Richard Florida
by Richard Florida
Thu Feb 12th 2009 at 8:30am UTC

The Great Reset

The crash of 2008 continues to reverberate loudly nationwide—destroying jobs, bankrupting businesses, and displacing homeowners. But already, it has damaged some places much more severely than others. On the other side of the crisis, America’s economic landscape will look very different than it does today. What fate will the coming years hold for New York, Charlotte, Detroit, Las Vegas? Will the suburbs be ineffably changed? Which cities and regions can come back strong? And which will never come back at all?

That’s from my article, “How the Crisis Will Reshape America” from the just-released March issue of The Atlantic. It’s my first full-length feature for the magazine and I’m delighted that it made the cover. There are actually several different covers including one for New York, Chicago, and my new hometown of Toronto, among others.

There’s also an interview with me online here under the title, “The Great Reset,” which is the working title of the book I’m developing.

Plus a series of interactive maps based on research and data analysis by our team at the Martin Prosperity Institute.

10 Responses to “The Great Reset”

  1. Brock Says:

    Richard, Brilliant stuff as always and I agree with everything you say except – in the Atlantic interview: “I live in Toronto, where they’re good at using bicycles and walking.”

    We are? I don’t think we are. It takes me 30 mins to get from west downtown Toronto to east downtown Toronto during my morning commute on the TTC (2km). I’m presently in the process of moving just outside Waterloo and it will take me the same amount of time (30 mins) to travel 20 times the distance (40km).

  2. tpk-nyc Says:

    Congratulations on a very persuasive article. I despair, however, that we will be able to capitalize on this crisis. Most mega-regions (except for Texas and Charlotte/Atlanta) are deeply resented by the rest of the country. Political careers are built and sustained by heaping scorn on the wealth and influence of places like Bos-Wash and California. Your so-called “significant losers” are not going down without a fight and, even if it’s in the country’s long-term interest, they will not support the mega-regions becoming even more powerful without some (ultimately inefficient) trade-offs.

    Constitutionally, the US was not designed for regional planning. The states, except for California, are too small. Regional bodies, like the Port Authority of New York and New Jersey, are comparatively weak. Congress and the federal government are too diverse to engage in regional planning (which would be seen as favoring one part of the country over another). Highways are the only mass-infrastructure projects politicians can ever agree upon because they are seen (erroneously) as benefiting everyone equally.

    It’s one thing to talk about infrastructure in China, but you have balance it with the costs of a authoritarian regime. Yes, Beijing has an amazing new airport, but only through strong-arm tactics and at a social cost that would be unacceptable in the US or Canada.

    I believe we are experiencing a great reset, the real question is how do you plan for a spiky world in a flat democracy?

  3. Michael Wells Says:

    Great overview! The trick of course will be how to rebalance the country without devastating too many people who live in the wrong places and work(ed) in the wrong jobs. tpk-nyc has this part right. Is the bailout of the Big 3(2?) protectionism against the Asian car manufacturers or saving the American economy?

    For a view from one city, Portland, my personal real estate index is the Windermere Realty ads in the Sunday Oregonian. A year ago they were two pages and always had over a dozen million dollar houses — now it’s one page (or less) and this week had one house over a million (barely). But the regular full page ad one broker runs in my neighborhood monthly newspaper, the Northwest Examiner, doesn’t show much drop in prices. So I’m assuming that even within cities, house prices are spiky.

    For some complimentary reading:

    Fareed Zakaria in Newsweek talks about why your new home is better off than the US or Europe. Canada stuck to basics.
    http://www.newsweek.com/id/183670

    Thomas Friedman in today’s Times writes about the necessity of easier immigration for the US to rebound. And darn, those Canadians are ahead of us again!
    http://www.nytimes.com/2009/02/11/opinion/11friedman.html?_r=1

    Checking the BLS website, the creative class cities seem to be clustered around the national unemployment average. The lowest unemployment rates are concentrated in places where people are leaving or few live. And I notice again that 9 of the 20 highest are in California’s Central Valley where I grew up, the region is getting hammered in every measure — pollution, foreclosures, unemployment.
    http://www.bls.gov/web/laummtrk.htm

  4. Wayne Says:

    Excellent points as always. I am interested in what the future holds for rural states like Wyoming, which is where I live.

    I do agree that homeownership ties people to places that they would otherwise leave. During our last oil/mineral crash here in the early 80’s, families stayed here until they had nothing left.

    I think that even more of a hindrance than homeownership to the economy is the insistence that if we wait long enough or provide the right incentives, everything will go back to “normal”. Here in Wyoming, much of our political culture is built on the rugged individualism of the cowboy. Zoning, economic development efforts, and the collective efforts of the community are built on supporting the cowboy culture.

    Although the cowboy culture continues to dominate socially (not economically) there are pockets of creative persons in portions of Wyoming that are actively innovating and working in creative fields.

    No matter what, I think that one of the outcomes of the economic crisis will be the demise of the site built single family steep roofed house and the supporting subcontractors and suppliers that relied upon this business. Quality factory built housing will replace an inefficient and wasteful construction process that relied upon undocumented workers to be successful.

  5. The Urbanophile Says:

    You should check out the new Indianapolis airport terminal – it’s truly first rate. As a regional airport, it’s not likely to be seen by the world’s elite, but I think it is possibly the nicest in the US. I put up an extensive seven part review of it with many photos that you can see starting here:

    http://theurbanophile.blogspot.com/2008/10/review-new-indianapolis-airport.html

    Now if only their public transport matched up…..

  6. Cliff Lippard Says:

    I believe there is an error in the population map, unless Cleveland, TN has experienced some massive growth of late.

  7. Dimitry Says:

    We are now just entering the crises . First wave of layoffs purging excess in some overgrown sectors. Still lot of optimism, how recession going to end in 8-12-18 months and everything going back to normal. Creative class is as much product of bubble and easy money as real estate, auto and finance. High unemployment , loss or reduction of income, are not providing welcoming environment for consumption of intellectual goods – bread, shelter and safety are taking priority in peoples mind. In short, financing will dry out and creative class with it. It is very sad, but economics can’t be fooled forever.

  8. Swordsman Says:

    Most nations have re-aligned their internal political maps in the last 100 years to reflect changing demographics and economies, including the UK, Spain, Germany, etc. The U.S. has not, and won’t, because each state is considered sacred and sovereign.

    Just like every country in the world that has a Constitution has completely revised it in the past 200 years, and even most U.S. states have, but the United States Constitution is revered, even though it was created in a time before terrorism, nuclear weapons, health care, mass transit, and the internet.

  9. zoltan acs Says:

    Richard, I took your article in the Atlantic with me on a short visit to the southwest UK. Walking along the cliffs of Devon I reflected on your words. Two things struck me. First,that our geography has been shaped by a singular industrial event and that housing was at the heart of our problem. That is overinvestment in housing. I guess I know this. All of my neighbors build new kitchens and two additional bathrooms to increase the price of their home. The problem is that new kitchens and bathrooms did not increase total factor productivity. In fact a second bathroom is like two trains from London to Bath as Keynes lamented years ago. The problem isthat the governmetn does not understand any of this. They are clueless.

  10. Wendy Says:

    fascinating, broad sweeping article. Your concluding lines caught my attention:

    “Over the course of the 19th century’s Long Depression, the country remade itself from an agricultural power into an industrial one. After the Great Depression, it discovered a new way of living, working, and producing, which contributed to an unprecedented period of mass prosperity. At critical moments, Americans have always looked forward, not back, and surprised the world with our resilience. Can we do it again?”

    The main difference between then and now is that back then the government didn’t “bail out” the old system. They let it fail. It was devestating for millions, but created the destruction to re-make America. For example, once Roosevelt decided to intervene in the economy, he put people to work building the infrastructure for the Fordist industrial age — roads and highways.

    Today, I fear the US is bailing out the old system, and not looking forward.

    I’m not sure that the crisis will be deep enough for the electorate nor the elected to have the courage to make the kinds of changes you suggest: stop subsidizing home ownership; stop promoting single-family-house-living; etc.