New Geography

Category: Politics

  • Paris and the Politics of Climate

    To some, particularly in the green movement, this month’s Paris climate change summit represents something like the great synods of the early Christian era, where truth and policy, for example, on pastoral celibacy, were determined by the princes of the church. Some others, largely marginalized on the fringes of the Right, insist the whole extravaganza is part of a vast left-wing conspiracy to delude people into accepting a world government.

    Lost in translation is that the Paris conference is largely a sideshow camouflaging a potentially epic struggle among national, regional and economic interests. This mundane reality is often lost amid the apocalyptic rhetoric, such as employed by Gov. Jerry Brown, that insists draconian action is necessary to avoid the species’ imminent “extinction.”

    In the real world, everything boils down to the winners and, arguably, the many more losers from the relentless drive to “decarbonize” the economy. Economist Bjorn Lonborg suggests that, by 2100, climate change policies will cost about a $1 trillion each year. Although scientists, bureaucrats, nonprofits and connected corporatists might actually benefit from decarbonizing quickly, it’s hard to see how most people will benefit from such an upheaval.

    Not surprisingly, a growing number of people in key countries have become increasingly less interested in sacrificing their lives for some impending but not-yet-occurring catastrophe. In fact, a recent BBC poll covering some 20 countries found a decreasing interest in the climate agenda in all but three – Russia, Turkey and Spain. In many countries, including the United Kingdom, despite almost incessant media coverage, the public has become more skeptical about paying for far-reaching climate policies.

    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 Flickr user presidenciamx.

  • Fostering a Climate of Intolerance

    The Paris Climate Conference, convening this week, takes place in the very place where, arguably, the most dangerous exemplar of hysteria, the Islamic jihadi movement, has left its bloody mark. Yet the think tank mavens, academics, corporate shills and endless processions of bureaucrats gather in the City of Light not to confront the immediate deadly threat, but to ramp up their own grisly scenarios and Draconian solutions.

    Welcome to the age of hysteria, where friends and foes, and even those who blissfully talk past each other, whip themselves into an emotional frenzy that bears no discussion, debate or nuance. Rather than entering a technological age of reason, we seem to lurching towards a high-tech middle ages, where warring bands – greens, jihadis, libertarians, social conservatives, nationalists – immerse themselves not in intellectual competition but, inflating their own individual outrage. In this environment, exaggeration and hysteria are weapons of recruitment, while opposition is met with demeaning attacks, potential imprisonment and, at the worst, vicious acts of violence.

    Establishment’s hysteria

    Amid the recent carnage in Paris – not to mention bloodshed in the Sinai, Beirut and Mali – one would expect the world’s economic and political leadership to focus on that clear and present danger presented by Islamic extremism. But for years, much of the world’s power structure, particularly on the Left, has convinced itself that climate change represents the greatest challenge to mankind, rather than more immediate threats such as terrorism, poverty, deforestation and stagnating global economies.

    For some, climate change has become the default cause of virtually everything, even the Syrian civil war. However much dry conditions may have contributed to the crisis, this assertion ignores the fact that people have been killing each other in the Middle East from time immemorial and that droughts have been a constant threat in that region, as here in California, since before biblical times.

    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: Entrance to Le Bourget UN climate Conference COP21 by Flickr user Takver

  • Jerry Brown’s Insufferable Green Piety

    At the site of real and immediate tragedy, an old man comes, wielding not a sword to protect civilization from ghastly present threats but to preach the sanctity of California’s green religion. The Paris Climate Change Conference offers a moment of triumph for the 77-year-old Jerry Brown, the apogee of his odd public odyssey.

    Jerry Brown has always been essentially two people—one the calculating, Machiavellian politician, the other the dour former Jesuit who publically dismisses worldly pleasures for austere dogma. Like a modern-day Torquemada, he is warning the masses that if they fail to adhere in all ways of the new faith or face, as he suggested recently humanity’s “extinction.”

    Brown is important because many other green cheerleaders like Al Gore grate on the public, in part because of rampant greed and a penchant for unsupportablepredictions. In contrast, Brown presents, with some justification, the very model of enlightened leadership and smart management, certainly in comparison with the ideologues and public employee pawns who dominate his party, and the blatant wealthy hypocrites who rule the green universe.

    Increasingly, Brown has become the patron saint of climate change, while at the same time exposing the effort’s flaws and contradictions most clearly. Railing against the satanic greenhouse gases, Brown, one supposes unwittingly, seems unconcerned he is waging what amounts to a war against the state’s own middle and working classes. His intolerance of dissent—albeit less extreme than some—reflects the current trajectory of environmentalism, which increasingly seeks to silence and even criminalize those who dispute their analyses and prescriptions.

    Like the Spanish father of the Inquisition, Brown has it in for anyone who dissents from his “God is not mocked,” as he suggested recently, attacking critics of his policies as “falsifying the scientific record,” something climate change advocates have also been caught doing on more than one occasion. Brown dismisses allclimate skeptics, even those who admit some carbon-caused warming,  as “a well funded cult.”

    Like a religious adept, Brown shows his need to link everything to one sin—greenhouse gas emissions—to explain virtually everything from wildfires to the current drought on climate change, although with little support from scientists who study such things. As was common in the worst aspects of the medieval Catholic Church, one increasingly cannot dissent in any way from revealed doctrine without being essentially evil.

    Between Image and Reality

    In Paris, Brown hopes to present himself as the great green success story, leader of an economy that has thrived despite some of the world’s most draconian climate change measures. And he has something of a case since California, after suffering greatly in the recession, has finally recovered its lost jobs and has bolstered its critical role as the dominant technology power on the planet.

    For many progressives, California represents “a beacon of hope.” Its “comeback” has been dutifully noted and applauded by left-wing economist Paul Krugman, and Michael Kinsley and the Washington Post’s Chris Cilizza have even suggested that Brown should run for president—at the ripe age of 77.

    These fans miss a big part of the reality. Outsiders think of California as a prosperous place that mints billionaires, but overall the state’s economic recovery has done little for many, if not most, state residents. Even with the boom in Silicon Valley, roughly one in three Californians live check to check, the state hashigher rate of poverty than Mississippi, as well as one-third of the nation’s welfare recipients. Among the emerging Latino majority, a prime Brown constituency, the state’s cost-adjusted poverty rate is more than 33 percent, compared to just 22.7 percent in Texas, a state often derided as unenlightened and cruel.

    During this “boom,” most California blue-collar workers in farming, fishing, and forestry have experienced actual average wage decreases. Employment in fields such as construction and manufacturing remain well below their 2007 levels. Much of this has to do with environmental regulation, which has raised energy costs almost twice those of nearby competitors and also helped raise housing prices to an unsustainable level.

    Once the beacon of opportunity, California is becoming a graveyard of middle-class aspiration, particularly for the young. In a recent survey of states where “the middle class is dying,” based on earning trajectories for middle-income cohorts, Business Insider ranked California first, with shrinking middle-class earnings and the third-highest proportion of wealth concentrated in the top 20 percent.

    Most hurt, though, are the poor. California is home to a remarkable 77 of the country’s  297 most “economically challenged,” cities based on levels of poverty and employment, according to a recent USC study; altogether these cities have a population of more than 12 million. Some stressed cities exist cheek-to-jowl with the state’s uber-rich—Oakland, Los Angeles, as well as Coachella, near Palm Springs. Most others are in the poorer, more heavily Latino interior, places like Riverside, Stockton, and Vallejo. Journalists who come to California to praise the governor may think it’s still “California Dreamin’” but for all too many, particularly away from the coast (PDF), it’s more like The Grapes of Wrath.

    The Making of a Modern Medievalist

    Of course, there’s a long history of such bifurcated society, where people tend to stay in their class and the poor depend largely on handouts from their spiritual “betters.” It’s called feudalism.

    In many ways, Jerry Brown is a perfect medievalist—the son of a self-made man, a person who largely inherited his position. Without the legacy of his father, Edmund G. “Pat” Brown, a natural politician and arguably the greatest governor in the state’s history, it’s unlikely the shy, awkward, although unquestionably bright kid would have been elected the first time in his mid-thirties.

    Brown came to politics bathed not in the practicum of politics but in theology. As a seminarian, he imbibed the Jesuitical approach—highly intellectualized, hierarchical, and accepting of class distinctions. Although he occasionally dabbled in populist politics, particularly in his presidential runs, Brown’s achievement has been to undermine not just the Reaganite regime but also the pro-growth progressive structure left behind by his father and earlier California governors.

    Brown’s acuity has often been on target, as, for example, when he took on the encrusted bureaucracy at the University of California and inside state government. But Brown’s maverick approach also revealed a streak that reflected a harshness toward those who were weaker, including the poor. In his first term, Brown’s callous treatment of the mentally ill left 30,000 mental patients in worsening conditions in inadequate nursing facilities. As the Los Angeles director of mental health told me at the time, under Reagan there was “genuine concern for people,” while under Brown he didn’t “see much concern for people at all.”

    He came into office, recalled top aide Tom Quinn, “questioning the values of the Democratic Party” and rejecting the “build, build, build thing” of his father. Like the 15th century Florentine Catholic monk Girolamo Savonarola, he came to Sacramento, in part, to rid it of suberbia and luxuria. Most important, he did not restart the infrastructure building, most portentously for water storage, that marked his father’s regime; the severity of the drought and the awful condition of the state’s roads are, to some extent, his legacy.

    Brown’s initial politics were built around three principles—“serve the people, save the earth, and explore the universe.” Some, such as farmworkers, owe him much. But the biggest winners under Brown were the well-financed green lobby and public employee unions have become so powerful that that replaced the coalition of developers, farmers, and industrialists who had accepted, and often bankrolled, his father.

    In recent years, Brown, after being praised for his moderation in his first four years as second time governor, has become more “crotchety,” according to the Los Angeles Times’ George Skelton. He has insisted on funding his favorite project, the much maligned “bullet train,” even though many on the left, including Mother Jones, have identified it not as an environmental benefit but a colossal waste of time and money.

    In contrast, on most everything else, Brown leans toward austerity—he even reveals a fondness for the ration cards used during World War II. Yet surprisingly, Brown, the supposed ascetic, appears increasingly comfortable with his own wealth. He has speculated freely in Bay Area real estate and stocks, essentially creating a multimillion-dollar estate that, as the San Jose Mercury put it kindly, “belie [the] monastic image.” Recently he shocked his own green supporters by having a state agency perform a detailed analysis of the oil, gas, and mineralresources on his family’s 2,700-acre Northern California ranch, a service not readily available to other mere mortals.

    As for the poor left behind in California’s recovery, this, Brown insists, is not due to policy failure but because the state is an irresistible “magnet” for the masses.

    The High Priest of the Oligarchy

    Early on Brown cleverly cultivated the emerging tech oligarchy in Silicon Valley. This has created a new class of major donors who, along with the unions and Hollywood, have financed his political re-ascendency.

    The oligarchs seem kindred souls for Brown, with little patience for less advanced beings. He also knew that their success has allowed him to show economic gains without having to concede to the regulatory concerns of more traditional industries. In the new Silicon Valley, most of the “dirty work” is shoved off to other more benighted states, or abroad; regulatory overreach poses only limited problems. For his part, Brown sees the oligarchs as the state’s economic foundation. “We’ve got a few problems, we have lots of little burdens and regulations and taxes,” he said recently, “but smart people figure out how to make it.”

    Brown’s Bay Area connection is helped by the fact that the venture and tech firm oligarchy often share his climate concerns. He has further tightened this alliance by lavishing enormous subsidies for often dodgy, expensive renewable energy schemes backed by companies such as Google and by many among the venture capitalist elite.

    Ironically, none of Brown’s moves will, by themselves, have any demonstrable impact on climate. California is too small, too temperate, and, at this stage, too de-industrialized to make a difference. Indeed, as one recent study found, California could literally disappear tomorrow with virtually no effect on the climate. Perhaps less recognized, its efforts to reduce emissions have accounted for naught, since so much industry and so many people—some 2 million in the last decade—have taken their carbon footprint elsewhere, usually to places where climate and less stringent regulation allow for greater emissions. Some states, rather than embrace Brown’s formula and seeing an opportunity to score, have detached themselves from renewable mandates entirely.

    And now the world

    So why the dogged insistence on draconian policies? It’s very much for the same reason people take priestly vows, or why penitents whip themselves: moral posturing before the rest of the world and, for politicians, the prospect of attracting the adoring masses (or at least the media). President Obama looks to California policies for his future climate policies. On this issue Brown is the rock star, and will be in Paris, cool again after all these years.

    Brown’s green religion now has a most powerful ally, the leading Jesuit on the planet, Pope Francis. This alliance offers something of a religious redemption for Brown, a former seminarian who has rejected most traditional Catholic teachings on such things as gay marriage, abortion, population control, and, most recently,euthanasia.

    In Paris, Brown’s claims of economic infallibility should be questioned particularly among leaders of developing countries. Some 3 billion people suffer from pollution created by burning wood, coal, or dung. Some 4.3 million die annually from the resultant indoor pollution compared to 250,000 deaths that might be assigned to climate change by 2050. For many, fossil fuels represent a lifesaver today. To offer these people expensive and inefficient solar panels instead of basic necessities, as economist Bjorn Lonborg has suggested, represents nothing more than “inexcusable self-indulgence.”

    Some developing countries are making their intentions clear. Indian Prime Minister Narendra Modi has thrown out Greenpeace for agitating against coal mines in his energy-starved country. China, whose world-leading emissions are now almost twice those of the U.S., recently admitted to burning 17 percent more coal than previously estimated. No doubt they will happily wink and nod their assent to a vague green agreement while Western countries, following Brown, Obama, and the Pope, adopt ever stricter regulations. By the time we get to 2030, when China might begin reducing emissions, the West itself may be so weakenedeconomically that it won’t be able to question anything Beijing wants to do anyway.

    Russia and virtually the entire Middle East also are not likely to give up on fossil fuels, which is the only thing that makes the world pay attention to them. Rather than use our energy boom to create leverage against these autocracies, Brown and his confederates are pushing policies that consequently make them more influential, also allowing them to finance and arm terrorists, whether ISIS, al Qaeda, or theocratic Iran and their satraps.

    A decade from now, the futility and wasted economic potential of this posturing will be clear. What could have been accomplished, at least initially, by replacing coal with natural gas and the careful expansion of nuclear power, will instead lead to a lower quality of life for all but the rich in the West, with perhaps worse ill-effects elsewhere. But by then Brown will likely have faded from the scene, although he may manage to get his wife, former Gap attorney Ann Gust Brown, elected to succeed him.

    What will be Brown’s main legacy? A more environmentally pure but severely bifurcated California and, if he and his compatriots have their way, an accelerating decline of the Western world and arguably the stagnation of the entire world economy. But Brown and his crony capitalist and priestly friends will be happy. They may have messed up the world, but they will always have Paris.

    This piece first appeared at 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.

    Facebook photo by BigStockPhoto.com.

    Photo: Troy Holden

  • Tech Titans Want to be Masters of All Media We Survey

    The rising tech oligarchy, having disrupted everything from hotels and taxis to banking, music and travel, is also taking over the content side of the media business. In the process, we might see the future decline of traditional media, including both news and entertainment, and a huge shift in media power away from both Hollywood and New York and toward the Bay Area and Seattle.

    This shift is driven by several forces: the power of Internet-based communications, the massive amounts of money that have accumulated among the oligarchs and, perhaps most important, their growing interest in steering American politics in their preferred direction. In some cases, this is being accomplished by direct acquisition of existing media platforms, alliances with traditional firms and the subsidization of favored news outlets. But the real power of the emerging tech oligarchy lies in its control of the Internet itself, which is rapidly gaining preeminence in the flow of information.

    This transition is being driven by the enormous concentration of wealth in a few hands, based mostly in metropolitan Seattle and Silicon Valley. In 2014, the media-tech sector accounted for five of the 10 wealthiest Americans. More important still, virtually all self-made billionaires under age 40 are techies. They are in a unique position to dominate discourse in America for decades to come.

    In recent years, like Skynet in the “Terminator” series, the oligarchs have become increasingly aware of their latent power to shape both the news media and the political future. A prospectus for a lobbying group headed up by Mark Zuckerberg’s former Harvard roommate, suggests tech will become “one of the most powerful political forces.” The new group’s “tactical assets” include not only popularity and great wealth but the fact that “we control massive distribution channels, both as companies and individuals.”

    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.

    Facebook photo by BigStockPhoto.com.

  • A Question of Values: Middle-Income Housing Affordability

    This is the Executive Summary from a new report “A Question of Values: Middle-Income Housing Affordability and Urban Containment Policy" authored by Wendell Cox and published by the Frontier Centre for Public Policy. Ailin He, a PhD doctoral candidate in economics at McGill University served as research assistant.

    The "report is a public policy narrative on the relationships between urban containment policy, housing affordability and national economies. It is a synthesis of economic and urban planning analysis that is offered as a policy evaluation of urban containment. The analysis is presented in the context of higher-order objectives of domestic policy: improving the standard of living and eradicating poverty" (Page 9). The research focuses on the international experience, especially in Canada, Australia, New Zealand, the United Kingdom and the United States. Download the full report (pdf) here.

    Middle-income housing affordability is important to people and the economy: Canada’s house prices have risen more than house prices in most other high-income nations. This is of concern, because higher house prices reduce discretionary incomes, which defines the standard of living and poverty. If discretionary incomes are reduced, households will have less to spend on other goods and services, which can retard job creation and economic growth. Improving the standard of living and eradicating poverty are among the highest-order domestic priorities.

    Urban containment policy can lead to higher house prices: Urban land-use regulation has become stronger in many metropolitan areas and often includes urban containment policy. Urban containment severely restricts or bans development in urban fringe areas. Consistent with basic economics, this increases land values and house prices (all else equal). The planning intention and expectation is that higher housing densities will offset the land-price increases and that housing affordability will be maintained.

    Severe losses in housing affordability have been experienced in urban containment markets: Top housing and economic experts attribute much of the loss in housing affordability to stronger land-use policy.

    Housing affordability losses have been sustained in the five nations this report focuses upon: Across the United Kingdom, Australia, New Zealand and some markets in Canada and the United States, house prices have nearly doubled or tripled compared with household incomes as measured by price to income ratios. Much of this has been associated with urban containment policy.

    Demand and supply: Some research suggests that the huge house-price increases have occurred due to higher demand and the greater attractiveness of metropolitan areas that have urban containment policy. However, the interaction of supply and demand sets house prices. Claims that metropolitan areas with urban containment policy are more attractive are countered by their net internal out-migration and diminished amenities for some households.

    An intrinsic urban containment amenity seems doubtful: Some urban containment advocates claim that urban containment policy intrinsically improves amenities (such as a dense urban lifestyle). However, whether a feature is an amenity depends on individual preferences. Moreover, the strong net internal migration away from many metropolitan areas with urban containment policy is an indication that there is no urban containment amenity for most households.

    Higher densities have not prevented huge losses in housing affordability: In contrast with planning expectations, the land-value increases expected from urban containment have not been nullified by higher densities within urban containment boundaries.

    Intervening urban containment boundaries are more influential than topographic barriers: It has been suggested that topographic barriers such as mountains and the ocean cause higher house prices. However, in urban containment metropolitan areas, urban containment boundaries are usually placed between the built-up urban areas and the topographic barriers. As a result, house-price increase associated with the land shortage will be principally associated with the urban containment boundary, not the topographic barrier.

    A competitive land supply is required for housing affordability: A risk with urban containment policy is that by limiting the land for sale, large landholders will seek to buy up virtually all of the land for future gain. Without urban containment, there will not be a land shortage, and there will not be an incentive to monopolize the land supply. A sufficient land supply can be judged to exist only if prices relative to incomes are not higher than before the urban containment policy came into effect.

    Urban containment policy has been associated with reduced economic growth: Evidence suggests that urban containment policy reduces job creation and economic growth. The increased inequality noted by French economist Thomas Piketty is largely attributed to the housing sector and is likely related to strong regulation. Other research estimated a US$2-trillion loss to the U.S. economy, much of it related to strong land-use regulation, and called this “a large negative externality.”

    Urban containment policy has important social consequences: There are also important social consequences such as wealth transfers from younger to older generations and from the less-affluent to the more-affluent households.

    Urban containment policy has failed to preserve housing affordability: Some have expressed concern that urban containment policy might not have been implemented if there had been the expectation of losses in housing affordability. In fact, the administration of urban containment policy has been deficient, with corrective actions largely not taken despite the considerable evidence of losses in housing affordability. In urban containment markets, programs should be undertaken to stop the further loss of housing affordability and transition toward restoring housing affordability. Further, urban containment should not be implemented where it has not already been adopted.

    Canada could be at risk: Canada could be at greater risk in the future. Already, huge losses in housing affordability have been sustained in Vancouver and Toronto. Other metropolitan areas are strengthening land-use regulations. This could lead to severe consequences such as lowering middle-income standards of living and greater poverty with less job creation and less economic growth.

    The urban containment debate is fundamentally a question of values: Ultimately, the choice is between the planning values of urban design or urban form and the domestic policy values of improving the standard of living and reducing poverty. Urban containment policy appears to be irreconcilable with housing affordability. Proper prioritization requires that the higher-order values of a better standard of living and less poverty take precedence.

    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.

  • Are We Heading for An Economic Civil War?

    When we speak about the ever-expanding chasm that defines modern American politics, we usually focus on cultural issues such as gay marriage, race, or religion. But as often has been the case throughout our history, the biggest source of division may be largely economic.

    Today we see a growing conflict between the economy that produces consumable, tangible goods and another economy, now ascendant, that deals largely in the intangible world of media, software, and entertainment. Like the old divide between the agrarian South and the industrial North before the Civil War, this threatens to become what President Lincoln’s Secretary of State, William Seward, defined as an “irrepressible conflict.”

    Other major economic divides—between capital and labor, Wall Street versus Main Street—defined politics for much of the 20th century. But today’s tangible-intangible divide is particularly tragic because it undermines America’s peculiar advantage in being a powerhouse in both the material and non-material worlds. No other large country can say that, certainly not China, Japan, or Germany, industrial powerhouses short on resources, while our closest cousins, such as Canada, Australia, and New Zealand, remain, for the most part, dependent on commodity trade.

    The China syndrome and the shape of the next slowdown

    Over the past decade, the United States has enjoyed two parallel booms that combined to propel the economy out of recession. One was centered in places like Houston, Dallas-Ft. Worth, Oklahoma City, and across much of the Great Plains. These areas were all located in the first states to emerge from the recession, and benefited massively from a gusher in energy jobs due largely to fracking.

    At the same time, another part of the economy, centered in Silicon Valley as well as Seattle, Austin, and Raleigh/Durham, has also been booming. Though far more restricted than their counterparts in the “tangible” economy in terms of both geography and jobs, the tech/digital economy did not lag when it came to minting fortunes. By 2014, the media-tech sector accounted for six of the nation’swealthiest people. Perhaps more important, 12 of the nation’s 17 billionaires under 40 also hail from the tech sector.

    Until China’s economy hit a wall this fall, these two sectors were humming along, maybe not enough to restore the economy to its ’90s trim robustly enough to improve conditions in many parts of the country. But as China begins to cut back on commodity purchases, many key raw material prices—copper and iron to oil and gas as well as food stuffs—have fallen precipitously, devastating many developing economies in South America, Africa, the Middle East, and Southeast Asia.

    Plunging prices are also beginning to hurt many local economies in the U.S., particularly in the “oil patch” that spreads from west Texas to North Dakota. This is one reason why overall economic growth has fallen, and is unlikely to revive strongly in the months ahead. Overall, according to the most recent numbers, job growth remains slow and long-term unemployment stubbornly high while labor participation is stuck at historically low levels. Much of this loss is felt by the kind of middle and working class people who tend to work in tangible industries.

    But it’s not just the much maligned energy economy that is in danger. The recovery of manufacturing was one of the most heartening “feel good” stories of the recession. Every Great Lakes state except Illinois now enjoys an unemployment rate below the national average, and several, led by the Dakotas, Minnesota, Nebraska, and Iowa, boast unemployment that is among the lowest in the nation. Now a combination of a too-strong dollar, declining demand for heavy equipment, and falling food prices threaten economies throughout the Great Lakes and the Great Plains.

    Waging war on the tangible economy

    President Obama’s emphasis on battling climate change—aimed largely at the energy and manufacturing sectors—in his last year in office will only exacerbate these conflicts. For one thing, the administration’s directive to all but ban coal could prove problematic for many Midwest states, including several—Iowa, Kansas, Ohio, Illinois, Minnesota, and Indiana—that rely the most on coal for electricity. Not surprisingly, much of the opposition to the Environmental Protection Agency’s decrees come from heartland states such as Oklahoma, Indiana, and Michigan. The President’s belated rejection of the Keystone Pipeline is also intensely unpopular, including among traditionally Democratic-leaning construction unions.

    These policies have also succeeded to pushing the energy industry, in particular, to the right. In 1990 energy firms contributed almost as much to Democrats as to Republicans; last year they gave more than three times as much to the GOP.

    In contrast, the tech oligarchs and their media allies largely embrace the campaign against fossil fuels. Environmental icon Bill McKibben, for example, has won strong backing in Silicon Valley for his drive to marginalize oil much like the tobacco industry was ostracized earlier. Meanwhile the onetime pragmatic interest in natural gas as a cleaner replacement for coal is fading, as the green lobby demands not just the reduction of fossil fuel but its rapid extermination.

    Embracing the green agenda costs Silicon Valley little. High electricity prices may take away blue collar jobs, but they don’t bother the affluent, well-educated, Telsa-driving denizens of the Bay Area, who also pay less for power. But those rates are devastating to the less glamorous people who live in California interior. As one recent study found, the average summer electrical bill in rich, liberal andtemperate Marin County was $250 a month, while in impoverished , hotter Madera, the average bill was twice as high.

    Many Silicon Valley and Wall Street supporters also see business opportunities in the assault on fossil fuels. Cash-rich firms like Google and Apple, along with many high-tech financiers and venture capitalist, have invested in subsidized green energy firms. Some of these tech oligarchs, like Elon Musk, exist largely as creatures of subsidies. Neither SolarCity nor Tesla would be so attractive—might not even exist—without generous handouts.

    In this way California already shows us something of what an economy dominated by the intangible sectors might look like. Driven by the “brains” of the tech culture, the ingenuity of the “creative class,” and, most of all, by piles of cash from Wall Street, hedge funds, and venture capitalists, the tech oligarchs have shaped a new kind of post-industrial political economy.

    It is really now a state of two realities, one the glamorous software and media-based economy concentrated in certain coastal areas, surrounded by a rotting, and increasingly impoverished, interior. Far from the glamour zones of San Francisco, the detritus of the fading tangible economy is shockingly evident. Overall nearly a quarter of Californians live in poverty, the highest percentage of any state. According to a recent United Way study, almost one in three Californians is barely able to pay his or her bills.

    Silicon Valley’s political agenda

    For the time being, with the rest of the economy limping along, the tech oligarchs seem, if anything, ever more arrogant and sure that they will define the future of the country’s politics. At a time when most small business owners hold Obama in low regard, the Democratic Party can consider the tech sector as an intrinsic part of its core political coalition. In 2000 the communications and electronics sectorwas basically even in its donations; by 2012 it was better than two to one democratic.

    Once largely apolitical or non-partisan in their approach, firms like Microsoft, Apple and Google now overwhelmingly lean to the Democrats. President Obama has even enlisted several tech giants—including venture capitalist John Doerr, Linked In billionaire Reid Hoffman, and Sun cofounder Vinod Khosla—to help plan his no doubt lavish and highly political retirement.

    The love-fest between Obama and Silicon Valley grows from a common belief in being extraordinary. The same media that has marveled at Obama’s celebrated brilliance also hails Silicon Valley’s ascendency as a triumph of brains over brawn.

    Yet in reality many traditional industries such as energy and manufacturing still depend on skilled engineers. Indeed, after Silicon Valley, the biggest concentration of engineers per capita (PDF) can be found in brawny metros like Houston and Detroit. New York and Los Angeles, which like to parade as tech hotbeds, rank far behind.

    In contrast to engineers laboring in Houston or Detroit, those who work in Silicon Valley focus largely on the intangible economy based on media and software. The denizens of the various social media, and big data firms have little appreciation of the difficulties faced by those who build their products, create their energy, and grow their food. Unlike the factory or port economies of the past, those with jobs in the new “creative” economy also have little meaningful interaction with working class labor, even as they finance politicians who claim to speak for those blue collar voters.

    This may explain the extraordinary gap between the economies—and the expectations—of coastal and interior California. The higher energy prices and often draconian regulations that prevented California from participating in the industrial renaissance are hardly issues to companies that keep their servers in cheap energy areas of the Southwest or Pacific Northwest and (think Apple) manufacture most if not all of their products in Asia.

    In the process the Democrats, once closely allied with industry, are morphing into a post-industrial party. Manufacturing in strongholds like Los Angeles, long the industrial center of the country, continues to erode. In a slide that started with the end of the Cold War, Southern California’s once-diverse industrial base has eroded rapidly, from 900,000 jobs just a decade ago to 364,000 today. New York City, which in 1950 boasted 1 million manufacturing jobs, now has fewer than 100,000. Overall, manufacturing accounts for barely 5 percent of state domestic product in New York and 8 percent in California, compared to 30 percent in Indiana and 19 percent in Michigan.

    This divide could become decisive in the election. In contrast to advances in energy, autos, and homebuilding, which produced good blue collar and middle-skilled jobs, the benefits of the current tech boom have been limited, both in terms of job creation (outside of the Bay Area) and increased productivity, for the vast majority of voters.

    This underlying economic conflict is redefining our politics less along lines of ideology and more in terms of interests. Increasingly states that follow the Obama line on energy, such as New York and California, are not contestable for Republicans. But elsewhere—beyond the coasts—there may be greater resistance.

    Among those who are likely to revolt are those workers and entrepreneurs in the oil patch, those who build heavy machinery, and those who grow large quantities of food. The recent Republican win in Kentucky was in part based on opposition to anti-coal regulations coming from the Obama administration. As the EPA ramps up its regulatory onslaught, one can expect energy-dependent industries and regions to recoil, particularly at a time when their industries are headed into a recession. Republicans claims that regulatory policies hurt the tangible economies will gain traction if car factories and steel mills start shutting down again, while farmers plant fewer soybeans and developers build fewer suburban homes.

    The emergence of an economic civil war?

    Hillary Clinton may praise the economic progress under President Obama, and win the nods of those in the tech, media, and financial community who have done very well on his watch. There’s enough momentum from these industries to guarantee that the entire West Coast and the Northeast will fold comfortably, and predictably, into the Clinton column, despite rising concern about crime, homelessness, and loss of middle class jobs. But the very same policies that attract the tech world voter to Clinton will just as certainly alienate many working class and middle class Democrats in places like Appalachia, the Gulf Coast, and particularly the politically pivotal Great Lakes.

    The stakes could be huge. If the Republicans can convince most voters in the middle of the country that the coastal-driven policy agenda is a direct threat to their interests, the GOP will likely carry the day. But if the Democrats can convince the country that coastal California and New York City represent the best future for us all, then get ready for Hillary, because nothing else—certainly not the old social issues—will stop her.

    This piece first appeared at 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.

  • The Looming Political Battle of the Ages

    The old issues of class, race and geography may still dominate coverage of our changing political landscape, but perhaps a more compelling divide relates to generations. American politics are being shaped by two gigantic generations – the baby boomers and their offspring, the millennials – as well as smaller cohorts of Generation X, who preceded the millennials, and what has been known as the Silent Generation, who preceded the boomers.

    Both the boomers and the Silents gradually have moved to the right as they have aged. Other factors underpin this trend, such as the fact that boomers are overwhelmingly white – well over 70 percent compared with roughly 58 percent for millennials. People in their 50s and 60s have seen their incomes and net worth rise while millennials have done far worse, at this stage of their lives, than previous generations.

    Although millennials are more numerous than boomers, the elderly are a growing portion of the population, and they tend to vote in bigger numbers. Voters over age 65 turn out at a rate above 70 percent, while barely 40 percent of those under 25 cast ballots. That may be one factor in why this presidential campaign is dominated not by youth, but by aging figures like Donald Trump (69), Hillary Clinton (68) and Bernie Sanders (74).

    The Silent Generation

    Leading generational analysts – Neil Howe, Morley Winograd, Mike Hais – have suggested that the experiences people have growing up shape political beliefs throughout their lives. This does not mean that people do not change as they age, but where they started remains a key factor in determining how far these changes spread within a generation.

    The now-passing Greatest Generation – the group that survived the Depression and the Second World War – were largely shaped by the experiences of the New Deal and the boom of the postwar era. This has made them consistently less conservative than successor generations, and they have retained their Democratic affiliations.

    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: driki

  • How Big Government and Big Business Stick It to Small U.S. Businesses

    From the inception of the Soviet Union, transformation was built, quite consciously, on eliminating those forces that could impede radical change. In many ways, the true enemy was not the large foreign capitalists (some of whom were welcomed from abroad to aid modernization) but the small firm, the independent property owner.

    “Small scale commercial production is, every moment of every day, giving birth spontaneously to capitalism and the bourgeoisie … Wherever there is business and freedom of trade, capitalism appears,” noted the state’s founder Vladimir Lenin. He understood that while larger firms could be manipulated to serve the state, “capitalism begins in the village marketplace.”

    Later on, this drive to eliminate grassroots capitalists—notably the “rich peasants” or kulaks—took on a particularly deadly form. In 1929 Stalin decided on the “liquidation of the kulaks as a class.” Millions of small rural entrepreneurs were imprisoned, murdered, or starved to death, until by the end of the ’30s independent business in the Soviet Union was largely eliminated, giving the state free rein.

    Who are America’s Kulaks?

    The United States, fortunately, is not the Soviet Union and even the most “transformation” oriented politician does not—at least yet—have power to create a gulag or openly appropriate the wealth or lives of citizens. Yet lately there is nevertheless a powerful trend to limit and largely disempower the country’s small business community—our kulaks—from a host of antagonists, including the Obama administration, the large financial institutions, and the ever-expanding regulatory apparat.

    In the 19th century, the small farmer epitomized the national ideal: independent, hard-working, frugal and engaged in his community. Later, as agriculture’s share of the economy dropped, the “yeoman” farmer gave way to the Main Street business owner, whose conflicts, particularly in the late 19th and early 20th centuries, were more with oligopolistic corporations—notably utilities, oil companies, and railroads—than the government.

    Kulaks are not just people with some money and capital. They tend to be engaged in the private sector, where risk is an everyday concern. There are other parts of the affluent middle class who are not Kulaks but actually beneficiaries of the intrusive state, such as academics, parts of big business and, of course, elite members of the ever-expanding governmental nomenklatura. These professionals, as well as corporate executives, have helped make the Democratic Party, as the New York Times’ Tom Edsall suggests, the “favorites of the rich.”

    The Decline of a Class

    In the ascendance during the Reagan and Clinton booms, our kulaks—the roughly 10 million businesses under 500 employees that employ 40 million people—are clearly in secular decline, with grave implications for the economy, employment, and the future of democracy.

    Rather than a new age of democratic capitalism imagined by Reagan era conservatives, we increasingly live in a world dominated by large companies. The overall revenues of Fortune 500 companies have risen from 58 percent of nominal GDP in 1994 to 73 percent in 2013. At the same time, small business start-ups have declined as a portion of all business growth, from 50 percent in the early ’80s to 35 percent in 2010. Indeed, a 2014 Brookings report (PDF) revealed that small business “dynamism,” measured by the growth of new firms compared with the closing of older ones, has declined significantly over the past decade, with more firms closing than starting for the first time in a quarter century. Only 35 percent of small business owners, according to a recent survey by the National Small Business Association, express optimism about the economy.

    This decline in entrepreneurial activity marks a historic turnaround. Start up rateshave fallen for young people in particular, dropping to the lowest levels in a quarter century. At the same time the welfare state has expanded dramatically to the point that nearly half of all Americans now get payments from the federal government, notably through Medicare and Social Security. At the same time, the lack of grassroots economic activity may contribute to labor participation rates, now the lowest in almost four decades.

    The Obama administration’s progressive-sounding rhetoricmay offend some of the thinner-skinned members of the oligarchy, but his economic policies—the bank bailouts, super-low interest rates, and growing federal power—have also improved the balance sheets of the corporate hegemons and the super-rich. In contrast, these policies do little, or less than little, for the yeoman class. Money today is made far more easily today by playing games with the market than making or selling on Main Street.

    High business costs, some related to the rising tide of regulation under President Obama—including Obamacare—have become a huge burden to smaller firms. Indeed, according to a 2010 report (PDF) by the Small Business Administration, federal regulations cost firms with fewer than 20 employees more than $10,000 each year per employee, while bigger firms paid roughly $7,500 per employee. The biggest hit to small business comes in the form of environmental regulations, which cost 364 percent more per employee for small firms than it does for larger ones. Small companies spend $4,101 per employee, compared to $1,294 at medium-sized companies (20 to 499 employees) and $883 at the largest companies, to meet these requirements.

    Nowhere has consolidation of power under the current regime been more obvious than in the financial sector. Goldman Sachs’ Lloyd Blankfein has described his firm as “among the biggest beneficiaries of reform.” The new regulatory environment has created huge barriers to any potential competitors and places smaller firms at a distinct disadvantage.

    In contrast these regulations have hastened the rapid decline of community banks, for example, down by half since 1990, particularly hurts small businesspeople who depended on loans from these institutions, leaving them, as even Ben Bernanke admits, with major obstacles at achieving credit.

    The large banks also benefited from the Obama administration’s steady refusal to prosecute any Wall Street grandees. Their get-out-of-jail-free card is a testament to the pilfering lobbyists of Washington’s K Street and the greed of politicians in both parties.

    Resisting the New Duopoly: Big Government and Big Business

    Under Lenin and Stalin, the threat to the kulaks was explicit, and in the end genocidal. Here in America, to be sure, the process is far less extreme. And not all the assault on Kulaks can be traced to government.

    Technology and globalization often work against small firms. In the past, technology promoted competition whereas now it increasingly works to foster the consolidation of a new oligarchy dominated by such quasi-monopolies as Microsoft, Amazon, Apple, Google, and Facebook.

    Indeed, the future being envisioned in the media and by the oligarchs is one dominated by automated factories and computer-empowered service industries. This will reduce opportunity for both middle-class jobs and small business in the future. To some, the American middle and working classes are becoming economically passé. Steve Case, founder of America Online, has even suggested that future labor needs can be filled not by current residents but by some 30 million immigrants. In this he reflects the cosmopolitan notions favored by the oligarchs. But likely not so much by the Kulaks and the bulk of the populace.

    Rather than a republic of yeoman, we could evolve instead, as one left-wing writer put it, to live at the sufferance of our “robot overlords,” as well as those who program and manufacture them, likely using other robots to do so. The financial community seems to have little problem with this tendency, as we can see in its support for companies such as Uber, which, however convenient, is growing at the expense of what had been thousands of full time workers. And former top Obama aides are leading Uber’s defense against threatened taxi drivers.

    Politicians on both the right and left seek to appeal to middle class voters and small business owners, but neither party can be said to have the interests of these groups at heart. The large corporations and banks have enjoyed an unprecedented surge in profits, but few small business have crashed that party. Republicans and their leading lobbyists generally have no interest in doing anything, such as equalizing capital gains and income rates, that would offend those who support their campaigns and fund their ongoing political activities.

    In the past, Democrats may have appealed to Kulaks, but that seems to have died with the end of Bill Clinton’s second term. Whereas the first Clinton accepted limits on government largesse, the newly emboldened progressives, citing inequality, are calling for more transfers to the poorer parts of society. They even plan to hit the kulaks where they live—largely suburbia—as part of an effort to social engineer American communities.

    This trend has almost universal support in the mainstream media, the campuses, and some corporations, who can better manipulate the regulatory and tax system. There is even a role model: to become like Europe. As The New York Times’ Roger Cohen suggests, we reject our traditional individualist “excess” and embrace instead continental levels of modesty, social control, and, of course, ever higher taxes.

    Trump, Sanders, and the future of the Kulaks

    The assault on the kulaks has had significant political consequences, although the endgame remains very much in question. Certainly there’s widespread dissatisfaction towards the Obama administration: in 2012, small business ownersranked as the least approving group for the current regime.

    Yet it is not just Republicans or Tea Partiers who are upset with the rising plutocracy. Americans, according to Gallup, greatly favor small companies over big business. Indeed most large institutions—government and media as well as large corporations—now suffer some of the lowest rankings in recent history, with only small business and the military doing well.

    Given these attitudes, it’s not surprising that the rising candidates of 2015 were those—Trump, Carson, Sanders , and even Fiorina—who have tried to position themselves in opposition to the status quo. The candidate most feared by Wall Street isn’t the folksy socialist Bernie Sanders but Donald Trump, whose candidacy, reports Politico, is setting off “a wave of fear” among the investor class. This is not just concern over Trump’s xenophobia, but his essential populism.

    Both Trump’s support and that of Ben Carson come from Republicans who do not oppose higher taxes on the ultra-rich; they might not be far right culturally but they tend to the left on issues of economic security. These issues are critical toboomers, the group that dominates the small property owning class and the largest share of voters, and have been turning more conservative.

    The kulaks may agree with Bernie Sanders on the dangers of corporate power, but they are likely no fans of redistribution. They also may suspect, rightly, that they, and not the grandees at Apple or Goldman Sachs, will be the ones to pay for the Democrats’ increasingly extravagant redistributionist demands.

    Overall the kulaks do not seem impressed with candidates, such as Hillary Clinton and Jeb Bush, who are essentially creatures of dueling oligarchies. The kind of acceptance of corporate leadership that dominated Republican politics through much of the past half century is now fading, and the results are a GOP fractured not only by ideology but also by class. The big money may be on the corporate side, but there are a lot more Kulaks than grandees when it comes to voting.

    In Russia, the forces of the state managed to destroy the kulaks, cementing a legacy of economic stagnation, particularly in the countryside, that remains today. America’s war on the kulaks may be less bloody-minded, but if it is not somehow halted, both our economy and the country’s intrinsic entrepreneurial spirit will fade. We may end up looking all too much like contemporary Russia, an oligarch-dominated kleptocracy that holds out increasingly little promise to its own people, and provides no real role model to the rest of the world.

    This piece first appeared at 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: Main Street America Russell, Kansas by http://www.cgpgrey.com [CC BY 2.0], via Wikimedia Commons

  • The Candidates’ Other Demographic Challenge

    It is massively larger than 11 million illegals.

    Hans Rosling, co-founder of Gapminder, calls it “the biggest change of our time”. It is Africa’s population growth from 1 billion people today to 2.5 billion by 2050 and 4 billion by 2100.

    You could say that a close “second biggest change of our time” is the aging and stagnation of the population in rich countries. The combined population of North America, Europe, Japan and Australia/New Zealand is now at 1.3 billion and it will remain at 1.3 billion by 2050 and 2100 with small gains in North America and Oceania offset by declines in Europe and Japan.

    This boom and bust present an unprecedented challenge to policy makers in every country of the world. Poor countries in Africa and Asia are ill-prepared for a boom that will last for decades. And rich countries must adapt their economies to a new reality of flat or falling domestic demand. In addition, the West also faces an increased flow of migrants from Africa and the Middle East fleeing poverty or war.

    If a candidate wishes to seriously address the demographic emergency, he might turn his attention to the much larger global picture, not just what happens at the US-Mexico border. Without an improvement in local conditions in Africa and Asia, millions will try to move to the West. The numbers we now see crossing the Mediterranean at great risk will pale in comparison to those of twenty or thirty years from now.

    In the same week that Donald Trump announced his immigration plan, there was news that Germany could accept as many as 750,000 refugees this year. If they end up remaining in Germany, this would amount to 0.9% of the German population, a higher annual rate of immigration than the US has had in over a century. By way of comparison, the current US rate is at 1 million green cards per year, equal to 0.3% of  the US population. The post war average is 0.25% per year.

    The migrant crisis is putting Europe’s openness to the test. Not all countries are as welcoming. Sweden is more open than others and has been accepting the equivalent of 1%+ of its population every year. Other countries only agree to take in very small numbers or reserve the right to be selective.

    Of course, it is not as easy to move from Africa to North America. The Atlantic and Pacific Oceans will deter millions of desperate migrants who will instead try their luck with Europe.

    In fact, barring the unexpected, the Western hemisphere is relatively insulated from this century’s population boom. On current UN projections, the population of North and South America will rise by a relatively modest 225 million between now and 2050, less than 10% of the entire 2.4 billion rise in world population. Nonetheless we can assume that some millions, or perhaps tens of millions, out of a few billions, will find their way across the oceans.

    This chart shows the scale of the expected changes. The first bar on the left, nearly invisible, is the current population of illegal immigrants in the US, estimated at 10 to 15 million. The next one, barely visible, are the future legal immigrants into the US between today and 2050 assuming the current run rate of 1 million per year. The next four bars are the increases in populations for the US, the Western hemisphere, Africa and the world in the next 35 years.

    IllegalsvsPopChg

    So you can see that our domestic concerns are minute in comparison to what is happening elsewhere in the world. It is true that close proximity to a crisis creates a greater sense of urgency. A small problem next door can be more pressing than a large problem a thousand miles away.

    But the rapidly changing demographics of the West, and of Africa and Asia, are already having an impact on our lives. It is right therefore to discuss the following during a political campaign:

    • Developed countries including the US, Canada, Europe, Japan, Australia, New Zealand are having fewer children than in the past. Their total fertility ratios (TFR) are below the replacement level of 2.1 average children per woman. This means that the populations of these countries are shrinking (Japan, Germany, Italy), plateauing (Europe in general) or growing slowly (North America, France, Great Britain).
    • According to the latest UN estimate, the US population will increase from 322 million today to 389 million in 2050. This projection includes future immigrants and is equivalent to an annual growth rate of 0.5%, well below the 1.2% average of the last 100 years. The post war average is also 1.2%.
    • Europe’s population will fall from 738 million to 707 million. Russia, Germany and Italy will shrink while France and the UK grow slowly.
    • Several emerging markets including China and Russia also have TFRs below replacement. China’s population will be peaking then falling. It will be surpassed by India’s within the next ten years.
    • All the above mentioned countries except India have aging populations. The median age in the United States is now 38 years and rising. In nearly all European countries, it is over 40. In Germany and Japan, it is 46. At the other end of the spectrum, in booming Nigeria, Ethiopia and Congo, it is less than 20.
    • Dependency ratios (loosely the number of dependents per worker) are rising everywhere except in Sub-Saharan Africa, India and a few other countries.
    • As noted above, the populations of Sub-Saharan Africa and of the Indian subcontinent (India, Pakistan, Bangladesh) are booming. Sub-Saharan Africa is estimated to grow from 962m today to 2.1 billion in 2050. India from 1.3 billion to 1.7 billion.
    • And the world population is expected to grow by 2.4 billion additional people by 2050. But the Western hemisphere is expected to add only 225 million, less than 10% of the projected increase.

    Screen Shot 2015-08-17 at 4.04.27 PM

    So what is to be done?

    One of Mr. Trump’s proposals is to build a wall along the Mexican border. Beyond the near term, this may or may not prove effective. Certainly, the Southern border as it stands today is one of the softest points of entry for current and future illegal immigrants.

    A more comprehensive and more robust solution is to improve conditions in the migrants’ countries of origin through trade, investments in infrastructure, health care and education, and assistance in building stronger institutions. (Such an effort may fly in the face of Mr. Trump’s other promise to repatriate jobs that have been outsourced to China and other emerging markets, but that is another topic.)

    Contrary to some political discourse, an investment in the economies of poor countries is not just altruism. It is a win-win strategy and an investment in our own future. Bjorn Lomborg, founder of the Copenhagen Consensus, wrote recently about investing in the health and education of children in poor countries:

    It is morally right that every child should be given the best chance to survive, eat well, stay healthy, and receive an education. Now we also know that it is among the best investments we can make. Healthy, well-educated kids grow into productive adults, capable of providing a better future for their own children, creating a virtuous circle that can help build a better, more prosperous world.

    Our own work at populyst centers on the development of the populyst index™ which rates each country on three measures: innovation/productivity, demographics/health care, and institutional strength/governance. In recent years, the deteriorating demographics of the West have eroded their standing in the index. And the booming demographics of poor countries have given them an opportunity to make significant strides if they can implement the needed reforms.

    A symbiotic solution that addresses the challenges of both rich and poor countries would involve the following:

    • Emerging economies would benefit from western capital, technology and institutional expertise.
    • Better health care in Africa and India would lower infant mortality, improve women’s health and accelerate the fall in TFRs, curbing the big population boom.
    • Domestic demand is slackening in rich countries and would benefit from new sources of demand from rising populations. A rising standard of living in poor countries will add to the revenues of Western firms dealing with sluggish home markets.
    • An improvement in emerging economies would relieve the migrant crisis we are now seeing in the Mediterranean and Europe.

    In case of inaction, the political instability and economic dislocation the world may suffer because of the ongoing population boom will touch our own country in more undesirable ways than a few million unwanted immigrants have done so far.

    How do we respond to the twin problem of stagnant demographics in the West and booming demographics in poor countries? This is the question that all candidates should be debating.

    Sami Karam is the founder and editor of populyst.net and the creator of the populyst index™. populyst is about innovation, demography and society. Before populyst, he was the founder and manager of the Seven Global funds and a fund manager at leading asset managers in Boston and New York. In addition to a finance MBA from the Wharton School, he holds a Master’s in Civil Engineering from Cornell and a Bachelor of Architecture from UT Austin.

  • Environmental Activists Turn up the Rhetorical Heat

    What is the endgame of the contemporary green movement? It’s a critical question since environmentalism arguably has become the leading ideological influence in both California government and within the Obama administration. In their public pronouncements, environmental activists have been adept at portraying the green movement as reasonable, science-based and even welcoming of economic growth, often citing the much-exaggerated promise of green jobs.

    The green movement’s real agenda, however, is far more radical than generally presumed, and one that former Sierra Club President Adam Werbach said is defined by a form of “misanthropic nostalgia.” This notion extends to an essential dislike for mankind and its creations. In his book “Enough,” green icon Bill McKibben claims that “meaning has been in decline for a long time, almost since the start of civilization.”

    And you may have thought the Romans and ancient Chinese were onto something!

    Rather than incremental change aimed at preserving and improving civilization, environmental activists are inspired by books such as “Ecotopia,” the influential 1978 novel by Berkeley author Ernest Callenbach. He portrays an independent “green” republic based around San Francisco, which pretty much bans fossil fuels and cars and imposes severe limits on childbearing. These measures are enforced by a somewhat authoritarian state.

    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.