New Geography

Author: Joel Kotkin

  • The Broken Ladder: The Threat to Upward Mobility in the Global City

    Since the beginnings of civilization, cities have been the crucibles of progress both for societies and individuals. A great city, wrote Rene Descartes in the 17th Century, represented “an inventory of the possible”, a place where people could create their own futures and lift up their families.

    In the 21st Century – the first in which the majority of people will live in cities – this unique link between urbanism and upward mobility will become ever more critical. Cities have become much larger. In 1900 London was the world’s largest urban center with seven million people. Today there are three dozen cities with larger populations.

    No longer do a handful of western cities represent the only, or even the most critical, front in the battle for social progress. Mexico City and Mumbai, two cities we have studied, have three times London’s 1900 population. Indeed, of the world’s twenty most populous regions, the preponderance are located in third world or developing countries. The urban drama will play out on a truly global stage, with the most decisive developments taking place in the growing mega-cities of the developing world.

    It is first and foremost in these great cities of the human future that upward mobility must be most accelerated. Urban agglomerations such as Beijing, Shanghai, New Delhi, Sao Paulo, Mumbai, and Mexico City daily stand witness to one of the most rapid expansions of prosperity in history, as well as to wrenching examples of deep seated misery.

    Urbanity in the advanced industrial world is an increasingly interdependent system. The established centers of the global urban culture – New York, Los Angeles, London, Paris, Tokyo, Berlin – provide the critical markets, capital, and technological assistance that drive economic growth in the developing countries, whose growth in turn provides new opportunities for the citizens of the advanced cities.

    These established centers are often seen as occupying the Leninist “commanding heights” of the global economy. Is the kind of centralization we see in these cities, and in other mega-cities around the world, truly inevitable? And is their growth universally desirable? The answers to these questions are vital, notably because it is particularly in these locations that upward mobility now appears to be increasingly stalled. The stasis is reflected in both income trends and popular opinion in the leading centers of advanced world, including the United States, Japan and the United Kingdom.

    Optimists like historian Peter Hall believe that “neither western civilization, nor the western city, shows any sign of decay”. A recent World Bank report insists that large urban concentrations – the more dense the better – are the harbingers of opportunity and wealth creation. “To spread out economic growth”, it argues, is to discourage it. And it is certainly true that as countries modernize, they also urbanize, often quite rapidly. As a result, cities in the developing world – which also receive a great deal of international investment and aid – tend to be growing far more quickly than peripheral regions.

    Yet, in the longer term, the impacts of dense urbanization may not be universally useful at promoting either poverty alleviation or upward mobility. In advanced countries, this is already evident in large urban areas. Indeed, even the strongly pro-urbanist World Bank report acknowledges that as societies reach certain affluence levels, they begin to deconcentrate, with the middle classes in particular moving to the periphery.

    This process reflects a shift in economic and social realities over the past few decades. After nearly a half century of sustained social progress in most advanced countries, income growth for the middle class, even among the best-educated, has slowed considerably, and by some measurements has even turned negative. As we will see, the effects have been particularly tough on the urban middle and working classes in cities as diverse as Toronto, Los Angeles, Tokyo and London.

    Such concerns have been heightened by the current deep recession, which has caused wages to fall in both developing and developed countries. Yet concern over upward mobility was developing even in the relative “boom” times of the recent past, particularly in the advanced western countries, but also in the developing ones. Since 1973, for example, the rate of growth of the “typical family’s income” in the United States has slowed dramatically, and for males has actually gone backwards when adjusted for inflation. This diminishment has been particularly marked in major urban centers such as New York, Chicago, San Francisco and Los Angeles.

    Similar developments can be seen in a host of European cities, including London and Berlin, and even in Tokyo, which long has been seen as distinctly middle class. In all these cities, the middle class appears to be diminishing, while the population living in poverty has increased.

    The reasons for this trend include the impact of technology, aging demographics, globalization, and greater government indebtedness. A critical factor may also be opposition to the very idea of economic growth, something first seen in the 1970s and now increasingly persuasive, at least within large portions of academia, the media, and even parts of the financial community. This attitude is vividly and forcefully expressed, for example, within sectors of the ecology movement.

    Polls of popular opinion in the United States and the United Kingdom find ecological concerns well down the list, behind such issues as the economy, immigration, crime, unemployment and even the state of morality. Yet the agenda to address anthropogenic global warming promotes policies that seem likely to depress economic growth, particularly in cities, through further declines of productive industry, unaffordable housing prices and high levels of taxation.

    As recently seen at the global climate change conference in Copenhagen, few governments in the developing world are anxious to adopt any policy that weakens their ability to spark income and job growth in the near future. The pressing concerns of these cities remain focused on basic issues: sanitation, alleviation of poverty, industrial growth, infrastructure development and employment.

    Policies that prolong poverty and depress mobility seem likely to delay the necessary social consensus needed to enact long-term environmental improvements. When concern for the sustenance of families grows, focus on environmental issues tends to decline, as is already clear in recent surveys in the advanced countries. The much overworked term “sustainability” needs to include both economic and social components, as opposed to strictly ecological ones.

    Within the developing world, as the focus remains on basic economic issues, middle class residents of noted megacities appear to be more optimistic about personal advancement than their counterparts in the advanced countries. This may reflect the fact that countries such as India, China and Brazil have experienced rapid economic growth over the past decade, and expect more of the same in the decades ahead.

    Yet this does not suggest that the rising cities of the Second and Third World are growing in ways that do not deepen inequality. With rapid economic growth, these locations have seen considerable expansion of gaps between rich and poor, particularly with the decline of socialist institutions. Similarly, in some developing cities – Mumbai, Bogota and Sao Paulo, for example – there may be a widening gap between economic success and population density, as growth shifts to places with better infrastructure, less congestion, and less crime.

    In order to look in depth at differing attitudes among urban dwellers, we have focused our research on three megacities that represent different stages of economic development. We start with London, arguably the world’s most important global city, and explore the prospects for upward mobility there.

    Then we look at Mexico City, a city that represents the broad “Second World” of urban centers that have enjoyed some rapid growth but now face increased competition from China and other ascendant locations. Mexico City represents some of the realities that emerging urban centers in the Third World will face as they achieve higher levels of economic development.

    Third, we focus on Mumbai, India’s premier commercial city and financial center. Mumbai reflects the dichotomy of a rapidly growing city in the developing world: increasing wealth and rising expectations among its expanding middle class, with the continued creation of huge populations of destitute slum-dwellers.
    Yet for all the differences between these three great cities, we also find some commonalities. First, their future vitality depends largely on the future of their middle classes. Second, the critical issue for all these places remains how to sustain economic growth to meet the needs and aspirations of their citizens.

    Finally, they share the challenges of the current great economic revolution – what has been called the “post-industrial” era by Daniel Bell or the “third wave” by Alvin Toffler – on the nature of class. The increasing primacy of technology and education, once seen as liberating, could make widespread class mobility far more difficult than in the past.

    As occurred in the early stages of the industrial revolution, the current economic transformation threatens massive displacement of existing classes. Just as the machine age undermined the status of weavers, artisans and small farmers, the current technological epoch could well have similar impacts on not only industrial workers, particularly in the West, but on the supposedly ascendant educated middle class as well.

    This leads us to suggest a primary focus by all great cities on basic economic issues. Current concerns among the dominant cognitive classes in the media, the academic world, and the policy elites, particularly in the First World, have tended to center on aesthetics and “green” issues, as well as on who can draw ‘the best and the brightest”, rather than on how to employ the vast middle or working classes.

    We will explore some of the common challenges that will face all mega-cities as they evolve. Increasingly, they may find that their scale, long seen as an advantage, also produces inherent problems. In a globally interconnected urban environment, they must successfully compete not only with each other, but with smaller scale, and often more efficiently organized, urban areas throughout both the advanced and developing world.

  • The Limits Of The Green Machine

    Environmentalism is strangely detached from the public’s economic goals.

    The awful oil spill in the Gulf–as well as the recent coal mine disaster in West Virginia–has added spring to the step of America’s hugely influential environmental lobby. After years of hand-wringing over global warming (aka climate change), the greens now have an issue that will play to legitimate public concerns for weeks and months ahead.

    This is as it should be. Strong support for environmental regulation–starting particularly under our original “green president,” Richard Nixon–has been based on the protection of public health and safety, as well as the preservation of America’s wild spaces. In this respect, environmentalists enjoy widespread support from the public and even more so from the emerging millennial generation.

    Conservatives who fail to address this concern will pay a price, even more so in the future. The Bush administration’s apparent clubbiness with conventional energy interests has undermined the GOP’s once-proud legacy on environmental causes. The oil spill could prove a great campaign issue for Democrats assigning blame for the disaster on lax Republican regulators and their oil company chums.

    But there’s also a danger for Democrats who tilt uncritically toward “green” policies. Instead of following the environmentalists’ party line, they should adopt a balanced approach adding both economic and social needs to their concept of “sustainability.”

    Sadly, many in the administration seem anxious to extend environmental regulation into virtually every aspect of life. Legitimate concerns over pollution and open space preservation, for example, have now been conflated with a renewed drive to strangle suburbia in favor of forced densification.

    The administration’s “livability” agenda, as suggested by Transportation Secretary Ray LaHood, for example, proposes policies that favor dense urban development over the dispersed living preferred by most Americans. This, notes analyst Ken Orski, represents an unprecedented federal intrusion over traditional local zoning and local decisions.

    This centralizing tendency supports a wide array of interests, notably big city mayors and urban land speculators, and also is eagerly promoted by many architects, the media and planning professors. Not surprisingly, less intrusive ways to reduce energy use, such as telecommuting or the dispersion of worksites closer to people’s homes, have elicited very little administration support.

    Herein lies the Achilles heel of environmentalism–its profound disconnect from public preferences and aspirations. By embracing such a radical social engineering agenda, the greens may end up undermining their own long-term effectiveness.

    The first sign of this pushback, notes analyst Walter Russell Mead, can be seen in growing skepticism about climate change policies both here and in Europe. At a time of severe economic challenges, greens and their political allies need to consider how specific environmental costs threaten an already beleaguered middle and working class.

    Voters, for example, may support strong penalties and stricter controls of energy giants such as British Petroleum or Massey Energy, but roughly six in 10, according to a post-spill NBC/Wall Street Journal poll, continue to back the idea of expanded offshore oil drilling. Voters may embrace new environmental improvements but they also want to keep their jobs.

    This conflict will be on display in the coming struggle over the “cap and trade” proposals in the Senate. Strongest opposition comes from those states and regions most adversely impacted by strict limits on carbon, clustered in the south and Midwest.

    Mitch Daniels, governor of coal-dependent Indiana, even has denounced such proposals as Washington “imperialism.” But Daniels’ opposition also is shared by many Democrats from fossil-fuel-rich states such as North Dakota, West Virginia and Louisiana. Cap and trade even manages to offend many on the left, who see it as yet another opportunity for Wall Street to profit from complex federal regulation.

    On the state level, more draconian mandates on shifting to renewable fuels, such as those in place in California, could also cause future power shortages, as the state auditor warned recently. Such concerns are routinely brushed aside by environmentalist and their prodigious PR machines who prattle on about our coming economic salvation through the creation of “green jobs.”

    In reality, given their dependence on massive subsidies from both taxpayers and rate-payer, it’s unlikely that renewables, as opposed to relatively clean alternatives such as plentiful natural gas, will produce a net positive impact on the economy for years or even decades. Certainly highly aggressive subsidies for wind and solar have not proved any kind of elixir in countries like Spain, where such policies have been long in place but now are being scaled back due to their drain on both the economy and the public budget.

    To some extent, the hype over “green jobs” sometimes appears as something of a PR smokescreen. Prominent greens have long been opposed to the very idea of economic growth and wealth creation, particularly in advanced industrial countries. For decades John Holdren, President Obama’s science advisor, has favored what he calls “de-development” of Western countries in order to preserve natural resources and reduce pollution.

    This approach appears to be gaining support even as the pain of economic dislocation has devastated the advanced countries of the West. Boston University sociologist Juliet Schor, writing in the influential left-leaning The Nation, even attacks “progressive economists”- such as those calling for a second New Deal- for focusing on “climate destabilizing growth” as a way to create new jobs and raise middle class incomes.

    In the Huffington Post one-time investment banker Ann Lee, now an economics professor at NYU, has called for “a new economic ideology” that focuses on “human dignity, creative and degrees of freedom” instead of following traditional measurements of material well-being. This “new” economy, she argues, would provide greater returns to favored groups like artists and, of course, teachers, who she considers severely underpaid.

    This kind of low-carbon academic “esteem” economy appeals to people who already enjoy considerable material wealth and can count on the support of the state. It is not so promising on the West’s aspirational middle and working classes, particularly those employed in the private sector, whose individual strivings would now be compensated by a deadly combination of high taxes and slow growth.

    Until the issues of growth are tackled honestly, the green movement will continue to depend on tragic events such as the Gulf oil spill to maintain its public support. But in the long run, environmentalism will not remain politically “sustainable” if it fails to balance a green future with the economic aspirations of current and future generations.

    This article originally appeared in 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. His newest book is The Next Hundred Million: America in 2050, released in Febuary, 2010.

    Photo by just.Luc

  • Immigration Is U.S.

    You can sing about sea to shining sea or amber waves of grain, but it’s immigration that provides America’s basic rhythm. Nothing distinguishes the American experience from that of other nations more than the mass migration of people from elsewhere to here. We are truly a nation of immigrants: Close to 90% of the population–excluding Native Americans and those who were forced here in shackles–moved here out of their own volition.

    Not that this has made things any easier for immigrants. In the 1850s the nativist Native American Party–reacting to a wave of Irish Catholic and German immigrants–declared that America faced “an imminent peril” from immigrants “of an ignorant and immoral character.” California in the late 19th century tried to ban Asian immigration and land ownership. In 1924 immigration from everywhere outside northern Europe was severely restricted.

    The current wave of immigration, largely from Asia and Latin America, has once again sparked nativist fears. (Witness Arizona’s recent, harsh immigration law.) Yet America needs immigrants now more than ever. The U.S., like virtually all advanced countries, produces insufficient native-born children to prevent it from becoming a granny nation-state by 2050.

    Only immigration can provide the labor force, the expanding domestic markets and, perhaps most important, the youthful energy to keep our society vital and growing. Many bustling sections of American cities–the revived communities along the number 7 train line in Queens, N.Y., Houston’s Harwin Corridor, Los Angeles’ San Gabriel Valley–are dominated by immigrant enterprise. In contrast, the cities without large-scale immigration, such as Cleveland, Pittsburgh and Cincinnati, have stagnant and even declining populations.

    In the future successful immigration will distinguish America from most key competitors. Globally, resistance to immigration or any form of linguistic, religious or ethnic diversity has become more commonplace. Over the past few decades Iran, Egypt, Turkey, Russia, Indonesia and the nations of the former East Bloc have constricted their concept of national identity. In Malaysia, East Africa and even the province of Quebec preferential policies have led successful minorities such as Jews, Armenians, Coptic Christians Indians and Chinese to find homes in more welcoming places, often in the U.S.

    In recent decades Europe has received as many immigrants as the U.S., but it has proved far less able to absorb them. The roughly 20 million Muslims who live in Europe remain marginalized. In Europe, notably in France, unemployment among immigrants–particularly those from Muslim countries–is often at least twice that of the native born; in Britain as well Muslims are far more likely to be out of the workforce than either Christians or Hindus.

    But in the U.S. immigrant workers with lower educations are more likely to be in the workforce than their nonimmigrant counterparts. And most American Muslims are comfortably middle class, with income and education levels above the national average. The newly crowned Miss America is from a Detroit-area Shiite immigrant family from southern Lebanon.

    Our 21st-century economy will be shaped in large part by these immigrants and their descendants. Much is made of the movement of poor, largely uneducated immigrants from south of the border, but more than half of all skilled immigrants in the world come to the U.S., too. Even with its slow-growing population, Europe continues to be a major source of American immigrants, particularly skilled workers. By 2004 some 400,000 E.U. science and technology graduates were residing in the U.S. Barely one in seven, according to a European Commission poll, intends to return to their home continent.

    Of course, the majority of the nation’s immigrants, both undocumented and legal, come from developing countries: China, India, Mexico, the Philippines and the Middle East. Since roughly four in five immigrants come from nonwhite countries, by 2039, due largely to immigrants and their offspring, the majority of working-age Americans will be “minorities.”

    Even if immigration slows down dramatically, particularly with a weak economy, these groups will grow in significance as we approach mid-century. In 2000 one in five American children were already the progeny of immigrants; by 2015 they will make up as much as one-third of American kids. Many demographers predict that by 2050 non-Hispanic whites will be in the minority. America’s racial and ethnic dye is already cast, and permanently shaped, by immigration.

    By embracing, and being embraced by, immigrants, America follows the path of history’s most successful civilizations. The Roman civilization, which started in a tribal city-state, gradually opened citizenship to all Italians, and by the third century made citizenship available to free men throughout the “multi-nationed” empire; less than half the Senate came from Italy. “Rome,” wrote a Greek writer in the second century, “is a citadel which has all the peoples of the earth as its villagers.”

    In this sense the American model of immigration and ethnic integration, for all its many flaws, forms a critical pillar for the nation’s future global leadership. Even those who return home will retain strong familial and business ties to the U.S. They will confirm America’s unique status as the world’s one great global civilization.

    This article originally appeared in 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. His newest book is The Next Hundred Million: America in 2050, released in Febuary, 2010.

    Photo by telwink

    May 21, 2010

  • Houston: Model City

    Do cities have a future? Pessimists point to industrial-era holdovers like Detroit and Cleveland. Urban boosters point to dense, expensive cities like New York, Boston and San Francisco. Yet if you want to see successful 21st-century urbanism, hop on down to Houston and the Lone Star State.

    You won’t be alone: Last year Houston added 141,000 residents, more than any region in the U.S. save the city’s similarly sprawling rival, Dallas-Fort Worth. Over the past decade Houston’s population has grown by 24%–five times the rate of San Francisco, Boston and New York. In that time it has attracted 244,000 new residents from other parts of the U.S., while older cities experienced high rates of out-migration. It is even catching up on foreign immigration, enjoying a rate comparable with New York’s and roughly 50% higher than that of Boston or Chicago.

    So what does Houston have that these other cities lack? Opportunity. Between 2000 and 2009 Houston’s employment grew by 260,000. Greater New York City–with nearly three times the population of Houston–has added only 96,000 jobs. The Chicago area has lost 258,000 jobs, San Francisco 217,000, Los Angeles 168,000 and Boston 100,004.

    Politicians in big cities talk about jobs, but by keeping taxes, fees and regulatory barriers high they discourage the creation of jobs, at least in the private sector. A business in San Francisco or Los Angeles never knows what bizarre new cost will be imposed by city hall. In New York or Boston you can thrive as a nonprofit executive, high-end consultant or financier, but if you are the owner of a business that wants to grow you’re out of luck.

    Houston, however, has kept the cost of government low while investing in ports, airports, roads, transit and schools. A person or business moving there gets an immediate raise through lower taxes and cheaper real estate. Houston just works better at nurturing jobs.

    It’s not just smug coastal places getting smoked by Texas. Since the collapse of the housing bubble Houston has outperformed Sunbelt counterparts like Phoenix, Las Vegas and Los Angeles. A big factor has been that manufacturing, professional services, international trade and technology industries have been the primary drivers of the city’s economic growth–rather than construction and speculation. Ironically, this has increased home values. Since 2007 prices of homes in Houston have ticked slightly higher, while those in Las Vegas, Phoenix, Los Angeles and the Bay Area each are down by more than 35%.

    Some traditional urbanists will concede these facts but then try to shift the focus to “qualitative” factors: the best-educated residents, the highest salaries, the most expensive real estate. Although it also attracts a large number of low-skill migrants, Houston has considerably expanded its white-collar workforce. According to the Praxis Strategy Group, Houston’s ranks of college-educated residents grew 13% between 2005 and 2008. That’s about on par with “creative class” capital Portland, Ore. and well more than twice the rate for New York, San Francisco or Los Angeles.

    But Houston’s biggest advantage cannot be reduced to numbers. Ultimately it is ambition, not style, that sets Houston apart. Texas urbanites are busy constructing new suburban town centers, reviving inner-city neighborhoods and expanding museums, recreational areas and other amenities. In contrast with recession-battered places like Phoenix, Houston remains remarkably open to migrants from the rest of America and abroad.

    Houston, perhaps more than any city in the advanced industrial world, epitomizes the René Descartes ideal–applied to the 17th-century entrepreneurial hotbed of Amsterdam–of a great city offering “an inventory of the possible” to longtime residents and newcomers alike. This, more than anything, promises to give Houstonians the future.

    This article originally appeared in 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. His newest book is The Next Hundred Million: America in 2050, released in Febuary, 2010.

    Photo by telwink

  • So Much for Europe’s Superiority

    For much of the last quarter century, European pundits, particularly in France, have been promoting the notion that the old continent sat on the verge of a grand resurgence. The events of the past month—culminating in a trillion dollar rescue of the Euro—should, at least, put that dodgy notion to rest.

    Although the financial crisis may have originated on Wall Street, it’s been Europe and the Euro that now represent the big threat to drive world markets back into recession. The show stealers are India, China and Brazil. Still the big boy on the block, the American economy is growing, albeit not spectacularly.

    What a change from the heady predictions of the European elites just a decade ago. Back then Jacques Attali, eminence grise for former French President Francois Mitterrand, asserted that “Japan and Europe” would likely “supplant the United States as the chief superpowers wrangling for global economic supremacy.” More recently, author Jeremy Rifkin wrote a book about what he defined as The European Dream, a green-tinged, social democratic ode to enlightened diversity that he predicted would supplant the declining dirty, unruly model forged by the United States on the world stage.

    You can blame the spendthrift Greeks for this trouble, or even the lack of geeks in Europe (anyone found a continental Google or Apple lately?). But Euro-stagnation is nothing new. It’s deeply rooted and longstanding. Indeed, since 1970 it has not been the U.S. that has faded before the onslaught from the East, but the core 15 nations of the European Union. Over that 40-year period the EU-15’s share of world GDP has plummeted from roughly 37 percent to under 28 percent; the American chunk, roughly 27 percent, has stayed remarkably even. Basically Asia, and particularly China and India’s gain, largely has been at Europe’s expense, not our’s.

    In stating the case for European superiority, much has been made by boosters of Europe’s different institutional framework, tax or regulatory structure. No question these have advantages and disadvantages compared with those of the United States, but there’s little case for arguing that the “Euro-model” has been a rip-roaring economic success. It’s imploding on its weak periphery, and the collapse is threatening even bigger players, including the United Kingdom.

    Europe’s problems extend well beyond policy, into the realm of culture and demographics. Even in France, people and what they do actually matter more than abstract ideas. A culture that believes in itself, not only to have children, but also start businesses and innovate will overcome one, however theoretically well managed, that does not. This is the fundamental problem of Europe as whole, although it does not apply equally to every individual country in the union.

    One key element is demographics. According to the most conservative estimates, the United States by 2050 will be home to at least 400 million people, roughly 100 million more than live here today. In contrast, the populations of much of the EU, as well as most of East Asia, will be stagnant or falling over the next few decades. Like other advanced countries, the United States will be aging but not nearly as quickly. By 2050, there may be close to 40 percent of the population in Japan and Germany over 65; in the United States that proportion should be closer to 25 percent.

    If there’s going to be a European dream, they better start importing people or creating them. Otherwise, the European workforce will be dying out, literally. Between 2000 and 2050 the population of the U.S. between 14 and 64 is projected to expand by some 44 percent, while that of the EU contracts by 25 percent and Japan’s by over 40 percent.

    With its growing workforce, the United States will require substantial economic growth in order to stave off downward mobility of its young population. Europe’s prime challenge will be to pay for its aging population with a diminished workforce, and perhaps find ways to invest in faster growth economies. Europe’s future may be as the world’s coupon-clippers, consultants and waiters.

    Yet this may not be the fate of all Europe, particularly if the grand neo-Bonapartist European is allowed to fizzle and national characteristics can reassert themselves. The aptly named PIGS (Portugal, Italy, Greece and Spain) make clear that you can not enjoy a Scandinavian welfare state with a Mexican-style economy. You have to earn the right to six weeks of vacation and Porsche-level heath-care plans.

    This contrasts with the productive, disciplined countries of the north—roughly today’s version of the Medieval Hanseatic League—who continue to export goods and services enough to sustain their expansive, and generally less corrupt, welfare states. Essentially you have the sunny, good food and times countries—an arc from Portugal to Spain—and the gloomier places like Scandinavia, the Netherlands and Germany.

    A secular kind of Protestant ethic is alive and well in post-Christian Europe. In some countries like Sweden and Denmark, blond and red-haired baby-making is making a modest comeback, lifting the future prospects for these countries. As for the Mediterranean crowd, get used to African or Arab chefs cooking your pasta. It might not be too bad, as long as the weather holds up.

    This article originally appeared in The Daily Beast.

    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. His newest book is The Next Hundred Million: America in 2050, released in Febuary, 2010.

    Photo by alibaba0

    May 16, 2010

  • Arizona’s Short-Sighted Immigration Bill

    Arizona’s recent passage of what is widely perceived as a harsh anti-immigrant bill reflects a growing tendency–in both political parties–to focus on the here and now, as opposed to the future. The effort to largely target Latino illegal aliens during a sharp recession may well gain votes among an angry, alienated majority population, but it could have unforeseen negative consequences over time.

    In terms of the Arizona law, this is not simply a case of one wacko state. The most recent Gallup survey shows that more Americans favor the law than oppose it, with independents and Republicans showing strong support. Despite the negative coverage in the media, the Arizona gambit could somewhat pay off in November. A weak economy tends to exacerbate nativist sentiments, something that has been constant throughout much of American history.

    But there is a distinct danger for the GOP here, not only in Arizona but in the rest of the country as well. As Bill Frey of the Brookings Institute points out, there is a growing gap between the electorate, which is still largely white and older, and the much younger, far more rapidly growing Latino population. In Arizona Frey says the “cultural generation gap” between the ethnicity of seniors and children is some 40%, meaning that while 83% of senior are white, only 43% of children are. Nationwide, Frey estimates the gap in the ethnic composition of seniors and youths stands at a still sizable 25 points.

    Arizona’s large disequilibrium in the ethnicity of its generations is a product, in part, of the state’s historic pull to white retirees. Yet its formerly booming economy, based largely around construction and tourism, required a massive importation of largely Latino, low-wage labor, much of it illegal. As a result over the past two decades, Arizona’s Latino population has grown by 180%, turning what had been a 72% Anglo state to one that is merely 58% white.

    You don’t have to go very far–in fact just across the California border–to see what awaits Arizona’s nativist Republicans. The Grand Canyon state’s future has already emerged there. In the 1970s and 1980s California’s generally robust economy made it a primary destination for immigrants from both Asia and Latin America. Comfortable in their Anglo-ness, papers like the Arizona Republic were dismissing California as a “third world state,” particularly in the wake of the 1992 LA riots.

    Like their Arizona counterparts today, many white Californians then were sickened by pictures of mass Latino participation in looting during the riots. Many were also concerned with soaring costs of providing social services to a largely poor immigrant population. Sensing an opportunity, in 1994 Gov. Pete Wilson–locked in tough re-election battle amid a deep recession–endorsed Proposition 187, a measure designed to prevent illegal aliens from accessing public services. The measure passed easily, with support from both whites and African-Americans. The strong backing among Independents and even some Democrats helped Wilson win re-election with surprising ease.

    But the long-term consequences of 187 reveal the longer-term consequences for the GOP. During the Reagan era and even the first Wilson term, Latino voters split their votes fairly evenly between the parties. But after 1994 there was a distinct turn toward the Democrats, with the GOP share at the gubernatorial level falling from nearly half in 1990 to less than a third in subsequent election. In some cases, right-wing Republicans garnered even smaller portions of Latino voters.

    This is a classic case of the past waging war on the future. Since 1990 Latino and immigrant population has continued to grow. Overall, the percentage of foreign-born residents, according to USC demographer Dowell Myers, has grown from roughly 22% to 27%. One-third of Californians in 2000 were Latino; Myers projects Latinos will constitute almost 47% of the state’s population in 2030.

    The political consequences will only get worse for Republicans. Latino population voting power already has doubled from roughly 10% of the total in 1990 to 20% in 2006.

    This Latino population will become increasingly active and engaged. It is, for one thing, ever more English-fluent, and increasingly dominated by the second and third generations. This group could become permanently estranged, like African-Americans, from the GOP. If that happens, notes longtime Sacramento columnist Dan Weintraub, Republicans could “all but become a permanent minority party in California.”

    And the rest of the country will feel these trends; between 2000 and 2050, the vast majority of America ‘s net population growth will come from racial minorities, particularly Asians and Hispanics. Already one out of every five American children–tomorrow’s voters–is Hispanic.

    Of course, as Latinos integrate and intermarry, they may become less particular in their world view and share more in common with other middle-class Americans. Yet memories of slights against a particular group can overcome even economic self-interest. Blood often proves thicker than bank accounts. The tendency of Jews, a largely affluent and entrepreneurial tribe, to back often harshly anti-business Democrats has its roots in old world scars left from the pogroms in czarist Russia as well as the right-wing genocide in Nazi Germany. Some older voters recall the rabid anti-Semites once prominent in the American far-right as well as the more genteel exclusionism practiced by more refined upper-class Republicans.

    In the future, today’s images of shrill, anti-immigrant right-wing activists could resound for coming generations of Latinos as well as Asians and other newcomer groups. It could essentially deprive the Republican Party of voters who might otherwise consider the GOP option, handing the Democrats a permanently expanded base, not only in southwest but in much of the country.

    None of this is necessary or good for the country. Political competition for ethnic groups is a healthy thing for national interests and for the individual groups. Lock-step support by African-Americans may make them powerful within the Democratic Party, but it also means they can also be taken for granted when push comes to shove. And, of course, when they are in power, Republicans have little real political stake in confronting the serious issues facing black America.

    All this is particularly disturbing since competition for Latino voters should be intense. Heavily employed in construction and manufacturing industries, they have been badly hurt in the recession and their interests were not particularly addressed in the Obama stimulus plan. Many are also socially conservative, supporting, for example, California’s Proposition 8 ban on gay marriage.

    In coming months other proposed steps by the administration and its congressional allies, such as the proposed cap-and-trade legislation, could prove very tough on industries that tend to employ Latinos. Climate change-inspired moves against single-family homes–already in place in California–conflict directly with the aspirations of many Latinos as well as other immigrants who, unlike the usually affluent, homeowning white population, are still seeking the chance to buy their own home.

    But instead of fighting for their economic interests, the Arizona law has handed the Democrats a golden opportunity for to engage their own demagogy on race issues. Instead of having to defend their plans to restart the economy and reorient them to middle and working class needs, Democrats now can play to narrow racial concerns among Latinos while further bolstering the self-righteousness of their affluent, white, left-wing base.

    The reversion to racial politics prompted by the Arizona law ultimately does no good for anyone except “base-oriented” partisan campaign consultants, nativists and ethnic warlords. With all the long-term economic and social challenges that face this growing country, Phoenix’s folly marks an unfortunate step backward to our more shameful past and away from a potentially promising future.

    This article originally appeared in 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. His newest book is The Next Hundred Million: America in 2050, released in Febuary, 2010.

    Photo by Caleb Alvarado

    May 4, 2010

  • Growing America: Demographics and Destiny

    Over the next four decades, American governments will oversee a much larger and far more diverse population. As we gain upward of 100 million people, America will inevitably become a more complex, crowded and competitive place, but it will continue to remain highly dependent on its people’s innovative and entrepreneurial spirit.

    In 2050, the U.S. will look very different from the country in 2000, at the dawn of the new millennium. By mid-century, the U.S. will no longer be a “white country,” but rather a staggering amalgam of racial, ethnic and religious groups, all participants in the construction of a new civilization whose roots lie not in any one country or continent, but across the entirety of human cultures and racial types. No other advanced, populous country will enjoy such ethnic diversity.

    The implications of this change will be profound for governments-perhaps in ways not now commonly anticipated. Many “progressives” believe a more diverse, populous nation will need more guidance from Washington, D.C., but a more complex and varied country will increasingly not fit well into a one-size-fits-all approach.

    Although the economic crisis of 2008 led to a rapid rise of federal power, there has been a stunning and largely unexpected push-back reflected, in part, by the tea party movement. Some states have passed laws that seek to restrict federal prerogatives on a host of issues. More importantly, public opinion, measured in numerous surveys, seems to be drifting away from major expansions of government power.

    Of course, most Americans would accede to the federal government an important role in developing public works, national defense and regulations for health and safety. But generally speaking, they also tend to believe that local communities, neighborhoods and parents should possess the power to craft appropriate solutions on many other problems.

    This also reflects our historical experience. From its origins, American democracy has been largely self-created and fostered a dispersion of power; in many European countries, and more recently in parts of Asia, democracy was forged by central authorities.

    Other periods of massive government intervention, most notably after the New Deal and the Great Society, also elicited reactions against centralization. But the current push-back’s speed and ferocity has been remarkable. Yet the often polarizing debate about the scope of federal power largely has ignored the longer-term trends that will promote the efficacy of an increasingly decentralized approach to governance.

    Perhaps the most important factor here is the trajectory of greater growth and increasing diversity of who we are and how we live. Not only are Americans becoming more racially diverse, but they inhabit a host of different environments, ranging from dense cities to urbanized suburbs, to smaller cities and towns, that have different needs and aspirations.

    Americans also are more settled than any time in our history-partially a function of an aging population-and thus more concerned with local developments. As recently as the 1970s, one in five Americans moved annually; in 2004 that number was 14 percent, the lowest rate since 1950. In 2008, barely one in 10 moved, a fraction of the rate in the 1960s. Workers are increasingly unwilling to move even for a promotion due to family and other concerns. The recession accelerated this process, but the pattern appears likely to persist even in good times.

    Americans also prefer to live in decentralized environments. There are more than 65,000 general-purpose governments; the average local jurisdiction population in the United States is 6,200-small enough that nonprofessional politicians can have a serious impact on local issues. This contrasts with the vast preference among academic planners, policy gurus and the national media for larger government units as the best way to regulate and plan for the future.

    Short of a draconian expansion of federal power, this dispersion is likely to continue. Roughly 80 to 90 percent of all metropolitan growth in the last decade took place on the periphery; at the same time, the patterns of domestic migration have seen a shift away from the biggest cities and toward smaller ones. As Joel Garreau noted in his classic Edge City, “planners drool” over high-density development, but most residents in suburbia “hate a lot of this stuff.” They might enjoy a town center, a paseo or a walking district, but they usually resent the proliferation of high-rises or condo complexes. If they wanted to live in buildings like them, they would have stayed in the city.

    Attempts to force major densification in these areas will be fiercely resisted, even in the most liberal communities. Some of the strongest anti-growth hotbeds in the nation are areas like Fairfax County, Va., with high concentrations of progressives-well educated people who might seem amenable to environmentally correct “smart growth”-advocating denser development along transit corridors. As one planning director in a well-to-do suburban Maryland county put it, “Smart growth is something people want. They just don’t want it in their own neighborhood.”

    The great long-term spur to successful dispersion will come from technology, as James Martin first saw in his pioneering 1978 book, The Wired Society. A former software designer for IBM, Martin foresaw the emergence of mass telecommunications that would allow a massive reduction in commuting, greater deconcentration of workplaces and a “localization of physical activities … centered in local communities.”

    Technology would allow skilled people to congregate in communities of their choice or at home. Today not only knowledge workers but also those in construction trades, agriculture and other professions are home-based, conducting their operations out of trucks, vans or home offices.

    Many leading-edge companies now recognize this trend. As much as 40 percent of IBM’s work force operates full time at home or remotely at clients’ businesses. Siemens, Hewlett-Packard, Cisco, Merrill Lynch and American Express have expanded their use of telecommuting, with noted increases in productivity.

    At the same time, employment is shifting away from mega-corporations to smaller units and individuals; between 1980 and 2000, self-employed individuals expanded tenfold to include 16 percent of the work force. The smallest businesses, the microenterprises, have enjoyed the fastest rate of growth, far more than any other business category. By 2006 there were some 20 million such businesses, one for every six private-sector workers.

    Hard economic times could slow this trend, but recessions have historically served as incubators of innovation and entrepreneurship. Many individuals starting new firms will have recently left or been laid off by bigger companies, particularly during a severe economic downturn. Whether they form a new bank, energy company or design firm, they will do it more efficiently-with less overhead, more efficient Internet use and less emphasis on pretentious office settings. In addition, they will do it primarily in places that can scale themselves to economic realities.

    Simultaneously the Internet’s rise allows every business-indeed every family-unprecedented access to information, something that militates against centralized power. Given Internet access, many lay people aren’t easily intimidated into accepting the ability of “experts” to dictate solutions based on exclusive knowledge since the hoi polloi now possess the ability to gather and analyze information. Even the powerful media companies are rapidly losing their ability to define agendas; there are too many sources of information to mobilize mass opinion. The widespread breakdown of support for climate change is a recent example of this phenomenon.

    Once the current drive for centralization falters, support for decentralization will grow, including progressive communities that now favor a heavy-handed expansion of federal power. Attempts to impose solutions from a central point will be increasingly regarded as obtrusive and oppressive to them, just as they would to many more conservative places like South Dakota. In the coming era, in many cases, only locally based solutions-agreed to at the community, municipal or state level-can possibly gather strong support.

    This drive toward dispersing power will prove critical if we hope to meet the needs of an unprecedentedly diverse and complex nation of 400 million. New forms of association-from local electronic newsletters to a proliferation of local farmers markets, festivals and a host of ad hoc social service groups-are already growing. Indeed, after a generation-long decline, volunteerism has spiked among Millennials and seems likely to surge among downshifting baby boomers. In 2008, some 61 million Americans volunteered, representing more than one-quarter of the population older than 16.

    It’s these more intimate units-the family, the neighborhood association, the church or local farmers market-that constitute what Thomas Jefferson called our “little republics,” which are most critical to helping mid-21st-century America. Here, our nation of 400 million souls will find its fundamental sustenance and its best hope for the brightest future.

    This article originally appeared in GOVERNING Magazine.

    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. His newest book is The Next Hundred Million: America in 2050, released in Febuary, 2010.

    Photo by slynkycat

    May 3, 2010

  • The Worst Cities For Jobs

    In this least good year in decades, someone has to sit at the bottom. For the most part, the denizens are made up of “usual suspects” from the long-devastated rust belt region around the Great Lakes. But as in last year’s survey, there’s also a fair-sized contingent of former hot spots that now seem to resemble something closer to black holes.

    Two sectors have particularly suffered worst from the recession, according to a recent study by the New America Foundation: construction, where employment has dropped by nearly 25%, and manufacturing, which has suffered a 15% decline. The decline in construction jobs has hit the Sunbelt states hardest; the manufacturing rollback has pummeled industrial areas such as the Great Lakes as well as large swaths of the more recently industrialized parts of the Southeast.

    Read how we pick the best cities.

    Then there is California, a state that should be doing much better given its natural advantages and vast human capital but whose regions–with the exception of government-rich Hanford–share various degrees of distress. The bursting of the real estate bubble has hit the Golden State hard, but seeing so many poor performances in my adopted home state is distressing and points to much deeper problems. Rankings author Michael Shires, pointing to the looming prospect of high taxes and expanding regulation, notes that “While California’s economy has come roaring back many times before, a resurgence this time will be slowed by the state’s increasing willingness to aggressively tax and regulate those who will make it happen.”

    Rust Belt Ruins

    The traditional manufacturing heartland long has suffered, and in this recession industrial jobs have declined rapidly and only now seem to be slowly expanding. Ever since we started these surveys back in the early 2000s, cities and towns along the rust belt have inhabited the bottom rungs.

    Starting up from the last place finisher, No. 397 Warren-Troy, Mich., these old industrial cities dominate the nether regions; of the bottom ten finishers overall, six come from the Wolverine State, including long-suffering Detroit, which ranks 394th overall and 65th on the list of large metros (next to its neighbor, Flint, in last place). Other rust belt bottom-dwellers include No. 395 Elkhart and No. 392 Kokomo in nearby Indiana.

    Perhaps more disturbingly, many of those at the bottom come from what used to be called “the new South,” cities that industrialized late and often benefited from the flow of jobs from the old rust belt. Places such as No. 396 Morristown, Tenn., No. 390 Dalton, Ga., and No. 389 Hickory-Lenoir-Morganton, N.C., have suffered from a recession that has either forced companies to shut down or move overseas.

    Sun Belt Busts

    Ever since the collapse of the housing bubble in 2007, we have seen a remarkable turnaround in many Sunbelt regions. Traditionally, these led the list as emerging boomtowns. Now many appear more like bust-towns.

    Take a look at the rapid decline of such hot spots as Las Vegas, which now ranks 57th out of the 66 largest metros in the country; Phoenix, now lurking at No. 51; and No. 61 West Palm Beach, No. 56 Fort Lauderdale, No. 54 Tampa and No. 45 Miami, all in Florida. Many of these cities stood proudly near the top of the list as recently as three years ago. Perhaps nothing illustrates the reversal of fortunes than the fall of Reno, once our fastest-growing mid-size region, now No. 92 in the same category.

    California: The Great Disaster

    No state has suffered a greater reversal of fortunes than California. Five or six years ago California regions generally inhabited the top half or third of our lists. Today they generally have fallen even faster than the other Sunbelt states, even though the state’s economy boasts many assets beyond merely real estate speculation.

    California now accounts for a remarkable 7 of the bottom 20 regions on our big metro list. The diversity of the disaster spans both the urban centers and the exurbs–witness exurban Riverside-San Bernardino at No. 63 and the city of Oakland at No. 62. Historic high-flyers No. 59 Los Angeles and neighboring Santa Ana-Anaheim Irvine, which checks in at an abysmal No. 60, didn’t fare much better.

    Perhaps more shocking is the poor performance handed in by the state capital, Sacramento, a former high-flyer now mired at No. 54, and San Diego, a high-tech haven with a near-perfect climate, that resides at No. 48. Even No. 47 San Jose/Silicon Valley has done poorly, despite all the consistent hype about the world class tech center. The likes of Steve Jobs of Apple and Eric Schmidt at Google may be minting money, but the region, paced by declines in construction, manufacturing and business services, now has 130,000 fewer jobs than a decade ago. San Francisco does not do much better, clocking in No. 42, just ahead of its equally celebrated alter-ego Portland, Ore.

    Prognosis From the Emergency Room

    If this list tells us the current occupants of intensive care, what then are the prognoses for recovery? It seems the story differs for each of our three basic categories. For the rust belt cities, relief will only come when the country decides to reprioritize industry, while allowing for the restructuring of firms and contracts. On the bright side is the recovery of Ford and the potential for a second life for a greatly reduced General Motors and even Chrysler. A modest surge in production of these firms and related industries, such as steel and electronics, could help some selected regions rise up from the bottom.

    The recovery of the Sunbelt economies seems likely to take hold first. Despite the giddy predictions of East Coast pundits that places like Las Vegas, Phoenix, Orlando and Tampa are doomed to what Leon Trotsky allegedly described as the “dustbin of history,” this is not the first time these areas have suffered a setback. They have still not shown much life yet, but I would not count them out for the long term. There is a lot to be said for a sunny climate, greatly enhanced affordability and what many see as a high quality of life.

    Ultimately, notes Rob Lang, director of Brookings Mountain West and professor of sociology at the University of Nevada-Las Vegas, the assets of these regions have either not changed–pro-business administrations and warm weather–or, in the case of housing affordability, have become more attractive. “Phoenix and Las Vegas will be fine,” Lang predicts, noting that Las Vegas is working to reinvent itself beyond gaming to becoming a “convening capital” for the world economy. Similar dynamics could also boost cities in Florida, particularly if they begin focusing beyond tourism and housing.

    And then there is California, which by all rights should be leading, not lagging, the current recovery. Statewide unemployment, already 12.6%, has been rising while most states have experienced a slight drop. Silicon Valley companies, Hollywood and the basic agricultural base of the state remain world-beaters. But the problem lies largely in an extremely complex regulatory regime that leads companies to shift much of their new production and staffing to other states as well as foreign countries. The constant prospect of a state bankruptcy, in large part due to soaring public employee pension obligations, does not do much to inspire confidence among either local entrepreneurs or investors.

    Hopefully this will be the year when Californians decide that it needs an economy that provides opportunities to people other than software billionaires, movie moguls and their servants. It will have to include much more than the endlessly hyped, highly subsidized “green jobs.” More than anything, it will take rolling back some of the draconian regulations–particularly around climate-change legislation–that force companies, and jobs, to go to places that, while not as intrinsically attractive, are friendlier to job-creating businesses.

    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. His newest book is The Next Hundred Million: America in 2050, released in Febuary, 2010.

    Photo: JSFauxtaugraphy

    April 27, 2010

  • We Need a New Ross Perot

    Is it time to bring back Ross Perot? Not the big-eared, chart-crazed egomaniac and his Texas cigar boat, but a nascent movement like his among independents that can transform today’s stale and essentially self-destructive debate between two equally bankrupt parties.

    Independent politics outside the established main parties has been on the upswing around the world, from Europe to the Tea Parties here at home. Perhaps the most stunning case has occurred in the United Kingdom, where Nick Clegg, leader of the perennial also-rans, the Liberal Democrats, was widely judged as the winner of the second in three debates with Prime Minister Gordon Brown and Conservative challenger David Cameron.

    Helped by good looks and an affable manner, Clegg is emerging as a real threat to the long-established Labour and Conservative parties. He has risen in the polls since early April from below 20 percent to above 30 percent. As my London-based colleague at the Legatum Institute, Ryan Streeter, observes, Clegg may himself be an Establishment figure—educated at elite schools and married to a Spanish lawyer—but his rise is based largely on “anti-government, anti-political sentiment.” His appeal is particularly strong among 18- to 34-year-old voters.

    This revolt of the independent middle is not unique to the U.K. Last year Japanese voters threw out the long-dominant Liberal Democratic Party for a newly cobbled together Democratic Party. French voters this year also bolted away from established parties to support independent, smaller groupings on both left and right.

    Independents matter even if they fail to take power. Clegg may not make it all the way to 10 Downing Street, but his stronger showing could transform British politics, forcing both Tories and Labourites to find ways to counter his appeal.

    This occurred here with the Perot movement in the early 1990s. Looking back, one can almost say it was Perot who ultimately shaped the times. Challenging both Bill Clinton and George the First, Perot gave voice to a deep-seated national concern—particularly among the older adult middle class—about out-of-control spending, a rising deficit, and declining national competitiveness. By focusing on these issues, he made George Bush and his cynical deal with the religious right seem both diversionary and divisive.

    The Perotista base, not wildly dissimilar from today’s Tea Parties, helped drive the first Bush from the White House by splitting the center-right vote. Two years later, upset with perceived Clintonian overreaching, particularly on health care, these same middle-class independents handed the Congress to the Republicans. In the end, we got the best of both worlds: a fiscally responsible government without the moralistic clatter and reflexive militarism of the GOP right.

    Over the next few years, we could use a Perot-like person who would challenge both the slavishly pro-greed Republicans and the crony capitalism of our Chicago machine government. The time seems right: Both Democrats and Republicans are losing support and, more important, respect from an increasingly alienated mainstream middle.

    The rise of new political forms across both Europe and America reflects some of the new realities of contemporary media. With the rise of the Internet, the ability of large parties to use the press as their obedient propaganda corps has been greatly diminished. Similarly, establishment consensus on issues—for example, on climate change—is no longer easy to enforce. The Internet is too protean and easy to penetrate to be corralled by either the power of money or lobbyist influence-peddling.

    The current political unrest also reflects a growing sense among the middle class in advanced countries, particularly those employed in the private sector, that the dominant parties are simply not interested in their fate. In the U.S., this view has been reinforced around the two biggest issues facing Congress this year, health-care and financial reform.

    On health care, the Republicans, ever subservient to their corporate donors, refused to address the fundamental issues—such as eliminating exclusions for pre-existing conditions, portability of coverage, or provisions allowing small businesses and sole proprietors to buy reasonably priced coverage—that matter to middle-class voters. Their inability to do something significant when in control of Congress and the White House opened the door to Obamacare.

    That said, the Democratic alternative, as Rodney Dangerfield would put it, proved no bargain either. Their plan ended up suiting insurance companies, Big Pharma, and those, mostly union members, holding “Cadillac” health plans. The losers were, as usual, members of the entrepreneurial middle classes who will now be subject to ever higher taxes in exchange for what could prove even worse coverage.

    The bankruptcy of the existing parties is, if anything, even more evident in the financial-reform debate. Desperate to win back their wayward constituency on Wall Street, most Republicans oppose regulation of even the dodgiest practices. At the same time, they are correct to call out the Democrats’ embrace of “too big to fail” institutions, which in essence would allow big banks to operate with the patina of guaranteed federal support.

    So in the end, we have something akin to a shouting match in a whorehouse over who gets to cavort with the best-endowed john. The Democrats may play a populist tune, but they take in far more money from the likes of Goldman Sachs—the firm was the largest corporate donor to the 2008 Obama campaign—than the more obviously craven GOP. A former Obama White House counsel, Gregory Craig, even serves on the pirate firm’s legal defense team.

    All this suggests the Democrats stand largely for the expansion of crony capitalism, the melding of corporate power and state. The Dodd bill, as Representative Brad Sherman, an independently minded California Democrat, has suggested, will give the kind of “unlimited executive bailout authority” that the Wall Street interests “desperately want but doesn’t dare ask for.”

    The Republicans, for their part, talk of adherence to conservative principles but, with a sly wink, are engaged in a giant “come-on” to the financial elite. Instead of too big to fail, they embrace the unfettered right to cheat and dissemble. In the end, the losers are the smaller banks and the middle class, who are forced to choose between corporate vultures and an ever more arrogant, clubby government-business alliance.

    Ultimately, the only way to rein in these awful people is to develop new independent political movements outside the Beltway. This category can include the Tea Partiers but also can extend to budget-conscious, grassroots Democrats like Montana Governor Brian Schweitzer. Although we could conceivably see the emergence of a new Perot-like figure, the independents may flex their muscle this time in a more grassroots, multifaceted manner.

    Something certainly needs to arise to force the parties to abandon policies that will lead to the destruction of the middle class—one party by unbridled corporations, the other by over-expansive government. In this respect, for all his goofiness, Ross Perot and his movement are looking better all the time.

    This article originally appeared at The Daily Beast.

    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. His newest book is The Next Hundred Million: America in 2050, released in Febuary, 2010.

    Photo: Leia

    April 24, 2010

  • The Best Cities For Jobs

    This year’s “best places for jobs” list is easily the most depressing since we began compiling our annual rankings almost a decade ago. In the past–even in bad years–there were always stalwart areas creating lots of new jobs. In 2007’s survey 283 out of 393 metros areas showed job growth, and those at the top were often growing employment by at least 5% to 6%. Last year the number dropped to 63. This year’s survey, measuring growth from January 2009 to January 2010, found only 13 metros with any growth.

    Mike Shires at the Pepperdine School of Public Policy, who develops the survey, calls it “an awful year.” Making it even worse, the source of new jobs in almost all areas were either government employment or highly tax payer-funded sectors like education and health. This year’s best-performing regions were those that suffered the smallest losses in the private economy while bulking up on government steroids.

    So far the recovery has favored the government-dominated apparat and those places where public workers congregate.After all, besides Wall Street, public-financed workers have been the big beneficiaries of the stimulus, with state and local governments receiving more than one-third of all funds. Public employment grew by nearly 2% over the past three years, while private employment has dropped by 7%.

    Read how we pick the best cities.

    Private sector workers have also seen their wages decline, while those working for the various levels of government have held their own. Federal workers now enjoy an average salary roughly 10% higher than their private sector counterparts, while their health, pension and other benefits are as much as four times higher.

    Not surprisingly government workers, according to a recent survey, are more likely to see the economy improving than those engaged in the private sector. It’s not so pretty a picture on Main Street; personal bankruptcy filings rose 23% in the year ending in March.

    Small Is Still Beautiful

    Despite these differences, some patterns from previous years still persist. The most prominent is the almost total domination of the top overall rankings by smaller communities. With the exception of Austin, Texas, all the top 10 growers–and all the net gainers–were small communities. Americans have been moving to smaller towns and cities for much of the past decade, as well as jobs, and this recession may end up accelerating the trend.

    At the top of the list stands No. 1 Jacksonville, N.C., whose economy grew 1.4%, paced by 3.3% growth in government jobs. Fast growth, however, is not a stranger to this Southern community, whose employment base has grown 22.8% since 1998. The area includes the massive Marine Base at Camp Lejeune, a beehive of activity since the U.S. started waging two wars in Afghanistan and Iraq. Fort Hood-Temple-Fort Hood in Texas came in fourth place overall with Fayetteville, N.C., home to the Army’s Fort Bragg, placing sixth and Lawton, Okla., home of Fort Sill, close behind at No. 7. Similar explanations can apply to war economy hot spots Fort Stewart (No. 20 overall) and Warner Robbins (No. 26), both in Georgia.

    But perhaps nothing captures the current zeitgeist more than the presence, at No. 23, of Hanford-Corcoran, Calif. A large Air Force base and a state prison have bolstered Hanford-Corcoran’s economy, which shows that even in the Golden State–an economic basket case whose unemployment keeps rising–a large concentration of government jobs still guarantees some degree of growth.

    Not all our top-ranked small stars got their stimulus from Uncle Sam. Energy-related growth explains strong performances from Bismarck and ag-rich Fargo, N.D., at Nos. 2 and 8, respectively. You can also credit some energy-related growth to the high standing of Morgantown, W.Va., (No. 17) and Anchorage, Alaska, (No. 18), which have benefited from consistently high prices of oil and other sources of energy.

    Texas at the Top of Big Cities

    Our list of best places among big cities is dominated this year, as last, by Texas, with the Lone Star State producing fully half of our top 10. This year, like last, the No. 1 big city (those with a more than 450,000 non-farm jobs) was Austin, Texas, which enjoys the benefits of being both the state capital and the home to the University of Texas, as well as a large, and growing, tech sector.

    But the Texas story also includes places that do not enjoy Austin’s often overwrought “hip and cool” image. Broad-based economies, partly in energy, have paced the growth of No. 2 San Antonio, No. 3 Houston, No. 5 Dallas and No. 7 Fort Worth. Other consistent big-city Southern performers include No. 8 big metro Raleigh-Cary, N.C., as well as two ascendant Great Plains metropolises, No. 9 Omaha and No. 11 Oklahoma City. None of these places were too hard-hit by the mortgage meltdown, and they all have retained reputations as business-friendly areas.

    The other big winner among the large areas is an obvious one: No. 6 ranked greater Washington, D.C. While most American communities suffer, our putative Moscow on the Potomac has emerged as the big winner under Barack Obama and the congressional centralizers. Remarkably, federal employment in the area has grown at a smart pace throughout the recession. One partial result: Washington office space is now–for the first time ever–more expensive than that in Manhattan. Northern Virginia, home to many beltway bandit companies, ranks No. 4 on our list.

    The Eds and Meds Economy

    With the productive economy outside energy only now getting its footing, the biggest relative winners have been what could be called the “eds and meds” economies. This includes de-industrialized places such as Pittsburgh (ranked a surprising No. 13), Rochester, N.Y., (ranked No. 17) and Buffalo, N.Y. (No. 20). If you have few more factory jobs to lose, little in-migration and a huge collection of institutions relatively immune to the economic turndown, you have a better chance to look good in bad times. The stimulus tilted more toward education and health than to construction and infrastructure, something that has worked to the favor of these cities.

    We can see this in New York City, whose huge and growing concentration of colleges and hospitals helped propel it to No. 10 among the big regions, its best ranking ever, despite losing almost 130,000 jobs. This is all the more remarkable since the Big Apple was the epicenter of the financial collapse, although that also made it the prime beneficiary of the federal bailout and Wall Street’s boom. Soaring salaries for hedge fund managers and new hires at financial firms could be pacing new growth in the city’s elaborate service industry, from toenail painters, restaurateurs and psychologists to dog walkers and yoga instructors.

    The health of the eds and meds economy, however, has even been enough to lift some traditional bottom-dwelling sad sacks, such as No. 14’s Philadelphia, to unfamiliar, if rather relative, heights. With private-sector growth weak everywhere, cities with lots of big hospitals, universities and nonprofit foundations look better for the time being than they have in a generation.

    The Road Ahead

    We expect our list to change next year, but how it will do so will depend as much on politics as economics. The current policy approaches–with healthy increases in government employment and strong support for education–have worked relatively well for taxpayer-financed economies including those with a strong “eds and meds” sectors. State universities, now confronted with the real pain of the recession felt by state taxpayers, are already crying for heavy increases in federal support.

    But if Congress takes a turn to the center, or even right, after November, the advantageous position of the favored government-supported sectors may erode. Particularly vulnerable will be state workers, whose current federally sanctioned reprieve could be terminated if voters force legislators to start addressing concerns over the huge governmental deficits both locally and nationally. Given D.C.’s unique ability to print money, Washington and its environs will likely continue to expand, as they did under the spendthrift Bush regime, but many state and local governments may be forced onto a stringent diet.

    On the other hand, a welcome return to basic growth in overall economy would further boost those relatively low-cost areas–notably in Texas, the Great Plains and the Intermountain West–that have in recent years enjoyed the strongest trajectory in the non-government related sectors, including natural resource-based industries . These places have pro-business regulatory and tax regimes, lots of available land and affordable housing, which will attract new businesses and workers to their areas.

    This change could also benefit some places, such as Silicon Valley, parts of Southern California and the Pacific Northwest, which despite high costs still retain globally competitive, tech-related sectors. A resurgent job market in these areas would erase the current apparent advantage enjoyed by “eds and meds” based economies in favor of those places that will serve as the real incubators for a revived private sector economy. With the resumption growth, hopefully, our economy next year will begin resembling the more capitalist, competitive one we have enjoyed in the past.

    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. His newest book is The Next Hundred Million: America in 2050, released in Febuary, 2010.

    Photo: kiril106

    April 20, 2010