 11 million workers compared to 2.7 million in information. Both have seen their share of jobs go down since 2004, but, suggests the Bureau of Labor Statistics, industrial jobs are likely to remain six times as numerous by 2024. Throw in the mining sector, which includes energy, and the difference is expected to be roughly 9.4 million jobs compared to 2.4 million in the information sector.

    Ironically, the workforce in these industries is far more diverse than in those businesses run by the Obama oligarchs, who loudly champion the rainbow ideal but rarely in practice.   Silicon Valley  employs very few African-Americans or Hispanics; they make up barely 6 percent, for example, of Facebook’s workforce while overall leading tech firms employ barely 5 percent. In contrast,  according to 2015 data, 16.2 percent of manufacturing workers are Latinos and 9.7 percent are African-Americans. In mining, quarrying, and oil and gas extraction, Latinos make up 16.9 percent of the workforce and African-Americans 4.8 percent, while in agriculture, forestry, fishing, and hunting, nearly a quarter of the workforce—23.0 percent—is Latino and 2.7 percent African-American.

    If Trump policies can unleash a boom in these industries, he may have more staying power than many in the chattering classes admit. At least the Trumpians offer the prospect of upward mobility, greater independence, and the pride of work. In contrast, Silicon Valley’s vision, notes Greg Ferenstein, who has researched the views of the post-industrial elite, suggests a world where a “greater share of economic wealth will be generated by a smaller slice of very talented or original people”—that is, the denizens of Silicon Valley. “Everyone else,” he continues, “will increasingly subsist on some combination of part-time entrepreneurial ‘gig work’ and government aid. “

    One has to wonder whether the prospect of widespread downward mobility for all but the “best and brightest” will prove very attractive to the majority of Americans. In contrast, Trump’s outsized promises, however unrealistic, may retain surprisingly long-term appeal. 

    Trump’s business cronies may be grizzled, and even reactionary. They still may well end up as anachronisms, the last devotes of a dying industrial, largely white, America. But the Trump interregnum could become a new dominant paradigm if the Obama oligarchs fail to develop a vision that allows a better future than the jobless, socially stagnant and politically correct one now on offer.

    This piece first appeared in The Daily Beast.

    Joel Kotkin is executive editor of NewGeography.com. He is the Roger Hobbs Distinguished Fellow in Urban Studies at Chapman University and executive director of the Houston-based Center for Opportunity Urbanism. His newest book, The Human City: Urbanism for the rest of us, was published in April by Agate. He is also author of The New Class Conflict, The City: A Global History, and The Next Hundred Million: America in 2050. He lives in Orange County, CA.

    Photo: Gage Skidmore, CC License

  • Common Sense on Immigration

    No issue divides the United States more than immigration. Many Americans are resentful of the estimated 11 million undocumented immigrants, worry about their own job security, and fear the arrival of more refugees from Islamic countries could pose the greatest terrorist threat. At the other end of the spectrum are those who believe the welcoming words on the Statue of Liberty represent a national value that supersedes traditional norms of citizenship and national culture.

    What has been largely missing has been a sharp focus on the purpose of immigration. In the past, immigration was critical in meeting the demographic and economic needs of a rapidly growing nation. Simply put, the country required lots of bodies to develop its vast expanses of land and natural resources and to work in its factories.    

    The need for foreign workers remains important, but the conditions have changed. No longer a largely rural, empty country, more than 80 percent of Americans cluster in urban and suburban areas. Many routine jobs have been automated; factories, farms and offices function more efficiently with smaller workforces. Since at least 2000, notes demographer Nicholas Eberstadt, the “Great American Escalator” has stopped working.

    These changes suggest the need to rethink national immigration policies. In a country where wages for the poorest workers have been dropping for decades and incomes have stagnated for the middle class, allowing large numbers of even poorer people into the country seems more burden than balm. They often work hard, but largely in low-income service jobs and in the low end of the health care field. In California, home to an estimated 2.7 million largely Latino undocumented immigrants, approximately three in four Latino non-citizens struggle to make ends meet, as do about half of naturalized Latino citizens, according to a recent United Way study.

    Overall, our current immigrants, legal and illegal, have not advanced as quickly as in previous generations. This, along with the crisis in much of Middle America, should be our primary national concern. This doesn’t necessarily translate to mass deportations or even severe cutbacks in legal immigration, as some, including Attorney General Jeff Sessions and several congressional Republicans, have said. But it certainly does suggest taking a fresh look at how we view immigration.    

    Learning From Abroad

    So, what kind of immigration is best for America?

    Models to consider are those that put premiums on marketable skills and language proficiency rather than family reunification. The Canadian and Australian systems, as President Trump correctly noted, are more attuned to their own national needs, compared with the U.S approach, which emphasizes family re-unification. Canadian authorities allow some 60 to 70 percent of their immigrants to come for economic purposes, notes Carter Labor Secretary Ray Marshall, supporting their system mainly by “filling vacancies that are measured and demonstrated in the Canadian economy.”    

    Such a needs-based program would be a better, and fairer, way of addressing skills shortages than the odious H-IB program, which allows temporary indentured tech workers to replace American citizens. Instead, talented newcomers would be welcomed as future citizens and given the right to negotiate their own labor rates and conditions.

    This emphasis on admitting immigrants with needed skills leaves Canadians and Australians with generally more positive views about immigration than Americans. Australia is one of only three countries in the world where children of migrants do better at school than children of non-migrants. Canadian support for immigration is particularly high in Toronto, which has been transformed from a sleepy Anglo enclave to a vibrant, diverse global capital.

    But such hospitality is not limitless. A former Canadian immigration judge told me recently, in a tone of alarm, that his country’s invitation to 25,000 Syrian refugees could incubate the same sort of disorder that we see across Europe. There, in many heavily immigrant communities, poverty and isolation has persisted, sometimes for generations.    

    I doubt many Americans would want to see the kind of social unrest we see across once peaceful places like Sweden, where women now complain of being perpetually harassed, even as supposedly feminist politicians look the other way. In France, Muslims make up about 7.5 percent of the French population compared to 1 percent in the U.S., but France has been ravaged by Islamic terrorism, Muslim-fueled anti-Semitism, and a widening cultural gap between the immigrants and the indigenous French population. In France and many other European countries, we see the rise of nativist politicians that make Donald Trump seem like Mother Theresa.

    Citizenship and National Culture

    The United States could be headed to a similar devolution. America’s ideals may be universal, but our political community has always been based on U.S. citizenship. You should not have to be an Anglo to admire the Founders, or to embrace the importance of the Constitution. Yet it’s now fashionable among some progressive activists to reject established American political traditions, which constitute a fundamental reason people have come here for the last two centuries.

    Yet the “open borders” lobby on the progressive left increasingly demeans the very idea of citizenship. In some cases, they see immigration as way to achieve their desired end of “white America.” Some advocates for the undocumented, such as Jorge Bonilla of Univision, assert that America is “our county, not theirs” referring to Trump supporters. Others, like New York Mayor Bill di Blasio, refuse to differentiate between legal and illegal immigrants.

    As usual, California leads the lunacy. Gov. Jerry Brown, who famously laid out a “welcome” sign to Mexican illegal and legal immigrants, has also given them drivers’ licenses and provides financial aid for college, even while cutting aid for middle-class residents. Some Sacramento lawmakers are pressing to give undocumented immigrants’ access to state health insurance. Senate President Pro Tem Kevin de Leon recently boasted, “Half of my family would be eligible for deportation under the executive order, because they got a false Social Security card, they got a false identification.”

    The “open borders” ideology has reached its apotheosis in “sanctuary” cities which extend legal protection from deportation to criminal aliens, including those who have committed felonies. Donald Trump opportunistically emphasized this absurd and inappropriate situation—sometimes invoking the names of murdered Americans—during his 2016 campaign. The only mystery is why it would surprise the chattering class that many voters responded to his message.

    Most Americans are more practical about immigration than politicians in either party. The vast majority of us, including Republicans, oppose massive deportations of undocumented individuals with no serious criminal record. Limiting Muslim immigration appeals to barely half of Americans. Only a minority favor Trump’s famous “big beautiful wall” on the Mexico-U.S. border.

    Yet even in California, three-quarters of the population, according to a recent U.C.-Berkeley survey, oppose “sanctuary cities.” Overall, more Americans favor less immigration than more. According to a recent Pew study, most also generally approve tougher border controls and increased deportations. They also want newcomers to come legally and learn English, notes Gallup. This is not just an Anglo issue. In Texas, by some accounts roughly one-third of all Latino voters supported Trump.

    Sadly, immigration as an issue has been totally politicized. Obama deported far more undocumented aliens than his Republican predecessor, or any previous president, for that matter, without inciting mass hysteria. To be sure, Republicans face severe challenges with new generations that are more heavily Latino and Asian and generally more positive about immigration. The undocumented account for roughly one in five Mexicans and upwards of half of those from Central American countries, meaning that overly brutal approaches to their residency would be eventual political suicide for Republicans in many key states, including Arizona, Florida, Nevada, Colorado and even Georgia.

    Any new immigration policy has to be widely acceptable — both where immigrants are common as well as those generally less diverse areas where opposition to immigration is strongest. Unlike many issues, immigration cannot be devolved to local areas to accommodate differing cultural climates; it is, and will remain, a federal issue. A policy that melds a skills-based orientation, compassion, strong border enforcement, expulsion of criminals, and forcing the undocumented to the back of the citizenship line seems eminently fair.

    Economic Growth: The Secret Sauce of Immigration Policy

    Strong, broad-based economic growth remains the key to making immigration work. A weak economy, unemployment, population density, or sudden uncontrolled surges in migration, notes a recent Economic Policy Institute, drives most anti-immigration sentiment. The labor-backed think tank suggests it would be far better to bring in migrants with skills that are in short supply and avoid temporary workers, such as H-1B visa holders, who are paid lower wages, undercutting the employment prospects for Americans.

    Given the demands of competition and changes in technology, it seems foolish to allow many additional lower-skilled people enter our country. This is not elitism: Industry needs machinists, carpenters and nurses as well as computer programmers and biomedical engineers. What we don’t need to do is flood the bottom of the labor market. Again, this reality is race-neutral. Economist George Borjas suggests that the influx of low-skilled, poorly educated immigrants has reduced wages for our indigenous poor, particularly African-Americans, but also for the recent waves of immigrants, including Mexican Americans, over the past three decades.

    Like most high-income countries, America’s fertility rate is below that needed to replace the current generation. This constitutes one rationale for continued legal immigration. But our demographic shortcomings are also entwined with lack of economic opportunity, crippling student debt, and the high cost of family-friendly housing stock. In other words, one reason Millennials are putting off having children is because they can’t afford them.

    Overall immigration is a net benefit, if the economic conditions are right. An overly broad cutback in immigration would deprive the country of the labor of millions of hard-working people, many of whom are highly entrepreneurial. The foreign-born, notes the Kaufmann Foundation, are also twice as likely to start a business as native-born Americans. It’s always been thus—and these aren’t just small, ethnic, family-owned restaurants we’re talking about. More than 40 percent of Fortune 500 companies were founded by immigrants or their offspring.    

    American immigration has succeeded in the past largely due to economic expansion. The historical lesson is clear: a growing economy, more wealth and opportunity, as well as a sensible policy, are the true prerequisites for the successful integration of newcomers into our society.

    Joel Kotkin is executive editor of NewGeography.com. He is the Roger Hobbs Distinguished Fellow in Urban Studies at Chapman University and executive director of the Houston-based Center for Opportunity Urbanism. His newest book, The Human City: Urbanism for the rest of us, was published in April by Agate. He is also author of The New Class Conflict, The City: A Global History, and The Next Hundred Million: America in 2050. He lives in Orange County, CA.

    Photo: Jonathan McIntosh

  • How the Democrats can Rebuild

    Numerous commentaries from both the political left and right have expounded the parlous state of the Democratic Party. And, to be sure, the Democrats have been working on extinguishing themselves in vast parts of the country, and have even managed to make themselves less popular than the Republicans in recent polls.

    Yet, in the longer term, the demographic prospects of a Democratic resurgence remain excellent. Virtually all of the growing parts of the electorate — millennials, Latinos, Asians, single women — are tilting to the left. It is likely just a matter of time, particularly as more conservative whites from the silent and boomer generations begin to die off.

    But, in politics, like life, time can make a decisive difference. It’s been almost a decade since the Atlantic proclaimed the end of “white America,” but Anglos will continue to dominate the electorate for at least the next few electoral cycles, and they have been trending to the right. In 1992, white voters split evenly between the parties, but last year went 54 percent to 39 percent for the GOP.

    Identity politics vs. social democracy

    To win consistently in the near term, and compete in red states, Democrats need to adjust the cultural and racial agenda dominating the “resistance” to one that addresses directly the challenges faced by working- and middle-class families of all races. This notion of identity politics, as opposed to those of social class, is embraced by the progressives’ allies in the media, academia, urban speculators, Hollywood and Silicon Valley, since environmentalism, gender and race issues do not directly threaten their wealth or privileged status.

    The rise of identity politics, born in the 1960s, has weakened the party’s appeal to the broader population, as Columbia University humanities professor Mark Lilla argued in a November New York Times column. But most progressives, like pundit Matthew Yglesias, suggest that “there is no other way to do politics.” To even suggest abandoning identity politics, one progressive academic suggested, is an expression of “white supremacy,” and she compared the impeccably progressive Lilla with KKK leader David Duke.

    This hurts the Democrats as they seek to counter President Donald Trump. Americans may not be enthusiastic about mass deportations, but the Democratic embrace of open borders and sanctuary cities also is not popular — not even in California. And while most Americans might embrace choice as a basic principle, many, even millennials, are queasy about late-term abortions.

    Democrats also need to distance themselves from the anti-police rhetoric of Black Lives Matter. Among millennials, law enforcement and the military are the most trusted of all public institutions. Rabid racial politics among Democrats, notes Lee Trepanier, political science professor at Saginaw Valley State University in Michigan and editor of the VoegelinView website, is steadily turning white voters into something of a conscious racial “tribe.”

    Finally, Democrats have now embraced a form of climate change orthodoxy that, if implemented, all but guarantees that America will not have a strong, broad-based economic expansion. The economic pillars of today’s Democratic Party may thrive in a globalist, open-border society, but not many in the more decidedly blue-collar industrial, agricultural or homebuilding industries.

    This piece first appeared in The Orange County Register.

    Joel Kotkin is executive editor of NewGeography.com. He is the Roger Hobbs Distinguished Fellow in Urban Studies at Chapman University and executive director of the Houston-based Center for Opportunity Urbanism. His newest book, The Human City: Urbanism for the rest of us, was published in April by Agate. He is also author of The New Class Conflict, The City: A Global History, and The Next Hundred Million: America in 2050. He lives in Orange County, CA.

    Photo: Gage Skidmore

  • Is L.A. Back? Don’t Buy the Hype.

    With two football teams moving to Los Angeles, a host of towers rising in a resurgent downtown and an upcoming IPO for L.A.’s signature start-up, Snapchat parent Snap Inc., one can make a credible case that the city that defined growth for a half century is back. According to Mayor Eric Garcetti, the Rams, Chargers and the new mega-stadium that will house them in neighboring Inglewood, show that “that this is a town that nobody can afford to pass up.”

    And to be sure, Los Angeles has become a more compelling place for advocates of dense urbanism. Media accounts praise the city’s vibrant art scene, its increasingly definitive food scene and urbanist sub-culture. Some analysts credit millennials for boosting the population of the region and reviving the city’s appeal. Long disdained by eastern sophisticates, there’s an invasion from places like New York. GQ magazine called downtown L.A. “America’s next great city” last year.

    Downtown has transformed itself into something of an entertainment district, with museums, art galleries, restaurants, and sports and concert venues. Yet it has not become, like San Francisco or New York, a business center of note. In fact, jobs in the region have continued to move out to the periphery; downtown accounts for less than 5% of the region’s employment, one-third to half the share common in older large cities.

    Downtown’s residential growth needs to be placed in perspective. Since 2000 the population of the central core has increased by only 9,500; add the  entire inner ring and the population is up a mere 23,000. Meanwhile over the same span, the L.A. suburbs have added 600,000 residents. Jobs? Between 2000 and 2014, the core and inner ring, as well as older suburbs, lost jobs, U.S. Census data show, while newer suburbs and exurbs added jobs.

    In our most recent ranking of the metro areas creating the most jobs, Los Angeles ranked a mediocre 42nd out of the 70 largest metro areas; San Francisco ranked first. That’s well behind places like Dallas, Seattle, Denver, Orlando, and even New York and Boston, cities that we once assumed would be left in the dust by L.A.

    A New Tech Hub?

    The emergence of Snap has led some enthusiasts to predict L.A.’s emergence as a hotbed of the new economy. And to be sure, there is a growing tech corridor in the Santa Monica-Marina area that may gradually gain critical mass. Talk of a growing confluence between tech and entertainment content — the signature L.A. product — and the proliferation of new entertainment venues, could position the area for future growth. At the same time, the presence of Elon Musk’s Space X in suburban Hawthorne, near LAX, has excited local boosters.

    Yet despite these bright spots, Los Angeles’ current tech scene is almost piteously small. One consistent problem is venture capital. Despite the massive size of its economy, and huge population, Los Angeles garners barely 5% of the nation’s venture capital, compared to 40% for the Bay Area, 10% for New York and Boston. Companies that were born in L.A. often end up moving elsewhere, like virtual reality pioneer Oculus, which was frog marched to the Bay Area after being acquired by Facebook.

    Indeed, despite bright spots like Snap, since 2001 STEM employment in the L.A. metro area has been flat, in sharp contrast to high rates of job growth in the San Francisco Bay Area, Austin, Houston and Dallas, and the 10% national increase. Tech employment per capita in the L.A. area hovers slightly below the national average, according to a recent study I conducted at Chapman University. Los Angeles County, once the prodigious center of American high-tech, is also now slightly below the national average of engineers per capita.

    The Poverty Economy

    The regional economy, notes a recent Los Angeles Development Corporation report, continues to produce largely numbers of low-wage jobs, mostly in fields like health, hospitality and services. Sixty percent of all new jobs in the area over the next five years will require a high school education or less, the report projects.

    At the same time in the year ending last September, employment dropped in three key high-wage blue collar sectors: manufacturing, construction and wholesale trade notes the EDC The largest gains were in lower-wage industries like health care and social assistance, hospitality and food service.  Since 2007 Los Angeles County has 89,000 fewer manufacturing jobs, which pay an average of $54,000, but 89,000 more in food service that pay about $20,000. No surprise more than one out every three L.A. households have an income under $45,000 a year.

    All this works well for the people who are increasingly coming to enjoy L.A.’s great restaurants, hipster enclaves and art venues. The football teams will add to this mixture, offering employment selling peanuts, popcorn and hot dogs to generally affluent fans in the stands.

    Yet low wages could prove catastrophic in a region that lags only the Bay Area in housing costs. Some 45,000 are homeless throughout the metro area, concentrated downtown but spreading throughout the region all the way to Santa Ana, in the south. Housing prices have risen to five times median household income, highest in the nation and more than twice the multiple in New York, Chicago, Houston or Dallas-Ft. Worth. L.A. leads the nation’s big metro areas in a host of other negative indicators, including the percentage of income spent on housing, overcrowding and homelessness. A city which once epitomized middle class upward mobility is increasingly bifurcated between a wealthy elite, mostly Anglo and Asian, and a largely poor Latino and African-American community.

    A recent United Way study, for example, found that 37% of L.A. families can barely make ends meet, well above the 31% average for the state; the core city’s south and east sides have among the largest concentrations of extreme poverty in the state. Once a beacon for migrants from all over America, L.A. now has a similarly high rate of mass out-migration as New York. But unlike New York, where immigrants continue to pour in, newcomers to the U.S. are increasingly avoiding Los Angeles – it had the lowest growth in its immigrant population of any major metropolitan area over the past decade. Perhaps even more revealing, the Los Angeles area has endured among the largest drops in the number of children since 2000,notes demographer Wendell Cox,  more than New York, Chicago and San Francisco.

    Altered DNA

    The writer Scott Timberg notes that L.A.’s middle class, was once “the envy of the world.” L.A. used to be a place where firemen, cops and machinists could own houses in the midst of a great city. Dynamic, large aerospace firms, big banks and giant oil companies sustained the middle class.

    But the city has lost numerous major employers over the years, most recently longtime powerhouse Occidental Petroleum, and the U.S. headquarters of both Toyota and Nestle. The regional aerospace industry, which provided nearly 300,000 generally high-wage jobs in 1990, is now barely a third that size. High housing cost have devastated millennials, whose home ownership rate has dropped 30% since 1990, twice the national average.

    Many urbanists hail the emergence of a transit-oriented, dense city. Since 1990, Los Angeles County has added seven new urban rail lines and two exclusive busways at the cost of some $16 billion. Yet ridership on the Metropolitan Transportation Authority rail and bus services is now less than its predecessor Southern California Rapid Transit District bus services in 1985, before any rail services were opened. The share of work trips on transit in the entire five-county Los Angeles metropolitan region, has also dropped, from 5.1% in 1980 and 4.5% in 1990 to 4.2% in 2015. Meanwhile the city endures the nation’s worst traffic.

    Some longtime Angelenos are mounting a fierce ballot challenge — known as Measure S — to slow down ever more rapid densification. The ballot measure would bar new high-density construction projects for the next two years. “The Coalition to Preserve L.A.,” which is funding the measure, claims to be leading in the polls for the March 7 vote, but faces well-financed opposition from politically connected large developers, Mayor Garcetti, both political parties, virtually the entire city council, and much of the academic establishment. The L.A. Times denounced Proposition S as a “childish middle finger to City Hall” and its architecture critic Christopher Hawthorne, has urged the citizenry “to move past the building blocks of post-war Los Angeles, including the private car, the freeway, the single-family house and the lawn.”

    Proposition S proponents include many neighborhood and environmental groups, as well progressives and conservatives, including former Mayor Richard Riordan. The people controlling Los Angeles may dream of being the “next” New York but many residents, notes longtime activist Joel Fox, “are tired of the congestion and development and feel that more building will only add to congestion.”

    Renewing La La Land

    Of course, slowing or banning development by popular proposition is probably not the ideal  way to get control over the deteriorating situation. Yet it is clear that the current trajectory towards more dense housing is not addressing the city’s basic problems. Los Angeles, as the movie “La La Land” so poetically portrays, remains a “city of dreams” but that mythology is clearly being eroded by a delusional desire to be something else.

    In my old middle-class neighborhood in the San Fernando Valley, heavily populated by people from the creative industry, the worsening congestion, the upsurge of ever taller buildings and ever more present homeless did not reflect the giddiness of “La La Land.”

    Yet despite all these problems, Los Angeles has the potential to make a great comeback. It has a dispersed urban form that allows for innovation and diversity, and an unparalleled physical location on the Pacific Rim. Its ethnic diversity can be an asset, if somehow it can generate higher wage employment to stop the race to the bottom. The basics are all there for a real resurgence, if the city fathers ever could recognize that the City of Angels needs less a new genome but  should build on its own inimitable DNA.

    This piece first appeared in Forbes.

    Joel Kotkin is executive editor of NewGeography.com. He is the Roger Hobbs Distinguished Fellow in Urban Studies at Chapman University and executive director of the Houston-based Center for Opportunity Urbanism. His newest book, The Human City: Urbanism for the rest of us, was published in April by Agate. He is also author of The New Class Conflict, The City: A Global History, and The Next Hundred Million: America in 2050. He lives in Orange County, CA.

    Photo: AdamPrzezdziek

  • The True Legacy of Gov. Jerry Brown

    The cracks in the 50-year-old Oroville Dam, and the massive spillage and massive evacuations that followed, shed light on the true legacy of Jerry Brown. The governor, most recently in Newsweek, has cast himself as both the Subcomandante Zero of the anti-Trump resistance and savior of the planet. But when Brown finally departs Sacramento next year, he will be leaving behind a state that is in danger of falling apart both physically and socially.

    Jerry Brown’s California suffers the nation’s highest housing prices, largest percentage of people in or near poverty of any state and an exodus of middle-income, middle-aged people. Job growth is increasingly concentrated in low-wage sectors. By contrast, Brown’s father, Pat, notes his biographer, Ethan Rarick, helped make the 20th century “The California Century,” with our state providing “the template of American life.” There was then an “American Dream” across the nation, but here we called it the “California Dream.” His son is driving a stake through the heart of that very California Dream.

    California crumbling

    Nothing so illustrates the gap between the two Browns than infrastructure spending. Oroville Dam’s delayed maintenance, coupled with a lack of major new water storage facilities to serve a growing population, reflects a pattern of neglect. Just this year alone, the massive water losses at Oroville Dam and other storage overflows have almost certainly offset a significant portion of the hard-won drought water savings achieved by our state’s cities. A sensible state policy would have stored more water from before the drought, and would now be maximizing the current bounty.

    Once a national and global leader in infrastructure, according to a report last year by the Center for Budget and Policy Priorities, California now spends the least percentage of its state budget on infrastructure of any state. In the critical Sacramento-San Francisco Delta, an ancient levee and dike system is decaying, and ever more stringent environmental regulations limit key state and federal water facility operations. To be sure, Brown has supported a “water fix” — a dual tunnel through the Delta — to address some of these problems, but his efforts have only produced a mountain of paper, rather than real-world improvements. In terms of preparing for the future, California’s current penchant for endless studies and environmental hand-wringing is fostering pre-Katrina Louisiana conditions, rather than the forward-looking capital investments previously the state’s hallmark.

    This piece first appeared in The Orange County Register.

    Joel Kotkin is executive editor of NewGeography.com. He is the Roger Hobbs Distinguished Fellow in Urban Studies at Chapman University and executive director of the Houston-based Center for Opportunity Urbanism. His newest book, The Human City: Urbanism for the rest of us, was published in April by Agate. He is also author of The New Class Conflict, The City: A Global History, and The Next Hundred Million: America in 2050. He lives in Orange County, CA.

    Photo: Troy Holden