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  • Geography of the Election: A New Era of Racial Politics

    Laura Jean Berger worked on the Congressional Campaign of Assemblyman Van Tran. This is her account of the results.

    Energy and free beer flowed through Assemblyman Van Tran’s campaign headquarters, the crowd anxiously building with anticipation each time Fox News reported another House seat for the Republicans. Every major network’s live trucks crowded the parking lot of the converted Blockbuster video store, their cameras trained on a stage set for a victory speech.

    But the crowd would be disappointed tonight. Results had Tran and incumbent Democratic Congresswoman Loretta Sanchez tied early in the evening, but she pulled ahead to a nine-point lead by midnight. And now, almost a week later, the wait is not yet over. While national press has declared Sanchez the winner yet again in central Orange County, California, neither candidate has yet conceded or declared victory.

    So why in California’s 47th district — where most have declared Sanchez the winner–will neither candidate make a declaration? Just ask the Orange County Registrar of Voters: the surprise in the ballot box is that there are still approximately 30,000 votes yet to be tallied, as reported by the Orange County Register. In a race where approximately 66,000 ballots cast have been counted thus far, one third of the vote share remains outstanding.

    The race could go either way at this point because those ballots yet to be counted are record numbers of both vote by mail and provisional ballots. If you’re Loretta Sanchez, you know that provisionals will likely break in your favor due to alleged polling place confusion in heavily Democratic Santa Ana. But if you’re Van Tran, you are hoping that the largest Vietnamese community outside Vietnam all decided to vote absentee this year.

    The Voice of OC asserts that “history has shown that absentee and provisional votes often make big differences in municipal elections involving large numbers of Vietnamese voters.” In this district, it seems that race is playing a substantial role in the election results just as it did during the campaign.

    National media attention descended when Sanchez declared on the Spanish television station Univision that the “Vietnamese and the Republicans” were trying to “take this seat…” and also remarked that Tran was very “anti-immigrant.” Her comments ignited a firestorm because Tran is, in fact, a Vietnamese immigrant himself. Sanchez was accused of bringing racial divisiveness into the campaign and later offered an apology for her comments once prompted.

    While the Vietnamese community in Orange County is certainly cohesive, they are not single-issue voters, as opposed to many Hispanics. OC Weekly columnist Gustavo Arellano stated in an interview with Southern California Public Radio, “All really that matters to the Spanish-language media right now is the question of immigration because that is the biggest question that its readership has…Everything else is secondary.” Since Tran has not defined his views on immigration precisely, he is “largely ignored” by Spanish-language media.

    Vietnamese voters, on the other hand, share the country’s priority on jobs yet also consider how either candidate–Vietnamese or not–would handle policy positions toward Vietnam. Sanchez’s work on House Resolution 334 calling for an end to Vietnam’s political imprisonment of those who supported Saigon and the South greatly helped her relationship with the Vietnamese community, approximately fifteen percent of the district’s residents.

    While that number might not seem like much, it’s important to note that the Vietnamese turn out at much higher percentages than Hispanics. Hao-Nhien Vu, managing editor of the largest Vietnamese newspaper in the US, ascribes civic involvement with the fact that “they went through so much to get here.”

    Yet the racial disparity in Orange County plays into a larger statewide picture. Voters in California supported Proposition 20 on Election Day, which gives the power of redistricting state and federal districts to a citizens’ committee as opposed to state legislators. California’s districts have been compared to “Swiss cheese,” but the district bordering the 47th to the north, the 40th, makes some rather interesting jabs around the edges.

    The Republican (and Vietnamese) stronghold of Garden Grove has been seemingly attacked by a cookie cutter, while one could argue that isolating predominantly Hispanic Anaheim and Santa Ana in the same district lumps too many Democratic votes together. Both parties are to blame for drawing illogical districts to maintain the status quo. But there’s an even greater national issue growing in this Petri dish.

    President Barack Obama’s election was seen by many as an advance in the fight against racial politics in the United States. But in light of Sanchez’s and Tran’s campaigns and supporters, when does cohesiveness cross the line? This district is a prime example of a place where there are more minority residents than whites. Therefore, it’s logical that a minority representative would be easily elected.

    But which minority?

    The answer is different for each voter. Identifying with the electorate has always worked well in politics. Sanchez identifies with the Hispanics while Tran pulls in the Vietnamese. Each has their supporters among Anglos and African-Americans. But even so, the inevitable is that one ethnic group is pitted against the other in a sense, and everyone knows it (and now admits it after Sanchez’ aforementioned Univision comments).

    The good news? The issue of race is now forced onto the table. Now that it’s no longer completely taboo, there’s a hope that different ethnic groups can come together and realize the diverse issues they all face. If this can be done, the voters will undoubtedly select the candidate that can best represent them, and that may not be a candidate with whom they identify based on race.

    However, this can only happen once an interracial dialogue is established. It won’t happen overnight. Members of minority voting blocs will and do integrate into the larger political discussion with time. Only after this is achieved will race become the non-issue that it should be in politics.

    As for California’s 47th Congressional district, the jury is still out for this year. And in 2012, who knows what the Citizens’ Redistricting Committee will change? Hopefully this year is one of the last in which race will play such a deciding role in elections. But that depends on the opening of communication channels between groups. As our country gets more diverse, and complex, we could be witnessing the beginning of a new era of racial politics in America.

    Laura Jean Berger is a senior at Chapman University studying Political Science and Communication Studies. A lifelong resident of Glendale, she is an avid classical pianist and a self-diagnosed political junkie.

    Photo by Neon Tommy

  • Greetings From Recoveryland: Ten Places to Watch Coming Out of the Recession

    Like a massive tornado, the Great Recession up-ended the topography of America. But even as vast parts of the country were laid low, some cities withstood the storm and could emerge even stronger and shinier than before. So, where exactly are these Oz-like destinations along the road to recovery? If you said Kansas, you’re not far off. Try Oklahoma. Or Texas. Or Iowa. Not only did the economic twister of the last two years largely spare Tornado Alley, it actually may have helped improve the landscape.

    We have compiled a list of the 10 American cities best situated for the recovery. These are places where the jobs are plentiful, and the pay, given the lower cost of living, buys more than in bigger cities. In other words, places unlike much of the rest of the country. The cities, most of which lie in the red-state territory of America’s heartland, fall into three basic groups. There’s the Texaplex—Austin, Dallas, San Antonio, and Houston—which has become the No. 1 destination for job-seeking Americans, thanks to a hearty energy sector and a strong spirit of entrepreneurism. There are the New Silicon Valleys—Raleigh-Durham, N.C.; Salt Lake City; and urban northern Virginia—which offer high-paying high-tech jobs and housing prices well below those in coastal California. And then there are the Heartland Honeys—Oklahoma City, Indianapolis, and Des Moines, Iowa—which are enjoying a revival thanks to rising agricultural prices and a shift toward high-end industrial jobs.

    Unlike the Sun Belt states and cities along the East and West coasts, these locales not only grew during the boom of the mid-2000s, they suffered least in the Great Recession. The fact that they are mostly in red states should give the newly ascendant GOP comfort as it tries to deliver on its election-year promise to right the economy. That isn’t to say all the blue states will remain weather-beaten. Wall Street, heady with cheap money, has sparked a return to opulence. And the strong demand for high-tech products and services will likely keep places like Boston, San Francisco, and San Diego from devolving into fancy versions of Detroit. Yet given the results of last week’s election and the increasing odds against another bailout of state governments, the near-broke and highly regulated blue states will be hard-pressed to generate much new employment.

    Of course, not everyone living in our Top 10 cities has avoided the heartache. And the continued slow pace of the economic recovery could hamper expansion even in the most-favored cities. If energy tanks as a result of a renewed global slowdown, it could hurt Texas and Oklahoma; dropping agricultural prices would hit some of the Heartland Honeys hard. But relatively—and that is the operative word in this tough economy—our 10 cities should fare better than most anywhere in America. And they could offer us a road map for what the nation’s economy will look like once the dust settles.

    THE TEXAPLEX

    For sheer economic promise, no place beats Texas. Though the Lone Star State’s growth slowed during the recession, it didn’t suffer nearly as dramatically as the rest of the country. Businesses have been flocking to Texas for a generation, and that trend is unlikely to slow soon. Texas now has more Fortune 500 companies—58—than any other state, including longtime corporate powerhouse New York.

    Austin boasted the strongest job growth in our Top 10, both last year and over the decade. Home to the state capital and the ever-expanding University of Texas, the city is arguably the best-positioned of the nation’s emerging tech centers. It enjoys good private-sector growth, both from an expanding roster of homegrown firms and outside companies, including an increasing array of multinationals such as Samsung, Nokia, Siemens, and Fujitsu.

    Yet Austin’s newfound prosperity isn’t simply a product of its university culture or its synergetic collection of technology firms. Its success owes a great deal to simply being in Texas—a state itching to eclipse its historic archrival, the increasingly troubled California. Indeed, Texas is becoming to the Golden State what Arizona, Nevada, and Oregon were in the last decade: a refuge for workers and companies fed up with California’s high unemployment, cost of living, and dysfunctional state government.

    The Texas economy has benefited from widening diversification. Houston has a robust energy business and medical-services industry, and thriving international trade—all long-term growth areas. Dallas enjoys an expanding tech sector and well-developed business-service industries tied to a powerful corporate base. San Antonio has a strong military connection and an expanding manufacturing capacity, and it is a key locale for the growing Latino marketplace. What’s more, Texas offers pro-business policies and relatively low taxes, and the physical infrastructure in the cities is generally as good or better than in many East and West coast metropolitan areas.

    People are voting with their feet. All four Texas cities are enjoying strong immigration from the rest of the country and abroad. Houston and Dallas have higher rates of immigration than Chicago, and if the job picture stays the same, those cities could someday rival New York and Los Angeles in terms of ethnic diversity.

    THE NEW SILICON VALLEYS

    Although Massachusetts and California are lauded as the places “where the brains are,” neither ranked high in the growth of tech jobs over the past decade. More important is where the brains are headed.

    A lot of them are going to North Carolina, Virginia, and Utah. The population of Raleigh-Durham grew faster than any major U.S. metropolitan area during the recession, and the city ranked third on our list in terms of job growth over the last decade. To the north, in Virginia, lies another Silicon Valley wannabe, stretching across Alexandria, Arlington, and Fairfax counties. And then there’s Salt Lake City and its environs, buoyed by the arrival of such big names as Adobe, Twitter, and Electronic Arts. The Greater Salt Lake region, which follows the Wasatch Mountains from Provo to Ogden, has much to attract tech companies: short commutes, decent public schools, spectacular nearby recreation, and, perhaps most important, affordable housing. Roughly 75 percent of households in Salt Lake can afford a median-priced house, as compared with 45 percent in Silicon Valley and roughly half that in New York City and San Francisco. The cost advantages of cities like Salt Lake and the other high-tech hubs are expected to prove especially attractive to millennials—the generation born after 1982—as they begin forming families and buying homes en masse.

    None of these Silicon Valleys may ever reach the critical mass of the real thing in California, but they will become increasingly more effective competitors and take an expanding market share of the nation’s technology business.

    THE HEARTLAND HONEYS

    The oft-ignored center of the country boasts a thriving economy that seems poised for further expansion. The region is well positioned to take advantage of growing markets for agricultural commodities and farm machinery in fast-growing countries such as India and China. The Great Plains and parts of the southern Midwest have also attracted new investments in manufacturing, both from domestic and foreign firms.

    Having largely missed out on the housing bubble, the region also avoided the hangover. As a result, after watching generation after generation move away, several heartland cities are enjoying a noticeable uptick in domestic migration as well as immigration. During the Great Depression, it was Oklahomans who moved to California to escape the Dust Bowl. Now there are considerably more people moving from California to Oklahoma than the other way around.

    Indianapolis, once written off as “Indiana no-place,” is one emerging hotspot. The area’s housing affordability now stands at a remarkable 90-plus percent. Although the recession has hit some of Indiana’s manufacturing-oriented northwest corner, over the past decade Indianapolis’s population grew at a rate 50 percent greater than the national average, notes urban analyst Aaron Renn. Much of this success is due to an aggressively pro-business attitude that promotes growing clusters such as life sciences, motor sports, and Internet marketing.

    Oklahoma City and Des Moines have also enjoyed steady growth in both jobs and net migrants over the past decade. Des Moines was recently rated the No. 1 spot in the country for business and careers by Forbes magazine, thanks to a surging agricultural sector and strength in the business-services segment. And Oklahoma City—which enjoys low unemployment as a result of its steadily growing energy and aerospace sectors—has been ranked among the best job markets for young people, ahead of Dallas, Seattle, and even New York (having Kevin Durant lead the NBA’s Oklahoma City Thunder for the foreseeable future can only improve the buzz).

    Of course, none of the cities in our list competes right now with New York, Chicago, or L.A. in terms of art, culture, and urban amenities, which tend to get noticed by journalists and casual travelers. But once upon a time, all those great cities were also seen as cultural backwaters. And in the coming decades, as more people move in and open restaurants, museums, and sports arenas, who’s to say Oklahoma City can’t be Oz?

    Job Growth
    Net Domestic Migration
    Total 2010
    2009
     
    10yr
    7yr
    2yr
    1yr
    9yr
    6yr
    2yr
    1yr
    Emplymt
    Population
    Northern Virginia 13.8% 11.5% -1.0% 1.2% 12.3 3.2 10.1 8.3 1,309,675 2,558,256
    Raleigh 13.5% 13.7% -4.9% -0.4% 236.7 186.6 47.2 18.4 496,900 1,125,827
    Salt Lake City, Ogden, Provo 7.7% 8.5% -6.7% -1.4% 9.2 15.9 7.4 2.4 961,900 2,227,413
    Austin 14.1% 17.8% -0.9% 1.7% 177.2 136.5 37.3 15.5 768,500 1,705,075
    Dallas-Fort Worth 3.7% 8.1% -3.6% 0.8% 59.3 44.8 14.3 7.2 2,876,925 6,447,615
    Houston 11.7% 10.9% -3.6% -0.5% 51.2 42.9 15.5 8.7 2,518,675 5,867,489
    San Antonio 11.4% 10.8% -2.7% -0.2% 102.1 86.4 21.3 9.3 833,325 2,072,128
    Oklahoma City 4.9% 6.7% -2.2% 1.0% 37.8 32.7 11.6 7.3 561,125 1,227,278
    Des Moines 7.8% 7.4% -3.5% -0.9% 63.6 56.2 14.0 6.1 316,975 562,906
    Indianapolis 1.6% 0.3% -5.5% -0.3% 45.9 34.6 8.0 4.1 870,850 1,743,658
    New York -1.5% 0.3% -4.1% -0.5% -104.7 -82.6 -13.8 -5.8 8,288,300 19,069,796
    Los Angeles -6.2% -5.2% -8.0% -1.0% -107.9 -89.0 -15.7 -6.3 5,118,950 12,874,797
    San Francisco -13.1% -6.0% -8.9% -2.6% -83.1 -57.6 3.4 1.9 1,853,350 4,317,853
    Chicago -8.0% -4.8% -7.4% -1.7% -60.0 -45.8 -8.8 -4.2 4,235,175 9,580,567
    Nation -1.2% 0.4% -4.9% -0.1%   130,690,750  
    Areas are Metroplitan Statistical Areas
    Northern Virginia, Va. includes Arlington, Clarke, Fairfax, Fauquier, Loudoun, Prince William, Spotsylvania, Stafford, and Warren Counties and Alexandria, Fairfax, Falls Church, Fredericksburg, Manassas, and Manassas Park Cities in Virginia.
    Salt Lake City region includes Ogden and Provo Metroplitan Statistical Areas
    Job growth uses May-August average for each year.
    Job data:  U.S. Bureau of Labor Statistics, Current Employment Survey
    Migration data:  U.S. Census Population Estimates.  Migration is cumulative over 10, 7, 2, or 1 yr period.  Number is rate per 1,000 residents in base year.

    —————-

    This article originally appeared in Newsweek.

    Praxis Strategy Group and Zina Klapper provided research for this article.

    Joel Kotkin is executive editor of NewGeography.com and is a distinguished presidential fellow in urban futures at Chapman University and an adjunct fellow with the Legatum Institute in London. 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: Jeanette Runyon

  • Will Wright

  • Corn Crop 2010: Food, Fuel, Feed and Folk Art

    The harvest of this year’s U.S. corn crop is about 90 percent complete, and it is going to be a bin-buster. If it surpasses 2009’s astonishing 13.1 billion bushels, it could become the largest in U.S. history. American farmers are growing more corn today than at any time in the past, and the trend is accelerating. The last five years have brought us five of the largest corn crops ever. Where to store the stuff is becoming an issue: When the bins and elevators are full, the corn is simply piled on the ground. Bankers are saying that we are experiencing the best farming environment in decades.

    Genetically modified seed, powerful fertilizer, and the rich soil of the Central Plains have turned field corn into the most prolific and versatile commodity on earth. It’s used in biofuel, animal feed, fabrics, biodegradable plastics, makeup, fireworks, crayons, shoe polish, batteries, and thousands of other products we consume every day.

    The U.S. Department of Agriculture reports that of the 13 billion bushels of field corn produced last year, 36 percent was used as feed for domestic livestock (beef, pork, poultry), 31 percent was used for ethanol (also resulting in 1.5 billion bushels of distiller grains, a byproduct of ethanol production that is used as livestock feed), 14 percent was exported to other countries (Japan, Mexico, South Korea, Taiwan and Egypt are the top recipients), 9 percent was used for human food, seed and industrial use, and 11 percent was carried over as a surplus.

    According to Nathan Fields, Director of Biotechnology and Economic Analysis for the National Corn Growers Association (yes, that is his real name), today’s farmers are good at growing corn—very good. No other county in the world even comes close.

    Corn was domesticated more than 7,000 years ago, when the early agronomists of the Americas instigated the upward trajectory of what might be described as the world’s first and most successful designer crop. In 1621, Squanto taught the pilgrims how to cultivate corn — maize —that sported only eight rows of kernels and was about one quarter of the length that it is today.

    In 2009, farmers in the Corn Belt — usually defined as Iowa, Illinois, Indiana, Minnesota, South Dakota, North Dakota, Nebraska, Kansas, Missouri, Ohio, Oklahoma, northern Texas, and Colorado— averaged a record yield of 165 bushels per acre. In 1927, when the first official records were kept, yield was only 26 bushels per acre. Fields asserts that the genesis of modern agriculture was in the 1880s, when ingenious farmers began to cross pollinate corn, creating hybrid seeds that produced hardier plants with the ability to outperform their parents. In the 1920s, geneticists developed inbred corn; after that, each decade brought and growth spurt after spurt. In the 1990s, biotech hybrids were developed that better tolerated drought, variances in temperature, and insects. But farmers still battle the weather every year. Indeed, it’s not unheard of for farmers to be fighting snow drifts during the last few weeks of harvest, and no amount of technology can stop a late summer hailstorm from destroying an entire crop in ten minutes or less.


    The winner of the National Corn Yield Contest last year grew 307 bushels per acre. A bushel of corn is 56 pounds and the size of a small laundry basket. A bold prediction is the expectation of 300 bushels per acre as a national average by 2030. It would be an 80 percent increase in just 20 years.

    Nathan Fields emphasizes that developments have led to higher US corn yields, grown on fewer acres with less water, chemicals, fertilizers, and fuel. Dramatic reductions in inputs per acre mean a smaller environmental footprint. There are 316,000 corn farmers in the U.S., and 95 percent of them are family farmers, the vast majority multigenerational. “For family farmers,” Fields asserts, “success is not measured by a single season. Family farmers are determined to leave the land in good shape for the next generation.”

    Enormous combines harvest biotech hybrid crops with the use of sophisticated GPS navigation systems—it’s no longer your grandfather’s farm, a fact reinforced to me recently by my 94-year-old grandpa, Ben Radcliffe. Radcliffe was a South Dakota farmer in the 1940s before he became the president of South Dakota Farmers Union and one of the country’s most revered farm activists. When Radcliffe’s father (my great-grandfather) was farming in the early 1900s, less than 1 percent of planted corn was hybrid; early farmers saved their seed from year to year. By the early 1940s, 78 percent of the corn planted was hybrid.

    Radcliffe notes,“Today, farmers use a weed control chemical so they don’t have to cultivate [plow between the rows]. We had to cultivate twice a year just to get the weeds out of the row. Today, the rows can be closer and the number of plants automatically doubles.”

    Today’s farmers also plant earlier. In the 1940s there was a farmer tradition that planting corn ideally began May 10th and was completed before June 1. Because today’s seed is more resistant to frost, farmers now begin planting in April. Today, most if not all of the corn harvest is sent to grain elevators. In Radcliffe’s day, most of it was fed to livestock right on the same farm. “Almost every farm, including mine,” he says, “had hogs and cows.”

    A new market for corn has recently opened up in China. According to CHS market analyst Kent Beadle, “China has undergone dramatic changes over the last decade. As incomes and lifestyles are changing, there is a demand for better food—specifically, more protein.” Pork, beef, and chicken consumption have caused demand to exceed supply, putting the world’s most populous country in a position to begin to buy U.S. corn.

    The U.S. supplies 62 percent of the world’s corn. Last year, America’s farmers exported $9 billion worth of it, an export surplus that most U.S. industries would envy… all from the ability of a genetically modified kernel of corn that weighs one-hundredth of an ounce to produce a 10 foot tall plant. A”maize”ing.

    Photo by Deborah Dragseth: The World’s Only Corn Palace, located in eastern South Dakota, twelve miles from where the author grew up in the heart of corn country. A folk art wonder, it is redecorated each year with 275,000 ears of corn. The 13 different colors and shades of corn include yellow, red, brown, blue, black, white, orange, calico and (this year for the first time via genetic engineering), green.

    Debora Dragseth, Ph.D. is an associate professor of business at Dickinson State University in Dickinson, North Dakota. She trains and develops leadership curriculum for CHS, Inc. a diversified energy, grains and foods company. The Fortune 100 company is the largest cooperative in the United States. Dragseth’s family owns a farm 8 miles east of the World’s Only Corn Palace.

  • Currency Wars: The Yuan and The Dollar Face Off

    In the currency wars looming between the United States and China, everyone is focused on the decline of the U.S. dollar and the overvaluation of the Chinese renminbi. In the standoff, China maintains a low valuation for the yuan — the unit in which the renminbi is denominated — against the dollar, insuring that Wal-Mart can fill its aisles with goods that cost less than the patio furniture and video games made in Paducah, Kentucky.

    The Obama administration would like to “jawbone” the Chinese to relax its currency peg, so that the yuan appreciates, making it possible for Chinese consumers to buy goods from the United States. This monetary logic assumes that Chinese buyers want to own serialization rights to “The Apprentice”, or are shopping for B-1 bombers, as at the moment that may be what the U.S. economy primarily has to offer for export.

    In trying to explain the depth of the current U.S. recession, economists have latched onto the phrase “structural issues,” to indicate that the U.S. needs fewer pilates classes and more steel orders if it is to pay down its debts and create new jobs. The phrase itself is a hint that the currency wars have provoked bizarre east/west role reversals.

    While the mandarins of the Chinese politburo sound increasingly like hard-nosed American executives, the Obama administration is speaking a language that could well be lifted from Mao’s Little Red Book.

    Like the Cultural Revolution, the U.S. administration came to power pledging to get rid of the “four olds”: old thoughts, old culture, old customs, and old habits. It might well have denounced “Party formalism” or “spiritual pollution.” Yes, there would be struggle sessions and the opposition of turmoil elements. But the result of the reforms would be a Great Leap Forward, although one that evidently comes with the price tag of $2 trillion in annual deficits.

    China’s worry, meanwhile, is that its economy relies on one client with a receivable problem. Its treasury sits on $1 trillion of U.S. government bonds and securities, the peg to keep the yuan in line with the dollar, while the dollar is sinking under the weight of its GM shares, subprime loans, entitlement IOUs, and health care payouts.

    Twenty years ago it would have been a dream to imagine “capitalist roaders” running China. Now, we fear having to answer to repo men.

    Like any nervous creditor, the Chinese leadership focuses on “payout ratios,” “interest cover,” “debt-to-equity,” and “price-to-book.” Mao might have warned about “spontaneous tendencies toward capitalism,” but the new Chinese leadership thinks more about solvency and capital adequacy.

    Hence the current American hand–wringing at IMF meetings and the calls in Congress to convene what the Central Committee used to call “Grievance Redress Societies.”

    While the Chinese are working on Saturdays, the Obama administration’s jobs policy, for the moment, consists largely of hiring America’s unemployed into the Census Bureau. Maybe we can expect large posters of Uncle Sam exhorting Americans: “Do Your Economic Duty: Stand Up and Be Counted!”

    Why do Americans have trade and payment imbalances with China? The short (and nonacademic) answer might begin by saying that Americans are in love with such big box stores as Target and Costco, and can’t own enough sheets, towels, housewares, wrapping paper, sweatshirts, shoes, T-shirts, caps, kitchen appliances, televisions, recliners, electronics, iPhones, picture frames, blue jeans, and sneakers, all of which China is willing to supply at cut-rate prices.

    Consumerism in China is not the state religion that it is in the United States. Shoppers in the U.S. congregate in malls and stores that are the size of the Vatican, and they walk around in the same hushed raptures. The average shop in China, as best as I can tell from my travels there, is the size of a closet and sells bags of rice, bottled water, Hand of Buddha Tea, little pots, bird cages, and shoots of bamboo, none of which are made in those retooled New England woolen mills.

    China would buy our software, were it not already stealing it. As it is, all the Chinese want from the U.S. is a few buckets of KFC chicken, some coal plants, and the odd New York Yankees cap. Too bad they don’t want to buy AIG, the city of Las Vegas, or the Social Security system.

    Although the last thing I want to be accused of is “mountaintopism” or “right opportunism,” my fear is that the failure of the Obama administration’s currency pronouncements, combined with the rise of Tea Party nativism, will provoke the kind of protectionism that would warm the earmarks of Senator Smoot and Congressman Hawley.

    What could be easier than to impose tariffs on a variety of Chinese–made goods? The problem with protectionism is that it will further delay the economic recovery.

    In the short run, protectionism could redress the monthly U.S. trade imbalance (up to $28 billion a month with China), stimulate a few jobs, and end the “capitulationism” toward the subsidized state capitalism of the Far East.

    Longer term, protectionism puts the U.S. on a path in which its economy will be isolated from the rest of the world, with these (“renegade”) consequences: trade collapses, government debt remains high, foreign investors disappear, costs and inflation increase, unemployment goes up, savings go down, and “the carefree clique” in Washington raises taxes to pay for these “opportunist errors.”

    The currency disagreements mask the inherent imbalances in the global financial system: the West consumes too much and saves too little, and the developing world, and countries like China, spend too little and horde too much. Only economic expansion, debt reduction, and expanded trade can redress this so-called disequilibrium. Neither protectionism, nor more Fed magic will do the trick. Nor will declaring a currency war against China.

    Even the Chinese know that it’s better to be a dog in peace than a man in troubled times.

    Photo by Eric Mueller, “It’s Money, Comrade!”

    Matthew Stevenson is the author of Remembering the Twentieth Century Limited, winner of Foreword’s bronze award for best travel essays at this year’s BEA. He is also editor of Rules of the Game: The Best Sports Writing from Harper’s Magazine. He lives in Switzerland.

  • The Post Election Deconstructors

    Mid-term Election Accelerates Federal Deconstruction

    The mid-term election of 2010 has already been labeled a political earthquake. It was more like a shift of tectonic plates than a mere earthquake, and its results may be felt for decades. The landmark election signaled the beginning of deconstruction at the federal level in the United States. The Young Guns of the Republican Party (Representatives McCarthy, Cantor and Ryan) will lead a freshman class of 65 new members of Congress on a budget crusade to rein in government spending. Their first act will be to return federal spending to 2008 levels. There will be many acts to follow. These Congressmen will follow the lead of the “Deconstructors” who began deconstruction at the state level earlier this year.

    Republican Governor Chris Christie was sworn into office in January of 2010 in a blue state election shocker. He wasted no time declaring a fiscal state of emergency. New Jersey had raised taxes 115 times in eight years and increased spending from $26 billion in 2001 to $45 billion when Christie took office. The state had a $10 billion deficit and had exhausted its borrowing capacity. Christie slammed on the brakes and froze $2.2 billion of spending. He refused to raise taxes. Christie tackled the Teachers unions, forced the Democratic legislature to impose pension reform, and even cancelled the $10 billion ARC tunnel between New Jersey and New York, the most costly public works project in the United States. Governor Christie has emerged as the first Deconstructor.

    California’s inconsistent governor, Arnold “The Terminator” Schwarzenegger may be forced to become “The Deconstructanator” before he leaves office. Faced with a $19 billion deficit, Arnold was forced to furlough 200,000 government workers. His plan for three day a month furloughs, equivalent to a 14% pay cut, was upheld by California’s Supreme Court. Six labor unions and 37,000 workers settled with Arnold accepting pension reform over furloughs. Further Deconstruction is inevitable.

    Newly elected Governor Brown will not have revenues from housing and dot.com bubbles to sustain the largess of his legislators. On October 23rd, the LA Times reported California shed 37,300 jobs in September. According to the state Employment Development Department, local government absorbed 32,400 of the job losses in September. The public employee layoffs are just beginning as cities and counties join the state in austerity measures. Where the private sector absorbed the brunt of the layoffs in 2008 and 2009, and Obama’s Stimulus bill insulated the public sector in 2010, the next wave will decimate the public employees of California.

    With the mid-term election mandate, federal bail-outs are no longer a viable solution to balance state budgets. Dozens of states have projected budget shortfalls of more than $100 billion for Fiscal Year 2012. Joining California in the state fiscal train wreck category are Illinois, Michigan and New York. Illinois has a budget of $26 billion that is $13 billion in the red. Despite its huge deficit, Illinois legislators increased state spending by 15% this year based on wishful projections that revenues will increase by 17%. Michigan is not far behind with a $4 billion deficit and a budget that was only balanced with $1 billion from the federal government.

    New York has a FY 2012 deficit of $13.5 billion. Its state government is dysfunctional and in denial. Newly elected Governor Cuomo has presented vague plans to solve New York’s misery. E.J. McMahon, executive director of the conservative Empire Center for New York State Policy said, “Cuomo’s budget proposals boil down to vague pledges of reducing costs and rooting out inefficiencies.” Cuomo is no Deconstructor and he will not be able to hide from New York’s fiscal reality. Where rationale fiscal management has long been ignored, Greek-like austerity measures and Deconstruction are inevitable.

    Not All States are Mismanaged

    Rhode Island was in dire straits last year with a $60 million deficit, declining revenues and unemployment at 12%. Governor Donald Carcieri realized the only way out of financial trouble was to make tough choices and embrace “fiscal responsibility.” He trimmed the state workforce through layoffs, attrition and leaving jobs unfilled. A classic deconstructionist, he streamlined and combined offices and agencies. He raised the retirement age for state pensions, cut benefits, and negotiated better contracts with unions and health care providers.

    Another Deconstructor is Governor McDonnell of Virginia. When McDonnell was swept into office with Governor Christie in 2010, Virginia had a $1.8 billion deficit. Virginia’s state budget had grown by 73.4% between 2000 and 2009, much faster than its population and inflation. Since taking office, Governor McDonnell converted the deficit into a $200 million surplus. He overhauled Virginia’s pension system saving $3 billion over 10 years. He imposed an immediate, statewide hiring freeze that covers all noncritical areas of state government. He cut and consolidated boards and agencies saving $20 million per year.

    Deconstruction Goes Global

    Global Deconstruction began in 2010 as a result of reduced worldwide government revenues caused by the prolonged Great Recession. No nation is exempt, including the US. Some like Germany have opted for fiscal discipline, helping to maintain Europe’s strongest economy. The Greeks ignored the crisis and rioted in response to the austerity plan imposed by the European Union. Yet despite their displeasure, austerity is an imposed reality Greek workers cannot avoid.

    The French responded characteristically with paralyzing civil strikes in response to the Sarkozy government increasing the retirement age from 60 to 62. The French unions are adamantly opposed to any change to the pension system. Sarkozy said he would shore up the pension system with “new levies on France’s highest earners and on company profits”. (France 24 International News October 5, 2010)

    In England, the response to the fiscal realities of the Great Recession have been draconian cuts which will cost 490,000 public sector jobs 2015. The cuts of $128 billion over 4 years made on “Axe Wednesday” represent 4.5% of their 2014-2015 GDP, equivalent to $650 billion in cuts to the US budget. (Chart 1.4 – SPENDING REVIEW 2010 Presented to Parliament by the Chancellor of the Exchequer by Command of Her Majesty October 2010). The BBC will see its funding cut by 360 million pounds, the budget of all its national radio services combined. Hundreds of London based diplomats will see their jobs disappear. Even the sacrosanct defense budget will receive cuts of 8%. (FT.com Daniel Pimlott October 20, 2010).

    Deconstruction is not limited to Europe. In Russia, Nikolai Volgin, president of the National Assembly of Labour and Social Policy Specialists, said he anticipates widespread layoffs this year, with as many as 1.5 million more people losing their jobs. Russia already has 8 million unemployed. Volgin said, “I do not rule out that there may be 9 to 9.5 million jobless in the country.” If Volgin’s predictions are correct, Russia will see an unemployment rate of 12 to 12.7 percent in 2011.

    Even Cuba has felt the chilling winds of deconstruction. President Raul Castro startled his people in August by stating 20% of Cuban workers may be redundant. He announced they will eliminate 500,000 state jobs in March of 2011 and allow some workers to work for themselves. Cubans are allowed to sell their own fruits and vegetables for the first time. The Cuban workforce is 5.1 million and 95% work for the state. Castro’s deconstruction will effect 10% of all Cuban workers.

    The difficult deconstruction occuring both at home and abroad is just in its earliest stages. Those countries and regions that take the opportunity to reform themselves will be the ones who will emerge with greater prosperity after the Great Deconstruction.

    Robert J Cristiano PhD is the Real Estate Professional in Residence at Chapman University in Orange, CA and Head of Real Estate for the international investment firm, L88 Investments LLC. He has been a successful real estate developer in Newport Beach California for twenty-nine years.

    ¬¬¬

    Other works in The Great Deconstruction series for New Geography
    Deconstruction: The Fate of America? – March 2010
    The Great Deconstruction – First in a New Series – April 11, 2010
    An Awakening: The Beginning of the Great Deconstruction – June 12, 2010
    The Great Deconstruction :An American History Post 2010 – June 1, 2010
    A Tsunami Approaches – Beginning of the Great Deconstruction – August 2010
    The Tea Party and the Great Deconstruction – September 2010
    The Great Deconstruction – Competing Visions of the Future – October 2010

    November 4, 2010

  • The Smackdown Of The Creative Class

    Two years ago I hailed Barack Obama’s election as “the triumph of the creative class.” Yesterday everything reversed, as middle-class Americans smacked down their putative new ruling class of highly educated urbanistas and college town denizens.

    More than anything, this election marked a shift in American class dynamics. In 2008 President Obama managed to win enough middle-class, suburban voters to win an impressive victory. This year, those same voters deserted, rejecting policies more geared to the “creative class” than mainstream America.

    A term coined by urban guru Richard Florida, “the creative class” also covers what David Brooks more cunningly calls “bourgeois bohemians”–socially liberal, well-educated, predominately white, upper middle-class voters. They are clustered largely in expensive urban centers, along the coasts, around universities and high-tech regions. To this base, Obama can add the welfare dependents, virtually all African-Americans, and the well-organized legions of public employees.

    These are the groups for whom Obama’s persona and policies pack the greatest appeal. Since Obama took office, the prime beneficiary of fiscal and monetary policies has been Wall Street, which has seen a nice 30% rise in the market and record bonuses. Large corporations, which are largely financed by stocks and bonds, have seen their profits soar over 40%, in part due to access to easy money.

    The financial boomlet is most marked in key creative class strongholds such as Manhattan, Boston and San Francisco, as well as their surrounding, super-affluent suburbs. The largesse benefits not only the traders, but the high-priced lawyers, accountants and publicists serving the financial elite. It has also benefited the high-end consumer industry, including the arts, which support much of the creative class. Not surpisingly, the Democrats scored well in these areas last night despite the GOP tide.

    The creative class also has benefited from the lavish expenditures of public funds to major universities for research. This has lifted the prospects of the professoriate at the elite colleges from which Obama takes much of his advice. Finally the administration has rewarded its friends and funders among Silicon Valley venture capitalists. Once self-described paragons of entrepreneurial risk-taking, they increasingly search out government incentives and subsidies to pay for their large bets on renewable energy technology.

    In contrast, the traditional middle class has not fared well at all. This group consists of virtually everyone who earns the national household median income of $50,000 or somewhat above. They tend to be white, concentrated outside the coasts (except along the Gulf), suburban and politically independent. In 2008 they divided their votes, allowing Obama, with his huge urban, minority and youth base, to win easily.

    Since Obama’s inauguration all the economic statistics vital to their lives–job creation, family income, housing prices–have been stagnant or negative. Not surprising then that suburbanites, small businesspeople and middle-income workers walked out on the Democrats last night. They did not do so because they loved the Republicans but because the majority either fears unemployment or already have lost their jobs. Many were employed in the industries such as manufacturing and construction hardest hit in the recession; it has not escaped their attention that Obama’s public-sector allies, paid with their taxes, have remained not only largely unscathed, but much better compensated.

    Of course, few on the progressive left–more expressive of a dictatorship of the professoriate than that of the proletariat–seem likely to confront these class realities. Many will ascribe last night’s disaster to the dunderheadness of the American people, or to the clever venality of the right. Certainly some tea party candidates, inexperienced and untested, did appear incapable of passing a high school civics test. But the results had less to do with Karl Rove’s money than the Democrats disconnect with the middle class.

    The real problem for the Democrats lies with fundamental demographics. The middle class is a huge proportion of the population. Thirty-five million households earn between $50,000 and $100,000 a year; close to another 15 million have incomes between $100,000 and $150,000. Together these households overwhelm the number of poor households as well as the highly affluent.

    In contrast, the “creative class” represents a relatively small grouping. Some define this group as upward of 40% of the workforce–largely by dint of having a four-year college degree–but this seems far too broad. The creative class is often seen as sharing the hip values of the Bobo crowd. Lumping an accountant with two kids in suburban Detroit or Atlanta with a childless SoHo graphic artist couple seems disingenuous at best. In reality the true creative class, notes demographer Bill Frey, may constitute no more than 5% of the total.

    At the same time, this affluent constituency may be more than offset by another more traditional upper class. This consists of people closely tied to such basic sectors as agriculture, fossil fuel production, suburban home-builders and the aerospace industry. These voters have, for the most part, remained solidly Republican for generations, and but many followed the “creative class” into the Democratic Party in 2006 and 2008. Last night this part of the upper class shifted back toward their political home.

    But the real decider–to use George W. Bush’s unfortunate phrase–remains the much larger, more amorphous middle class. Given the economy of the past two years, the subsequent alienation of this group should pose no mystery. Suburban swing voters didn’t suddenly turn into racists or right-wing cranks. Instead they have seen, correctly, that Obama’s economic policy has to date worked to the advantage of others far more than themselves or their families. Until the Democrats and Obama can prove that they once again can serve the interests of these voters, they will continue to struggle to recapture the optimism so appropriate two years ago.

    This article 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. 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 by World Economic Forum

  • “Redneck” Calgary Elects Liberal Muslim Academic Mayor: World Doesn’t End

    Calgary municipal politics rarely makes news outside of the city. Going into this year’s municipal election, I had reason to believe this would change. I came to Calgary to manage the campaign of the runner up from the last election. He is a Muslim (specifically Ishmaili), and an outsider to the political establishment. People told me there’s no way someone like that could be elected in Calgary. I’m happy to say that they were proven wrong. Unfortunately, I had nothing to do with this.

    My former candidate is a colorful guy. He had lived in Calgary for less than five years before running for mayor the first time around. His odds were pretty steep. Mayor Dave Bronconnier had garnered over 80% of the vote in the previous election. His closest rival had just over 5%. My candidate spent over a million dollars of his own money to run a viable campaign against the two term incumbent. He finished that election with a quarter of the votes. Internal polling suggested he had a serious chance, until false allegations concerning his past business dealings in Kenya derailed his candidacy.

    He is also a strong believer that Calgary’s redneck image is outdated. Calgarian values are old fashioned in many ways, many of them good. There is no major Canadian city where people are as supportive of free-enterprise as Calgary. Think of it as Houston North. The economy is largely driven by the oil and gas money, and it is perceived as being a very socially conservative, predominately white city. This perception is out of date. Nearly a quarter of Calgarians are members of visible minority groups, and the city elected Canada’s first Muslim Member of Parliament. My candidate mocked this perception. One of his ice breakers with skeptics of his candidacy was to tell them that “redneck Calgary is ready to elect a brown, bald guy from Kenya” as Mayor. It turns out he was right about the “brown” part.

    I ended up leaving that campaign early. We had different visions for the campaign, and the candidate always wins that argument. He wound up pulling out of the race the day before the election officially got underway. I harbored suspicions that the only reason he came in second the last time was that he happened to be the only guy willing to spend a million bucks to run against a popular incumbent. Had he not run, the two term incumbent would have walked to another landslide victory. Some people were angry with the incumbent, and he was the other name on the ballot they recognized.

    My faith that a member of a visible minority group could be elected Mayor of Calgary dwindled. But in the last few weeks of the campaign, something odd began happening in the polls. A man by the name of Naheed Nenshi started to poll at 20%. Few people took his candidacy seriously before this. His numbers began to climb into the 30% range in the final week. I started making long shot bets with friends that Nenshi would win, but I didn’t really expect it to happen. Surely the polling was wrong. Redneck Calgary couldn’t possibly elect a Liberal Muslim academic as Mayor.

    The polling actually was wrong. Since many young people only have cell phones, they are underrepresented in polls. It turns out that the polls massively underestimated Nenshi’s support. He didn’t just sneak by. Turnout was an astonishing 53%–shattering records for the last 3 decades—and he grabbed 40% of the votes. This was supposed to be a two way race between fiscal hawk alderman Ric McIver, and popular news anchor Barb Higgins. Elections don’t always turn out as they’re scripted by the pundits.

    The fact that we’ve actually elected a Muslim Mayor has lead to a serious rethink of Calgary’s redneck reputation. Pundits claim that this represents a shift in the city’s attitude towards immigrants. I disagree. Like its American energy town counterpart Houston, it’s an open, opportunity-oriented city. People don’t care if you’re white, brown, or from Saskatchewan. Calgary is a magnet for entrepreneurial people. It is a city that was built on people from all over the world seeking opportunities. One fifth of Calgarians are immigrants.

    “Go west, young man” is not a mantra that was exclusively adopted by white Protestant men. Nenshi was born and raised in Calgary, but his mayoralty would not have been possible if it weren’t for the hospitable Calgarian attitude.

    Frankly, he’ll probably do an alright job. Nenshi has an impressive business background, and his knowledge of urban public policy and municipal government is extensive. He’s more of a market liberal, than the dogmatic leftist that his critics painted him as. He wants more public amenities, but understands fiscal prudence and the need for efficient regulations.

    No matter how much his critics called him a socialist, Nenshi was the candidate who was able to convince voters that he knew how to provide the necessary services without breaking the bank. Voters wanted a clear vision of the city’s future, and that’s what Nenshi provided. People knew what they were voting for. Frontrunner Ric McIver offered slightly lower tax increases, combined with major spending initiatives. We’ve all seen what happens when politicians promise tax cuts without a plan to reduce spending. This isn’t a vision, so much as a recipe for disappointment.

    Calgarians wanted to elect a Mayor who would clean up City Hall. Nenshi offered that, and people didn’t care what God he worships (or doesn’t). Calgarians didn’t vote for a Muslim mayor any more than they voted for a Protestant Mayor the last election. They voted for the guy they thought would get things done. That’s the Calgarian attitude.

    Photo by 5of7

    Steve Lafleur is a public policy analyst and political consultant based out of Calgary, Alberta. For more detail, see his blog.

  • New Index Estimates New House Cost Impact of Land Regulation

    In recent decades, an unprecedented variation has developed in the price of new tract housing on the fringe of US metropolitan markets. Nearly all of this difference is in costs other than site preparation and construction, which indicates rising land and regulation costs.

    Our first annual Demographia Residential Land & Regulation Cost Index estimates the price of land and regulation for new entry level houses compared to the historic norm in 11 metropolitan regions (Note 1). Metropolitan regions in which land and regulation costs remain at or below normal have an Index of 1.0 while those with land and regulation costs above normal will have an Index above 1.0 (Figure 1).

    More restrictive land use regulation is variously referred to as “smart growth,” “growth management” and other terms. More restrictive land use regulation is estimated to have added from nearly $30,000 (in Minneapolis-St. Paul) to more than $220,000 (In San Diego) to the price of a new home.

    Economic research has associated rising residential land costs with more restrictive land use regulations. The table indicates some of the more important price increasing impacts of more restrictive land use regulation.


    More Restrictive Land Use Regulation:

    Factors that Can Drive House Prices Higher

    1.. Increases underlying land costs

    2.. Increases planning and development costs

    3.. Raises financing costs

    4.. Encourages more expensive houses.

    5.. Increases construction costs

    6.. Encourages concentration of market power and land banking

    7.. Encourages land and housing speculation

    The Land and Regulation Ratio

    For decades, construction costs of tract house on the urban fringe in the United States have represented 80% or more of the advertised house price. The balance of 20% or less has been for land and regulation costs and will be referred to as the “land and regulation cost ratio.” In metropolitan markets with less restrictive land use regulation, the historic 20% or less land price ratio remains in place. The Demographia Residential Land & Regulation Cost Index assumes a 20% expected land and regulation ratio.

    In some metropolitan markets, however, house prices have increased far more rapidly than in the rest of the nation. The greater increase in house prices and escalation of land costs above the historic 20% land and regulation cost ratio has occurred in metropolitan markets burdened by more restrictive land use regulations. Urban growth boundaries, limits on the number of houses that can be built, large lot zoning and excessive development impact fees and the like are regulation strategies that increase the cost of land for building houses. These land cost increases are not the result of more rapidly rising construction costs or underlying market forces such as consumer demand.

    More restrictive land use land use regulation also creates obstacles to people buying houses, requiring them to devote more money to housing than necessary and increases their vulnerability to losses in the event of a financial downturn. This exposes mortgage lenders to increased risks of loan defaults. Finally, more restrictive land use regulation makes residential land development more dependent on politics, with the potential for greater influence through campaign contributions.

    The first annual Demographia Residential Land & Regulation Cost Index estimates cost of land and regulation for new entry level houses compared to the historic norm in 11 metropolitan markets. Each of the metropolitan regions in which house prices have risen above normal have adopted more restrictive land use regulations. Conversely, in each of the metropolitan regions in which house prices have not risen above normal levels, there is less restrictive land use regulation. During much of the Post-World War II era, all metropolitan markets had less restrictive land use regulations.

    Results

    The overwhelming majority of new housing in the United States continues to be detached and is built near or on the urban fringe (Note 2). For new detached homes, the Index is 1.0 in six metropolitan markets (Atlanta, Dallas-Fort Worth, Houston, Indianapolis, Raleigh-Durham and St. Louis). This indicates that land use regulation is less restrictive and does not add more than normal to the price of new homes (Note 3).

    In the other five metropolitan markets, the land and regulation cost ratio has risen above 20%, resulting in a higher Index. The Index is 2.4 in Minneapolis-St. Paul, 3.9 in Seattle, 4.5 in Portland, 5.7 in Washington-Baltimore and 13.2 in San Diego. It is estimated that more restrictive land use regulation raises the price of the least expensive detached houses from nearly $30,000 (in Minneapolis-St. Paul) to more than $220,000 (in San Diego) than would be expected if these metropolitan markets had retained less restrictive land use regulation (Figure 2).

    The metropolitan markets with more restrictive regulation have an average Demographia Residential Land & Regulation Cost Index of 5.9 for detached housing, while the metropolitan markets with less restrictive regulation average 1.0.

    Housing Affordability: Through the Bubble and Bust

    There is increasing concern about declining housing affordability across the nation. Even after the deflation of the housing bubble, house prices in some metropolitan markets remain well above pre-bubble prices and historic affordability standards. The housing affordability of the included metropolitan markets is illustrated by land use regulatory category in Figure 3. The Figure indicates the National Association of Home Builders-Wells Fargo Housing Opportunity Index for 1995, the peak of the bubble and early 2010, showing the percentage of households able to afford the median priced house. Similar affordability measures can be reviewed in the Annual Demographia International Housing Affordability Survey.

    Future Editions

    The 11 metropolitan regions included in the initial Demographia Residential Land & Regulation Cost Index were selected to provide a geographical and regulatory balance and because they had sufficient data from which to develop the Index. Additional areas will be added in future editions, with the intention of including all metropolitan regions with more than 1,000,000 population.

    ——-

    Note 1: The Index was derived from a database developed of new house offerings by national, regional and local builders, using internet sites and published metropolitan home guides. The period covered is January through June 2010.

    Note 2: In 2006, more than 85% of new single family houses sold in the United States were detached, according to Bureau of the Census data. Detached housing represents approximately 62% of all US housing units (including multi-unit dwellings).

    Note 3: In each of the metropolitan markets with less restrictive regulation, the estimated construction costs were more than 80% of the house price. By using a 20% land and regulation ratio, the house construction cost was capped at 80% of the house price. In each of the metropolitan markets with more restrictive regulation, the estimated construction cost was less than 80% of the house price.

    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”

    Photo: Will County, Chicago urban fringe (By author)

  • The Real OC: Diverse, Dynamic and — Dare I Say — Progressive

    I recently returned to Orange County after a decade’s absence, fully aware that a stereotype of all-white, card-carrying-John Birchers still exists among many who remain unfamiliar with facts on the ground here.

    I never bought that old saw in the first place.

    And now, on a second venture into OC, I’m amazed by how deeply those old stereotypes have been buried under the accumulated accomplishments of everyday folks.

    The truth is that OC can rightfully claim ground as a leader when it comes to all sorts of popular buzzwords that are falsely applied to a lot of so-called cosmopolitan places.

    Start with “diversity,” a sop for all seasons in Los Angeles and other urban centers, where ethnic communities often are treated like so many pawns.

    Then there’s “dynamic,” another adjective that many metropolitan areas seem to think is theirs simply for the taking.

    Dare I add the presumptuous “progressive” to the list of over-used and seldom-earned buzzwords?

    I shall.

    In many ways OC, with its suburban reputation and libertarian leanings, comes closer to living up to the actual meaning of those words compared to many of the so-called cosmopolitan centers that cling to old stereotypes about this place.

    How do I figure?

    Take the campaign between Democratic incumbent Loretta Sanchez and Republican challenger Van Tran for the 47th District seat in the U.S. House of Representatives, an area that includes much of Central County.

    Tran has made Sanchez work hard in her re-election bid, no small feat considering her long incumbency.

    Neither candidate can count on ethnic appeal alone to propel them to the top. Latinos account for about 68% of the population in the district, which helps Sanchez. But voter registration is a different matter. Asians make up a smaller-but-still-significant base for Tran, with about 15% of the district—slightly more than whites. The winner will have to pick up a good chunk of voters outside their respective ethnic bases.

    That makes for a competitive race in a general election.

    And that’s a rarity in too many metropolitan areas.

    Consider Los Angeles, where ethnic communities too readily are factored like so many widgets into the calculus of ethnic politics. Electoral districts are carved up to turn this or that ethnic community into a lock for one political party or another.

    Candidates in these tailored districts typically get in line with power brokers before launching campaigns. There are occasional primary contests. But the differences between candidates in those intraparty affairs are usually so small that any debate is dominated by minute matters rather than any real difference in philosophies or policies.

    That’s stagnation.

    Some so-called cosmopolitan types might look at OC and say that the Sanchez-Tran race is an anomaly because of the challenger’s heritage. The local Vietnamese community ended up in OC after its founders fled a communist government, making it a natural for conservative, Republican politics here. That makes the community an outlier in terms of politics, ethnic or otherwise.

    That might hold up if it weren’t for Phu Nguyen, the Democratic nominee for the 68th District seat in the California Assembly, a territory that stretches from Anaheim to Newport Beach.

    Nguyen and Tran—Democrat and Republican— together belie any notion that the Vietnamese community is an outlier because of over-riding Republican loyalties in the local Vietnamese community.

    Nguyen’s opponent for the Assembly seat, Costa Mesa Mayor Allan Mansoor, points in the same direction as he engages in their high-spirited debate.

    Mansoor is a Republican who springs from Arabic and Finnish stock. The district that he and Nguyen vie to represent takes in parts of Little Saigon and Little Arabia, but does not feature a majority of voters of Vietnamese or Arabic heritage. There’s no big Finnish contingent, either.

    So you have a couple of candidates who can be readily identified by their ethnicities locked in an electoral battle that goes well beyond ethnic politics. They must reach beyond ethnic politics because the district in the heart of OC is too diverse for such narrow appeals.

    I don’t see any saints in the local political lineup. I’m willing to bet that both parties have tried to slice and dice the map to come up with districts that would make cynical use of ethnic communities.

    The point here is that OC attracts the sort of residents who reach beyond the familiar, pushing out here and bumping into one another there. Sure, Little Saigon is the major center of Vietnamese-American life, Santa Ana has an undeniably Latino core, and there is a Little Arabia in Anaheim. Yet those centers function more as cultural touchstones and less as assigned areas for members of those respective ethnic communities.

    The truth is that OC’s population mix is pretty well spread geographically and socioeconomically, with plenty of ambition—political and otherwise—throughout.

    That’s a different sort of diversity compared to what we hear so much about in a lot of so-called cosmopolitan centers.

    Sounds pretty dynamic.

    You might even call it progressive.

    Sullivan is managing editor of the Orange County Business Journal (ocbj.com)

    Photo by vansassa