Arnold Kling challenges me to a $50 dollar bet.

For me, this is more of an emotional bet than an economic one. Florida and I both share the premise that Wall Street will not come back. Florida’s economic case is that the New York economy may actually be less dependent on financial services than Columbus, Ohio or Hartford, Connecticut…

I hate the Mets. I find the heavy-handed sensory overload of New York tiring and ultimately unpleasant, in the same way that I find Las Vegas or Disney World unpleasant. Although I can actually enjoy New York in short stretches, and I cannot say the same for Vegas or Disney…

I don’t think that the arts are all that important. To me, creative innovation that matters is somebody in a lab at MIT coming up with a more efficient battery or solar cell. It is somebody at Stanford coming up with a way to make computers smarter or cancer more preventable. I just can’t get excited about some frou-frou fashion designers and the magazines that feature their creations.

Ryan Avent responds:

Kling seems to want us to live in some bleak, technophilic dystopia, where we work to enable ourselves to work. But that would be a poor society indeed. Cultural goods aren’t just a nice by-product of a modern economy. They’re the very justification for it.

I’m not a betting man. But because I think very highly of Kling… and, well, because I’m pretty confident on this one – I’ll take it.

A quick disclaimer: As a boy growing up in New Jersey I was a huge fan of the 1960s Mets – Tom Seaver, Jerry Koozman, Nolan Ryan, Tug McGraw, Tommy Agee, Cleon Jones, Ron Swoboda – I can name more players from that team than the current one. I was also a huge fan of the NY Jets – Namath, Snell, Boozer, and company…

My point is that New York is a diverse open economy with a fast metabolism which will keep it attracting people and generating new businesses, industries, and modes of consumption – that will likely range from management and technology to arts, culture, entertainment, and media, and, yes, even finance – and in many cases capitalizing on the intersection and convergence of these. Can you say Bloomberg?

And while we’re at it: D.C.’s success (which I’d also bet on) is based not just on the fact that it’s a government town with highly educated people and a growing tech sector, it’s in effect become a suburb of New York, as the whole Bos-Wash corridor has become a more integrated economic unit – which can be seen most visibly in the relocation of major chunks of broadcast and print media – due to greater D.C.’s proximity, affordability, and quality of life.

I’ll also take San Francisco (from Napa to the Silicon Valley), Seattle, all of Cascadia, Chicago (which has roiled up many of the management functions of the old Midwest), and my very own Toronto – which to my mind may well have the biggest upside of any city in North America. I could go on…

So, how do you wager?

Ryan Avent points to this finding from a 2006 report from the Center for Housing Policy, which documents the share of income people devote to housing and transportation. It’s higher than you might think.

Bruce Katz and Jennifer Bradley make the case for extending urban policy to the suburbs, creating a broader metropolitan-oriented policy:

America can’t ensure its leading place in the global economy unless we grapple with the problems and opportunities of our suburbs. Nonprofits, long focused on inner cities, need to reach out to poor families and immigrants in the suburbs. The federal government should support the production and preservation of affordable housing there. Even more important, Washington needs to recognize that suburban governments are being flattened by the housing crisis—they don’t have the experience or the capacity to slow the tide of foreclosures or deal with neighborhoods strafed by vacancies. The Feds need to use some of the billions in recovery funding to help local governments buy up foreclosed properties and put that land to productive use.

Ryan Avent weighs in here.

Sure, some suburbs need help. Sure, there will be a lot of adaptive reuse work to be done there. Sure, we can us regionally oriented metropolitan policy. But in the main, we need to reorient urban policy from social policy to economic competitiveness policy. The cornerstones of that policy must be to enable mobility (which has all but stopped now), encourage scale and density, and dramatically increase speed and velocity of the movement of goods, people, and ideas within urban areas. The scale of the problem is gi-normous and there is precious little indication the U.S. political system is up to it, or even aware it. One thing is for certain, getting this geography right is key to broad U.S. recovery, critical to any stimulus, and essential to  long-run competitiveness and proseperity. The historical analog is of course suburbia’s role as the spatial fix for post-World War II capitalism and the spur for Fordist production. So what is the spatial fix for today’s economy? The place that gets this right generate huge first-mover advantages in capitalism’s next phase.  For something so important, I’m amazed so few people are even thinking about it.

That’s what the proposed $800 plus billion U.S. stimulus has come to. TPM’s Elena Schor has the details direct from Representative Jim Oberstar’s (D-MN) speech fo the U.S. Conference of Mayors.

That is why we set forth this $85-billion initiative from our committee. It’s been reduced in the final going. We expect that it’ll come out somewhere around $63 billion, but $30 billion for highways.  The reason for the reduction in overall funding — we took money out of Amtrak and out of aviation; we took money out of the Corps of Engineers, reduced the water infrastructure program, the drinking water and the wastewater treatment facilities and sewer lines, reduced that from $14 billion to roughly $9 billion — was the tax cut initiative that had to be paid for in some way by keeping the entire package in the range of $850 billion.

Ryan Avent has more to say here; Matt Yglesias here.

So it’s yes to highways and tax cuts, no to transit. I’m speechless.

Ryan Avent, one of my favorite and one of the very best urban bloggers around, digs into Obama’s urban policy team. As a preface to his longer article which appears in Grist, Avent writes on his blog: “My thinking on the selections has evolved somewhat. Initially, I was fairly disappointed, but I’m more sanguine now.” Money quote: “The urban picks are probably just a bit more explicitly pragmatic and shouldn’t be read as a betrayal by the president.”

The best member of team city, as judged by urbanists and other progressives, is likely to be Shaun Donovan, tapped by Obama as secretary of Housing and Urban Development …A Clinton-era veteran of the agency, he’s familiar with the federal bureaucracy and managed to be effective despite institutional hurdles. More recently, he has demonstrated his knowledge of best practices in affordable housing as a capable head of New York City’s Department of Housing Preservation and Development  … Yet it’s unclear whether Donovan appreciates the scope of the housing challenge facing the nation.

From a visionary perspective, Obama’s Transportation pick is widely seen as the most baffling … Obama used the pick to name his promised Republican cabinet member (Defense secretary holdover Robert Gates excepted). Ray LaHood, a retiring downstate Illinois representative, will be handed the reins of the department at perhaps the most crucial juncture for transportation investment since the Eisenhower years …

Less remarked upon by urbanists but perhaps more disappointing, on the face of things, is Obama’s choice for head of the new Office of Urban Policy… And so the choice of Bronx Borough president Adolfo Carrion was also somewhat underwhelming. Carrion is at least nominally qualified. He’s a trained urban planner and a veteran of the New York political scene. He helped engineer redevelopment of underused portions of the Bronx … Carrion did take a courageous stand in favor of Mayor Michael Bloomberg’s congestion pricing plan … There is little in Carrion’s resume to indicate that the Bronx lifer can explain the necessity of a difficult transition to increased density to residents and leaders of the nation’s great suburban expanses.

The whole piece, here, is required reading for anyone interested in American urbanism and the future of urban and regional policy.

In recent decades, global trade patterns–that is the structure of
supply chains and mix of products shipped–have developed in a world of
more or less persistent declines in transportation costs (and, one
presumes, the expectation that those declines would continue). In the
same way, our domestic urban geography has evolved with certain
expectations about transportation cost trends in mind.

Some non-trivial portion of those transportation cost declines,
actual and expected, are likely not sustainable over the long-term.
Depending on just how off expectations were, we could see some
interesting changes in economic patterns. For one, I’d expect a global
squishing of supply chains and cities. For another, I’d expect the mix
of shipped goods to move toward high value items, which have a lower
ratio of shipping costs to sale price. That may mean a return of some
production jobs to service-oriented economies.

He’s got a very good point.