But most of all, it seems to herald the death knell of Fordism, which Victoria De Grazia defined as “the eponymous manufacturing system designed to spew out standardized, low-cost goods and afford its workers decent enough wages to buy them.” And hopefully the beginnings of something new, more human scale, healthier, denser and better.

Miami tops the list with more than 171,704 foreclosures followed by Phoenix with 124,720 and Riverside with 101,210. The map above prepared by Zara Matheson of the Martin Prosperity Institute shows the 20 metros with the highest total number of foreclosures based on the RealtyTrac data.

And, 19 of the 20 metros with the highest foreclosure rates are located in just three Sunbelt states –  Nevada, California, and Florida. In Las Vegas, a staggering one in 10 housing units (10.88 percent) went through foreclosure in 2010.

Unfortunately, foreclosure rates were up in nearly three-quarters (72 percent) of the 206 metros  tracked by RealtyTrac.  But, foreclosure activity was down in the 10 metros with the highest foreclosure rates, which could be a signal that the worst of the housing crisis is finally past.

Is a new world financial order emerging from the economic crisis? Will Asia’s rising financial centers displace the long-held dominance of New York and London?

The newly released edition of the Global Financial Centres Index (GFCI), an annual competitiveness ranking of the world’s leading financial centers, provides useful data with which to assess the evolving landscape of global finance.

The map above, prepared by Zara Matheson of the Martin Prosperity Institute (MPI), shows the world’s leading financial centers based on the GFCI ranking.

London and New York remain the world’s leading financial centers. But, Hong Kong and Singapore, which hold the third and fourth spots, are gaining ground, according to the report. Tokyo takes the fifth place and Shanghai has surged to sixth, giving Asia four of the top six spots overall. Chicago, Zurich, Geneva, and Sydney round out the top 10. Toronto, with its strong stable banks, ranks 12th overall but makes the list of the world’s eight leading “broad and deep” financial centers.

It’s true that big international economic crises – like the financial panic and Long Depression of the 1870s and the Great Depression of the 1930s — have a way of upending the geopolitical order and hastening the fall of old powers and the rise of new ones, and we may be in the early throes of such a shift now. But what factors can help us better understand the shifting landscape of global finance today?

In his magisterial book, Capitals of Capital, the economic historian Youssef Cassis writes that financial capitals, once established, “have incredible staying power.” The rise of major financial centers correlates with the rise of the nation’s economic power, but with a considerable time lag. The United Kingdom lost its position to the United States as the world’s largest economy in 1872 and the largest exporter in 1915. By the middle of the 20th century, America’s economic output was twice that of all of Europe combined. But it was only after the war that New York unseated London as the world’s financial center.

To get at this, my colleague Charlotta Mellander and I looked at the economic might of financial centers themselves and of the nations in which they are located. We ran a basic correlation analysis and generated a series of scattergraphs. The data cover 52 global financial centers. We stress that that these are preliminary, exploratory analyses that simply point to associations between variables. We don’t make any claims here about the direction of causality, and we acknowledge that intervening variables may come into play.

There is a clear connection between economic heft and global financial centers. This holds both for the financial center itself and the nation in which it is located. Our measure of metropolitan economic output comes from our research that uses satellite images of the world at night to derive a systematic measure of economic output based on light or energy emissions which we dub as our “light-based regional product” (LRP). A city’s global financial center score is reasonably associated with its LRP (.46) and slightly more so with its LRP per capita (.53). Both correlations are substantially higher than for a city’s population (.35).

The same basic pattern holds at the national level. Global financial centers are more likely in bigger economies. The GFCI is reasonably associated with economic output measured as gross domestic product per capita. The correlation was .28 when we used the combined score of all of a nation’s financial centers, and even higher (.51) when we used the score of its highest-ranked financial center.

Global financial centers are also more innovative. GFCI score is modestly correlated with patenting overall (.28) and slightly more so with patents per capita (.32).

The ability to attract talent has long been a defining characteristic of leading global financial centers. Cassis writes that: “The crucial contributory factor in the financial center’s development over the last two centuries, and even longer, is the arrival of new talent to replenish their energy and their capacity to innovate.” So we looked at the relationship between global financial centers and a proxy measure for openness to global talent  - data on attitudes toward racial and ethnic minorities from Gallup surveys. And we found a reasonably close association. The correlation was .4 when we used the combined score of all of a nation’s financial centers and .51 when we used its highest-ranked financial center.

We also looked at the relationship between global financial centers and another measure of openness – attitudes toward gay and lesbian people, also from Gallup surveys. And we again found a reasonably close association. The correlation was .32 when we used a nation’s highest-ranked financial center, and it was .27 (though not statistically significant) when we used the combined score of all the financial centers in a nation.

The economic crisis is altering the landscape of global finance, but change in the world financial order occurs slowly and gradually. Global financial centers have long staying power, and shifts at the very top follow long lag times. Asian financial centers, particularly Hong Kong and Singapore, have gained ground on London and New York, and Shanghai has risen rapidly to the top echelons of the global financial system. Our analysis finds a close association between global financial power and economic power more generally at the local and national level – and this bodes well for rising Asian centers, more so for Shanghai than for the smaller city-states of Hong Kong and Singapore. That said, their rise may be hindered from intense and growing regional competition among one another. Our analysis also finds a close association between openness and financial power which may hinder their rise to preeminence. Even though Asian centers, from Hong Kong and Singapore to Shanghai, are striving to improve their talent-attracting game, they still do not offer the level of openness, fluidity, and amenity found in London and New York. The interaction of these two factors – economic power and economic openness – will shape the evolution of the global financial system and its pinnacle powers for the foreseeable future.

Striking and eerily beautiful aerial photographs of housing developments stymied by the housing bust (via Barry Ritholz, The Big Picture).

On Tuesday, The Daily Beast ran my new Housing-Mortgage Stress Index. While the U.S. housing market saw a sharp drop in July and millions of homeowners remain underwater, housing market troubles vary significantly by metro region.

The Housing-Mortgage Stress Index shows the U.S. metros whose housing markets — and homeowners — face the highest levels of stress and danger of foreclosure and falling prices. The index, developed with my collaborator Charlotta Mellander, is based on three variables:

• Negative equity — percent of mortgages where owners owe more than their homes are worth.
• Loan-to-value ratio — total Mortgage Debt Outstanding divided by Total Property Value — both from Core Logic.
• Monthly mortgage cost-to-income ratio from the U.S. Census American Community Survey.

The index weights all three variables equally and covers 142 U.S. metros.

The first map above, prepared by Zara Matheson of the Martin Prosperity Institute based on data from Core Logic, shows the percentages of mortgages that are underwater across U.S. metros. Las Vegas tops the list with nearly three-quarters of all mortgages underwater. More than half of all mortgages are underwater in Stockton, Modesto, Vallejo-Fairfield, Bakersfield, and Riverside, California; Port St. Lucie, Orlando, Cape Coral, and Fort Lauderdale, Florida; Phoenix, and Reno. In Miami, Tampa, and Detroit, more than 45 percent of all mortgages are underwater.

The second map shows the performance of U.S. metros on the overall Housing-Mortgage Stress Index. The most troubled metros are located primarily in California, Florida, and Nevada. Nine of the top 20 troubled metros – including all five of the top five – are located in California (Stockton, Modesto, Vallejo-Fairfield, Riverside-San Bernardino-Ontario, Bakersfield-Delano, along with Fresno, Visalia-Porterville, Sacramento, and Salinas). The six Florida metros on the list are Miami, Orlando, Port St. Lucie, Deltona-Daytona Beach-Ormond Beach, Lakeland-Winter Haven, and Palm Bay-Melbourne. Rounding out the top 20 metros are Las Vegas and Reno, Nevada; Phoenix; Provo, Utah; and Greely, Colorado.

Among large metros — those with more than 1 million people — Tampa, Detroit, Atlanta, San Diego, Jacksonville, Washington, D.C., Virginia Beach, Chicago, and L.A. show high levels of housing-mortgage stress, along with the five noted above — Riverside, Las Vegas, Orlando, Phoenix, Sacramento, and Miami.

There is still a great deal of localized stress in the U.S. housing market, and recovery is likely to take a lot longer than most people anticipate.

On Sunday, August 29, Richard Florida was interviewed on CNN’s Fareed Zakaria GPS. They discussed The Great Reset and how cities will change as Americans adapt to a world after the recession. Click the image below to watch the interview.

In my last post, I mapped the projected growth in service jobs across America’s metro regions. Today, I look at a subset of those higher-paying, higher-skill jobs for knowledge, professional, and creative workers that make up the creative class. More than 35 million people are currently employed in creative class work in fields like science, technology, and engineering; business, finance, and management; law, health care, and education; and arts, culture, media, and entertainment. The creative class makes up roughly a third of total employment and accounts for more than half of all wages and salaries in America. Creative class employment has seen relatively low rates of unemployment during the course of the economic crisis. Creative class jobs will make up roughly half of all projected U.S. employment growth – adding 6.8 million new jobs by 2018.

The map (above) plots the projected creative class job growth across U.S. metros. The biggest gainers are, by definition, the biggest regions. Greater New York tops the list with a projected gain of 250,000+ jobs, followed by Los Angeles (184,241), Greater Washington, D.C. (143,227), Chicago (139,577), Atlanta (106,148), Boston (103,120), Dallas (98,373), Philadelphia (92,187), Minneapolis-St. Paul (89,188), and Houston (88,024).

But job growth is a function of population size; it’s expected that large regions will dominate the list of the biggest job generators. So, the next map plots the projected percentage change in creative class jobs for U.S. metros. Gainesville, FL – home to the University of Florida – is the biggest projected gainer, with a projected 17.7 percent increase in creative class jobs, followed by Richmond, VA (17.5 percent), Greater Washington, D.C. (17.4 percent), Morgantown, WV (17.01 percent), Punta Gorda, FL (16.9 percent), Sioux Falls, SD (16.7 percent), Ocala, FL (16.5 percent), Columbia, MO (16.4 percent), and Durham, NC (16.4 percent). The only large metro to make the list is Greater Washington, D.C., and college towns stand out, as well as a couple of smaller Florida communities where jobs are growing off of a small existing base.

The good news is that creative class jobs will continue to grow and provide high-wage, high-skill employment for a large and significant share of the American workforce. It’s important to recognize that not all of these jobs require college degrees. Though nearly three-quarters (72 percent) of college graduates go on to do this kind of work, four in 10 creative class workers do not hold college degrees, according to analysis by my colleagues at the University of Toronto’s Martin Prosperity Institute. The bad news is that creative class jobs will be geographically concentrated. That, combined with the decline of blue-collar jobs and the bifurcation of the workforce into high-pay, creative class jobs and much lower-pay service class jobs, will contribute to mounting economic, social, and geographic inequality. As a nation, we have to increase the number of creative class jobs, but we also need to do much, much more to improve service work as I noted in my previous post.

At bottom, a jobs strategy needs to start from a fundamental principle: That each and every human being is  creative and that we can only grow, develop, and prosper by harnessing the full creativity of each of us. For the first time in history, future economic development requires further human development. This means develop a strategy to nurture creativity across the board – on the farm, in the factory, and in offices, shops, non-profits, and a full gamut of service class work, as well as within the creative class. Our future depends on it.

Arnold Kling is all over it:

Old consensus: we need Freddie and Fannie in order to make housing “affordable.”

New consensus: we need them in order to “prevent further house price declines,” in other words, to make housing less affordable …

Government interference in housing markets, which helped produce the disorder known as the financial crisis, is still producing disorder…

The effort to prop up home prices does the following:

1. Diverts capital from other uses.

2. Uses up taxpayer money that could be spent on other things.

3. Increases the wealth of people who find suckers to buy their houses at too-high prices.

4. Decreases the wealth of the suckers who buy now.

5. Decreases the liquidity and mobility of people who cannot find rational buyers for their houses because rational buyers do not buy into a rigged market.

6. Decreases the investment opportunities for rational buyers, who are unable to buy homes in an un-rigged market.

The old government-backed system had a rationale of sorts in the old industrial order, providing a “geographic Keynesianism” which spurred consumption of durable goods coming off of U.S. assembly lines – everything from cars to refrigerators, washer-dryers, air-conditioners, and TVs. But little of that is produced in the U.S. anymore – it’s now a subsidy to offshore manufacturers. And the economy is far less manufacturing-intensive and far more knowledge-driven. These newer economic structures come along with much greater labor market flexibility and mobility, and conventional housing policy is thus at odds with Kling’s point #5. It’s time to put this bad policy to bed. But, we’re faced with an Olsonian political bind where there is not enough political clout to counter the housing and related lobby. And as Olson long ago pointed out, it’s just these kinds of political constraints that put nations and regions on the road to economic decline. Are counter-forces sufficient to overcome them? That seems to be the real question.

The past week or so, I’ve been tracking where new jobs will be created in America. Today, I look at the sector of the economy that accounts for the largest share of all jobs – the service class. More than 60 million American workers do this kind of low-skill, low-wage, routine service work, making up 45 percent of the work force. These service class jobs are projected to make up more than roughly half of all projected new jobs out to 2018 – 7.1 million new jobs, including 835,000 projected new home health and personal care aides, 400,000 new customer service positions, 400,000 new food preparation workers, and 375,000 new retail sales clerks.

The map above plots the growth in service class jobs across U.S. metros. The biggest gainers are the biggest regions. Greater New York again tops the list with more than 285,000 projected new service class jobs, followed by Los Angeles (192,364), Chicago (174,704), Houston (111,727), Atlanta (106,132), Greater Washington, D.C. (96,857), Philadelphia (96,133), Phoenix (94,189), Minneapolis (85,694), and Dallas (85,521).

But job growth is a function of population size; it’s expected that large regions will dominate the list of the biggest job generators. So, the next map plots the projected percentage change in service class jobs for U.S. metros. Two Texas metros – Brownsville (11.8 percent) and McAllen (11.6 percent) – top this list, followed by Rochester, MN (11.5 percent), Duluth, MN (11.4 percent), Alexandria, LA (11.3 percent), Vineland, NJ (11.1 percent), Greenville, NC (11 percent), Hickory, NC (11 percent), Waterbury, CT (11 percent), and Atlantic City, NJ (11 percent).

The next map shows the regions with the largest projected share of their work force doing service class work out to 2018. The largest share of service class work is, not surprisingly, in resort towns and tourist destinations where nearly two-thirds of the work force is projected to be employed in service class work: Ocean City, MD (63.9 percent), Atlantic City, NJ (63.4 percent), Myrtle Beach, SC (62.8 percent), West Palm Beach, FL (59.8 percent), Bradenton, FL (59.6 percent), and Punta Gorda, FL (59.4 percent).

Service class jobs compose the biggest share of all jobs, and are projected to grow considerably in the future. We can no longer be content to see service class jobs as low-skill, low-paid work. A serious job creation strategy must see service class jobs as a key to providing better, more engaging, higher-wage employment. Americans need to remember that manufacturing jobs were not always good jobs. A century ago, they were dirty, dangerous, low-wage jobs. Business strategies to improve productivity, the labor movement, public policies that enabled workers to form unions and to bargain collectively, and the post-Depression, post WWII social compact between capital and labor made them good jobs.

That is the key task of a jobs strategy today – we have to make service class jobs good jobs. The way to do that is to begin to improve the quality of those jobs and to see service class workers as sources of innovation, continuous improvement, and productivity gains. Service class jobs are the last frontier of real inefficiency in the economy. Already, companies like The Container Store, Whole Foods, Best Buy, The Four Seasons, and Starbucks are developing new and better strategies to engage their workers, improve pay, and promote from within. These efforts are in their infancy and much more can be done to extend them.

The Obama administration should convene a national service jobs summit, calling together industry executives, unions and workers’ organizations, and leading experts to define a strategy for upgrading service class jobs. It also means Americans will have to consider paying more for services. Henry Ford instituted his famous $5 day to enable his workers to buy cars. As a nation, we increased blue-collar pay and we – all of us – paid more for cars, appliances, and durable goods coming off the assembly line. In return, large parts of our work force were able to make enough to enjoy a decent middle-class life. What is more important to you, what would you really rather pay more for – a new car or the people who take care of your children or your ailing parents, or even the people who prepare the food you feed your family? Improving service jobs means spreading the costs of higher pay across our economy and all of us as consumers.

In my next post, I turn to the other big area of job growth in the U.S. economy – the projected growth of higher-skill, knowledge-based, creative class jobs.

The United States has seen a steady erosion of blue-collar work over the past several decades. We define blue-collar, working class jobs as those which primarily make use of physical skill or manual labor. These occupations include not only factory work or production occupations, but jobs in construction, materials moving, transportation, installation, and repair. Blue-collar, working class jobs currently account for 23 percent of all U.S. employment. Blue-collar occupations and the regions that specialize in this kind of work have seen the highest levels of unemployment and the greatest vulnerability to the economic crisis. The decline of high-paying, blue-collar jobs for lower-skilled workers has caused considerable concern that the U.S. is losing an important source of good, family-supporting jobs, and that the American labor market is becoming more uneven and increasingly split between higher-paying knowledge work and lower-paying routine service work. But what will the geography of blue-collar work look like in the future?

The map above shows the metros with the biggest projected gains in blue-collar work. Not surprisingly, the biggest metros top this list. The biggest gainer is Greater New York which is projected to gain 41,084 working-class jobs followed by Houston (32,249), Chicago (30,482), Los Angeles (28,811), Phoenix (23,957), Atlanta (22,754), Washington, D.C. (21,387), Dallas (19,315), Riverside (16,755), and Las Vegas (14,781).

But job growth is a function of population size; it’s expected that large regions will dominate the list of the biggest job generators. So, the next map plots the projected percentage change in working-class jobs for U.S. metros. The regions with the largest projected working class increases are all in the Sun Belt: Pascagoula, MS (8.2 percent), Naples, FL (8.1 percent), Punta Gorda, FL (7.9 percent), Santa Fe, NM (7.4 percent), Cape Coral, FL (7.4 percent), Farmington, NM (7.4 percent), Jacksonville, NC (7.2 percent), Las Vegas ( 7.1 percent), Grand Junction, CO (7 percent), and St. George, UT (7 percent). The places with the slowest projected growth are mainly traditional manufacturing metros such as Elkhart (.2 percent) and Columbus, IN (1.06 percent), Muskegon, MI (1.16 percent), Oshkosh, WI (1.41 percent), Hickory, NC (.68 percent), and Dalton, GA (.46 percent), among others.

The next map shows the regions that are projected to have the highest share of their workforce doing blue-collar work out to 2018. Elkhart, IN, tops the list with nearly half (48.5 percent) of its workforce in blue-collar jobs – though that is down from 51.3 percent in 2008. It is followed by Dalton, GA (45.9 percent), Morristown, TN (40.9 percent), Houma, LA (40 percent), Decatur, AL (37.6 percent), Fort Smith, AR (36.5 percent), Hickory, NC (35.8 percent), Odessa, TX (35.4 percent), Gainesville, GA (35.3 percent), and Sheboygan, WI (34.3 percent).

The good news is that the U.S. will continue to create relatively high-paying working class jobs. These jobs will continue to provide good livelihoods for the workers fortunate enough to have them. The bad news is that their rate of growth will be sluggish and not nearly enough to provide the amount of good, family-supporting jobs required to undergird a middle class of lower-skilled workers. The harsh reality is that blue-collar, working class jobs in the U.S. are increasing slowly, and they will grow the slowest in traditional manufacturing and industrial regions and communities whose economic and social life has revolved around these jobs. There is little policy-makers can do – aside from declaring a trade war – to bring back large numbers of these high-paying jobs. But they can develop strategies to improve not just the wages but the content of blue-collar work, by engaging workers more fully and seeing them as a source of innovation. And they can help to infuse more creativity and design into manufacturing products, helping to broaden their market and counteract the trend toward declining prices. And policy-makers will have to develop strategies for improving wages and the content of work in other faster-growing segments of the economy, a point I will get to in my next post, which will cover the projected growth of service jobs.