Creative Class

…Cassandra is universally disliked (h/t to Bob Eberhart).

What are we to make of this poll that shows Obama rapidly losing altitude with voters, particularly the Independent voters? Just as Obama was being inaugurated, and immediately afterward, I wrote a number of posts on this blog warning about his mistakes in taking ownership of the Bush mistakes. After taking heat from my friends and the incredible (the root word here is credit, which means trustworthiness etc.) rise of the stock market, I decided to keep my mouth shut.

Now we are nearly six months into the new presidency and what do we have? Obama has invoked Bush era Imperial Presidency secrecy rules, signing statements, and even willingness to torture. The CIA has admitted lying to Congress, the direct representatives of the people, and there are no prosecutions. Unemployment that is reaching ever new highs, and the green shoots the Administration promised shriveling and dying. Wars in Afghanistan and now Pakistan are spiraling downward. For those who admonished opponents of these wars that there was no choice, I can guarantee you that the war will be lost and we will be worse off for having gotten involved. It is existential bad faith and terrible politics to say there are no choices. The Iraq War continues on. Our treasure is being squandered even as we are going bankrupt as a nation.

The real catastrophe that threatens to swamp Obama are the bailouts without end to Wall Street and, even more important, the increasing perception among Americans that Wall Street has become a rigged casino where citizens, pension funds, and 401Ks go to be sheared. Whereas Obama should have begun prosecuting executives who lied materially about the status of their companies, e.g., Lehman Brothers, Bear Stearns, and AIG, they have so far been given a free pass. There are stock market rumors about front running in on a massive scale, tip-offs from the Federal Reserve to selected banks about forthcoming actions that allow the equivalent of insider trading, etc. This is serious stuff.

It was these abuses that were the core of the Roosevelt clean-up of Wall Street. There have been massive bailouts, but no programs such as the Civilian Conservation Corps etc. to put people back to work.

Consider the observed pecking order of bailouts: Wall Street gets trillions; GM and Chrysler 100s of millions; state and local governments tens of millions; ordinary citizens very little. If Obama is to save his presidency, then he needs to fight as hard for the Main Street as he has for Wall Street. Let’s hope the newest polls give him the message.

How are you folks feeling? Has the Obama Administration been doing the right things? Is this the way forward for the country?

The Iranian Presidential Election will be held this Friday. Against seemingly insurmountable odds, Hossein Mousavi, a moderate and progressive candidate (by Iranian standards) has emerged as a serious contender to the incumbent Mahmoud Ahmadinejad.

While his “Green Revolution,” at first seemed nothing more than a Sisyphean struggle by a group of young moderate Iranians against a totalitarian and despotic government – destined for failure despite their greatest efforts – the winds of change have dramatically and suddenly tipped in Mousavi’s favor and, at this point, it’s anyone’s race.

Iran’s state-controlled media has given Mr. Mousavi no air-time, the government has banned his party from hosting peaceful rallies in sports stadiums and other public venues, and those rallies which have occurred spontaneously in the street have been met with hostilities from government officials. Still, his candidacy built momentum.

So how did Mr. Mousavi, whose supporters promise “a new greeting to the world,” emerge as a serious contender to Mr Ahmadinejad despite a state-wide government campaign to quell his movement? The answer: FACEBOOK. Mousavi’s supporters – mostly young people and educated urban dwellers – have taken to the Web, garnering support and enthusiasm on Facebook and on blogs, posting videos of their candidate on YouTube, and organizing impromptu street rallies by mass-texting fellow supporters literally on the fly. The result: a highly organized, energetic, and sophisticated force for change.

Mousavi supporter Emad Mortazavi, a 24-year-old sociology student, said, “Last week, there was suddenly this feeling that it was possible, that Mousavi could get enough votes. Social-networking sites and text-messaging have played a big role in spreading the message.”

In typical form, Ahmadinejad blocked Facebook in May in an attempt to silence his opposition, but to no avail (it was opened back up three days later). In the end, Iran’s youth proved more tech-savvy than anyone in Ahmadinejad’s government.

In an uncanny mirror image of the U.S. election last year, it appears the Net-Generation – people born between 1980 and 1996 – may once again anchor the winning candidate by embracing progressive attitudes and exploiting the power of the internet to collaborate and organize for their candidate. Evidence of a seismic demographic shift, the precipitous rise of Mousavi proves that young Iranians are a force to be reckoned with.

The AFP reports:

“With more than 60 percent of Iranians born after their nation’s Islamic revolution in 1979, the under-30 vote will be crucial in next week’s election in which hardline President Mahmoud Ahmadinejad is being challenged by three fiercely critical rivals.

Several analysts predict a high urban youth turnout in favour of former premier Mir Hossein Mousavi…Tehran has been gripped by a new fashion frenzy ahead of the June 12 vote, with scores of teenagers and 20-somethings sporting green wristbands, scarves and T-shirts.”

Iranian youth ultimately face many of the same problems as young people in Canada, the U.S., and Europe. In a time of economic turmoil they want a candidate who can answer their questions and who can appeal to their better instincts; not some religious zealot who spends most of his time demonizing the Western World and threatening the extinction of its neighbors. The DailyKos writes,

“The economy is a key issue, and many young people with college degrees cannot find jobs or acceptable living arrangements in Tehran and other major cities…the ruling elites cannot ignore the desires of such an enormous percentage of the nation for long. Iran is in for some major shifts due to demographics alone.”

Tomorrow, the Iranian people will take to the polls. The sun may rise Saturday morning on a very different looking Middle East.

Web 2.0 is the network as platform, spanning all connected devices; Web 2.0 applications are those that make the most of the intrinsic advantages of that platform: delivering software as a continually-updated service that gets better the more people use it, consuming and remixing data from multiple sources, including individual users, while providing their own data and services in a form that allows remixing by others, creating network effects through an “architecture of participation,” and going beyond the page metaphor of Web 1.0 to deliver rich user experiences.

- Tim O’Reilly

To the popular press “hacker” means someone who breaks into computers. Among programmers it means a good programmer. But the two meanings are connected. To programmers, “hackers” connotes mastery in the most literal sense: someone who can make a computer do what he wants-whether the computer wants to or not.

- Paul Graham, Hackers & Painters

Welcome to the Open Cities blog on CCE. My name is David Eaves and I’ve been writing, speaking, and thinking about open, citizen engagement and public policy for a number of years. Most recently, I worked to help push forward the City of Vancouver motion that requires the city to share more data, adopt open standards, and treat open source and proprietary software equally.

Cities have always been platforms – geographic and legal platforms upon which people collaborate to create enterprises, exchange ideas, educate themselves, celebrate their culture, start families, found communities, and raise children. Today the power of information technology is extending this platform, granting us new ways to collaborate and be creative. As Clay Shirky notes in Here Comes Everybody, this new (dis)order is powerful. For the meaning and operation of cities, it will be transformative.

How transformative? The change created by information technology is driving what will perhaps be seen as the greatest citizen-led renewal of urban spaces in our history. Indeed, I believe it may even be creating a new type of city, one whose governance models, economies and notions of citizenship are still emerging, but different from their predecessors. These new cities are Open Cities: cities that, like the network of web 2.0, are architected for participation and so allow individuals to create self-organized solutions and allow governments to tap into the long-tail of public policy.

And just in the nick of time. To succeed in the 21st century, cities will have to simultaneously thrive in a global economy, adapt to climate change, integrate a tsunami of rural and/or foreign migrants, as well as deal with innumerable other challenges and opportunities. These issues go far beyond the capacity and scope of almost any government – not to mention the all-too-often under-resourced City Hall.

Open Cities address this capacity shortfall by drawing on the social capital of their citizens. Online, city dwellers are hacking the virtual manifestation of their city which, in turn, is giving them the power to shape the physical space. Google transit, DIYcity, Apps for Democracy are great urban hacks, they allow cities to work for citizens in ways that were previously impossible. And this is only the beginning.

Still more exciting, hacking is a positive sum game. The more people hack their city – not in the poorly misunderstood popular press meaning of breaking into computers but in (sometimes artful, sometimes amateur) way of making a system (read city) work for their benefit – the more useful data and services they create and remix. Ultimately, Open Cities will be increasingly vibrant and safe because they are hackable. This will allow their citizens to unleash their creativity, foster new services, find conveniences and efficiencies, notice safety problems, and build communities.

In short, the cities that harness the collective ingenuity, creativity, and energy of its citizenry will thrive. Those that don’t – those that remain closed – won’t. And this divide – open vs. closed – could become the new dividing line of our age. And it is through this lens that this blog will look at the challenges and opportunities facing cities, their citizens, and institutions. Let’s see who’s open, how they’re getting open, and what it will all mean.

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.

Remember the television program Lost in Space?

There was a robot that would usually at times of relative tranquility begin shouting “Danger, danger, danger.” On this optimistic bright-side blog, I feel like a terrible Cassandra. My apologies to Rich and my cheerful colleagues. I have kept silent while Obama has had an incredible bear rally, but it is time for some more “realistic” comments.

Today, the Pew Research Center shows that Americans are not becoming more populist, but rather are quite optimistic about the future. For most of you this is a good outcome. We, as Americans, dare I say in deference to Rich, North Americans believe optimism is good. What could possibly be wrong here?

My concern is that this optimism and the Obama Administration-sponsored talks of “green shoots” in the economy is lulling Americans to sleep regarding the extraordinary seriousness of the economic crisis we are facing. Already, concerns regarding controlling executive pay at the banks, letting shareholders and lenders suffer from the business decisions they made to invest, and general moral hazard arguments have been forgotten even though the miscreants have received tens of billions of government funds through a myriad of programs, bailouts, and other mechanisms. This will come back to haunt us as the world economy takes another leg downward in the months to come.

This second leg downward, as the entire U.S. including California basically declare bankruptcy, will finally wipe crackpot optimism off the faces of Americans. It is only then that we will be able to become realistic about the circumstances that we face and begin the grim task of reregulating, rethinking the role of finance, and rebuilding our economy.

Rich has always and correctly warned of the problem with the “squelchers.” However, today in this economy full of crackpot optimists, Cassandras are an important social asset, if they can prevent suicide by the delusional. To put a point on it, when the robot warns of danger, foolish optimism is not a survival response.

How do you folks see the current economic conjuncture?

Where does democracy come from? What are the social, demographic, and economic factors that shape the onset of democracy in a country and its subsequent stability and subsequent development?

This is a question that has vexed social scientists for decades. A new study puts the question to perhaps its most systematic test yet.

Researchers from ETH Switzerland and Georgetown University used a statistical procedure called “extreme bounds analysis” to test the salience of 59 factors identified in more than three million previous statistical regressions (h/t: Charlotta Mellander). The study finds a “humbling result”: Out of all those studies, all those variables, and all those millions of statistical analyses, just five factors predict the emergence of democracy, while four predict its survival.

Most surprising of all is the role played by economic growth, measured as gross domestic product (GDP) per capita. The study finds that GDP per capita is negatively associated with the transition to democracy. Contrary to “modernization theory”, the study finds that richer countries are not more likely to become democracies. Richer countries are more likely to remain democracies once they become one.

A new Gallup poll finds that:

Here are some snippets from Michael Ignatieff’s speech accepting the leadership of Canada’s Liberal Party.

We know that economic recovery cannot be purchased at the price of leaving anyone out in the cold. We know that economic recovery means unlocking the creativity of every citizen. … To unite our people, to treat everyone fairly while this crisis lasts, we need a common national standard of eligibility for Employment Insurance … A strategy for recovery must be a strategy for learning …Government cannot predict where the economic opportunities of the future will emerge. But government can prepare our people to seize those opportunities when they arise. We must create a society where learning is a way of life and learning is life-long. A knowledge society—where what counts is what you know, not who you know. A knowledge society – where learning creates hope and opportunity. A knowledge society—where every child gets an equal start with world-class early learning and childcare.

A Canada where every new Canadian has the chance to work hard and achieve their goals, like my father did. A Canada where our researchers and scientists know that their governing is supporting them, not undermining them. A Canada where every creator, artist and filmmaker knows that their federal government will do everything to help them succeed on the international stage. A Canada where hope and opportunity take root again in our farming communities, our small towns, our northern and remote regions.

The way out of this slump is hard, but the direction is clear. In the union hall, in the lecture hall, in the concert hall, wherever one Canadian is teaching another to do something they never thought possible, far-sighted government must be there to provide the resources to help everyone realize their full potential.

We need a government as competent, courageous, co-operative and creative as the people themselves.

The whole thing is here.

What can be done to kick-start the housing industry, and also make housing more affordable for the poor and middle class buyers? A new book by economists Ed Glaeser and Joseph Gyourko takes on these questions and more. Here’s a blurb from the American Enterprise Institute which commissioned the book:

Even after the burst of the housing bubble, homes remain unaffordable for the poor and the middle class in many parts of the country. In a new NRI-commissioned book, Rethinking Federal Housing Policy: How to Make Housing Plentiful and Affordable (AEI Press, December 2008), Edward L. Glaeser and Joseph Gyourko examine why. They show that local building restrictions are the cause of much of the continued high cost of housing.

Glaeser and Gyourko argue that reform of the home mortgage interest deduction would provide incentives to local governments to reduce these barriers, allowing the market to provide more housing and reducing costs. Additionally, they believe that federal subsidies for the production of low-income housing should be eliminated and the funds reallocated to increase the scope of federal housing voucher programs, which allow poor households to relocate to areas of greater economic promise.

Here’s a link for the PDF of the entire book.