Creative Class

I think this post is exactly the type of post that could use a little more of what Tyler Cowen dubs “anthropology of ideology” - not to mention a refresher course in grammar and writing.

Unfortunately, what research we do have has been unable to find the true
causal mechanisms to what is shaping up to be one of America’s most
vexing urban problems. It is somewhat unclear whether the new residents
were full douche bags before they arrived, or whether they were
transformed into douche bags upon moving into their new abodes. Is
douchebagness produced by the local environment? Do the handful of non
douche bag residents run the risk of becoming douche bags do to
increased exposure to small dogs, overpriced handbags and DINKs? Or are
douche bags somehow integral to the production of new urban space? As
cities slowly but surely rezone every inch of waterfront land for high
rise condos in the hoping of luring the Richard Florida Fan Club, a
massive influx of complete, utter, quasi and mega class douche bags to
what may have once been somewhat interesting, gritty or real places is
inevitable.

What is it about our time and technology which has seemingly enabled and encouraged people to disseminate such gibberish? When did it become OK to publish unsolicited opinion without so much as looking at data or collecting a single solitary fact?  My sense is this is worse in urban planning related matters than in most other fields, but that may simply be because it’s my field.

A list of his posts is here (via Mark Thoma).  I got a kick out of this quote, from a new Marx biography by Francis Wheen:

After gaining his doctorate [Marx] thought of becoming a philosophy lecturer,
but then decided that daily proximity to professors would be intolerable. ‘Who
would want to have to talk always with intellectual skunks, with people who
study only for the purpose of finding new dead ends in every corner of the
world!’ Besides, since leaving university Marx had been turning his thoughts
from idealism to materialism, from the abstract to the actual. ‘Since every true
philosophy is the intellectual quintessence of its time,’ he wrote in 1842, ‘the
time must come when philosophy not only internally by its content, but also
externally through its form, comes into contact and interaction with the real
world of its day.’ That spring he began writing for a new liberal newspaper in
Cologne, the Rheinische Zeitung; within six months he had been
appointed editor.

Lots more here and here.

Washington Monthly’s Kevin Drum disagrees with Tyler Cowen’s plea for “intellectual anthropology.”

Actually, this kind of amateur anthropology goes on all the time, and
it obviously has its uses. But it also has its drawbacks: the
conventions of social interaction allow people to obfuscate,
prevaricate, evade, and just generally lay on the charm in ways that
frequently blur distinctions instead of sharpening them. And human
beings being the social primates that we are, we often give views that
we hear in person more weight than they deserve simply because we heard
them in person.

So I disagree: When it comes to important issues of public policy
this kind of personal interaction should be secondary. For the most
part, we shouldn’t judge people by what they say in private or how they
act around their kids. We shouldn’t judge presidential candidates by
how sociable they are on the press plane or whether they’d make a good
drinking buddy. That’s how we ended up with George Bush. We should
judge them mostly by their public record: their speeches, their
actions, their roll call votes, and their funding priorities.
Anthropological research, aka hanging out and having a few beers, is
fun and interesting, but it’s not necessarily a superior guide to what
someone really thinks or what they’ll really do when the crunch comes.

After reading this, I immediately asked myself: Is this the difference between academic and journalistic styles and norms? In my experience, academics are much tougher critics of ideas than journalists, but they tend to be more civil. That is, they want to take down an idea, not a person. So, they tend to restrict their criticisms to the realm of ideas and don’t get into personal motivations and attacks. They are colleagues with many of the people they debate. Journalists are less concerned with ideas and principles. Their focus is on personal motivations. They see themselves as a check on the system and don’t give a hoot if they hurt someone’s feelings. It’s just part of their job.  For some, the goal is a personal take down; and in this day and age, that can get pretty nasty.

Am I overdrawing this one - your thoughts?

Rolling Stone’s recent “hot issue” named  Philadelphia a hot music scene. Airoots, one of my favorite urban blogs has an interview with DJ Diplo who relocated his music label the the city of brotherly love. Here’s the money quote.

“cant afford new york - my rent in philly is 300 bucks a month.”

Don Tapscott, my neighbor in Toronto and my colleague at the Rotman School, is one of the smartest thinkers on the internet around. Now, Dave Atkins (via All About Cities) applies the theories of Don’s terrific book, Wikinomics to cities.

When Rise of the Creative Class was published I was shocked by the vehemence of personal attacks - some of them quite vicious and insulting - that came my way. I was said to have a gay agenda, to be anti-family, and of attempting to undermine the precepts of Judeo-Christian civilization. I took this quite hard at first, and it took some time to develop a thicker skin. I`m told that great public intellectuals like Robert Putnam also were surprised and hurt by the vehemence of personal attacks that came their way. Having faced this this made me considerably more sensitive when writing about others.

So this post by Tyler Cowen resonated big time with me.

I’d like to propose a new research convention.  Anytime a writer or
blogger talks about what The Right or The Left (or some subset thereof)
really wants or means, I’d like them to list their personal
anthropological experience with the subjects under consideration. …  Tell us how much field work you did, who you did it with, how much they trusted you, and what you wish you could have done but didn’t.

Bryan Caplan adds:

Since the publication of my book, I’ve been meeting a much wider range of people.
I’ve talked to an elite Republican book club, a room full of vaguely
Marxist academics at the New School, retirees, Cato, Heritage, a
conference of largely leftist philosophers, the State Department (!),
the Yale law school, DC economists, and UVA social scientists. I’ve
also spoken on a wide range of radio shows and podcasts, left and right.

What have I learned?  Primarily, I’m more convinced than ever that virtually everyone is sincere. The legions of people who imagine that their opponents secretly agree
with them are utterly deluded. Even when you’ve got undeniable facts on
your side, your opponents probably think that those facts don’t matter;
you’re missing the deeper picture.

The lesson I draw: Sincerity is greatly overrated. It’s an easy and
widely distributed virtue. So what is in short supply? Common-sense. Literalism. Staying calm.  Listening.  Sticking to the point.  Accepting and working through hypotheticals.

If you’ve got these, I’d like to meet your tribe.

I could not agree more. In the age of attack journalism, these are words to live, and work by. I will do my best to abide by them.

Over at Time Magazine`s Curious Capitalist, Justin Fox compares the Case-Shiller Housing Price Index which measures appreciation since 1987 to my Creativity Index. His results, here, and after the jump. Michael Wells weighs in with a comment on this blog. Michael has much to be happy about given Portland`s long and short-run performance.

I`m actually struck by the pattern Fox documents and believe it fits in rather well with my theory. I promise to dig into it even more once I`ve had a chance to digest the data. But for now, let me just jot down some quick reactions.

First of all, my earlier post which Fox points to was about the recent turnaround in the Case-Shiller Index as was a post here earlier today.

That said, over the long-run, the big outliers in terms of the Creativity Index boil down to  two cities - Miami and Las Vegas - both of which perform much better on the Case-Shiller Index over the past two decades than their (low) scores on my Creativity Index would suggest. One explanation might be that both regions have high Gay Index values (their technology and talent scores are low) which as Charlotta Mellander and I have found are extremely closely associated with median housing prices.

However, I think there is another, even more significant factor at work. The significant real estate appreciation experienced by Miami and Las Vegas over the past couple of decades was speculative and thus badly out of whack with their economic fundamentals. These are fun-and-games resort destinations which saw huge and unsustainable gains during the go-go  years of the housing boom.

My main point is that now things are coming back to earth - and more into line with what the Creativity Index would predict. After two decades of significant appreciation Miami and Las Vegas have experienced big declines and are headed for even bigger ones, as the Case-Shiller Index documents. (I live in Toronto and want a house in warm weather and I`m prepared to wait it out another year or two until the south Florida market starts to really correct). My top Creativity Index regions - places like San Francisco, DC, Boston, Seattle, Portland, Denver, etc. - are showing mixed performance - some are declining more than others. But, if my priors are right, they should decline much more modestly than Miami and Las Vegas, and rebound quicker once things start to turn around.  A number of these markets are actually seeing mixed performance. The DC market, which I know very well (having sold a house there this past summer) is declining overall on Case-Shiller. But it is really a tale of two markets with steep declines in far-off suburbs, while the city and close-in markets seem to be holding on.

To my mind, the biggest outliers in in terms of short-run Case-Shiller performance are San Diego and Charlotte, though both are in sync with the Creativity Index over the long-run. San Diego has been hard hit in the past year or so, which I would not have expected given its location, long-run super-star status, high-tech economy, and Creativity Index score. But the region is known for boom and bust real estate cycles. Charlotte has been much stronger than I would expect in the current downturn, perhaps due to its strong financial sector.

Fox says this is the last of his housing market posts for a while. I hope not.  He`s been doing yeoman`s work helping advance our understanding of the unfolding dynamics of the housing and real estate markets which are sure to play a big role in U.S. and regional economic performance over the next couple of years.  Anyway, I have another one to throw into the mix:  Housing in Toronto, Vancouver, Sydney, Melbourne, and Brisbane continues to appreciate like crazy.  Canada and Australia have surged ahead of the US on the UN Human Development Index. Might global indicators like the UN Human Development Index or my own Global Creativity Index help to explain these differences among international housing markets.

Creativity Index Score, followed by Case-Shiller Index in percentages, January 1987-current for 14 regions

San Francisco, 2,  136%
Boston, 5, 30%
Portland, 7, 141%
Washington-Baltimore, 11, 90%
Denver, 14, 47%
San Diego, 19, 117%
New York, 20, 48%
Los Angeles, 31, 129%
Chicago, 39, 64%
Tampa, 51, 45%
Charlotte, 60, 14%
Miami, 72, 94%
Las Vegas, 95, 72%
Cleveland, 118, 17%

This chart reflects the new S&P/Case-Shiller Home Price Index data (chart via Tom Iacono of Seeking Alpha). A table by region is after the jump.  Tampa, Miami, Detroit, Las Vegas, Phoenix, and San Diego have seen the biggest annualized declines. My sense is that we are a long way from the bottom in all of these markets with the partial exception of San Diego.  Seattle, Portland and Charlotte remain up for the year.  Dallas and Atlanta are treading water. Boston, New York and Denver are down, but not by a whole lot.

I still believe we are looking at two or three separate housing markets. The crash will be worst in areas where housing investment was highly speculative and where the underlying economy is shallow, and in older regions like Detroit where the economy has turned quite negative.  Regions where economic fundamentals remain more stable, where there is a sizable creative economy, and which have been long-run super-star real estate markets may decline but the decline will be much less severe than in other markets and they will be much more likely to rebound in time.

If you live in a cold climate like me and are looking for the vacation home in warm weather, my advice is to hold on for a season or two (or make very aggressive offers). These markets still have a long way to fall and asking prices have not yet adjusted to the new market reality.

(more…)

The latest edition of the UN’s Human Development Index is out. I could quibble with its methodology but I think it gets it just about right. Iceland ranks first of the 177 countries ranked in the report, followed by Norway, Australia, Canada, Ireland and Sweden.  The United States has slipped to 12th, around the same position as Spain.  And that’s the US as a whole.  But because the US is highly unequal, socially economically and regionally, some areas in the US are likely to be quite a bit lower than this, while others are higher.

The UN ranking seems similar to my own Global Creativity Index rankings in Flight of the Creative Class.  It sheds light on the real competitors in terms of quality of life, development and potential talent attraction, which as I argued in Flight, are and will be mainly smaller countries.

The much talked about up and coming growth machines of China and India are much lower. China is 81st, behind Colombia, the Ukraine, Bosnia, Brazil and Kazakhstan. India is 128th behind all of them and Botswana and Namibia. Are these really the nations, experts, journalists and the leadership of advanced countries should be worried about and comparing themselves to? At least during the “competitiveness debate” of the 1980s and 1990s, people were talking about the US, Japan, Germany and the Scandinavian countries.

It’s prosperity we’re after, rather than just income and growth, the UN rankings tell a pretty reasonable story.  The ranking table is here.

Jim Bacon has a nice post on suburbs vs. cities, families vs. gays, and the Kotkin-Florida exchange. Not sure I agree with everything he has to say, but he’s right that population and job growth do NOT equal prosperity.  Per capita income is one way to get at it, but at the Prosperity Institute were trying to do better than that. As I write, our deputy director, Kevin Stolarick is over in Sweden meeting with Charlotta Mellander who runs a sister institute there to work on developing a new and improved Prosperity Index.  More to come.