Category: Politics

  • Enterprising States 2014: Re-creating Equality of Opportunity

    This is the executive summary for the U.S. Chamber of Commerce Foundation’s 5th Annual Enterprising States report, authored annually by Praxis Strategy Group. View the interactive map with state-by-state data and download the full report here.

    The growing skills gap is one of the most persistent challenges affecting thriving and lagging state economies—the disparity between the skills companies need to drive growth and innovation versus the skills that actually exist within their organizations and in the labor market. This disconnect, expected to grow substantially as the boomer generation retires, causes workers and companies to miss out on realizing their full potential. A sizable skills gap impacts virtually every aspect of the economy, thereby affecting our national competitiveness and, in turn, causing the economy to fall short of its potential.

    The nature of the skills gap that employers face varies by geography. Each state has its own economic DNA with varying levels of growth and specialization for each industry. The energy-related skills gap in Texas or North Dakota, for example, is different from a manufacturing-driven gap in Michigan, aerospace in Washington, information technology in Utah, or the chemical industry in Louisiana.

    Businesses and the public sector must work side by side to identify where there is a deficit of talent, reskill incumbent workers, and skill new entrants into the workforce to close the gaps within their communities. This is not a problem that can be solved quickly, but it can be solved. Strengthening America’s science, technology, engineering, and mathematics (STEM) and middle-skills pipeline will require public-private partnerships as well as collaborations across federal, state, and local governments.

    States as a Focal Point for Action

    States and their governors play a pivotal role in filling the talent pipeline, providing critical leadership to link businesses with the education, workforce, and economic development systems. Solutions will vary by state of course, but there is an emerging framework built on a foundation of both basic education and an employer-responsive workforce pipeline.

    Economic development starts with strong schools focused on 21st century skills. For the past three decades, efforts by U.S. businesses, government, and educational organizations focused on retooling K–12 science, mathematics, and reading education and on addressing persistently high dropout rates in inner cities. Progress has been slow to remedy the looming skills shortage, but there is a growing sense of optimism that industry sector partnerships, greater attention to career pathways, and the implementation of integrated education and training will help to close the gap.

    An employer-responsive talent pipeline requires aligning education, workforce development, and economic development. Postsecondary education institutions now get a considerably lower percentage of their funding from state sources than just a decade ago, but states continue to make significant financial investments in higher education. Yet, a common refrain is that postsecondary offerings—at both two- and four-year institutions—are not sufficiently aligned with the skills needed in the workforce. For years, knowledge creation, research and development, and technology transfer have dominated higher education’s economic development role. However, higher education’s most important contribution to state economic competitiveness in the future might be teaching and talent production because states with the most high-level talent will have a leg up in the future economy of decentralized global networks.

    Investing in people is perhaps the most effective long-term economic growth strategy. Training and education offer the best chance for workers to find well-paying long-term employment, while providing businesses and employers in every sector with the talent they need to grow.

    Coordinating education, workforce development, and economic development has proven to be challenging among the states because the three fields are historically separate systems, with separate cultures and perspectives. States that are successful in navigating program integration and facilitating collaboration between these traditionally separate institutions will put themselves in the forefront of meeting one of the primary challenges to building a 21st century economy.

    Because of these complexities, a governor serves the issue best by playing a leadership role in forming partnerships – particularly between business and education – and creating the structure to ensure effectiveness and efficiency in a demand-driven education to workforce pipeline. Often this involves a decentralized approach so that more decisions can be made at the local level.

    Enterprising States 2014

    Now in its fifth edition, the Enterprising States study measures state performance overall and across five policy areas important for job growth and economic prosperity. Those five areas include:

    • Talent Pipeline
    • Exports and International Trade
    • Technology and Entrepreneurship
    • Business Climate
    • Infrastructure

    The 2014 report relates these policies and practices to the need for collaboration between education, workforce development, and economic development to positively combat the nation’s growing skills gap.  

    Top Performers

    Utah lands in the top 6 in each of the five policy categories and 3rd in overall economic performance. It is the only state to finish in the top 10 on all six lists.

    Colorado appears on 5 top 10 lists, Texas on 4, and Washington is in the top 15 of five lists.

    North Dakota is another strong performer, leading by a large margin in economic performance and ranking 1st in talent metrics and 9th in business climate.

    Florida and Nevada rank well on many policy measures, a sign that the economies of those states may be ripe for a turnaround.

    Virginia ranks 5th in technology and entrepreneurship, and talent metrics, helping it land just outside the top 10 in economic performance.

    Minnesota ranks 10th in economic performance, partly due to its second place in talent pipeline. 

    See how your state ranks by viewing our interactive map. Or view a PDF of the full report.

    Enterprising States is authored by Praxis Strategy Group along with Joel Kotkin. Praxis Strategy Group is an economic research, analysis, and strategic planning firmJoel Kotkin is executive editor of NewGeography.com and author of the forthcoming The New Class Conflict.

  • European Style Going Out of Fashion at Ballot Box

    The recent political earthquake in Europe has great implications for the United States, both internationally and domestically. The unpopularity of European Union institutions produced record-breaking votes for a motley assortment of anti-establishment parties across the Continent, suggesting it’s time to stop looking across the Atlantic for role models as Europe’s dismal prospects have inspired the lowest levels of political support in several decades.

    Many of the parties that did best in the May 25 multinational balloting for the European Parliament – from Greece’s Far Left Syriza party to Britain’s oddball United Kingdom Independence Party and France’s historically racist National Front – are hardly ideal candidates for responsible governance. Yet, despite their many blemishes, these and other anti-EU parties fed on growing distaste for the 28-nation EU’s sprawling, largely unaccountable bureaucracy blamed for, in the words of one British group, “undermining” liberal democracy in these countries.

    This suggests that it’s time for Americans to stop looking across the Atlantic for role models. For decades, American gentry liberals have seen the EU as a superior mode of governance. Jeremy Rifkin’s 2005 book, “The European Dream” – and a host of similar tracts that all assert European superiority – now may seem absurd on their faces, but it’s doubtful many EU boosters, here and abroad, will let facts get in their way.

    The Urge to Merge

    The bigger loser in the May elections was the notion that more concentration of power leads to better results. Many American intellectuals and policy wonks favor handing ever-greater control to the “best and brightest” who run academia, much of the media and the bureaucracy. Figures, such as former Obama budget adviser Peter Orszag and New York Times columnist Thomas Friedman, argue that power should shift from naturally contentious elected bodies – subject to pressure from the lower orders – to credentialed “experts” operating in Washington, Brussels or the United Nations. This notion suggests the popular will is too lacking in scientific judgment and societal wisdom to be trusted with real authority.

    Yet, as the EU parliamentary elections suggest, people object to having details of their lives controlled from a great distance. Beyond the Right, many on the Left also nowoppose the Brussels-based EU for imposing austerity measures on several struggling economies. The British website Socialist Alternative saw the vote not just as a shift to the right but “a revolt against the capitalist establishment,” which remains, like the bureaucracy and media, devotedly pro-EU.

    In the United States, there is also mounting resistance to centralization. The 2010 congressional elections reflected a reaction to attempts by President Obama and his Democratic Party to put more of our lives under Washington’s control. Even now, less than two years after the president’s re-election, opposition to an extended federal role is, if anything, even stronger. Less than one in five Americans trust the federal government, and barely two in five see it as even capable of reversing the inequality. There may be a groundswell of support for the social democratic goals of the Great Depression’s New Deal, but likely not for the reimposing of its highly centralized policy prescriptions.

    Energy and Economy

    Pundits, such as the New York Times’ Paul Krugman, routinely describe Europe’s approach to economic, environmental and social policy as far more enlightened than that in the U.S. Wherever possible, progressives push European style in areas such as energy, with strong attempts to force a rapid conversion to “green” energy.

    Yet, there’s not much to cheer for in Europe’s energy policy. The attempt to turn the Continent into a renewable-energy superpower has been hampered by soaring prices. The policy has increased dependence on unreliable and expensive renewable power – as well as Russian natural gas – forcing some European countries, including Germany, to boost their use of coal, certainly not much of a victory against climate change.

    Ultimately, the consequences of high energy prices tend to fall, as they do here, on the middle and working classes, who see their electricity bills soar, along with the cost of gasoline. Some Europeans, in fact, may see their jobs threatened as employers look for lower-cost alternatives, including moving to energy-rich parts of the USA.

    Addressing Inequality

    In seeking out economic models that promote greater equality and upward mobility, many pundits look to Europe as a model. French economist Thomas Piketty’s influential book, “Capital in the Twenty-First Century,” argues that the only way to confront increasing income inequality and prevent deeper social fracturing is to expand the “social state” that forcibly redistributes wealth. In his mind, economic growth, traditionally a prime source of social uplift, is little more than a “illusory” solution.

    Like many American progressives, Piketty looks to governmental action as the sole force for greater equality. Financed by taxes on wealth, the “social state” would curb the rich, but would also empower the bureaucracy and other parts of the rising clerisy with unprecedented power.

    Yet recent European experience also provides little support for the benefits of redistribution, given the persistently high rates of unemployment across most of the EU. This is particularly true for much of the Continent’s youth, who are widely described as “the lost generation.”

    Just as in the United States, pervasive inequality and limited social mobility have been well documented in larger European countries, including France, which has among the world’s most evolved welfare states. This is true even in historically egalitarian Sweden, where, over the past 15 years, the gap between the wealthy and other classes has increased four times more rapidly than in the United States. As Europe’s population ages, and its economies stagnate, demands for redistribution may well increase, but the ability to pay will surely decline.

    Issue of Immigration

    Concern over immigration has been a key driver in mounting anti-EU sentiment. Immigration has always been a more contentious issue for Europeans, who generally belong to a single ethnic group and prefer something closer to homogeneity than to the kind of rolling ethnic evolution that characterizes the United States. This nativism has been painfully evidenced in recent decades in from everything from the violent breakup of Yugoslavia and the far more civilized dismantling of Czechoslovakia to France’s recent campaign against the Roma, Catalonia’s attempts to divorce from Spain, and even the upcoming vote on Scottish independence from the United Kingdom.

    During the boom times of the 1950s and ’60s, many European countries – France, Germany, Netherlands and the U.K. – invited hundreds of thousands of foreign workers, many from outside Europe. But with European labor markets far weaker, such an infusion seems to many middle- and working-class voters as a threat to their economic futures as well as to their identities.

    Immigration played a role in UKIP’s victory in Britain’s voting for European Parliament.Diversity in London, by some counts home to the world’s largest concentration of immigrants, thrills London’s media and business communities but stirs resentment, particularly among more working- and middle-class voters. The fact that as many as 87 percent of new jobs generated in the recovery go to immigrants has not warmed their sentiments.

    Future of the ‘nation-state’

    As we look to how to reform our own less-than-perfect union, adopting the European approach seems, at best, misguided. One does not have to share the Tea Party’s reflexively hostile view of government to see that attempts to expand control from Washington could, in the long run, create the very stagnation and often-ugly political reactions that we see in Europe today.

    More to the point, the drift toward an EU-like state works against the very structure of the American political community, designed to disperse power among various levels of government and varied constituencies. The tendency of administrations to rule through executive orders, or regulatory agencies, has been growing, particularly during the Obama years; a centralized state also could pose a threat to progressive Americans and their values under conservative rule.

    For America, this may be the biggest takeaway from Europe’s crisis. Our political culture, for all its problems, was designed to allow localities greater leeway in determining their own fates. There are many areas – water, air quality, arterial road infrastructure – that require cooperation along regional lines, but, for the most part, the best approach, whenever possible, is to allow localities to control their fates. It is a decentralized, bottom-up system that, for the most part, has performed far better over time than the dysfunctional blunderbuss that is the European Union.

    This article first appeared in the Orange County Register.

    Joel Kotkin is executive editor of NewGeography.com and Distinguished Presidential Fellow in Urban Futures at Chapman University, and a member of the editorial board of the Orange County Register. He is author of The City: A Global History and The Next Hundred Million: America in 2050. His most recent study, The Rise of Postfamilialism, has been widely discussed and distributed internationally. He lives in Los Angeles, CA.

  • Is Brazil Still the Country of the Future?

    Not long ago, Brazil was riding high. It was feted as one of the “BRIC” nations destined to be the next world economic powers. The commodities boom had its natural resources and agricultural sectors humming. The press – for example, Monocle magazine’s swooning over Brazil’s push to boost its diplomatic presence – was adoring. And Rio was awarded the 2014 World Cup and the 2016 Olympics, two events that were intended to both serve as a catalyst for further development, and also as a coming out party of sorts for the country.

    The World Cup is underway, but otherwise things haven’t quite worked out as Brazil thought they would. The average citizen of the country is upset at the vast sums being spent on international events that don’t benefit them. The last two years have featured riots, strikes, and various other expressions of unrest. Economic growth in the country has collapsed. In a special section last September, the Economist asked, “Has Brazil Blown It?

    Late last month the McKinsey Global Institute issued a major report on the country called “Connecting Brazil to the World: A Path to Inclusive Growth.” At 104 pages, it’s massive, but a must read for anybody interested in South America’s giant.

    And it’s a somewhat depressing read as well. Though there are immense strengths and opportunities for the future, Brazil has big problems too, most of them longstanding, and which hobble its aspirations.

    Brazil is the 7th largest economy in the world and the 7th leading destination for foreign direct investment. But it’s 95th in per capita GDP, 114th in the quality of its infrastructure, and 124th in its level of ease in trading across borders. Its export sector is also heavily commodity dependent, particularly oil. Ranked only 43rd in global connectedness on McKinsey’s index, they estimate a potential boost of 1.25% (presumably percentage points) to annual GDP growth from improvements on that measure alone.

    Three particular items jumped out at me from the study. One is the “custo Brasil” – the Brazil cost, so notorious it gets its own Wikipedia entry. A variety of factors from bureaucracy to the tax regime to an uncertain legal climate, poor infrastructure, crime, and corruption make the cost of doing business in Brazil very pricey indeed.

    The second is the very low rate of investment in the economy. Brazil’s gross investment rate as a percentage of GDP is 18%, compared with 26% in Chile, 29% in Mexico, 40% in India, and 49% in China. Conversely, government consumption is at 22% in Brazil vs. 12% in Chile and Mexico, 13% in India, and 14% in China. Private consumption is similar in the countries except for China, which is notably lower. This probably helps explain the poor state of the infrastructure in the country.

    The third is something I have personal experience with, namely protectionist trade barriers designed to create and sustain domestic industries in sectors like autos and computers. I suspect these rules were modeled on Japan, and more lately China, which used rules and business practices to build successful local champions. But in Brazil this has rendered its industry sclerotic. In effect, cars sold in Brazil have to be made in Brazil, ditto for computers, etc. This is where my personal experience comes in. When we were doing global PC procurement, Brazil was always a special case and our vendors had to have special Brazil made PCs for domestic use. This may not be an actual rule, but tariffs produce a de facto barrier. While this technique may have worked in Japan, it’s clear that it failed in Brazil. As the exception that proves the rule, McKinsey uses the example of regional jet manufacturer Embraer as a counterfactual. That company was privatized and opened to global competition. The result is that its got tough itself and is now an industrial champion for Brazil.

    There are tons of statistics in the study that are worth scanning just to see. Brazil is consistently benchmarked against Chile and Mexico in Latin America, as well as fellow BRICs India and China. The comparisons aren’t pretty.

    Reading a lot about the country in the last year, I put its problems into three categories: poor governance, geographic disadvantage, and scale disadvantage.

    1. Poor Governance
    Most of the issues pointed out by McKinsey fall squarely under the heading of poor governance. The contrast with nearby Chile could not be more plain across every dimension: corruption, the rule of law, investment, public sector debt, tax burden, infrastructure, regulation, etc.

    Latin America seems to prefer two sorts of governments these days. One is a right wing nationalist heir to the military juntas of the past, best exemplified by the Kirchner regime in Argentina. The other are left wing populist-nationalist movements like Venezuela that tend to feature a streak of anti-Americanism. Both of these have produced pitiful results.

    Brazil is a sort of lite version of the latter. Lula da Silva was a charismatic labor activist who led strikes and was jailed by the previous military dictatorship in his youth. Post-democratization, he went into politics. After moderating some of his more radical views, he was elected president on a reform agenda. While he had some success and was arguably and improvement on his predecessors, he ultimately failed to deliver on material changes in governance. His hand picked successor Dilma Rousseff has not been as effective and is in an electoral struggle for another term.

    In line with the nationalist streak of this governing type, one of Da Silva’s primary concerns was Brazil’s amour-propre. As one of the world’s largest countries, he found it self-evident that Brazil should be treated as a great power. He lobbied for Brazil to have a permanent seat on the UN Security Council. He and others responded in kind to any affront to the nation’s pride, such as requiring American and only American visitors to be finger printed after the US imposed a fingerprinting requirement on foreign visitors. He sought out diplomatic coups where ever he could find them, which included cozying up to unsavory characters like Mahmoud Ahmadinejad who thinks Israel should be destroyed and that Iran has no gays (presumably because he has them executed when he can find them).

    Da Silva forgot that there’s more to being a great power than being a big country – you’ve got to earn it. And as a very popular politician he did not seize his moment of opportunity to truly grasp the nettle of reform.

    Meanwhile nearby Chile is one of the Latin American governments that’s followed a different model. It’s been run by center-left governments more or less the entire time since the restoration of democracy, and they’ve delivered on a good governance model that has taken them to effectively developed country status. Chile is now even a member of the OECD. Chile is basically the Minnesota of Latin America, and the results demonstrate it. This should show Brazil the size of the prize if the get their act together.

    2. Geographic Disadvantage
    Brazil is simply a long way from major developed markets. This puts it at a geographic disadvantage versus many other countries. Current airplanes cannot make a non-stop flight from Brazil to East Asia, arguably the most important emerging part of the world. It’s even a long haul from the United States, with relatively few gateway cities vs. say major European capitals. Brazil is time-zone advantaged with the US, however. It also speaks Portuguese instead of Spanish, which imposes a linguistic handicap.

    3. Scale Disadvantage
    Brazil is a big country, geographically and in population. Size can be an advantage, but it also makes reform difficult as it’s hard to turn a battleship. Brazil’s population of 200 million is more than ten times that of Chile.

    Brazil’s two principal cities, São Paulo and Rio de Janeiro, are also megacities. São Paulo in particular is huge, and at north of 20 million people (more than the entire country of Chile) is the 10th largest city in the world. I recently wrote that it’s unlikely the world’s emerging megacities will turn the corner in eliminating dysfunction. Their problems are just too huge and their national growth rate too low. Though I’d consider this more hypothesis than conclusion at this point, my rule of thumb is that a megacity can only achieve escape velocity from pervasive dysfunction if they are a major city in a country that is the world’s current rising economic (or historically imperial) power.

    Brazil is not that country, and two mega cities will be a drag on growth. Although São Paulo is an important emerging global city – 23rd in the world in a forthcoming report I helped create – I’m told that both São Paulo and Rio are growing more slowly than secondary cities in the country. A previous McKinsey study threw cold water on the idea that megacities are an advantage, noting their under performance by saying:

    It is a common misperception that megacities have been driving global growth for the past 15 years. In fact, most have not grown faster than their host economies, and MGI expects this trend to continue. Today’s 23 megacities—with populations of 10 million or more—will contribute about 10 percent of global growth to 2025, below their 14 percent share of global GDP.

    In contrast, 577 middleweights—cities with populations of between 150,000 and 10 million, are seen contributing more than half of global growth to 2025, gaining share from today’s megacities.

    So I’m not surprised that it’s Curitiba, not one of the megacities, that’s where the innovative BRT revolution was begun. If I were looking to invest in Brazil, I’d be looking at this next tier of cities. Nor is it surprising that Santiago, Chile (population 5.4 million) has had great success in modernizing given its more moderate size.

    Plain and simple the degree of difficulty is higher in Brazil because of the size.

    Brazil is also a very racially diverse country with a number of challenges resulting from its history of oppression. Brazil had more slaves than any other country in the world and was the last New World colony/nation to abolish it. If slave reparations are on the agenda in the United States, how much more so similar issues in Brazil? Again, contrast with Chile, which never had very many slaves and abolished slavery in 1818. With the exception of a relatively few indigenous peoples on reservations, Chileans largely perceive themselves as ethnically homogenous, though with some skin tone based status (moderately sized…historically racially homogenous…Minnesota?)

    Which is to say that it’s tough to entirely fault Brazil for not living up to the example of Chile. Its degree of difficulty is much higher. And its geography hamstrings its global interaction.

    Nevertheless, solving the governance challenges to address the real issues Brazil faces remains the top agenda item. McKinsey has laid out a number of good suggestions, the real question is whether or not Brazil’s socio-political system can produce the ability to implement them.

    Aaron M. Renn is an independent writer on urban affairs and the founder of Telestrian, a data analysis and mapping tool. He writes at The Urbanophile, where this piece originally appeared.

    Photo: Ponte estaiada Octavio Frias – Sao Paulo by Marcosleal

  • Let’s Make Kalamazoo’s Promise America’s Promise

    In 2005, in order to boost their city’s economy, a small group of donors in the city Glenn Miller made famous created the Kalamazoo Promise. It  offered any graduate of the city’s public schools a four-year scholarship covering all tuition and mandatory fees at any of Michigan’s public colleges or universities, provided those students maintained a 2.0 grade average in college and made regular progress toward a degree.

    The offer had an immediate and noticeable effect on public school enrollments and home construction within the city as families moved back in to take advantage of the chance to boost their children’s higher education opportunity. Enrollments in the public schools rose initially by 17.6% even as high school dropout rates fell by half. Residential construction permits within the district rose from 30% within the overall metropolitan area to 50%.  The program’s success caused other cities across the country as disparate as El Dorado, Arkansas and Tulsa, Oklahoma to adopt similar programs.

    Now a recent national study of the results of such initiative has documented the positive impact such promise programs can have on increasing educational attainment, while encouraging more students to attend a wide range of colleges.  University of Pittsburgh professors, LeGower and Walsh found that programs offering scholarships to all students regardless of merit, and to the widest range of two and four year colleges and universities, saw the biggest gains in enrollment. Their research published in a National Bureau of Economic Research working paper, documented enrollment gains in Kalamazoo and other identical programs.

    With these compelling results in hand, it’s time to make Kalamazoo’s promise America’s promise. A bi-partisan proposal from the non-profit Redeeming America’s Promise seeks to do just that by creating a federal American Promise Scholarship program that would pay the cost of tuition for every academically capable and personally determined high school student in America from families earning $180,000 or less. The plan would offer two year scholarships for high school graduates of $2500 per year, and four year scholarships worth on average $8500 per year to students graduating with a 2.75 GPA. These rates represent the current average cost of in state resident tuition at our public community colleges and universities. States would need to agree to accept such scholarships in lieu of any tuition payments from the families of APS students and at a minimum maintain their current level of support for their institutions. Additional incentives would be provided to encourage them to do even more to make sure a college education is both accessible and affordable for their residents. According to the Bipartisan Policy Center, there is $52 billion in current expenditures which can be used to fund the American Promise Scholarships by redirecting the money the federal government currently spends on tuition tax credits as well as by integrating the Pell Grant program into this new form of support.

    Other parts of the plan, which can be downloaded in its entirety at redeemingamericaspromise.org, would provide additional support for students who are the first in their family to attend college and reward college completion as well as post-graduation service to community or country. Money for these programs can be found by reducing the level of profits the government currently makes on student loans and ending other college support programs which have not proven their effectiveness.  

    The current system of financing higher education is unsustainable.  Student loan debt, which is not dischargeable in bankruptcy, now exceeds one trillion dollars—more than all the credit card debt in the country. The burden is felt disproportionately by lower and middle income families and is a severe drag on the desire of members of the Millennial Generation (born 1982-2003) to start a family, buy a house and have children. Furthermore, there is no historical precedent for placing such a burden on our youngest citizens.

    Since the country’s founding, education has been a key component of the promise of upward economic mobility. This has been true in every era, beginning with the Northwest Ordinance setting aside land for one room schoolhouses to the institution of mandatory, free primary education in all states at the time of the Civil War. The expansion of educational opportunities continued in the 20th Century as our growing Industrial Age economy required workers with a high school education for our factories and offices. Government funds in every state and community were set aside to provide a free, public high school education for boys and girls to respond to these new demands. Later in the century, after WWII, the GI Bill of Rights and then the Higher Education Act 0f 1965 were enacted to further encourage college enrollment, thereby establishing the educational foundation for our rapidly expanding middle class. It is only in this century that we have asked a generation, Millennials, to self-finance the education they need, and our country needs, to be economically successful.

    This wrong-headed inter-generational and economically disastrous policy needs to end before America loses its global competitive edge for good. The current system is creating a skills gap.

    America needs to make Kalamazoo’s Promise a promise every American can count on and that can address the growing skills gap in many parts of the occupational spectrum.  By joining with the Democrats and Republicans, young and old, who are already supporting Redeeming America’s Promise’s plan to make college tuition free we can ensure that day arrives sooner rather than later.

    Morley Winograd is co-author of the newly published Millennial Momentum: How a New Generation is Remaking America and Millennial Makeover: MySpace, YouTube, and the Future of American Politics and fellow of NDN and the New Policy Institute.

    Graduation photo by Bigstock.

  • Columbus, Know Thyself

    What Is Your Ambition?

    Columbus doesn’t have a powerful brand in the market outside of Ohio. Having said that, the city is growing rapidly in population and jobs, is extremely livable and improving day by day, and seems to make its residents very happy. Is there any reason the city has to be better nationally known in order to be complete or something?

    I say No.  It’s a valid choice to simply stay with the status quo.

    Many citizens may indeed feel that way, but much of the city’s leadership doesn’t. This was hammered home in a 2010 New York Times piece on the city’s rebranding efforts. That desire to be seen as a high caliber city at the national level clearly came through in my most recent trip, even from Mayor Coleman himself.

    I also tend to be personally biased towards high ambition, particularly in a place where it’s obvious that the ambition can be realized.  Columbus is that place, in contrast to long troubled regions  like Detroit and Cleveland are really struggling to rebound from severe problems. And no matter what they do, they will never recover the national stature they once enjoyed.   

    Columbus is both operating from a baseline of strength, and also at a point where it is still on the way up as a city.   Columbus has never been a larger, more important, more prominent city in the world than it is right now – and it has the potential to reach still higher  Not every city and not every generation is granted the opportunity that Columbus has right now.  

    Finding Columbus’ Mojo

    But assuming the answer is go for it, then what needs to be done? There is a need to go beyond the checklist.

    The first thing  is to really be committed to change and going after the brass ring. This is not an easy journey to make. Some of the things you are going to have to do are really, really hard because they involve looking  closely at civic insecurities, and also questioning perhaps your most fundamental and cherished truths, especially the truth about what you’re best at.

    It’s very hard for cities to admit where they are weak, but it can actually be even harder for them to admit where they are strong.

    One of the sayings of the Greek oracle was “Know Thyself.” Sage wisdom, indeed. Knowledge of yourself is often the most difficult to come by but valuable of commodities. Because as the saying goes, “Without awareness there is no choice.”

    Where does a city get knowledge of itself that’s useful for branding? I argue it very often comes from the past. Cities didn’t just take their present form overnight. They are the process of a long process of growth and change. In particular, the founding ethos of a place profoundly stamps its character, usually in a permanent way. The Dutch trading culture and spirit of openness of New Amsterdam is still present in contemporary New York, for example.

    When a new creative director comes in to revive a failing fashion house, what’s the first thing he does? He goes to the archives. He investigates the history of the house. What does this brand stand for? Who were the people who founded it? How did they become who they were? What happened along the journey of that house?

    To use a hackneyed phrase, that new creative director wants to understanding the “Brand DNA,” and the key to the brand DNA is in the past.

    I think that’s as true of Columbus as anyplace. Columbus certainly had good luck in getting where it is today, but I’d argue there’s more to it. One of their historical keys to success was a fateful decision in the 1950s to pursue an aggressive annexation strategy. You can say that was one mayor’s choice, but I believe the fact that it happened in Columbus and not elsewhere in Ohio signaled  that there was something different about the city. What is it?
    You need to start with an anthropological, archeological, historical deep dive into a city, its people and its culture. I’d suggest tapping into Ohio State’s cultural anthropology resources. There might even be a dissertation in it for someone.

    Aspirational Narrative

    One you have the mojo, you not only use it to build the future reality, you also sell it by telling the story of Columbus to the world. You need to create an aspirational narrative of the city that people can imagine themselves being a part of.

    Think of the story of New York. TV shows like Friends, Sienfield, and Sex and the City have created a contemporary positive narrative of life in New York. People know what it’s about. If you can make it there, etc. (This wasn’t always the case. Escape from New York, Death Wish, and Fort Apache the Bronx told quite a different narrative in a previous era). Portlandia tells a story about the place where young people go to retire. Think about the Bay Area, LA, Miami, etc. and the stories come to our heads without much thinking.

    What’s that story of life in Columbus? You create that story around the authentic mojo of the city.

    What’s on your rap sheet?

    Beyond finding the mojo, there’s another key task that goes along with the investigation. That’s finding the missing or defective genes in the civic DNA that could sabotage the city’s ambitions.

    Everybody’s got a rap sheet. The only question is whether or not we know what’s on ours. When I was working in corporate America I knew if I was getting nothing but glowing feedback from my boss, if Ihad nothing I need to get better at, I was dangerously blind. If not, why was I not the CEO of the company? Clearly, there’s a reason why I am where I am and not the President of the United States.

    So Columbus needs to understand not just checklist items it is missing like a major transit investment, but also cultural items that are holding the city back and what they are rooted in. Then it can attack them with a change program that can hopefully work, like the civic equivalent of therapy.

    On a related note though methodologically different, the city needs to be willing to take a hard look in the mirror and realistic assess its assets and accomplishments and how compelling they are in the market. The cold reality is that while Columbus is a great city in many ways and has lots of great stuff, what it has doesn’t add up to a nationally or globally compelling story. You need to take the marketing glasses off and ask how people who aren’t in or from the city   see things.

    That doesn’t necessarily mean you recategorize your assets as bad. But you have to understand that checklist items that lots of other cities are doing (e.g., bike infrastructure) are probably not going to set the city apart in the marketplace. If you don’t have it, you’re in trouble. But if you do, it doesn’t win the game. These things are just the new urban ante.

    Illustrative Applied Examples

    I want to give a quick examples – and let me stress this is provisional and speculative to some extent – illustrating these three points.

    On the mojo front, the city’s previous branding effort that identified “smart” and “open” as two key civic attributes is right on in my view. It’s a good start. But why is Columbus open? That is, why is it easier for newcomers to acclimate, penetrate networks, accomplish things, etc. in Columbus than in many other places?

    I speculate it’s rooted in being the state capital. I’ve seen a similar trait in other capitals. I speculate that because people from all over the state are coming to Columbus on political business, and because there’s always churn in elected office, civic networks don’t become closed and calcify in a sort of “Why the Garden Club Couldn’t Save Youngstown” effect.

    For the missing gene example, I think it’s very possible that one reason Columbus didn’t create a compelling, unique product in the market is that it it’s just not in the civic DNA. One local leader I talked to speculated that the city’s values were shaped by those of Ohio State football and Woody Hayes. That is, the secret to success is to work relentlessly at the fundamentals and always be pounding the ball ahead with the running game – “three yards and a cloud of dust.” Not exactly the West Coast Offense. This may be too facile, but it is clear that Columbus excels at the fundamentals, the blocking and tackling of city stuff, but hasn’t thrown the civic equivalent of the long bomb.  

    For the asset evaluation example, I think Columbus needs to be realistic about Ohio State’s stature. Ohio State is a great school, but it’s not Harvard or Stanford. I went to Indiana University and I’d say the same about them. Now, obviously you’d never come out in public and downplay Ohio State, which legitimately is a power house for the city. But you don’t want to mistakenly believe it’s doing to spawn the next Cambridge or Palo Alto without some major change either.

    It’s Cow Town, Jake

    To truly discover the secret of its mojo, Columbus needs to be willing to stare into the abyss of cow town.

    Talk to people in Columbus and you’ll hear them claim that they are not a “cow town” anymore or how people used to refer to them as a “cow town.” I have seen this as an analogy to the case of Indianapolis and “naptown.” I’ve always doubted that hardly anyone outside of Indianapolis itself ever used the term Naptown historically as an insult. No one would ever have cared enough about the city to even bother insulting it.

    Similarly, I’d never heard the term cow town until somebody from Columbus told me about it. I strongly doubt it’s ever really been a term of derision nationally, at least not outside Ohio. I know there’s a strain of Cincinnatian who loves heaping abuse on places like Columbus and Indy. As Columbus has grown while other cities in Ohio wandered in the wilderness, it’s easy for me to believe there’s been a lot of sniping. So while the market would never think of Columbus as cow town, there may be some legitimate in state reasons for them to be sensitive to the term.

    The impression I get, again provisional based on my limited experience, is that in an attempt to rid itself of the stigma of being a cow town, Columbus has sheared off its past, in effect repudiating everything that happened before 1990 or 2000.

    I observed to Mayor Coleman that Indianapolis in recent years has downplayed the 500 Mile Race. I asked him whether or not Columbus was similarly neglecting its greatest brand asset in the market by downplaying Ohio State football. He said, “No. There was a time in the 60s and 70s and the 80s, and even the 90s, where Columbus was nothing but Ohio State football. And I love the Buckeyes; I love the football team. It’s better than any professional team in the state of Ohio. And they’re still amateurs. That’s good. But having said that, Columbus is no longer just the Ohio State football team. We don’t view ourselves that way anymore [emphasis added].”

    This seems consistent with what I hear from other people. There’s an embedded idea here that there’s little to nothing of value in the city’s past and in fact that past is something to be embarrassed about or outgrown. I have never heard anyone from Columbus brag about their city for anything related to the past, apart from historic architecture.   For example, the mayor went on to talk about the importance of Ohio State in terms of its contemporary research impact. I’m not sure I’ve ever heard a city talk less about its heritage.  That lack of historic rooting may be one reason why the city can come across as somewhat generic.

    As I’ve noted before, this is normal for us to go through. When we go off to college, Mom puts our high school letter jacket up in the attic. We try as hard as we can to fit in at the new level, and treat the stuff we left behind as little kids stuff.

    But eventually we become comfortable in our own skin. We learn who we are and what we stand for, and we stop becoming so concerned about what other people think of us. Of course we are social creatures and will never stop caring about others’ perceptions of us. We find a healthier balance.

    The same is true of cities. Columbus is far enough along in its growth path to really be comfortable being itself, and acknowledging and embracing its past.

    This doesn’t mean Columbus should be or ever was a cow town. What it does mean is that things from its past that Columbus   are actually its strongest brand assets and things to be proud of and build its future on.

    Let’s give some examples. The Midwest has a history of local, low grade lager brands. Virtually all of these were abandoned and ceased production. The hip, cool thing to do was to drink microbrews, not even Bud or Miller Lite, to say nothing of Sterling (my dad’s brand).

    Then one day the hipsters on the coasts started drinking Pabst Blue Ribbon, and all of a sudden back in the Midwest, we started drinking it too and now are re-launching or re-embracing all those old blue collar brands (including Sterling). The same thing happened with workwear clothing, which is now selling for quite a premium in some places and very popular among the Bearded Ones.

    In effect, we had to re-import our own heritage after a bunch of other people elsewhere saw the value in it – the same heritage we rejected as “cow town.”

    The clearest example of this is agriculture. The Midwest is all about ag. Ohio State is a huge ag power house. Columbus could have owned urban agriculture, farm to table, organics, etc. But it didn’t. And now it’s doing them, but it’s doing them as the follower, not the leader.   

    This is one of the tragedies of the Midwest. We turned away from our heritage and a bunch of guys in Brooklyn bought it from a thrift store for a song.

    The South avoided this. Look at Nashville. Did they turn their back on country music as “cow town”? No, they embraced it as central to their identity past, present, and future. Of course they are more than country. But they kept it front and center. But they also updated it. It’s not the old AM radio country. It’s not Hee Haw. They respect those people and institutions and see them as in continuity with today, but they have evolved. Today’s it’s glitzier, “Nashvegas.” Think Carrie Underwood, not Minnie Pearl.

    This is what it means to know thyself and build the future out of the authentic mojo of the past. Columbus surely has many things in its past and in its historic civic character   of immense value. The question and the challenge to the city is being willing to find out what those are and own and embrace them and champion them as a key part of the mojo on which it will build its future reality and aspirational civic narrative.

    I believe the potential is right there. The question is whether the city is ready and willing to step up and grab it.

    Aaron M. Renn is an independent writer on urban affairs and the founder of Telestrian, a data analysis and mapping tool. He writes at The Urbanophile, where this piece originally appeared.

  • Watch What You Say, The New Liberal Power Elite Won’t Tolerate Dissent

    In ways not seen since at least the McCarthy era, Americans are finding themselves increasingly constrained by a rising class—what I call the progressive Clerisy—that accepts no dissent from its basic tenets. Like the First Estate in pre-revolutionary France, the Clerisy increasingly exercises its power to constrain dissenting views, whether on politics, social attitudes or science.

    An alliance of upper level bureaucrats and cultural elites, the Clerisy, for for all their concerns about inequality, have thrived, unlike most Americans, in recent years. They also enjoy strong relations with the power structure in Washington, Silicon Valley, Hollywood and Wall Street.

    As the modern clerisy has seen its own power grow, even while the middle class shrinks, it has used its influence to enforce a prescribed set of acceptable ideas. On everything from gender and sexual preference to climate change, those who dissent from the official pieties risk punishment.

    This power has been seen recently in a host of cancellations of commencement speakers. Just in the past few months Ayaan Hirsi Ali, former Secretary of State Condoleezza Rice, International Monetary Fund managing director Christine Lagarde, and former UC Berkeley Chancellor Robert Birgeneau, have been prevented from speaking by campus virtue squads whose sensibilities they had offended.

    The spate of recent cancellation reflect an increasingly overbearing academic culture that promotes speech codes on what is permissible to say and even seeks to provide “trigger warnings” to warn students about the presence of nominally troubling subject matter in readings and discussions so they can avoid the elements of reality they find offensive. 

    The very term Clerisy first appeared in 1830 in the work of Samuel Coleridge to described the bearers society’s highest ideals: the intellectuals, pastors, scientists charged with transmitting their privileged knowledge them to the less enlightened orders.  

    The rise of today’s Clerisy stems from the growing power and influence of its three main constituent parts: the creative elite of media and entertainment, the academic community, and the high-level government bureaucracy.

    The Clerisy operates on very different principles than its rival power brokers, the oligarchs of finance, technology or energy. The power of the knowledge elite does not stem primarily from money, but in persuading, instructing and regulating the rest of society. Like the British Clerisy or the old church-centered French First Estate, the contemporary Clerisy increasingly promotes a single increasingly parochial ideology and, when necessary, has the power to marginalize, or excommunicate, miscreants from the public sphere.

    Of course, every society needs a clerical class, to instruct the young and maintain cultural standards. But in the past, at least in modern America, they tended to be a tolerance for fairly disparate views. Today’s Clerisy, by contrast, is increasingly homogeneous in its beliefs- despite pockets of conservative power such as the Heritage Foundation and most notably the media empire controlled by the Murdoch family.

    The modern Clerisy’s homogeneity springs from their social conditioning. Educated along similar ideological lines at major universities, they tend to be geographically concentrated in wealthy, “progressive” places, where few dissent from the prevailing worldview. As such they breathe, as analyst Walter Russell Mead suggests, “within a cocoon.” Inside their urban cocoons they operate from a thoroughly internalized set of progressive tropes on such issues as the environment, urbanism, gender and race. In practical terms, such as in their support of President Obama and the Democratic Party, they are both broadly allied with centers of power and influence, much as the clergy was in Medieval and early modern times.

    America’s Nomenklatura

    The Clerisy has thrived during these hard times. Since 1990, the number of government workers has expanded by some five million to some twenty million. That’s four times the number who were employed by the government at the end of the Second World War, a growth rate roughly twice that of the population as a whole.

    The upper bureaucracy have been among the greatest beneficiaries—along with Wall Street and the green crony capitalists —of the Obama Administration’s economic policy. The number of workers, particularly at the federal level, continued to rise even at the height of the great recession. Between late 2007 and mid-2009, the number of U.S. federal workers earning at least $150,000 more than doubled. The ranks of federal nomenklatura—combined with a host of related private contractors —- have swelled so much that Washington DC by 2012 replaced New York as the wealthiest region in the country .

    The upper bureaucracy has evolved into a privileged and cossetted caste. In California, state workers are allowed such special privileges as having their Department of Motor Vehicle records kept confidential; a sensible precaution for those, like police, who deal with criminals but now expanded to cover a vast array of public servants, including social workers. Naturally, as beneficiaries of an expanded government, public sector unions have been among the strongest backers of regulatory growth and ever increased social services. Their political power has also been on the rise; since 1989, public sector unions accounted for two of the top three top ten donors to political candidates.  

    More important still is the bureaucracy’s ability to control society through unelected agencies, something that grew even during Republican administrations, but has achieved unprecedented scale under President Obama. Increasingly, agencies such as the EPA and HUD, seek to shape community development patterns—for example on land use policies —- that traditionally fell under local control. With their power, the agencies have harassed unfriendly conservative organizations, as seen by the IRS, and monitored the populace’s private conversations, seen in the case of the NSA. But to some prominent members of the Clerisy, these power grabs haven’t gone far enough.

    Leading figures of the Clerisy, like former Obama budget advisor Peter Orszag and Thomas Friedman, argue that power should shift from naturally contentious elected bodies—subject to pressure from the lower orders—to credentialed “experts” operating in Washington, Brussels or the United Nations. The popular will, according to the Clerisy and its allies, lacks the scientific judgment and societal wisdom to be trusted with power.

    The Real College of Cardinals.

    Like the upper bureaucracy, academia has also expanded rapidly in recent decades. In 1958 universities and colleges employed under 370,000 people; by 2014 that number had expanded to roughly 1.7 million. With universities now serving roughly twenty million full and part time students, academics have never exercise more influence over young Americans.

    Ironically, despite its patina of egalitarian beliefs, the academic world now epitomizes the new hierarchical class order as much as any major institution. The roughly 1.4 million instructors in the University system, have experienced what one writer calls “the great stratification” between roughly 500,000 largely older tenured “alpha” Professors and a vast “beta” of low-paid teaching assistants, contingent faculty and those working in extension programs.

    At the same time, the bureaucracy of the University, like that of the government, has exploded, even more at elite (and tax-favored) private schools than among public ones. Whereas there were about 250,000 administrators and professional staff members in 1975, about half the number of professors, by 2005 there were over 750,000, easily outnumbering tenure-tracked professors. As the University has gained in power, those in control have taken on ever more the trappings of an aristocracy whose primary mission is self-preservation—not unlike the Medieval European clergy.

    The Creative Elite

    The final element of the Clerisy’s triumvirate is the culture-based industries and their upper middle classes participants. Arnold Toynbee identified the “creative genius” as the historic leader and savior of society—an apt description of the self image held by many of the new tech and media elites.

    Today, this “creative” element has grown ever more pervasive. Artists, writers, fashion designers and actors have achieved enormous status in our society; and a handful has become very wealthy. More important still has been the rise of media oligarchs, some tied to the tech establishment, who now rank among the wealthiest Americans. Indeed of the world’s 25 richest people, a majority come from either the information sector, the fashion industry or media. These new media elites, combined with the tech oligarchy, could well emerge as the dominant economic force of the 21st Century, surpassing fortunes made in energy, manufacturing, or housing.

    The media itself is increasingly populated by the children of prominent politicians and by those who come from the ranks of the plutocracy. These include the offspring of the Reagans, GOP stand-bearer John McCain, various Kennedys, and Nancy Pelosi. In Hollywood, meanwhile, some of the new powerful producers come from the ranks of the ultra-rich, including heirs to the Pritzker fortune and the daughter of Oracle Founder Larry Ellison, one of the world’s ten richest men.

    The Clerical Consensus

    Today’s Clerisy attempts to distill today’s distinctly secular “truths”—on issues ranging from the nature of justice, race and gender to the environment—and decide what is acceptable and that which is not. Those who dissent from the accepted point of view can expect their work to be simply ignored, or in some cases vilified. In the Clerical bastion of San Francisco, an actress with heretical views, in this case supporting a Tea Party candidate, who was pilloried, and lost work for her offense.

    The pattern of intolerance has been particularly notable in the area of climate change, where serious debate would seem prudent not only on the root causes and effects, but also what may present the best solutions. Climate scientists who diverge from the warming party line, even in a matter of degree, are routinely excoriated by the Clerisy as “deniers” of “settled” science even in the face of 15 years of relatively stable temperatures. The media also participates in this defense of orthodoxy. The Los Angeles Timesas well as the website Reddit have chosen to exclude contributions from skeptics.

    The stifling orthodoxy from the technocrats and media elite is benign compared to the inquisitional behavior can be seen in institutions of higher education. It is nothing short of tragic, notes civil libertarian Nat Hentoff, that a 2010 survey of 24,000 college students found that barely a third thought it “safe to hold unpopular views on campus.”

    Such attitudes seem natural in an environment where, according to various studies, liberals outnumber conservatives by between eight and fourteen to one. Whether this reflects natural preferences among the well-educated or is partially due to institutional discrimination remains arguable. But consider that 96 percent of all Presidential donations from the nation’s Ivy League schools went to Barack Obama, something more reminiscent of Soviet Russia than a properly functioning pluralistic academy. Nor is there any sign that this trend is slowing. Between 2007 and 2010, a University of California study revealed that “far left” and liberal views grew from 55 percent to almost 63 percent of full-time faculty while the conservative segment dropped from roughly 16 % to less than 12%. If the academic left simply waits long enough, it could look forward to a conservative-free faculty on many campuses.

    A similar, if less uniform, clerical consensus suffuses the media culture, led by the television networks and the leading newspapers. In fact nearly half of all Americans consider the media too liberal, more than three times as many who see it as too conservative. Overall, reports Pew, the percentage who feel news is tilted to one side has grown dramatically from 53 percent in 1985 to 77 percent in 2011.

    To be sure, there remain important exceptions to this rule, notably Fox News and talk radio, and the editorial pages of the Wall Street Journal. Yet the right’s hold on the major media is demonstrably weak, and likely to decline further once Murdoch himself is no longer on the scene. A detailed ++UCLA study found that of the twenty leading news outlets in the country, eighteen were left of center.

    Despite the journalistic embrace of the idea of diversity, a recent Indiana University Study notes that journalists themselves have become increasingly homogeneous.  Journalists are far more likely to be college educated than they were in 1970, and less likely to be a racial minority than just a decade ago. But the biggest change has been an ideological one; barely seven percent in 2013 were Republican, compared to nearly a quarter in 1971.

    Even Arnold Brisbane, the former ombundsman of the The New York Times, has noted the group-think that now overshadows objectivity, long cherished by that most important of America media outlets. Brisbane observed that, “so many share a kind of political and cultural progressivism—for lack of a better term—that this worldview virtually bleeds through the fabric of The Times.”

    These positions are all reflected in almost lock-step media support for President Obama. Over sixteen prominent journalists joined the Obama administration, which was something of a record; in 2012 employees at the major networks sent President Obama almost eight times as much in contributions as they did his Republican opponent.

    This consensus of views prevails as well in the electronic media. As the liberal author Jonathan Chait suggests, the media increasingly reflects not just commercial values, but “a vast left-wing conspirary.” He adds: “You don’t have to be an especially devoted consumer of film or television (I’m not) to detect a pervasive, if not total, liberalism.”

    Will the Clerisy rule after Obama?

    The fact that Republicans continue to maintain considerable power in both Washington and the states suggests that the Clerisy’s power is not yet determinative. And indeed after President Obama leaves office, the Clerisy’s reach may be temporarily diminished, but its ability to set the social and political agenda will likely persist and even grow given their influence to shape perceptions, particularly among the young.

    The current atmosphere of ideological unanimity—in academia, the arts and much of the government bureaucracy—set the stage for the outrages of this commencement season, making painfully palpable the growing authoritarian spirit in so many of our leading institutions. They often see themselves as a liberating force in our society, but in their dislike of conflicting ideas and open debate, today’s  Clerisy increasingly resembles the closed-minded dogmatists of the Medieval church.

    This article first appeared at The Daily Beast.

    Joel Kotkin is executive editor of NewGeography.com and Distinguished Presidential Fellow in Urban Futures at Chapman University, and a member of the editorial board of the Orange County Register. He is author of The City: A Global History and The Next Hundred Million: America in 2050. His most recent study, The Rise of Postfamilialism, has been widely discussed and distributed internationally. He lives in Los Angeles, CA.

  • Pandering to the Minority Vote

    As they approach what could be a troublesome election season, Democratic party strategists have targeted two issues – inequality and race – as their primary means to prevent another shellacking in the mid-terms.

    But given the growing dominance of wealthy and overwhelmingly white gentry liberals, the class issue could prove troublesome, particularly given the tepid performance of the economy.

    In contrast, race appears to be the gift that keeps on giving. For Democrats, every day recalls the early civil rights struggle. Racially-tinged outbursts by people like Clippers owner Donald Sterling and Nevada rancher Cliven Bundy allow the progressives and the media to play the race card – a convenient way to boost minority turnout.

    Clearly, any sizeable drop- off in minority turnout would benefit the Republicans, who, to date, have been largely unsuccessful in appealing to non-white voters.

    A more relevant concern may be whether the overwhelming commitment minorities have to the Democratic Party actually works in their favor.

    To be sure, under the current regime, well-educated, affluent and well-connected minorities stand at the pinnacle of power, including the presidency and attorney general’s office.

    Culturally, the impact of African Americans and, increasingly, Hispanics has arguably never been greater.

    But beyond the symbolic level, the picture is considerably less inspirational. However much some historically neglected minorities have thrived and excelled, the overall economic and social gains for most minorities have been paltry at best.

    Despite the benefits of government programs such as affirmative action – something opposed by some other minorities, notably Asian Americans – African Americans have not expanded their share of the middle class in recent decades. Indeed, racial economic disparities are growing, with black unemployment more than double the white jobless rate and reaching 40 percent among youths.

    Even more revealing, many of those areas under the most complete progressive control – New York, San Francisco and Chicago – also have among the worst disparities between black and white incomes, notes a recent National Urban League study.

    It may well be that hyper-regulatory regimes in the left-leaning cities tend to chase away blue collar jobs and raise the price of housing so high that minorities simply leave. Many of those who stay pay an inordinate share of their income, often upwards of 50 percent, just to keep a roof over their head.

    As Thomas Sowell has observed, the black population of San Francisco, the ultimate gentry city, is now half of what it was in 1970, even as the city has experienced an overall demographic resurgence.

    To be sure, a primarily redistributionist approach may improve some material conditions, but it also seems to foster a permanent underclass of dependents.

    This can be seen in the ability of the 50-year war on poverty to reduce levels considerably after the initial gains of the 1960s.

    The biggest reductions in poverty have taken place not during periods of higher welfare spending, but during economic expansions such as those that occurred under Presidents Reagan and Clinton, both of whom, in different ways, opposed the expansion of traditional welfare programs.

    This article first appeared in the Orange County Register.

    Joel Kotkin is executive editor of NewGeography.com and Distinguished Presidential Fellow in Urban Futures at Chapman University, and a member of the editorial board of the Orange County Register. He is author of The City: A Global History and The Next Hundred Million: America in 2050. His most recent study, The Rise of Postfamilialism, has been widely discussed and distributed internationally. He lives in Los Angeles, CA.

    Voter sign photo by Bigstock.

  • California’s Green Bantustans

    One of the core barriers to economic prosperity in California is the price of housing. But it doesn’t have to be this way. Policies designed to stifle the ability to develop land are based on flawed premises. These policies prevail because they are backed by environmentalists, and, most importantly, because they have played into the agenda of crony capitalists, Wall Street financiers, and public sector unions. But while the elites have benefit, ordinary working families have been condemned to pay extreme prices in mortgages, property taxes, or rents, to live in confined, unhealthy, ultra high-density neighborhoods. It is reminiscent of apartheid South Africa, but instead of racial superiority as the supposed moral justification, environmentalism is the religion of the day. The result is identical.

    Earlier this month an economist writing for the American Enterprise Institute, Mark J. Perry, published a chart proving that over the past four years, more new homes were built in one city, Houston Texas, than in the entire state of California. We republished Perry’s article earlier this week, “California vs. Texas in one chart.” The population of greater Houston is 6.3 million people. The population of California is 38.4 million people. California, with six times as many people as Houston, built fewer homes.

    And when there’s a shortage, prices rise. The median home price in Houston is $184,000. The median price of a home in Los Angeles is $530,000, nearly three times as much as a home in Houston. The median price of a home in San Francisco is $843,000, nearly five times as much as home in Houston. What is the reason for this? There may be a shortage of homes, but there is no shortage of land in California, a state of 163,000 square miles containing vast expanses of open space. What happened?

    You can argue that San Francisco and Los Angeles are hemmed in by ocean and mountains, respectively, but that really doesn’t answer the question. In most cases, these cities can expand along endless freeway corridors to the north, south, and east, if not west, and new urban centers can arise along these corridors to attract jobs. But they don’t, and the reason for this are the so-called “smart growth” policies. In an interesting report entitled “America’s Emerging Housing Crisis,” Joel Kotkin calls this policy “urban containment.” And along with urban containment, comes downsizing. From another critic of smart growth/urban containment, economist Thomas Sowell, here’s a description of what downsizing means in the San Francisco Bay Area suburb Palo Alto:

    “The house is for sale at $1,498,000. It is a 1,010 square foot bungalow with two bedrooms, one bath and a garage. Although the announcement does not mention it, this bungalow is located near a commuter railroad line, with trains passing regularly throughout the day. The second house has 1,200 square feet and was listed for $1.3 million. Intense competition for the house drove the sale price to $1.7 million. The third, with 1,292 square feet (120 square meters) and built in 1895 is on the market for $2.3 million.”

    And as Sowell points out, there are vast rolling foothills immediately west of Palo Alto that are completely empty – the beneficiaries of urban containment.

    The reason for all of this ostensibly is to preserve open space. This is a worthy goal when kept in perspective. But in California, NO open space is considered immediately acceptable for development. There are hundreds of square miles of rolling foothills on the east slopes of the Mt. Hamilton range that are virtually empty. With reasonable freeway improvements, residents there could commute to points throughout the Silicon Valley in 30-60 minutes. But entrepreneurs have spent millions of dollars and decades of efforts to develop this land, and there is always a reason their projects are held up.

    The misanthropic cruelty of these polices can be illustrated by the following two photographs. The first one is from Soweto, a notorious shantytown that was once one of the most chilling warehouses for human beings in the world, during the era of apartheid in South Africa. The second one is from a suburb in North Sacramento. The scale is identical. Needless to say, the quality of the homes in Sacramento is better, but isn’t it telling that the environmentally enlightened planners in this California city didn’t think a homeowner needed any more dirt to call their own than the Afrikaners deigned to allocate to the oppressed blacks of South Africa?

    The Racist Bantustan

    201402_Soweto-500px


    Soweto, South Africa  –  40′ x 80′ lots, single family dwellings

    When you view these two studies in urban containment, consider what a person who wants to install a toilet, or add a window, or remodel their kitchen may have to go through, today in South Africa, vs. today in Sacramento. Rest assured the ability to improve one’s circumstances in Soweto would be a lot easier than in Sacramento. In Sacramento, just acquiring the permits would probably cost more time and money than doing the entire job in Soweto. And the price of these lovely, environmentally correct, smart-growth havens in Sacramento? According to Zillow, they are currently selling for right around $250,000, more than five times the median household income in that city.

    The Environmentalist Bantustan

    201402_Sacramento-500px


    Sacramento, California  –  40′ x 80′ lots, single family dwellings

    When you increase supply you lower prices, and homes are no exception. The idea that there isn’t enough land in California to develop abundant and competitively priced housing is preposterous. According to the American Farmland Trust, of California’s 163,000 square miles, there are 25,000 square miles of grazing land and 42,000 square miles of agricultural land; of that, 14,000 square miles are prime agricultural land. Think about this. You could put 10 million new residents into homes, four per household, on half-acre lots, and you would only consume 1,953 square miles. If you built those homes on the best prime agricultural land California’s got, you would only use up 14% of it. If you scattered those homes among all of California’s farmland and grazing land – which is far more likely – you would only use up 3% of it. Three percent loss of agricultural land, to allow ten million people to live on half-acre lots!

    And what of these lots in North Sacramento? What of these homes that cost a quarter-million each, five times the median household income? They sit thirteen per acre. Not even enough room in the yard for a trampoline.

    There is a reason to belabor these points, this simple algebra. Because the notion that we have to engage in urban containment is a cruel, entirely unfounded, self-serving lie. You may examine this question of development in any context you wish, and the lie remains intact. If there is an energy shortage, then develop California’s shale reserves. If fracking shale is unacceptable, then drill for natural gas in the Santa Barbara channel. If all fossil fuel is unacceptable, then build nuclear power stations in the geologically stable areas in California’s interior. If there is a water shortage, than build high dams. If high dams are forbidden, then develop aquifer storage to collect runoff. Or desalinate seawater off the Southern California coast. Or recycle sewage. Or let rice farmers sell their allotments. There are answers to every question.

    Environmentalists generate an avalanche of studies, however, that in effect demonize all development, everywhere. The values of environmentalism are important, but if it weren’t for the trillions to be made by trial lawyers, academic careerists, government bureaucrats and their union patrons, crony green capitalist oligarchs, and government pension fund managers and their partners in the hedge funds whose portfolio asset appreciation depends on artificially elevated prices, environmentalism would be reined in. If it weren’t for opportunists following this trillion dollar opportunity, environmentalist values would be kept in their proper perspective.

    The Californians who are hurt by urban containment are not the wealthy elites who find it comforting to believe and lucrative to propagate the enabling big lie. The victims are the underprivileged, the immigrants, the minority communities, retirees who collect Social Security, low wage earners and the disappearing middle class. Anyone who aspires to improve their circumstances can move to Houston and buy a home with relative ease, but in California, they have to struggle for shelter, endlessly, needlessly – contained and allegedly environmentally correct.

    Ed Ring is the executive director of the California Policy Center.

  • Know Your City’s Marketplace Leverage

    I’ve noticed so often that urbanist policy suggestions or case studies are treated as universals. That is, with a presumption that a good idea or policy can be replicated pretty much anywhere. Clearly, there are a number of items like bike lanes and trails that would appear to be widely applicable, and for which the best practice standards would appear to work without much modification in most places. On the other hand, this isn’t true of everything.

    Where do most urban progressive policy ideas come from? From what I’ve seen, these tend to get wide currency when the come from one of the major urbanist citadels like London, New York, Washington, San Francisco, or Portland. This doesn’t always mean that was the place that came up with the idea, but it often is. But these cities are very different from your average, workaday type place.

    One problem with our analysis of these things is that they seldom take into account the amount of marketplace leverage a particular place has. Let’s take New York, for example. That’s a city with immense marketplace leverage, meaning that people and businesses are willing to put up with enormous cost and hassles to live, work, and do business there. In particular, the finance industry, which remains heavily centralized in New York as one of the two top global finance centers, generates tons and tons of cash. Most places don’t have that. It’s similar for tech in the Bay Area, government in Washington, DC, etc. These places have high value industries that are bound to the geography they are located and generate immense wealth and tax revenue. That means these places can get away with a lot of things other cities can’t. They’ve got a cash register that never stops ringing.

    One current case study is Seattle’s raising of the minimum wage to $15. First the small city of SeaTac raised its minimum wage to that level. SeaTac has 27,000 residents, but also includes SeaTac airport as the name implies. Airports employ a large service class who can benefit from a minimum wage increase. And most airport service businesses don’t have the luxury of moving off airport. That gave SeaTac marketplace leverage to raise the minimum wage significantly without huge risk to its employment base. SeaTac airport isn’t going anywhere.

    The city of Seattle itself has followed suit with a graduated increase to $15/hr. Again, Seattle is, like San Francisco, a city of the elite or on its way. The cost of doing business there is such that most businesses that are cost sensitive are already gone or on their way out the door. The coffee shops and other establishments with lower paid workforces mostly can’t move without losing their customer base. So in my view Seattle also has more leverage than your average city in setting this policy.

    It would be tempting to look at the Seattle case and say that other cities should raise their minimum wage. But for places without the concomitant marketplace leverage, it could prove to be economically disastrous.

    So understanding that degree of marketplace leverage you have is critical to evaluating local policies where the result could affect competitive positioning. Cities with greater marketplace leverage will have more flexibility to have local specific policies that might otherwise disadvantage them by raising costs, regulatory hurdles, etc. They can afford to be in the vanguard of policy experimentation.

    Places that fail to take stock of this do so at their peril. One place that has clearly done that is Rhode Island. It has basically acted like it’s entitled to put into place the same sorts of policies as next door Massachusetts and Connecticut, but without the captive high value industries to finance it. Massachusetts has the global power of greater Boston with its unmatched universities, tech, and biotech clusters. Connecticut has access to New York money. Rhode Island doesn’t have anything like this.

    Unfortunately for the Ocean State, it doesn’t seem to get it. I think in part that’s because the state’s intellectual elite – its cultural 1%, so to speak – live in a different reality. Many of them have lived and worked elsewhere like Manhattan and chose to move to Providence for lifestyle. Or they are affiliated with Brown or RISD, two atolls of actual competitive advantage in the state. They look around and see that they are in Rhode Island and they can compete at the global level, so they push for the same sorts of ideas that they used to have back when they actually did live in Manhattan or wherever, without realizing that the other 99% of Rhode Island can’t compete at that level.

    Back in early 2013, I summed it up like this:

    The basic problem of Providence (and by extension the rest of Rhode Island) becomes obvious: it is a small city, without an above average talent pool or assets, but with high costs and business-unfriendly regulation. Thus Providence will neither be competitive with elite talent centers like Boston, nor with smaller city peers like Nashville that are low cost and nearly “anything goes” from a regulatory perspective.

    One reason it’s unlikely they’ll escape from this dilemma is that in my view they aren’t ready to face up to the reality of where they stand in the market competitively.

    Acting like you have leverage when you don’t can be a serious problem, but you can also “leave money on the table” when you do have leverage and fail to take advantage of it. Just as one example, Indianapolis has a “beggar’s mentality” when it comes to development. It just so happens that because of the tourism/sports business and the locals penchant for chain dining that upscale national chains have some of their best locations anywhere in downtown Indianapolis. It’s literally one of the most profitable places in the country for that kind of business – not that you’d know it from the way the city treats them.

    As one example, a BW-3 was built on Washington St. downtown a couple years back. As it turned out, they built something contrary to their approved plans and which violated numerous design guidelines of the city. Did the city make them fix it? Nope. So BW-3′s insult to streetscape humanity was allowed to stand. The city had a lot of marketplace leverage in this case, but didn’t recognize it or wasn’t willing to use it.

    The lesson here is that you need to take stock of the amount of marketplace leverage you have, and tailor your approach accordingly. This is part of coming up with an urban solution set that is right for a specific place and not just a bunch of imported ideas from elsewhere pursued without thought.

    Also, cities should also be asking what they can do to add to their marketplace leverage. Hopefully over time as they continuously improve, their intrinsic attractiveness will go up, which will accrue leverage benefits right there.

    Aaron M. Renn is an independent writer on urban affairs and the founder of Telestrian, a data analysis and mapping tool. He writes at The Urbanophile, where this piece originally appeared.

    Top Photograph: Downtown Seattle from the Space Needle (by Wendell Cox)

  • Three-headed Democratic Party

    As they face the midterm elections with the wind in their faces, Democrats increasingly stake their collective political future on the issue of inequality. The topic has great resonance, given the economy’s vast preponderance of benefits to the very rich and the almost obsessive focus on the issue by the mainstream media.

    But if raising the class-warfare flag gives Democrats at least hope for avoiding a 2010-style shellacking, it also threatens to open up huge, and potentially irreconcilable, differences within the party. Unlike with social issues, where the party is relatively united, class divides threaten party unity by pitting its different constituencies against each other.

    Today we can speak really of three Democratic parties, each with a separate class interest. Their divisions are as deep, perhaps more so, as that between the mainstream Republican Party and the Tea Party. As the Republicans are divided between Main Street grass-roots activists and the corporate “moderate” wing, the Democrats face potential schisms over a whole series of policies, from policing Wall Street to the environment, monetary policy and energy.

    The Gentry Liberals

    This group currently dominates the party, and have the least reason to object to the current administration’s performance. All in all, the gentry have generally done well in the recovery, benefiting from generally higher stock and real estate prices. They tend to reside in the affluent parts of coastal metropolitan areas, where Democrats now dominate.

    The liberal gentry have been prime beneficiaries of key Obama policies, including ultra-low interest rates, the bailout of the largest financial institutions and its subsidization of “green” energy. Wall Street Democrats also profit from the expansion of government since, as Walter Russell Mead points out, so many make money from ever-expanding public debt.

    What most marks the gentry, particularly in California, is their insensitivity to the impact of their policies on working-class and middle-class voters. They may support special breaks for the poor, but are in deep denial about how high energy and housing prices – in part due to “green” policies – are driving companies and decent-paying jobs from the state. The new “cap and trade” regime about to be implemented figures to push up gasoline and electricity prices for middle-income consumers, who, unlike the poor, have little chance of getting subsidies from Sacramento. High energy prices, one assumes, have less impact on the Bay Area or West Los Angeles Tesla- and BMW-driving oligarchy than to people living in the more extreme climate and spread-out interior regions.

    The gentry liberals’ power stems from their dominion over most of the key institutions – the media, the universities, academia and high-tech – that provide both cash and credibility to the current administration. The gentry impact is epitomized by hedge-fund billionaire and environmentalist Tom Steyer, an increasingly influential figure in Democratic circles, as well as nanny-state billionaire Michael Bloomberg and financier George Soros. It is largely the gentry who are pushing climate change as the party’s big issue, even though the voters, notes Gallup, rank it as among the least-important issues.

    The Populist Progressives

    Many more traditional left-leaning members of the Democratic Party – whom I would call the populist progressives – recognize that the Obama years have been a disaster for much of the party’s traditional constituencies, notably, minorities. Although the nation’s increasingly wide class divides and stunted upward mobility has been developing for years, they have widened ever more under Obama, as the wealthy and large corporations have enjoyed record prosperity.

    Although too loyal to openly abandon the first black president, and perhaps too terrified of the Republicans, the populist Left sees Barack Obama as unnecessarily timid in pursuing the war against the hated “1 percent.”

    As Massachussetts U.S. Sen. Elizabeth Warren has noted, the priorities in both Congress and the administration after the financial crisis was not to help the millions damaged by the Great Recession. “The government’s most important job,” she remarks, “was to provide a soft landing for the tender fannies of the banks.”

    In the future, particularly as President Obama fades from view, the new populists will inevitably have conflicts with their party’s key gentry backers. The campaign by Minnesota U.S. Sen. Al Franken against the Comcast merger with Time Warner – uniting two huge firms tied to the gentry – could prove a harbinger of this evolving tension.

    Standing up to the oligarchs could make Warren, as the New Republic noted recently, a potential “nightmare” for the expected presidential run of Hillary Clinton and Clinton’s phalanx of insiders, Wall Streeters and 1 percenters. But the populists’ often-blunderbuss redistributionist tendencies – seen most notably in deep blue big cities – could alienate many middle-class voters who, for good reasons, suspect that this redistribution will come largely at their expense.

    The Old Social Democrats

    Ironically, the weakest part of the Democratic Party is also the last bastion of traditional American liberalism. The old Democrats are the remnants of the great political party that produced the likes of Andrew Jackson, Harry Truman, and, to some extent, even Bill Clinton. Unlike the other party factions, this group can appeal consistently to the middle and working classes, including the famous “Bubba” vote. Unlike the gentry, or the coastal new populists, they tend to be relatively moderate on social issues.

    This group is the most closely associated with private-sector labor, manufacturing and areas dependent on fossil-fuel production. Long dependent on white working-class voters, they are the most threatened by the increasingly hostile attitudes among them to President Obama and his gentry liberal regime. Already, some building trade unions in Ohio, angry about delays on the Keystone XL pipeline and other infrastructure projects, have even shifted toward the GOP.

    These shifts directly threaten the last redoubts of the Old Democrats in such conservative states as Louisiana, Arkansas, Montana, Alaska, West Virginia and even purplish Colorado. Although Old Social Democrat senators tend to support fossil fuel development, they and their private-sector union backers increasingly find themselves outbid by green gentry Democrats. Steyer has pledged more money to the party this year than Keystone backers, such as the Laborers Union, have given since 1989.

    How these divides can play themselves out

    Clearly, there’s potential for some serious class warfare here. A party that represents both the tech oligarchs and the environmental lobby does not share the same concerns of, say, aspiring suburban homeowners or unionized energy workers. Steyer and Co. may not be able to remove the Old Democrats through primaries yet, but their approach is helping to erode working-class support, which could cost them both House and Senate seats.

    As the prime beneficiaries of the economic recovery, the gentry are vulnerable to attacks from the populists, who, rightly, see the wealthy’s outsized gains as anathema in an economy that has done precious little for the working and middle class.

    Here, the old Democrats would tend to make common cause with the new populists. But such a shift to the economic left, as opposed to the green or cultural left, risks support over time from companies like Google, who may be encouraged further to step up their efforts to gain influence among conservatives.

    To win nationally, the party needs to make room for all three kinds of Democrats. But the issues of class and inequality threaten to undermine any hope for comity.

    Just as it has increasingly become the case with the GOP, the most vicious Democratic struggles won’t be against their political opposition, but between each other.

    This article first appeared in the Orange County Register.

    Joel Kotkin is executive editor of NewGeography.com and Distinguished Presidential Fellow in Urban Futures at Chapman University, and a member of the editorial board of the Orange County Register. He is author of The City: A Global History and The Next Hundred Million: America in 2050. His most recent study, The Rise of Postfamilialism, has been widely discussed and distributed internationally. He lives in Los Angeles, CA.