The evolution of cities is a protean process–and never more so than now. With over 50% of people living in metropolitan areas there have never been so many rapidly rising urban areas–or so many declining ones.
Our list of the cities of the future does not focus on established global centers like New York, London, Paris, Hong Kong or Tokyo , which have dominated urban rankings for a generation. We have also passed over cities that have achieved prominence in the past 20 years such as Seoul, Shanghai, Singapore, Beijing, Delhi, Sydney, Toronto, Houston and Dallas-Fort Worth.
Nor does our list include the massive, largely dysfunctional megacities–Mumbai, Mexico City, Dhaka, Bangladesh–that are among planet’s most populous today. Bigger often does not mean better.
Instead, our list focuses on emerging powerhouses like Chongqing, China, (population: 9 million), which Christina Larson in Foreign Policy recently described as “the biggest city you never heard of.”
Chongqing sits in the world’s most important new region for important cities: interior China. These interior Chinese cities, notes architect Adam Mayer, offer a healthy alternative to coastal megacities such as Shanghai, Hong Kong, Shenzen and Guangzhou, which suffer from congestion, high prices and increasingly wide class disparities. China’s bold urban diversification strategy hinges both on forging new transportation links and nurturing businesses in these interior cities. For example, in Chengdu, capital of the Sichuan province, new plane, road and rail connections are tying the city to both coastal China and the rest of the world. And the city is abuzz with new construction, including an increasing concentration of high-tech firms such as
India, although not by plan, also is experiencing a boom in once relatively obscure cities. Its rising urban centers include Bangalore (home of Infosys and
The growth of India and China also creates opportunity for other emerging players, particularly in Southeast Asia by creating markets for goods and services as well as investment capital. Potential hot spots include places like Hanoi, Vietnam, which is attracting greater interest from Japanese, American and European multi-national firms upset with China’s often bullying trade practices and rising costs. Malaysia’s capital Kuala Lumpur–with its rising financial sector–also displays considerable promise.
Africa also boasts many huge, rapidly growing cities, but it’s hard to identify many of these places–like Lagos, Nigeria, Luanda, Angola or Kinshasa, the Democratic Republic of the Congo–as bright prospects. One exception may well be Cape Town, the beautiful South African coastal city that shone so well during the recent World Cup.
Latin America, too, has a plethora of huge and growing cities, but it’s hard to nominate the likes of Mexico City or Sao Paulo as likely hot spots for future sustainable growth.
The best economic prospects in this region lie in more modestly sized cities like Santiago, the capital of resource-rich Chile, and even Campinas, Brazil, a growing smaller city–with 3 million residents–that lies outside the congested Sao Paolo region. This shift to smaller-scaled cities, as Michigan State’s Zachary Neal points out, has been conditioned by massive improvements in telecommunications and transportation infrastructure throughout the urban world. Today, he asserts, it is the ability to network long-distance–not girth–that makes the critical difference.
This is clear in the Middle East, where the emerging stars tend to be smaller cities. Tel Aviv, whose total metropolitan area is no larger than 3 million, has emerged as a major center for technology as well as one of the world’s premier diamond centers. The other leading candidates in the region hail from the United Arab Emirates, notably oil-rich Abu Dhabi and perhaps its now weakened neighbor, Dubai.
In North America the best urban prospects–Raleigh-Durham, N.C.; Austin, Texas; Salt Lake City; and Calgary, Canada–are far smaller than homegrown giants New York, Chicago and Los Angeles. Generally business-friendly and relatively affordable, these cities will attract many talented millennials as they start forming families in large numbers later in this decade.
Europe’s urban problem lies with stagnant or slow-growing population levels, and in the south at least, very weak economies. The only rapidly growing big city lies on the region’s periphery: Istanbul, which straddles the border between Europe and Asia and faces many of the problems common to developing-country mega-cities.
Overall, the populations of Europe’s cities are growing at barely 1%, the lowest rate of any continent. With low birthrates and growing opposition to immigration, it seems unlikely that any European city will emerge as a bigger global player in 20 years than today.
Other leading cities all over the world may also be in the early stages of fading from predominance. In the United States, according to analysis by the California Lutheran University forecast, Los Angeles and Chicago, America’s second and third cities, respectively, have fallen behind not only fast-comers like Houston and Dallas-Fort Worth, but even historically dominant New York in such key indicators as job generation and population growth.
Similarly Berlin, once seemingly poised to thrive in the post-Cold War future, has chronic high unemployment and a weak private sector, compared with Germany’s generally smaller, less unruly successful cities. The Osaka-Kobe-Kyoto area in Japan may also be set to fade a bit, due largely to the overwhelming predominance of Tokyo and the general demographic and economic decline of Dai Nippon.
Of course, none of this is set in stone. But this list provides an educated peek into which cities are best positioned to prosper and grow in our emerging era of cities.
Chengdu, China
The development of interior China, long on the back burner of national priorities, has reached the country’s western-most large city. Chengdu is abuzz with new construction, including an increasing concentration of high-tech companies, including Dell and Cisco. New plane, road and rail connections are tying the city to both coastal China and the rest of the world. With a metropolitan population of 6 million, economic factors–including lower costs–may prove critical to the capital of the Sichuan province. The business-friendly city still has a way to grow to catch up to the GDP per capita of Shanghai.
Chongqing, China
Chongqing enjoys rapidly improving transportation links with its neighbors to the west and the coastal megacities. Foreign companies like Ford, Microsoft, Hewlett Packard and Singapore-based Neptune Orient Lines are flocking to the city. The Business Times of Singapore reports that since 1998, Chongqing’s GDP has quadrupled from $21 billion to $86 billion. Last year alone, Chongqing’s GDP expanded at almost twice the rate of China as a whole. The population, according to United Nations projections, should grow from 9 million to 11 million by 2025.
Chongqing, China
Chongqing enjoys rapidly improving transportation links with its neighbors to the west and the coastal megacities. Foreign companies like Ford, Microsoft, Hewlett Packard and Singapore-based Neptune Orient Lines are flocking to the city. The Business Times of Singapore reports that since 1998, Chongqing’s GDP has quadrupled from $21 billion to $86 billion. Last year alone, Chongqing’s GDP expanded at almost twice the rate of China as a whole. The population, according to United Nations projections, should grow from 9 million to 11 million by 2025.
Ahmedabad, India
This is the largest metropolitan region in Gujarat, perhaps the most market-oriented and business-friendly of Indian states. Gujarat’s policies helped lure away the new Tata Nano plant from West Bengal (Kolkata) to Sanand, one of Gurajat’s exurbs. One Indian academic, Sedha Menon, compares the state–which has developed infrastructure more quickly than its domestic rivals–with Singapore and parts of Malaysia. Per-capita incomes in Gujarat are more than twice the national average. India’s seventh-largest city has a population of roughly 5.7 million and is expected, according to the U.N., to grow to over 7.6 million by 2025.
Santiago, Chile
Santiago boasts a diversified economic base: mining, textile production, leather technologies and food processing. Its favorable investment climate has enticed many multinational companies; there are few restrictions on foreign investment, and transparency is extensive. Recent surveys have ranked Chile and Santiago as leading locations in Latin America in terms of competitiveness. The 2010-2011 Global Competitiveness Report ranked Chile the highest in terms of competitiveness (based on institutions, infrastructure, macroeconomic environment, education, market efficiency, financial market development, et. al).
Raleigh Durham, North Carolina
Even in hard times this low-density, wide-ranging urban area has repeatedly performed well on Forbes’ list of the best cities for jobs. The area is a magnet for technology firms fleeing the more expensive, congested and highly regulated northeast corridor. One big problem obstructing the region’s ascendancy has been air connections. But Delta recently announced a large-scale expansion of flights there from around the country. Population growth will likely be lead by educated millennials seeking affordable housing and employment opportunities. Today the region has 1.7 million residents; the State of North Carolina projects it will grow to 2.4 million by 2025.
Tel Aviv, Israel
This urban region of roughly 3 million may boast the most vibrant economy of any along the Mediterranean. Tel Aviv and its surrounding environs control the vast majority of Israel’s high-tech exports, making it what may well be the closest thing to a Silicon Valley outside East Asia or California. It also boasts a household income that is nearly 50% above the national average for Israel. But perhaps its greatest asset is its free-wheeling lifestyle: Tel Aviv combines an Israeli entrepreneurial culture with the attributes of a thriving seacoast town.
Kuala Lumpur, Malaysia
Kuala Lumpur’s prospects lie in a development strategy focused on improving its air service, road and trade infrastructure, much as occurred in previous decades in Singapore. The urban area’s population has grown to over 5.8 million, and demographer Wendell Cox projects a population of roughly 8.2 million by 2025. KL has emerged as a global Islamic financing hub and maintains close ties with the Arabian Gulf’s finance sector. Educational and health care institutions also bolster the city’s growth. Forbes lists Kuala Lumpur as one of Asia’s future financial centers.
Suzhou, China
As in the U.S., some of the fastest-growing cities in China are located close to the bigger cities. Suzhou, only 75 miles from Shanghai, seems well positioned to benefit from spillover growth from the megacity. Known as the Venice of China, with many attractive canals and vast international tourism potential, its beauty and history could help secure its aspiration to become “the world’s office.” Some reports suggests Suzhou may already be the most affluent city in China; demographer Wendell Cox estimates that per-capita income is more than three times that of interior cities like Chengdu.
Hanoi, Vietnam
Chinese, Japanese, American, Singaporean, European and Indian companies identify this fast-growing city as ripe for industrial and infrastructure growth. The population of the region has doubled since the end of the Vietnam War to almost 3 million, and the U.N. projects a population of 4.5 million by 2025. Along with Ho Chi Minh City (formerly Saigon), Hanoi is expected be one of the fastest-growing GDPs in the world. Hanoi’s GDP growth rate for the first nine months of 2010 was estimated at 10.6%, almost twice that for the same period of last year.
Chennai, India
Formerly known as Madras, this metropolitan area of 7.5 million, up from 4.7 million 20 years ago, is projected by the U.N. to approach 10 million by 2025. Located on India’s east Asian coast, the city has so far this year created over 100,000 jobs–more than any other Indian city outside of the much larger Delhi and Mumbai. Chennai’s metropolitan area is taking full advantage of India’s soaring industrial sector, particularly the booming automobile sector. Electronics, led by Dell, Nokia, Motorola, Samsung, Siemens, Sony and Foxconn, are also booming. Chennai is home to India’s second-largest entertainment industry, behind Mumbai.
Austin, Texas
Austonites tend to be smug–but they have good reason. The central Texas city ranked as the No. 1 large urban area for jobs in our last Forbes survey. Along with Raleigh-Durham, Austin is an emerging challenger for high-tech supremacy with Silicon Valley. The current area’s population is 1.7 million and is expected to grow rapidly in the coming decades. Austin owes much both to its public sector institutions (the state government and the main Campus of the University of Texas) and its expanding ranks of private companies–including foreign ones–swarming into the city’s surrounding suburban belt.
Abu Dhabi, United Arab Emirates
Oil rich Abu Dhabi is among the world’s wealthiest countries in terms of per-capita GDP, which exceeds $68,000. However, the non-oil sector is likely to grow to about 45% of the GDP in coming years. To do so, the government has started to invest its oil revenues in construction, tourism and the electricity and water industry. Abu Dhabi is also helping to keep its neighbor Dubai afloat. If Dubai, with its world class infrastructure, can make a comeback, a global city separated by 80 miles of desert Arabian Gulf coastline could arise.
Campinas, Brazil
Campinas, located around 50 miles north of São Paulo, the country’s dominant industrial center, has attracted many technology companies, including IBM, Dell, Compaq, Samsung and Texas. The city also boasts a major research and university center. Firms engaged in high-tech activities–following a global pattern–tend to cluster in relatively pleasant, affordable and efficient places. Campinas could prove a big Brazilian beneficiary of this trend.
Melbourne, Australia
Australia has resources galore and relatively few people. But which of its cities is poised to benefit most from the nation’s expanding trade with China and India? Sydney’s costs have been shooting up–particularly for housing, but Melbourne’s political class seems about to open up new land for suburban development to restore some of the area’s affordability for younger Australians. Demographer Bernard Salt has predicted that Melbourne’s population will exceed Sydney‘s in less than 20 years. Melbourne also boasts Australia’s most walkable and pleasant urban cores , a pleasant San Francisco-like climate and a European ambiance.
Bangalore, India
Many big players in tech and services–Goldman Sachs, Cisco, HP as well as India-based giants like Tata–have located operations in Bangalore. But the city also boasts home-grown tech giants Infosys and Wipro, which each have over 60,000 employees worldwide. Since 1985 Bangalore’s population has more than doubled to over 7 million and is projected by the U.N. to reach 9.5 million by 2025. In the future, maintaining Bangalore’s advantage over smaller, less congested cities could prove a challenge.
Salt Lake City, Utah
Once seen as a Mormon enclave, the greater Salt Lake urban area–with roughly 1 million people –has every sign of emerging as a major world player with a wider appeal. The church still plays a critical role, in part by financing a massive redevelopment of the city’s now rather dowdy city core. The area’s population has doubled since the early 1970s and will grow another 100,000 by 2025 to well over 1.1 million. New companies are flocking to this business-friendly region, particularly from self-imploding California. Increasing national and global connections through Delta’s hub will tie this once isolated city closer with the wider world economy.
Nanjing, China
The one-time Imperial and Republican (Nationalist) capital sits only 150 miles from Shanghai. The relative affordability of Nanjing has drawn huge construction projects to the city, which is also the capital of Jiangsi Province. The city is developing a transport hub, and huge commercial construction projects abound in the downtown area. A majority of employment is in the fast-growing service sector. The metropolitan economy grew 50% just between 2006 and 2008, and future rapid growth is likely.
Cape Town, South Africa
The second-largest city in South Africa behind Johannesburg, Cape Town made the most of the recent World Cup. The region of some 3 million boasts fast-growing communications, finance and insurance sectors. Cape Town is looking to intellectual capital, transportation assets, business costs, technology, innovation and ease of doing business as its primary assets. In 2009 Empowerdex rated Cape Town as the top-performing municipality in South Africa for service delivery. About 97% of the operational budget went to infrastructure development, ensuring that households can enjoy adequate sanitation and water access.
Calgary, Canada
You don’t have to buy the notion of a climate-change-driven northern ascendancy to see a bright future for Alberta’s premier city. Calgary is positioned well on the fringe of Canada’s largest energy belt and enjoys lower taxes and less stringent regulations than its Canadian rivals. Calgary has been hit by a slowdown in energy business, but over time demand from China, India and a slowly recovering world economy should boost this critical sector. The region is expected to be back to its familiar place on top among Canadian urban economies by next year.
The World’s Diminishing Cities: Chicago, Ill.
Great cities don’t only rise, some decline. Even with Barack Obama in the White House, Chicago is struggling with persistent job losses that, since 2000, are exceeded only by Detroit among the nation’s top 10 largest U.S. regions. The Windy City’s deficit as a percentage of spending–a remarkable 16.3 %–is now higher than Los Angeles and twice that of New York. Moreover, crime remains stubbornly high, and the widely hyped condo boom has left a legacy of uncompleted buildings, foreclosures and vacancies.
The World’s Diminishing Cities: Berlin, Germany
By all rights, Berlin should be a European boomtown: The capital of united Germany, a natural crossroads to the east and Europe’s bohemian hot spot. But it remains, as its mayor, Klaus Wowereit, famously remarked, “poor but sexy.” Berlin suffers unemployment far higher than the national average, and its gross added-value per inhabitant amounted to just over half that created by residents in the northern city of Hamburg, which has about half as many people. One-quarter of the workforce earns less than 900 euros a month, and one out of every three children lives in poverty.
The World’s Diminishing Cities: Osaka-Kobe-Kyoto, Japan
Few places possess a more glorious urban pedigree than Japan’s Kansai region. But the shift of manufacturing to China and other countries has undermined the economy of Osaka, traditionally the industrial heart of Japan. As Japan shrinks both economically and demographically, Tokyo, the world’s largest city, looms ever larger while Osaka’s role is, as one demographer put it, “fading away.” Tokyo’s population, now over 30 million, has grown to be double that of the Osaka region, and continues to outpace it. Most critical: It is to Tokyo, not Osaka, that Japan’s diminishing reserves of educated young people–and industries dependent on their talent–are headed.
This article originally appeared at Forbes.com.
Joel Kotkin is executive editor of NewGeography.com and is a distinguished presidential fellow in urban futures at Chapman University. He is author of The City: A Global History
The New World Order
Tribal ties—race, ethnicity, and religion—are becoming more important than borders.
For centuries we have used maps to delineate borders that have been defined by politics. But it may be time to chuck many of our notions about how humanity organizes itself. Across the world a resurgence of tribal ties is creating more complex global alliances. Where once diplomacy defined borders, now history, race, ethnicity, religion, and culture are dividing humanity into dynamic new groupings.
Broad concepts—green, socialist, or market-capitalist ideology—may animate cosmopolitan elites, but they generally do not motivate most people. Instead, the “tribe” is valued far more than any universal ideology. As the great Arab historian Ibn Khaldun observed: “Only Tribes held together by a group feeling can survive in a desert.”
Although tribal connections are as old as history, political upheaval and globalization are magnifying their impact. The world’s new contours began to emerge with the end of the Cold War. Maps designating separate blocs aligned to the United States or the Soviet Union were suddenly irrelevant. More recently, the notion of a united Third World has been supplanted by the rise of China and India. And newer concepts like the BRIC nations (Brazil, Russia, India, and China) are undermined by the fact that these countries have vastly different histories and cultures.
The borders of this new world will remain protean, subject to change over time. Some places do not fit easily into wide categories—take that peculiar place called France—so we’ve defined them as Stand-Alones. And there are the successors to the great city-states of the Renaissance—places like London and Singapore. What unites them all are ties defined by affinity, not geography.
1. New Hansa
Denmark, Finland, Germany, Netherlands, Norway, Sweden
In the 13th century, an alliance of Northern European towns called the Hanseatic League created what historian Fernand Braudel called a “common civilization created by trading.” Today’s expanded list of Hansa states share Germanic cultural roots, and they have found their niche by selling high-value goods to developed nations, as well as to burgeoning markets in Russia, China, and India. Widely admired for their generous welfare systems, most of these countries have liberalized their economies in recent years. They account for six of the top eight countries on the Legatum Prosperity Index and boast some of the world’s highest savings rates (25 percent or more), as well as impressive levels of employment, education, and technological innovation.
2. The Border Areas
Belgium, Czech Republic, Estonia, Hungary, Iceland, Ireland, Latvia, Lithuania, Poland, Romania, Slovakia, U.K.
These countries are seeking to find their place in the new tribal world. Many of them, including Romania and Belgium, are a cultural mishmash. They can be volatile; Ireland has gone from being a “Celtic tiger” to a financial basket case. In the past, these states were often overrun by the armies of powerful neighbors; in the future, they may be fighting for their autonomy against competing zones of influence.
3. Olive Republics
Bulgaria, Croatia, Greece, Italy, Kosovo, Macedonia, Montenegro, Portugal, Slovenia, Spain
With roots in Greek and Roman antiquity, these lands of olives and wine lag behind their Nordic counterparts in virtually every category: poverty rates are almost twice as high, labor participation is 10 to 20 percent lower. Almost all the Olive Republics—led by Greece, Spain, and Portugal—have huge government debt compared with most Hansa countries. They also have among the lowest birthrates: Italy is vying with Japan to be the country with the world’s oldest population.
4. City-States
London
It’s a center for finance and media, but London may be best understood as a world-class city in a second-rate country.
Paris
Accounts for nearly 25 percent of France’s GDP and is home to many of its global companies. It’s not as important as London, but there will always be a market for this most beautiful of cities.
Singapore
In a world increasingly shaped by Asia, its location between the Pacific and Indian oceans may be the best on the planet. With one of the world’s great ports, and high levels of income and education, it is a great urban success story.
Tel Aviv
While much of nationalist-religious Israel is a heavily guarded borderland, Tel Aviv is a secular city with a burgeoning economy. It accounts for the majority of Israel’s high-tech exports; its per capita income is estimated to be 50 percent above the national average, and four of Israel’s nine billionaires live in the city or its suburbs.
5. North American Alliance
Canada, United States
These two countries are joined at the hip in terms of their economies, demographics, and culture, with each easily being the other’s largest trade partner. Many pundits see this vast region in the grip of inexorable decline. They’re wrong, at least for now. North America boasts many world-class cities, led by New York; the world’s largest high-tech economy; the most agricultural production; and four times as much fresh water per capita as either Europe or Asia.
6. Liberalistas
Chile, Colombia, Costa Rica, Mexico, Peru
These countries are the standard–bearers of democracy and capitalism in Latin America. Still suffering low household income and high poverty rates, they are trying to join the ranks of the fast-growing economies, such as China’s. But the notion of breaking with the U.S.—the traditionally dominant economic force in the region—would seem improbable for some of them, notably Mexico, with its close geographic and ethnic ties. Yet the future of these economies is uncertain; will they become more state–oriented or pursue economic liberalism?
7. Bolivarian Republics
Argentina, Bolivia, Cuba, Ecuador, Nicaragua, Venezuela
Led by Venezuela’s Hugo Chávez, large parts of Latin America are swinging back toward dictatorship and following the pattern of Peronism, with its historical antipathy toward America and capitalism. The Chávez-influenced states are largely poor; the percentage of people living in poverty is more than 60 percent in Bolivia. With their anti-gringo mindset, mineral wealth, and energy reserves, they are tempting targets for rising powers like China and Russia.
8. Stand-Alones
Brazil
South America’s largest economy, Brazil straddles the ground between the Bolivarians and the liberal republics of the region. Its resources, including offshore oil, and industrial prowess make it a second-tier superpower (after North America, Greater India, and the Middle Kingdom). But huge social problems, notably crime and poverty, fester. Brazil recently has edged away from its embrace of North America and sought out new allies, notably China and Iran.
France
France remains an advanced, cultured place that tries to resist Anglo-American culture and the shrinking relevance of the EU. No longer a great power, it is more consequential than an Olive Republic but not as strong as the Hansa.
Greater India
India has one of the world’s fastest-growing economies, but its household income remains roughly a third less than that of China. At least a quarter of its 1.3 billion people live in poverty, and its growing megacities, notably Mumbai and Kolkata, are home to some of the world’s largest slums. But it’s also forging ahead in everything from auto manufacturing to software production.
Japan
With its financial resources and engineering savvy, Japan remains a world power. But it has been replaced by China as the world’s No. 2 economy. In part because of its resistance to immigration, by 2050 upwards of 35 percent of the population could be over 60. At the same time, its technological edge is being eroded by South Korea, China, India, and the U.S.
South Korea
South Korea has become a true technological power. Forty years ago its per capita income was roughly comparable to that of Ghana; today it is 15 times larger, and Korean median household income is roughly the same as Japan’s. It has bounced back brilliantly from the global recession but must be careful to avoid being sucked into the engines of an expanding China.
Switzerland
It’s essentially a city-state connected to the world not by sea lanes but by wire transfers and airplanes. It enjoys prosperity, ample water supplies, and an excellent business climate.
9. Russian Empire
Armenia, Belarus, Moldova, Russian Federation, Ukraine
Russia has enormous natural resources, considerable scientific-technological capacity, and a powerful military. As China waxes, Russia is trying to assert itself in Ukraine, Georgia, and Central Asia. Like the old tsarist version, the new Russian empire relies on the strong ties of the Russian Slavic identity, an ethnic group that accounts for roughly four fifths of its 140 million people. It is a middling country in terms of household income—roughly half of Italy’s—and also faces a rapidly aging population.
10. The Wild East
Afghanistan, Azerbaijan, Kazakhstan, Kyrgyzstan, Pakistan, Tajikistan
This part of the world will remain a center of contention between competing regions, including China, India, Turkey, Russia, and North America.
11. Iranistan
Bahrain, Gaza Strip, Iran, Iraq, Lebanon, Syria
With oil reserves, relatively high levels of education, and an economy roughly the size of Turkey’s, Iran should be a rising superpower. But its full influence has been curbed by its extremist ideology, which conflicts not only with Western countries but also with Greater Arabia. A poorly managed economy has turned the region into a net importer of consumer goods, high-tech equipment, food, and even refined petroleum.
12. Greater Arabia
Egypt, Jordan, Kuwait, Palestinian Territories, Saudi Arabia, United Arab Emirates, Yemen
This region’s oil resources make it a key political and financial player. But there’s a huge gap between the Persian Gulf states like Saudi Arabia and the United Arab Emirates and the more impoverished states. Abu Dhabi has a per capita income of roughly $40,000, while Yemen suffers along with as little as 5 percent of that number. A powerful cultural bond—religion and race—ties this area together but makes relations with the rest of the world problematic.
13. The New Ottomans
Turkey, Turkmenistan, Uzbekistan
Turkey epitomizes the current reversion to tribe, focusing less on Europe than on its eastern front. Although ties to the EU remain its economic linchpin, the country has shifted economic and foreign policy toward its old Ottoman holdings in the Mideast and ethnic brethren in Central Asia. Trade with both Russia and China is also on the rise.
14. South African Empire
Botswana, Lesotho, Namibia, South Africa, Swaziland, Zimbabwe
South Africa’s economy is by far the largest and most diversified in Africa. It has good infrastructure, mineral resources, fertile land, and a strong industrial base. Per capita income of $10,000 makes it relatively wealthy by African standards. It has strong cultural ties with its neighbors, Lesotho, Botswana, and Namibia, which are also primarily Christian.
15. Sub-Saharan Africa
Angola, Cameroon, Central African Republic, Congo-Kinshasa, Ethiopia, Ghana, Kenya, Liberia, Malawi, Mali, Mozambique, Nigeria, Senegal, Sierra Leone, Sudan, Tanzania, Togo, Uganda, Zambia
Mostly former British or French colonies, these countries are divided between Muslim and Christian, French and English speakers, and lack cultural cohesion. A combination of natural resources and poverty rates of 70 or 80 percent all but assure that cash-rich players like China, India, and North America will seek to exploit the region.
16. Maghrebian Belt
Algeria, Libya, Mauritania, Morocco, Tunisia
In this region, spanning the African coast of the Mediterranean, there are glimmers of progress in relatively affluent countries like Libya and Tunisia. But they sit amid great concentrations of poverty.
17. Middle Kingdom
China, Hong Kong, Taiwan
China may not, as the IMF recently predicted, pass the U.S. in GDP within a decade or so, but it’s undoubtedly the world’s emerging superpower. Its ethnic solidarity and sense of historical superiority remain remarkable. Han Chinese account for more than 90 percent of the population and constitute the world’s single largest racial-cultural group. This national cultural cohesion, many foreign companies are learning, makes penetrating this huge market even more difficult. China’s growing need for resources can be seen in its economic expansion in Africa, the Bolivarian Republics, and the Wild East. Its problems, however, are legion: a deeply authoritarian regime, a growing gulf between rich and poor, and environmental degradation. Its population is rapidly aging, which looms as a major problem over the next 30 years.
18. The Rubber Belt
Cambodia, Indonesia, Laos, Malaysia, Philippines, Thailand, Vietnam
These countries are rich in minerals, fresh water, rubber, and a variety of foodstuffs but suffer varying degrees of political instability. All are trying to industrialize and diversify their economies. Apart from Malaysia, household incomes remain relatively low, but these states could emerge as the next high-growth region.
19. Lucky Countries
Australia, New Zealand
Household incomes are similar to those in North America, although these economies are far less diversified. Immigration and a common Anglo-Saxon heritage tie them culturally to North America and the United Kingdom. But location and commodity-based economies mean China and perhaps India are likely to be dominant trading partners in the future.
This article originally appeared in Newsweek.
Legatum Institute provided research for this article.
Joel Kotkin is executive editor of NewGeography.com and is a distinguished presidential fellow in urban futures at Chapman University and an adjunct fellow with the Legatum Institute in London. He is author of The City: A Global History
Illustration by Bryan Christie, Newsweek
California’s Failed Statesmen
The good news? Like most rock or movie stars, there’s nothing fundamentally wrong with California. It’s still talented, and retains great physical gifts. Our climate, fertility and location remain without parallel. The state remains pre-eminent in a host of critical fields from agriculture to technology, entertainment to Pacific Rim trade.
California can come back only if it takes a 12-step program to jettison its delusions. This requires, perhaps more than anything, a return to adult supervision. Most legislators, in both parties, appear to be hacks, ideologues and time-servers. This time, when the danger is even greater, we see no such sense of urgency. Instead we have a government that reminds one more of the brutally childish anarchy of William Golding’s 1954 novel “Lord of the Flies.”
Arnold Schwarzenegger has not turned out to be that supervision. Rather than the “post-partisan” leader hailed by the East Coast press, he has proven to be the political equivalent of the multi-personality Sybil. One day he’s a tough pro-business fiscal conservative; next he’s the Jolly Green Giant who seems determined to push the green agenda to a point of making California ever more uncompetitive.
Contrast this pathetic performance with what happened after our last giant recession in the early 1990s. At that time, a bipartisan coalition of leaders – Speaker Willie Brown, State Senator John Vasconcellos and Governor Pete Wilson – worked together to address what was perceived as a deep economic crisis. They addressed some key problems and brought the state back from the brink. California recovered smartly between the mid-90s and the new millennium.
Overall though, things are worse now. California has been flirting for the past year with its highest unemployment rate since the Great Depression. The last time we could blame the end of the Cold War for much of our economic distress; now the problem is a more broadly based, largely self-inflicted secular decline.
A bloated government is part of the problem: Between 2003 and 2007, California state and local government spending grew 31 percent, even as the state’s population grew just 5 percent. The overall tax burden as a percentage of state income, once middling among the 50 states, has risen to the sixth-highest in the nation, says the Tax Foundation. Even worse, the state is getting ever less benefit from these revenues; since the Pat Brown era the percentage of budget spent on basic infrastructure has dropped from 20 to barely 5 percent.
Although these taxes are often portrayed as “progressive,” California has continued to become more socially bifurcated. Our ranks of middle-wage earners are dropping faster than the national average even as the numbers of the affluent and poor swell. Overall California’s per capita income, roughly 20 percent above the national average in 1980, now barely stays with the national average. When housing and other costs are factored in, Los Angeles, San Francisco and Fresno rank among the top five major urban areas in America in terms of percentage of people in poverty, according researcher Deborah Reed of the Public Policy Institute of California. Only New York and Washington, D.C. do worse.
At the root of these problems is an increasing lack of economic competitiveness. An analysis of the economy made for the Manhattan Institute shows California losing its edge in everything from migration, income, jobs and in entertainment industry employment. Tech companies may cluster in Silicon Valley but many are sending their new jobs abroad or to other sites. Recently, several leading Bay Area firms – Twitter, Adobe, eBay, Oracle and Adobe – have established major new operations in the Salt Lake area alone.
So how do we turn it around? First, let’s find some adults, like former Speaker Robert Hertzberg or GOP financer Gerald Parsky, who know what it is to run a business and comprehend that the economy actually matters, and get them to head up a commission on the economy. Second, our leaders and policy elites must engage the emerging new business leadership of the state, which is increasingly immigrant, Asian and Latino.
Right now neither party seems focused on the state’s future besides enriching their core constituencies. Lower taxes – the favored strategy of the right – on the already wealthy reflects an understandable desire to preserve one’s asset but is insufficient as a strategy.
Democrats meanwhile seem determined to defend public sector pensions, Draconian labor, the high-speed rail boondoggle and environmental regulations, no matter what the cost to the economy.
However contradictory their sound bites, the established parties are each following a script that would assure the next generation of Californians – largely Latino – remain an underclass that will have to move elsewhere to reach their aspirations. The left would do it by killing jobs in such fields as agriculture, manufacturing, construction and warehousing. As Robert Eyler, chairman of the economics department Sonoma State puts it, “the progressives have become the regressives.”
For their part the GOP would kill the new California by starving it. They have no plan to bolster the basic services – like community colleges, roads, water and power systems – that will allow future working-class Californians to thrive.
Their interests ignored by the parties, the immigrants and their offspring still represent the very key source of demographic energy and entrepreneurship that can revitalize the state. If you still want to see hopeful stirrings in California, go to places like Plaza Mexico in Lynwood or the new Irvine center recently built by the Diamond Development Group. Appealing to young families and distinct tastes, these retail facilities have thrived as the rest of the state’s overall retail economy has declined.
More important still are the companies started by immigrant entrepreneurs like John Tu, CEO of Kingston Technology or scores of smaller Asian-owned firms in places like the San Gabriel Valley. Since the 1990s, newcomers have launched roughly one in four Silicon Valley startups.
Add to this the muscle of the emerging Latino economy, led by food processing companies like the Cardenas Brothers, who now provide Costco with its frozen Mexican food.
Due to their strong family and cultural ties in California, such ethnic firms appear less likely to move than more Anglo-dominated companies. But if the state keeps eroding public services and adding new regulations, these firms – like their counterparts in Silicon Valley and elsewhere – will place most of their new jobs as well in Utah, Texas or overseas.
What we have here, in the end, is a massive disconnect between economics and politics. Does anyone in Sacramento talk to or even know about the largely Middle Eastern-led L.A. fashion industry? Is anyone talking to the hip sportswear mavens of Orange County’s own “Velcro valley”? Or what about agriculture, our traditional ace in the hole, which is largely disdained by the state’s intellectual and media class who see in large farms the work of the corporate devil?
Somehow these productive voices – essential to our comeback – must be placed at the center of the debate. Sacramento’s leaders need to talk not just to lobbyists but to the key job-creators.
These are the people who, even in hard times, are showing how we can grow an economy based on our natural advantages of climate, ethnic diversity, entrepreneurship and location.
Ultimately we must make the creation of new jobs a priority that goes beyond formulaic mantras about lower taxes or illusory, state-supported “green jobs.” With a return to growth, California can still address its basic problems and challenges. But first we must corral the ideological hobbyhorses now running wild through Sacramento and make the needs of job-creators the central issue for our policy-makers.
This article originally appeared in the Orange County Register.
Joel Kotkin is executive editor of NewGeography.com and is a distinguished presidential fellow in urban futures at Chapman University. He is author of The City: A Global History
Latino Dems Should Rethink Loyalty
Given the awful state of the economy, it’s no surprise that Democrats are losing some support among Latinos. But they can still consider the ethnic group to be in their pocket. Though Latinos have not displayed the lock-step party loyalty of African-Americans, they still favor President Barack Obama by 57 percent, according to one Gallup Poll — down just 10 percentage points from his high number early in the administration.
This support is particularly unusual, given that probably no large ethnic group in America has suffered more than Latinos from the Great Recession. This is true, in large part, because Latino employment is heavily concentrated in manufacturing, and even more so in construction.
A half-million Latino workers in the construction sector — in which their share of the work force is double what it is in the broader economy — have lost their jobs since the start of the recession.
Unfortunately, the Obama stimulus plan was light on physical infrastructure. It favored Wall Street, public-sector unions and large research universities. Big winners included education and health services — in which Latinos are under-represented.
Not surprisingly, Latino communities across the country are in trouble. Today, of the 10 most economically “stressed” counties, seven are majority or heavily Latino, according to The Associated Press.
Theoretically, Republicans should be able to take advantage of this situation. But not with the party’s increasing embrace of its noisy nativist right — evident not only in support of the controversial Arizona immigration law but also in the strong move against “birthright citizenship.” This makes the prospect of earning back President George W. Bush’s 40-plus-percentage-point support difficult at best.
Thus, Latinos remain allied with Democrats whose policies inhibit the growth of construction and manufacturing jobs. This dichotomy puzzles many in the business community.
“You have all these job losses in Latino districts represented by Latino legislators who don’t realize what they are doing to their own people,” said Larry Kosmont, a California business consultant. “They have forgotten there’s an economy to think about.”
Despite that economic logic, Latino Democrats mindlessly follow liberal Democrats such as House Speaker Nancy Pelosi and Rep. Henry Waxman of California and Sen. John Kerry of Massachusetts, who represent largely white, affluent white-collar constituencies on issues such as cap and trade and federal regulation of greenhouse gases. Whatever the intent, these policies are likely to further decimate blue-collar employment in Latino districts.
If they had independent thoughts, Latino Democratic politicians would be advocating positions that create new opportunities for their districts — particularly among young people. They could push, for example, a Works Progress Administration-like public works program that could provide new opportunities and skills training.
One possible reason for not doing so is the opposition of public employee unions, which dominate Democratic politics, particularly in urban districts, and would see such a program as competing against their special interests.
In contrast, Obama administration policies favor Ivy League schools, high-speed rail and light-rail service — issues with predominantly well-to-do, Anglo constituencies.
This disjunction between interests and politics is particularly evident in California, the state with the largest Latino population. Latino Democrats have generally embraced the state’s draconian environmental and planning policies.
The state’s fertile Central Valley offers one example. A green-inspired diversion of water from farms to save an obscure species of fish has forced more than 450,000 acres to lie fallow. Thousands of agricultural jobs — held mostly by Latinos — have been lost, perhaps permanently. Unemployment, which stands at 17 percent across the valley, reaches upward of 40 percent in towns like Mendota.
These policy positions speak to the limits of the current Latino leadership. Latino political power has waxed in Sacramento since 1999 — the state Assembly has had three Latino speakers. But on the ground, things have waned for the state’s Latino working class. During the past decade, according to research from California Lutheran University, the state has experienced one of the nation’s most dramatic drops in household earnings — between $35,000 and $75,000 in lost income.
The pain at the bottom of the economic ladder is even greater. Indeed, according to Deborah Reed of the left-leaning Public Policy Institute of California, when housing and other costs are factored in, three heavily Latino counties — Los Angeles, Fresno and Monterey — rank among the 10 poorest metropolitan areas in the United States. Increasing numbers of working- and middle-class Latinos have been migrating to more job-friendly areas such as Texas and the Plains states.
Latino Democratic politics are equally dysfunctional at the local level. In the largely Hispanic industrial belt south of downtown Los Angeles, for example, a sprawling Latino machine, marked by near Chicago-scale corruption, now controls most elective posts. Many of its leaders — most outrageously in the city of Bell — have proved far more adept at feathering their own nests than at reviving local economies.
A similar disconnect can be seen in the City of Los Angeles, where corruption and inefficiency have led some local entrepreneurs to invest in other regions. “It’s extremely difficult to do business in Los Angeles,” said retail developer Jose de Jesus Legaspi. “The regulations are difficult to manage. … Everyone has to kiss the rings of the [City Hall politicians].”
L.A. Mayor Antonio Villaraigosa epitomizes this self-defeating ethnic politics. Last year, for example, Cecilia Estolano, executive director of the Los Angeles Community Redevelopment Agency, supported shifting resources from building high-end housing and amenities downtown to rejuvenating the large industrial district, a major employer of blue-collar Latinos.
Her efforts quickly ran afoul of Villaraigosa, whose staff favors pouring more money into downtown amenities — even if doing so drives out industrial jobs. Estolano, who now works for a local nonprofit, says the lack of interest in manufacturing and the blue-collar economy is easy to explain: campaign contributions.
“The problem is manufacturers in L.A. are mostly small and don’t contribute to campaigns,” Estolano said. “L.A.’s politics are controlled by real estate interests, their lawyers and consultants.”
As Latinos become a critical part of our emerging economy, they need to develop a policy agenda that focuses less on old-style, machine ethnic politics and more on the critical issue of upward mobility.
Latino voters might also consider avoiding the African-American one-party model by embracing both growth-oriented Democrats and enlightened Republicans. This is most likely to increase their political leverage, while creating a politics that supports their most fundamental interests.
This article originally appeared at Politico.
Joel Kotkin is executive editor of NewGeography.com and is a distinguished presidential fellow in urban futures at Chapman University. He is author of The City: A Global History
Why Housing Will Come Back
Few icons of the American way of life have suffered more in recent years than homeownership. Since the bursting of the housing bubble, there has been a steady drumbeat from the factories of futurist punditry that the notion of owning a home will, and, more importantly, should become out of reach for most Americans.
Before jumping on this bandwagon, perhaps we would do well to understand the role that homeownership and the diffusion of property plays in a democracy. From Madison and Jefferson through Lincoln’s Homestead Act, the most enduring and radical notion of American political economy has been the diffusion of property.
Like small farmers in the 19th century, homeowners–and equally important, aspiring homeowners–now represent the core of our economy without which a strong recovery is likely impossible. Houses remain as a financial bulwark for a large percentage of families, the anchor of communities, and, increasingly, home-based businesses.
The reasons given for abandoning the homeownership ideal are diverse. Conservatives rightfully look to diminish the outsized role of government in promoting homeownership. Some suggest that Americans would be better off putting their money into things like the stock market or boosting consumer purchases.
New-urbanist intellectuals like the University of Utah’s Chris Nelson predict aging demographics will lead masses to abandon their homes for retiree communities and nursing homes. The respected futurist Paul Saffo predicts that as skilled laborers move from Singapore to San Francisco to New York and London, there is little need to “own” a permanent place. In the brave new future, he suggests, we will prefer time-sharing residences as we flit from job to job across the global economy.
Some of the greatest hostility towards homeownership increasingly comes from the progressive left, some of whom are calling for the total elimination of the homeowner mortgage interest deduction. “The Case Against Homeownership,” recently published in Time, encapsulates the current establishment’s conventional wisdom: that homeownership is by nature exclusionist, “sprawl” promoting and responsible for “America’s overuse of energy and oil.”
Yet for all the problems facing the housing market, homeownership–not exclusively single-family houses–is not likely to fade dramatically for the foreseeable future. The most compelling reason has to do with continued public preference for single-family homes, suburbs and the notion of owning a “piece” of the American dream. This is why that four out of every five homes built in America over the past few decades, notes urban historian Witold Rybczynski, have less to do with government policy than “with buyers’ preferences, that is, What People Want.”
What we are going through now is not a sea change but a correction from insane government and business practices. The rise in homeownership from 44% in 1944 to nearly 70% at the height of the bubble reflected a great social democratic achievement. But by the mid-2000s government attempts to expand ownership–eagerly embraced by Wall Street speculators–brought in buyers who would have historically been disqualified.
In some markets, prices exploded as people moved up too quickly into ever more expensive housing. Housing inflation was further exacerbated by “smart growth” policies, which limited new home construction in suburban areas and instead promoted dense, “transit oriented” housing with limited market appeal and economic logic.
Rather than artificially constraining supply and protecting irresponsible borrowers, we should let nature take its course. Home values need to readjust historic balance between incomes and prices. Over the past 60 years, notes demographer Wendell Cox, it took two to three years or less of median household income to purchase a median-priced home. At the peak of the boom, that ratio had ballooned to 4.6.
The disequilibrium was the worst in regions like Los Angeles, Las Vegas, San Bernardino-Riverside and Miami. At the peak of the bubble, between 2006 and 2008, according to the National Homebuilders Association- Wells Fargo “Housing Opportunity Index,” barely 2% of families with a median income households in Los Angeles could afford to buy a median priced home; even in the traditionally affordable Riverside area, the number was roughly 7%. In Miami, barely 10% could afford such a purchase; in Las Vegas, often seen as one of the cheaper markets, only 15%.
What a difference a market correction makes. The affordability number for Los Angeles is now 34%, 17 times better than two years ago, while Riverside is now near 70%. Miami’s affordability picture has improved to over 60% while in Las Vegas, it’s back over 80%.
These lower prices–not Wall Street or federal gimmickry–will lure new buyers to the places that some new urbanists have predicted will be “the next slums.” Already there’s evidence in places like Miami of a renewed interest in now-affordable suburban single-family homes while condos stay empty or become rentals.
Of course without a return to robust job growth, particularly in the private sector, the home market– and pretty much all mainstream consumer purchases–will remain weak. No matter how low prices get, people worried about losing employment do not constitute a promising new market for homes.
But over the longer run most Americans will seek to purchase homes –whatever the geography. Increasingly this will be less a casino gamble, and more a long-term lifestyle choice. As America adds upwards of 100 million more Americans by 2050, the demand will stare us in the face.
As boomers age, the two big groups that will drive housing will be the young Millenial generation born after 1983 as well as immigrants and their offspring. Sixty million strong, the millenials are just now entering their late 20s. They are just beginning to start hunting for houses and places to establish roots. Generational chroniclers Morley Winograd and Mike Hais, describe millenials in their surveys as family-oriented young people who value homeownership even more than their boomer parents. They also are somewhat more likely to choose suburbia as their “ideal place to live” than the previous generation.
These tendencies are even more marked among immigrants and their children. Already a majority of immigrants live in suburbia, up from 40% in the 1970s. They are attracted in many cases by both jobs and the opportunity to buy a single-family home. For an immigrant from Mumbai, Hong Kong or Mexico City, the “American dream” is rarely living in high density surrounded by concrete; if they wanted that, they could have stayed home.
Over coming generations, changes in family and work life will make single-family homes, townhouses and other moderate-to-low density housing more attractive. Contrary to the anonymity predicted by most futurists, your chosen place is becoming more important, as evidenced by numerous suburban and small town downtown revivals as well as growing local volunteerism.
Equally important, multi-generational households are on the rise back to 1950s levels–in part due to immigrant lifestyle preferences. People are staying put; even before the bubble burst, mobility had dropped to the lowest level in over a half century. With the rise of new technologies allowing for dispersed work, the single family home increasingly houses not only residents, but part and full-time offices.
Barring a long-term permanent recession or a national planning regime aimed at curbing single-family home construction, these factors should lead to a new surge in home buying starting later this decade. It may be too late to save many who overextended themselves in the bubble, but this resurgence could do much to propel our anemic economy, restoring the home to its rightful place one of the cornerstone not only of the American dream, but of our democracy.
This article originally appeared at Forbes.com.
Joel Kotkin is executive editor of NewGeography.com and is a distinguished presidential fellow in urban futures at Chapman University. He is author of The City: A Global History
Urban Plight: Vanishing Upward Mobility
Since the beginnings of civilization, cities have been crucibles of progress both for societies and individuals. A great city, wrote Rene Descartes in the seventeenth century, represented “an inventory of the possible,” a place where people could create their own futures and lift up their families.
What characterized great cities such as Amsterdam—and, later, places such as London, New York , Chicago, and Tokyo—was the size of their property-owning middle class. This was a class whose roots, for the most part, lay in the peasantry or artisan class, and later among industrial workers. Their ascension into the ranks of the bourgeoisie, petit or haute, epitomized the opportunities for social advancement created uniquely by cities.
In the twenty-first century—the first in which the majority of people will live in cities—this unique link between urbanism and upward mobility is under threat. Urban boosters still maintain that big cities remain unique centers for social uplift, but evidence suggests this is increasingly no longer the case.
This process reflects a shift in economic and social realities over the past few decades. For example, according to a recent Brookings Institution study, New York and Los Angeles have, among all U.S. cities, the smallest share of middle-income neighborhoods. In 1980, Manhattan ranked 17th among the nation’s counties for social inequality; by 2007 it ranked first, with the top fifth earning 52 times that of the lowest fifth, a disparity roughly comparable to that of Namibia.
President Obama’s hometown of Chicago shows much the same pattern, according to a recent survey by Crain’s Chicago Business. Conditions have improved for a relative handful of neighborhoods close to the highly globalized central businesses. But for many neighborhoods things have not improved, and in some cases have deteriorated. Even before the recession there were fewer jobs than in 1989 and fewer opportunities for the middle class, many of whom—including more than 100,000 African-Americans—have left the city over the past decade.
This pattern does not reflect perverse conditions unique to the United States, as many academics and progressive pundits often suggest. Between 1970 and 2001, the percentage of middle-income neighborhoods in Toronto dropped from two-thirds to one-third, while poor districts had more than doubled to 41 percent. According to the University of Toronto, by 2020, middle-class neighborhoods could account for barely less than 10 percent of the population, with the balance made up of both affluent and poor residents.
Similarly, Tokyo, once widely seen as an exemplar of egalitarianism, is transforming. The city’s post–World War II boom yielded a thriving middle class and remarkable social mobility. That is now giving way to a society where wealth is increasingly concentrated. The poverty rate, including some 15,000 homeless people, has risen steadily to the highest level in decades.
Much the same process can be seen in great social democratic havens of Europe. In Berlin, Germany’s largest city, unemployment has remained far higher than the national average, with rates at around 15 percent. Some 36 percent of children are poor; many of them are from other countries. The city, notes one left-wing activist, has emerged as “the capital of poverty and the working poor in Germany.”
To a large extent, urban poverty in Berlin and other European megacities is concentrated among Muslim immigrants. Muslims constitute at least 25 percent of the population of Marseilles and Rotterdam, 20 percent of Malmo, 15 percent of Birmingham, and 10 percent or more of London, Paris, and Copenhagen. Over the next few decades, according to a recent Pew Research Center study, Muslims will constitute a majority of the population in several of these European cities.
The Case of London
Perhaps nowhere is the growing class divide more evident than in London, perhaps the world’s most important megacity. Despite a massive expansion of Britain’s huge welfare state, the ladder for upward mobility seems broken, especially in London. This represents a dramatic shift from the period after World War II. In the ensuing decades, incomes for most Londoners grew, access to education expanded, and the sharply drawn and notorious class lines began to blur.
But contemporary London’s emergence as the headquarters of globalization has had widely differentiated impacts on class. On the one hand, it has paced the emergence of the West End. Many once hardscrabble neighborhoods—including Shoreditch, Islington, and Putney—have gentrified. Yet walk a bare half mile or less from the Thames River, particularly to the south, and you encounter many marginal, and often dismal, districts. These areas have not much benefited from the global economy and are inhabited largely by those who survive at the expanding bottom of the wage profile.
Equally troubling, globalization’s benefits have disproportionately accrued to those already possessing considerable means; the ranks of top professionals, according to a 2009 report by the British government’s social mobility task force, have been increasingly dominated by the children of the wealthiest families.
Even less noted has been London’s deepening concentration of poverty. Today more than one-third of the children in inner London are living in poverty, as are one in five in the outer ring communities. London has the highest incidence of child poverty in Great Britain, even more than the beleaguered Northeast.
Poverty also affects 30 percent of working-age adults, more than one-third of pensioners in inner London, and roughly one in five in outer London. The inner London rates are the worst in Britain. More than 1 million Londoners were on public support in 2002. These figures are certain to become worse as a result of the recession that began in 2008.
The conditions are certainly not as extreme as those recorded in Friedrich Engels’s searing 1844 tome, The Condition of the Working Class in England, but there remains a macabre relationship between mortality and geography. Steve Norris, a former Conservative Party chairman and onetime head of London Transport, notes that public health data published by the King’s Fund demonstrates that life expectancy in the poorer parts of east London is 4.5 years lower than in West London. That’s six months for every station east of Waterloo on the Jubilee Line. This poverty, Norris adds, extends to many white Londoners. They often live cheek to jowl with immigrants, and feel themselves competing for housing, jobs, and government services. The rich, Norris adds, “Buy their way out of poor quality education and healthcare” while the working and middle classes “queue for public housing for themselves and their children.”
Of note is the rise of the phenomena among the white working class described as “yobbism.” Large parts of Britain—including less fashionable corners of London—suffer among the highest rates of alcohol consumption in the advanced industrial world. London School of Economics scholar Dick Hobbs, who grew up in a hardscrabble section of east London, traces this largely to the decline of the blue-collar economy in London. Over the past decade, job gains in Britain, like those in the United States, have been concentrated at the top and bottom of the wage profile. The growth in real earnings for blue-collar professions—in industry, warehousing, and construction—generally has lagged those of white-collar workers.
One other thing is clear: the welfare state has not reversed the growing class divide. Despite its proletarian roots, New Labour, as London Mayor Boris Johnson acidly notes, has presided over what has become the most socially immobile society in Europe.
The Role of Housing and ‘the Green Factor’
Housing costs have exacerbated these conditions. Due largely to restrictions on new housing on the periphery, London now ranks, next to Vancouver, as the most expensive city to buy a house in the English-speaking world. Estimates by the Centre for Social Justice finds that unaffordability for first-time buyers doubled between 1997 and 2007. This has led to a surge in waiting lists for government-funded “social housing”; by mid-2008, some 2 million households (5 million people) were on the waiting list for such housing. In London, this number reached one in ten in 2008.
Broad-based economic growth might seem the most logical solution to this dilemma. In the past, socialists, liberals, and conservatives might vigorously have debated various approaches, but generally agreed about the desired end result: shrinking slums and expanding opportunity for the middle or working class. Today, however, many urban “progressives” do not trouble themselves overmuch about the hoi polloi. Instead, they are more likely to devise policies to lure the much-ballyhooed “creative class” of well-educated, often childless, high-end workers to their cities. This goes along as well with an increased focus on aesthetic and “green” issues.
In many ways, these approaches actually work at cross-purposes with upward mobility. Green-oriented policies are often hostile to “carbon intensive” industries such as manufacturing, warehousing, or construction that employ middle-income workers. Green policies implicitly tilt towards industries such as media, entertainment, and finance that employ the best-situated social classes.
Indeed, some climate change enthusiasts, such as The Guardian’s George Monbiot, see their cause in quasi-religious terms. In Monbiot’s words, he is waging “a battle to redefine humanity.” In his view, we must terminate the economic “age of heroism,” supplanting the “expanders” with anti-growth “restrainers.”
This is not just the latest edition of British “loony Left” thinking. President Obama’s own science advisor, John Holdren, long has embraced the notion of what he calls “de-development” of Western economies to a lower level of affluence. Such approaches impose enormous costs on both the middle and working classes in European and North American cities, particularly given the unlikelihood of similar restrictions on competitors in China, India, Russia, and other countries. A huge shift to renewable fuels, for example, could quadruple the cost of energy in Britain, forcing a large percentage of the population into “fuel poverty.”
Key Focus: Economic Growth
The emerging class conflict in the great global cities ultimately could have many ill effects. Persistently high unemployment and underemployment in British metropolitan areas, for example, has spurred nativist sentiment and intolerance towards immigrants. This is true in America today as well. But views towards immigrants generally soften as an economy improves. Broad-based prosperity is a good antidote for intolerance.
Attacking the class gap requires a redefinition of current views about the overused term “sustainability.” This concept needs to be expanded beyond its conventional environmental definition to reflect broader social and economic values as well. It is one thing to consider how, in an era dominated by dispersed work, core cities might still attract those elite workers needing direct “face-to-face contact.” It is quite another to develop strategies so that the vast majority will be able to find work doing anything other than servicing the needs of the upper echelons.
In turning away from the fundamental issues of economic growth and upward mobility, these cities are in danger of permanently undermining the very thing that has made great cities so attractive over the centuries. The ultimate worth of urbanity lies in its ability to deliver a better life, not only to the established affluent and the most skilled, but to that broader population who, like others over the millennia, come to a big city to create a better life.
This article originally appeared at The American.
Joel Kotkin is executive editor of NewGeography.com and is a distinguished presidential fellow in urban futures at Chapman University. He is author of The City: A Global History
Where’s Next: November May Determine Regional Winners
As the recovery begins, albeit fitfully, where can we expect growth in jobs, incomes and, most importantly, middle class opportunities? In the US there are two emerging “new” economies, one largely promoted by the Administration and the other more grounded in longer-term market and demographic forces.
The November election and its subsequent massive expansion of federal power may have determined which regions win the post-bust economy, but the stakes in November are particularly acute for some prime beneficiaries of what could be called the Obama economy: the education lobby, Silicon Valley venture firms, Wall Street, urban land interests and the public sector. All backers of his 2008 campaign, these groups have either reaped significant benefits from the stimulus or have used it to bolster themselves from the worst impact of the recession.
In a sense the Obama policies are designed to overturn the pattern of economic dispersion –towards the exurbs, the south, the intermountain West, and more recently the Plains – that has defined the last half century. The biggest winner, in regional terms, is the Washington area. Even as local governments cut back, the federal establishment continues to swell. Federal employment, excluding the postal service, remains roughly 200,000 larger than in 2008.
It is not surprising then that the capital district enjoys the highest job growth since December 2009 of any region. Indeed, the Great Recession barely even hit the imperial center. Given its current trajectory, it’s likely to remain the primary boom town along the east coast.
There are other less obvious regional winners from Obamanomics. Wall Street, despite its recent wailing, has fattened itself on the Fed’s cheap money. It may benefit further from highly complex new financial regulations that will drive smaller, regional competitors either out of business or into mergers with the megabanks.
Manhattan – a liberal bastion dependent on arguably the greediest, most venal purveyors of capitalism – enjoyed a revived high end consumer economy of high fashion, fancy restaurants and art galleries. Silicon Valley’s financial community also is seeing a surfeit of grants and subsidies for the latest venture schemes, keeping Palo Alto and its environs relatively prosperous. Perhaps this is the positive “change” that Time recently credited in its paen to the stimulus.
Other regional winners from the Obama economy generally can be found in state capitals and University towns, particularly those with the Ivy or elite college pedigrees that resonate with this most academic Administration. One illustration can be seen in the relatively strong recovery of Massachusetts – home to many prestigious Universities and hospitals – which has seen jobs grow by 2.2 percent since the Obama ascension.
Similar, albeit less dramatic recoveries can be found in Columbus, Madison and Minneapolis-St.Paul, with their large university communities and regional federal employment centers. Yet the political benefits of this growth may be limited. Many other parts of these same states, including the outer boroughs of New York are not doing well; aside from Columbus, Ohio has continued to skid as its industrial and corporate base dwindles, often moving to more business friendly states.
At the same time, the strongest growth clusters in those regions that stick to the basics: relatively low taxes, pro-business regulations and continued infrastructure investment. Some regions – particularly in Texas, Alaska, Wyoming and the Great Plains – also have benefited from the growth in such basic industries as agriculture, oil and mining.
Like resource-producing Canada and Australia, which barely felt the great recession, these economies have been boosted by continued growth in demand from countries like India and China. The current rise in food commodity prices, in part due to poor conditions in Russia and other former Soviet Republics, may further intensify this trend. Beyond the current food crisis, changing consumer tastes in boom markets like China seem certain to boost demand for such products as corn, used to help meet that country’s soaring demand for pork and other meat products.
But perhaps even more important, once the economy recovers these areas – with their business friendly regimes and lower costs – may continue to siphon much of the next wave of industrial and even tech growth from the more expensive, largely Obama-friendly regions. Caterpillar, for example, one of the likely beneficiaries of expanded exports, recently announced plans to open a new assembly plant not in its Midwestern base but in Victoria, outside Houston.
This trend has been building for at least a generation and seems likely to intensify under today’s highly competitive global business environment. If we start seeing a recovery in such things as auto sales, one can expect much of the new demand to be meant in efficient, largely foreign owned factories that have been gearing up across the Southeast. Unless powerful federal intervention forces Americans to buy General Motors products like the Volt, consumer preference is likely to be strongest for smart, fuel efficient brands built largely in towns from southern Ohio down to Texas.
Perhaps even more significantly, these areas are also challenging the Obama regions in such fields as high-technology. Tech hiring has picked up in places like Silicon Valley, New York and DC, but consistently the fastest growth in science, engineering and technical jobs has been in low-cost states such as North Dakota, Virginia, New Mexico, Utah and Texas. Just recently, several major Silicon Valley powerhouses – Adobe, Twitter, Electronic Arts and eBay – announced major new expansions in Utah, a state that is among a brood seeking to move prized businesses, including even entertainment, from the Golden State.
To a distressingly large extent, the fate of these two distinct economies may hinge on the outcome in November. If the Republicans gain an effective blocking majority – perhaps with a handful of centrist Democrats from growth-oriented states – many favored programs of the Obama economy may be cut or eliminated entirely. These include high-speed rail, increased subsidies for new light rail lines, massive investments in University research and investment breaks for renewable fuels.
On the other hand, if the Democratic majority persists the tilt towards the Obama economy may even become stronger, as the Democrats will be the ones primarily losing their seats in many growth states. Many policies inimical to the growth states – support for government satrapies like General Motors, tougher restrictions on domestic fossil fuel development and policies designed to curb suburban single family housing – might even intensify.
In this sense, we need to see November as much as a conflict between growth economies as an ideological contest. The results could determine what regions are next to boom, and whose economy will slow or even decline. What might be best – a compromise recognizing the need to boost growth in all regions – may be a too far a stretch of logic in this political climate.
This article originally appeared at Forbes.com.
Joel Kotkin is executive editor of NewGeography.com and is a distinguished presidential fellow in urban futures at Chapman University. He is author of The City: A Global History
America’s 21st-Century Business Model
Current attitudes aren’t too kind to the old American way of doing business. In our globalized economy, the most enthusiastically touted approaches are those adopted by centralized, state-dominated economies such as China, Brazil and Russia as well as–somewhat less oppressively–those of the major E.U. states.
Yet the U.S. may well be constructing the best sustainable business model for the 21st Century. It is an approach built on the country’s greatest enduring strength–an innovative business culture driven increasingly by a diverse pool of immigrants.
This model, of course, lacks the kind of centralized control beloved by many pundits. Yet its virtues are also missing from statist-oriented European or East Asian capitalism. These other regions’ systems may be more disciplined in their thinking, but they do not draw as well on the diversity of human experience and connections that drive America’s post-racial economy.
This is not to suggest that state-based, national capitalism is inferior, but that it may not apply so well to this vast, highly diversified economy–just look at the stimulus. If the U.S. wants to retain pre-eminence, it needs to go with what makes it a great country: its protean national and increasingly post-racial business culture.
This evolution is increasingly evident at the very top of our economy. Between 1990 and 2005 immigrants started one quarter of all venture-backed public companies. Large American firms are also increasingly led by people with roots in foreign countries, including 14 of the CEOs of the 2007 Fortune 100. Even the top tier of corporate America–once the almost-exclusive reserve of native-born Anglo-Saxon–increasingly reflects the diversification of the larger society.
Already, for example, eight Indian American CEOs run U.S. corporations with over $2 billion in sales, including companies like Citicorp,
This process will intensify in the coming decades. Take for instance the case of Li Lu, a former Tiananmen Square activist now widely expected to take the helm of Warren Buffett’s Berkshire-Hathaway when the old billionaire retires. Imagine if a former American radical was placed in charge of one of China’s huge state-supported enterprises. Not likely.
One critical harbinger can be seen in the current crop of students at top U.S. business schools. Between one-third and one-half all students at Stanford, MIT, University of Pennsylvania, University of Chicago and UC Berkeley come from abroad. These schools are training camps for immigrants transitioning into careers as American entrepreneurs.
Equally important, immigrant commerce also thrives at the grassroots level. It manifests most visibly in the proliferation of small stores, restaurants, food-processing businesses, garment factories and trucking lines. Overall, immigrants are 60% more likely to start a new business than native-born Americans. The number of self-employed immigrants has grown even in New York City, where the number of self-employed among the native-born has dropped.
Immigrant businesses have thrived by providing basic services, such as banks, insurance agents, funeral homes and grocery stores. Some of these businesses arose because the mainstream community had failed to identify opportunities in these markets or had consciously decided to exclude them.
This follows a historical pattern. In the past many immigrants succeeded by focusing on an economic specialty–Jews in the garment industry, Chinese in laundries, Greeks in diners, and Italians in green groceries, barbershops and fish stores. Ultimately, some moved beyond these niches and began to develop whole new business models. One clear example is A. P. Giannini’s Bank of Italy in San Francisco, which eventually became
There is clearly something in the immigrant experience that encourages innovation–one can call it the advantage of non-acceptance. Take the founding generation of the film industry–Samuel Goldwyn, Louis B. Mayer, Harry Cohn, Jesse Lasky, Adolph Zukor. They had their roots in the Jewish enclave economy in the eastern cities. The great historian Irving Howe notes that the immigrant need to find an unoccupied or underserved niche shaped these often “vulgar, crude and overbearing” men. That they became founders of the nation’s premier cultural industry, Howe noted, “was something of a miracle and something of a joke.”
We are now witnessing a continuation of this process, and on a scale simply not seen in other countries. In 2005 the U.S. swore in more new citizens than the next nine countries put together. The national immigration debate may focus largely on low-skilled newcomers, but more than half of all skilled immigrants in the world also come to the U.S. Even with the continent’s slow-growing population, Europe continues to be a major source of American immigrants, particularly skilled workers, with some 400,000 E.U. science and technology graduates residing in the U.S.
These newcomers are a prime source of entrepreneurial vitality. In the 21st century Asians, like the Jews and Italians before them, have concentrated in specific niches and expanded outside the boundaries of historic ghettos. Indians from the subcontinent, who arrived in large numbers starting in the 1970s, specialized in hotels and motels across the country. Koreans opened up green groceries in New York and Los Angeles. Vietnamese became well-known for nail parlors, and Cambodians for owning doughnut stores. Overall Asian enterprises expanded roughly twice the national average through the first several years of the new century.
This pattern can be seen particularly in food-related businesses. In Houston, once dominated by Southern cooking, nearly one in three restaurants serves Mexican or Asian cuisine. Together they account for more establishments than hamburger, BBQ and Italian restaurants put together. Nationwide, as pizza, hamburger and “traditional” fast-food restaurants have stagnated, new chains that sell quick, inexpensive Mexican or Asian food have flourished. Immigrant-founded firms such as El Pollo Loco, Wolfgang Puck and Panda Express, are emerging as the
The emerging post-racial economy provides two distinct opportunities for American business. First the newcomers offer a new domestic “emerging” market. Taken together, purchases by African-Americans, Asians and Native Americans, according to the Selig Center for Economic Growth at the University of Georgia, have exploded, growing far more rapidly than the national average. Combined with Latinos, these minorities could account for over $2.5 trillion by 2010, close to $1 in every $4 in total U.S. consumer spending.
But perhaps even more important may be the uniquely international cast of American business. Heads of corporations and senior executives of many leading American firms will not have to go to graduate school in international training; they will have received theirs at home, talking to parents or grandparents who migrated from Mexico, Cuba, Russia, Iran, China, India, Israel or a host of other countries.
This diversity will allow Americans to tap the global market, and culture, in ways other countries and their state-based enterprises just can’t match. It is in this model, not in imitating foreign ones, that American business can find the path to greater success in the globalized, dispersed economy of the 21st century.
This article originally appeared at Forbes.com.
Joel Kotkin is executive editor of NewGeography.com and is a distinguished presidential fellow in urban futures at Chapman University. He is author of The City: A Global History
The China Syndrome
China’s ascension to the world’s second-largest economy, surpassing Japan, has led to predictions that it will inevitably snatch the No. 1 spot from the United States. Nomura Securities envisions China surpassing the U.S.’ total GDP in little more than a decade. And economist Robert Fogel predicts that by 2050 China’s economy will account for 40% of the world’s GDP, with the U.S.’ share shrinking to a measly 14%.
Americans indeed should worry about the prospect of slipping status, but the idée fixe about China’s inevitable hegemony–like Japan’s two decades ago–could prove greatly exaggerated. Countries generally do not experience hyper-growth–the starting point for many predictions–for long. Eventually costs rise, internal pressures grow and natural limitations brake and can even throw the economy into reverse.
Instead the U.S. has a decent chance of remaining the world’s pre-eminent economy not only over the next decade or two and even by mid-century. There are five key reasons for this contrarian conclusion.
1. If Water is the “new oil,” China faces a thirsty future. China’s freshwater reserves are about one-fifth per capita those of the United States, notes Steve Solomon, author of Water: The Epic Struggle for Wealth, Power and Civilization. Much of that supply has become dangerously polluted; ours , for the most part, has become cleaner.
More important, the U.S. has become more efficient in its water usage, says Solomon. China, with a far less developed economy, will face increasing demands from industrial and agricultural users as well as hundreds of millions of households that now don’t enjoy easy access to clean drinking water.
2. China’s energy demands are soaring, but it lacks adequate domestic resources. China impresses journalists and policy-makers with grand “green” projects and heavy investment in renewables, but two-thirds of the country’s energy comes from that dirtiest of sources. China burns more coal than the U.S., Europe and Japan combined, often using very primitive technology. It has now overtaken the U.S. for the dubious honor of the most total energy use and highest greenhouse gas emissions. Since 1995 China’s dependence on foreign oil has grown from near to approaching 60%, and the country, long a coal exporter, is becoming a major importer of that unfashionable fuel.
The U.S. meanwhile sits on largely untapped fossil fuel resources, including coal, natural gas and oil. Add Canada to the equation and North America ranks second, behind the Middle East, in energy resources. In contrast to China, America’s energy use and greenhouse emissions appear to be dropping while still enjoying enormous, still largely untapped renewable resources, particularly from wind power in the Plains and biomass.
3. Food remains pressing problem for China. Scarce water, mass pollution and high energy costs all will limit China’s future food production. By some estimates acid rain falls on a third of all agricultural land; some climate experts predict long-term reductions in the country’s vital rice crop.
Plagued by floods, China now will have to look to U.S. and Canada to meet demand for crucial foodstuffs, particularly corn. And the food deficit may get worse over time: As China becomes wealthier, demand for high-protein foods like beef and pork will increase. The U.S. remains the world’s most reliable supplier of many of those agricultural products.
4. China’s rapidly aging population and shrinking workforce will slow growth, perhaps dramatically, by the next decade. Like that of the “Asian tigers” in the ’70s and ’80s, China’s rapid growth has been propelled in part by an expanding young workforce. Due to a very low birthrate, however, this trend will reverse within a decade or two. By 2050 31% of China’s population will be older than 60, compared with barely one-quarter in the U.S. There will be over 400 million elderly, with virtually no social security and few children to support them. Also worrisome: The preference for male children has skewed sex demographics dramatically, with roughly 30 million more marriageable boys than girls.
The logical solution to this dilemma would be immigration, but China’s culture appears far too insular for such an event. Rather than a benevolent “socialist” super power China, whose population is made up over 90% Han Chinese, will bestride the world as a racially homogeneous, and communalistic “Middle Kingdom.” In contrast, the U.S., despite occasional fits of nativism, remains remarkably successful at integrating cultures from around the globe.
5. Dictatorship thrives sometimes in a “take off” period, but often fails to compete well with more open societies during later stages of growth. Many American intellectuals and journalists celebrate China’s achievements, much as some of their predecessors admired past “successful” economic regimes in fascist Italy, Nazi Germany and the late Soviet Union. The longest lasting of the authoritarian superpowers, the Soviet state massively misallocated its resources in its unsuccessful competition with the more flexible systems of the U.S. and its allies.
Big Brother economies experience more subtle problems. Chinese entrepreneurs , according to a survey by the Legatum Institute in London, depend far more than their more nimble and self-reliant Indian counterparts. Overweening Chinese state power also might be chasing many foreign businesses–and some developing countries– toward more congenial investment and trade partners.
For all these problems, the Chinese emergence remains the dominant business event of our epoch. But world-wide dominion seems highly unlikely. One often overlooked factor: political problems stemming from growing inequality in this officially Marxist state. Over the past 20 years China’s income distribution pattern has shifted from the relative egalitarianism of Sweden, Japan or Germany to that of countries like Argentina and Mexico.
The class divisions will deepen further as growth inevitably slows. Roughly one-third of 2008’s 5.6 million university graduates have been unable to find work. Things are even worse for those less skilled, rural residents and small manufacturers.
Ironically, the Communist Party appears to further concentrate wealth and power; most of the richest people in China are linked to the party. Policies push growth, but with diminishing rewards to the masses. Over the last decade the share of GDP going to consumption dropped from 46% to less than 36%.
Of course, a comparatively small number of skilled, with often well-connected professionals and investors flourishing, but opportunities for economic advancement may now be scarcer for most workers compared to the earlier period of China’s remarkable “liftoff” after 1980. Conditions for the working class in China remain more akin to Dickensian England than a Marxian “worker’s paradise.” China’s dismal health care system for example, ranks according to the World Health Organization, among the world’s most inequitable, 188th out of 191 nations.
Not surprisingly, class anger has reached alarming proportions, with almost 96% of respondents, according to one recent survey, agreeing that they “resent the rich.”
America also faces its own share of social problems but not to such an extreme degree. Many Americans resent the affluent, but also dream of becoming them. How else to explain the popularity of paeans to bourgeois vulgarity like Housewives of New Jersey?
In the coming decades China, not the currently depressed U.S., may face greater headwinds. America’s biggest enemy will prove to be not China, but itself. The U.S. needs to move toward a pro-growth course driven by investments in our productive economy, basic infrastructure and skills-based education as well as sustainable immigration and population growth levels. If the country does these things then Americans will someday look back at their current Sinophobia as a delusion dressed up as irresistible conventional wisdom.
This article originally appeared at Forbes.com.
Joel Kotkin is executive editor of NewGeography.com and is a distinguished presidential fellow in urban futures at Chapman University. He is author of The City: A Global History
Photo: Steve Webel
Sarah Palin: The GOP’s Poison Pearl
Sarah Palin has emerged as the right’s sweetheart, a cross between a pin-up girl and Joan of Arc. For some activists, like the American Thinker‘s Lloyd Marcus, she’s “my awesome conservative sister” who the mainstream media wants to “destroy at any cost.”
On a more serious note, leading right-wing pundit Roger Simon argues Palin’s is now the biggest name in Republicandom, which he admits is not too great an accomplishment. Armed with “something more than intellect,” he praises her unique ability to “connect with the base.” He also believes, citing some polls for 2012, that she could run a close race against President Obama.
These Republicans may grow to regret their embrace of Sarah Palin: She will likely prove less a gem than a poison pearl for conservatives. Sure, she can stir the base, but her crossover appeal remains limited. Recent Pew surveys show that she’s still toxic for the Independents and moderate Democrats who generally determine national elections.
Palin keeps building her brand, but she may also be diminishing the GOP’s. She has helped propel several potentially weak, marginal “Tea Party” candidates such as Rand Paul in Kentucky and Sharron Angle in Nevada into the general elections. These could end up losing seats that more earth-bound Republicans could have won.
But if conservatives really want evidence of Palin’s limitations, they only need to talk to people in her home state of Alaska. “She represents a constituency that is rural, but that’s it,” says Jim Egan, executive director of Commonwealth North, a local think tank. “What she says and does makes little sense in the urban environment that most Americans live in.” If it does not sell across the board in Anchorage, home to almost half of Alaskans, you wonder how well her message will play in Omaha or suburban Houston, much less New York or Los Angeles.
Conservatives in Washington might also cool their drool, Egan suggests, if they examine Palin’s Alaska record. True, she did initially take on some in-bred corruption, but she left the state as dependent on oil revenues and federal largesse as before. She left no strong legacy, particularly in comparison with the late former Sen. Ted Stevens–known widely as “Uncle Ted”–who brought heaps of federal blubber to the Last Frontier.
In contrast, Palin is seen by many Alaskans–including business-oriented conservatives–as a hopeless lightweight. “She’s a narcissistic individual,” suggests Republican State Sen. Craig Johnson. “What bothers me is people think we are like Sarah Palin. We’re not.”
To Johnson and many Alaska political veterans Palin is more self-promoter than serious politician. Even as some are touting her as a serious candidate for president of the United States, it’s important to realize she proved ill-prepared to be governor of Alaska–more interested in powdering her nose than putting it to the grindstone.
And remember that Alaska, a vast, underpopulated state of 700,000 hard-working individuals, does not require the horsepower needed to rule a disaster zone like Michigan, much less a mega insane asylum like California. For one thing, Alaska, due to its huge mineral wealth, is a comparatively rich state, with the eighth highest per capita income in the nation. Over 80% of the state budget comes through energy-related taxes. Everyone even gets a nifty $1,300 check as well, also paid for by the energy companies.
Egan and others argue that Palin, who boosted the return to taxpayers from oil revenues, failed to capitalize on these assets. The state’s bulging revenues during the energy price spike of 2007-08 could have been applied to badly needed infrastructure and education, not to buy new snowmobiles and shotguns. “She epitomizes the whole idea of we get a piece and no sense of planning for the future, about thinking about what we need to do,” Egan says.
In this sense Palin appeals to the grifter spirit of America–opportunistic and self-centered. This was amply evidenced by her decision to quit office mid-way through her first term for the more lucrative job of cashing in on her personality cult. “Sarah Palin was a breath of fresh air,” says one-time supporter Iris Gardner, who with her husband operates a mercantile store in Alaska’s scenic Seward (population 3,000). “But she blew all that when she quit. People have soured on her.”
This view is widely shared in Alaska. Today, according to Alaskadispatch.com, about half of Alaskans want to be “done with her.” Only 56% of Republicans count themselves as Palin fans. She is widely unpopular among both Democrats and Independents, the state’s largest electoral base, the Dispatch noted.
So we have to ask why Palin continues to be attractive for so many conservatives? It has more to do with subliminals than the subtleties of public policy. Palin’s power is not that of serious policymaker but rather as someone with a keen understanding of message and branding. Still, Palin’s appeal cannot be easily dismissed. Certainly charisma does not necessarily translate into a lack of gravitas. Prominent conservatives like Norman Podhoretz have pointed out that Ronald Reagan too was considered a lightweight by many in the mainstream media.
Yet those who knew and covered Reagan–like my old boss Lou Cannon–always argued Reagan was a serious figure, surrounded by a coterie of very smart advisers. He had spent decades in and around politics before ascending to the White House. Palin, in contrast, seems to be making up her politics along the way.
Reagan also served two terms as governor of California, despite running for the nomination in 1976. Even today he enjoys some considerable respect from longtime opponents, as well as something close to adoration among friends. As those who interviewed him can attest, he also was very sharp: Reagan would have never allowed a Katie Couric to get the better of him. To paraphrase the famous Lloyd Bentsen’s quip about Dan Quayle, Sarah Palin is no Ronald Reagan.
Still Palin’s populist appeal seems well-suited against a Democratic Party–and a president–burdened with what seems like a congenital inability to connect with most middle- and working-class concerns. Barack Obama has turned intellectualism into a liability.
There’s also the novelty factor working in Palin’s favor. “It’s a sense of mystery we can’t keep away from,” Jim Egan suggests. In this sense, oddly, she’s a bit like Barack Obama–someone people enthuse over not because they are ready for the job but because they appeal to some emotional need for novelty. But, as Palin herself would say, how’s that working out for ya?
This article originally appeared at Forbes.com.
Joel Kotkin is executive editor of NewGeography.com and is a distinguished presidential fellow in urban futures at Chapman University. He is author of The City: A Global History
Photo: geerlingguy