New Geography

Category: Policy

  • Oregon’s Fringes: A New Rural Alternative

    Once the bastion of a thriving rural middle class, Oregon’s rural communities are now barely scraping by. The state’s timber industry employed 81,400 residents at its peak in 1978. At the time, the industry made up 49% of all manufacturing jobs in the state according to the Oregon Employment Department.

    Since then, the recessions of the early eighties and nineties, increased land-use restriction, decreased timber supply, global competition and automation of the timber industry have devastated rural communities that relied on once-plentiful timber jobs. Total timber industry employment has dropped to barely 11,000. Long term forestry prospects are glum. The benefits of carbon sequestration, endangered species protections, growing green building industry and the desire to protect Oregon’s forests for recreation will continue to hamper extraction and employment opportunities.

    Meanwhile, residents of such places as the southwest town of Oakridge (pop, 4,000) are left with few options. As the last mill went in the early nineties, so did the jobs. Many left for employment in surrounding cities. Those who stay often work multiple minimum-wage retail shifts; a trailer or shared space is many times their only living option.

    Oregon’s rural places were wrecked not just because of the necessary industry shift (away from logging) but because of the lack of long-term planning required to accommodate that shift.

    The obvious decline in timber employment called for a multi-generational plan to re-invent the state’s rural communities. Instead, towns like Oakridge were allowed to sink until the situation became bleak enough to gain state attention. What followed was reactionary policy that mandated mostly welfare and other band-aid solutions.

    The current situation calls for a more drastic plan that will once again restore Oregon’s proud rural tradition. The initial step is recognizing that rural Oregon – if the state is to preserve its natural resources and provide healthy communities for its residents – must transition from a rural layout to denser small town formations. The state lacks the resources, population density and geographic appeal to allow all of rural Oregon to make this change.

    Instead, select areas with the potential for turn-around should be identified across the state and given special attention in making the transition. At best, this should come from the ground up: through the initiative of local communities. These “New Towns” will be allotted state resources and special legislation to reinvent themselves as more compact and sustainable communities with the capacity of attracting skilled workers and business alike.

    Rather than attempt to wrestle with every factor in the discussion of the New Town model, what follows is a broad outline of the more crucial considerations suggested by such an approach . This leaves much open to discussion, to which the reader is invited to contribute.

    First, Oregon’s historically strict land-use regulations need to be re-evaluated. Instead of discouraging development, it should be encouraged within the New Town boundaries by incentive packages to developers who add an element of “community value” to their projects. Projects that are built sustainably, offer employment, scenic access, cultural attractions, restaurants, and/or retail options will qualify for the incentives.

    Of course many oppose almost any further development across rural Oregon. But in reality we really have two options: either accept a future of rural disenfranchisement and resource extraction; or concentrate resources, re-zone, and intelligently build new, economically as well as environmentally sustainable towns across Oregon.

    Alternative energy companies such as SolarWorld, Vestas and Solaicx, Inc. are just a handful of the dozens of renewable energy companies running or planning new facilities in Oregon.

    Initially, these firms have clustered around Portland or its surrounding suburbs. But factors such as dwindling space and access to workers could drive these firms further outwards. The right incentives package, inexpensive land and labor would make the New Towns an attractive option for the green industry in the coming years.

    Green business could provide one foundation for these places. Once the green industry demonstrates confidence in the New Town model, other economic players would likely follow. These include industries – such as food processing, data centers and specialized services – that could also be nurtured successfully, as has occurred in smaller communities elsewhere in the region.

    The New Town proposal also offers a viable solution to Oregon’s expected population growth. Between 1980 and 2006, the Oregon population grew from 2.6 million to 3.7 million, an increase of 40.5 percent. By 2050 population growth for the state is projected at 5.8 million according to the Northwest Rural Development Center using U.S. Census data.

    The state’s population growth – mainly from immigration and domestic migrants – will be attracted to locales with affordable housing and job opportunities. So far this has translated into a largely urban migration. Growth within cities or in their surrounding suburbs increased by as much as 50%, while non-metro growth increased by only 19%.

    As long as jobs remain in or near the handful of cities Oregon has to offer, these trends will continue. Fortunately, the majority of newcomers are not drawn primarily by urban amenities. Inexpensive housing, job opportunities, and scenic attractions could compensate nicely for the increasing cost and congestion that accompanies urban living.

    The development of the suburbs stemmed from the desire to escape the urban core’s problems. The suburbs continue to surround our cities because of the resources and job availability. However, there is little reason that with the digital revolution and the coming green revolution, once-isolated towns cannot become self sustainable and very desirable.

    Many readers will feel uneasy by the suggestion of deliberately spurring growth in particular places while allowing others to wane. It seems to go against free market ideology and even to be unauthentic.

    Yet a change is needed. These places initially thrived because they were located near natural resources. By shifting from extraction industries, the basis of the local economy has shifted. The whole approach to town development needs to be readjusted to meet these new realities.

    Without a complete shift in how planners view and design for the spaces across the entire state, the rural poor will continue to struggle, while population increases will make our metropolitan areas less and less attractive. The New Town model could present a viable option to the contemporary problems Oregonians face and perhaps to other problems now only on the horizon.

    Ilie Mitaru is the founder and director of WebRoots Campaigns, based in Portland, OR, the company offers web and New Media strategy solutions.

  • Phantom Bonds Update: The New Treasury Bond Owner’s Manual

    Shortly after my piece on Phantom Bonds, Blame Wall Street’s Phantom Bonds For The Credit Crisis, posted here on NewGeography.com in November, a friend called from New York to ask if I’d seen the latest news. Bloomberg News reported on December 10 that “…The three-year note auction drew a yield of 1.245 percent, the lowest on record… The three-month bill rate [fell] to minus 0.01 percent yesterday.” The US Treasury is seeing interest rates on its notes that are “the lowest since it started auctioning them in 1929.”

    My friend is an intelligent person, a lawyer who managed to accumulate more than $1 million working a 9-to-5 job in a not-for-profit firm and retire in her 50s. Some of her portfolio is in Treasury bonds, so she had a lot of questions. In the course of our conversation, it became clear that I wasn’t going to be able to explain all she needed to know on the phone, despite her background. I decided to write this short owner’s manual.

    Here’s how it works, and how it ties back to the problem of phantom bonds. When the US government needs to raise money it authorizes its agent, the Federal Reserve Bank (FRB), to sell securities. The different names for these securities are associated with how long they will remain outstanding, like the term of a loan: bills are up to 1 year, notes are up to 7 years, and anything longer than that is a bond. We’ll just call them bonds to make it easy.

    The FRB has relationships with several primary dealers like Citigroup, Goldman Sachs, JP Morgan, and Morgan Stanley. When notifications are sent out that some bonds will be sold, these primary dealers submit bids in the form of prices. If a financial institution bids $99 for a $100 bond, then that bond will essentially pay – or ‘yield’— roughly 1% from the US Treasury (UST) to its holder. If the investor bids $101 for the $100 bond, then it will pay 1% for the privilege of lending money to the UST; the bond’s ‘yield’ would then be minus 1%. That’s a very good thing if you happen to be the UST, which of course we all are because it’s all taxpayer money.

    So— as the prices of bonds rise, the yields fall, and these yields translate into the interest rate that the UST pays to the bondholders in order to borrow the money it needs to fund the budget deficit (and to refinance the existing national debt).

    This is all roughly speaking, of course. But the idea is that the interest rates are set based on the prices that are bid in something that’s like a blind auction. The bidders don’t see the other bids, but because there are more bids than there are bonds available, financial institutions will bid the highest prices they can to avoid being shut out altogether. (FRB usually gets bids for 2 to 3 times as many bonds as they have available to sell.) This is good for UST, with a heavy emphasis on the “us”! High bond prices translate into low interest rate loans for UST.

    Bonds are funny that way: when a bond’s price goes up, its interest rate goes down, and interest is the cost of borrowing money. So we should like to see Treasury bonds selling at very high prices, and with very low costs to the UST. Unfortunately, all those fails-to-deliver — those phantom bonds — especially over the past few months, had the effect of pushing down the price of bonds by (artificially) increasing the supply. That was keeping the interest rate paid by UST higher than it needed to be over the last year or so.

    When bond prices are high — or inching up, as they are now — we all benefit. UST sold $32 billion in 30-day Treasury bills on December 9th at a yield of 0%, meaning that investors are lending UST money for nothing except the promise to return their money without losing any of it. Investors bid for four times as many of these particular Treasury bills as were available for sale. This is as it should be.

    As the primary brokers rush to cover their phantoms — those failed to deliver Treasuries of the past — in order to settle their transactions, we’re seeing a surge in the price of treasury securities. The prices of bonds are rising, the yield is falling; the UST is paying lower rates on the money it borrows from investors.

    An increase in the price of the new bonds can also mean that the price of existing bonds – those already outstanding – will also increase. The increase in the prices of outstanding bonds will help my friend in New York. A good part of her $1 million retirement portfolio is invested in Treasuries. Treasury bond funds, like Merrill Lynch and Vanguard, are earning 11 to 12 percent for their investors.

    These high rates of return in Treasury bond funds won’t last forever, of course. The number of fails-to-deliver in Treasuries is falling quickly, now that the spotlight is on. When settlement is final and on time, then the usual rules of supply and demand will apply. Prices of new bonds and those bonds in the funds (the outstanding bonds) will even out. But the demand for UST bonds will likely stay strong as long as there is global financial turmoil. And that demand turns out to be good for the US (lower interest rates) and good for us (higher prices for the bonds in funds).

    People like my friend in New York ask me if Treasury bonds are safe. I tell them: if the US Treasury fails to pay you back, you’ll have bigger problems than a decrease in the value of your portfolio.

    Susanne Trimbath, Ph.D. is CEO and Chief Economist of STP Advisory Services. Her training in finance and economics began with editing briefing documents for the Economic Research Department of the Federal Reserve Bank of San Francisco. She worked in operations at depository trust and clearing corporations in San Francisco and New York, including Depository Trust Company, a subsidiary of DTCC; formerly, she was a Senior Research Economist studying capital markets at the Milken Institute. Her PhD in economics is from New York University. In addition to teaching economics and finance at New York University and University of Southern California (Marshall School of Business), Trimbath is co-author of Beyond Junk Bonds: Expanding High Yield Markets.

  • Postindustrial Strength Brain Drain Policy

    In the discussions of the stimulus and infrastructure problem, little attention has yet been paid to addressing brain drain. Yet for many regions – particularly in the old industrial heartland – no issue could be more critical.

    Perhaps the most important investment in regional human capital occurs at local schools. Enterprise looks to the secondary and post-secondary institutions within the area for labor. In this regard, it makes sense to fund better learning with local and state taxes as long as that talent remains within that geography.

    Older industrial age cities and states are particularly dependent on a parochial labor pool. That’s the political legacy of the industrial economy. Workers tended to put down deep roots and this lack of geographic mobility made unions the only means to fight depressed wages.

    But the conventional solution for regional decline has been greater ‘investments’ in education. Yet increasingly high local and state taxes for education no longer make sense. In fact it can be argued that Rust Belt cities such as Pittsburgh have often been victims of their own success. Excellent schools – particularly in the suburban periphery – increased the geographic mobility of the next generation. When tough times hit in the late 70s and early 80s, these young adults were ready to embrace opportunity wherever it may be. When they left for Houston, Phoenix or Tampa, they took all those tax dollars with them.

    Out-migration isn’t a problem when your region is benefiting from some other place’s investment in human capital. But if no one is moving to your city or state, then retention of talent becomes a matter of economic survival. This is difficult to accomplish when your graduates are smart enough to know about greater opportunities that exist all the way across the country. It is also made worse when your local businesses are loath to pay the prevailing national market rate for the labor it needs.

    In this sense then, plugging brain drain can help depress wages and make a place like Charlotte that much more attractive to Rust Belt graduates. Remember, captains of industry made a lot of money exploiting captive labor markets.

    The dependence on local talent also disrupts network migration. Cities that must attract “foreign” workers develop pathways that make it easier for future workers to move there. It also helps connect the local economy to the global one, as has occurred on the west coast, with Asian immigrants opening connections to Pacific Rim economies and in south Florida, where Cuban migration has created a dynamic international business sector.

    Furthermore, getting newcomers helps outsource the costs of cultivating human capital. Low tax regimes bank on in-migration. Poor local schools don’t really matter when the best and brightest from the Rust Belt are moving into your brand spanking new crystal palaces. In this sense, the “legacy economy” is subsidizing Sun Belt boomtowns.

    The Rust Belt needs to learn from the Sun Belt. The game is all about attraction. The geographic mobility of talent within the Rust Belt would be a good place to start. Instead of squeezing the local labor pool, pave a new path to a fellow postindustrial city with a similar tax burden and effectively starve the boomtowns. Your neighboring legacy economy feels the same pain you do. Talent churning between the two locales beats the futility of fighting brain drain.

    Even growth states such as Georgia are overly concerned with who leaves. Sun Belt (i.e. growth) states obsess the out-migration of native graduates as much as Rust Belt (i.e. shrinking) states do. The same policy boondoggle in Ohio exists in Georgia. Across the board, there is a prejudice for homegrown talent.

    In contrast, I think older, now shrinking cities must embrace out-migration and focus more on growing the numbers of newcomers. These people will bring the new ideas and connections regions like ours need. Leave the self-destructive nativism to the Sun Belt.

    Read Jim Russell’s Rust Belt writings at Burgh Diaspora.

  • Go North Young Man

    With his foreign policy team now in place, President-elect Barack Obama certainly will be urged to make his first forays into high profile places like Pakistan, Israel and Palestine, as well as to greet his devoted fan base in Europe.

    But before heading off on the diplomatic grand tour, he might do well to turn his attention first to the country with which we have the closest political, economic and environmental ties: Canada. Although not as momentous or sexy a locale as Paris or Jerusalem, Ottawa could well hold the key to developing a bold new strategy for America in an increasingly incoherent and multi-polar world.

    A focus on Canada and to some extent Mexico as well, would require a reversal of the kind of wide-ranging foreign policy focus that has dominated the country since the 1940s. In that period, the United States has extended – one might increasingly say overextended — its economic and political reach ever further from its continental base.

    In the process, the country has become ever more intertwined with unreliable and often malicious regimes on the Asian continent and subservient to the interests of an often jealous and uncomprehending Europe. As a result, the country has sacrificed its own economic health, becoming ever more dependent on fuel, manufactured goods and even its self-esteem from countries with which we often share distressingly little.

    Instead, the new President should place greater emphasis on the fundamental basis of our uniqueness and economic strength: the enormous continent we share with our Canadian as well as Mexican neighbors. This would represent a return to a version of the politics – so important in our 19th Century emergence – that understood resources, natural and human, constitute the true foundation of national greatness.

    This shift also would help us establish significant psychological distance between the United States and Europe. Although there are segments of the country, notably in the Northeast, who would prefer America become a clone of the Old Continent, our demographic and physical realities are diverging every day from those of a rapidly aging and resource-poor Europe.

    In contrast, Canada shares with America a somewhat more vibrant demography. This is driven largely by immigrants who are rapidly integrating and invigorating both countries. With Australia, the two countries have emerged as the preferred location for immigrants in part because they are where they are – in sharp contrast with that of Europe – most likely to succeed.

    Being a country of immigrant aspiration represents just one aspect of our close cultural ties with Canada. Our northern neighbor ranks among the largest senders of immigrants as well; roughly 840,000 Canadian citizens now have established themselves south of the border. On a familial level millions of Canadians have relations with Americans; in fact, places like Los Angeles, if current and former Canadians were counted, would constitute among the largest cities in that country.

    Canada is also our country’s largest source of visitors – there are parts of Florida where French is the second language – and a major player in our national real estate and financial market. Whole sections of the northern Great Plains depend on consumers coming from over the border. (Full disclosure: Joel Kotkin’s wife is a native of Montreal, Quebec and the Schills live in Grand Forks, an icy spit from the Manitoba border).

    Most critically our economic ties to Canada represent the largest bilateral relationship in the world while Mexico has emerged as our third largest trading partner. And unlike our chronically poor terms of engagement with countries like China and Japan, our trade with Canada and Mexico also includes healthy transactions in basic manufactured goods, technology and farm products.

    At the same time, Canada and United States together share a critical interest in agricultural commodities, a market where they are the undisputed world leaders. In a world that is likely to get too crowded and short of basic resources, a strong North America should be well-positioned in comparison with relatively resource-poor competitors such as Western Europe and East Asia.

    But perhaps the most critical relationship lies in the energy arena. The globally Saudi-centered energy policy of recent years, particularly during the Bush-Cheney era, has fueled our deadliest enemies and also threatens both our environment and long-term economic viability.

    A U.S.-Canada energy consortium — with the eventual involvement of Mexico — provides an out from our fundamental geopolitical dilemma: how to grow our economy while reducing our dependence on imported energy and, over time, carbon-emitting fuels. This could take the form of something like a North American Energy Community, which would help coordinate research, development and environmental resources across the continent.

    This approach would offer a way to shift our economic interests away from unreliable and unfriendly regimes towards countries with whom we have far better personal, political and economic ties. Current estimates indicate we will increase oil imports from 12.6 million barrels a day today to 16.4 million in 2030. More than half of that is expected to come from OPEC suppliers, with much of the rest from Russia and the Central Asia autocracies.

    A continental strategy would halt this dangerous slide. Taken together, the resources of our three countries are both immense and extraordinarily diverse. Overall, North America ranks second only to the Middle East in proven oil reserves. Canada, for example, has the world’s second largest proven crude oil reserves, outpaced only by Saudi Arabia; the United States ranks 11th and Mexico 14th. The three North American states rank in the top fifteen in natural gas production, as well.

    This alliance can work both in the short run on fossil fuels and will, over time, blossom with the shift to renewables. Canada, well known for its surplus of fossil fuels, also possesses promising potential in hydroelectric and wind energy. Wind alone, Canadian researchers believe, could provide 20 percent of that nation’s power. Prince Edward Island, on the country’s east coast, is already conducting a major experiment to shift its primary energy dependence towards wind and biomass.

    Mexico, long an oil exporter, needs new technology both to upgrade its current energy industry and to exploit its potential in renewable fuels. Over time, experts say, Mexican production of fossil fuels will drop, but the nation has an almost totally unexploited potential in solar and sugar-based ethanol fuel, following the Brazilian model. For its part, the United States also has considerable solar, wind, and biofuels, of which we are already the world’s second largest producer.

    This energy alliance would also help spark employment and growth across the continent. Money spent on development and importation of energy from Russia, Saudi Arabia, or Iran offers few benefits for our economy. We conduct pathetically little export trade with these nations; we constitute less than 5 percent of Russia’s imports, less than 14 percent of Saudi Arabia’s, and virtually none of Iran’s. Europe, Japan, and, increasingly, China – not the United States – are the growing and primary beneficiaries of the energy-producers’ wealth.

    The same dollars spent within North America have a very different effect. Canada and Mexico together constitute by far the largest export market for the United States. Over one third of our exports now go to our North American allies, compared to less than 5 percent to OPEC and less than one percent to the Russian Federation.

    Investment in Mexico’s Peninsula de Atasta, an ethanol plant in Iowa, or a hydroelectric plant in Quebec enriches customers for whom the United States is a primary source of both manufactured goods and of services, including tourism. A wealthier Mexico also means more visitors to the parks of Orlando, Anaheim or to Houston’s Galleria. Canadians, for their part, flock first to New York, Seattle, Chicago, Los Angeles or Florida when they have extra change to spend.

    So as he considers his options, President-elect Obama may want to consider this continental strategy as a means to create new wealth here and to strengthen our hand abroad. We know these proposals are radical, and will be subject to all sorts of opposition by well-organized pressure groups.

    But by focusing on our continental economy, the United States can begin facing the world not as another slowly declining European descended power but once again as a youthful, defiantly multi-racial and ascendant one.

    This piece originally appeared at Politico.com

    Joel Kotkin is a presidential fellow at Chapman University and is finishing a book on the American future. He is executive editor of www.newgeography.com. Mark Schill is the site’s managing editor and an associate at the Praxis Strategy Group.

    December 19, 2008

  • How To Save The Industrial Heartland

    You would think an economic development official in Michigan these days would be contemplating either early retirement or seppuku. Yet the feisty Ron Kitchens, who runs Southwest Michigan First out of Kalamazoo, sounds almost giddy with the future prospects for his region.

    How can that be? Where most of America sees a dysfunctional state tied down by a dismal industry, Kitchens points to the growth of jobs in his region in a host of fields, from business services to engineering and medical manufacturing. Indeed, as most Michigan communities have lost jobs this decade, the Kalamazoo region, with roughly 300,000 residents, has posted modest but consistent gains.

    Of course, Kalamazoo, which is home to several auto suppliers, has not been immune to the national downdraft that has slowed job growth. But unlike the state – which he describes as “a hospice for the auto industry” – Kalamazooans are already looking at expanding other emerging industries, including advanced machining, food processing, medical equipment, bioscience and engineering business services. Unemployment, although above the national average, is more than two points below the horrendous 9.3% statewide average.

    As Kitchens notes, this relative success came through often painstaking and laborious work, a marked departure from the “magic bullet” approach to economic recovery that often dominates Michigan and other rustbelt states. In the past, Michigan Gov. Jennifer Granholm has touted ideas about developing “cool cities” to keep young people from bolting to more robust locales and, more recently, on the promise of so-called “green jobs” tied to sustainable energy.

    “People don’t want to talk about ‘blocking and tackling,’” Kitchens suggests. “You keep your head down and keep pushing. It’s not sexy but it works over the longer term.”

    For his part, Kitchens never much embraced the idea of coolness – a “cool Kalamazoo” effort even received $100,000 from Gov. Granholm as part of her strategy of promoting “creative urban development” as a way to keep talent in the state.

    Of course, this gambit failed miserably almost everywhere, even before the recent economic meltdown. Nearly one in three residents, according to a July 2006 Detroit News poll, believes Michigan is “a dying state.” Two in five of the state’s residents under 35 said they were seriously considering leaving for other locales.

    Kitchens does not express much faith either in Granholm’s latest gambit, developing Michigan into a green energy superpower. After all, states like Texas and California have a wide lead in these technologies and other areas, notably the Great Plains, possess a lot more wind and biofuel potential. And in terms of low-mileage “green” vehicles, the Big Three lag way behind not only the Japanese but even some European competitors.

    So instead of believing in reincarnation or finding some miraculous cure, Kitchens believes places must rely on exploiting their historic advantages. In the case of Michigan, those are assets like a powerful engineering tradition and a hard-working and skilled workforce that can be harnessed in fields outside the auto industry. In addition, the area enjoys a cost of living significantly below the national average and far less than those in the coastal states.

    “There’s no easy way to get out of the trouble the region is in,” Kitchens suggests. “You can’t make it by trying to be ‘cool places’ or be the green capital. Instead we have to focus on who we are, a place that has a great tradition of advanced engineering, and take advantage of this.”

    So far this approach has paid off, leading to the creation of some 8,000 new jobs over the past three years. The region has focused both on bringing in new companies as well as helping existing ones expand. Perhaps most importantly, it has also raised a $50 million venture capital fund from local investors to help launch fledgling entrepreneurs.

    The region also boasts an extensive set of business incubators, which seek to leverage the engineering skill of those just out of school or those who have left bigger companies.

    The Kalamazoo experience shows one way out for not only Michigan but also other struggling Midwestern industrial hubs. Another promising example can be seen in Cleveland’s recently developed “District of Design,” which seeks to capitalize on the regions historic strengths in specialty manufacturing. It is all about taking advantage of the embedded DNA that exists in these once wondrously productive places.

    This approach can even revive the residues of the automobile industry. There may be widespread and deserved contempt for the top management of firms like General Motors, but industry veterans repeatedly point out that the region – most particularly the area around Detroit – retains an enormous reservoir of engineering talent, which could provide the linchpin for regional recovery.

    One recent sign validating this was the opening of a new $200 million Toyota research and development center in suburban Detroit. The key reason for making the investment, noted Japanese Consul-General Tamotsu Shinotsuka, was Michigan’s “abundant human resources.” If you are looking for “resources” who know the business of building cars and engines, locating in Michigan has certain logic.

    Of course, this talent pool long has been available to the Big Three. However, as retired automotive engineer Amy Fritz has suggested, they have been ill-used by top management. American engineers, the British-born and educated Fritz suggests, are not inherently less talented than their Asian or European counterparts. They tend be more innovative but their creativity is often stifled by the short-term oriented management priorities of their bosses.

    “With or without a bailout, the Big Three as we have known them will not be the same,” writes Fritz. “One or two could disappear. Others will no doubt shrink. However, the intelligence that exists within the engineering and industrial talent of Michigan remains. This is what the country should look to save from extinction, not the mediocrities who have ruled from highest management.”

    Indeed, even in a future with a shrunken Big Three – and perhaps the extinction of at least one of them – the industrial heartland does not have to die. Nor does it have to become a permanent “hospice” for failed once-great companies. The way to a long-term prosperous future cannot be built by depending on the administrations of Washington or the political clout of the United Auto Workers.

    Instead, Michigan, and much of the industrial heartland, should build a strategy that taps into culture that once made it the envy of the manufacturing world. These people are the key to any recovery, the ones who can both transform fading companies or start new ones. As the late Soichiro Honda once told me, “What’s important is not gold or diamonds, but people.”

    This is the basic lesson of business that the current leaders of the Big Three, most Michigan politicians and perhaps too many on Capitol Hill have forgotten, or perhaps never learned. The industrial heartland may be down but as long as the talent and will is there, it is far from out.

    If you do not believe it, take a little trip up to Kalamazoo, which may be quietly showing how to take the Great Lakes toward a new and brighter future.

    This article originally appeared at Forbes.

    Joel Kotkin is executive editor of NewGeography.com and is a presidential fellow in urban futures at Chapman University. He is author of The City: A Global History and is finishing a book on the American future.

  • Bailing out California, Again

    If many of the nation’s governors have their way, the next agenda item for the spendthrift federal government could be a bailout of state budgets. According to a report issued on December 10 by the Center on Budget and Policy Priorities, 37 states face mid-year 2009 budget deficits, totaling $31.7 billion. As would be expected from its size, California leads the pack at $8.4 billion. However, California’s shortage is well above its share, at more than one-quarter of the total which is double its share of the population.

    Yet it gets worse. Later, California Governor Arnold Schwarzenegger announced that the budget deficit had risen to $14.8 billion, which would take its share of the deficits to more than three times its share of the population. All of this is after a long and drawn out legislative process that was to have closed a previous $22 billion deficit earlier in the year.

    For years, California boasted a strong economy, with the world’s leading technology, entertainment and agricultural industries. The state’s Legislative Analyst claims that California would be the 7th largest economy in the world if it were a nation. California is rich not only in the aggregate, but at the ground level. Only eight of the 50 states have a higher gross state product per capita. This means that California is per capita the richest large economy in the world. Thus, any bailout would be disproportionately financed by parts of the country that are often far less affluent.

    How can it be that California stands in such tatters seeking a handout? Why are people from other states, at least 30 of which wouldn’t even rank in the top 50 economies of the world, being asked to prop up this dynamo?

    The problem starts in Sacramento. California has been pitifully served by its state government. After missing the June 30 statutory deadline for balancing the 2009 budget, the legislature and governor spent the better part of the next three months doing everything they could to finish the job. In the final analysis they pretended to balance the budget with math that virtually no-one believed. That’s probably why there has been so little outrage at the new $15 billion deficit that has developed so quickly.

    But the buck doesn’t stop with lawmakers. After all, California’s electorate has repeatedly sent the elected representatives to Sacramento that have produced this mess. In California the voters themselves seem oblivious to the financial status of the state.

    This is likely to get worse before getting better. In the past voters could be counted on to vote down expensive new projects in hard times. But not anymore. In November they approved more than $30 billion in additional bonded indebtedness when they should have been asking for either a draconian spending cut or the tax increases. Californians will not be stopped from living beyond their means.

    So how can this continue? One way is for the world’s richest largest economy to be bailed out by people in states that are generally poorer and have been more frugal than California. The state’s powerful congressional delegation, with such heavyweights as Speaker Nancy Pelosi and Henry Waxman, the new boss of the House Energy and Commerce Committee, are likely to see to it that the national interest is sacrificed on behalf of California.

    The final irony here is the nation and indeed the world is already paying a heavy price for another exercise in Californian excess. The state is ground zero for the mortgage meltdown. It was here that house prices exploded. State and local land use policies provided the fuel for much of the increase, so that when demand increased in response to the profligate lending, the housing supply market could not adequately respond (unlike other higher demand parts of the country).

    With the most bloated housing bubble in the nation, mortgage losses understandably were concentrated in California. California, which accounts for 12 percent of the national population has accounted for more than one-half of the aggregate loss in housing value. California house prices dropped at least 10 times as much as the national average since the peak of the bubble. When the people could not pay their mortgages, unprecedented losses occurred and house values plummeted from 25 percent to 50 percent in some areas. Enough people who had virtually no financial stake in their houses walked away.

    California’s ability to spend every dollar the nation can print on its behalf should not be underestimated. Boatloads of federal money for California are likely to postpone any genuine efforts to improve California’s long run financial picture. The often used line about fighting a fire with gasoline has few better applications. A state that has thrown financial caution to the wind is not likely to adopt the necessary frugality with a new, national source of revenue. The special interests that have driven California’s spending into the stratosphere will not be more inclined to moderate their demands or to spend less lobbying money in Sacramento’s corridors. California’s taxpayers, perhaps the most anti-tax in the nation, are not likely to accept higher taxes if Washington can be counted on to pay instead.

    There could be no worse signal to California’s dysfunctional governor and legislature than to bail them out. With the situation deteriorating daily, bailing out California could become a continuing national obligation – sort of like Iraq, but without the prospect of an exit date.

    Wendell Cox is a Visiting Professor, Conservatoire National des Arts et Metiers, Paris. He was born in Los Angeles and was appointed to three terms on the Los Angeles County Transportation Commission by Mayor Tom Bradley. He is the author of “War on the Dream: How Anti-Sprawl Policy Threatens the Quality of Life.”

  • Financial Crisis: Who will Bailout the State and Local Governments?

    The continual Illinois corruption scandals have created not only ignominy to the Land of Lincoln, but have now placed a negative ranking from Standard and Poor on its credit. If Illinois vies with other states for the title of most corrupt, it has plenty of company when it comes to financial disaster.

    Although building for years, the impending collapse of state and municipal finance has been hastened by the growing financial crisis. The year 2008 will go down as one of the most turbulent years in the history of financial markets. Long established companies such as Lehman Brothers, Fannie Mae, Freddie Mac, and Citigroup have imploded. Large retailers like Circuit City have already filed for bankruptcy and, without federal help, huge companies like General Motors will join the parade.

    Yet with all the turbulence in the private economy, there has been much less media attention on the coming bankruptcy of some municipalities and perhaps even some states. Many of us are taught in college finance classes that the yield on municipal bonds always has to be lower than U.S. Treasury securities, largely due to their exemption from federal income taxation. This normal pricing of municipal bonds no longer exists. Municipal bond yields, the last couple of months, are consistently higher than U.S. Treasuries. This tells us that the credit markets perceive great risk in lending to America’s cities. The perceived ability to pay back principal is now the operating rule in the credit markets.

    As of this writing, Triple-A rated, Tax-Exempt General Obligation Bonds are yielding over 5% while the 30 Year Treasury Bond yields around 3%.This suggests that many communities and some states as well may be in distinct danger of default.

    There’s a general pattern as to where the biggest problems lie: in those states and communities where public employee unions wield all but unlimited power. This is not so much the fault of unions – the purpose of every union is to gain higher wages for its workers – but in many states and cities there is no counterforce to their influence. This becomes a vicious circle. Local politicians overpay unionized government workers who make campaign contributions and organize “get out the vote” drives to make sure the politicians keep overpaying them.

    The most recent famous example is the California city of Vallejo filing for Chapter 9 bankruptcy. George Will writes:

    Joseph Tanner, who became city manager after this municipality of 120,000 souls was mismanaged to the brink of bankruptcy, stands at a white board to explain the simple arithmetic that has pushed Vallejo over the brink. Its crisis — a cash flow insufficient to cover contractual obligations — came about because (to use figures from the 2007 fiscal year) each of the 100 firemen paid $230 a month in union dues and each of the 140 police officers paid $254 a month, giving their respective unions enormous sums to purchase a compliant City Council.

    So a police captain receives $306,000 a year in pay and benefits, a police lieutenant receives $247,644, and the average for firefighters — 21 of them earn more than $200,000, including overtime — is $171,000. Furthermore, police and firefighters can store up unused vacation and leave time over their careers and walk away, as one of the more than 20 who recently retired did, with a $370,000 check. Last year, 292 city employees made more than $100,000. And after just five years, all police and firefighters are guaranteed lifetime health benefits.

    The recent news out of the state of California is no better. The L.A. Times reports that California’s budget deficit could reach $41 Billion by 2010. Can California continue to pay 3600 prison guards over $100,000 a year? It would be wrong to single out California. Many other places are on pace for financial ruin.

    Massachusetts is another state where unions have hijacked the political process for the benefit of their members. Last year, The Boston Globe reported how lucrative rent-seeking can be:

    Nearly one in 10 Massachusetts State Police officers made more than the governor last year, with 225 officers topping the $140,535 annual salary of the state’s chief executive.Four of the 2,338 state troopers were paid more than $200,000, and 123 others were paid more than $150,000, the salary of the governor’s Cabinet secretaries, according to payroll information obtained by the Globe under the state public records law.

    And that brings me back to my home state of Illinois. We not only face an immediate cash flow crisis but also must confront an underfunded public pension fund deficit of more than $50 Billion, and the Blagojevich scandal has held up a needed $1.4 billion short-term bond offering. Chicago Public Radio reports the Illinois pension deficit is “larger than the state’s annual budget.” There is a clause in the Illinois State Constitution that prevents any state or local government worker’s pension from being cut. Will a federal bankruptcy judge have to come in and void a section of the Illinois State Constitution?

    When the major credit rating agencies failed to accurately price in the risk of subprime mortgages, questions about their rating standards are now becoming quite important. If you can’t trust Moody’s, Standard and Poor’s, and Fitch, what should you be looking for if you want to own municipal bonds?

    In the coming years, many municipalities and state governments will need to deal with the conflict between those who pay taxes and those who consume them. Government workers’ salaries come from the taxpayers: which means government workers aren’t net taxpayers. Cheap and easy credit might no longer be available to help pay for overpaid government workers.

    This situation can be resolved in two ways. As in a bankruptcy proceeding, states and cities can work with unions to control costs and reduce obligations. Or they can – as Wall Street and Big Three have done – come to Washington, DC to beg. Once that happens, the long-term credibility of Washington’s debt will need to rise to record levels, with implications that are almost too horrific to contemplate.

    Steve Bartin is a resident of Cook County and native who blogs regularly about urban affairs at http://nalert.blogspot.com. He works in Internet sales.

  • Rust Belt Realities: Pittsburgh Needs New Leaders, New Ideas and New Citizens

    The current recession provides a new opportunity for Pittsburgh’s elite to feel good about itself. With other boom economies from Phoenix to Miami on the skids – and other old Rust Belt cities like Detroit, Cleveland and Buffalo even more down on their luck – the slow-growth achievements of the Pittsburgh region may seem rather impressive.

    Yet at the same time, the downturn also poses longer-term challenges for which the local leadership is likely to have no answers.

    In large part, Pittsburgh’s “success,” such as it is, has been based on what may be called a “legacy economy,” essentially funded by the residues of its rich entrepreneurial past. This includes the hospitals, universities and nonprofits whose endowments have underwritten the expansion of medical services and education, which have emerged as among the region’s few growth sectors.

    The other great advantage Pittsburgh has – as do potentially other shrinking Rust Belt burgs – is lower housing prices. That’s the good news. But the lack of a great surge in housing prices during the real estate “bubble” also testifies to the region’s general lack of overall attractiveness and its languid job market.

    The current national economic meltdown now changes these realities, and in ways that may not allow Pittsburgh and other slow-growth burgs as much comfort as they might wish.

    For one thing, the “legacy” economy is almost certain to start shrinking as the portfolio investments of universities, hospitals and nonprofits begin to erode. After all, these institutions rode the boom elsewhere for a long time; they now will reap the consequences of that dependence.

    Perhaps even more important, the great housing advantage seems certain to weaken as a net positive. As prices in Florida, Arizona and even California begin to decline, Rust Belt residents who’ve been thinking of moving to warm weather, more dynamic economies and lively entrepreneurial environments will now have their chance.

    To thrive, Pittsburgh simply cannot rely on being somewhere that is a good place to go to school, get sick or die. It needs to offer restless, entrepreneurial people an opportunity to succeed and do something new.

    As local blogger Jim Russell notes, the real problem with his hometown is not that people leave, but that others do not come to replace them. People always leave places, but exciting locales – Los Angeles, New York, Seattle, Houston or San Francisco – also attract large numbers of new people. The immigrants, many of them seeking the “main chance,” are generally the people who shake things up and bring new energy to places.

    Who seeks their “main chance” in Pittsburgh? Certainly not foreign immigrants, who are staying away in droves. Metropolitan Pittsburgh has one of the lowest percentages of foreign-born residents in the nation. Even Detroit, with its sizable Arab population, has some sort of ethnic vibe.

    In the short run, some might argue, not having immigrants relieves the stress on schools and eases potential social tensions. Yet in the America that is emerging, these newcomers represent arguably the most dynamic new element and harbingers of the future. By 2000, one in five American children already were the progeny of immigrants, mostly Asian or Latino; by 2015 they will make up as much as one-third of American kids.

    Rather than compliment itself on not exhausting itself by running too fast, the Pittsburgh region should think about producing enough of a pulse to attract immigrants and aggressive young people. A place that reassures itself on the basis of its stable, homogeneous and rapidly aging population seems doomed to achieve little better than self-satisfied stagnation.

    City leaders may be proud to see Pittsburgh hailed in the media – most recently by USA Today and the Cleveland Plain Dealer – as a poster child for urban “renaissance,” yet these glowing accounts are clearly not inspiring many people to settle there.

    Indeed, in a nation with the most vigorous demographics in the advanced industrial world, the City of Pittsburgh continues to suffer one of the most precipitous declines in population. Like the former East Germany, the town needs more coffins than cribs. Even the suburbs of Pittsburgh have been losing population.

    More worrisome, there seems no strategy – or even an inclination of needing one – to change this reality. Rather than stimulate the grassroots economy, the region for decades has sought to revive itself by spending billions on new stadia, arenas, convention centers and cultural facilities, sometimes in the process demolishing vibrant working-class neighborhoods or local business districts. Meanwhile, the roads and bridges of the city – which continues to battle bankruptcy – are in a constant state of disrepair.

    Every time I read about or visit Pittsburgh, the powers that be have a new project to prove to themselves that the city actually has a life. Most recently, it’s a lame-brained scheme to create a 1.2-mile, $435 million (at least) transit tunnel under the Allegheny River to connect Downtown’s heavily subsidized office towers to the North Shore’s even more heavily taxpayer-funded pro sports stadiums and a future casino.

    Yet, in reality, Pittsburgh’s “Tunnel to Nowhere” is simply part of the same old brain-dead development strategy that may impress visiting journalists or conventioneers but creates little in the way of good new jobs or long-term opportunities.

    You have to think about what the energetic people who come to a community really want – things like economic opportunities, single-family houses and good schools for their kids. Who but speculators and city officials cares about luring the latest ESPN Zone or Planet Hollywood? These kinds of venues are simply commodities now, with no sense of place and available in any city of decent size willing to subsidize them.

    So what should the Pittsburgh region do differently?

    The first thing would be to consider using its scarce public funds to revive the old urban neighborhoods and leafy suburbs that constitute Pittsburgh’s greatest competitive advantage. These are places that may attract students now, but to matter in the long term, some of these young people must stay after they graduate. This will be particularly critical as the current “echo boom” begins to fade and the now record-high number of students begins to drop.

    Second, the region should target growing small businesses. The era when Pittsburgh was a big-business town is all but over. In 1960, 22 Fortune 500 companies were headquartered there. Now it’s roughly a third that number. High taxes, tiresome regulatory regimes and the enormous burden created by outsized city employee pensions have hit the small entrepreneur hardest. Addressing these issues is more important to them than new arts venues or jazz clubs.

    Finally, the city needs a shtick to call its own. It might look at its historic strengths as an innovative engineering city. Pittsburgh could look also to its hinterland, a region rich in beauty and resources, as part of its competitive advantage.

    All of these things could provide linchpins for a true renaissance – one driven not by public relations and shiny new subsidized edifices, but by the energy of its people.

    That’s what has always made for great cities – and what will do so well after this current recession has passed into memory. Pittsburgh has the potential to catch the inevitable next wave that will emerge after the crisis, but only if it can get past its long-standing celebration of mediocrity.

    This article originally appeared at Pittsburgh Tribune-Review.

    Joel Kotkin is executive editor of NewGeography.com and is a presidential fellow in urban futures at Chapman University. He is author of The City: A Global History and is finishing a book on the American future.

  • How About a Rural Stimulus?

    In Pennsylvania, public and private funds mainly are directed into areas where people live and where people vote. As a result urban Pennsylvania has significant advantages over rural communities in securing public funds and private investment.

    Although rural Pennsylvania comprises a significant percentage of Pennsylvania’s geography it contains a very low percentage of the overall population and its political clout is dwindling. According to Trends in Rural Pennsylvania March/April 2003 overview of the state’s population, urban counties outnumber the population of rural by a ratio of more than 3 to 1.

    Politically rural and small town Pennsylvania once wielded considerable power. The “T” which ran up the center of Pennsylvania and east to west across the northern tier of the state was key to Republican victories statewide. In recent elections, it has been the southeastern region that has dominated politics. It has reached the point where it can be safely stated that no candidate can win statewide in Pennsylvania without carrying at least one of the five southeastern counties.

    All this puts rural Pennsylvania at a distinct disadvantage, particularly in terms of basic infrastructure. Rural Pennsylvania has 57,065 miles of highway compared to 62,577 in urban counties. Local governments receive only about 10 percent of state revenues from the Motor License Fund and the rest is funded by local taxes.

    In rural Pennsylvania, because miles of roadway responsibility are funded by a smaller tax base per mile, the choice is between higher taxes or ignoring the problem. More and more, residents in small, rural communities are driving on outdated highways and over creaky bridges. In many ways, highway infrastructure is moving backwards in time as bridges close or become weight restricted isolating rural communities.

    Mass transit is another issue in the divide. Pennsylvania has 46 fixed transit systems. Twenty-four serve small urban areas and another twenty service rural communities. This said the two systems that serve the cities of Philadelphia and Pittsburgh, SEPTA and PAAT, receive roughly 90 percent of all transit monies in the state.

    Transit receives about $900 in annual state subsidies. These funds come from a wide-variety of sources and are distributed under a myriad of conditions most of which the rural systems cannot meet. The result is the budgets of rural systems must rely more on passenger receipts and local subsidies than the much larger systems.

    In 2007, as part of an effort to find more funds for roads, bridges and transit, Act 44 was passed. Under this legislation Interstate 80 would be tolled. This superhighway runs through rural Pennsylvania. In blunt terms, the politics played out that rural Pennsylvania was being tolled to fund transit in Philadelphia. The only reason I-80 has not been tolled yet has been because the U.S. Department of Transportation rejected Pennsylvania’s proposal.

    There are other dramatic differences between the two Pennsylvanias in terms of basis infrastructure. Census data show that 36 percent of people in rural Pennsylvania get their drinking water from wells or some other sources. There are 5,697 active drinking water systems in rural Pennsylvania of which 70 percent are owned by investors or individuals according to n Trends in Rural Pennsylvania May/June 2004. Most of the sewer and other basic water systems are antiquated. The American Society of Civil Engineers’ that rural Pennsylvania needs $5.26 billion invested over the next 20 years in drinking water infrastructure and more than $6 billion over the same period to update sewage.

    Yet when Pennsylvania speaks about the upcoming stimulus, the primary voices are urban, epitomized by Governor Ed Rendell, a former Mayor of Philadelphia and fervent urbanist. We can expect that he will be working hard for more stimulus in the big cities, including for such things as the $800 million expansion of the Pennsylvania Convention Center which is now under way.(link to piece on this) Once again demographics and politics could be working against rural and small town communities where projects are on a much smaller scale, but equally important to the welfare of areas of rural Pennsylvania.

    Like many similar places around the country, rural Pennsylvania has many assets that would benefit from new infrastructure. It is an area of tremendous natural beauty and bountiful recreational opportunities. Most of these areas have good school systems and are safe areas to live. They could contribute to the nation’s economic recovery and provide an alternative for many urban residents who want improved quality of life or are thinking about retiring to an area that is less expensive. The problem is we have to get our own state officials, and the Obama administration to start paying attention.

    Dennis M. Powell is president and CEO of Massey Powell an issues management consulting company located in Plymouth Meeting, PA.

  • City Planning and The Politics of Pollution

    Part Two. Yesterday, in Part One, Critser discussed scientific advances in understanding air pollution. Today, he addresses the social implications.

    The new science of air pollution, with its emphasis on dose-response mechanisms, may remake the traditional advocacy realm of social and environmental justice. In the past, that world has been focused on class, race and ethnicity, classic markers of inequality and vulnerability. Today, the focus is more “exposure driven.” “Dosage… may be something people who have ignored environmental justice can get their heads around,” one researcher at last month’s Environmental Epidemiology conference in Pasadena noted. “It may get people’s attention on something that affects us all.”

    Other new observations are recasting ancient (and highly suspect) urban-suburban dichotomies as well. If one parses the science of small, regional temperature increases—the kind we may see more of in the future—and how those spikes “activate” ultrafine particles, one discovers a disturbing phenomenon: The combination of heat and UFPs makes airborne plant pollens more inflammatory. Such was the finding of Italian researchers studying how traffic emissions and high temperatures in Naples fortify the toxicity of urtica, the common allergen known as the nettle plant. One wonders how the same combination remakes the lovely sage and chaparral environment surrounding Southern California suburbs, even when the region isn’t burning. It is a disturbing prospect for those who believe they have escaped inflammation by exchanging big cities for exurban greenlands.

    What, besides moving to Iceland, can be done? Few have thought more about that, at the practical level, than Andrea Hricko, an associate professor of clinical preventive medicine at USC, where she is trying to translate epidemiological data about pollution into practical public health policy. For years, Hricko’s focus was the Port of Los Angeles and the neighborhoods and schools surrounding that diesel-saturated realm. What she found were huge spikes in childhood chronic diseases, especially asthma, as well as other heart and lung problems. She and others succeeded in getting one school relocated—pushed back from the most truck-intensive route near the Alameda Corridor—but even that victory was a lesson in the unintended consequences of regulation.

    “Come over here, you have to see this,” she said to a visitor one day in her crammed office on the medical school campus. On her computer appeared a picture of a group of kids playing soccer. In the immediate background loomed trucks belching the substances that eventually make the port air so heinously foggy. “See, this is where the school was. This was supposed to be the buffer zone, but… being that it is also rare, unoccupied space, and LA schools have so little recreational area, it is now a defacto playground. So you have kids better protected inside, but doing their deepest breathing part of their day right on top of the trucks.” It’s a perfect public health storm, she notes, because “getting kids outside and exercising more is a huge priority in the obesity-diabetes crisis.”

    Hricko’s focus on the ports, arguably the octopus of contemporary industrial Los Angeles, has taught her some hard lessons. You can always get a regulation that says, for example, don’t build a school within X distance of a freeway, but you can rarely switch the scenario around, say, with a ruling that says don’t widen a freeway when it is within X distance of a school. The same is true of building a new rail yard, as is the case just north of the port today. For years, area residents waged war with the railroad and the port to simply locate the new yard closer to the water, which would have drastically reduced the number of short, emission-intensive trips by trucks, and thus hopefully cut down the high rate of respiratory disease in the area. The solution, instead, was to go ahead and build the yard right by the homes, with a promise by state regulatory agencies to install new, high efficiency filters in all area homes. While that protects the children while they’re inside—and, it would seem, suggests a possible boom enterprise for the filter industry—it’s far from an ideal solution. “They’re still spending most of their time outside, and we still need to get them to exercise more while they’re out there. It’s a frustrating exercise.”

    Hricko has also wondered if the same impasse won’t obtain in the arena of the low-income housing juggernaut led by Los Angeles Mayor Antonio Villaraigosa. One recent hearing concerned an affordable housing complex proposed alongside the 5 freeway near East Los Angeles. As Hricko tells it, that project would be sandwiched between one of the most emissions-choked portions of the freeway and the mass transit Gold Line, which would run just behind it. “There was all kinds of talk about filtering, etcetera, but the real question was never brought to the fore: Perhaps this shouldn’t be considered for housing in the first place.” She notes that a member of the LA County Public Health staff made precisely this point… privately.

    One can understand why. Affordable housing is an important, unmet need in Los Angeles, one with a substantial political establishment behind it and a charismatic mayor in front of it. There is, as a result, an understandable reluctance to get in the way of the parade, especially after years of political impasse. The mayor recently upped the ante and proclaimed a new $5 billion housing initiative, much of which would center on building new housing near mass transit stations. The essence of this transit pod strategy has a fairly sustainable logic: If you can get people to live near mass transit, you’ll dramatically reduce one of the biggest single factors in urban pollution: the numerous short, one-to-five mile trips that people make every day, whether to work or to the store or to pick up the kids at school. You’ll also reduce traffic jams.

    The problem, of course, is human nature, and the naughty desire by poor people, especially in Los Angeles, to be like the rich people, driving whenever and to wherever they want. Compounding this, for the scheme to work, we still must get from the station to work and people will use a car to do that. “For Antonio’s plan to work, you’d basically have to make it a condition of ownership that you don’t have a car. Or, that if you are going to buy this housing, you have to work somewhere on the trainline,” Hricko said with a knowing smile. “Because if you don’t, you still have people driving. You’re defeating your purpose before you ever get started.”

    That’s one realm where a leader like Villaraigosa, with his celebrity status and megawatt smile, could lead by example. But that hasn’t happened so far. Mike Woo, who describes himself as a supporter of the mayor, says “I want to say that I think the mayor’s people are on top of this. I wish I could say that. I really wish I could say that.” Woo notes that there is a slightly bigger time window for solving the housing crunch than is popularly acknowledged. The Planning Commission’s most recent staff report holds that meeting the need for housing in most transit corridors for the next 8-10 years does not require raising the density of housing.

    That’s a rare breather, Woo says. Let’s make the most of it.

    Greg Critser is the author of Fat Land: How Americans Became the Fattest People in the World (Houghton Mifflin 2003), Generation Rx: How Prescription Drugs Are Altering American Lives, Minds, and Bodies (Houghton 2005), and Eternity Soup: Inside the Quest to End Aging (Random/Harmony 2009).