New Geography

Category: Politics

  • “Jaw-Droppingly Shameless:” Mother Jones on California High Speed Rail Projection

    Kevin Drum of Mother Jones reports on the highly questionable "cost of alternatives" that has been routinely repeated by proponents of the California high speed rail project, in an article entitled "California High Speed Rail Even More Ridiculous than Before."

    The mantra goes something like, "yes high speed rail is expensive, but it would cost even more to not build it." Yes, indeed, it is expensive, starting at the low estimate of $98.5 billion the press and proponents usually cite to the nearly $118 billion that the California High Speed Rail Authority itself indicates. Advocates then cite a $171 billion figure as what Californian’s would have to pay if they didn’t build the line.

    Joseph Vranich and I detailed the flaws in this "alternatives estimate" in a Wall Street Journal commentary on January 10 ("California’s High Speed Rail Fibs"). We noted that the claim "sets a new low for planning projections in a field that has been rife with abuse." This was a reference to "strategic misrepresentation” ("lying") that has characterized rail project forecasts, according to top European academics.

    Drum goes further, calling the claim "jaw-droppingly shameless," an appropriate characterization based upon the method and documentation. He goes on to suggest that "A high school sophomore who turned in work like this would get an F."

    Regardless of the views that officials or the public may have on high speed rail, they are entitled to a standard of professional (and taxpayer financed) analysis above "jaw-droppingly shameless."

  • The Last Patrician: Romney Falls From Favor as America Loses Faith in Old Money

    Mitt Romney’s collapse in South Carolina reflects the larger, long-term decline of the American patrician class he represents. That decline was accelerated by the 2008 financial meltdown that resulted in both the wave of populist anger now being channeled by Romney’s Republican competitors, and the rise of the new post-industrial elite championed by President Obama.

    Defined by inherited wealth, property and (like the original Roman patricians) a certain sense of propriety, Romney’s once dominant class has become increasingly marginalized as the bond between its interests and those of the rest of the nation has been effaced.

    The son of top corporate executive and former Michigan Governor George Romney, Mitt holds joint degrees from Harvard’s law and business schools and enjoyed a lucrative career in private equity—a pedigree that may prove a bigger liability in the increasingly working-class Republican Party than his supposed social moderation. Both Newt Gingrich, who bested Romney in South Carolina, and Rick Santorum, who edged Romney in Iowa, successfully stressed their middle-class roots in a way impossible for him to imitate.

    Romney’s Mormonism may be a departure from the old Protestant aristocracy, but the former Massachusetts governor epitomizes both the traditional strengths (a sense of modesty and self-control, a pristine personal life and lack of ostentation) and the weaknesses (an inability to personally connect with those less fortunate, less able or less educated) of the patricians. Perhaps nothing illustrates those weaknesses better than the inability of the richest major party candidate in a generation to comprehend how his scandalously low personal income tax rate and his use of offshore tax havens might offend voters, particularly in an economically ravaged state like South Carolina.

    In a general election, against a far more disciplined foe than his party rivals, Romney’s patrician values could pose a mortal danger to the Republican cause—although perhaps not as lethal as the weaknesses of his rather pathetic GOP opponents. But in the primary Gingrich, Santorum and even Ron Paul have the advantage of those with little to lose. They can demagogue the national media class as “elitist” in ways that would not come naturally to the refined Mitt, or play well in the general election.

    The decline of the patricians has been occurring slowly for decades as the interests of the wealthiest have diverged from those of ordinary Americans. In the country’s first two centuries, some common ground joined the traditional conservatives who made up the bulk of the moneyed class and who spearheaded the quest for national power and economic expansion with the muscular progressivism epitomized by the two President Roosevelts. The forgers of American preeminence in the business world—Henry Ford and Alfred Sloan, the Rockefellers, Thomas J. Watson of IBM, David Packard and Bill Hewlett—embraced the ideal of growth where enriching themselves meant creating unprecedented opportunities for hundreds of thousands of Americans. These men built and financed things—from oil wells and high-tech instruments to autos and suburban tract houses—essential to the prosperity of the working and middle classes they employed and depended on to purchase their products.

    But the last successful product of this class, John Kennedy, was elected more than a half century ago, to lead a nation that was ascendant, confident and economically vibrant. In the ensuing decades patrician politicians, particularly George W. Bush and his 2004 opponent, John Kerry, lacked the self-confidence and charisma to transcend their class. In contrast, the two most popular and accomplished politicians of recent decades, Ronald Reagan and Bill Clinton, were self-made men from the working class with a great facility for establishing a clear connection with a vast portion of the electorate.

    This patrician decline occurred at the state and local level as well. In New York, the old WASP establishment epitomized by Citibank’s Walter Wriston was deeply engaged in the fate of the region. Wriston once explained to me that before the 1980s banks had depended heavily on the New York public primary schools and especially the City University for employees; but as finance unmoored from the rest of the economy in its “go-go” period of derivatives and other abstract financial instruments it found itself less anchored to the rest of Gotham’s economy. In the new financial world, employers had little need for competent “ordinary” public school graduates as employees but rather courted “rocket scientists” with primarily Ivy League, Stanford or MIT pedigrees.

    A similar pattern can be seen in California. The founders of the Golden State’s great aerospace, semiconductor and computer firms, the great suburban developers and even Hollywood moguls employed tens of thousands of skilled workers. Now few new facilities are built in the state, and few well-paying jobs outside of government exist for those without an elite education. When tech firms create middle-income jobs, they are increasingly located abroad or in other, cheaper states. The winners of each tech “boom” tend for the most part to be graduates of elite schools like Stanford rather than places like San Jose State. The idea that captains of industry and common citizens were in a significant sense “in the same boat” has disappeared—one of the common complaints that seemed to bridge the Tea Party and the erstwhile Wall Street occupiers.

    Given how little the patrician class now provides to the rest of the country, it’s not surprising that public esteem for them has plummeted, particularly in the ongoing aftermath of the Wall Street meltdown of 2008. According to a recent Gallup survey, less than one in four Americans express any confidence in the primary institutions traditionally dominated by the patrician class—big business and the Wall Street banks. In contrast, roughly half or more expressed confidence in small business, the police and the military, areas where the patrician class is rarely present these days.

    Seen in that light, it’s no surprise then that Republican voters preferred a Pennsylvania working-class warrior like Rick Santorum in Iowa and even as unlikely a self-identified champion of the middle class as Gingrich in South Carolina over the refined resume of a private equity executive.

    The demise of the patrician class could be more palatable if it signaled the restoration of middle- or working-class political power in America. But the real winners here are not likely to be the largely suburban masses but a new, heavily urban littoral ruling class. Of course, the politically potent liberals who populate these urban areas live amidst far greater income inequality than the non-coastal, red-state “rubes.” Epitomized by Barack Obama, this ascendant force draws its strength largely from high reaches of academia, the media, the environmental lobby and, increasingly, the digital billionaires of Silicon Valley.

    Like the old patricians, this new group shares a basic ideology. Indeed they can be seen as something of a clerisy—members of a secular congregation whose shared faith is in a society run by experts such as themselves according to the dictates of accepted science. That those experts would profit from their own advice is seen as merely part of a virtuous circle, scarcely worth the notice of the high-minded citizens scientifically calculating the common good. For the most part, the clerisy believes not so much in economic growth but in enforcing an agenda of ever-increasing urban density, racial redress, cultural experimentation and “green” energy. Obama reigns largely as high priest of this class.

    The clerisy’s geographic base includes much of what was, a century ago, largely patrician-dominated turf: upper-income urban neighborhoods, high-end suburbs, and university communities. The difference now is that these areas have all expanded rapidly, due in large part to the growth of science-based industry and, perhaps more important, the money passed from patricians to their offspring. This money also funds many in the burgeoning nonprofit sector which employs many in the clerisy and often promotes their agenda.

    Not surprisingly, all five of the largest donors to the Obama campaign—Microsoft, Comcast, the University of California, Harvard University and Google—represent the clerisy’s bases in academe and the information sector. Not a manufacturing, construction or traditional energy company made the top of the list.

    The rise of this post-industrial ruling class may be the most tragic result of patrician decline. As bad or even evil as old patricians like Andrew Carnegie, Henry Ford and John Rockefeller could be, they were also generally nationalists who believed in economic growth and progress. Carnegie endowed not only concert halls and art galleries but libraries and institutes to help better middle- and working-class Americans even in small towns and rural hamlets. Teddy Roosevelt, a different sort of patrician, cleaned up New York’s police department, volunteered for the army and modernized the navy.

    Most important, as employers, the old patricians understood the need for basic education and training for their workers. In contrast, the clerisy has little needed for the basically educated, but only an approving claque and faithful servants. Many members of the rising new elite and their well-off employees depends on non-profits or family trusts for income so that their economic interests lie primarily in asset inflation, whether in real estate or equities. No surprise then that the businesses with which they most identify are media and social media companies that outside of the odd receptionist employ largely the best educated and affluent. Significantly, these companies’ stocks provide huge increases in wealth without causing any direct harm to their holders’ delicate environmental and aesthetic sensibilities. After all, the environmental impact of a computer company can easily be shifted out of the view of the Bay Area, as for instance Apple functions as an ideas company in the United States, and a manufacturer in China.

    In contrast, the clerisy generally feels indifferent or even contemptuous toward the basic industries—home building, fossil fuel energy, basic manufacturing—that still provide the best route to increased wealth and opportunity for the middle and working classes. The rejection of the XL Keystone project by Obama last week represents just the most obvious expression of this agenda. In a second term, we may see this approach amplified as the EPA and other government agencies seek to regulate any tangibly based economic growth.

    In this sense, then, the decline of the patrician class—like their antecedents in the late Roman Republic—represents something of a tragedy for the rest of us. With the middle and working classes divided by social and cultural issues and with no credible champion for their economic concerns, power may simply shift to the clerisy, supported by their media enablers. As the Who once famously put it: “Meet the new boss, same as the old boss.”

    No matter how much we might dislike Mitt Romney and his aristocratic ilk, we may someday look back at him and his class with something approaching nostalgia.

    This piece originally appeared at TheDailyBeast..

    Joel Kotkin is executive editor of NewGeography.com and is a distinguished presidential fellow in urban futures at Chapman University, and contributing editor to the City Journal in New York. He is author of The City: A Global History. His newest book is The Next Hundred Million: America in 2050, released in February, 2010.

    Photo from BigStockPhoto.com.

  • Against Cosmopolitanism

    All science fiction agrees. History is leading to the unification of earth. The united world may be governed by benign world federalism or by a dystopian global tyranny. But the modern literature of prophecy is clear: the age of competing nation-states is coming to an end. There are no visions of the future in popular culture in which advanced technology is combined with the continued sovereignty and competition of nation-states like China, India, and the United States or blocs like the European Union. The only near-equivalent is George Orwell’s nightmare vision, in 1984, of endless rivalry among the three totalitarian blocs of Oceania, Eurasia, and Eastasia.

    Most educated people today are similarly in accord, associating historical progress with the increasing scale of our moral and political loyalties. Individuals are liberated from the communities into which they happened to be born. The tribe gives way to the nation and the nation gives way to humanity. History will soon culminate in a secular millennium in which emancipated individuals will be citizens of a postnational, global community.

    Since the late 19th century, hopeful visions of the future have almost always been identified with the transcendence of nation-states. In the early 1900s, many in the West looked forward to the fulfillment of Alfred Tennyson’s vision in "Locksley Hall" (1842) of "the Parliament of man, the Federation of the world." Wendell Willkie predicted in 1943 that World War II would be followed by a new age of unity given its title by his book: One World. The fall of the Berlin Wall triggered yet another wave of claims that a postnational epoch was dawning. These forecasts took crude forms, like Thomas L. Friedman’s inaccurate depiction of a global market compelling the convergence of national policies, or sophisticated ones, like the British diplomat Robert Cooper’s claim that premodern and modern societies would give way gradually to postmodern societies.1

    Although philosophical cosmopolitanism today is generally associated with secular elites, its roots are religious. The idea that all human beings belong to a single moral community was part of ancient Stoicism. But the Stoics did not believe in progress. Instead, they envisioned a cyclic universe, like that of Hinduism, in which the world was periodically incinerated and re-created. The combination of progress and cosmopolitanism comes from the apocalyptic tradition in Zoroastrianism, which influenced apocalyptic Second Temple Judaism, Christianity, and Islam. According to this school of thought, at some point probably in the near future, history would be brought to an end by God whose direct rule would replace the division of humanity among languages and nationalities that the Biblical tradition explained with the myth of Babel.

    The combination of moral cosmopolitanism with unidirectional progress constitutes Christianity’s greatest legacy to the secular intelligentsia. The idea that a moral person must not be a selfish localist or nationalist, but must take a personal interest in the well-being of poor, suffering, far-away people was a Christian notion long before it informed the view of secular intellectuals of themselves as world citizens who have transcended petty local loyalties and interests. In its secularized version, Providence takes the form of social forces like the economy and culture, but the result is the same: the formation of a single planetary community free from ethnocentrism, wars, and trade conflicts. This kind of secular providentialism informs the philosophies of numerous thinkers including Immanuel Kant, G.W.F. Hegel, Karl Marx, and more recently Martha Nussbaum, Ulrich Beck, Peter Singer, and Kwame Anthony Appiah.

    The underlying providential structure of cosmopolitanism explains the combination of certitude and moral fervor found among liberal and socialist one-worlders. In Christianity, to deny God’s providential plan for the world is a sin, as it is to obstruct the unfolding of that plan. The same is the case in secular providentialism. Globalist liberals and socialists predict that a single cosmopolitan society will inevitably be brought about by irresistible social forces and then condemn anyone­ — nationalist or capitalist — who resists those forces. Postnational liberals tell us that the nation-state is withering away and then condemn those who defend national sovereignty for delaying the allegedly inevitable postnational future. The sun will rise tomorrow precisely at 7:00 a.m., therefore we must help it rise and fight those who would prevent its rising.

    1.
    Contemporary cosmopolitanism, in defiance of Hume, combines an "ought" with an "is." The "ought" is the view that the nation-state is a parochial form of organization and should be replaced by broader, more inclusive loyalties. The "is" takes the form of the claim that the nation-state is destined to wither away because of irresistible technological or economic forces, whether we like it or not.

    But the trends proffered as evidence of a historic shift toward postnational cosmopolitanism are in fact consistent with the persistence of the nation-state as the main actor in world politics. Changes in the global economy, most significantly, are not signs of cosmopolitanism. The popular conception of globalization is overly simple and misleading. As Alan M. Rugman has pointed out, instead of a single global market there is today a somewhat Balkanized world economy organized around the "triad" of Europe, North America, and East Asia.2

    The emerging world economy is highly regionalized and remains connected to the nation-state. While some industries, like computer electronics manufacturing, are truly global, others, like the automobile industry, are dominated by corporations with most of their production and sales based in one of the three major blocs. New blocs might join the existing triad — India-centered South Asia, for example — but it is naïve to think that all barriers to the free flow of capital, goods, and labor among countries and regions will disappear.

    Even multinational corporations turn out to be not quite so multinational. The 100 largest multinationals in 2008 held 57 percent of their total assets and 58 percent of their total employment abroad, with foreign sales making up 61 percent of their total.3 But this merely means that most multinationals are half-global, at best. The typical multinational still has a distinct national identity, with around half of its assets, employment, and sales within its home market. In fact, very few multinational corporations conduct an overwhelming majority of their business outside of their home countries.

    The domination of global commerce by corporations based in the United States, Japan, and Germany — the three most populous industrial democracies — shows the importance of a large domestic market as a base for multinational sales and operations. Despite the celebration of global corporations by libertarians and their denunciation by leftists and populists, global companies possess national identities after all. Even financial globalization proved more superficial than advertised: major global banks turned to their national governments for bailouts following the 2008 financial crisis.

    The temporary influence of the Washington Consensus notwithstanding, the epoch of economic nationalism never ended. Outside of the Anglophone countries, this is the age of mercantilism. Instead of tariffs, post-1945 mercantilist nations have used subsidies (Europe and the United States); non-tariff barriers (Japan); and currency "tariffs," subsidies, and state-directed credit (China) to protect domestic markets and support export-oriented sectors of their economies. Mercantilism cannot work without a "patsy," and the United States agreed during the Cold War and post-Cold War period to play the role of consumer of first resort for mercantilist nations. This decision was based, partly on libertarian ideology, but mainly on national strategy, to encourage first Japan and West Germany and then China to become one-dimensional civilian manufacturing powers instead of rival military powers. In the long run, it is more likely that the United States — the world’s most protectionist nation before 1945 — will move back toward mercantilism than it is that China, Japan, and Germany will adopt the economics of the late Milton Friedman.

    Current trends in immigration do not support the cosmopolitan claim that national borders are breaking down. Neither the fact that a country like the United States chooses to admit large numbers of legal immigrants nor the fact that it chooses to tolerate large numbers of illegalimmigrants demonstrates that it is powerless to do otherwise. With respect to transnational flows of labor, all advanced industrial countries, including the United States, have undertaken actions — ranging from issuing national identity cards to building border fences — to secure their borders and airports against illegal immigrants. The assertion of effective state control over immigration is driven, in part, by fear of international terrorism, but also by a backlash against poor immigrants among native-born citizens of developed countries — a backlash that is likely to deepen if the Great Recession is prolonged over many years.

    At the same time that advanced countries are seeking to reduce unwanted immigration, many are competing for skilled immigrants. Britain, Australia, and Canada, for example, have adopted a "points system" in which educated immigrants are favored over the uneducated. When these trends are put together, the result is the opposite of the borderless world with free flows of labor predicted by prophets of globalization a decade ago. Most countries in the 21st century are likely to combine a tough attitude toward illegal immigration with selective legal immigration favoring skilled workers.

    What about the political trends of the 21st century? The historical pattern is clear. The breakup of the Habsburg and Ottoman empires after World War I produced many new nation-states and some new multinational states, like Yugoslavia. Following World War II, the decolonization of the European empires in Asia and Africa produced dozens of new states, some of them multinational (like Nigeria and Pakistan, which may themselves break apart like Yugoslavia). With the dissolution of the Soviet Union and Yugoslavia, new states were again added to the United Nations General Assembly. It is a safe bet that the maps of the world in 2050 and 2100 will show still more independent countries than exist today.

    The conventional wisdom of today’s cosmopolitans holds that ethnocultural nationalism is a barbaric relic of an earlier stage of civilization and that as enlightenment and prosperity spread, people become more cosmopolitan. But far from being moribund, nationalism — defined not as aggression or xenophobia, but as a preference for the nation-state as the unit of legitimate government — remains the most powerful force in global politics for the third century in a row.
    Thus nationalism is not atavistic; indeed, it is modern — just as modern as industrialism and urbanism. The trend of reorganizing a world of premodern dynastic empires and city-states into a world of nation-states, in which most (though not all) states are identified with a majority ethnocultural group, has paralleled the conversion, in the economic realm, of an agrarian world into an industrial world.

    As societies become urban and industrial, village societies give way to anonymous urban societies in which individuals identify with larger "imagined communities." These need not be national — Islamists, for example, identify with the imagined community of the Muslim ummah. But the community that has proven most effective in attracting the loyalty of individuals in modern, large-scale societies is the nation, which can be defined minimally in terms of shared language and customs, as in most liberal democracies, or maximally, in terms of shared "race" and/or religion, as in illiberal nationalism.

    It follows that as people become more educated and more prosperous they are more likely to prefer to be members of the majority in a nation-state rather than minorities in someone else’s nation-state or one of several squabbling nationalities in a multinational state. As the world grows richer, movements by stateless nations, from the Scots to the Kurds, to obtain nation-states of their own, whether by peaceful or violent means, are likely to increase, not decrease.
    Arguably, we are still in the early stages of the technological era in economics and the era of the nation-state in politics. In the most likely scenario, the 21st century will witness the completion of two trends that have been underway since the 18th — the conversion of all humanity from an agrarian lifestyle to an urban-industrial one, and the replacement of premodern forms of political organization almost everywhere by nation-states.

    2.
    In recognizing the continuing, and likely expanding, hegemony of the nation-state as the primary unit of global political, economic, and social organization, we need not deny the simultaneous expansion of cosmopolitan sympathies. Liberalization of government controls on trade and finance, greater cross-border immigration and global travel, and the constitution of something approaching a global public through mass media communication of serial cosmopol­itan "moments" all contribute to the spread of cosmopolitan sentiments. But those sympathies are likely to continue to exist alongside national identities and allegiances.

    To be sure, global initiatives such as the Millennium Development Goals and other antipoverty programs, as well as post-Cold War military interventions in the former Yugoslavia, Iraq, Afghanistan, and Libya have been justified, to some extent, on cosmopolitan grounds. The US intervention in Libya, to take one recent example, appears to have involved a protracted debate within the Obama Administration between advocates of the cosmopolitan notion of "Responsibility to Protect" (R2P) and pragmatists opposed to the application of US military power in conflicts where there is no clear national interest. In this debate, the cosmopolitans appear to have prevailed.

    But we should be careful not to read too much into these examples. In virtually every case, the nation-state remains the institution through which economic and military resources are deployed in service of cosmopolitan objectives. In many cases, it is often difficult to disentangle where national interest ends and cosmopolitan interest begins. The wars in the Balkans and the Middle East can just as easily be explained in terms of the national interests of the United States and its allies in defeating sponsors of terrorist attacks (Afghanistan), securing US regional military hegemony (Iraq and Libya), and averting destabilizing flows of refugees to Europe (a motivation behind European participation in the Balkan and Libyan wars), as through cosmopolitan ones. As such, even where cosmopolitan sentiments succeed in galvanizing national or international action in response to global and regional challenges, those responses are likely to only further establish the nation-state as the focal point for making those decisions and the primary institution through which such interventions are likely to be carried out.

    The resulting organization of global affairs is better explained by liberal internationalism than by cosmopolitanism. In this view, nation-states, rather than individuals, corporations, or non-governmental organizations (NGOs), will continue to be the main actors in world politics (though certainly not the only ones) for generations to come. Liberal internationalists maintain that all human beings have inalienable rights, which should be secured by governments resting on their consent. While those rights-securing governments may take various forms, the nation-state is the largest unit that has been able to combine effective government with a sense of solidarity among its citizens. The nation to which the state corresponds can be defined broadly, in terms of a shared culture and language, and it can be generous to minority nationalities that may share its territories. But there is a point at which linguistic and cultural diversity undermine the minimum of community needed to maintain a sense of shared citizenship. A global government would be a Tower of Babel which few would be willing to obey, to provide with taxes, or to support with military service.

    Liberal internationalism answers the question of how the world can be organized, if each people, however defined, has a right to its own sovereign, accountable nation-state. The alternative to both Hobbesian anarchy and global cosmopolitanism is cooperation by nation-states. This cooperation can take the form of international law, international arbitration, and international agencies, as well as military alliances and concerts of power. But international is not supranational. Countries may delegate powers to international agencies for some purposes, but as long as the delegations are revocable, they are not surrendering sovereignty.

    3.
    The most important distinctions in 21st century world politics will be based on scale. By the middle of this century, the greatest powers may eventually be those, such as China, India, and the United States, which combine (or will combine) at least moderately developed industrial economies with populations of half a billion people or more. 

    The US investment bank Goldman Sachs predicts that by 2050 China will have the largest economy in the world, followed by the United States and India. The next tier might be occupied by Russia, Brazil, and Japan, and a third tier would include Germany, Britain, and other once-mighty European economic powers.4 Just as the Italian city-states of the Renaissance were dwarfed and marginalized by the national monarchies north of the Alps in the 16th and 17th centuries, so the large nation-states of the past — Britain, France, Germany, Russia, and Japan — will be overshadowed by the titans of the 21st and 22nd centuries.

    The United States will owe its position in the club of titans to its immigration-fed population growth, which could produce an American population of 400-600 million by 2050. The 2010 medium fertility estimations of the United Nations suggested that in 2050 the most populous nations would be India (1.7 billion) and China (1.3 billion), followed by the United States (400 million), Nigeria (400 million), and Indonesia (300 million).5 It is Europe, not the United States, which faces a significant decline in relative population, wealth, and power. Europe, which accounted for 22 percent of the world’s population in 1945 and 12 percent in 2000, may have only 6 percent in 2050. Because GDP is based on working-age population and productivity, even though Europeans will grow richer, the European share of the global economy may decline from 22 percent today — roughly comparable to that of the United States — to only 12 percent in 2050.6

    In modern industrial societies, technology and politics combine in what Edward Luttwak has called "geoeconomics." Technological economies of scale reward big enterprises in large, unified markets. As champions of the global market ceaselessly point out, technological and commercial economies of scale are best realized at the global level. But psychological and political economies of scale are best realized by nation-states.

    In theory, both economic and political economies of scale could be realized by multinational blocs, but in practice this outcome is unlikely. As early as the 1840s, British and French observers speculated that the future would be dominated by two giant states, the United States and Russia. The imperialism of the industrial era, from the 1870s to World War II, was (among other things) an attempt by medium-sized nation-states like Britain, France, Germany, Italy, and Japan to create economic areas comparable in scale to those that existed inside the borders of the United States and Tsarist Russia (later the Soviet Union).

    After World War II, largely at the insistence of the United States, the international system outlawed old-fashioned empire building. But even if 20th century history had taken a different course, it is doubtful that multinational empires, held together by repression and, in the case of maritime empires like the British and Japanese, separated by oceans, could have competed in the long run with giant nation-states.

    The former Western European imperial powers have sought to achieve the same result by partially pooling their sovereignty in the European Union. But European countries retain their sovereignty in foreign policy, rendering a unified voice impossible in conflicts including the Balkan wars, the Iraq War, and the Libyan War. Meanwhile, the Greek financial crisis has proven that the European Union lacks the overarching central economic institutions, like a central bank with emergency lending capabilities, necessary to function as an efficient monetary and commercial union. Because of popular resistance to further political integration, the European Union is no more likely to be the successful equivalent of a giant nation-state than the former European empires proved to be.

    Psychological economies of scale favor nation-states with a strong sense of solidarity among their citizens that makes them willing to fight in wars, pay taxes, and tolerate redistribution for the common good. China, with its overwhelming Han majority, has a far greater sense of national identity and solidarity than much smaller multinational states like Canada and Belgium, which are in danger of breaking up along ethno-national lines as Yugoslavia and Czechoslovakia have done.

    It follows, then, that in the future, as in the past, the economic gains from scale will be reaped chiefly by entities with immense, free, internal markets congruent with political boundaries. Concerns about national security and domestic distribution will always constrain market integration among nation-states. In a post-imperial, post-dynastic world, the most successful great powers will be very big nation-states.

    4.
    Contrary to the claims of the prophets of cosmopolitanism, the world is likely to remain divided among great sovereign powers for ages to come. Sometimes they will compete, at other times they will collaborate, but they are unlikely to sacrifice their sovereignty by merging into a single global government; if one were established, by force or intimidation, it would probably break apart quickly.

    The ideas of postmodernity and second modernity appeal primarily to thinkers in European nations where it is necessary to transcend and pool sovereignty in order to compete with huge nation-states like the United States and China. Large nation-states, in contrast, are powerful on the basis of their internal populations, resources, and economies, so it is unsurprising that they see no benefit in surrendering their sovereign powers to supranational organizations dominated by smaller countries. In a world of sovereign nation-states, the biggest nation-states are more sovereign than the others. Unilateralism is natural for the great powers. Whales do not consult the barnacles on their sides or the schools of small fish who swim in their wake.

    The rise of the giants is likely to lead to less, not more, emphasis on international organizations like the United Nations and the World Trade Organization. If the United States, China, and India account for much of the world economy in fifty to a hundred years, then they may prefer setting the rules of world trade and investment by bilateral or trilateral negotiations. Why should giants consult with dozens or hundreds of pygmies before acting? International law has traditionally been championed by small- or moderate-sized, neutral countries (including the United States in the 19th century). Its influence may decline in an age in which a few titanic continental states have hundreds of millions or billions of inhabitants.

    Unfortunately, cosmopolitanism is not simply a quaint, harmless religious faith held by global elites. Confusing the cosmopolitan "ought" with the cosmopolitan "is" results in all sorts of disastrously wrongheaded policies. If, for example, the world really is on the verge of full economic and political integration, then outsourcing all US manufacturing capacity to China might make sense in the same way that it might be reasonable for a state like California to outsource all of its manufacturing capacity to other US states. They share the same tax, regulatory, and social welfare systems; they make shared national investments in infrastructure and education; and they share the same military and national security interests. But in a world in which nation-states are likely to continue to retain their sovereignty and in which economic nationalism continues to reign, trade and investment policies that presuppose a borderless world make no sense at all.

    The cosmopolitan error has similarly distorted international efforts to address global challenges. International climate policy has persistently foundered upon the basic realities of an international political economy that continues to be defined by the interests of national economies. International development and antipoverty efforts in recent decades have similarly failed to align themselves with the basic economic interests of donor economies. As such, the cosmopolitan error has had real consequences for both national efforts to build healthy, equitable economies and international efforts to address serious global problems and risks.

    The frequently-made argument that extensive supranational cooperation is necessary to solve global problems is incorrect. Without question, destructive, zero-sum national rivalries are a threat to a peaceful and prosperous world — on this point, liberal internationalists and liberal cosmopolitans can agree.

    Fortunately, most of the world-order goals of cosmopolitanism can be achieved by enlightened liberal internationalism without the need to sacrifice or weaken the democratic nation-state, the organization in which most of the progress toward equality and economic security over the last three centuries has taken place. Contrary to the commonly held views of pundits and science-fiction­­ writers, a world government or a true global market is unlikely to emerge in the foreseeable future. But a successful and enlightened liberal internationalism would permit us to enjoy the benefits of both without the costs of either. 

    This piece was first published by the Breakthrough Journal.

    Michael Lind is Policy Director of the Economic Growth Program at the New America Foundation and author of The Next American Nation.

    Photo by BigStockPhoto.com.

    ~~~~~~~~~~~~~~~~~

    1. Friedman, Thomas. 2005. The World is Flat: A Brief History of the Twenty-first Century. New York: Farrar, Straus and Giroux; Cooper, Robert. 2000. The Postmodern State and the World Order. London: Demos. (back)

    2. Rugman, Alan. 2001. The Myth of Globalization: Why Global Strategy is a Myth and How to Profit from the Realities of Regional Markets. AMACOM. (back)

    3. Nolan, Peter and Jin Zhang. 2010. "Global Capitalism After the Financial Crisis." New Left Review 64. July/Aug (102). (back)

    4. Wilson, Dominic and Roopa Purushothaman. 2003. "Dreaming with BRICS: The Path to 2050." Global Economics Paper Number 99. Goldman Sachs. October 1.(back)

    5. United Nations. 2010. Population Division of the Department of Economic and Social Affairs of the United Nations Secretariat. World Population Prospects: The 2010 Revision. (back)

    6. Institut Francais des Relations Internationales (IFRI) 2002. "Le Commerce Mondiale au XXIe siecle [World Trade in the 21st Century] Scenarios for the European Union."; Walker, Martin. 2003. "French Study Says Europe Fading," UPI, May 14. (back)

  • This Is America’s Moment, If Washington Doesn’t Blow It

    The vast majority of Americans believe the country is heading in the wrong direction, and, according to a 2011 Pew Survey, close to a majority feel that China has already surpassed the U.S. as an economic power.

    These views echo those of the punditry, right and left, who see the U.S. on the road to inevitable decline.  Yet the reality is quite different. A confluence of largely unnoticed economic, demographic and political trends has put the U.S. in a far more favorable position than its rivals. Rather than the end of preeminence, America may well be entering  a renaissance.

    Just survey the globe. The European Union’s prolonged crisis will likely end in further decline. Aging Japan has long passed its prime, its market share receding in everything from autos to high tech.  China’s impressive economic juggernaut has slowed down, and the Middle Kingdom faces increased social instability, environmental degradation and a creaky one-party dictatorship.

    While the U.S. has its challenges, it is positioned to achieve a more solid long-term   trajectory than its European and Asian rivals. What it lacks, however, is a strong political leadership capable of seizing this opportunity.

    Resources

    Energy constitutes the biggest ace in the hole for the U.S. For almost half a century, an enormous fossil fuel bill that still accounts for 40% of the nation’s trade deficit has hampered economic growth. Now that situation is changing rapidly.

    Due to vast new finds and improved technology to exploit them, the U.S. is now the world’s largest producer of natural gas and could emerge as the leading oil producer by 2017. Reserves of natural gas — a clean-burning fuel — are estimated at 100 years supply and could generate more than 1.5 million new jobs over the next two decades.

    The U.S. agricultural sector is also booming, with exports reaching a record $135.5 billion in 2011. With global demand increasing, sustained growth  will continue across America’s fertile agricultural regions.

    Manufacturing

    The other big game changer is manufacturing. As President Barack Obama recently acknowledged, this is America’s “moment” to seize the industrial initiative. U.S. manufacturers have expanded their payrolls for two straight years, and they have increased production while Japan, Germany, China and Brazil have scaled back.

    A recent survey of manufacturing CEOs revealed that 85% believed production could shift soon from overseas. Both foreign and domestic manufacturers are alarmed about rising wages and labor unrest in China. Some important Japanese, German and Korean companies also have concerns about China’s policies that favor local firms and abscond with investor’s technology.

    Foreign Investment

    Rising foreign investment reflects the new American competitiveness. Since 2008 foreign direct investment to Germany, France, Japan and Korea has stagnated; in 2009 overall investment in the E.U. dropped 36%.

    In contrast, in 2010 foreign investment in the U.S. rose 49%, mostly coming from Canada, Europe, and Japan. Industrial investment rose $30 billion just between 2009 and 2010, while investment in the energy sector more than tripled to $20 billion.

    The Information Sector

    In the information sector, American domination continues to mount, contrary to predictions of decline over the past two decades. Although high-tech manufacturing has shifted largely to Asia, Americans rule the increasingly strategic software sector.   American-based companies, who constitute more than two-thirds of the world’s 500 largest software companies, including  nine of the top ten.

    Outside the U.S., there are no significant equivalents of Apple, Google, Microsoft, Amazon and Facebook. Hollywood, for its part, rules the entertainment world, producing 40% of world’s audiovisual exports, a dominion that troubles China’s President Hu Jintao, who recently complained  that the “cultural fields” represent “the focal area” for Western “infiltration”.

    Demographics

    The Great Recessionhas slowed population growth everywhere, but the U.S. maintains the   youngest and most vibrant demographic profile of any advanced country. Between 1980 and 2010, the U.S population expanded by 75 million to over 300 million. In contrast many European countries, including Germany, have suffered stagnant growth, while in Russia and Japan populations have already started declining.

    The disastrous fiscal implications of slow or negative population growth are evident in Greece, Spain and Italy, all of which suffer among the world’s lowest fertility rates. Rapid aging also will soon catch up with Germany. By 2030, Germany will have 48 retirees for every 100 workers — that’s barely two workers per retiree. The numbers are even worse in Japan: 53 retirees for every 100 workers by 2030.

    Political Factors

    Given the ineptitude of the last two administrations, enthusiasm about America’s political system is hard to justify. But our constitutional systems of laws and checks on central power remain a critical advantage. Immigration has declined with the recession, but the U.S. can expect to welcome religious and political exiles — such as Middle Eastern Christians displaced by   the “Arab Spring” — as well as Greeks and Irish fleeing Europe’s economic decline.

    Many from Russia and China are seeking to immigrate to the United States, Canada or Australia in order to protect property or just live a freer life. Indeed, among the 20,000 Chinese with incomes over 100 million Yuan ($15 million), 27% have already emigrated and another 47% have said they were considering it, according to a report by China Merchants Bank and U.S. consultants Bain & Co. published in April.

    Needed from Washington: A New American Strategy

    Sadly no leading politician or political party seems ready to   embrace the country’s new strategic advantages.  Many on the left may find the very notion distasteful, having    swallowed declinism with their academic mother’s milk. The president himself dislikes the notion of American “exceptionalism.” Many key Obama backers like SEIU boss Andy Stern and former auto czar Steven Rattner, embrace the superiority of China’s authoritarian system. Others embrace Europe and even Japan as models for an aging superpower.

    Worse still: Some Obama policies work against the well springs of national resurgence.   Threats to raise income taxes on families making over $250,000 directly threatens the aspiring entrepreneurial class more than the real “rich” whose fortunes are protected by low capital gains taxes and family trusts. Most critical: The administration’s hostility to fossil fuel represents a direct threat to the country’s greatest new source of advantage and threatens to strangle America’s recovery in its infancy.

    Not that the Republicans are any less clueless. Many reject the infrastructure needed by an expanding economy — ports, roads, bridges as well as worker training and support for basic research — as mere “pork.” Budget restraint and fiscal discipline are important, but preparing the country for more rapid economic growth requires an active, supportive government.

    Republicans also tend to view immigration as something akin to a hostile invasion. Yet many key industries — notably manufacturing and high tech — rely heavily on immigrant entrepreneurship, intelligence and work values. Running against immigration constitutes an assault on the nation’s increasingly diverse demographics.

    So this is where we now sit.  With all the essential elements for a strong, sustained recovery place, the big question is whether we will find political leaders capable of tapping this country’s phenomenal potential.

    This piece originally appeared at Forbes.com.

    Joel Kotkin is executive editor of NewGeography.com and is a distinguished presidential fellow in urban futures at Chapman University, and contributing editor to the City Journal in New York. He is author of The City: A Global History. His newest book is The Next Hundred Million: America in 2050, released in February, 2010.

    Photo from BigStockPhoto.com.

  • Mistaking an Aberration for the End of Home Ownership

    It is well known that home ownership has declined in the United States from the peak of the housing bubble. According to Current Population Survey data, the national home ownership rate fell 2.9 percentage points from the peak of the bubble (4th quarter 2004) to the third quarter of 2011.

    It is less well understood, however, that the spurt in home ownership was, like the housing bubble, an aberration. Looking over the data from the 2010 census, it seems clear that since 2000 the actual decline was a much smaller: 0.8 percentage points from the 2000 census. In fact the current home ownership rate tracks fairly well with that of the post 1960 and the entire pre-bubble period.

    The End of Home Ownership? Analysts such as Richard Florida suggest an end to the preference for home ownership, citing the losses from the bubble, which were, in fact, an aberration. Most recently, Xavier University’s Michael F. Ford wrote in the Washington Postabout home ownership having been driven to 69% by "guarantees" and "tax breaks," such as the mortgage interest deduction. He notes that this "spending spree" led to a loss of $6 trillion in US real estate value.

    Ford does not mention the fact that home ownership had hovered between 60% and 65% for more than three decades before the bubble, without suffering any such losses. Nor does he mention the roles played by Fannie, Freddie and Frank (D-Massachusetts), along with others in Washington, or the related "drunken sailor" mortgage policies concocted by lenders and Wall Street that anyone familiar with credit should have known could only lead to disaster. This was obvious to many observers, although shockingly not to the Federal Reserve Board, as recent reports indicate .

    There is no doubt that the "spending spree" led to the housing bust and triggered the Great Financial Crisis. However it was not the long-standing ownership support programs of the federal government that were primarily to blame. As late as the beginning of the decade, there was no bubble and the median multiple in major metropolitan areas averaged 2.9, within the maximum affordability rating of 3.0. The "spending spree" itself was a rational response to policies that turned housing into the equivalent of a speculative commodities market, with destructive results, in certain large markets. Critically the bubble did not appear in many others.

    Speculation and the "Bubble States:" The extent to which speculation fueled house price increases is the subject of a recent Federal Reserve Bank of New York paper by Andrew Haughwout, Donghoon Lee, Joseph Tracy and Wilbert van der Klaauw. The researchers examine investment, or speculation in real estate markets, during the housing bubble. Investors buy houses that they do not intend to live in for the purpose of making money. In normal times, this investment is principally for rental income or long term capital gains. However, in the highly charged housing markets that developed in some metropolitan areas, prices rose so rapidly, that "flipping" (short term ownership) became very profitable, at least for some.

    Pointing out that "The recent financial crisis—the worst in eighty years—had its origins in the enormous increase and subsequent collapse in housing prices during the 2000s," the New York Fed researchers show that speculative activity was much greater in California, Florida, Arizona and Nevada (which they label the "bubble states") than elsewhere. My analysis indicates that two-thirds of the house value drop in the nation before the Lehman Brothers collapse (September 15, 2008) occurred in the four "bubble states." According to the researchers, this greater speculative activity in these markets made the market more instable because unlike owner-occupiers, investors are far more likely to default on mortgage loans.

    Missing the Geography of Speculation (the Geography of "Smart Growth"): The New York Fed research, however, ignores the geography of speculation. Why was speculation was so much more rampant in the bubble states? There is no reason to believe that residents of California, Florida, Arizona or Nevada are any less interested in making money or, in general, any more greedy. Yet speculators largely stayed out of markets in high demand areas, such as Dallas-Fort Worth, Houston and Indianapolis. In fact, in large parts of the nation, there was little speculative activity. In these markets prices were not rising inordinately so speculators did not bother with them. Instead they focused on more volatile markets where prices were already rising strongly, further swelling local price increases.

    The geography of speculation corresponds largely to the geography of excessive land use restrictions, which created the shortage of land for housing that drove the prices up in the four bubble states (Note). It is a fundamental principle of economics that prices tend to rise where desired goods are in short supply.

    In California and Florida, restrictive land use policies (smart growth or growth management) created a shortage of land for new housing relative to demand. The largest metropolitan areas of Nevada (Las Vegas) and Arizona (Phoenix) are surrounded by government owned land that was auctioned for development at such a slow rate that prices rose by more than five times during the bubble.

    Astonishingly, having missed the geography of speculation, the New York Fed researchers suggest that a solution is to regulate speculation. There is a much simpler answer, which Florida has already implemented which is to repeal the restrictive land use regulations, without which inordinately speculative profits cannot occur.

    Meanwhile, as the speculators have been driven out of the market, and despite federal government efforts to prop-up the artificially high house prices, values have fallen to below 2000 levels for the first time (Figure 1). Based upon Federal Reserve Board and Census Bureau data, it is estimated that the average owner-occupied house value in 2011 (three quarters) has fallen to $211,000, which is down from a peak of approximately $345,000 in 2006 and $222,000 in 2000 (adjusted for inflation).

    So is Ownership now doomed? Yet the home ownership naysayers have little to cheer. Yes, home ownership dropped in the last decade. However, all of the loss was in mobile homes and boats. Even so, the number of mobile home owners remained greater than home owners living in apartments, including condominiums (Figure 2). In fact there was a slight increase in the share of households owning their own homes, if mobile homes and boats are excluded (Figure 3), with a rise from 60.6% in 2000 to 60.9% in 2010.

    There were 5,057,000 more home owners in 2010 than in 2000, and perhaps more surprisingly, 5,119,000 more home owners occupying detached housing. Detached, attached (town house) and apartment ownership each increased over the past decade (Figure 4). Contrary to new urbanist theoreticians, detached housing – not urban condos – overall accounted for the most housing growth, both owner-occupied and rentals.

    Xavier’s Ford calls the American Dream of home ownership a myth and even goes so far as to suggest that home ownership is "more important to special interests than it is to most Americans." In fact, Ford’s interpretation is delusional. That home ownership continued its advance, however modestly, in the face of the worst economic downturn in 80 years, reveals the durability and, indeed the reality of home ownership as an American Dream.

    Photo:  Preventing speculation (New Development, Dallas-Fort Worth suburbs)

    Note: Overall, the bubble states and other restrictively regulated metropolitan areas accounted for more than 90% of the pre-Lehman Brothers loss.

    Wendell Cox is a Visiting Professor, Conservatoire National des Arts et Metiers, Paris and the author of “War on the Dream: How Anti-Sprawl Policy Threatens the Quality of Life”

  • Martin Luther King, Economic Equality And The 2012 Election

    In the last years of his life Dr. Martin Luther King expanded his focus from political and civil rights to include economic justice. Noting that the majority of America’s poor were white King decried the already huge gaps between rich and poor, calling for “radical changes in the structure of our society,” including a massive urban jobs program.

    If King were alive today, he would have plenty of reason to take pride in the success of his struggle for human rights. Yet he would surely be disheartened at the economic situation among African-Americans and other racial minorities. African-American unemployment, for example, is at its worst level in more than three decades. While African-Americans make up 12% of the nation’s population, they account for 21% of the nation’s unemployed. Unemployment for black men stands at a staggeringly high 19.1%, and the Economic Policy Institute estimates that overall black unemployment will remain well above 10% till at least 2014.

    The black middle class is also under siege. The gap in net worth of minority households compared with whites is greater today than in 2005. White households may have lost 16% of their net worth in recent years, but African-Americans have lost 53%, and Latinos 66%. The recent decline in public sector jobs across the country could deepen these negative trends; blacks are 30% more likely to be government employees.

    Some of these problems stem from the larger economic crisis. The collapse of the real estate bubble, for example, has disproportionally affected minority groups, particularly Hispanics. Yet many of them are tied to shifts in government policy. The Obama administration could help ameliorate some of the pain minorities are feeling in the jobs sector, but its focus on white-collar information jobs, academia and the green economy has done little to help this already underserved community.

    But will these failures have political consequences in 2012? It’s hard to say.

    Despite the poor economic news, approval of the current administration — headed by an African-American President, Barack Obama –  stands at 84% among African-Americans even as it has weakened among whites.

    The situation among Latinos, the nation’s largest ethnic minority, is somewhat more complex. Throughout the ’90s and the first seven years of the new millennium, Latinos enjoyed steady advances in everything from business formation to home ownership.  But the real estate collapse disproportionately devastated Latinos, whose net worth tended be tied to their houses as opposed to stocks and bonds. Latinos also were over-represented in the hard-hit construction and manufacturing sectors.

    Conceivably, hard times could help the GOP a bit with Latinos. In 2004 George W. Bush — a Texan with a seemingly simpatico attitude — captured more than 40% of their votes. But in 2008, Latinos strongly lined up behind Obama, who won roughly two-thirds of their vote. In 2010, Latinos shifted somewhat to the right, remaining strongly Democratic at 60% but significantly down from 69% in 2006. Recent polls have shown presidential approval levels barely above 50% among Latino voters.

    Perhaps a bigger problem, particularly with Latinos, will be getting them to vote in anything like the numbers seen in 2008. The Obama administration might recapture their support by pointing out that their economic calamities originated during the Bush administration. It can also make the point that in the short run ameliorative steps taken by the president and Congressional Democrats — such as extending unemployment benefits — have aided minorities disproportionately.

    But the biggest question is whether the current progressive agenda supports minority upward mobility. From its inception the Obama administration’s focus has been on the largely white information economy, notably boosting universities and the green-industrial complex based in places like Silicon Valley. The Obama team’s decision to surrender working class whites to appeal to what Democratic strategists call the “mass upper middle class” makes political sense but could lead to problems for an American working class that is itself increasingly minority.

    An emphasis on green industries and strong across-the-board regulation often works against traditional industries like heavy manufacturing, warehousing and fossil fuel development that historically have employed many minorities. Opposing development of new petrochemical plants and such things as the XL Pipeline — opposed by many greens and their allies in the Obama Administration — could reduce new opportunities for minority workers, many of them unionized, particularly in the heavily African-American, and increasingly Latino, Gulf region.

    Modern-day progressivism’s primary laboratory, California, tells a cautionary tale. The draconian green legislation enacted under former Republican Gov. Arnold Schwarzenegger has hit the state’s manufacturing and construction industries far more than the national average. Even more troubling: a new report from the Public Policy Institute of California found that this region’s affluent, largely white population has expanded far more quickly than the national average.

    More important is the dissatisfaction among some Latino and African American Democrats that the current progressive regime. Writing recently in the Los Angeles Business Journal, Roderick Wright, a Democratic state senator from south Los Angeles argues draconian environmental laws have seriously undermined job creation in his heavily minority, working-class districts.

    Congressman Dennis Cardoza, a Portuguese-American who represents a heavily Latino district in the San Joaquin Valley, also recently lambasted President Obama for neglecting the concerns of “real people.” Cardoza claimed that the president has been particularly deaf in addressing “the environmental, resources, housing and employment areas.” This frustration is understandable given that Cardoza’s Central Valley district suffers from among the nation’s highest unemployment rates.

    Sadly the GOP has done little to address these failings. Republican pandering to nativist constituencies will contain Latino willingness to hear the party’s message. Old links to racist groups (in the case of Ron Paul) or possession of a tin ear (Newt Gingrich) does neither the GOP nor the more important cause of political competition a great service.

    A hard focus on economic growth and opportunity by minorities might not win accolades from the mainstream press, academia or top party cadres. Yet if we wish to see Dr. King’s real dream extended beyond a relatively small number of the gifted few, minority voters should start challenging Obama’s and the other candidates’ economic agenda — or they can expect their support and their futures to again be taken for granted.

    This piece originally appeared at Forbes.com.

    Joel Kotkin is executive editor of NewGeography.com and is a distinguished presidential fellow in urban futures at Chapman University, and contributing editor to the City Journal in New York. He is author of The City: A Global History. His newest book is The Next Hundred Million: America in 2050, released in February, 2010.

    Photo from U.S. National Archives and Records Administration.

  • Three Cheers for Urban Sprawl

    “Hands off Our Land!” screams the Daily Telegraph, like some shotgun-toting red-faced farmer.  The newspaper, on behalf of the reactionary toffs who form the least pleasant section of its readership, has launched a campaign directed against ‘urban sprawl’ (ie. the rest of us).

    On a good day, the Telegraph serves up enlightened articles by progressive liberals like Janet Daley and Simon Heffer and Jeff Randal (I’m talking about real liberals here, not American Trotskyites).  But then it disappears under the desk, drinks some devilish, bubbling potion and emerges looking like Mr Hyde, all wonky teeth and messy hair.  “Hands off Our Land” is the Telegraph at its worst – a campaign to thwart the government’s all-too-modest suggestions to reform Britain’s vicious planning laws.  

    NIMBY (Not In My Back-Yard) is a misnomer.  As James Heartfield observes in his brilliant book Let’s Build! if it was their back-yard there wouldn’t be a problem.  By “Our Land”, the Telegraph’s Colonel Blimps do not mean “land owned by us”.  They mean “other people’s land”, over which they wish to continue to exercise control via the State. 

    The battle against suburbanisation (which the Greens these days clothe in the jargon of ‘sustainability’) has been going on for decades, and the success of the NIMBYs in keeping the bulk of Britain’s population locked inside towns and cities, has disfigured Britain and blighted the lives of millions of people.  As a result of State planning restrictions, Britons are stuffed into towns and cities like battery-farmed chickens.  We are among the most densely packed people in the world.  In Britain, 90 percent of people live in urban areas.  In Germany (which has a similar population density) only 75 percent of people live in urban areas, while only 68 percent of Italians live in urban areas, and only 62 percent of the Irish (is the Italian or Irish countryside so awful?).  In India only 30 percent of the people live in urban areas. 

    And to make matters much worse for the Brits, our urban areas constitute a mere 9 percent of total land use.  That’s right – 90 percent of the people crammed into 9 percent of Britain.  Compare that to the 13 percent of land devoted to ‘Green Belt’ (the stuff holding us in).  Even in the South East of England, by far the most densely crowded bit of the UK, woodland and farmland, absurdly, accounts for more than three quarters of land use. 

    Britain is not a crowded island – contrary to the frothing rants from the misanthropes at the Telegraph.  Viewers wrote in to express their incredulity when the BBC broadcast a series called ‘Britain from Above’.  The BBC helicopters filmed hour after hour of vast, unending tracts of flat, rectangular fields and giant swathes of green nothingness.  It was astonishing to the naïve urbanites watching to see how empty the place was.  (Just take a look on Google satellite images).  The reason why Britain feels, to most of us, like an overcrowded island, is because all most of us ever see are congested towns and cities (or a fleeting glimpse of industrial farmland out of a car window as we travel along ‘urban corridors’ between towns). 

    Hemming people into towns and cities with ‘Green Belts’, has acted like a pressure-cooker on property prices.  The planning system, by limiting the amount of land available to build on, has created an artificial shortage of living space, forcing up the prices of houses and flats to such astronomical heights that many young couples can only dream of affording one.  The less affluent dare not get a job for fear of losing housing benefit.  There are families in London where the children sleep three and four to a room – a tiny room in a dingy flat.  Children who have outgrown their cots are forced to stay in them, sleeping with their legs bent (I have direct knowledge of such cases).  It is impossible to document the sheer bloody misery caused by the planning system – countless examples of diminished lives.  Even well paid professional couples in London now struggle to afford dark, crumbling Victorian houses, in rough parts of town.  Houses built for costermongers and chimney sweeps in the late 19th Century.

    But it goes far beyond property prices. Soaring urban land values have a knock-on effect, raising the cost of everything, from cinema tickets to shoes.  The land and property shortage (artificially created remember) has pushed all prices up, reducing our quality of lives in a myriad of unseen ways.  Meanwhile, the few remaining patches of green in our towns and cities are fast shrinking and disappearing. Gardens are designated ‘brown-field’ sites to allow more flats and houses to be built.  Houses are horribly divided into tiny disfigured flats.  School fields, parks and squares are shrinking and disappearing at an alarming rate, extra blocks of flats spring up everywhere, like weeds in the cracks.  The shocking effect of Green Belts has been to empty our urban areas of green spaces, and yet, as State planners know fine well, these are the most cherished bits of green in Britain, giving far more people, far more pleasure than ‘the countryside’ (to which so few of us go).  Worryingly, the London Planning Advisory Committee has decided that London has room for 570,000 extra homes.  As James Heartfield pleads, ‘Do we really want every inch of London packed with houses, instead of parks, squares, playgrounds and other amenities?’  And of course transport in our congested urban areas has become a living hell.  They cram us in then prohibit us from parking anywhere and charge us for causing ‘congestion’.

    Nor is the misery confined to the towns. Green Belts have killed the countryside.  Although a gigantic amount of Britain’s land mass is reserved for agriculture, farming accounts for less than one percent of Britain’s economic activity (and even this is massively subsidised).  In the countryside itself, only 3 percent of people actually work in agriculture.  It is argued the countryside must be preserved in order to protect traditional communities and ways of life.  But there is nothing traditional about our countryside.  The vast, boring fields you see today bear no resemblance to the small, labour-intensive agriculture of old.  The landscape has changed, the ‘communities’ have changed, the economics has changed.  Nor should we idealise what went before … grovelling, impoverished tenant small-holders and agricultural labourers (and before them serfs) breaking their backs to maintain the idle gentry.   Life for the rural masses was poor, hard, dull and servile. 

    The NIMBYism of the new gentry (organised, for example, in the Council for the Protection of Rural England) has stunted and thwarted genuine economic development in the countryside.  The vast bulk of Britain is now a wasteland, a poorly attended heritage theme-park, fit for well-heeled second-homers to live out their naff rural fantasy every third weekend.  Ordinary folk in the countryside are reduced to working in National Trust postcard shops, and with their meagre wages, they struggle to afford small nasty-looking houses which face directly onto busy A-roads.  No wonder the young want to get the hell out. 

    But the battle over planning laws has nothing to do with the giant wide open spaces in Northumbria and wherever else, because no-one in their right mind wants to go and live there.   The land in dispute is in truth much smaller.  The desire for planning restrictions is really an expression of upper class disdain for suburbs, and the people who live in them and like them.  Peter Hall, the professor of planning at the Bartlett School of Architecture, in his book Cities of Tomorrow, exposes the motives behind ‘sustainable development’, which in effect means ‘pulling up the drawbridge to stop anyone else entering their well-healed enclaves (save a few select people like themselves, whom it would be quite fun to invite for drinks on Sundays) … pulling up the drawbridge against newcomers, especially if they lack the right income or right accent.’ 

    The snobbery and hatred of the suburbs dates back to the end of the 19th Century.  The railways allowed the first suburbs to flourish as the working and lower-middle-class ‘clerk’ class, experiencing prosperity for the first time, sought to escape the urban slums, to have a little house and a little garden.  The suburbs were considered vile because of the people who inhabited them. In a book called The Suburbans, written in 1905, the poet T.W.H. Crossland launched a vitriolic attack on the ‘low and inferior species’, the ‘soulless’ class of ‘clerks’ who were spreading into the new comfortable houses in the suburbs, eating tinned salmon.  He was disgusted by them, their aspiration to self improvement, offensively self-made and self-assured.

    Professor John Carey, in his magnificent book The Intellectuals and the Masses, describes the widespread upper class loathing of the newly enriched masses and their suburban ways.  In Evelyn Waugh’s Vile Bodies, two characters are leaving England in an airplane. They recall Shakespeare’s description of England, ‘This precious stone set in a silver sea’, but then they look out the window.  They see the ‘straggling’ suburbs, the hills sown with bungalows, the wireless masts and overhead power cables, and ‘men and women, indiscernible except as tiny spots’ who were ‘marrying and shopping and making money and having children.’  Then one of Waugh’s characters says, ‘I think I’m going to be sick.’

    HG Wells contemptuously describes suburbs as a ‘tumorous growth’ … ‘ignoble’ Croydon and ‘tragic’ West Ham.  Betjeman of course pleaded to the Nazis, ‘Come friendly bombs and land on Slough, it isn’t fit for humans now’.  The suburbs were “Bathed in the yellow vomit” of sodium lamps.  Carey describes Betjeman’s horror of the suburbs, ‘harbouring the mixed bag of atrocities with which Betjeman associates with progress – radios, cars, advertisements, labour-saving homes, peroxide blondes, crooked businessmen, litter, painted toenails and people who wear public-school ties to which they are not entitled.’

    The vile lower orders had to be stopped.  It is no accident that one of the key figures in post-war planning was Sir Patrick Abercrombie, founder and head of the Council for the Protection of Rural England.  Planners like Abercrombie knew that ordinary folk were itching to escape the grimy crowded towns.  But instead of the semi-detached houses with nice back gardens, which they craved, they would have to be stacked high in tower blocks.  The planners knew that it wasn’t what people wanted.  They knew that people wanted a little space of their own, with a little back lawn where they could keep an eye on their three-year old playing.  A fairly modest, basic human desire in this day and age, you might think, and yet one they would be deprived of.

    A system of Green Belts was devised to keep the proles locked in.  Professor Hall refers to Green Belts, correctly, as ‘the polite English version of apartheid’ … ‘a system of controlling and regulating the suburban tide to a degree that would have been unthinkable in the United States’.  The Town and Country Planning Act of 1947 effectively nationalised the right to develop land.  Hall describes how the containment of the lower orders in increasingly crowded urban areas, and the resulting inflation of land and property prices, led to distress on a vast scale.  Since land was so scarce and pricey, to build houses which people could actually afford, private builders were forced to build smaller and smaller homes, reducing the quality to make them less expensive.

    As the private housing market was strangled, it was decided that instead the State would build inner-city accommodation for the masses.  They were to be confined to urban areas, forced to live in high densities in high-rise blocks.  Rather than chose their own home in a free market, ordinary people had to apply to the State to be housed and would be allocated one (a very nasty State produced home).  By the 1970s around a third of the British population lived in State housing.  The State thus determined how and where we should live.  Over the years, it has become suffocating.  Green spaces inside towns have shrunk or disappeared as more and more nasty council blocks have been crammed in.  Early ‘leafy suburbs’ like Ealing have become more and more crowded and less and less leafy.  Now, they feel like part of the towns, only without the attractions of the bright lights.  In Britain, the dream of better living stopped in 1947.

    We have had enough of all this crap about ‘protecting the countryside’.  Planning (let us call it what it is: authoritarian State control of our lives) has always been primarily a tool of social prejudice.  Behind the cult of the British countryside, from Wordsworth and Ruskin onwards, has always been contempt for the masses.   Who are we protecting the ‘countryside’ for?   And from whom are we protecting it? 

    Let us be honest about ‘the countryside’.   These days it is largely made up of very big, very flat rectangular fields used for (largely pointless, subsidised) industrial farming … not at all beautiful and frankly the last place you would want to have a picnic. (Ironically most of the green rural fantasists in our midst tend to hang out in relatively crowded places like Southwold and Alderburgh (to enjoy the music festivals) and the ‘Wordsworth-country’ bit of the Lake District where Beatrix Potter lived.)

    Very few bits of the countryside look like it does in Postman Pat, and these bits are enjoyed by very few people indeed.   Let’s have more of them.  Wonderfully landscaped areas – big ones – not far from towns and suburbs, accessible to lots of people, with adjacent toilets and cafes and car-parks.  We do not want Green Belts, we want Green Patches – big parks and broad, lovely town squares, and large chunks of beautifully landscaped green spaces, close to where people live.  We want green everyone can enjoy.  And in between the green bits, we demand the freedom to build what we want, where we want. Three cheers for ‘Urban Sprawl’, the motor car, roads, supermarkets, golf courses and service stations.

    It’s time to get angry with the angry-brigade at the Telegraph.  To get angry with the organic, home-grown TV chefs and their agro-hobbyist friends, with the grungy middle class road protesters (imaging themselves to be radical), with the suburb-hating, supermarket-opposing, free-range chicken loving reactionaries, the metropolitan elite who can afford second-homes, yet who would deny first-homes to others, the heritage bores and bearded ramblers and people who drink cloudy expensive beer from local breweries and write bad guide books and erect plaques everywhere and think Ruskin had a point.  It’s time to get angry with Prince Charles – the Dark Lord, and his toady friend Richard Rogers, who thinks we should all live in shoe-boxes.  This collection of bigots are trying to keep us in our place.  They have damaged the lives of millions of people.  Now they must be stopped.

    Martin Durkin is a documentary film director and TV producer based in the UK.

    Photo from Bigstockphoto.com.

  • The U.S. Needs to Look Inward to Solve Its Economy

    Over the past months as the global economy heads for another recession, U.S. lawmakers have done their best to deflect blame by focusing on various external forces including the most popular straw-man of the day: China’s currency.

    Almost every year for the last few years, Congress and the White House have pressed China to revalue its currency, the renminbi. And every time this happens, China responds that it will do what it always does: let it appreciate gradually, at about 5% per year as it has done for the last several years.

    With the APEC Summit in Honolulu last month, Obama and the White House strategically — and perhaps with an eye to the coming re-election campaign —prodded at China and also managed to further deflect America’s problems by focusing attention on the Eurozone Crisis. Timothy Geithner, tailoring his speech for the Asia-Pacific audience, said Europe needs to “move quickly as instability hurts the U.S. and Asia.”

    Geithner, the godfather of “too big to fail” from his days at the New York Fed, is an expert at delivering economic policy speeches that do not address America’s problems head-on. He is the mouthpiece of American weakness and misdirection, and has been recently seen so not only in China, but in Europe where people scoff, understandably, at the very idea of his giving advice to the bedraggled Eurozone.

    The fact is that, right now, the US cannot dictate the conditions of economic gain. Although still the world’s largest economy by far, the US can no longer impose its mantra of ‘free-trade’ on the rest of the world.  Instead it needs to take an honest look at the reality of the 21st Century global marketplace to better assess what it can do to improve its situation. The following suggestions might be a good start:

    Forget About Economic and Political Ideologies

    Many Americans, including politicians, are under the impression that certain ‘isms’ are magic bullets for prosperity while other ‘isms’ hold prosperity back. For instance, conservatives like to use the talking point that ‘socialism’ will destroy America. Similarly, many of those on the left protest against as what they see as ‘capitalism’ leading to widening inequality. Being for or against a particular ‘ism’ does nothing to improve the economic situation but only serves to inflame rhetoric and kill policies that could potentially help the U.S. economy.

    One example is domestic government investment. Conservatives detest any kind of public spending proposal as ‘socialism’, even if public funds would be used for practical things like improving roads or public schools. On the other side, those on the left confuse high-level collusion between the financial sector and federal government with free-enterprise, which it is not.  Geitner is not a capitalist, but a collusionist. He is no more a free-market capitalist than he is a Maoist.

    Stop Blaming China

    Nothing else debunks the validity of mainstream political and economic ideologies better than China’s rise to economic prominence. Still considered a ‘communist’ state by Cold-War minded individuals, China’s development would be best described as a gradual evolution in policy decisions rather than a static, ideologically-based approach. To be sure, the Communist Party desire to stay in power remains paramount. But this leads to policies designed to keep the economic engine humming as a way to maximize social stability.

    Despite its advances, China still has tremendous obstacles to overcome including a still very low per-capita GDP and an environment polluted from industrial development. Yet it is the height of hypocrisy for the U.S. government to call out China on its currency manipulation and intellectual property theft when U.S. companies have benefited enormously from China’s opening up of the past three decades. This also has allowed U.S. consumers buy coveted products at low prices.

    Of course, politicians at the Federal level (and even some Republican Presidential candidates) talk tough on China to score brownie points with voters. But meanwhile local state and city governments as well as prominent business leaders continue to send delegations to China in droves to promote cooperation and trade. Yes, China’s competitive cost of labor and lack of regulations has had a direct impact on the loss of jobs in the U.S. Unfortunately forcing China to float its currency will not reverse this trend as manufacturing jobs move to lower cost locales, and will continue to do so, perhaps to other countries.

    Acknowledge That Not All Regulation Is Created Equally

    Conservatives love to point the blame for economic malaise on government regulation. This argument is only half correct. For one thing there is not enough regulation on large banks in terms of how they divert investments when huge recent profits can be traced largely to fiscal largesse from Washington. Large banks received huge stimulus injections from the Federal Reserve during QE I and II, but did not invest enough of that money into the domestic economy. Instead, investment banks were free to take that money wherever maximum returns were to be had. That’s fine for an investor who has made his own way, but when the bank profits have stemmed from taxpayer largesse, some other priorities should creep in.

    At the state and local municipal levels, regulation is perhaps the greatest roadblock to restoring economic prosperity. Crippling state and local taxes, along with outdated zoning regulations – such as restrictions on something as simple as running a business from one’s own home – slow enterprise formation. This is not to mention the cost of obtaining permits from various authorities and the constant threat of lawsuits. Clearly the pendulum – at least in some states such as California – has swung too far in the wrong direction. Unfortunately, given ubiquitous budget shortfalls across state and local levels, it is unlikely that local governments will be willing to decrease taxes and fees when they are in desperate need of revenue generation.

    Reassess the American Social Contract

    Conservatives balk at any mention of social programs, yet they fail to acknowledge that American corporate institutions no longer play the role they once did in promoting social stability. Across the board, businesses are understandably cutting retirement and healthcare benefits just in order to survive. America’s broken social contract is perhaps the greatest obstacle to restoring prosperity and economic growth.

    Politicians are under the impression that high-taxes and runaway government spending are the primary cause for economic malaise. The reality is that America’s economy lags because individual spending is paralyzed due to increased costs of living across the board. The costs of housing, healthcare, and higher education have all increased in the past 10 years while wages and job opportunities have stagnated. This paralyzes risk-taking and investment in new businesses. Not only that, the presence of large oligopolies in everything from high-tech and cellular phones to food processing work to reduce competition from  entrepreneurial upstarts.

    Conclusion

    The U.S. needs to stop looking at external factors as the source of its problems. Instead, American leaders should look inwards and take an honest assessment of the current problems resulting from the changes in the world over the past 20 years.

    Unfortunately, no one on either side of the political aisle seems willing to step forward and lead the country out of its predicament. The Republican presidential contenders continue to waste time bickering about irrelevant social issues while President Obama jet sets around the world trying to allay doubts about the country’s decline.

    America needs a concrete plan to get up and running again. This will mean more regulation at the macro level and less regulation at the lower levels. It will mean that Americans need to be confident that basic needs like housing and healthcare are taken care of so they can get on with starting businesses and creating employment. Education needs to promote trade skills and remove the stigma that expensive college degrees are mandatory for future prosperity.

    Until these things happen, the U.S. economy will be stuck in its rut.

    Adam Nathaniel Mayer is an American architectural design professional currently living in China. In addition to his job designing buildings he writes the China Urban Development Blog.

    Photo courtesy of Bigstockphoto.com

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  • What Lies Ahead for Transportation in 2012?

    As befits this time of year, our thoughts turn to the events that await us in the days ahead. Putting aside the major imponderable — the outcome of the presidential and congressional elections that inevitably will impact the federal transportation program —what can the transportation community expect in 2012? Will Congress muster the will to enact a multi-year surface transportation reauthorization? Or will the legislation fall victim to election year paralysis? What other significant transportation-related developments lie ahead in the new year? Here are our speculations as we gaze into our somewhat clouded crystal ball.

    Will Congress enact a multi-year transportation bill?

    In 2011, the Senate Environment and Public Works (EPW) Committee passed a bipartisan two-year surface transportation bill (MAP-21) and the Senate Commerce Committee approved the measure’s safety, freight and research components. But at the end of the year, the bill’s titles dealing with public transportation, intercity passenger rail and financing were still tied up in their respective committees (Banking, Commerce and Finance). What’s more, the Senate bill ended up $12 billion short of meeting the $109 billion mark set by the EPW Committee as necessary to maintain the current level of funding plus inflation.

    Finance Committee Chairman Max Baucus (D-MT) has yet to publicly identify the offsets needed to cover the final $12 billion of the bill’s cost. Repeated assurances by EPW committee chairman Sen. Barbara Boxer (D-CA) that the necessary "pay fors" have been found, has met with widespread skepticism. "I’ll believe it when I see it" has been a typical reaction among congressional watchers. With the Republicans opposed to using "gimmicks" (Sen. Orrin Hatch’s words) to come up with the needed money, it’s not entirely clear that the bill, as approved on the Senate floor, will contain the full $109 billion in funding.

    On the House side, the fate of a multi-year bill remains equally clouded. In November, Speaker Boehner announced that he would soon unveil a combined transportation and energy bill, dubbed the "American Energy & Infrastructure Jobs Act" (HR 7). The bill would authorize expanded offshore gas and oil exploration and dedicate royalties from such exploration to "infrastructure repair and improvement" focused on roads and bridges.

    However, questions have been raised about this approach. Critics, including Sen. Barbara Boxer and Sen. James Inhofe (R-OK) EPW committee’s ranking member, judge the approach as problematical. They allege, along with many other critics, that the royalties the House is counting upon would fall billions of dollars short of filling the gap in the needed revenue (the gap is estimated at approximately $75-80 billion over five years). They further contend that the revenue stream from the royalties would not be available in time to fund the multi-year transportation program. What’s more, using oil royalties to pay for transportation would essentially destroy the principle of a trust fund supported by highway user fees. In sum, the House bill, if unveiled in its currently proposed form, will meet with a highly skeptical reception in the Senate.

    Assuming that both reauthorization bills in some form will gain approval in February, will the two Houses be able to reconcile their widely different versions by March 31 when the current program extension is set to expire? Or will the negotiations bog down in an impasse reminiscent of the current payroll tax stalemate? Given the importance that both sides attach to enacting transportation legislation and given the desire of both sides to avoid the blame of causing an impasse, we think the odds are in favor of reaching an accommodation — probably more along the lines of the Senate two-year bill than the still vague and unfunded House five-year version. If this simply kicks the can down the road a couple of years, that may be OK with Senate Republicans. As one senior Senate Republican confidently told us, by the bill’s expiration date the Senate will be in Republican hands and "the true long-term bill will be ours to shape."

    Will California lawmakers pull the plug on the high-speed train?

    In 2011 Congress effectively put an end to the Administration’s high-speed rail initiative by denying any funds to the program for a second year in a row. Does the same fate await the embattled $98 billion California high-speed rail project at the hands of the state legislature in 2012?

    At a December 15 congressional oversight hearing, witnesses cited a litany of reasons why the projects is a "disaster" (Rep. John Mica’s words). Among them: unrealistic assumptions concerning future funding; quixotic choice of location for the initial line section ("in a cow patch," as several lawmakers remarked); lack of evidence of any private investor interest in the project; eroding public support (nearly two-thirds of Californians would now oppose the project if given the chance, according to a recent poll); a "devastating" impact of the proposed line on local communities and farm land; unrealistic and out-of-date ridership forecasts; and lack of proper management oversight.

    More recently, the project came under additional criticism. The job estimates claimed by the project’s advocates ("over one million good-paying jobs" according to House Minority Leader Nancy Pelosi) have been challenged— and acknowledged by project officials— as grossly inflated. Four local governments in the Central Valley, including the City of Bakersfield, have formally voted to oppose the project, fearing harmful effect on their communities. And agricultural interests are gearing up for a major legal battle, according to the Los Angeles Times.

    But most unsettling for the project’s future is the inability of its sponsors to come up with the needed funding. To complete the "Initial Operating Segment" to San Jose (or the San Fernando Valley) would require an additional $24.7 billion. To finance this construction, the California Rail Authority’s business plan calls for $4.9 billion in Proposition 1A bonds and assumes $19.8 billion in federal contributions – $7.4 billion in federal grants and $12.4 billion in the so-called Qualified Tax Credit Bonds (QTCB). But the latter assumptions came in for sharp congressional criticism as so much wishful thinking, given the bipartisan congressional refusal to appropriate funds for high-speed rail two years in a row.

    Further challenges await the project early in 2012. A group of 12 congressmen led by House Majority Whip Kevin McCarthy (R-CA) has formally requested the Government Accountability Office (GAO) to review the project’s viability and "questionable ridership and cost projections." Also expected early in January are a critique of the Authority’s business plan by the Independent Peer Review Group and a follow-up report by the State Auditor.

    Meanwhile, the governor and state legislature, are being asked by the Rail Authority to approve a $2.7 billion bond issue authorized by Proposition 1A to fund and begin construction  of the initial Central Valley section of the rail line from Fresno to Bakersfield. Will they be swayed by the findings of the three respected reviewing bodies and by the increasingly negative editorial and public opinion? Or will they continue to hold on to the seductive vision of bullet trains zooming from northern to southern California in two and a half hours — however distant and uncertain that vision may be? At this point, we believe the decision could go either way. However, sharply critical reports by the Peer Review Group and the General Accountability Office could tip the scale against funding the Central Valley project.

    Will tolling join the gas tax as a mainstream source of highway revenue?

    With the possibility of a near-term gas tax increase "less than zero," attention has turned to alternative means of raising transportation revenue. The most prominent option appears to be tolling— and 2012 may be the year when tolling becomes accepted as a mainstream source of highway revenue.

    Recent toll increases on the nation’s highways attest to their growing use (if not popularity) as revenue enhancers. In New Jersey, tolls are set to rise by 53% on the New Jersey Turnpike and by 50% on the Garden State Parkway. The Port Authority of New York and New Jersey also has approved substantial toll increases on bridges linking the two states. These moves have provoked Sen. Frank Lautenberg (D-NJ) to sponsor a "commuter protection act" that would transfer toll setting powers to the U.S. Secretary of Transportation. But the Senator’s initiative does not appear to have obtained much support in Congress. IBTTA, the toll industry association, has lodged strong objections, arguing that federalizing toll rate setting would encroach on the states’ jurisdiction and interfere with their ability to use tolls as a tool of infrastructure financing, and Congress appears to be listening.

    A recent Reason Foundation poll has found that people are more willing to pay tolls than increased fuel taxes (by a margin of 58 to 28 percent.) Moreover, the formation of a new "U.S. Tolling Coalition" suggests a growing interest in tolling on the part of the states. Under a pilot program that allows up to three Interstate highways to be reconstructed with tolls, Virginia will add tolls along the I-95 corridor and Missouri will toll its stretch of I-70. Arizona and North Carolina have applied for the remaining slot in the pilot program. Other states are embracing tolling to finance new capacity. Washington State, for example, has begun tolling the SR-520 floating bridge over Lake Washington to help pay for its replacement. Nor is the practice of tolling confined just to a few states. All told, 35 states already depend on toll revenue to some extent.  

    The Tolling Coalition wants to expand the pilot program and give the states the flexibility to toll any portions of their Interstate and other federal highways, "whether for new capacity, system preservation, or reconstruction." So far, neither the Senate nor the House have agreed to relax existing prohibitions, but they are prepared to retain the current pilot program.

    However, the need to reconstruct and modernize the existing Interstates which are reaching the end of their 50-year design life, combined with the necessity to expand capacity of the Interstate highway system to meet the needs of an expanding population, may soften congressional opposition to relaxing the current Interstate tolling restrictions. With the gas tax no longer able to meet the nation’s transportation investment needs, and with the concept of a VMT (vehicle-miles travel) fee still a distant vision, the year 2012 could mark a turning point in the acceptance of tolling as a serious highway revenue enhancer.

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    Note: the NewsBriefs can also be accessed at www.infrastructureUSA.org
    A listing of all recent NewsBriefs can be found at www.innobriefs.com

  • Central Florida: On the Cusp of Recovery?

    Central Florida is poised at the cusp of a major turnaround, and its response to this condition will either propel the region forward, or drag it backward.  This cusp condition is brought about by a train and a road; neither of which have begun yet but both of which appear imminent.  Sunrail uses existing 19th century railroad tracks as a commuter spine through Orlando’s disperse, multipolar city.  The Wekiva Parkway completes a beltway around Orlando, placing it with Washington DC, Houston and other ringed cities.  Before either gets built, the region deserves some analysis on their combined effect, and how they can be nudged onto a pathway to make the region better.

    Sunrail brings with it mythology  about how trains affect cities.  In what has now become the standard, tired kabuki dance between developer interests and municipal ones.

    Not surprisingly, heavy regulation has entered the scene, with the avowed goal of creating dense urban pockets along even largely rural  train stops. This has sparked rising property values which may end up  frustrating the dream of transit-oriented development (TOD).  Affordable dwellings and meaningful employment within a half-mile of a train stop must be created in order to make this development work, but unless Central Florida can spark this, the new train will likely suffer from the same fate as the vast majority of its sunbelt counterparts:  low ridership and increasing tax subsidies.

    Inserting TOD into 17 locations in Central Florida is a bold experiment. In order for it to work, the rising costs of housing will need to be addressed, and Central Florida can take advantage of this ambition to succeed.  Orlando home sales are coming back, thanks to the mild climate and desirable lifestyle. That is very different, however, from guaranteeing that the economics of the rail commuter will make it worth discarding the single-family detached American Dream in favor of a relatively new model that has an unproven track record.

    Orlando also seems to be blithely going about the business of creating another ring of traffic around itself, descending into the same level where Atlanta’s Perimeter, the DC Beltway, and other like-kind roads live.  The Wekiva Parkway, long considered unneeded, is now being designed to complete the ring around Orlando, and will cross 25 miles of pristine wetlands that is a vestige of once-vast water resources of the region. 

    The Expressway Authority proposes this ring as an alternative to existing roads to serve the “growth needs of this area,” it conceded recently that this road segment made little economic sense except as a toll road accessing a new suburban single-family home development carved out of the swamps by one of the Governor’s chief fundraisers .  The asset value of this ring road may be more private than in the public interest.

    Traditionally agricultural land interlaced with wetlands, The Wekiva area to the northwest of Orlando has avoided large-scale Florida style bulldozing.  All this will change if the Governor is successful in eliminating water management regulations , freeing up much of Florida, including this corner of Orlando, for speculation.

    The local press, quick to criticize Alaska’s Bridge to Nowhere and always ready to jump on environmental issues, meekly ponders  the need for this $2 billion highway.  Maybe the elevated design, intended to be more ecologically friendly, makes it OK, despite the safety problems and high maintenance associated with this design.  Florida’s history is littered with the drawings of many other elevated highways eventually built on grade to save cost.  Once approved, the Wekiva Parkway may quickly be brought down to earth as well, displacing wetlands and agricultural land.

    The Wekiva Parkway will open up land supply which indeed will allow for more growth.  Done right, the asphalt will make land available that could be useful to the area’s economy.  It will bring traffic to historic, but presently lonely Sanford, potentially infusing the economy of this once-vibrant rail town.  Using principles of scarcity, land values could reflect people’s high desire to live in rural areas with all the services and guarantees that 21st century suburban life offers: fire and police protection, state-of-the-art infrastructure, and free pizza delivery.  It could invigorate neighboring towns that are currently struggling for survival.

    The risk is that such a road will simply allow more investment into Florida real estate without giving Florida much back in exchange.  Florida, already strained to meet its current population needs, should not simply trade another commercial strip for water resources that benefit many species and contribute to the region’s resilience. Rather, development models should emulate the best of America’s conservation development happening in states where water rights are scarce.  Connecting local employers with residential areas will enhance the value of both, and strategically keeping rural agricultural areas intact will preserve the region’s present land use diversity.

    Well managed development that conserves resources and balances broader needs with private interests will elevate the state’s prospects at this critical juncture.  One more bit of the original subtropical wilderness represents an asset for both present and future generations. With the right approach, the Wekiva Parkway can provide an enlightened model of low-density development that respects the value of open space.

    In town, Sunrail presents denser development as an alternative.  The normal pathway, however, seems to pit the profit-seeking real estate developer against ever higher regulatory burdens, which eventually make his product unaffordable to those coming here to escape high costs and regulations in other cities.  Keeping both employment and housing affordable are critical to achieving success with any of these projects.

    Moving product down the value chaindoes not do well current system, which leaves out the very people who Sunrail supposedly will benefit.  Density is one of those characteristics that seems to be about good timing: if you have it today, like San Francisco or New York, this is largely the result of history;  if you do not have it today, like Orlando, it is risky and probably a dubious proposition.

    The road and the train open up land that must be carefully stewarded to create opportunities for meaningful employment and affordable housing, both of which are presently scarce commodities.  The concept of transit-oriented development needs a success story, and Sunrail provides 17 opportunities to find one; meanwhile, the road presents a danger as well as an opportunity for Florida’s wetlands.  As the region slowly recovers from the recession, the two projects together should be carefully considered by the region’s citizens and leadership to truly redefine Central Florida’s identity for the 21st century.

    Richard Reep is an Architect and artist living in Winter Park, Florida. His practice has centered around hospitality-driven mixed use, and has contributed in various capacities to urban mixed-use projects, both nationally and internationally, for the last 25 years.

    Photo courtesy of BigStockPhoto.com.