Category: Policy

Is This Hell or Indianapolis?

I’ve observed many times that cities outside of the very top tier almost always come across as generic, cheesy, and trying too hard in their marketing efforts. They highlight everything about their city that is pretty much a variant on things everybody else already has (beer, beards, bicycles, etc) while downplaying the things that truly reflect their community. Call it “aspirational genericism.”

Most places are extremely desperate to be part of the cool kids club, and so they buy the right preppy clothes, etc. and treat the things that are authentic and true about themselves as something to be ashamed of instead of celebrated.

Today lots of cities produce videos to showcase themselves. But a while back it was cities commissioning songs, hoping for something like Frank Sinatra’s standards about New York and Chicago. These were for the most part embarrassingly cringe worthy.

Indianapolis did the same a while back, in an effort I won’t given specifics on to protect the guilty, who were, after all, operating with the utmost sincerity.

What I do want to highlight is though is that Indianapolis has one of the greatest songs ever recorded about a city, the Bottle Rockets’ “Indianapolis.” I have not, however, ever heard anyone in the city actually bring it up.

And it’s easy to understand why. The song is an extremely negative take on the city in every respect. The refrain is:

Can’t go west
can’t go east
I’m stuck in Indianapolis
with a fuel pump that’s deceased

Ten days on the road
Now I’m four hours from my hometown
Is this Hell or Indianapolis
with no way to get around?

He proceeds to regale us with a series of humorous but negative observations about the city, such as:

Who knows what this repair will cost
Scared to spend a dime
I’ll puke if that jukebox
Plays John Cougar one more time.

Having seen the Bottle Rockets in concert many times, I can tell you that songwriter and lead singer Brian Henneman really does seem to dislike Indianapolis, where he apparently had an actual bad experience. (His hometown is somewhere near St. Louis, and he spent a lot of time with the Uncle Tupelo crew in Southern Illinois – and environment one would not expect to encounter someone looking down on Indy).

Nevertheless, this is an amazingly great song. Here’s a 1991 acoustic demo version recorded with Jeff Tweedy and Jay Farrar. If the video doesn’t display, click over to listen on You Tube.

While it’s probably a bridge too far to suggest that the city should embrace this song as a branding anthem, I’d like to point out that many nicknames and branding aspects of cities started out as digs. And let’s be honest, the idea of being trapped in Indy without a car isn’t that far from the truth. I might also observe that gangster rap became a phenom precisely because it did not deny the reality of life in the inner city.

Here’s another, though not a song but a TV commercial. This one is a local legend. You’ll have to watch it to believe it. It’s a TV ad for local institution “Don’s Guns.” The eponymous Don was famous for his slogan, “I don’t want to make any money, folks. I just love to sell guns.” If the video doesn’t display for you, click over to watch on You Tube.

If you search “Don’s Guns” on You Tube you can watch a variety of other colorful ads.

Again, this is not likely to be something that will be used in the chamber of commerce’s marketing materials anytime soon. But if you don’t live in Indy, wouldn’t you find the idea of a bunch of people there who love guns believable? Of course you would, because it’s true. Indiana is a state that explicitly includes a right to bear arms for self defense in its constitution. Now, many people locally may not like guns, but at some point people are going to discover the actual reality of the place, even if you don’t tell them about it. And believe it or not there’s a large market of people who have an interest in guns. If you want to try to market to the gun-free crowd, are they likely to put Indy at the top of their list anyway? You’re probably fighting an uphill battle.

Then lastly back to music. If there’s one thing that people around the world know about Indianapolis, its the Indianapolis 500. So it’s no surprise that the city and race were featured in the 1983 song “Indianapolis” by Puerto Rican boy band Menudo. There’s even a music video for it. You should click over to watch on You Tube as this copyrighted music has playback restrictions.

This one, it’s true, is a cultural relic that has not stood the test of time, other than for retro flourish purposes (though it’s not a bad song). But it seems to be little known locally. I didn’t know about it until a message board commenter linked some years back. And I haven’t seen a marketing campaign around the city focused on auto racing in a long time.

The struggles of working class life in a car dependent town, guns, and auto racing. Not the makings of glamour, but certainly authentic. Jim Russell and others have written a lot about rembracing the industrial heritage of the Midwest as “Rust Belt chic.” Indy is not really Rust Belt in the same sense as Cleveland or Pittsburgh. But these items are part of its own unique take on the formula. What could potentially be done with them?

Certainly Texas has done well by being Texas. And Nashville has succeeded by being unapologetic about country music. And I’ll point out again that the Midwest repudiated its own heritage of agriculture, workwear, and blue collar lagers only to have them picked up by Brooklyn hipsters and made cool again. The Midwest threw its culture away and Brooklyn bought it out of the thrift store. Now the region is reimporting is own birthright after it has been made “safe” by the embrace of the cool kids. Midwest cities should have owned local and urban agriculture. But of course, in a region of places like Columbus that are deeply ashamed of being seen as “cow towns”, that was simply impossible. If Brooklynites ever start buying up old Chevy Vans, expect that only then will a place like Indy embrace the reality of that culture as well.

Aaron M. Renn is a senior fellow at the Manhattan Institute and a Contributing Editor at City Journal. He writes at The Urbanophile, where this piece first appeared.

October 2, 2015
The Energy Election

Blessed by Pope Francis, the drive to wipe out fossil fuels, notes activist Bill McKibben, now has “the wind in its sails.” Setting aside the bizarre alliance of the Roman Catholic Church with secularists such as McKibben, who favor severe limits of family size as an environmental imperative, this is a potentially transformational moment.

Simply put, the cultural and foreign policy issues that have defined U.S. politics for the past have century are increasingly subsumed by a divide over climate and energy policy. Progressive pundits increasinglyenvision the 2016 presidential election as a “last chance,” as one activist phrased it, to stop “climate change catastrophe.” As this agenda gets ever more radical, the prominence of climate change in the election will grow ever more obvious.

The key here is that the green left increasingly does not want to limit or change the mix of fossil fuels, but eliminate them entirely, the faster the better. The progressive website Common Dreams, for example, proposes eliminating fossil fuels within five or six years in order to assure “reasonable margin of safety for the world.”

This new militancy is a break from the recent past, when many greens embraced natural gas and nuclear power as practical, medium-term means to slow and even reverse greenhouse gas growth. But the environmental juggernaut, deeply entrenched within the federal bureaucracy and pushed by a president with seemingly limitless authority, is committed increasing to the systematic destruction of one of the country’s most important, and high-paying, industries. One goal is to demonize fossil fuel producers along the lines of the tobacco industry.

The pope’s intervention has bolstered the tendency within the environmental movement not to allow any challenge to its own version of infallibility. This, despite discrepancies between some models of climate change and what has actually taken place.

As we have moved from a rational discussion of the issue toward an increasingly dogmatic agenda, we have lost sight of more pragmatic, and less economically painful, ways to reduce greenhouse gases through methods such as conservation, the substitution of natural gas for coal, and a re-embrace of nuclear power. As the Breakthrough Institute has shown, most reductions in greenhouse gases in the United States have not come from subsidized renewable energy sources but instead from improved efficiency and the rise of natural gas at the expense of coal. Overall, solar and wind, the favorites of the greens, account for barely 1.35 percent of the world’s energy.

The Breakthrough Institute’s pragmatism intends to create a middle ground between the left, which demonizes even the slightest criticism of green policy dogma, and the right, which equally mistakenly dismisses climate change as essentially a fabrication. But with the extremes in control of the debate, we can expect next year to mainly hear divisive discourse instead of solutions.

The Geography of Energy

In some parts of the country, most notably the Northeast and the West Coast, the imperatives of climate change demand the destruction of the fossil fuel industry. In others, those that depend the most on low-cost energy, the attack on fossil fuels represents a moral threat to local economies, jobs and well-being. The battleground will be in the Great Lakes, arguably the most critical region for the next election. Contrary to its sad sack image, the economy there has been on the rebound for years. Virtually every Great Lakes state except Illinois now enjoys unemployment rates below the national average. Several, led by the Dakotas, Minnesota, Nebraska, and Iowa, boast job rates that are among the nation’s highest.

Three key factors are propelling this comeback: an energy boom, a resulting jump in manufacturing, and relatively low housing costs. Energy firms have been a major source of new work for industrial firms, and lower electricity costs have provided U.S. manufacturers with an energy price advantage over European and Asian firms. German electricity prices, a result of their “green” energy policies, are almost three times the average of those in the United States.

The administration’s directive to all but ban coal could be problematic for many Midwest states, including several—Iowa, Kansas, Ohio, Illinois, Minnesota and Indiana—that rank among those most reliant on coal for electricity. Not surprisingly, much of the opposition to the EPA’s decrees come from Heartland states such as Oklahoma, Indiana, and Michigan.

Politically, the energy-rich states running from Texas, Oklahoma, and Louisiana up to the Dakotas may be all but lost to the Democrats. Before the decline in oil prices, these areas enjoyed a gusher in energy jobs, providing high wage employment (roughly $100,000 annually) that exceeds compensation for information, professional services, or manufacturing. Due largely to energy, they have enjoyed the highest jobs growth since 2007 and were among the first states to gain back the jobs lost in the recession.

In contrast, the areas that form the solid base of the progressives—basically the Northeast and the West Coast—have an increasingly small stake in fossil fuel industries. California, which has the fifth largest oil reserves among the states, has basically decided to abandon the industry, gradually pushing the remnants of what was once a thriving sector out of the state.

For the most part, with the notable exception of Pennsylvania, Northeastern states have little in the way of fossil fuels, and have gradually been eliminating much of their manufacturing base for over a half century. Nor do they have much need for electricity for industry as they continue to deindustrialize. Manufacturing accounts for barely 5 percent of state domestic product in New York and 8 percent in California—but 19 percent in Michigan and 30 percent in Indiana.

Rise of the Climate-Industrial Complex

Climate activists such as hedge fund billionaire Tom Steyer increasingly couch their policies on theological grounds, one reason why the pope’s intervention was so timely. Stark self-interest is also at work. Many of the Silicon Valley and Wall Street supporters of green policies have been among those most anxious to capitalize on big oil’s demise.

This includes cash-rich firms such as Apple, as well as many high-tech financiers and venture capitalists. Some of the biggest new fortunes, notably that of Elon Musk, are largely the creatures of subsidies. Neither SolarCity nor Tesla would be so attractive—and might even not exist—without generous handouts from taxpayers.

In contrast to traditional manufacturers, capitalists like Musk have a well-developed interest  in taking advantage of the most draconian energy legislation. Other tech figures, including top executives atGoogle, have benefited from government-subsidized renewable energy schemes, including a remarkably inefficient and expensive solar project that has obliterated a huge part of the Mojave Desert.

No surprise, then, that the crony capitalists of Silicon Valley and their Wall Street financiers have emerged as primary funders of the green left. Much like the oil firms that help finance Republicans, particularly those who are climate change skeptics, the new oligarchs have solid business reasons to embrace the pontiff’s environmental dogma, though they seem unlikely to follow his admonitions to eschew corporate greed.

Ironically, the new militancy among greens is likely to hurt most the poor and working class with whom Pope Francis takes pains to identify. A rapid ban on fossil fuels in the developing world would hurt efforts to increase access to electricity. Today, some 1.3 billion people  are off the grid, and not by choice. In sub-Saharan Africa, where much of the world’s population growth is expected to take place, roughlytwo-thirds of the population lacks regular access to electricity.

As Bjorn Lomborg has pointed out, whatever the negative effects of climate change on the poor, the impact of no electricity and poor sanitation are infinitely greater. Climate change policies, he notes, are an inefficient way to accomplish such things as reducing malaria; the Kyoto Protocol’s carbon cuts could save 1,400 malaria deaths for about $180 billion a year. More traditional approaches could save 300,000 people for about $500 million year.

Greens seem to have little idea what the poor want or need. When asked, people in developing countries prioritize such things as education, health care, job opportunities and better food; climate change ranked 16th—dead last on the list—according to a UN survey.

But the green gentry retain their catechisms. Prince Charles embraces the “intuitive grammar” of ultra-dense slums such as Mumbai’s Dharavi, which, he claims, have perfected more “durable ways of living” than those in the suburbanized West.San Francisco’s Friends of the Earth  similarly applauds slum-dwellers as an “inspiration” for the low-carbon urban future, while Stewart Brand openly endorses the notion, “Save the Slums,” because they will save the planet.

Needless to say, it’s unlikely these apostles of urban squalor would want their children to live like that and it is absurd to suppose that leaders of such emerging powers as India and China have any intention of giving up on their gains in reducing poverty. We cannot expect they will accommodate the passions of wealthy Westerners at the expense of their own people.

A War on the Western Working Class?

Those most likely to pay for the new green agenda will be middle- and working-class populations in what are now rich countries. Germany spends hundreds of billions of dollars on solar panels and wind turbines that provide only an unreliable 15 percent of its electricity and 3 percent of its total energy. German consumers pay three times more for electricity than the average American. It’s so bad that Germans have added a new term to the language: “energy poverty.”

Perhaps the best test case for the impact of draconian climate policies is in my adopted home state of California. Here, high energy costs brought about by renewable mandates have devastated manufacturing growth and boosted electric bills, particularly in the poorer, and hotter, inland areas. Asone recent study found, the summer electrical bills in rich, liberal Marin come to $250 monthly while in impoverished Madera, the average is twice as high.

Of course, energy policy is just one of the things raising poverty in a state where many of the world’s greatest fortunes are being minted. But it’s part of a climate change-driven agenda that is also somewhat responsible for the state’s absurdly high housing costs by consciously limiting affordable suburban growth. Overall, nearly a quarter of Californians live in poverty, the highest percentage of any state, including Mississippi, and, according to a recent United Way study, close to one in three are barely able to pay their bills.

With the blessings of the pope and broad support in the media, few Democrats are likely to stand up against the green policies. Hillary Clinton’s shift against the Keystone XL Pipeline, despite strong union support for the project, shows that she is willing to trade blue-collar workers in the Heartland for the approval of the coastal gentry, among whom climate change has acquired something of a religious aspect. “Whether it’s eating vegetarian or wearing organic eye shadow, we’re all shopping for absolution,” observes Daniel Engber in Slate.

Ultimately Democrats will embrace the determined attempt by President Obama to secure his “legacy” as the great calmer of the Earth’s climate. Yet there’s some question how effective these policies will prove. Invariably, efforts will follow to silence those skeptical of the current course, particularly regarding the economic impact on working-class voters. In California, Steyer and his allies have worked overtime to suppress any potential dissent from politicians who hail from the largely Latino, blue-collar districts hit most directly by these policies.

Despite a massive investment in Latino “grassroots” front groups, as well as politicians, this effort is not foolproof. This month a handful of largely Latino and inland Democrats, some of them backed by the state’s residual energy industry, killed Jerry Brown’s attempt to force a 50 percent reduction in fossil fuel use by 2030, a measure that would have allowed the state impose gas rationing.

To be sure, this rebellion may prove short-lived, as state regulators now seem determined to impose by decree what could not even make it through the state’s Democratic-dominated legislature. Steyer loyalists such as State Senate President Kevin de Leon will continue to mollify his impoverished constituents–nearly half of all households in his district earn less than $34,000 a year—with handouts from “cap and trade funds” and the ever illusive chimera of “green jobs.”

In truth, if anyone has benefited from green policies and subsidies, it’s been the well-off.

They are the ones who benefit from subsidized solar, electric vehicles, and fuel-efficient cars; a recent UC Berkeley study found the top fifth of households received 60 percent of these wealth transfers, compared to barely 10 percent of those in the bottom quintile. Generally speaking, barrio residents don’t drive $100,000 Teslas.

So will climate change be an effective issue for the Democrats next year? There is room for skepticism. In 2014 Steyer and his acolytes spent some $85 million on “green” candidates, only to fail impressively. Geography and class work against their efforts, driving longtime working and middle-class Democrats, driving voters in places like Appalachia, the Gulf Coast and some areas of the Great Lakes increasingly out of the Democratic Party.

It is not even certain that Millennials, faced with diminishing prospects for good jobs and home ownership, will prove reliable backers of a draconian climate agenda. One recent survey suggested that young voters are actually less likely to identify as “environmentalist” than previous generations.

Like extreme social conservatism on the right, climate change thrills the coastal “base” of the Democratic Party, but threatens to lose support from other parts of the electorate. Despite the duet of hosannas of both the hyper-secular media and the Bishop of Rome, a policy that seeks, at base, to reduce living standards may well not prove politically sustainable.

This piece originally appeared at Real Clear Politics.

Joel Kotkin is executive editor of NewGeography.com and Roger Hobbs Distinguished Fellow in Urban Studies at Chapman University, and a member of the editorial board of the Orange County Register. He is also executive director of the Houston-based Center for Opportunity Urbanism. His newest book, The New Class Conflict is now available at Amazon and Telos Press. He is also author of The City: A Global History and The Next Hundred Million: America in 2050. He lives in Orange County, CA.

Midwest drilling rig photo by Bigstock.

September 30, 2015
New Report: Putting People First

This is the abstract from a new report “Putting People First: An Alternative Perspective with an Evaluation of the NCE Cities ‘Trillion Dollar’ Report,” authored by Wendell Cox and published by the Center for Opportunity Urbanism. Download the full report (pdf) here.

A fundamental function of domestic policy is to facilitate better standards of living and minimize poverty. Yet favored urban planning policies, called "urban containment" or "smart growth," have been shown to drive the price of housing up, significantly reducing discretionary incomes, which necessarily reduces the standard of living and increases poverty.

This makes the alleviation of poverty, the opportunity for better living standards and aspirations for upward mobility secondary to contemporary urban planning prescriptions. Despite this, calls to intensify land use regulations are becoming stronger and more insistent.

A New Climate Economy report (NCE Cities report), by Todd Litman, "Analysis of Public Policies that Unintentionally Encourage and Subsidize Urban Sprawl," contends that the failure to implement urban containment policy (smart growth) costs more than $1.1 trillion annually in the United States. The urban containment policies favored by the NCE Cities report seek substantially increase urban population densities and transfer urban travel from cars to transit, walking and cycling.

There are serious consequences to such policies, which lead to lower standards of living and greater poverty. This report evaluates the NCE Cities report which places urban containment policy as its most important priority. This Evaluation report offers an alternate vision, focused on improving living standards for all, while seeking to eradicate poverty.

The NCE Cities report relies heavily on social costing and externality analysis of lower density development. While these are useful tools, they are ultimately subjective and should be used with great caution.

This Evaluation identifies a number of issues with respect to the NCE Cities report cost analysis.

1. Nearly 90% of the cost is attributable to personal vehicle use, and is based on a fixed cost per mile differential between the Most Compact (densest) quintile of US urban areas and the four quintiles that are less dense. This Evaluation finds a range of differences in per capita mileage among the quintiles that is far smaller than the NCE Cities report estimates. Adjustment for this and other issues would reduce the NCE Cities report cost estimate by nearly 85 percent, to a maximum that is under $200 billion. Other, unquantified issues are identified that could reduce the reduced estimate even further.

2. The NCE Cities report largely dismisses the housing affordability consequences of urban containment policy. By rationing land, urban containment policy drives up the price of housing and has been associated with an unprecedented loss of housing affordability in a number of metropolitan areas in the United States and elsewhere. Urban containment policy has also been associated with greater housing market volatility. This is a particular concern given the role of the 2000s US housing bubble and bust in precipitating the Great Financial Crisis that resulted in a reduction of international economic output.

3. Urban containment policy has significant negative externalities. A recent economic analysis associates an annual loss of nearly $2 trillion in gross domestic product in the United States with more stringent housing regulation. This estimate would nullify the NCE Cities report cost of dispersion estimate by more than 1.5 times. More significantly, it would dwarf the NCES Report cost estimate as adjusted in this Evaluation.

The purpose of public policy in cities is not to focus a particular urban form, planning philosophy, type of housing, population density, or mode of transport. The purpose is rather to seek better lives for people. The most appropriate form of urban planning policy is that which facilitates better living standards and less poverty. There is increasing evidence that urban containment policy is not only irreconcilable with housing affordability and price stability but also with better standards of living and reduced poverty.

Download the full report (pdf) here.

Wendell Cox is Chair, Housing Affordability and Municipal Policy for the Frontier Centre for Public Policy (Canada), is a Senior Fellow of the Center for Opportunity Urbanism (US), a member of the Board of Advisors of the Center for Demographics and Policy at Chapman University (California) and principal of Demographia, an international public policy and demographics firm.He is co-author of the "Demographia International Housing Affordability Survey" and author of "Demographia World Urban Areas" and "War on the Dream: How Anti-Sprawl Policy Threatens the Quality of Life." He was appointed to three terms on the Los Angeles County Transportation Commission, where he served with the leading city and county leadership as the only non-elected member. He served as a visiting professor at the Conservatoire National des Arts et Metiers, a national university in Paris.

September 28, 2015
Becoming America the Not-So-Beautiful

“They don’t know history, but they are making it. But what are they making?”

– Victor Serge, “The Conquered City,” 1932

In contrast to the physical sciences, and even other social sciences, the study of history is, by nature, subjective. There is no real mathematical formula to assess the past. It is more an art, or artifice, than a science.

Yet how we present and think of the past can shape our future as much as the statistics-laden studies of economists and other social scientists. Throughout recorded time, historians have reflected on the past to show the way to the future and suggest those values that we should embrace or, at other times, reject.

Today we are going through, at both the college and high school levels, a major, largely negative, reassessment of the American past. In some ways, this suggests parallels to the strategy of the Bolsheviks about whom Serge wrote. Under the communists, particularly in the Stalinist epoch, the past was twisted into a tale suited to the needs of the state and socialist ideology. This extended even to Bolshevik history, as Josef Stalin literally airbrushed his most hated rivals – notably Leon Trotsky, founder and people’s commissar of the Red Army – into historical oblivion.

Progressive Assault

In the modern reformulation, America – long celebrated as a beacon of enlightenment and justice – now is often presented as just another tyrannical racist and sexist state. The founding fathers, far from being constitutional geniuses, are dismissed as racist thugs and suitable targets of general opprobrium.

Initially, the progressive assault made some sense. Traditional “civics” education often presented American history in an overly airbrushed manner. Many of the nation’s worst abuses – the near-genocide of American Indians, slavery, discrimination against women, depredations against the working class and the environment – were often whitewashed. These shortcomings now have been substantially corrected in recent decades, from what I can see in my children’s textbooks.

Read the entire piece at The Orange County Register.

Joel Kotkin is executive editor of NewGeography.com and Roger Hobbs Distinguished Fellow in Urban Studies at Chapman University, and a member of the editorial board of the Orange County Register. He is also executive director of the Houston-based Center for Opportunity Urbanism. His newest book, The New Class Conflict is now available at Amazon and Telos Press. He is also author of The City: A Global History and The Next Hundred Million: America in 2050. He lives in Orange County, CA.

Photo by Scott Catron (User:Zaui) (Own work) [GFDL, CC-BY-SA-3.0 or CC BY 2.5], via Wikimedia Commons

September 21, 2015
Low Hanging Fruit

As a San Franciscan I get a lot of raised eyebrows when I mention that I recently bought property in Cincinnati. “Huh?” Then I walk them through it. Here’s the mom and pop business district along Hamilton Avenue in the Northside neighborhood during a recent Summer Streets event. This is a classic 1890’s Norman Rockwell Main Street with a hardware store, a Carnegie library, barbers, cafes, bars, funky little shops, and seriously good architectural bones.

Travis Estell UrbanCincy

Travis Estell UrbanCincy

Travis Estell UrbanCincy

It’s the perfect human scaled neighborhood. Kids walk to school. Older people make their way to shops and the farmers market on foot. Riding a bicycle to work is a normal natural activity that doesn’t involve spandex and Tour de France levels of endurance. Bus service to the university and downtown is frequent and convenient. And you can hop on the highway and be anywhere in Cincinnati in minutes.

I tell folks around here that Northside is the kind of neighborhood where you can buy a quality home next door to great neighbors like these and thisand enjoy public events like this for less than the cost of a really good parking space in California. No one builds homes or neighborhoods like these anymore. We no longer have the culture that created these places.

Google

On the one hand Northside is a compact walkable neighborhood with a distinctive urban feeling at its center. But on the other it’s surrounded by forested hills, a vast historic cemetery, and productive small scale agriculture with farm houses that date back to the 1840’s. It’s a true suburb in the best sense of the word. It offers a good balance of urban convenience and vitality at your front door with the countryside at your back.

Google

I spend a lot of time talking to people who long for a particular kind of urban living environment. It’s not Manhattan or Hong Kong exactly. It’s smaller and more intimate. It’s more like a friendly small town with ready access to big city opportunity and culture. The old street car suburbs of the 1880’s to 1940’s like Northside are pretty much spot on. But we just haven’t built great urban places like these for three or four generations. As a society we don’t seem able to do it any more.

In most places built after about 1950 you can live in a French Provincial tract house on a cul-de-sac near the strip malls and office parks, or… you can live in a Spanish colonial tract house on a cul-de-sac near the strip malls and the office parks. Those are your modern choices. The best you can hope for is an enlightened city planner or civil engineer who stripes a few bike lanes on the sides of the high speed eight lane arterials. Big whoopee.

New Urbanists and the Smart Growth crowd are up against a massive wall of cultural resistance and institutional barriers. Trying to build new towns in the historical pattern or retrofit post war suburbs is not for the faint of heart. Personally I don’t have the desire to chip away at that mountain. Life’s too short. But there’s so much low hanging fruit out there. Neighborhoods like Northside exist all over the country. They’re already fabulous. They’re already filled with great people. They’re often very reasonably priced. And the best part is that all the obstructionist people who hate walkable urban places and obsess about how to accommodate all the cars have self-selected out. They live an hour away in the distant suburbs and want nothing to do with the city.

John Sanphillippo lives in San Francisco and blogs about urbanism, adaptation, and resilience at granolashotgun.com. He’s a member of the Congress for New Urbanism, films videos for faircompanies.com, and is a regular contributor to Strongtowns.org. He earns his living by buying, renovating, and renting undervalued properties in places that have good long term prospects. He is a graduate of Rutgers University.

Lead photo by Travis Estell UrbanCincy

September 19, 2015

Are-You-Better-Off: An Update

Going into the silly-season of US Presidential campaigning, I want to get a head start on updating the “Are you better off today than you were four years ago?” discussion. In an April 2009 ng article, Rogue Treasury, I compared measures of our economic well-being before and after passage of the Emergency Economic Stabilization Act of 2008. Treasury assured Congress and the people that spending $700 billion would “ensure the economic well-being of Americans.” The Troubled Asset Relief Program (TARP) was going to save the American Dream of homeownership. The numbers showed a very different story. We were, in fact, largely worse off in the first six months after the bill passed. In the table below, I update the figures for May 2015.

	Before TARP	So Far	2015 Update
National Unemployment	7%	8%	5.5%
*Lowest state unemployment*	3.3% (WY)	3.9% (WY)	2.6% (NE)
*Highest state unemployment*	9.3% (MI)	12% (MI)	7.6% (CO)
National Foreclosure rate (per 5,000 homes)	11	11	5
*Lowest state foreclosure rate*	< 1 in 7 states	< 1 in 6 states	<1 in 4 states
*Highest state foreclosure rate*	68 (NV)	71 (NV)	12 (FL)
Dow Jones Industrial Average	10,325	7,762	18,126

“Before TARP” figures are as close to passage of the Bailout Bill (October 3, 2008) as possible; “So Far” figures vary slightly by category from February through April 2009. Unemployment and foreclosure rates by state were available at Stateline.org. The 2015 Update are May 2015 from RealtyTrac.com and BLS.gov.

Six years later, homeowners appear to be potentially better off even in the worst hit state, Nevada, where they can no longer claim the highest state foreclosure rate. That honor now belongs to Florida. But look at the other end – there are fewer states than ever in the category of having less than 1 foreclosure per 5,000 homes. In December 2006, there were 17 states with less than 1 per 5,000 homes. Nationally, foreclosures in May 2015 were about where they were in December 2006, before things got really bad but after foreclosures were already on the rise nationally – up 35% from the previous year. In December 2006, Florida was at about 6 foreclosures per 5,000 homes; the rate is double that now at 12. Nevada was at 13 in 2006 compared to about 10 now.

National unemployment before the recession and all the bailouts and stimulus packages (2007 average) was 4.6% – we just are not seeing full recovery yet. Nebraska’s unemployment rate is a little lower now than the 2007 annual average of 3.0%. At the other end of the spectrum, Colorado’s May 2015 unemployment rate is 7.6%, still about double its rate of 3.8% from 2007. Where there is recovery, it is very, very uneven. The battle ground states in the 2012 Presidential election were Colorado (worse), Florida (worse), Michigan (better), and Nevada (better).

Meanwhile, the rich got richer with TARP. The Dow Jones Industrial Average is up 75% above its pre-TARP level. This as it turns out, seems to be the point of TARP after all. Instead of helping citizens stay in their homes, TARP was used to bailout the banks by purchasing the mortgage-backed securities that weren’t backed by mortgages. After about a month of that, in November 2008, Quantitative Easing (QE) was used to buy the mortgage-related bonds and the TARP money was re-directed so the Fed could take ownership positions in financial institutions.

By the way, just as we had pointed out in our January 2009 ng article Should We Bailout Geithner Too? a US Court ruled that the New York Fed did not have legal authority to take over a business. On June 15, 2015, Judge Thomas C. Wheeler ruled (in Starr International v. The United States, Case No. 11-779C) wrote: ‘there is nothing in the Federal Reserve Act or in any other federal statute that would permit a Federal Reserve Bank to take over a private corporation and run its business as if the Government were the owner’ the way they did with AIG. Judge Wheeler noted that the Fed’s own lawyers told them they were ‘on thin ice’ going forward with their plans.

Here’s the bottom line: Legislation that was passed to support homeownership ended up supplying cash to banks both domestic and foreign. Between TARP and QE, the banks were able to sell all of their junk bonds to the government and use the extra cash to pad their reserve funds. More than half of the total money supply in the US is sitting in banks as excess reserves, earning 0.25% interest. That’s about $6.3 billion a year going to the banks on top of all the bailouts, loans, junk bond sales, etc. When the Fed decides to raise interest rates – my guess is February 2016 – the banks will be earning even more by holding on to the money they got from the Fed

Data Source: http://www.federalreserve.gov/releases/h3/Current/, Table 2. Monthly August 2014 through June 2015, then bi-weekly from July 8 through September 2, 2015.

Banks are using their excess reserves to run up the value of the stock market through overnight lending and investments. These are short-term investments – overnight is very short term! They are not the kinds of investments that create jobs or make homeowners better off. They are, however, the kinds of investments that make bankers better off. They also add to the wild swings you see in the Dow Jones Industrials Average (volatility).

Richard Nixon was quoted by a British newspaper in 1987 as saying that if the economy turns down, “a jackass” could be elected on the Democratic ticket.* As the 1988 presidential election approached, the US had just completed 6 years of economic expansion and the unemployment rate was 5.3%. George H.W. Bush (R) won the White House over Michael Dukakis (D) with 426 electoral votes to 111. In November 2008, the banks got the biggest bailouts in history while the nation and the world were entering the Great Recession. Barack Obama (D) beat out John McCain (R) by 365 to 173. If the banks keep going the way they have been, it could be very good news for some jackass running to extend the Obama economy … and bad news for the rest of us.

*Cited in ‘A New Political Picture’ by Tom Wicker, New York Times, 22 October 1987, p. A35.
Susanne Trimbath, Ph.D. is CEO and Chief Economist of STP Advisory Services. Dr. Trimbath’s credits include appearances on national television and radio programs and the Emmy® Award nominated Bloomberg report Phantom Shares. She appears in four documentaries on the financial crisis, including Stock Shock: the Rise of Sirius XM and Collapse of Wall Street Ethicsand the newly released Wall Street Conspiracy. Dr. Trimbath was formerly Senior Research Economist at the Milken Institute. She served as Senior Advisor on United States Agency for International Development capital markets projects in Russia, Romania and Ukraine. Dr. Trimbath teaches graduate and undergraduate finance and economics.

Wall Street photo by flickr user Manu_H.

September 18, 2015

Gas Tax Still a Tax

Governor Jerry Brown recently released a plan to find funds to fix California’s roads. Infrastructure funding is one of the essential roles of government, so it’s refreshing to hear that our otherwise dysfunctional state government is taking action on this front. But who will be paying for it? Those who use the roads most, that is, California’s drivers, who disproportionately tend to be members of the middle and working classes.

The Brown plan has two main components: a $65 highway user fee, and a lifting of the gas tax by 6 cents per gallon. The rise of the California state gas tax from 66 cents to 72 cents and the imposition of an additional registration fee are the products of a fairly standard view on infrastructure funding. The underlying thought is that the people who use infrastructure should contribute to its maintenance. After all, this is how private enterprises and public utilities from the Washington State Ferries system to the Los Angeles Department of Water and Power stay afloat. Tolls and fees for road use are nothing new, so why should anybody be concerned with small increases in California’s fees, especially when the funds go to so crucial a cause as infrastructure repair?

Because although these new costs may seem to be a pittance, for middle and working-class families every rise in the cost of living eats away at social mobility by reducing the amount of cash individuals can invest in homeownership, education, and other middle-class privileges

The service-fee model of infrastructure maintenance is theoretically sound. But every policy comes with unintended consequences. In California, the cost of living is driving middle and working-class families to cheaper climes like Texas and Florida in droves every year.

The blue regulate-and-tax model does have its uses. It’s important that there are reasonable regulations addressing every area of economic activity, and for certain public goods like vehicle and firearm registration, slight fees are sensible. But regulations have a way of cropping up frequently and never going away, even once they’ve become irrelevant. One regulation turns to four, four to twelve, and taxes and fees proliferate as well. What was once a fair and reasonable system devolves into a tangled web of incomprehensible rules and restrictions, veritably stifling growth, innovation, and freedom.

That’s where the regulate-and-tax model of Governor Brown’s infrastructure funding plan is leading us. California drivers already face a plethora of rules and fees, and adding a gas tax and registration fee only complicates the system more. Whatever the benefits are for the state’s coffers, the results are disastrous for those who will be most affected.

And it’s not as if the proposed new fees revolutionize California’s infrastructure in any way. The funding plan won’t reduce congestion or improve the flow of people, goods or ideas around the state. The American Interest reports on some important trends in transportation which the money-grubbing Brown plan largely ignores, including smarter cars and busses and ultimately autonomous vehicles.

This funding plan is a short-term fix to repair crumbling infrastructure that was built decades ago. Were it something more visionary and transformative, like a series of test courses for driverless electric vehicles, perhaps the added weight on the middle class could be justified. But, like all blue policies, it is merely an attempt to repair a system that was built in another time, for another world. There’s nothing imaginative in it at all.

There must be a better way.

Most sensible political observers would agree that investment in infrastructure funding is one of the state’s most important responsibilities. It pays for itself in time, and the upfront cost is too high for the private sector to take on. The government is the only actor that can adequately plan for and fund infrastructure on a mass scale, and it should do it well.

But to pay for the repair of infrastructure, we shouldn’t soak the very people whom that repair is meant to help — the masses of middle-class and working-class California drivers. While service fees are justifiable at times, there are some things, like convenient transportation and quality education, that the government should strive to provide as a workable starting point for upward mobility.

The money has to come from somewhere. In the $168 million 2015 California state budget, only $12 million went to transportation and infrastructure development. And of the funds that went to other areas, especially the $50 million apiece going to K-12 Education and Health and Human Services, not all of the money the state spends is going into teaching children or healing illnesses. Public employee pensions make up an estimated 19% of the state’s budget, and while pensions are important for government workers, they don’t particularly benefit the broader economy or the masses of California’s population. They also tend to drive polities into bankruptcy, as the fates of Stockton, Mammoth Lakes, and San Bernardino demonstrate.

California’s misaligned spending priorities are as titanic as those of the federal government. Funds ought to be redistributed to investments in infrastructure. More importantly, funding to other areas should be more efficient, with more money going directly to services the government is pledged to provide, so that existing taxation could be better dedicated to crucial public investments without soaking the middle and working classes.

Budget reform is the most pressing issue California faces today. That’s why the issue of Governor Brown’s gas tax proposal is so important this year. Only under a reformed budget system can the state make investments in infrastructure, education, and innovation, and run them properly, to promote broad-based economic growth and social mobility. Slapping taxes on the lower classes is a cheap, easy way out of making the uncomfortable steps necessary to realign the state budget.

Flickr photo by Pranav Bhatt of drivers in Los Angeles

Luke Phillips is a student studying International Relations at the University of Southern California. He has written for the magazine The American Interest and is a research associate at the Center for Opportunity Urbanism.

September 15, 2015
Neither Olympics Nor NFL Will Rescue Los Angeles

We all tend to have fond memories of our greatest moments, and for Los Angeles, the 1984 Olympics has served as a high point in the city’s ascendency. The fact that those Summer Games were brilliantly run, required relatively little city expenditure and turned a profit confirmed all those things we Angelenos loved about our city – its flexibility and pragmatism and the power of its civic culture.

After Boston turned down its chance to be the U.S. entrant in the sweepstakes to host the 2024 Olympics, it’s natural that Mayor Eric Garcetti and the city establishment, at least what’s left of it, desire a return engagement. But the Los Angeles of today barely resembles the vibrant, optimistic city of 30 years ago.

“The city where the future once came to happen,” a devastating report from the establishmentarian Los Angeles 2020 Commission recently intoned, “is living the past and leaving tomorrow to sort itself out.”

Last Best Chance?

So rather than a bold move toward establishing the city’s preeminence, the current move smacks more of a Hail Mary pass. It also seems to embody a kind of nostalgia, a sentiment reflected not only in the desire to relive Olympic glory but also in the efforts to bring pro football back to town, including, perhaps, a return of the long-departed Rams.

Yet ultimately, neither a third Olympics (the first was in 1932) nor the return of NFL football can alter a city’s fate. After all, the 2000 Athens Olympics did not lead to a new Greek renaissance, but may, instead, have contributed to that country’s fiscal morass. Summer Games in Montreal (1976) and Atlanta (1996) did not usher in a golden age for those cities, but periods of decline.

Read the entire piece at The Orange County Register.

Joel Kotkin is executive editor of NewGeography.com and Roger Hobbs Distinguished Fellow in Urban Studies at Chapman University, and a member of the editorial board of the Orange County Register. He is also executive director of the Houston-based Center for Opportunity Urbanism. His newest book, The New Class Conflict is now available at Amazon and Telos Press. He is also author of The City: A Global History and The Next Hundred Million: America in 2050. He lives in Orange County, CA.

“Olympic Torch Tower of the Los Angeles Coliseum” by unknown, U.S. Air Force – http://www.defenseimagery.mil; VIRIN: DD-SC-85-08929. Licensed under Public Domain via Wikimedia Commons.

September 9, 2015
Economic Progress is More Effective Than Protests

The election of Barack Obama promised to inaugurate the dawn of a post-racial America. Instead we seem to be stepping ever deeper into a racial quagmire. The past two month saw the violent commemoration of the Ferguson protests, “the celebration” of the 50th anniversary of the Watts riots, new police shootings in places as distant as Cincinnati and Fort Worth, and renewed disorder, tied to a police-related shooting, in St. Louis last week.

When President Obama was elected, two-thirds of Americans thought race relations were good. Now six in 10 think they are bad, according to a New York Times poll, including some 68 percent of African Americans.

This extreme alienation creates a rich soil for resurgence of a cramped form of black nationalism, as revealed in such widely read books as Ta-Nehisi Coates’s Between the World and Me. Coates, like the black nationalists of the ’60s, is fawned over by today’s progressive gentry. New York Times film critic A.O. Scott gushed that Coates’s writing is “essential, like water or air.” Yet the new nationalists do not, like many previous iterations, look to Africa for salvation, and as a potential place of re-settlement. Instead they may look to Africa for inspiration, but seem content to stew in the American racial cauldron, always apart but also here.

Yet to this reader, it’s hard to regard Coates’s book as anything more than a narrow selfie that holds little hope for any future racial progress. To Coates, America itself seems irredeemable, its very essence tied to racial oppression and brutality. America is not about ideals not yet fulfilled, but a legacy of “pillaging,” the “destruction of families,” “the rape of mothers,” and countless other outrages. Today’s abusive police—and clearly some can be so described—are not outliers who should be punished but “are merely men enforcing the whims of our country, correctly interpreting its heritage and legacy.” His alienation from America is so great that he admits to little sympathy for the victims of 9/11.

He has particular contempt for those blacks who seek to succeed within the American system, although Coates, a talented rhetorician, has clearly done well for himself. To him, they are deluded into believing they can make their way by “acting white, of talking white, of being white.” African-American families that have broken away from the inner city or the poor small town and found a home in the suburbs, he suggests, “would rather live white than live free.” In language no doubt reassuring to New York urbanistas, he even accuses these blacks of participating in a grand global destruction merely because they drive cars and live in suburbs.

Coates’s book also reinforces other nationalist voices such as can be found in certain vocal corners of the “Black Lives Matter” movement, which seems to have little room for the inclusive humanism that characterized the early ’60s civil rights campaigners. They shout down genuine progressives like Bernie Sanders and poseurs like Martin O’Malley for insisting that “all lives matter.” In this world-view all police are tarred similarly; in this construct, clear abuses, such as the Eric Garner case, are no different than that of Michael Brown in Ferguson, which even the Obama Justice Department found unworthy of federal prosecution.

The current radicalization of some prominent black thinkers poses some challenges to Democrats in particular, reflecting their increased dependence on lopsided support from African Americans. Republicans may be doomed to become “the white man’s party,” as my old friend Harold Meyerson suggests, but who thinks the GOP’s insularity deserves emulating? Do the new black nationalists think they have anything to sell outside the confines of liberal bastions or inner-city African-American communities?

Ultimately this program represents a dead end, both for the country and its increasingly diverse population. Ta-Nehisi Coates can’t expect to castigate whites as brutes who need to oppress blacks for both self-esteem and economic survival and then expect these same brutes to get on board with concessions, subsidies, and even reparations. Many academics and mainstream journalists may go along with such a program, but this is not a reasonable strategy for the rest of the country.

***

When desegregation began in earnest in the ’60s, the hope was that we would see the emergence of greater equality between minorities and whites. And to be sure, there was reduction in black poverty in the booming ’60s, and then again during the Reagan and Clinton expansions. Yet in ensuing years, and especially with the onset of the Great Recession, this progress reversed, in large part because black and Latino families bore the brunt of the foreclosure crisis. African Americans saw their household wealth plunge 31 percent during the recession, including a steep 35 percent decline in their retirement assets, according to the Urban Institute. By comparison, the wealth of white families fell a relatively mild 11 percent from 2007 to 2010.

This growing disparity has prompted demands for expanded racially-derived benefits that, according to advocates like former Attorney General Eric Holder, should be a permanent part of national policy. “The question,” says Holder, “is not when does it end, but when does it begin … When do people of color truly get the benefits to which they are entitled?”

This idea has been further expanded by the Obama administration’s commitment to correcting what it calls “disparate impact,” which would force communities—presumably middle-class suburbs—to accommodate poor and minority residents at taxpayer expense, if the federal Housing and Urban Development or the courts deem it appropriate.

Such an approach negates the aspirations of middle-class families, including many African Americans who have headed to the suburbs for a better life.Upwardly mobile African Americans have been deserting core cities for years: Today, only 16 percent of the Detroit area’s African Americans live within the city limits.

The big problem here is the emphasis on legal remedies and identity politics, rather than focusing on economic empowerment for Americans of all ethnicities. Perhaps as much as any senior government official, Holder argued in support of a quota regime, which at its logical extreme guarantees that even the children of black billionaires get preferences easier than a white kid brought up in an Appalachian hovel.

Yet this is the same official who gently treated Wall Street malefactors—the very people in large part responsible for millions of foreclosures, including those that affected many blacks—to an extent that even the usually pro-Obama Rolling Stone openly wondered if he was a “Wall Street double agent.”

The Obama years—following the previous disasters left over from the Bush regime—have been largely an economic disaster for black America. Child poverty is at the highest level in 20 years, and among African Americans it stands at a disastrous 38 percent, rising even during the recovery. After decades of gradual decline, concentrated urban poverty has grown rapidly over the past decade.

Nor have African Americans benefited much from the recovery. White American unemployment is either about the same or below what it was before the recession levels, while the gap with African Americans has grown, in some states two and a half times that of the majority population. In Washington, D.C., the fundamental center of blue-state America, it’s five times as high.

Far more helpful than expanding racial quotas would have been steps to put African Americans to work, particularly teenagers, who suffer nearly 30 percent unemployment rate, twice the national average. Many African Americans, for example, could have benefited more from a revival of the old Works Progress Administration, which would have put unemployed and underemployed people to work, than from any extension of affirmative action in universities. It’s hard to see how doling out “green” subsidies and breaks to Silicon Valley and Wall Street crony capitalists has been much of a benefit to African-American communities, or other underserved minorities.

Nor is the overall Obama environmental program—particularly on energy—helpful to African-Americans who need jobs in basic industries and in some places, such as California, are stuck with high electricity bills. Harry Alford, head of the U.S. Black Chamber of Commerce, accuses the EPA of “apparent indifference to the plight of low-income and minority households,” which he calls “inexcusable.”

For Coates’s part, he claims several times in his book that America depends on the oppression of blacks—who, he claims, represent “the essential below,” an oppressed class of workers whose sweat and blood propel America’s economy. This may well have been true in the times when cotton was king and the South produced most of our exports. But for many states in 2015, the fact is that the low-wage labor force is now made up of workers largely from Latin America or Asia, who do the grueling work that blacks too often performed in the past.

In a multi-racial society—where African Americans are in many places the second- or third-largest minority—black communities must focus on developing a competitive economic advantage. There are traditions here to draw on, from such disparate figures as Booker T. Washington and Marcus Garvey, who emphasized the need to be competitive with other peoples. The role models are not posturing Black Panthers but those who built institutions like Tuskegee Institute or even Howard University, Coates’s “Mecca.” Instead, Coates seems to prefer the theatrical racialism of the Panthers, whose legacy of violence left little in terms of tangible accomplishments, but who, like him, can count on the continued fawning approval of white intellectuals.

Revolutionary posturing and racial redress may appeal to New York publishers, but economic success requires more than identity politics. Community members must loan to each other, start banks and nonprofits, and seek to dominate specific niches. In contrast, how much independent wealth or how many jobs have been created by the likes of Al Sharpton, whose career is largely one of extracting money from frightened corporate donors seeking anti-racist absolution?

Ultimately the fate of black America is no different from the fate of the country as a whole: Both depend on economic progress more than political agitation. In a recent study I conducted with colleagues at the Center for Opportunity Urbanism, we found that the cities where African Americans and other minorities did best—measured by employment, income, homeownership—were those that created the most jobs, particularly for mid-skilled workers, and kept costs, particularly for housing, low.

These included primarily regions in the least “progressive” parts of the country, such as the Southeast. Since 2000, when the census registered the first increase in the region’s black population in more than a century, the “Great Migration” to the North has now reversed and is heading back South. In our survey, the South accounted for a remarkable 13 of the top 15 metro areas for African Americans. Blacks in Texas, for example, suffer an unemployment rate 50 percent lower than blacks in California. School segregation, notes the University of California’s Civil Rights Project, is greatest in the Northeast and urban areas and least pronounced in the Southeast and the suburbs.

***

Despite all the negative aspects of America’s tortured racial history, comparing today’s situation to that of the early 20th or even 19th centuries—most particularly in the South—is misleading and hyperbolic. America is no longer a black-white country and many newcomers, such as Asians, also suffered severe discrimination but have made enormous progress. Yet today Asians enjoy higher incomes and levels of education than whites. Increasingly they are no longer the subjects of affirmative action, but among its primary victims.

Perhaps even more revealing has been the progress of African immigrants, who represent one of the fastest-growing parts of our newcomer population. Between 2000 and 2010, their numbers grew from 800,000 to more than 1.6 million, and since 2010 grew by another 100,000, expanding faster as an immigrant group than those from any part of the world. Like African Americans, they are moving increasingly to Southern states, notably Texas and Virginia. As a group, they have done well in terms of income, education, and entrepreneurship.

To be sure, most Africans in America, like Latinos and Asians, do not carry with them the burdens of slavery, or as consistent a long history of legal discrimination. They came here by choice and this no doubt influenced their behavior. Yet the success of other minorities does suggest that lingering racism, so deeply entwined in the analysis of Coates and other neo-black nationalists, does not present an insurmountable barrier.

Of course, there is no clear pattern of such discrimination by police against Asians, and no way to distinguish the experiences of African immigrants from other blacks in terms of crime. Yet each group each is physically distinct, and they have not allowed this fact to prevent their ascendency in American society. This is not to say that serious changes in policing are not necessary—there certainly are—but that the focus of ethnic uplift needs to be focused not on what “they” do to you, but what you can manage to accomplish yourself despite their depredations.

America’s racial divide cannot be bridged anymore by demonizing the country than by ignoring the issue. America is not, and won’t be, entirely “color blind” any time soon. But that is somewhat beside the point—the key to economic success lies not in celebrating or exploiting victimhood but in people moving forward both as individuals and groups.

Simply put, to suggest that America is as racist today as in 1865 or 1965 is absurd, given the reality of the Obama presidency or, more specifically, given the demonstrable change in national attitudes. In 1958, a mere 4 percent of the population endorsed racial intermarriage, while today that percentage has risen to 87 percent. These views are particularly deeply felt among millennials, who are themselves the most diverse generation in American history.

In the long run, demanding an economy with sufficient opportunities represents the best way to address racial disparities. The new black nationalists may be feted by the intellectually chic, but in the end their strategies can only leave their people in a cul-de-sac of disappointment, anger, rage, and, ultimately, impotence.

This piece first appeared in The Daily Beast.

Joel Kotkin is executive editor of NewGeography.com and Roger Hobbs Distinguished Fellow in Urban Studies at Chapman University, and a member of the editorial board of the Orange County Register. He is also executive director of the Houston-based Center for Opportunity Urbanism. His newest book, The New Class Conflict is now available at Amazon and Telos Press. He is also author of The City: A Global History and The Next Hundred Million: America in 2050. He lives in Orange County, CA.

Photo by flickr user ａｍｉｒａｚｉｚ

August 30, 2015
Tech Oligarchs Tightening Their Grip on Democrats

The current state of the Republican Party may seem like a demolition derby, but there’s an equally fascinating, if less well-understood, conflict within the Democratic Party. In this case, the disruptive force is largely Silicon Valley, a natural oligarchy that now funds a party teetering toward populism and even socialism.

The fundamental contradictions, as Karl Marx would have noted, lie in the collision of interests between a group that has come to epitomize self-consciously progressive megawealth and a mass base which is increasingly concerned about downward mobility. For all his occasional populist lapses, President Obama generally has embraced Silicon Valley as an intrinsic part of his political coalition. He has even enlisted several tech giants – including venture capitalist John Doerr, LinkedIn billionaire Reid Hoffman and Sun Microsystems co-founder Vinod Khosla – in helping plan out Obama’s no-doubt lavish and highly political retirement.

In contrast, Hillary Clinton is hardly the icon in the Valley and its San Francisco annex as are both her husband and President Obama. But her “technocratic liberalism,” albeit hard to pin down, and close ties to the financial oligarchs seems more congenial than the grass-roots populism identified with Bernie Sanders, her chief rival for the Democratic presidential nomination.

“They don’t like Sanders at all,” notes researcher Greg Ferenstein, who has been polling Internet company founders for an upcoming book. Sanders’ emphasis on income redistribution and protecting union privileges and pensions is hardly popular among the tech elite. “He’s an egalitarian liberal,” Ferenstein explains, “These people are tech liberals. Equality is a nonissue in Silicon Valley.”

Read the entire piece at The Orange County Register.

Joel Kotkin is executive editor of NewGeography.com and Roger Hobbs Distinguished Fellow in Urban Studies at Chapman University, and a member of the editorial board of the Orange County Register. He is also executive director of the Houston-based Center for Opportunity Urbanism. His newest book, The New Class Conflict is now available at Amazon and Telos Press. He is also author of The City: A Global History and The Next Hundred Million: America in 2050. He lives in Orange County, CA.

Official White House Photo by Pete Souza

August 28, 2015