Creative Class

In an intriguing post, Stirling Newberry suggests that Reaganism set in motion basic economic and geographic forces that have led to a “self-inflicted recession” and shaped the demise of the conservative movement.

[T]he epicenters of that “Reagan Democrat” revolt are now the areas that are hardest hit by the present depression: California, the Upper Midwest, and the Sunbelt South. This is not an accident …

The only places that are doing well in the Republican universe are those strongly associated with mining, plus Republican metro centers such as Phoenix and Salt Lake City, which are the recipients of the labor draining from the rest of the Republican heartland. Resource extraction is the only bright spot in the Republican world …

The Bush boom produced a moment where it seemed like the producers of Residential Real Estate, the back bone of the Republican donating and agitating base, were finally at their pinnacle. Truck Dealers, Home Builders, Real Estate Agents, and the Small Business class that catered to the people who lived in the “boomburgs” saw rapid increases in employment, wages, and social power. They had the money and the confidence to try to press their social agenda on the rest of the country. It was, of course, doomed to failure; since none of these people made anything that could be exported; or if they did, it came at the costs of increased imports that counter-balanced them.

Earlier this week, Cornell mathematician Steven Strogatz reprised George Zipf’s famous power law for the size distribution of cities where “the population of a city is, to a good approximation, inversely proportional to its rank.”

Tim Gulden of George Mason University has used data based on satellite images of the world at  night to provide a Zipfian analysis for the 1,000 largest urban agglomerations globally, based on several different measures of city size comparing rankings for population, economic activity, and patented innovations.

Gulden’s research provides what is perhaps the first systematic depiction of the size distribution of global cities, and generates important insights into geographic organization of economic activity and innovation across the world.

While the population of cities tends to follow the Zipf law that Strogatz describes within a nation, this scaling does not hold for the whole collection of world cities. The distribution ends up being somewhat flatter – particularly among the largest cities. This may result from barriers to migration between countries.

The distribution of economic activity – which Gulden estimates using the light emissions from night-time satellite images – is more Zipf-like.

Innovation, however, appears to have a different scaling rule. The slope of -1.45 indicates that the distribution of patent activity is much more skewed.

Gulden’s work again reminds us that cities and urban agglomerations remain a key facet of globalization. As barriers come down and global forces continue to act on cities, the world’s cities are likely to eventually conform to the basic rank-size pattern Zipf identified – already evident in the global distribution of economic activity and the even more skewed pattern of global innovation. The world’s largest urban agglomerations are likely to become even bigger, while second- and third-tier cities face ever harsher competition.

“American draft dodgers in Canada were far outnumbered by the young Canadians who joined U.S. forces to fight in Vietnam.”

From the The illustrated History of Canada (thanks to Joe Martin for the pointer).

A blogger says the issue is more class than gender:

Men have worked as essentially shop keepers and store clerks for a lot longer than they have worked on assembly lines. There have been waiters forever. Lawyers are the world’s second oldest profession. Teaching was a male-only profession for centuries.  The idea that men are and ought to be unreflective, grunting, two-fisted louts is a class thing not a gender thing and it is imposed upon working class men by a system that needs them to be beasts of burden.

Men who reject certain values and behaviors as “sissy” or “girlie” are rejecting success, and don’t think their bosses aren’t grateful.

His point hit home with me.

When I was a young boy, my father would often take me with him to Newark on Saturdays to buy “Italian Bread.” We would inevitably pass by a neighborhood “beauty parlor” where my father would stop for just a minute. “Richard,” he would say, “I was so dumb. When your aunt (his older sister) moved to California, she wanted to give me this place. I could have made it work. I enjoy cutting your hair and coloring your mother’s. But when I was young, beauticians were considered ’sissies.’ So I let my pride take over. Instead of having my own place, being my own boss, and doing something enjoy, I stayed in the damned factory.”

The economic crisis is hitting hardest at working class jobs, and rates of male unemployment have skyrocketed. A commonly asked question is, how do we retrain them for emerging job opportunities in other sectors? The Globe and Mail’s Margaret Wente suggests the problem runs a whole lot deeper than we think.

The new economy (over the long term) is creating tons of service jobs in retail, customer support, and personal care. The trouble is that these jobs require temperamental attributes that are stereotypically feminine – things like patience, a pleasant demeanour, deference to the customer and the ability to empathize and connect. Another way to put it is that these jobs require emotional labour, not manual labour. And women, even unskilled women, are much better at emotional labour than men are …

This identification of masculinity with hard physical work (no empathy required) is deeply embedded in the history of the human race … But no matter how much education and retraining we offer, we are not going to transform factory workers and high-school dropouts into customer-care representatives or nurses’ aides any time soon. It’s their wives and daughters who will get those jobs …

In the new world of work, the old values of working-class men are an anachronism. And what we are really asking of them is not to retrain or upgrade. We are asking them to abandon their very idea of masculinity itself.

She’s right. I grew up in that culture. My father worked his entire life in a factory. I spent my high-school summers doing factory work. Sexism and racism ran rampant. Fights were almost everyday occurrences; working class disagreements almost always end in them. When a Garden State scholarship enabled me to attend Rutgers, I was floored by the relative safety, meritocratic orientation, and personal freedom afforded by middle-class culture. Sure, modern middle-class culture has plenty of faults. And certainly not all working-class men share these retrograde attitudes. Many workers in more modern, high-performance factories (a good deal of whom are women) would fit nicely into service or professional work. Still, that old blue-collar male culture remains too much a fixture in too many places.

The demise of high-paying blue-collar jobs and the economic devestation it means for families and and communities is tragic. But the demise of that old-school working-class male mind-set is not something to be sad about.

Real estate got just about everyone into trouble in Phoenix, and the thinking seems to be that real estate is going to get everyone out.

A real estate “frenzy” is apparently developing there, the NYT reports, as bottom-feeders gobble up mass foreclosures.

It’s not just Phoenix I fear, it’s our national mind-set writ large.

This map from a new NBER study by UCLA economist Matthew Kahn and Michael Cragg of the Brattle Group (using data from Purdue’s Vulcan project) shows the geography of carbon emissions by U.S. states. The study finds carbon emissions are more concentrated in poorer, more conservative locations, posing significant political obstacles for policy to limit greenhouse gas emissions.

Stringent regulation for mitigating greenhouse gas emissions will impose different costs across geographical regions. Low-carbon, environmentalist states, such as California, would bear less of the incidence of such regulation than high-carbon Midwestern states. Such anticipated costs are likely to influence Congressional voting patterns. This paper uses several geographical data sets to document that conservative, poor areas have higher per-capita carbon emissions than liberal, richer areas. Representatives from such areas are shown to have much lower probabilities of voting in favor of anti-carbon legislation. In the 111th Congress, the Energy and Commerce Committee consists of members who represent high carbon districts. These geographical facts suggest that the Obama Administration and the Waxman Committee will face distributional challenges in building a majority voting coalition in favor of internalizing the carbon externality.

The study (which can be downloaded here) includes a series of maps on industrial emissions, residential emissions, and more. Some more great maps from Purdue’s Vulcan project are here.

The Next American City’s Josh Leon reacts to my March Atlantic essay on cities and the crisis:

[N]ot everyone can afford to move and the poorest are left behind amidst urban blight and neglect. What do we do about the immobile? What do we do with cities that are net losers of the “creative class”? For this so-called creative brand of capitalism, the uncreative are someone else’s problem …There is an inherent inhumanity in leaving people and their cities in the dust. Besides, the cost of finding ways to get so-called obsolete classes of workers gainfully employed where they live is looking preferable to the social costs of managing huge ghost cities and permanent spatial inequality.

All sentiments I share. The first step – and the main point of my essay – is to elevate the issue of growing geographic inequality and bring it into the ongoing conversation about the crisis and recovery.

But what can be done? How to create whole new industries and jobs in declining places? Protecting old industries or baling out uncompetitive firms – two preferred solutions – make little economic sense. So what’s left?

We can confer subsidies on places to improve their infrastructure, universities, and core institutions, or quality of life. But this still is unlikely to stem the tide of the talented and the mobile, at least in the short-run. We can take a longer-term approach and help them gradually shift away from declining industries and build around their remaining assets organically and over time.

At the end of the day, people – not industries or even places – should be our biggest concern. We can best help those who are hardest-hit by the crisis, by providing a generous social safety, investing in their skills, and when necessary helping them become mobile and move to where the opportunities are.

Map by Scott Pennington, Martin Prosperity Institute

This map charts the housing-to-wage ratios for U.S. metropolitan areas in 2006, the height of the bubble. It differs from the more commonly used housing price-to-income ratio. Historically, housing prices have been about three times income, but by 2006 housing prices had soared to a high more than five times incomes. In Irvine, California, the housing price-to-income ratio soared to 8.6 by 2006.

The housing price-to-wage ratio may provide a better gauge of housing bubbles. Income is a broad measure that includes wealth from stocks and bonds, interests, rents, and government transfers and other sources. Wages constitute a more appropriate gauge of a region’s underlying productivity, accounting for remuneration for work actually performed.

Forget ratios like four or even eight. Six regions – all in California – posted ratios of 15 of greater: Salinas, Santa Cruz, Santa Barbara, Oxnard-Thousand Oaks, Napa, and San Luis Obispo. Another 12 metros had ratios above 10 – L.A., San Francisco, San Jose, San Diego, and Riverside, California, as well as Honolulu, Hawaii, and Naples, Florida.

The housing-to-wage ratio also generates a number of surprises. Greater New York’s ratio (9.4) was slightly higher than Las Vegas (9), and Greater DC..’s (8.7) slightly bested Miami (8.4). Boston (8.1) and Seattle (7.6) topped Phoenix (7.2). Chicago’s (5.9) was higher than Tampa (5.6) or Myrtle Beach (5.5).

What regions seem to have avoided the bubble? The cream of the crop on the housing-to-wage ratio are Dallas (3.5), Houston (3.2), Pittsburgh (3), and Buffalo (2.8).

Paul Krugman reflects on the demonization of cities and the people who live in them.

Basically, the accusation is that anyone with a good word for urbanism must just hate the American lifestyle.

[T]he same thing is true about pro-sprawl commentary … Conservatives really, really hate on Portland; examples here and here. Aside from the tendency to engage in factual errors, the hate seems disproportionate to the cause. But it’s an aesthetic thing: conservatives seem deeply offended by anything that challenges the image of Americans as big men driving big cars.

Me, I like dense urban areas. But I’m a pointy-headed intellectual. And bearded, too.

This trend is not new.

A disdain for cities and the diverse, open-minded people (like Krugman) who gravitate to them has long been a rallying point on parts of the right. Long before their forays into foreign policy, neoconservatives were railing against cities. Edward Banfield’s tellingly titled The Unheavenly City offered an incredulous chapter on “Rioting for Fun and Profit.” Early essays in the Public Interest sported snappy titles like “The City as  Reservation” and “The City as Sandbox.” Not to mention so-called “benign neglect” which argued that cities should be left to rot and run down so that land could become cheap enough to entice large-scale suburban-style retrofitting.

The anti-urban strain continues today, as Krugman notes. Ironically, its persistence is what’s really anti-American – anti-American economy that is – making it ever more difficult to leverage the powerful role played by cities and urban areas in innovation and economic growth for long-run economic prosperity.