New Geography

Tag: Economy

  • Maps of United States Manufacturing and Finance Industry

    For our War of the Regions piece I went through BLS data and calculated location quotients for a few key diverging industries, namely manufacturing and securities, commodities and investments side of the finance industry. These are the kind of numbers that really benefit from geographic visualization.

    A LQ tells us not where the most jobs are in any given industry, but how much of a state’s employment is clustered in the given industry.

    I’ve been following FortiusOne for a while but this is the first time I’ve gotten a chance to play around with their GEOCommons Finder! and Maker!, a new social production platform for agglomerating, sharing and visualizing geographic data. It’s a fantastic platform.

    Click on the map images here to explore them on the GEOCommons platform. You can see a lot of dark color in the rust belt, but at this point, the states of Indiana, Wisconsin, Arkansas, Iowa, Alabama, and Mississippi are at or ahead of Michigan and Ohio in state dependence on Manufacturing. Part of this is due to growth in the South and Great Plains, and part is due to manufacturing job losses in the Rust Belt, causing the concentration there to slip.

    Finance here is limited to Securities, Commodity Contracts, and Other Financial Investments and Related Activities (NAICS 523). Not surprisingly, this industry is clustered in the Northeast. You see Illinois, Minnesota, and Colorado shaded darker due to the role of Chicago, Minneapolis, and Denver as regional trade centers.

    Take some time to explore GEOCommons and some of the other visualizations created by others, and watch for more maps in this space as we do the same.

  • Income Inequality on the Rise

    A new report released today by the Organization for Economic Co-operation and Development (OECD) says that income inequality between the rich and poor has grown in three quarters of OECD nations over the past twenty years. The report, “Growing Unequal?”, states that the gap between the rich and middle class in the United States has also grown.

    According to the OECD report,

    “The United States is the country with the highest inequality level and poverty rate across the OECD, Mexico and Turkey excepted. Since 2000, income inequality has increased rapidly, continuing a long-term trend that goes back to the 1970s.”

    As this inequality has risen, rich households “have been leaving both middle and poorer income groups behind.” According to the 30 nation report, “this has happened in many countries, but nowhere has this trend been so stark as in the United States.”

    Commenting on the report, Business Week notes that such increases may pose a threat to “the ‘American Dream’ of social mobility,” with the OECD report noting that social mobility “is lowest in countries with high inequality such as the United States”.

    Facing a potentially deep economic downturn, the middle and lower classes may be in for rough times. Economist Anthony Atkinson, interviewed by Business Week noted that while much of the growth in inequality has taken place during a time of economic expansion, “If a rising tide didn’t lift all boats, how will they be affected by an ebbing tide?” As newgeography.com Executive Editor Joel Kotkin noted earlier today, the survival of the “American aspirational model” may be on the line.

  • Here They Go Again

    Recent soundings from Washington suggest that neither party has a solid idea of what to do about the deepening economic crisis. It makes me cringe to hear Barney Frank, Chairman of House Financial Services Committee, talking about a big stimulus to “prop up consumption”.

    Under the Democratic-controlled Congress, this would likely include the usual tax relief to middle and working class Americans, as well as big new payments to hard-pressed cities and states. To be sure, the interests of wage-earning Americans should be paramount, but this is reminiscent of the “stimulus” plan earlier this year that did little more than “prop up” spending on consumer goods for a couple months.

    Since many of these products are made in China or somewhere overseas, who are we helping most here? In addition, of course, the bail out of local governments benefits a prime Democratic constituency — public employee union. If we are going to cough up more to pay their salaries, why not ask them first to accept less largesse? Maybe they can agree not to retire until they are in their sixties, like the rest of us chumps, I mean, taxpayers. Then we can talk bailout.

    However, let’s not pick on Democrats alone. The Republicans seem to like consumer “stimulus” but only when spiked with more tax cuts for their dwindling, but still significant cadre of wealthy Americans. Maybe this will help consumption a bit more at Bloomingdales than Wal-mart, but in the end, who cares?

    My thought is that we should focus instead on the core issues of stimulating the “real economy” through incentives for high value manufacturing, domestic energy producers of all kinds (including nuclear power) and investment in basic infrastructure, including new transmission lines, research in clean and alternative fuels. All of these things would reduce our increasingly debilitating dependence on other countries to fund our deficits and consumption habits.

    To lift spirits of Americans the most we need a program that aims to make the country less dependent on both Middle East energy producers and Chinese manufacturers. As we did starting in the 1930s, let us create a climate for real upward mobility based on expanding the productive economy. It’s time to stop relying on quick sugar highs to spur more consumption of items we do not produce or can’t afford and time to start getting back to basics.

  • Nevada’s Decline

    A recent article in the Las Vegas Review-Journal lamented the economic decline in the state according to a report by the Rockefeller Institute of Government in NY. The Rockefeller report cited a growth index released by the Philadelphia Fed, but reset the index to a baseline of January 2007, singling out Nevada as the worst performing state in the nation over that period.

    Interested in the bigger picture, I looked up the original index from the Philadelphia Fed and charted it back to its original baseline of July 1992. The results show a much more interesting picture for the state of Nevada.

    We see a meteoric rise in economic activity in Nevada, far surpassing any state since 1992. Then as late as November 2007, the bottom began to fall out. The recent decline in Nevada is certainly serious, but we can always benefit by putting as much data into the picture as possible. What if the Rockefeller report had chosen January 2005 as a baseline? It would have shown Nevada as about flat, but obscured the detail of its true growth trajectory.

  • Creating the Next American System

    Michael Lind of the New America Foundation has just published an excellent and inspiring article in Democracy Journal about the need for a new financial and physical infrastructure.

    “One of the goals of reforming and regulating finance is to ensure that American industry and American infrastructure have access to the private and public investment they need,” Lind writes. “Industry, infrastructure, and finance form a system—an American System. And a new American system, well-designed and well-implemented, will be crucial in revitalizing American economic prosperity in the twenty-first century.”

    Lind talks about previous “American systems” of finance and organization that were adopted over time to adjust to the economic realities of the age and how today, we are in dire need of creating a new system that reacts to the new realities we face.

    Some of these ideas include the creation of a National Investment Corporation and a National Research & Development Bank and the creation of a Department of Infrastructure that merges some of the transportation agencies together. These are bold ideas explained in clear prose with illuminating historical examples.

    Many of his ideas lend themselves towards centralization and thus remind me of the New Deal a bit. The existence of the Works Progress Administration and the Public Works Administration was one of the rare times in American history when infrastructure finance was centralized. It was also one of the most prolific times in our history for the construction of vital and long lasting public infrastructure that still stands today.

  • “It’s Like Christmas in here”: Tourists Propping up the U.S. Luxury Market

    One interesting thing about the luxury economy today in the U.S. is how much of it is being driven by tourists and non-residents. Another salient point: how the very wealthy have been largely immune to the current downturn.

    An article in the LA Times about the shopping habits on Rodeo Drive brings both these points home. “Business has been crazy-great,” said a manager of the Christofle shop just off of Rodeo Drive in LA – a purveyor of silver flatware and other furnishings. “It’s like Christmas in here.”

    Apparently, the famed street of tony boutiques and celebrities has been annexed for the time being by flush foreigners. “Saudi princesses,” confided a saleswoman at one Rodeo Drive clothing store. “That’s who’s doing all the buying.” Where’s US Weekly’s article about how those poor starlets are feeling marginalized by all this?

    And today, an article in the New York Sun reveals that a full third of New York condo sales are being grabbed up by Europeans who now constitute 15 percent of the entire market.

    – Former San Francisco Mayor Willie Brown, who’s new column in the SF Chronicle I am thoroughly enjoying, had this vignette about walking around the shops at Union Square:

    “At Bloomingdale’s – packed and nobody speaking English. Neiman Marcus – no English. And nobody, but nobody, was speaking English in Prada.
    It’s all Italian, Dutch, French, German and heavy, heavy Russian.

    The Europeans are absolutely the biggest retail customers these days downtown, and they are spending like crazy.”

    But this could change, the dollar rose eight percent against the euro in the last month. Better grab those $10,000 silverware sets while you can.

    But nativist shoppers, fear not – I heard nary a foreign tongue as I flipped through the sales rack at Gap.

  • Windy City Triumphalism at Odds with Souring Economy

    Mayor Daley said this week that the economy in Chicago is the worst that he’s seen since becoming mayor.

    You’d never guess this judging by the article about “demographic inversion” published in the New Republic by Alan Ehrenhalt . The author prints a lot of anecdotal evidence about on-going gentrification he witnesses in his hometown but unfortunately offers precious few statistics about job growth.

    The vacancy rate for industrial real estate in the Chicago area recently climbed to its highest level in 14 years. The governor also called violence in the city “out of control.”