New Geography

Category: Politics

  • The Diminishing Returns of Large Cities: Population Growth Myths

    One of the big myths of the twentieth century is that large American cities are necessary and inevitable. Yet in reality growth has been dispersing to suburbs and smaller cities for the last two decades. As the decline of Detroit, once the country’s fourth largest city, reveals in all too harsh terms, being bigger is not always better.

    Yet the big city myth remains virtually unchallenged. A biased print media and a subsidized academic cartel are constantly singing the praises of big city life (as opposed to suburban or rural life). While American cities exhibited strong population growth in the early part of the twentieth century, recent Census numbers show America’s mega cities are growing below the national growth rate. According to the 2010 Census, San Antonio was the only city with a population of over 1 million people that grew above the national growth rate of 9.7%.   

    Years ago, scholar Milton Kotler wrote an important but much forgotten book on local government. Kotler showed what was behind the amazing growth numbers of the some big cities:

    Statistics show New York’s population increase from 1890-1900 to have been 2,096,370. This seems amazing, except that most of the increase came about with the annexation of Brooklyn, population 1,166,582. In short, its population grew at a rate far less than the increase by annexation.

    Municipalities are creations of the state legislature. In many cities, the boundaries changed to expand the power of cities along with their political class and related business rent-seekers. While some would argue about New York city’s population numbers, which has recovered from their lows, few would question Detroit’s long-term decline. As Detroit takes center stage line, the entire municipal bond market is about to take notice. Much is at stake here.

    Not only the economic foundation of a large American city but the concept that a creditor will get back its principal back.  The Detroit Free Press explains:

    Borrowing for Michigan cities could get more expensive in the future, if Detroit emergency manager Kevyn Orr’s restructuring plan is accepted by creditors and Chapter 9 bankruptcy is avoided, some bond experts caution.

    That’s because Orr’s plan would set a major precedent by treating all unsecured debt the same way — instead of giving a better payout or greater deference to general obligation bonds, sold for generations as safer investments backed by a city’s taxing authority.

    In Detroit, both the lack of checks and balances, and the maintenance of an engaged, informed public undermined the city’s fiscal health. Many Detroit citizens voted with their feet by exiting the corrupt system. With the middle class of all races deserting, the city of Detroit was ripe for looting of the taxpayers.

    In conclusion, it’s time for the informed public to realize many of our big cities are expensive, corrupt, and not redeemable. The Michigan Legislature should cut Detroit down to size. Perhaps they should consider de-annexation. It’s better to have Detroit become ten smaller municipalities. Of course there would be major political resistance for those who have made big money from Detroit’s decline. But without de-annexation, Detroit seems likely to remain on the brink of insolvency for a long-term since its political boundaries are too large for responsive governance and the crafting of unique solutions to its problems.

  • The Truce That Could Save American Cities

    Some states, such as New York and California, are loudly proclaiming that they have returned from the fiscal abyss. Maybe for now, but the future doesn’t look so good when long-term debt and pension obligations are factored in. Taken together, our 50 states owe $1 trillion in unfunded pension obligations.

    But right now the most severe and imminent fiscal crisis is in the nation’s cities. For one thing, some states are trying to improve their balance sheets by cutting aid to localities while imposing new mandates for everything from housing to green policies. Governors in states like Pennsylvania, New York and California have b been pushing obligations down to levels of government below them. California Gov. Jerry Brown’s ‘Realignment’ strategy put the responsibility of state justice programs on local governments (though this came with promises of increased state aid). Brown also oversaw the dissolution of over 400 Finance Redevelopment Agencies, some of which may now be forced into bankruptcy. So while state debt is expected to decline by $1.7 billion next year, local debt is set to increase by $600 million.

    Despite the mild recovery, many cities remain in dire fiscal straits. In April Moody’s Investors Service warned it could downgrade the ratings of Chicago, Cincinnati, Minneapolis, Portland and 25 other local governments and school districts as part of a change in how it factors public pensions into debt grades. In Chicago, teachers’ pensions alone cost $1 billion a year, while overall debt service accounts for close to a quarter of the city budget.

    Seven major municipalities have already filed for bankruptcy, the largest being San Bernardino, Calif. The main cause is not hard to find: unfunded pension obligations to employees. A recent Lincoln Institute paper estimated that the aggregate unfunded liabilities of locally administered pension plans top $574 billion and eat up nearly 20% of municipal budgets. But the worst is yet to come. According to the Lincoln Institute’s Anthony Flint,  “If trends continue, over half of every dollar in tax revenue would go to pensions, and by some estimates in some cases would suck up 75% of all tax revenue.”

    This dynamic will eventually be felt not only in long-term basket cases such as Detroit but also in America’s largest and most venerable cities such as Los Angeles, New York and Chicago. Part of the problem lies in legacy costs, similar to what we have seen in older industrial companies and airlines. The longer a municipality has been ladling out generous retirement benefits to public workers, the more they have to face the consequences, particularly as more retirees have the poor taste to live well into their eighties and beyond.

    In New York, notes the Manhattan Institute’s Steve Malanga, annual pension costs during Michael Bloomberg’s 12 years as mayor have grown from $1.8 billion to over $8 billion. According to the 2012 NYC budget, by 2015 these “legacy costs” will account for 25% of the city’s total budget, up from 16% in 2005. Overall these costs will have doubled over 10 years while other spending will have grown by barely 30%.

    A crisis is also brewing in Los Angeles, a once youthful city whose rent-seeking developer and union-dominated political structure has turned it into an economic and fiscal laggard. Former Mayor Richard Riordan has predicted that unless pensions and compensation are reformed dramatically, the city will slide toward bankruptcy. The nation’s second-largest city faces a projected $800 million deficit over the next four years and pensions that are underfunded by at least $15 billion.

    These  huge obligations increasingly constitute a tax on the future of urban residents. As cities are forced to cough up ever more money to meet their retirement promises to workers, they become ever more incapable of addressing the basic infrastructure needs critical to maintaining economic competitiveness against younger, often faster-growing cities in less union-dominated parts of the country, notably in the South and Southwest, as well as newer, often more affluent suburban areas.

    In the coming years count on the emergence of an increasingly dire conflict between urban boosters — who long for everything from improved schools to more bike lanes and better transit — and their traditional allies among the public-sector workforce. Essentially this will be not so much a war between conservatives and free-spending liberals, but what Walter Russell Mead has described as “blue on blue” conflict.

    Conservatives, of course, have their own answers to this conundrum: large-scale budget cuts, severing of union contracts, privatization of essential services even if  basic infrastructure   deteriorate. All but the last alternative have some place in forward-looking urban strategy, but face enormous political challenges given the essentially one-party, union-oriented politics in most major cities. If a media-savvy plutocrat like Michael Bloomberg could not slow the expansion of the cost structure of New York, it’s unlikely that the more run of the mill mayors around the country can much succeed.

    So is there a way out, short of the unlikely resurgence of conservative thinking in urban America? One possibility lies in restating urban priorities towards a  City Hall focus on boosting  the private sector as a means to meet at least some of its obligations. Rather than waging a war neither side can win, perhaps this new understanding could serve as the basis for a durable urban truce.

    This, of course, requires a short course in economics for most urban officials and unions. The impending bankruptcy of cities such as Detroit, where service cutbacks and contract rollbacks are now the order of the day, should be held up as a stark lesson of what can happen. Continued tax increases, the preferred solution among progressives, are a mistake since they tend to drive businesses and middle class workers to places with less onerous burdens.

    What needs to be drilled into the urban progressive mind is the basic reality that if the private economy fails, unions will find themselves confronted not by weak-kneed, weak-minded politicians they can own, but by bond holders, accountants, lawyers and judges who will press to either negate contracts or allow basic services to deteriorate to catastrophic levels.

    At the same time, the private sector needs to recognize its inherent interest in the maintenance of efficient and reliable city services. Rather than simply denounce government, per se, the business community needs to appreciate the fundamental importance of the public sector to long-term economic growth. For much of western history urban infrastructure and efficient services played a critical role in the creation of strong urban economies.

    This has been true as well in the United States, from the days of toll roads to late 19th century investments in water and sanitation systems. Modern Los Angeles would have been inconceivable without the aggressive, and often ruthless, building programs of the city-owned Department of Water and Power. And for all his many excesses, the resurgence of New York still rests on the road, bride and transit legacy created by the master builder Robert Moses.

    These public efforts provided a basis for economic growth, that can  generate revenues to pay city workers. Sadly this virtuous cycle has given way to a vicious one, with much of municipal spending wasted on economically questionable  “bread and circuses” — subsidized condo development, sports stadia, convention centers, arts programs, often marginal rail transit investments  — over more mundane investments in roads, bridges, buses, ports and the like. With rising interest rates imposing higher costs for infrastructure projects, the need to be judicious on spending priorities will become only greater.

    To assure the future of our cities, deals need to be struck between workers and cities to temporarily keep down costs as cities try to snap out of the post-recession doldrums and develop stronger growth-based economies. In economically distressed Rhode Island, State Treasurer Gina Raimondo, a former venture capitalist, led an effort to save that state’s cities and towns about $100 million this fiscal year and $1 billion over the next 20 years.

    Ultimately leaders in both the private and public sectors in cities need to recognize that the only way out of recurring crisis and inevitable decline lies in job-generating economic growth. Many of the cities with the best job growth are running budget surpluses , ranging from ultra-blue, union-dominated San Francisco to red state stalwarts such as Nashville, Fort Worth and Oklahoma City.

    This suggests that business and governments need not only to restrain spending, but spend public funds in ways that are most likely to stimulate economic growth. There should be a strong discussion about municipal priorities — they often differ somewhat by city – with the primary focus   on those things that promote job creation and upward mobility. The urban future can not be secured by providing lavish retirements for city workers or subsidies for rent-seekers. Cities can only truly prosper by promoting that foster  growth in ways that deliver  real benefits to the vast majority of their citizens.

    Joel Kotkin is executive editor of NewGeography.com and R.C. Hobbs Professor of Urban Studies 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.

    This piece originally appeared at Forbes.

    City Hall photo by Flickr user OZinOH.

  • Public Unions for Private Benefits: Public Sector Unions Enrich their Members by Distorting State Finances

    Concerned citizens of California are already familiar with the undue political influence of California’s prison guard union. According to Tim Kowal of the Orange County Federalist Society, the union raises $23 million dollars per year and spends $8 million of it lobbying. As a result, the state has found it impossible to engage in meaningful reform of its correctional system. The union helped defeat a 1999 bill allowing alternative sentencing to select parole offenders and attempts in 2000 and 2008 to provide substance abuse treatment for nonviolent drug users as a substitute for prison sentences. Such laws remain on the books that keep nonviolent criminals in prison, keeping prison guards in high demand with enviable job security.

    Experience shows that when public sector unions become powerful, they can influence the democratic process to secure promises of future benefits. These benefits are ubiquitous; a recent investigation uncovered that many Chicago police officers are eligible to receive annual six figure pensions upon retiring at age 50. In no way are these promises in the public interest. And the real fiscal crisis in America, at the state and local level, looms in states where public sector unions are out of control.

    Unions want more benefits and politicians would rather not incur the wrath of their constituents by raising taxes. To serve both masters, politicians incur more debt. But off the books, they also make completely unrealistic promises about retiree health benefits and pension plans. The promises are known as an unfunded liability – a promise to pay without a source of funds attached to it. Our research, “The Public Sector ‘Union’ Effect: Pushing up Unfunded Pension Liabilities and State Debt” published by The Beacon Hill Institute, establishes a convincing link between the strength of public sector unions and both public failures.

    For California, for instance, we attribute 42.8% of state and local debt to unions. This amounts to $173 billion dollars. We arrived at this conclusion by finding that, after controlling for other factors, a one percentage point increase in membership in public sector unions will lead to an increase in state and local debt by $78 per person. So, if the percentage of public sector employees increases from five to six percent, then we predict that public debt would eventually increase by $78 times the population of the state.

    In California, 58.7% of public sector employees are unionized – it isn’t even the most unionized state. The states in which public debt is most attributable to unions are Iowa (55.2% of their debt), Montana (54.3%), and Michigan (54.2%). The states which can least credibly attribute their fiscal problems to unions are Virginia (10.3%), South Carolina (11.8%), and North Carolina (12.8%).

    But this is only side of the problem. Unfunded liabilities are not included in these figures. The Pew Center on the States has elsewhere analyzed how well states are managing their public pensions and retiree health care benefits. For each of these, Pew rated states as a “Solid Performer,” “Needs Improvement,” or has having “Serious Concerns.”  California was one of several states to have “Serious Concerns” for both.

    There was only one state rated by Pew as having both liabilities under control, Wisconsin. To accomplish that, Governor Scott Walker expended a great deal of political capital to limit unions, and paid for it by nearly being recalled.

    To critically analyze this, we constructed an index out of Pew’s two ratings. For each unfunded liability, we assigned a “0” for states with “Serious Concerns,” a “1” for “Needs Improvement,” and a “2” for “Solid Performer” Then, we summed the two ratings together. States like California that are performing poorly in both have a total score of 0 in the index. Wisconsin received a total score of 4. Any state that receives a total score of 0 or 1 is poorly managing its liabilities.

    More detail is available in the paper, but one way of summarizing our results is this: After controlling for other relevant factors, a one percentage point increase the proportion of public sector employees who are unionized makes it one percent more likely for the state to receive a total score of 0 or 1. This demonstrates the link between unfunded liabilities and pressure from unions.

    The combination of high public debt and the specter of a drastic increase in costs to pay for retiree benefits constitute a recipe for disaster. If the issue is ignored, states like California will experience problems very similar to what European countries like Greece and Spain are now experiencing. Similar austerity measures would mean cuts to basic services and the highest state tax rates seen in US history to avoid bankruptcy.

    Responsible citizens and politicians should recognize the lethal pairing of high debt and poorly funded pension plans. And there is a clear relationship between poor state performance and the power of public sector unions. Engaging in real reform, as was accomplished in Wisconsin, may be politically costly, but it is the best path to allow democracy to function effectively once more.

    Ryan Murphy, PhD, is a research associate at the Beacon Hill Institute at Suffolk University.

  • The Hall of Gimmicks

    Occasional Urbanophile contributor Robert Munson has talked about how Chicago Mayor Richard M. Daley was among the first to recognize that there was a “taxpayer strike” in America. That is, given the breakdown in the social contract in our cities, taxpayers were increasingly unwilling to pour money down a rat hole.

    Localities have also been in a fiscal vice as their tax receipts have collapsed thanks to the Great Recession and especially the decline in housing values, while at the same time the chickens are coming home to roost from the accumulated unfunded liabilities that had been racked up from sweetheart pension deals and the like.

    And state and federal retrenchment have cut into municipal budgets. Aid to municipalities is easy to cut. Also, it’s easy for states to make municipalities bear the brunt of tax caps and other disempowerment items since living with them is Somebody Else’s Problem for state office holders. And most states radically under-empowered local governments to begin with.

    Combine these and there’s little room to maneuver for many cities and mayors. They are hemmed in on all sides. So what do they do? Unsurprisingly, they’ve increasingly turned to gimmicks, especially in bigger cities that have the talent firepower to dream them up.

    Exhibit A is parking meter lease in Chicago. It generated $1.2 billion in “free money” for Mayor Daley to use to paper over deficits, but at a huge long term cost. We’ve seen all sorts of other “public-private partnership” type deals that accomplish similar things. Many of these are not per se problematic – I’m a fan of privatization done right, for example – but the details can be troublesome when you examine them.

    One common complaint I hear in places like Chicago and Indy is the abuse of Tax Increment Financing (TIF). Without a doubt TIF has been abused in a number of cases. But what critics fail to take into account is that TIF is one of the few tools left in the civic toolbox that can actually raise real money.

    Let’s say we are all opposed to gimmicky privatization deals and TIF to raise money. Now let’s ask the question: how are our cities supposed to pay to rebuild their obsolete infrastructure like pothole-ridden streets that, even if they were already pristine, don’t meet modern 21st century demands? This is a real liability of the city, accrued over the years as previous generations failed to keep up with maintenance and such. Absent gimmicks, how is this supposed to be funded? And if the answer is don’t fund it, then how is a completely run down, dilapidated city with creaky services supposed to retain choice consumers who can easily pull up stakes and move to a new suburb or other part of the country that doesn’t have these problems? It’s easy to criticize, but solutions are needed.

    Munson thinks that we need to have accountability reforms so that the public will be convinced to open their wallets and invest. I agree this is critical. I personally have no desire to pour any more of my money into the local treasury until I can see that I’m going to get some return on it. And there’s evidence that the public will spend if you can demonstrate that. Capital bonds and actual tax increases for things like schools, transit systems, stadiums, and even cultural facilities have frequently passed across America when there’s assurance that the money is ring-fenced. When people know that they can vote for a tax and get something tangible for it, even something as dubious as a stadium, they can be convinced to vote for it. But more money for fewer and worse services is a loser every time.

    The problem is that the state controls the fiscal levers. Therefore there’s no guarantee that even if a city got its house in order, it would even be permitted to ask its residents for more money. Also, too many local leaders are beholden to special interests and so are unlikely candidates to deliver reform anyway. Paddy Bauler eloquently summed up this mindset when he famously said, “Chicago ain’t ready for reform.” Sadly, this remains true in all too many places.

    So while the use of gimmicks may be distasteful (and even destructive in the long term at times), we should expect more of it since the incentives are all aligned to produce this outcome. Those cities that do manage to reform, and get state support for the type of legal framework the need to operate (as called for in The Metropolitan Revolution) will be the ones that end up with long term success.

    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.

    Chicago parking meter photo by Ed Fisher.

  • How the Left Came to Reject Cheap Energy for the Poor

    Eighty years ago, the Tennessee Valley region was like many poor rural communities in tropical regions today. The best forests had been cut down to use as fuel for wood stoves. Soils were being rapidly depleted of nutrients, resulting in falling yields and a desperate search for new croplands. Poor farmers were plagued by malaria and had inadequate medical care. Few had indoor plumbing and even fewer had electricity.

    Hope came in the form of World War I. Congress authorized the construction of the Wilson dam on the Tennessee River to power an ammunition factory. But the war ended shortly after the project was completed.

    Henry Ford declared he would invest millions of dollars, employ one million men, and build a city 75 miles long in the region if the government would only give him the whole complex for $5 million. Though taxpayers had already sunk more than $40 million into the project, President Harding and Congress, believing the government should not be in the business of economic development, were inclined to accept.

    George Norris, a progressive senator, attacked the deal and proposed instead that it become a public power utility. Though he was from Nebraska, he was on the agriculture committee and regularly visited the Tennessee Valley. Staying in the unlit shacks of its poor residents, he became sympathetic to their situation. Knowing that Ford was looking to produce electricity and fertilizer that were profitable, not cheap, Norris believed Ford would behave as a monopolist. If approved, Norris warned, the project would be the worst real estate deal “since Adam and Eve lost title to the Garden of Eden.” Three years later Norris had defeated Ford in the realms of public opinion and in Congress.

    Over the next 10 years, Norris mobilized the progressive movement to support his sweeping vision of agricultural modernization by the federal government. In 1933 Congress and President Roosevelt authorized the creation of the Tennessee Valley Authority. It mobilized thousands of unemployed men to build hydroelectric dams, produce fertilizer, and lay down irrigation systems. Sensitive to local knowledge, government workers acted as community organizers, empowering local farmers to lead the efforts to improve agricultural techniques and plant trees.

    The TVA produced cheap energy and restored the natural environment. Electricity from the dams allowed poor residents to stop burning wood for fuel. It facilitated the cheap production of fertilizer and powered the water pumps for irrigation, allowing farmers to grow more food on less land. These changes lifted incomes and allowed forests to grow back. Although dams displaced thousands of people, they provided electricity for millions.

    By the 50s, the TVA was the crown jewel of the New Deal and one of the greatest triumphs of centralized planning in the West. It was viewed around the world as a model for how governments could use modern energy, infrastructure and agricultural assistance to lift up small farmers, grow the economy, and save the environment. Recent research suggests that the TVA accelerated economic development in the region much more than in surrounding and similar regions and proved a boon to the national economy as well.

    Perhaps most important, the TVA established the progressive principle that cheap energy for all was a public good, not a private enterprise. When an effort was made in the mid-’50s to privatize part of the TVA, it was beaten back by Senator Al Gore Sr. The TVA implicitly established modern energy as a fundamental human right that should not be denied out of deference to private property and free markets.

    The Rejection of the State and Cheap Energy

    Just a decade later, as Vietnam descended into quagmire, left-leaning intellectuals started denouncing TVA-type projects as part of the American neocolonial war machine. The TVA’s fertilizer factories had previously produced ammunition; its nuclear power stations came from bomb making. The TVA wasn’t ploughshares from swords, it was a sword in a new scabbard. In her 1962 book Silent Spring, Rachel Carson described modern agriculture as a war on nature. The World Bank, USAID, and even the Peace Corps with its TVA-type efforts were, in the writings of Noam Chomsky, mere fig leaves for an imperialistic resource grab. 

    Where Marx and Marxists had long viewed industrial capitalism, however terrible, as an improvement over agrarian feudalism, the New Left embraced a more romantic view. Before the arrival of “progress” and “development,” they argued, small farmers lived in harmony with their surroundings. In his 1973 book, Small is Beautiful, economist E.F. Schumacher dismissed the soil erosion caused by peasant farmers as “trifling in comparison with the devastations caused by gigantic groups motivated by greed, envy, and the lust for power.” Anthropologists like Yale University’s James Scott narrated irrigation, road-building, and electrification efforts as sinister, Foucauldian impositions of modernity on local innocents. 

    With most rivers in the West already dammed, US and European environmental groups like Friends of the Earth and the International Rivers Network tried to stop, with some success, the expansion of hydroelectricity in India, Brazil and elsewhere. It wasn’t long before environmental groups came to oppose nearly all forms of grid electricity in poor countries, whether from dams, coal or nuclear. “Giving society cheap, abundant energy,” Paul Ehrlich wrote in 1975, “would be the equivalent of giving an idiot child a machine gun.” 

    Elaborate justifications were offered as to why poor people in other countries wouldn’t benefit from cheap electricity, fertilizer and roads in the same way the good people of the Tennessee Valley had. Biomass (eg, wood burning), solar and efficiency “do not carry with them inappropriate cultural patterns or values.” In a 1977 interview, Amory Lovins added: “The whole point of thinking along soft path lines is to do whatever it is you want to do using as little energy — and other resources — as possible.” 

    By the time of the United Nations Rio environment conference in 1992, the model for “sustainable development” was of small co-ops in the Amazon forest where peasant farmers and Indians would pick nuts and berries to sell to Ben and Jerry’s for their “Rainforest Crunch” flavor. A year later, in Earth in the Balance, Al Gore wrote, “Power grids themselves are no longer necessarily desirable.” Citing Schumacher, he suggested they might even be “inappropriate” for the Third World.

    Over the next 20 years environmental groups constructed economic analyses and models purporting to show that expensive intermittent renewables like solar panels and biomass-burners were in fact cheaper than grid electricity. The catch, of course, was that they were cheaper because they didn’t actually deliver much electricity. Greenpeace and WWF hired educated and upper-middle class professionals in Rio de Janeiro and Johannesburg to explain why their countrymen did not need new power plants but could just be more efficient instead.

    When challenged as to why poor nations should not have what we have, green leaders respond that we should become more like poor nations. In The End of Nature, Bill McKibben argued that developed economies should adopt “appropriate technology” like those used in poor countries and return to small-scale agriculture. One “bonus” that comes with climate change, Naomi Klein says, is that it will require in the rich world a “type of farming [that] is much more labor intensive than industrial agriculture.” 

    And so the Left went from viewing cheap energy as a fundamental human right and key to environmental restoration to a threat to the planet and harmful to the poor. In the name of “appropriate technology” the revamped Left rejected cheap fertilizers and energy. In the name of democracy it now offers the global poor not what they want — cheap electricity — but more of what they don’t want, namely intermittent and expensive power. 

    From Anti-Statism to Neo-Liberalism

    At the heart of this reversal was the Left’s growing suspicion of both centralized energy and centralized government. Libertarian conservatives have long concocted elaborate counterfactuals to suggest that the TVA and other public electrification efforts actually slowed the expansion of access to electricity. By the early 1980s, progressives were making the same claim. In 1984, William Chandler of the WorldWatch Institute would publish the “The Myth of the TVA,” which claimed that 50 years of public investment had never provided any development benefit whatsoever. In fact, a new analysis by economists at Stanford and Berkeley, Patrick Klein and Enrico Moretti, find that the “TVA boosted national manufacturing productivity by roughly 0.3 percent and that the dollar value of these productivity gains exceeded the program’s cost.”

    Even so, today’s progressives signal their sophistication by dismissing statist solutions. Environmentalists demand that we make carbon-based energy more expensive, in order to “harness market forces” to cut greenhouse gas emissions. Global development agencies increasingly reject state-sponsored projects to build dams and large power plants in favor of offering financing to private firms promising to bring solar panels and low-power “microgrids” to the global poor — solutions that might help run a few light bulbs and power cell phones but offer the poor no path to the kinds of high-energy lifestyles Western environmentalists take for granted.

    Where senators Norris and Gore Sr. understood that only the government could guarantee cheap energy and fertilizers for poor farmers, environmental leaders today seek policy solutions that give an outsized role to investment banks and private utilities. If the great leap backward was from statist progressivism to anarcho-primitivism, it was but a short step sideways to green neoliberalism.

    But if developed-world progressives, comfortably ensconced in their own modernity, today reject the old progressive vision of cheap, abundant, grid electricity for everyone, progressive modernizers in the developing world are under no such illusion. Whether socialists, state capitalists, or, mostly, some combination of the two, developing world leaders like Brazil’s Lula da Silva understand that cheap grid electricity is good for people and good for the environment. That modern energy and fertilizers increase crop yields and allow forests to grow back. That energy poverty causes more harm to the poor than global warming. They view cheap energy as a public good and a human right, and they are well on their way to providing electricity to every one of their citizens. 

    The TVA and all modernization efforts bring side effects along with progress. Building dams requires evicting people from their land and putting ecosystems underwater. Burning coal saves trees but causes air pollution and global warming. Fracking for gas prevents coal burning but it can pollute the water. Nuclear energy produces not emissions but toxic waste and can result in major industrial accidents. Nevertheless, these are problems that must be dealt with through more modernization and progress, not less.

    Viewed through this lens, climate change is a reason to accelerate rather than slow energy transitions. The 1.3 billion who lack electricity should get it. It will dramatically improve their lives, reduce deforestation, and make them more resilient to climate impacts. The rest of us should move to cleaner sources of energy — from coal to natural gas, from natural gas to nuclear and renewables, and from gasoline to electric cars — as quickly as we can. This is not a low-energy program, it is a high-energy one. Any effort worthy of being called progressive, liberal, or environmental, must embrace a high-energy planet.

    Shellenberger and Nordhaus are co-founders of the Breakthrough Institute, a leading environmental think tank in the United States. They are authors of Break Through: From the Death of Environmentalism to the Politics of Possibility.

    This piece originally appeared at TheBreakthrough.org.

  • The Culture War That Social Conservatives Could Win

    For the better part of a half century, social conservatives have been waging a desperate war to defend “family values.” However well-intentioned, this effort has to be written off as something of a failure. To continue it would cause even more damage to many of the things that social conservatives say they care most about.

    It’s not that we don’t need some sort of culture war — a conflict over values is the ultimate liberal value — but it makes no sense to keep waging a losing one. This includes, first and foremost, attempts to oppose gay marriage, something that almost half of Americans accept, according to Pew. Gay marriage wins even more support among millennials, who will over time come to shape our politics. Other social conservative efforts, like prayer in school or efforts to establish Christianity as a state religion, as recently was proposed in North Carolina’s legislature, make even less political sense.

    Obscured by such divisive approaches are larger issues, such as the durability of the family unit, that should be of concern to both liberals and conservatives. The number of children born to single mothers continues to soar. In 1970, 11% of births were to unmarried mothers; by 1990, that number had risen to 28%. Today, 41% of all births are to unmarried women. Most frightening of all, for mothers under 30, the rate is 53%.

    And Americans are increasingly eschewing not only marriage, but having children, although not yet to the extent of their counterparts in East Asia and Europe. This is particularly evident among the young.

    Not coincidentally, this is taking place as church affiliation, if not in free fall, is clearly on the downward trend. Secularism and the promotion of singleness and childlessness has gained cachet. Contemporary social thinking, as epitomized by “creative class” theorist Richard Florida, essentially links “advanced” society to the absence of religious values. Indeed virtually the entire span of modern urbanism — which has become entangled with both modern progressivism — not only disdains religiosity but gives remarkably short shrift to issues involving families.

    These trends represent a threat to values that many, if not most, Americans still adhere to, such as the primacy of the family, the importance of faith and the centrality of children. You don’t have to be an absolute believer in the revealed veracity of the Bible to see the danger posed by a national shift away from family and toward a hyper-individualist ethos.

    The question is not whether there should be a debate, or, if you will, a “war” over culture, but on what terms this struggle should be waged. This can’t be done, as one conservative writer suggested to me last year, “by marching back to the 1950s.” History does not move backward, and trying to inspire the next generations to live or think like their parents or grandparents simply lacks any serious appeal. There is truth to the Democratic claim that conservative Republicans suffer a “modernity deficit” that could assure them permanent minority status.

    But for all the failings of social conservatives, we should not ignore the reality that the decline of the family and of child-bearing must be addressed if this society is going to have any dynamism in the decades ahead. The largely native-born population is demonstrating all the essential weakness of their counterparts in Europe and East Asia; last year, more whites died than were born. Despite a total rise in population of 27 million from 2000 to 2010, there were actually fewer births in 2010 than 10 years earlier.

    Immigrants may bail us out in the short run — migrants and their offspring have accounted for one-third of the nation’s population growth over the past three decades—but the longer they stay, the more marriage and child-bearing decline over time. Even more seriously, 44% of all millennials think marriage is “obsolete”; among their baby boomer parents, the number is 35%. And fewer young people think childbearing is even important in a marriage.

    This could have disastrous social consequences, Conservative analysts such as Charles Murray point out the deterioration of family life among working-class whites, as measured by illegitimacy and low marriage rates. Among white American women with only a high school education, 44% of births are out of wedlock, upfrom 6% in 1970. With incomes dropping and higher unemployment, Murray predicts the emergence of a growing “white underclass” in the coming decade.

    Sadly, neither of the rising political tendencies — what might be seen as “clerical” liberalism and its libertarian counterpoint — are focused on the fundamental social deficit. Libertarianism, rapidly becoming the most legitimate form of conservatism, is almost psychologically incapable of addressing social issues. “The libertarian priority is meeting market needs,” noted Ben Domenach in Real Clear Politics recently.

    Markets are wonderful things, but what if, as they evolve, they can also tilt against families and communities? If everything boils down to what Marx called “the cash nexus” or simple individual “empowerment,” then having children, or committing to marriage, becomes far less palatable. It’s easy for well-heeled tech entrepreneurs, or inheritors of vast wealth, to speak about principles of classical liberalism, but if free markets fail to serve society’s needs, then support for competitive capitalism will necessarily fade.

    Libertarians tend to detest class warfare, but seem incapable of identifying with anyone other than those they consider “talented.” They seem unconcerned about market manipulations (inevitably aided and abetted by government) that might force more people out of homes and into congested, overpriced apartments. Or how technology is destroying whole classes of jobs while programs to train people for needed skills remain poorly funded.

    Ironically such an approach plays into the hands of the sworn enemies of libertarians, what I call the clerical progressives, who inhabit  certain cosseted institutions: universities, the media and foundations. This is where the new theology of planning the lives of the masses has been cooked up; it is a dogma of both power and belief, one that sees little role for the family as the central institution in society.

    This represents a very dangerous break point from the kind of progressivism embraced by Harry Truman, Pat Brown and traditional liberalism. Rather than see government as something that can help families achieve greater autonomy, and spark voluntary association, the clerical progressives prefer an approach that embraces government in place of parenting, and elevates planning from above over grassroots community.

    If you want to glimpse the world view of the progressive clerisy, watch the inane “Life of Julia” presented last year by the Obama campaign. In “Julia,” virtually every step in life is predicated on some government service. She does “decide” to have a child although a man is never mentioned (one can’t assume that progressive clerics accept the notion of immaculate conception), and the child, once sent off to government-funded pre-school, never reappears. So much for the permanence of family ties.

    Julia did not upset modern progressives because it reflected their worldview — Ms. even carried a piece hailing Julia as “a future standard for women” who are increasingly told that they don’t need men either as long-term partners in child-raising or even as spouses.

    This divergence from familialism represents the real basis for a new culture war. This means moving away from a focus on divisive and peripheral issues, such as gay marriage at least speaks to the desire for long-lasting bonds between people. The new cultural warrior might seek instead combine some elements of traditional social democracy — in terms of a commitment to upward mobility — with the assumption that family represents the essential institution in our society.

    Nowhere will this battle be more intense than in the field of urban planning. The current generations of progressives ascribe, almost universally, to the notion that people should be cajoled, by price or by edict, away from owning homes large enough to raise modern families, particularly those with more than one child. Today’s progressives, echoing an old tradition among urban aesthetes, find our century-long movement to suburbia — which has slowed but barely stopped — an abomination worthy of contempt and eradication.

    In the end what is needed is a new political counterpoint that embraces family as critical to the health of the society. This approach may not fit the conventional preferences of many conservatives, and most progressives, but is a necessary counterpoint to a process that threatens the future trajectory of our society.

    Joel Kotkin is executive editor of NewGeography.com and a 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.

    This piece originally appeared at Forbes.com.

    Photo by John Perkins.

  • Cities Still Being Squeezed

    Recent announcements of state budget surpluses have led to the popping of corks across the deepest-blue parts of America, particularly here in California. In some cases, the purported fiscal recovery has been enshrined by an emerging hagiography about Jerry Brown’s steadfastness in the face of budget debacles. One prominent piece even argued that the “smart, bold progressive movement” actually “saved” the Golden State, in part, by forcing up income tax rates.

    Yet, as Walter Russell Mead, among others, has argued, the states’ fiscal meltdown has not been averted, but simply delayed, by the current asset-driven economic recovery. Taken together, the states owe $1 trillion in unfunded pension obligations alone. These costs are eating up much of the projected surpluses, even in prosperous and relatively frugal states such as Texas.

    But the first place where the fiscal blowout will hit the road may be at the local level. This is, in part, because one way that states try to improve their balance sheets is by cutting aid to localities while imposing new mandates dealing with everything from housing to green policies. This has occurred in such places as Pennsylvania, Massachusetts, New Jersey and New York.

    “Quietly and without fanfare, governors and state legislators approved overly generous pension packages, let stand costly, antiquated laws and continued to shift costs from Albany to our front doors,” noted one upstate New York newspaper.

    So, even as state budgets improve somewhat, municipal budgets remain very vulnerable to cutbacks. Pew reports that both state aid and property-tax collections have continued to drop, something that perhaps will be slowed by a developing bubble in real estate values.

    Similarly, according to a report by the National League of Cities, city financers at the end of 2012 projected a sixth consecutive year of year-over-year declining revenue. The ability of localities – particularly the most-distressed – to endure this pattern much longer is somewhat dubious.

    In fact, the run up to a wave of municipal bankruptcies has begun. Seven major municipalities have already filed for bankruptcy, the largest being the city of San Bernardino. To a large extent, these bankruptcies are being driven by unfunded obligations for employee pensions. A new study by the Brookings Institute “estimated that the aggregate unfunded liabilities of locally administered pension plans top $574 billion. … On average, pensions consume nearly 20 percent of municipal budgets.” But the worst is yet to come. “[I]f trends continue, over half of every dollar in tax revenue would go to pensions, and, by some estimates, in some cases, would suck up 75 percent of all tax revenue.”

    This has locked many localities across the country into a classic vicious cycle as they try to dig their way back to growth. Unless radically reformed, health care and retirement obligations to employees seem certain to outweigh the ability to fund necessary government functions, the very things – infrastructure, public safety and other economic development components – necessary to nurse a region and its governments back to health.

    By far, most vulnerable will be those cities with high unemployment, rising crime and tepid recoveries. These will include many of America’s most violent cities – Detroit, Cleveland, St. Louis, Chicago, Memphis, Tenn., – as well as those with generally dysfunctional schools and decaying infrastructure. The idea of cutting police services in such places would invite even greater deterioration of public order.

    This process of small-scale deterioration is already well advanced in California. When it comes to buck-passing to the local level, no one can outdo the Golden State. Gov. Brown’s “realignment” strategy put the responsibility for state justice programs largely on local governments (though this came with promises of increased state aid). Brown also oversaw the dissolution of the state’s 400-plus redevelopment agencies, some of which may now be forced into bankruptcy. Many cities consider these agencies, which provide tax relief to businesses, as one of their most effective economic development tools. So, while state debt is expected to decline by $1.7 billion next year, local-government debt in California is actually set to increase by $600 million.

    Many counties and localities risk also losing their health care benefits under Gov. Brown’s revised fiscal year 2013-14 budget. These changes will be hardest on those localities with the biggest problems, notably some smaller cities already tilting on the edge of bankruptcy. As many as 10 others, including Oakland and San Jose, could join them. Many others are simply cutting back; Sacramento is now asking newly recruited police officers to pay into their pension plans before joining the force.

    These problems also are deeply entrenched in the state’s largest city. Los Angeles, more than any of the top 10 cities in the country, with the possible exception of Chicago, still suffers from quasirecessionary conditions. Not surprisingly, L.A.’s budget situation, in large part due to pension and other employee-related costs, remains perilous. A former mayor, businessman Richard Riordan, has predicted that, unless pensions and compensation are reformed dramatically, the city will eventually slide, inexorably, toward bankruptcy.

    The primary culprit in this slide, notes Riordan, has been the political domination of Los Angeles, and other cities, by public employee unions and the lack of true political competition. The original poster child for this is San Bernardino, where labor costs consumed 80 percent of the city budget, in large part due to public-sector unions’ investment in local political races.

    Bigger and somewhat economically stronger, Los Angeles may not soon go the way of San Bernardino, but its fiscal problems remain severe, with a projected $800 million deficit over the next four years and pensions that are underfunded by at least $15 billion. Clearly, these shortfalls will continue to undermine the city’s ability to keep its streets safe, roads paved and parks operating – until City Hall is willing to stand up to the public-sector lobby.

    The most recent citywide election was not too comforting in this regard, since both candidates for mayor were reliable allies of city worker unions. But, at least, it should be noted that the loser, Wendy Greuel, was, in part, defeated by revelations of her massive financial backing from those unions. It almost certainly hurt her standing with what should have been her base among more conservative, quasisuburban voters from her “hood” – the San Fernando Valley.

    Yet, even if incoming mayor Eric Garcetti can right the ship, residents of Los Angeles are likely to face a combination of rising taxes and fees for years to come to address soaring pension costs. Given the financial drag of pension and other employee benefit obligations, even traditional city services, such as street repair, will likely need to be funded by additional debt or fees on property owners.

    Short of major reform, this self-defeating pattern of higher local taxes and fewer local services is likely to continue even if state economies and budgets climb out of their recent distress. Yet, at the same time, this presents an opportunity to rebalance the relationship between private- and public-sector interests.

    If good habits are learned first in the home, perhaps the road to fiscal health will have to begin at the local level. Sacramento and other state capitals have demonstrated skill at kicking the can down the road while shirking their responsibilities to local governments. Instead, it may fall upon the localities to come up with ways to overcome decades of poisonously irresponsible decision making and concoct the proper fiscal antidote.

    Joel Kotkin is executive editor of NewGeography.com and a 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.

    This piece originally appeared in the Orange County Register.

  • As the North Rests on Its Laurels, the South Is Rising Fast

    One hundred and fifty years after twin defeats at Gettysburg and Vicksburg destroyed the South’s quest for independence, the region is again on the rise. People and jobs are flowing there, and Northerners are perplexed by the resurgence of America’s home of the ignorant, the obese, the prejudiced and exploited, the religious and the undereducated. Responding to new census data showing the Lone Star State is now home to eight of America’s 15 fastest-growing cities, Gawker asked: “What is it that makes Texas so attractive? Is it the prisons? The racism? The deadly weather? The deadly animals? The deadly crime? The deadly political leadership? The costumed sex fetish conventions? The cannibal necromancers?” 

    The North and South have come to resemble a couple who, although married, dream very different dreams. The South, along with the Plains, is focused on growing its economy, getting rich, and catching up with the North’s cultural and financial hegemons. The Yankee nation, by contrast, is largely concerned with preserving its privileged economic and cultural position—with its elites pulling up the ladder behind themselves.

    This schism between the old Confederacy and the Northeastern elites is far more relevant and historically grounded than the glib idea of “red” and “blue” Americas. The base of today’s Republican Party—once the party of the North—now lies in the former secessionist states, along with adjacent and culturally allied areas, such as Appalachia, the southern Great Plains, and parts of the Southwest, notably Arizona, largely settled by former Southerners.

    “In almost every species of conceivable statistics having to do with wealth,” John Gunther wrote in 1946, “the South is at the bottom.” But even as Gunther was writing, the region had begun a gradual ascendancy, now in its seventh decade. That began with a belated post-WWII push to promote industrialization, much of it in relatively low-wage industries such as textiles. “Southerners don’t have any rich relatives. God was a Northerner,” the head of the pro-development Southern Regional Council told author Joel Garreau in 1980. “Without a heritage of anything except denial, Southerners, given a chance to improve their standard of living, are doing so.”

    While the Northeast and Midwest have become increasingly expensive places for businesses to locate, and cool to most new businesses outside of high-tech, entertainment, and high-end financial services, the South tends to want it all—and is willing to sacrifice tax revenue and regulations to get it. A review of state business climates by CEO Magazine found that eight of the top 10 most business-friendly states, led by Texas, were from the former Confederacy; Unionist strongholds California, New York, Illinois, and Massachusetts sat at the bottom.

    The South’s advantages come in no small part from decisions that many Northern liberals detest—lack of unions, lower wages, and less stringent environment laws. But for many Southerners, particularly in rural areas, a job at the Toyota plant with a $15-an-hour starting salary, and full medical benefits, is a vast improvement over a minimum-wage job at Wal-Mart, much less your father’s fate chopping cotton on a tenant farm.

    And the business-friendly policies that keep costs down appeal to investors. Ten of the top 12 states for locating new plants are in the former confederacy, according to a recent study by Site Selection magazine. In 2011 the two largest capital investments in North America (PDF)—both tied to natural-gas production—were in Louisiana.

    More recently, the region—led by Texas—has moved up the value-added chain, seizing a fast-growing share of the jobs in higher-wage fields such as auto and aircraft manufacturing, aerospace, technology, and energy. Southern economic growth has now outpaced the rest of the country for a generation and it now constitutes by far the largest economic region in the country. A recent analysis by Trulia projects the edge will widen over the rest of this decade, owing to factors including the region’s lower costs and warmer weather.

    These developments are slowly reversing the increasingly outdated image of the South as hopelessly backward in high-value-added industries. Alabama and Kentucky are now among the top-five auto-producing states, while the Third Coast corridor between Louisiana and Florida ranks as the world’s fourth-largest aerospace hub, behind Toulouse, France; Seattle; and California.

    Southern growth can also be seen in financial and other business services. The new owners of the New York Stock Exchange are based in Atlanta.

    While the recession was tough on many Southern states, the area’s recovery generally has been stronger than that of Yankeedom: the unemployment rate in the region is now lower than in the West or the Northeast. The Confederacy no longer dominates the list of states with the highest share of people living in poverty; new census measurements (PDF), adjusted for regional cost of living, place the District of Columbia and California first and second. New York now has a higher real poverty rate than Mississippi.

    Over the past five decades, the South has also gained in terms of population as Northern states, and more recently California, have lost momentum. Once a major exporter of people to the Union states, today the migration tide flows the other way. The hegira to the sunbelt continues, as last year the region accounted for six of the top eight states attracting domestic migrants—Texas, Florida, North Carolina, Tennessee, South Carolina, and Georgia. Texas and Florida each gained 250,000 net migrants. The top four losers were New York, Illinois, New Jersey, and California.

    These trends suggest that the South will expand its dominance as the nation’s most populous region. In the 1950s, the Confederacy, the Northeast, and the Midwest all had about the same populations. Today the South is nearly as populous as the Northeast and the Midwest combined, and the Census projects the region will grow far more rapidly (PDF) in the years to come than its costlier Northern counterparts.

    Yankees tend to shrug off such numbers as largely the chaff drifting down. “The Feet are moving south and west,” The Atlantic’s Derek Thompson wrote in 2010, “while the Brains are moving toward coastal cities.”

    To be sure, some Yankee bastions, such as Massachusetts and Connecticut, enjoy much higher percentages of educated people than the South. Every state in the Southeast falls below the national average of percentage of residents 25 and over with at least a bachelor’s degree—but virtually every major Southern metropolitan region has been gaining educated workers faster than their Northeastern counterparts. Over the past decade, greater Atlanta added over 300,000 residents with B.A.s, more than the larger Philadelphia region and almost 70,000 more than Boston.

    The region—as recently as the 1970s defined by its often ugly biracial politics—has become increasingly diverse, as newly arrived Hispanics and Asians have shifted the racial dynamics. While the vast majority of 19th-century immigrants to America settled in the Northeast and Midwest, today the fastest-growing immigration destinations—including Nashville, Atlanta, and Charlotte—are in the old Confederacy. Houston ranked second in gaining new foreign-born residents in the past decade, just behind New York City, with nearly three times its size. And Houston and Dallas both now attract a higher rate of immigration than Boston, Chicago, Seattle, or Philadelphia.

    These immigrants are drawn to the South for the same reasons as other Americans—more jobs, a more affordable cost of living and better entrepreneurial opportunities. A 2011 Forbes ranking of best cities for immigrant entrepreneurs—measuring rates of migration, business ownership, and income—found several Southeastern cities at the top of the list, with Atlanta in the top slot, and Nashville coming in third.

    Then there’s the most critical determinant of future power: family formation. The South easily outstrips the Yankee states in growth in its 10-and-under population. Texas and North Carolina expanded their kiddie population by over 15 percent; and every Southern state gained kids except for Katrina-ravaged Louisiana. In contrast New York, Rhode Island, and Michigan lost children by a double-digit margin while every state in the Northeast as well as California suffered net losses.

    The differences are most striking when looking at child-population growth among the nation’s 51 largest metropolitan areas. Eight of the top ten cities for growth in children under 15 were located in the old Confederacy—Raleigh-Cary, Austin, Charlotte, Dallas, Houston, Orlando, Atlanta, and Nashville. New York, Los Angeles, and Boston, along with several predictable rust-belt locals, ranked in the bottom 10.

    Historically, regions with demographic and economic momentum tend to overwhelm those who lack it. Numbers mean more congressional seats and more electoral votes, and governors who command a large state budget and the national stage. Unless there is a major political change, the South’s demographic elevation will do little to help Democrats there, who, like Northern Republicans, appear to be an endangered species.

    Pundits including the National Journal’s perceptive Ron Brownstein suggest that the GOP’s Southern dominance has “masked” the party’s decline in much of the rest of the country. Other, more partisan voices, like the New Yorker’s George Packer simply dismiss Southern conservatives as overmatched by the Obama coalition of minorities, the young, and the highly educated. The even more partisan Robert Shrum correctly points out that the Southern-dominated GOP is increasingly out of step with the rest of the country on a host of social and economic issues, from income inequality to support for gay marriage.

    “A lot of sociologists have projected that the South will cease to exist because of things like the Internet and technology,” Jonathan Wells told Charlotte Magazine. An associate professor of history at UNCC and author of Entering the Fray: Gender, Culture, and Politics in the New South, Wells predicts the region “will lose its distinctive identity that it had in the past.”

    It’s unlikely, though, that the South will emulate the North’s social model of an ever-expanding welfare state and ever more stringent “green” restrictions on business—which hardly constitutes a strong recipe for success for a developing economy. It’s difficult to argue, for example, that President Obama’s Chicago, broke and with 10 percent unemployment, represents the beacon of the economic future compared to faster-growing Houston, Dallas, Raleigh, or even Atlanta. People or businesses moving from Los Angeles, New York, or Chicago to these cities will no doubt carry their views on social issues with them, but it’s doubtful they will look north for economic role models.

    Instead, you might see some political leaders, even Democrats, in states such as Pennsylvania, Ohio (a Civil War hotspot for pro-Southern Copperheads), and Michigan come to realize that pro-development policies, such as fracking, offer broader benefits than the head-in-the-sand “green” energy policy that slow growth in places like New York and California. The surviving Southern Democrats (by definition, a tough breed) like Houston Mayor Anise Parker have shown that you can blend social liberalism with “good old boy” pro-business policies.

    Politicians like Parker, along with Republicans such as former Florida governor Jeb Bush, represent the real future of the states that once made up the Confederacy. As they look to compete with the Northeast and California for the culture, and high-test and financial-service firms that are forced to endure the high cost of the coasts, Southerners are likely to at least begin shrugging off their regressive—and costly—social views on issues like gay marriage.

    Bluntly put, if the South can finally shake off the worst parts of its cultural baggage, the region’s eventual ascendancy over the North seems more than likely. High-tech entrepreneurs, movie-makers, and bankers appreciate lower taxes and more sensible regulation, just like manufacturers and energy companies. And people generally prefer affordable homes and family-friendly cities. Throwing in a little Southern hospitality, friendliness, and courtesy can’t hurt either.

    Joel Kotkin is executive editor of NewGeography.com and a 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.

    This piece originally appeared at The Daily Beast.

    Photo by Belle of Louisville.

  • No Solar Way Around It: Why Nuclear Is Essential to Combating Climate Change

    Nobody who has paid attention to what’s happened to solar panels over the last several decades can help but be impressed. Prices declined an astonishing 75 percent from 2008 to 2012. In the United States, solar capacity has quintupled since 2008, and grown by more than 50 times since 2000, according to US Energy Information Administration data. In 1977, solar panels cost $77 per watt. Today, they are less than a dollar per watt.

    So it came as a shock to many and an offense to some to learn that new nuclear plants still cost substantially less than solar. Solar advocates have challenged our recent analysis finding that the electricity from Finland’s beleaguered Olkiluoto plant is still four times cheaper than electricity from Germany’s solar program, claiming that we cherry-picked cases to make nuclear look good and solar look bad.

    It is an odd objection, given that we selected perhaps the most expensive nuclear power plant ever built for our comparison. The complaint is odder still because many of the same critics who accused us of cherry-picking then turned around and, without any apparent irony, cherry-picked small, one-off solar projects as evidence that our analysis is slanted toward nuclear. 

    The reason we compared the Finnish plant to the German solar program is not just because renewables advocates have long claimed that the two examples prove that solar is cheap and nuclear is expensive. We also compared the two because both projects exist in the real world at significant scale, which helps avoid the cherry-picking problem of overgeneralizing from particular cases. Thanks to generous subsidies, Germany generated 5 percent of its electricity from solar last year — a huge amount compared to other nations. By contrast, last year the United States produced just 0.18 percent of its electricity from solar, according to the EIA.

    Some have reasonably asked if there aren’t broader surveys of the costs of new solar and new nuclear. There are. Both the International Energy Agency and the EIA have done them, and both find that solar costs substantially more than new nuclear construction.

    While those figures represent the cost of the average solar installation today, they don’t tell us what it costs for a major industrial economy to scale up solar rapidly, such that it gets a significant percentage of its electricity from solar. To date, Germany is the only major economy in the world that has done so. The costs of Germany’s solar feed-in tariff represent the only real world figure we have. 

    As solar has scaled up in Germany, the costs have declined. But the dynamics are not dissimilar with nuclear. France saw significant cost declines as it scaled up standardized plant designs in the 70s and 80s. The new plant in Finland is a first-of-kind design. Subsequent builds are already showing significantly lower costs. The EPR under construction in France, initiated around the same time as the one in Finland, is expected to cost slightly less. The third and fourth versions of the EPR, currently under construction in China, will be a third the cost of the Finnish plant.

    Had we chosen to use the two new Chinese plants, solar would have cost twelve times more than nuclear, rather than just four times more. Of course this comparison would almost certainly have raised further objections that we had compared German apples to Chinese oranges. Yet it turns out that the German solar program has benefited enormously from the scaling up of Chinese solar manufacturing — or in the eyes of the US Solar Energy Association, the US Trade Commission, and the European Union, the outright dumping of solar panels by Chinese firms. Indeed the flood of Chinese solar panels, which take up as much as 80 percent of market share in Europe, has depressed the cost of solar panels by as much as 88 percent according to EU officials.

    Surely, if it is appropriate to tout solar cost reductions that have been driven by Chinese mercantilism and industrial policy it is also appropriate to consider the cost benefits that Chinese manufacturing and construction costs are bringing to nuclear ­— even more so given that the vast majority of future carbon emissions will come from places like China, not Finland or Germany.   

    Our analysis was further biased toward solar over nuclear by not accounting for the high costs of backing up and integrating intermittent solar electricity. Leading anti-nuclear greens, including Bill McKibben and Robert F. Kennedy Jr., note that for a few hours during a sunny weekend day, solar provided 50 percent of Germany’s electricity; at the same time, as we pointed out, only five percent of the country’s total electricity came from solar in 2012. What that means is that if Germany doubled the amount of solar, as it intends to do, there might be a few hours or even days every year where the country gets 100 percent of its electricity from solar, even though solar only provides 10 percent of its annual electricity needs.

    What happens beyond that is anyone’s guess. Some say Germany could sell its power to other countries, but this would mean other countries couldn’t move to solar since Germany would provide electricity at the same hours it would seek to unload it on their neighbors. Solar advocates say cheap utility-scale storage is just around the corner; in fact, choices are extremely limited and expensive. As a result, analysis by the Clean Air Task Force suggest that integration costs for solar and wind are likely to surge dramatically should renewables rise much above 20 or 30 percent of total electrical generation (see graph below).


    Costs of adding intermittent generation are likely to scale super-linearly with penetration, creating a deployment barrier.  Some examples (various bases) in the figure: “Wind A” is the marginal cost per MWh of wind in ERCOT relative to the same index at 0% wind penetration. “Wind B” is the reciprocal of total system wind capacity factor in CAISO relative to 0% wind penetration (an indicator relative total system construction cost).“Wind C” is the number of annual CCGT start-ups in Ireland relative to 0% wind penetration (a proxy for system-wide O&M costs and emissions due to cycling).“PV” is the marginal cost per MWh of PV in ERCOT relative to the same index at 0% PV penetration. “RE Bundle” is the relative size of the US bulk transmission system (million MW-miles) due to bundled renewables (roughly ½ wind+solar) relative to 0% penetration.

    Sources: CATF from Denholm & Hand, 2011 (Wind A); Hart et al, 2012 (Wind B); Troy et al, 2010 (Wind C); Denholm & Margolis, 2006 (PV); NREL, 2012 (RE Bundle). 

    We do not present this evidence to advocate against solar subsidies or Germany’s program. We have long advocated that governments spend significantly more on energy innovation, including the deployment of solar panels. But it’s one thing to endorse Germany’s big investment in solar in the name of accelerating solar innovation, and it’s quite another to claim — as McKibben, Kennedy, and environmental groups do — that Germany’s solar program and increasingly cheap solar panels demonstrate that solar energy is ready to scale, capable of substantially displacing fossil energy, and a viable alternative to nuclear.

    In reality, there’s little evidence that renewables have supplanted — rather than supplemented — fossil fuel production anywhere in the world. Whatever their merits as innovation policy, Germany’s enormous solar investments have had little discernible impact on carbon emissions. Germany’s move away from baseload zero-carbon nuclear has resulted in higher coal consumption since 2009. In 2012, Germany’s carbon emissions rose 2 percent.

    Nuclear, by contrast, replaces fossil energy. A recent analysis by the Business Spectator’s Geoff Russell finds that big nuclear programs around the world have shown the ability to scale up three to seven times faster than Germany’s vaunted Energiewende (see below). In 1970, fossil fuels supplied roughly two-thirds of France’s electricity, with the balance mostly coming from hydro. By 1990, fossil’s share of the electricity supply had dropped to 10 percent, according to EIA data, while nuclear supplied 80 percent, an energy mix that still holds today. As a result, France’s electricity sector emits 80 grams of CO2 per kWh, compared to Germany’s 450 grams CO2 per kWh. Sweden and Ontario, which also have large shares of nuclear in their electricity supply, augmented by large hydro projects, are even lower. 

    In the United States, nuclear power grew from supplying zero percent of US electricity in 1965 to 20 percent in 1990. Over that same period, coal generation remained flat, rising from 54 percent of generation in 1965 to 60 percent in 1990, during a period when total electricity demand roughly tripled. Since the early 1990’s, when the US nuclear build-out stalled, the vast majority of new US electricity demand has been met by coal and gas.

    Even so, nuclear still needs to get better and cheaper if it is going to displace fossil energy at any scale that will make much difference in terms of climate change. Next generation plants that are safer, cheaper, and more reliable will be necessary if nuclear is to be more than a hedge against fossil energy in the developing world and to see significant new deployment at all in the developed world. Solar, wind, and energy storage technologies will need substantial further advances if they are going to even begin to achieve the scale possible with present day nuclear.

    Our analysis serves a broader point: we must reject technology tribalism if we are to meet rising energy demand and combat global warming. This entails paying close attention to the substantial challenges emergent technologies face, not ignoring them, and discerning how far different technologies are from being capable of replacing fossil energy. The question is not whether solar is the solution, or nuclear. The question is what technologies will deliver clean, reliable, and cheap energy to a growing population, and what it will take to get those technologies to scale. Any movement serious about addressing climate change will thus be characterized by a broad commitment to innovation and a willingness to take a hard, non-ideological look at present day zero-carbon technologies.

    Shellenberger and Nordhaus are co-founders of the Breakthrough Institute, a leading environmental think tank in the United States. They are authors of Break Through: From the Death of Environmentalism to the Politics of Possibility.

    This piece originally appeared at TheBreakthrough.org.

    Photo Credit: SonomaPortal.com.

  • The Unexotic Underclass

    The startup scene today, and by ‘scene’ I’m sweeping a fairly catholic brush over a large swath of people – observers, critics,  investors, entrepreneurs, ‘want’repreneurs, academics, techies, and the like – seems to be riven into two camps.

    On one side stand those who believe that entrepreneurs have stopped chasing and solving Big Problems – capital B, capital P: clean energy, poverty, famine, climate change, you name it.  I needn’t replay their song here; they’ve argued their cases far more eloquently elsewhere.  In short, they contend that too many brains and dollars have been shoveled into resolving what I call ‘anti-problems’ –  interests usually centered about food or fashion or ‘social’ or gaming.  Something an anti-problem company  might develop is an app  that provides  restaurant recommendations based on your blood type, a picture of your childhood pet, the music preferences of your 3 best friends, and the barometric pressure of the nearest city beginning with the letter Q.  (That such an app does not yet exist is reminder still of how impoverished a state American scientific education has descended.  Weep not! We redouble our calls for more STEM funding.)

    On  the other side stand those who believe that entrepreneurs have stopped chasing and solving Big Problems – capital B, capital P – that there are too many folks resolving anti-problems… BUT  just to be on the safe side, the venture capitalists should keep pumping tons of  money  into  those anti-problem entrepreneurs because you never know when some corporate leviathan – Google, Facebook, Yahoo! – will come along and buy what yesterday looked like a nonsense app and today is still a nonsense app, but a nonsense app that can walk a bit taller, held aloft by the insanities of American exceptionalism.  For not only is our sucker birthrate still high in this country (one every minute, baby!), but our suckers are capitalists bearing fat checks.

    On the other other side, a side that receives scant attention, scanter investment, is where big problems – little b, little p – reside.  Here, you’ll find a group I’ll refer to as the unexotic underclass.  It’s rather quiet in these parts, except during campaign season when the politicians stop by to scrape anecdotes off the skin of someone else’s suffering.  Let’s see who’s here.

    To your left are single mothers, 80% of whom, according to the US Census,  are poor or hovering on the nasty edges of working poverty.  They are struggling to raise their kids in a country that seems to conspire against  any semblance of proper rearing: a lack of flexibility in the workplace; a lack of free or affordable after-school programs;  an abysmal public education system where a testing-mad, criminally-deficient curriculum is taught during a too-short school day; an inescapable lurid wallpaper of sex and violence that covers every surface of  society;  a cultural disregard for intelligence, empathy and respect;  a cultural imperative to look hot, spend money and own the latest “it”-device (or should I say i-device) no matter what it costs, no matter how little money Mum may have.

    Slightly to the right, are your veterans of two ongoing wars in the Middle East. Wait, we’re at war? Some of these veterans, having served multiple tours, are returning from combat with all manner of monstrosities ravaging their heads and bodies.  If that weren’t enough, welcome back, dear vets, to a flaccid economy, where your military training makes you invisible to an invisible hand that rewards only those of us who are young and  expensively educated.

    Welcome back to a 9-month wait for medical benefits.  According to investigative reporter Aaron Glantz, who was embedded in Iraq, and has now authored The War Comes Home: Washington’s Battle against America’s Veterans, 9 months is the average amount of time  a veteran waits for his or her disability claim to be processed after having filed their paperwork.  And by ‘filed their paperwork,’ I mean it literally: veterans are sending bundles of papers to some bureaucratic Dantean capharnaum run by the Department of Veterans’ Affairs,  where, by its own admission, it processes 97%  of its claims by hand, stacking them in heaps on tables and in cabinets.

    In the past 5 years, the number of vets who’ve died before their claim has even been processed has tripled. This is America in 2013: 40 years ago we put a man on the moon; today a young lady in New York can use anti-problem technology if she wishes  to line up a date this Friday choosing only from men who are taller than 6 feet, graduated from an Ivy, live within 10 blocks of Gramercy, and play tennis left-handed…

    …And yet, veterans who’ve returned from Afghanistan and Iraq have to wait roughly 270 days (up to 600 in New York and California) to receive the help — medical, moral, financial – which they urgently need, to which they are honorably entitled, after having fought our battles overseas.

    Technology, indeed, is solving the right problems.

    Let’s keep walking.  Meet the people who have the indignity of being over 50 and finding themselves suddenly jobless.  These are the Untouchables of the new American workforce: 3+ decades of employment and experience have disqualified them from ever seeing a regular salary again.   Once upon a time, some modicum of employer noblesse oblige would have ensured that loyal older workers be retained or at the very least retrained, MBA advice be damned.  But, “A bas les vieux!” the fancy consultants cried, and out went those who were  ‘no longer fresh.’  As Taylor Swift would put it, corporate America and the Boomer worker  “are never ever getting back together.”  Instead bring in the young, the childless, the tech-savvy here in America, and the underpaid and quasi-indentured abroad willing to work for slightly north of nothing in the kinds of conditions we abolished in the 19th century.

    For, in the 21st century, a prosperous American business is a soaring 2-storied cake: 1 management layer at top thick with perks, golden parachutes, stock options, and a total disregard for those beneath them; 1 layer below of increasingly foreign workers (If you’re lucky, you trained these people before you were laid off!), who can’t even depend on their jobs because as we speak, those sameself consultants – but no one that we know of course — are scouring the globe for the cheapest labor opportunities, fulfilling their promise that no CEO be left behind.

    Above all of this, the frosting on the cake,  the nec plus ultra of evolutionary corporate accomplishment: the Director of Social Media.  This is the 20-year old whose role it is to “leverage social media to deliver a seamless authentic experience across multiple digital streams to strategic partners and communities.”  In other words, this person gets paid six figures to send out tweets. But again, no one that we know.

    Time and space and my own sheltered upbringing  defend me from giving you the whole tour of the unexotic underclass, but trust that it is big, and only getting bigger.

    ___________________________________

    Now, why the heck should any one care? Especially a young entrepreneur-to-be.  Especially a young entrepreneur-to-be whose trajectory of nonstop success has placed him or her leagues above the unexotic underclass.  You should care because the unexotic underclass can help address one of the biggest inefficiencies plaguing  the startup scene right now: the flood of  (ostensibly) smart, ambitious young people desperate to be entrepreneurs; and the embarrassingly idea-starved landscape where too many smart people are chasing too many dumb ideas, because they have none of their own (or, because  they suspect no one will invest in what they really want to do).  The unexotic underclass has big problems, maybe not the Big Problems – capital B, capital P – that get ‘discussed’ at Davos.  But they have problems nonetheless, and where there are problems, there are markets.

    The space  that caters to my demographic – the cushy 20 and 30-something urbanites – is oversaturated. It’s not rocket science: people build what they know.  Cosmopolitan, well-educated young men and women in America’s big cities are rushing into startups and building for other cosmopolitan well-educated young men and women in big cities.  If you need to plan a trip, book a last minute hotel room, get your nails done, find a date, get laid, get an expert shave, hail a cab, buy clothing, borrow clothing, customize clothing, and share the photos instantly, you have Hipmunk, HotelTonight, Manicube, OKCupid, Grindr, Harry’s, Uber, StyleSeek, Rent the Runway, eshakti/Proper Cloth and Instagram respectively to help you. These companies are good, with solid brains behind them, good teams and good funding.

    But there are only so many suit customisation, makeup sampling, music streaming, social eating, discount shopping, experience  curating companies that the market can bear.  If you’re itching to start something  new, why chase the nth  iteration of a company already serving the young, privileged, liberal jetsetter? If you’re an investor, why revisit the same space as everyone else?  There is life, believe me, outside of NY, Cambridge, Chicago, Atlanta, Austin, L.A. and San Fran.

    It’s where the unexotic underclass lives.  It’s called America.  This underclass is not some obscure niche market.  Take the single mothers. Per the US Census Bureau, there are 10 million of them  today; and an additional 2 million single fathers.  Of the single mothers, the majority is White, 1 in 4 is Hispanic, and 1 in 3 is Black.  So this is a fairly large and diverse group.

    Take the veterans. (I will beat the veteran drum to death.) According to the VA’s latest figures, there are roughly 23 million vets in the United States.  That number sounds disturbingly high; that’s almost 1 in 10 Americans.  Entrepreneurs and investors like big numbers.  Other groups you could include in the underclass: ex-convicts, many imprisoned for petty drug offenses, many released for crimes they never even committed.  How does an ex-convict get back into society?  And navigate not just freedom, but a transformed technological landscape?  Another group, and this one seems to sprout in pockets of affluence: people with food allergies.  Some parents today resort to putting shirts and armbands on their kids indicating what foods they can or can’t eat.  Surely there’s a better fix for that?

    Maybe you could fix that.

    ___________________________________

    Why do I call this underclass unexotic?  Because, those of us, lucky enough to be raised in comfortable environs – well-schooled, well-loved, well-fed – are aware of only 2 groups: those at the very bottom and those at the very top.

    We have clear notions of what the ruling class resembles – its wealth,  its connections, its interests.  Some of you reading this will probably be part of the ruling class before you know it.  Some of you probably already are.  For the 1% aspirants (and there’s no harm in having such aspirations), hopefully by the time you get there, you will have found meaningful problems to solve – be they big, or Big.

    We have clear ideas of what the exotic underclass looks like because everyone is clamoring to help them.  The exotic underclass are people who live in the emerging and third world countries that happen to be in fashion now -– Kenya, Bangladesh, Brazil, South Africa. The  exotic underclass are poor Black and Hispanic children (are there any other kind?) living in America’s urban ghettos.  The exotic underclass suffer from diseases that have stricken the rich and famous, and therefore benefit from significant attention and charity.

    On the other hand, the unexotic underclass, has the misfortune of being insufficiently interesting.  These are the huddles of Whites – poor, rural working class – living in the American South, in the Midwest, in Appalachia.  In oh-so-progressive Northeast, we  refer to them as ‘hicks’ and ‘hillbillies’ and ‘trailer trash,’ because apparently, this is the one demographic that American manners have forgotten.

    The unexotic underclass are the poor in Eastern Europe, and Central Asia, who just don’t look foreign enough for our taste.  Anyone who’s lived in a major European city can attest to the ubiquity of desperate Roma families, arriving from Bulgaria and Romania, panhandling in the streets and on the subways. This past April, the employees of the Louvre Museum in Paris went on strike because they were tired of being pickpocketed by hungry Roma children.   But if you were to go to Bulgaria to volunteer or to start a social enterprise, how would the folks back on Facebook know you were helping ‘the poor?’  if the poor in your pictures kind of looked like you?

    And of course, the biggest block of the unexotic underclass are the ones I alluded to earlier: that vast, suffocating mass right here in in America. We don’t notice them because they don’t get by on $1 a day. We don’t talk about them because they don’t make $1 billion a year.  The only place where they’re popular is in Washington, D.C. where President Obama and  his colleagues in Congress can can use members of the underclass to spice up their stump speeches: “Yesterday, I met a struggling family out in yadda yadda yadda…” But there’s only so much Washington can do to help out, what with government penniless and gridlocked, and its elected officials occupying a caste of selfishness, cowardice and spite, heretofore unseen in American politics.

    __________________________________

    If you’re an entrepreneur looking for ideas, consider looking beyond the city-centric, navel-gazing, youth-obsessed mainstream.  That doesn’t mean you need to fly to the end of the world.  Chances are there are more people addressing the Big Problems of slum dwellers in Calcutta, Kibera or Rio, than are tackling the big problems of hardpressed folks in say, West Virginia, Mississippi or Louisiana.

    To be clear, I’m not painting the American South as the primary residence of all the wretched of the earth. You will meet people down there who are just as intelligent and cultured and affluent as we pretend everyone up North is.

    Second, I’m not pitting the unexotic against the exotic.  There is nothing easy or trendy about the work being done by the brave innovators on the ground in Asia, Africa, and Latin America.  Some examples of that work: One Earth Designs which helps deliver clean energy and heating solutions to communities in rural China; Sanergy, which is bringing low-cost sanitation to Kenya’s poorest slums;  Samasource, which provides contract work to youth and women in Haiti, Ghana, Kenya, Uganda and India.  These are young startups with young entrepreneurs who attended the same fancy schools we all know and love (MIT, Harvard, Yale, etc.), who lived in the same big cities where we all congregate, and worked in the same fancy jobs we all flocked to post-graduation.  Yet, they decided they would go out and  tackle Big Problems – capital B, capital P. We need to encourage them, even if we could never imitate them.

    If we can’t imitate them,and we’re not ready for the challenges of the emerging market, and we have no new ideas to offer, then maybe there are problems, right here in America for us to solve…The problems of the unexotic underclass.

    ____________________________________

    Now, I can already hear the screeching of meritocratic,  Horatio Algerian Silicon Valley,

    “What do we have to do with any of this? The unexotic underclass has to pull itself up by its own bootstraps!  Let them learn to code and build their own startups!  What we need are more ex-convicts turned entrepreneurs, single mothers turned programmers, veterans turned venture capitalists!
    The road out of welfare is paved with computer science!!!”

    Yes, of course.

    There’s nothing wrong with the entrepreneurship-as-salvation gospel. Nothing wrong with teaching more people to code.  But it’s impractical in the short term, and misses the greater point in the long term:   We shouldn’t live in a universe of solipsistic startups…  where I start a company and produce things only for myself and for people who resemble me.  Let’s be honest.  Very few of us are members of this unexotic underclass.  Very few of us even know anyone who’s  in it.   There’s no shame in that.  That we have  sailed on a yacht of good fortune most of our lives — supportive generous families, a stable peaceful democracy, excellent schooling, prestigious careers and companies, relatively good health – is nothing to be ashamed of. Consider yourselves remarkably blessed.

    What is shameful though, is that in a country with so many problems, with such a heaving underclass, we find the so-called ‘best and brightest,’ the 20-and 30-somethings who emerge from the top American graduate and undergraduate programs, abandoning their former hangout,Wall Street, to pile into anti-problem entrepreneurship.

    Look, I worked for Goldman Sachs immediately after graduating from Wellesley. After graduating from MIT, I worked at a hedge fund. I am not throwing stones.   Here in hell, the stones wouldn’t reach you anyhow… If you’re under 30 and in finance, you’ve definitely noticed the radical migration of your peers from Wall Street to Silicon Valley and Silicon Alley.   This should have been a good exchange.  When I first entered banking, leftist hippie that I was (and still am), my biggest issue was what struck me as a kind of gross intellectual malpractice:  how could so many bright historians and economists, athletes and engineers, writers and biogeneticists, from every great school you could think of – Princeton, Berkeley, Oxford, Harvard, Imperial, Caltech, Amherst, Wharton, Yale, Swarthmore, Cambridge, and so on — be concentrated into a single sector, working obscene hours at a sweatshop to manufacture money?

    When I look at the bulk of startups today – while  there are notable exceptions (Code for America for example, which invites local governments to request technology help from teams of coders) – it doesn’t seem like we’ve aspired to something nobler: it just looks like we’ve shifted the malpractice from feeding the money machine to making inane, self-centric apps. Worse,  is that the power players, institutional and individual — the highflying VCs, the entrepreneurship incubators, the top-ranked MBA programs, the accelerators, the universities,  the business plan competitions have been complicit in this nonsense. 

    Those who are entrepreneurially-minded but young and idea-poor need serious direction from those who are rich in capital and connections.  We see what ideas are getting funded, we see money flowing like the river Ganges towards insipid me-too products, so is it crazy that we’ve been thinking small?  building smaller? that our “blood and judgment” to quote Hamlet, have not been  “so well commingled?”

    We need someone bold (and older than us) to stand up for Big Problems which are tough and dirty.  But what we especially need is someone to stand up for big problems – little b, little p –which are tough and dirty and too easy to overlook.

    We need:

    A Ron Conway, a Fred Wilson-type at the venture level to say, ‘Kiddies, basta with this bull*%!..  This year we’re only investing in companies targeting the unexotic underclass.”

    A Paul Graham and his Y Combinator at the incubator level, to devote one season to the underclass, be it veterans, single moms or overworked young doctors, Native Americans, the list is long:  “Help these entrepreneurs build something that will help you.”

    The head of an MIT or an HBS or a Stanford Law at the academic level, to tell the entire incoming class: “You are lucky to be some of the best engineering and business and law students, not just in the country, but in the world.  And as an end-of-year project, you are going to use that talent to develop products, policy and programs to help lift the underclass.”

    Of the political class, I ask nothing.  With a vigor one would have thought inaccessible to people at such an age, our leaders in Washington have found ever innovative ways to avoid solving the problems that have been brought before them.  Playing brinkmanship games with filibusters and fiscal cliffs;  taking money to avoid taking votes.  They are entrepreneurs of the highest order: presented with 1 problem, they manage to create 5 more. They have demonstrated that government is not only not the answer, it is the anti-answer…

    The dysfunction in D.C. is a big problem.

    Entrepreneurs: it looks like there’s work for you there too…

    C.Z. Nnaemeka studied Philosophy at Wellesley; logically, she has spent most of her time in finance, beginning at Goldman Sachs. Born in Manhattan to Nigerian parents, she attended French schools, graduating from the Lycée Français de New York. Since then she has alternated between writing, banking, and consulting to startups in Europe, Latin America, and Australia. Previously, she lived in Paris where she founded a political discussion group and was a foreign affairs commentator for the conservative newspaper, Le Figaro. She graduated from MIT in 2010, focusing on Entrepreneurship + Innovation.