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  • What Way for the Stimulus? Post-Industrial America vs. Neo-Industrial America

    As a result of the economic crisis, there is a broad consensus in favor of large-scale public investment in infrastructure in the U.S., both as part of a temporary stimulus program and to promote long-term modernization of America’s transportation, energy, telecom and water utility grids. But this momentary consensus masks the continuing disagreement on whether the U.S. government can legitimately promote American industries, and, if so, which industries. This is a problem for infrastructure policy, because different national infrastructures correspond to different national economic strategies.

    Consider the antebellum U.S. in Henry Clay’s American System: federal infrastructure investment in canals and later railroads (“internal improvements”) was part of a package that included import-substitution tariffs to protect infant U.S. industries from British competition. For Clay and his Whig allies and followers, including future Republicans such as Abraham Lincoln, internal improvements and tariffs were not ends in themselves. They were instruments to be used in the pursuit of the Whig-Republican vision of a decentralized, mixed industrial and agricultural economy where business owners, mostly small, and free workers, mostly prosperous, could realize the utopia of Clay’s “self-made man.”

    From Thomas Jefferson to Jefferson Davis, the Southern planters who opposed such ambitious schemes had no objection to infrastructure as such. They favored infrastructure tailored to suit the needs of their semi-colonial slave plantation economy, based on exports of cotton and other commodities to British and Western European factories. Local wharves and harbors that facilitated the shipment of crops to industrial Britain were acceptable to the planters. They opposed infrastructure that would encourage industrialization in the South or the U.S. as a whole, out of fear that urbanization and industrialization would threaten their local dominance over both black slaves and poor white yeoman farmers. They also feared they would be marginalized in national politics – as they indeed were – by industrialists, merchants and financiers.

    Today, the rivalry is not between the champions of an industrial America and an agrarian America. Rather, it is a rivalry between the champions of a neo-industrial America, which includes world-class industrial agriculture, and a post-industrial America, in which most if not all manufacturing and even agriculture will be outsourced. In this formulation, post-industrial America emerges as a consumerist paradise populated by investors, executives of multinational companies, rentiers, realtors, government and nonprofit bureaucrats, and a supporting cast of service sector proletarians including nursing aides, nannies, gardeners, security guards and restaurant and hotel workers.

    Just as there was one logical infrastructure for the industrializing North and one for the anti-industrial plantation South in the nineteenth century, so in the twenty-first century a different infrastructure would be appropriate, depending on whether the goal is a post-industrial America or a neo-industrial America.

    A post-industrial infrastructure can be simple, local and substantially foreign.

    The post-industrial infrastructure can be simple since it involves little more than the roads and harbors needed to bring in high-value-added imports from abroad and ship out low-value-added American commodities. Adequate harbors are necessary, as are adequate highways to help ship U.S. soybeans and timber to industrial Asia while bringing Chinese, Japanese and Korean goods to Wal-Marts for distribution.

    The post-industrial infrastructure can also be local. Just as the Southern planters were indifferent or hostile to regional or national infrastructure projects, so the elites of the service sector are interested chiefly in the infrastructure needs of the half dozen or so coastal megalopolitan areas where they live. Many favor high-speed rail to connect nearby big cities on the coasts, while denouncing federal investment in non-metropolitan areas as boondoggles. The FIRE (Finance, Insurance, Real Estate) economy of post-industrial America could function reasonably well as long as a handful of colossal city-states – Boswash, Northern California, Greater LA, the Texas Triangle – had state-of-the-art local telecom and transportation and energy grids. So what if the rest of the continent decayed?

    Finally, the post-industrial infrastructure can be largely foreign. Most of the urban service sector elite favors both outsourcing American industry and importing a new metropolitan immigrant proletariat willing to work for lower wages and fewer benefits than native Americans. To be sure, someone must build the components of the metro infrastructure and put them in place. But steel can be shipped in from Asia and assembled in New York, San Francisco, Atlanta, Chicago and Houston by immigrants, legal or illegal. Better yet, the metro-supportive infrastructure can be leased or permanently sold to foreign consortiums and even foreign sovereign wealth funds, in order to avoid the need to raise taxes to pay for upfront costs or repay bonds over the long term. The “leakage” of federal stimulus spending to benefit Chinese factories, law-breaking Latin American illegal immigrants and petrostate sovereign wealth funds will not bother elites who are not only post-industrial but to a large extent too sophisticated to worry about narrow patriotism.

    If the infrastructure of a post-industrial America would be simple, local and largely foreign, the infrastructure of a neo-industrial America should be complex, national and predominantly American.

    A neo-industrial infrastructure necessarily must be complex, because the purpose of a neo-industrial infrastructure would be onshoring – arresting and in some cases reversing the transfer of high-value-added manufacturing and services to other countries. This requires something more than freight rail bringing Chinese imports to Wal-Mart and airports helping to deliver Amazon.com boxes to urban apartments. It requires an infrastructure tailored to the needs of an entire complex ecosystem of factories, design offices, and their suppliers and contractors. And that infrastructure not only must be rebuilt in existing industrial areas like Detroit but also built from scratch in areas such as the Great Plains. It would aim to put many of tomorrow’s factories and research parks in today’s depopulating rural areas and derelict inner cities.

    A neo-industrial infrastructure must be national and inclusive in scope. Its goal resonates with the aspiration of Henry Clay Whigs, Lincoln Republicans and William Jennings Bryan Populists – a decentralized, prosperous middle-class society of small and medium-sized towns as opposed to a country where half a billion people are crammed into a few plutocratic megacities and forced to live in dense apartment blocks.

    Such decentralization – contrary to the claims of some urbanists and greens – need not mean excessive “sprawl.” This is still a very large country with lots of land, as anyone who spends time away from the coasts recognizes.

    But more important, there can only be an independent middle-class majority in a United States with 400 or 500 million people in 2050 if most Americans live and work in relatively low-density areas where homes are affordable and small business rents are not crippling. That means building new towns and new industrial centers away from the existing ones, to spread out the population and accommodate tens of millions of new immigrants with desirable skills. The rich, who will remain concentrated in a few metro areas, where they can socialize, compete and conspire with one another, must be taxed by the federal government to subsidize the infrastructure of the entire continental U.S., not just their own cities, metro areas and states.

    Last but not least, a neo-industrial infrastructure must be predominantly national with respect to its components and its workforce. It would be self-defeating to design an infrastructure friendly to American industries and workers and then hire foreign industries and foreign workers to build it. Most or all federal infrastructure spending should be reserved for corporations and suppliers whose high-value-added production takes place on American soil. And all jobs directly or indirectly related to infrastructure construction should be reserved for citizens or legal immigrants. Law-abiding American citizens should not be taxed to subsidize law-breaking illegal immigrant workers and the unpatriotic, criminal contractors who employ them. This is not “nativism.” The right kind of legal immigration would be an important part of any neo-industrial strategy, as would taking advantage of foreign direct investment by foreign companies and sovereign wealth funds in mutually beneficial ways.

    The debate about infrastructure, then, is also a debate about the future industrial profile of America. Will America in the twenty-first century be neo-industrial or post-industrial? This debate, in turn, may well determine whether the U.S. will become a decentralized, continental middle-class society or a collection of plutocratic, hierarchical city-states. The stakes could not be higher.

    Michael Lind is Whitehead Senior Fellow at the New America Foundation and Director of the American Infrastructure Initiative.

  • Should We Bailout Geithner Too?

    This morning the Senate Finance Committee approved the nomination for treasury secretary of Timothy F. Geithner, head of the Federal Reserve Bank of New York. Geithner is a Wall Street darling, but taxpayers may have a different take. Senator Jim Bunning (R-KY) reminded us at the Senate confirmation Hearing January 20 that Geithner was part of every bailout and every failed policy put forth by the current Treasury secretary. After you read this, you should begin to see why I’m so opposed to Geithner’s appointment – I don’t want the fox any closer to the hen house than he already is.

    For starters, look at what the Fed has admittedly been up to – this is from a recent speech by the President of the San Francisco Fed, Janet Yelin. The Federal Reserve Act authorizes the Fed to lend to “individuals, partnerships, or corporations” in extraordinary times. For the first time since the Great Depression, the Fed is invoking this authority to make direct loans to subprime borrowers – that is, those who can’t get credit from a bank.

    Basically, the New York Fed, under Geithner’s direction, created a couple of special companies so they could print money to get around restrictions on what the Fed can do directly. Now, be perfectly clear on this first point – this is not Treasury or TARP or Congress that’s spending this money. It’s the Federal Reserve. They don’t have to ask Congress for money, they just print it. The Fed is providing “credit to a broad range of private borrowers.” And by-and-large, they don’t have to tell you who they give the money to, either. Here’s how Yelin put it:

    “It is worth noting that, as the nation’s central bank, the Fed can issue as much currency and bank reserves as required to finance these asset purchases and restore functioning to these markets. Indeed, the Federal Reserve’s balance sheet has already ballooned from about $900 billion at the beginning of 2008 to more than $2.2 trillion currently—and is rising.”

    Notice how easy it is to double our money – they just keep the printing presses running. In fact, the recent expansion is extraordinary. Since 2003 the Fed’s balance sheet averaged only $838 billion. So this doubling has all taken place in the past year. In the last recession, around 2002, the Fed’s balance sheet increased by only 13%. If the current recession started in 2007, and if the Fed’s balance sheet is any gauge, then we’re in for much worse.

    Average Federal Reserve balance sheet

    Year

    Reserves

    % change

    2000

    $625,822,500,000

     

    2001

    $653,774,500,000

    4.5%

    2002

    $740,502,000,000

    13.3%

    2003

    $762,853,509,434

    3.0%

    2004

    $803,004,846,154

    5.3%

    2005

    $843,397,519,231

    5.0%

    2006

    $877,922,692,308

    4.1%

    2007

    $907,023,653,846

    3.3%

    2008

    $1,228,848,679,245

    35.5%

    2009

    $2,175,364,000,000

    77.0%
    2000-2002 are for last 2 weeks only; 2009 is for first 2 weeks only. Data available from http://www.federalreserve.gov/releases/h41/hist/

    Where are they spending all this cash? You probably didn’t hear that the Fed started buying commercial paper through these “private-sector vehicle[s]” created to sidestep an act of Congress. (Commercial paper is the short term debt of corporations.) Another thing you aren’t hearing about is that back in November 2008, the Fed bought $600 billion of mortgage-backed securities from AIG. This action, if taken without subterfuge, would not be legal. The Federal Reserve Act limits the Fed to buying securities that were issued or guaranteed by the U.S. Treasury or U.S. agencies. In order for the Executive Branch to get around a limit placed by the Legislative Branch, the Fed got help from the Treasury.

    Yelin laid it out unabashedly: “Cooperation with the Treasury is necessary because the program entails some risk of loss and, under the Federal Reserve Act, all Fed lending must be appropriately secured. The Treasury has committed $20 billion of TARP funds to protect the Fed against losses on the Fed’s lending commitment of up to $200 billion.” Don’t kid yourself: this is a credit default swap on a national level.

    On June 26, 2008, the Fed used this scheme to buy the assets of Bear Stearns. That money went to JP Morgan. On November 25, 2008, Geithner’s New York Fed bought out the underlying assets for which American International Group had written credit default swaps, saving AIG from having to pay off the swaps when the assets failed. On December 12, 2008, they bought more residential mortgage-backed securities from AIG. Those two bailout packages currently stand at about $73 billion. The big ones are those where the recipients are not being named. On October 27, 2008, they bought commercial paper from “eligible issuers.” On November 24, 2008, they bought “certificates of deposit, bank notes, and commercial paper from eligible issuers.”

    In an odd twist of democracy, you can read all about Geithner’s personal income tax problem but you won’t find anywhere information on who is benefiting from this particular bailout money which Geithner is in charge of passing out. The commercial paper bailout from the Fed (this doesn’t include anything that Treasury is doing or that Congress has authorized) stands at $333 billion.

    They aren’t done, either. According to Yelin, there are plans in place to substantially expand this spree of lending, buying, and guaranteeing to include more kinds of assets issued by more kinds of institutions, like commercial loans and non-agency mortgage-backed securities.

    Senator Chuck Grassley (R-IA) referred to this as Geithner’s participation in “a monstrous act of government intervention and ownership over our financial markets.” While TARP has a Special Inspector General and various congressional oversight duties, similar transparency and oversight does not exist for the bailouts conducted by Geithner in New York. Geithner may be, as Grassley asked him, “the general, drawing on your financial sector expertise, who will marshal the financial troops and assets of the Treasury Department.” But he can’t “lead our nation to prosperity.”

    He couldn’t, in six years, stop the primary dealers in US Treasuries from selling more bonds than Treasury issued. The only way this could go on to the extent that it did, with an average of $2.1 trillion of Treasuries sold but undelivered for seven weeks from September 24 to November 5, is because Geithner did not have the support of the “financial troops” to stop it. In fact, I will suggest to you that this level of abuse, in what amounts to massive naked short selling of US Treasury securities, could only be done with complicity.

    Finally, it is a simple matter to compare Geithner’s activities at the Fed to those of Ken Lay at Enron. Remember all those “partnerships” with cool names derived from Star Wars movies? Geithner’s New York Fed created Delaware Limited Liability Companies with the name “Maiden Lane” which is the Fed’s street address in New York. They are using unregulated companies to make loans and to buy and sell assets completely outside the view of the public. The Senate Finance Committee approved Geithner’s nomination on January 22, 2009 in an Open Executive Session. Geithner has proven he can hide the ball; let’s not let this scheme move to Treasury.

    Susanne Trimbath, Ph.D. is CEO and Chief Economist of STP Advisory Services. Her training in finance and economics began with editing briefing documents for the Economic Research Department of the Federal Reserve Bank of San Francisco. She worked in operations at depository trust and clearing corporations in San Francisco and New York, including Depository Trust Company, a subsidiary of DTCC; formerly, she was a Senior Research Economist studying capital markets at the Milken Institute. Her PhD in economics is from New York University. In addition to teaching economics and finance at New York University and University of Southern California (Marshall School of Business), Trimbath is co-author of Beyond Junk Bonds: Expanding High Yield Markets.

  • Obama’s Friends: Enemies of the American Dream?

    President Barack Obama has rightly spoken positively about the American Dream, how it is becoming more expensive and how it needs to be reclaimed. But to do this, he may have to disregard many of those who have been among his strongest supporters and the dense urban centers which have been his strongest bastion of support.

    Indeed, the American Dream has been achieved by countless millions of households, though many have been left out of this expansion that began following World War II. Home ownership has risen from little above 40 percent to nearly 70 percent. Automobile ownership has become nearly universal, making it possible for urban areas to grown to unprecedented size. The Brookings Institution, the Progressive Policy Institute and others have published studies showing that people in low income households are far more likely to find and hold employment if they have access to cars.

    All of this has been associated with a democratization of prosperity that has never before occurred. Per capita income is now 3.5 times its 1950 level in the United States (see 1929-2007 inflation adjusted data).

    Yet, the American Dream is under serious threat – and this predates today’s faltering economy. A key component lies in the machinations of an urban policy and planning elite contemptuous of the comfortable lifestyles achieved by so many Americans. Instead they propose creating an environment in which households would have to pay more for their houses and spend more of their lives traveling from one place to another.

    Most of those who wish to create this situation come from the political left and consider themselves to be “friends of Obama.” They have achieved positions of power in some urban areas, such as throughout California, Portland, Seattle and a host of other areas. As early as 2007 some saw Obama as the dream candidate – what one called “a smart growth President”.

    This elite group starts by demonizing the very foundations of America’s inclusive prosperity. Having declared “urban sprawl” a scourge, they seek to stop further development on the urban fringe and want virtually all development to be within already developed urban footprints. These and other overly stringent regulations have served to strangle urban land markets, forcing land prices and housing prices higher, in those region where they have been imposed.

    Over fifteen years ago William Fischell at Dartmouth University demonstrated that California’s overly restrictive land use policies had made that state more expensive than elsewhere. Since 2000, with the wider availability of mortgage credit, the new demand drove prices to double or triple historic norms in areas with restrictive regulation. Price reductions have lowered prices, but they are still well above historic norms. This means that fewer households still are able to own their own homes in areas with restrictive land use regulations. Once normal prosperity is restored, the higher house prices of the restrictive land use areas can be expected to resume their increase relative to the rest of the nation.

    This is a problem for some regions now. But many planners are enthusiastic about Obama in part because he is thought to be sympathetic to recreating these conditions throughout the entire country.

    ###

    The automobile plays the role of the Great Satan in this morality play. The goal of many ‘progressive’ urbanists is to force people into transit and stop road building. Transit, of course, has its place. There is no better way to get to your job south of 59th Street in Manhattan, to Chicago’s Loop or to a few other of the nation’s largest downtown areas. But the stark reality is that transit can not substitute for the automobile for the overwhelming majority of trips, except for these niche markets. Further, failing to expand highways to keep up with traffic growth increases traffic congestion (and air pollution) and reduces economic productivity (read: “increases poverty”).

    Higher costs for home ownership and slower commutes to work – and they will be slower because transit commutes average twice as long as automobile – impose significant burdens on people. Fewer people will have houses and fewer will have jobs. Forcing a single parent to take longer to navigate from home to the day care center to the job, whether by transit or by car, makes life more difficult – and for no rational reason. It is the equivalent of forcing people to work harder for nothing.

    Of course, this way of thinking has been around some parts of the country for decades. The new drive to reduce greenhouse gas (GHG) emissions has extended its reach. The typical formulation now is that in order to reduce GHG emissions, Americans need to be crowded into dense urban areas and give up our cars.

    ###

    In reality, nothing of the kind is required. “Green” houses are being developed that can make it possible to substantially reduce GHG emissions while Americans continue their favored suburban life styles (the lifestyles, by the way, also favored by Europeans and Japanese). Hybrid and other advanced car and fuel technologies can make it possible for the personal transportation sector to achieve massive long term GHG reductions. The answer is regulating emissions, rather than people.

    But the planning and urbanist lobbies may not fundamentally be driven by the perceived need to reduce GHGs. They would rather regulate people, just as was the case well before climate change was even on the political agenda.

    Of course, the planners don’t see their strategies as nightmarish. They have worked them all out theoretically in their heads. The problem is that the theory is not and cannot be translated into reality. There is no more comfortable place to live in the world for people – particularly those past their youthful and single years – than the American suburb. There are no metropolitan areas of similar size in the world where people spend less time traveling to and from work than in America. Take Hong Kong, which is by far the world’s most dense large first-world urban area. No other metropolitan area of its size should have such theoretically short trips, because everything is so close together. Yet, average travel time to work is almost double that of Dallas-Fort Worth, with a similar population. Indeed, even in “gridlocked” Los Angeles, so often ridiculed for its automobile-oriented “sprawl,” work trip travel times average nearly 40 minutes less per day than in that ultimate of urbanization, Hong Kong. That adds up to about a week’s worth of extra commuting time each year.

    Rather than trying to constrict the dream, President Obama should work on ways to expand it. This will not be easy. Today, less than 50 percent of African-American and Latino households own their own homes. At the same time, Anglo home ownership is about 75 percent. No program to extend the American Dream can be based on policies that unnecessarily increase the price of housing.

    For the new President, there is a clear choice. He can cast his lot with those whose strategies would extinguish the aspirations of millions of Americans, or he could make it easier for more households in the nation to achieve the American Dream.

    Wendell Cox is a Visiting Professor, Conservatoire National des Arts et Metiers, Paris. He was born in Los Angeles and was appointed to three terms on the Los Angeles County Transportation Commission by Mayor Tom Bradley. He is the author of “War on the Dream: How Anti-Sprawl Policy Threatens the Quality of Life.”

  • Housing Price Changes in the Western States

  • The Dawn of a New Age in the War on Poverty

    An article published in the Chicago Tribune on June 29, 1992 is entitled “The Great Society’s Great Failure.” It profiles the Inez, Kentucky family that appeared in the famous front porch photo that launched LBJ’s War on Poverty in 1964. Suffice it to say without revealing the particular gory details of their thwarted lives, the family’s fate was as dismal as the outcome of the War on Poverty. Mike Duncan, an Inez banker and now chairman of the Republican National Committee – battling to retain his position – put it mildly: “The War on Poverty did not succeed.”

    In 2009 where do we stand with America’s War on Poverty? Inez and the rest of Martin County were described in the article as “one of the poorest counties in a poor state. Of its 12,526 people, all but 27 are white.” The image stuck and Inez has been digging out ever since.

    The community’s lack of progress over the past several decades has been particularly ironic: until recently, the rest of America has been experiencing one of the greatest economic expansions in history.

    Now we have elected our first African American to the office of the presidency, a man who cut his political teeth working among the black poor of Chicago’s Southside. Barack Obama’s election has no doubt raised hopes around the Southside and other predominately African American distressed communities. But can the same be said for the more numerous, equally intractable neglected communities – labeled poor, white, aging, and rural (PWAR) – like Inez?

    This line of thinking has become even more popular as evidenced by the racial overtones, masquerading as satire, included on a CD released by a challenger of Mike Duncan for the RNC chair position. Politicos say there is a divide within both of the major political parties – appeal to the PWAR and die or reach out to gather more under the tent. PWARs are rarely spoken of in the media except in pejorative terms

    So far, there is little evidence that poor rural whites – epitomized by Appalachia – have any strong advocates in the new administration. There is not a single cabinet officer from anywhere in the deep or mid-south nor any important figure in the majority party from the region.

    So, what happens to the fortunes of the regions – the South in particular – in the new order? Will the battle of red versus blue gain new ground or will other rivalries and labels rise up? Will a region whose economy revolves around coal have a chance in a “new green world?”

    Right now places like Kentucky – decidedly red – could well be marginalized. The media enjoys painting our citizens as ignorant rubes (how else could they have voted against Obama?) This was implied in the mainstream news. (CNN had particular fun with it while profiling Clay County, Kentucky before the election and conducting a trailer escapade in Carlisle, Kentucky after the election).

    Seventeen years after the Tribune’s article, Inez and the rest of Martin County have chosen to declare their own war to overcome the endemic national stereotype that the War on Poverty placed upon them. This new spirit of localism was born first among the community’s young professionals who left Inez as high school graduates and have now returned as educated professionals seeking to earn their own piece of the American Dream. Their hope has been burnished in the fire of experiences gained as they saw and experienced the rewards of hard work and determination in other places. They concluded that Inez and Martin County could be something different, and they have returned to make it so.

    It is clear that President-elect Obama has a choice: be a great president and a uniter, or not. They say FDR was great because he reached out to those who were not for him. The times now are eerily similar. One hopes that a man who grew up as an outsider might realize that the “hill” people of Appalachia or the deep South aren’t all pathetic as portrayed in the news media; perhaps they don’t understand the message of hope because they have been betrayed before by “outsiders” attempting to convert them to the “mainstream.” The failures of the ‘war on poverty’ are still well remembered here.

    Not all 100 or more million new Americans who will be here by 2050 will head for the eight supercities. The vast majority won’t find work that will allow them to settle in the so-called “creative” hotbeds. Many will head for small to mid-sized towns with more affordable lifestyles, and perhaps more durable values. Perhaps others will begin to believe in the old adage that we can live and work anywhere and will do so, taking the opportunity to bring change to our communities.

    For its part, Inez, Kentucky has decided to rewrite its story and believes it can do so. As an Appalachian native, I believe it too. Their story is one of grit, determination, and sheer willpower to change the course of the future in a positive way. At a recent public meeting, an African American woman who had moved to Inez from D.C. stood up and provided a testimonial of faith and belief in her newfound home. She hoped others would come and begin to appreciate the lifestyle of a small town in hill and coal country. I had to ask afterward – is she for real? “Yes” came the reply, “she is very real.”

    A recent Esquire magazine feature called on “natives” to describe each of the 50 states. Actor Harry Dean Stanton, in the midst of philosophical ramblings, said: “There’s no answer to the state of Kentucky.” I don’t believe that’s entirely true.

    Sylvia L. Lovely is the Executive Director/CEO of the Kentucky League of Cities and the founder and president of the NewCities Institute. She currently serves as chair of the Morehead State University Board of Regents. Please send your comments to slovely@klc.org and visit her blog at sylvia.newcities.org.

  • Housing Price Shifts Vary by US Region

    Here’s a look at the monthly Office of Federal Housing Enterprise Oversight monthly housing price index by US Census Region. The OFHEO index gives us a little different geographic cut than the popular S&P Case-Shiller Housing Index. We can see the extreme fluctuations in the western US, especially in the Pacific states. These are seasonally adjusted numbers current as of October 2008. The black line, depicting the national composite, finishes at 204 – indicating a doubling of housing prices since 1991, but a fall of 8.8% since its peak in April 2007.

    The 8.8% national decline is interesting considering the larger declines depicted by the metropolitan focused Case-shiller index.

    Judging by these numbers, the housing prices in the 8 states of the West South Central and East South Central Regions appear to be most stable. The Great Plains states fare remarkably well, and the east coast states are falling in line with the national average. Interestingly, end-to-end growth in the Pacific region ends up about the same as the stable south, yet it took a much more turbulent path to reach that point.

    According to OFHEO, the data “is obtained by reviewing repeat mortgage transactions on single-family properties whose mortgages have been purchased or securitized by Fannie Mae or Freddie Mac since January 1975.” Here’s more on the OFHEO housing price index methodology.

  • Office of Federal Housing Enterprise Oversight, Monthly Home Price Index by US Region

  • Obama Family Values

    For a generation, conservatives have held a lock on the so-called “values” issue. But Barack Obama is slowly picking that lock, breaking into one of the GOP’s last remaining electoral treasures.

    The change starts with the powerful imagery of the new First Family. The Obamas seem to have it all: charming children; the supremely competent yet also consistently supportive wife, and the dynamo grandma, Marian Robinson, who serves as matriarch, moral arbiter and babysitter in chief.

    The new president’s focus on family reflects an increasing emphasis among African-American leaders on the importance of parental values. Many prominent black activists initially scorned Sen. Daniel Patrick Moynihan’s 1965 report linking poverty among African-Americans to the decline of intact family units. But today, when roughly half of all black children live with single mothers, it is widely accepted that strong families represent the most effective way to reduce “the racial gap” in incomes.

    When it came to family, the last Democratic White House residents – the highly entertaining but also obviously dysfunctional Clintons – embodied persistent conflicts among baby boomers over sex and social roles. Remember Hillary’s resentful comments about “baking cookies”?

    By contrast, the focused and disciplined Obamas epitomize the aspirations most Americans hold for their own personal lives: caring fathers, strong mothers and an involved extended family.

    These ideals may be particularly appealing for Americans under 40, whose support has been instrumental in the president’s rise to power. Younger Americans are proving to be more family-oriented, in part because close to half come from divorced homes.

    Surveys reveal that people born between 1968 and 1979 place a considerably higher value on family, and a lower value on work, than their baby-boomer counterparts. Women in the former age cohort are actually having more children than their predecessors and, particularly among the college-educated, they appear to be working somewhat less.

    And this family-friendly shift is likely to continue throughout the next wave of child-rearers. As Morley Winograd and Michael Hais suggest in their book, Millennial Makeover, the Millennial generation, born after 1983 and twice as numerous as Generation X, also enthusiastically embraces the notion of a strong family.

    Indeed, three-fourths of 13- to 24-year-olds, according to one 2007 survey, consider time spent with family the most important factor in their own happiness, rating it even higher than time spent with friends or a significant other. More than 80% thought getting married would make them happy. Some 77% said they definitely or probably would want children, while less than 12% said they likely wouldn’t.

    What’s more, the current state of the economy is likely to strengthen ties among family members. One-fourth of Generation X-ers, for example, still receive financial help from their parents, as do nearly one-third of Millennials. As many as 40% of Americans between ages 20 and 34 now live at least part-time with their parents, an option that will only become more commonplace in areas where home prices are particularly high and employment opportunities are sharply limited.

    Yet even if family values are in ascendance, how they are expressed sharply diverges from the norms and attitudes typically associated with the Religious Right. In fact, on a host of issues – including gay rights, interracial dating and stem cell research – millennials trend more toward liberal views than earlier generations, Winograd says.

    “They are more tolerant as well as more conventional,” he notes. “They follow the social rules – they don’t want to be rebellious. They want a basically conventional suburban family life.”

    Attitudes concerning religion – the other critical part of the “values” issue – reveal a similar fusion of conventionality and pragmatism. Like other Americans, Millennials are far more religiously oriented than their counterparts in other advanced countries. Fully one-fourth of Americans in their 20s and 30s, observes Princeton sociologist Robert Wurthnow, consider themselves “very spiritual,” even if they rarely attend church. A 2003 UCLA study found roughly three out of four college students deem their spiritual or religious views important, but most see their (older) professors as largely indifferent to such concerns.

    Yet this spiritual orientation does not imply a shift toward any retrograde “moral majority” conservatism. Upward mobility among evangelicals and fundamentalists, as well as the increased racial integration within churches, has lessened the once-glaring gaps between conservative Protestants, particularly in the South, and the rest of American society. This liberalization is particularly acute when it comes to issues like homosexuality and censorship, but also extends to the role of women and the teaching of religion in public schools.

    I’ve observed this shift firsthand teaching at Pepperdine, a school associated with the conservative Church of Christ, and Chapman University, which has a more liberal Christian orientation. Students embracing fundamentalist or evangelical creeds usually oppose both abortion and gay marriage, but they appear remarkably tolerant and accepting of homosexuals, racial minorities and Jews – attitudes that might shock the more insulated liberal landsmen.

    My more religious students also tend to be ecumenical in their views. Like the Obamas, many are seeking the right mix of spirituality and social activism. Wade Clark Roof, the author of Spiritual Marketplace: Baby Boomers and the Remaking of American Religion, describes such people as ‘grazers.’ They often meet their spiritual needs through different channels – online Bible study, meditation and even Buddhism.

    Obama seems to be honing his appeal to precisely this demographic. Tapping Orange County evangelical minister Rick Warren for the inaugural invocation opens an important avenue to a new generation of spiritually oriented young people.

    Warren should concern the increasingly marginal hard-right Christian conservatives, who face potent competition for the political loyalties of their younger congregants. With economic issues pushing the middle class to the left, Democratic progress among the so-called “value” voters could leave the already bedraggled Republican ranks even more seriously diminished.

    Also threatened are those on the cultural left, some of whom expressed outrage about Warren’s appointment. Some Democrats see it as part of a conscious strategy to subordinate their social agenda for a more mainstream, family-centered one that holds broader political appeal. “It’s good for him to let the bed-wetters go,” scoffs one well-connected Southern California labor organizer. “They are the ones who have made it difficult to get a majority for the really important things.”

    In reality, though, Obama’s jettisoning of the cultural left is relatively risk-free. No matter how offended they might be, feminist, gay-rights and ultra-secularist activists are not likely to become Republicans. Even if Obama is not as perfect as they imagined, he will be far more amenable to their causes than George W. Bush.

    Overall, Obama is playing an exceedingly smart game of cultural politics. Most Americans, particularly youth, no longer relate to the vintage 1950s sitcom Ozzie and Harriet, an illustration of the lifestyle embraced by conservatives. Too many women now work outside the home and have friends or relatives who practice “alternative lifestyles.” Demonizing “deviants” is increasingly difficult, after all, when many if not most Americans have loved ones who are gay or otherwise outside the historical mainstream.

    Yet at the same time, there is a growing rejection of the highly secularized, self-absorbed lifestyle many boomers embrace. As a result, when it comes to today’s values, the role models seem to be socially hip and strong families like the Huxtables from The Cosby Show. Or perhaps, just maybe, the Obamas.

    This article originally appeared at Forbes.

    Joel Kotkin is executive editor of NewGeography.com and is a presidential fellow in urban futures at Chapman University. He is author of The City: A Global History and is finishing a book on the American future.

    Image courtesy flickr user Vargas2040

  • Sylvia L. Lovely

  • Don’t Touch That Dial!

    If this were the 1950s, a buzz would be going through the African American community right about now because, come Tuesday, another small milestone would be reached in our progression from involuntary to voluntary servitude. The milestone? A black man is going to appear on television.

    Sightings of black people on the tube back then were rare. Hence, there was always some excitement when it occurred. You had Beulah and Amos and Andy on regularly – singer Hazel Scott once had her own show as did singer Billy Daniels. Nat King Cole had a very popular show for a while but lack of national sponsorship and the fact that they didn’t give him any money to pay his guests forced him to fold it. But you’ll notice these people were all entertainers. Real black people, those who couldn’t sing, dance, play an instrument or tell jokes, were never seen on television.

    Just as importantly, they were never seen in TV commercials. It seemed at the time we had a surfeit of bumbling white husbands and clueless white wives. But somehow sponsors were reluctant to associate their products with similarly deficient blacks.

    Blacks were also seldom seen in television dramas. Whole towns, let alone neighborhoods, were portrayed as devoid of dark-skinned residents. No one had a black friend in those towns. Workmen, sure. Servants, yes. But not friends.

    Simply put, black people were systematically and summarily excluded from the popular culture. And not just from television. It was radio too, where small skirmishes were fought over whose version of “I’m Walkin’” was to be played: Ricky Nelson’s or Fats Domino’s. Naturally, Ricky usually won. It was also true in movies where Super Sidney and Calypso Harry were our only stars. And even they better watch their step lest they offend with too strident a tone or too familiar a manner. And, of course, the newspapers simply did not cover the black community at all unless to report crime statistics.

    To black children of the time, it meant that except for the people in their immediate geographical area, other blacks did not exist. They could turn on the television and enter a world where they saw no one who looked like them. No one they could look up to; no black role models save the Kingfish.

    This situation gradually changed over time. As we moved into the Sixties, the days of “Civil Rights,” blacks emerged out of their real and virtual ghettos. The panoply of blacks expanded to include new types: protesters, militants and eventually, that curious group known as “tokens.” Those were black people used to dress a set like a table or lamp. Nothing was really expected of them but to stand there and be seen – to prove someone knew about them. The “token” was always a “good” black person, meant to represent and asked to speak for all black people. They were not angry like militant H. “Rap” Brown, or civil rights protesters like that troublesome Martin Luther King, Jr.

    Their pop culture numbers ranged from one-twelfth of the Dirty Dozen to a full 30% of the Mod Squad. These were fully-integrated, completely-assimilated, likeable, sympathetic blacks you could work with and invite to your home for dinner. What more could black people want?

    As it turned out, quite a bit more. Black people wanted to be part of things they had helped create. They wanted to be included in a country where inclusion was guaranteed by the Constitution. And, later, as the Eighties dawned in America, they also wanted to be on MTV.

    The pathways to those goals generally excluded politics. Politicians could never be counted on to improve our lot. It became a kind of game to parse the words of the white candidates to see how much they were on our side. There was always just enough there to get the black vote but not enough to turn away the still racially-averse white vote. And after they were elected, all the courtship promises were forgotten. After all, shouldn’t our Supreme Court Justice Thurgood Marshall be enough? Shouldn’t our UN Ambassador Ralph Bunche suffice for a while? Didn’t Adam Clayton Powell prove you couldn’t trust these people with real political power – and power over white people?

    So the preferred pathway lay elsewhere. Sports and entertainment became the ticket. The pop culture route was most efficient because entry couldn’t be denied. A 400-hitter or hundred-yard rusher was a crowd pleaser, white or black, and therefore an economic winner too. Singers, composers and musicians could set a toe tapping before the race of the performer was noticed. Albums of music could be distributed with no photos of the artists to offend the racially biased.

    In time, the economics of black consumerism was enough to move product – considerable product. By the Seventies, the purveyors of what became known as “blaxploitation” movies figured out that filling a movie cast with black faces might lead to filling movie theaters with black faces. And, once it was realized that blacks bought the same products and services that whites did, even television commercials began to feature one or two in the same inane scripts that once were reserved for whites. Later, new generations of whites weren’t as choosy about who made the music they liked. Thus the MTV barrier was broken. What more could black people want?

    And now, politics has been put back on the front burner. The playing field has changed. Not completely, of course. Regardless of what you hear, we are still far from being a post-racial society, not for another couple of generations, at least.

    But now there is a widening array of black images out there. There is something at last for young black people to shoot for and be proud of. There is another way to go besides being running back or gangsta rapper. There is being part of the making of the future – and not only for ourselves. There is being included in the calculation. There is greater belief in the sincerity of the politician. There is more balance in the popular culture.

    Is that the “more” that blacks wanted? Not really. The truth is blacks never wanted “more” in the first place. All we really wanted was the same.

    So when Tuesday rolls around, that buzz will still permeate the black community. Old, young, and in-between we will all gather around our LCDs, some of us wistful, some of us hopeful, to celebrate our past and watch history being made – as a black man appears on television.

    Bob Carr is a free-lance writer, editor and webmaster living in Los Angeles. He has been an Associate Editor and Senior Staff Writer for Playboy magazine and was born in Charleston, South Carolina shortly after VJ Day.