Creative Class

This AP report is just sickening.

Cross burnings. Schoolchildren chanting “Assassinate Obama.” Black figures hung from nooses. Racial epithets scrawled on homes and cars. Incidents around the country referring to President-elect Barack Obama are dampening the postelection glow of racial progress and harmony, highlighting the stubborn racism that remains in America. From California to Maine, police have documented a range of alleged crimes, from vandalism and vague threats to at least one physical attack. Insults and taunts have been delivered by adults, college students and second-graders. There have been “hundreds” of incidents since the election, many more than usual, said Mark Potok, director of the Intelligence Project at the Southern Poverty Law Center, which monitors hate crimes.

Michael Lind argues that the United States is embarking on its fourth great political (and economic) cycle (h/t Jerry Mayer).

The election of Barack Obama to the presidency may signal more than the end of an era of Republican presidential dominance and conservative ideology. It may mark the beginning of a Fourth Republic of the United States. In the past generation Bruce Ackerman, Theodore Lowi and I, in different ways, have used the idea of “republics” to understand American history… As I see it, to date there have been three American republics, each lasting 72 years (give or take a few years). The First Republic of the United States, assembled following the American Revolution, lasted from 1788 to 1860. The Second Republic, assembled following the Civil War and Reconstruction (that is, the Second American Revolution) lasted from 1860 to 1932. And the Third American Republic, assembled during the New Deal and the civil rights eras (the Third American Revolution), lasted from 1932 until 2004…

[W]hat causes these cycles of reform and backlash in American politics? I believe they are linked indirectly to stages of technological and economic development. Lincoln’s Second American Republic marked a transition from an agrarian economy to one based on the technologies of the first industrial revolution – coal-fired steam engines and railroads. Roosevelt’s Third American Republic was built with the tools of the second industrial revolution – electricity and internal combustion engines. It remains to be seen what energy sources – nuclear? Solar? Clean coal? – and what technologies – nanotechnology? Photonics? Biotech – will be the basis of the next American economy. (Note: I’m talking about the material, real-world manufacturing and utility economy, not the illusory “information economy” beloved of globalization enthusiasts in the 1990s, who pretended that deindustrialization by outsourcing was a higher state of industrialism.)

Naturally, the Americans alive during the founding of new American republics have other issues on their minds. The Civil War was fought over slavery, not steam engines, and the New Deal, for all of FDR’s commitment to nationwide electrical power fed by hydroelectric dam projects, was animated by a vision of social justice. The broad outlines of technological and economic change merely provide the frame for the picture; the details depend on the groups that emerge victorious in political battles.

That is why it is too early to predict the outline of the Fourth American Republic. Its shape depends on the outcomes of the debates and struggles of the next generation. But it is possible to speculate about its life span. If the pattern of history holds, the Fourth Republic of the United States will last for roughly 72 years, from 2004 (or, if you like, 2008) to 2076. And if the pattern of the past holds, we will see a period of Hamiltonian centralization and reform between now and 2040, followed by an approximately 36-year long Jeffersonian backlash motivated by ideals of libertarianism and decentralization.

And even if I am right that the new era began four years ago, historians are likely to identify the first president of the Fourth Republic of the United States as Barack Obama, not George W. Bush. Obama may join Washington, Lincoln and Franklin Delano Roosevelt on the short list of American presidents who, thanks both to their own leadership and the fortuitous timing of their elections, presided over the refounding of the United States. Yes, he can.

This is an intriguing formulation. But I think the breakpoints are confused and the time-lines or cycles longer. FDR’s time was one of a maturing and fairly well-understood period of industrial capitalism. While the Depression was deep and devastating, one could already see that demand stimulating via higher wages, infrastructure building, and home ownership were key building blocks for economic realignment and stimulation.

Today is much more like the mid-19th century and the time of Lincoln – the rise of a wholly new economic system and the large-scale class divides it produced. It is very difficult to even imagine the broad infrastructure or system architecture required to propel this emergent system of idea-driven, creative capitalism.

One thing is for certain: The old era will have to give way before the new era can take shape. The rise of industrial capitalism required a revolution in agricultural productivity and the mass shrinkage of farm-based employment. Remember Herbert Hoover’s mantra – “a chicken in every pot and a car in every garage.” Food had to become cheap to free up consumption and demand for cars and industrial products. The revolution in agriculture freed up capital and labor that could be redeployed in then expanding industrial economy.  The rise of single-family home ownership and the auto-oriented suburb then closed the consumption circuit of Fordism.

Building the next economy and a new republic will require a similarly fundamental transformation of the core sectors of Fordism. This is more than creating new technology and building a new green infrastructure. We will need to massively shrink the cost for consumption of houses and cars.

The new system will be unable to emerge if people are spending the overwhelming amount of their incomes on housing (mortgages plus maintenance, utilities, taxes) and auto-expenses. To do so, we will need to make the housing system much more flexible, massively increase the productivity and efficiency of housing production (I’ll be writing more on this soon), and enable people to become far less dependent on cars. Only this kind of massive shift in the underlying architecture of society will free up sufficient income and demand for the next new things and enable us to begin to build the new infrastructure which can set innovation and economic growth on a new trajectory. Who in the Obama administration is even thinking along these lines?

The clock of history is always ticking. Eventually, the place or places that can set in motion this shift will accure first-mover advantages similar to those that the U.S. gained in the late 19th and 20th centuries. Can this happen in the U.S.? Can Obama help catalyze this broad shift, or are we still too early in the historical process? What about entrenched U.S. interests – the insitutional rigidities the late Mancur Olson wrote about – can they be overcome and recast? Washington remains locked in a conversation which entails propping up the Fordist economy – a housing finance bailout, an auto bailout, a homewner bailout – when instead what is needed is to free up capital from these sectors and massively redeploy it into others. And if not the U.S., where and when might this happen? How long will it take?

Say it ain’t so… please ,someone. Bloomberg is reporting.

President-elect Barack Obama is pushing Congress this year to approve as much as $50 billion to save cash-starved U.S. automakers and appoint a czar or board to oversee the companies, a move that would require President George W. Bush’s support, people familiar with the matter said. Obama’s economic advisers are now convinced that if General Motors Corp. doesn’t get a financial lifeline soon, it will have to file for bankruptcy by the end of January. And if the companies don’t get almost $50 billion, Obama will be dealing with the issue again by next summer. Any czar or board would be patterned after the bailout of Chrysler in 1979 and New York City in 1975. Advisers such as former Federal Reserve Chairman Paul Volcker and former Treasury Secretary Lawrence Summers are said to be telling Obama that the cash is urgently needed now.

Congress would have to act in a lame-duck session that begins next week. Obama would need Bush’s backing to pass such a sweeping and costly measure in part because Democrats don’t have enough votes to force a floor vote or override a veto. Obama also would need strong support from auto-producing states such as Michigan, Ohio, Indiana, Illinois and Wisconsin to pass such a sweeping and costly measure. Yet to be determined is whether most of the money would be drawn from the $700 billion financial rescue package Congress passed last month or from newly allocated funds.

By injecting himself into the talks about how to save General Motors, Obama is making an exception to his decision to steer clear of policy-making until he takes office. The president-elect also wants the Federal Reserve to extend emergency loans to General Motors, Ford Motor Co. and Chrysler LLC, according to Obama aides who spoke on condition of anonymity. The failure of those companies would likely bring down parts-makers, dealerships and suppliers in addition to inflicting a deep psychological blow.

Is this really true? A multi-billion dollar bailout for the Big Three whose management has systematically squandered away a huge post-war economic and technological advantage, have misunderstood their markets, who have blamed workers every chance they get, and who failed to learn from their rivals and refuse to harness the creative capabilities of workers. An auto czar – huh? I thought Obama was elected by a combination of African-Americans and the creative class. How does this square with his electoral coalition or his vision of a better future? This will just forestall the inevitable. Why not just allow them to be taken over by Japanese car companies like Toyota and Honda who could truly restructure them? For the life of me and the good of the country, I hope this report is wrong.

Mark Cuban, over at the Huff Post, takes Obama to task on his old guard economic team:

It’s great to see President-elect Obama aggressively taking on the economy prior to his taking office. Unfortunately, the economic advisory team that he has put together looks more like a semester’s worth of great guest speakers for an MBA class than an economic advisory team that can truly help him… Notice anything missing?  Not a single entrepreneur.

The Washington Post is reporting that Obama appears to be committed to creating a new White House Office of Urban Policy. Let’s hope it’s one that recognizes urban policy as a key element of innovation, economic growth, and competitiveness as well as poverty mitigation.

Your thoughts on what a new urban policy should look like?

Rapidly improving and expanding network computer technology is a key reason why workplaces today are shifting fast toward more mobile and flexible environments. Reflecting upon events of the past week, I think there is another massive revolution in workplaces still to come.

The Obama campaign demonstrated the potential of computer-facilitated personal networks to bring about change. Through Facebook and MySpace, along with websites like YouTube, supporters connected with independents and people who were potential supporters, creating a viral-like marketing campaign. People found numerous different ways to connect and spread a message. Obama rode this 21st-century communications revolution to victory – it was not a machine to build and control, but rather energy and ideas to harness.

As corporations relax their rules about “who can be doing what on their work machine when,” a new generation might just use the myriad communications options available to do something fantastic. When corporations “let go” they might find they can hitch themselves to something amazing.

Imagine a global corporation – maybe a software company or an accounting-consulting firm – in which people at all levels and positions could interconnect and network together, and then solve problems together. A company with an internal intranet containing an internal Facebook, blogs, work logs, etc. fully searchable by anyone else in the company. Perhaps employees anywhere in the world could connect in any way they needed to: video conference instantly from their laptops, or leave video messages for each other.

If all the talent in the company could connect easily, that could bring enormous innovation acceleration. Problem solving could be far more efficient. Maybe David in the office in Singapore has already solved a problem now facing new person Carly in the office in Boston? What if Carly could type in a few key words and learn that David dealt with the same issues last month?

While I’ve heard of companies trying to better connect their workforces through intranet applications, I haven’t heard of too many turning all or most of the process over to all employees, especially the younger generation (but please comment and tell me who is doing this if you know).

The first company that achieves this extreme interconnectivity would instantly have tremendous leverage against competitors from an enormous boost in productivity and innovation.

Obama was the first major politician to grasp the potential, and harness the power, of youth and technology – and just look at how far ahead it put him. He left the best late-20th century political machine in the dust (the Clinton camp) and made McCain look like a relic of the 1950s.

Andrew Gelman tallies the big-county/ small-county; rich-county/poor-county votes.

A blogger shares perspective:

In short, I believe place, not just people, won this election for Barack Obama. And here’s why: cities are made up of three types of people.

1. Young people who migrate to them for college and professional opportunity.

2. Professionals who migrate to them for career advancements and financial gain.

3. Wealthy people who have gained enough money in their careers to stay in them over generations…

And credit the Obama campaign for doing such a good job of tailoring messages to this group. They’ve done a great job of making young urbanites feel good about those $25 political donations not to mention the volunteer numbers that come out of this group of voters. In a way, the Obama campaign emails make you feel like you’re not doing enough to make history if you didn’t at least volunteer on election day. And it’s worked like a charm in cities… Again, the Obama campaign – particularly in places like Philadelphia and D.C. – should get a lot of credit for being so well organized in cities, so much so that you would think he was running for mayor in places like Chicago and Raleigh, NC.

The critical feature of the creative economy is that it makes place the fundamental feature of politics, culture, and economics.

With all of the hoopla and celebrating over the Obama victory, many Americans may have looked past the country’s continued rejection of fundamental civil and human rights for gay and lesbian people. The Christian Science Monitor reports:

Same-sex couples will no longer be permitted to legally marry in the Golden State. With 95 percent of the vote counted Wednesday morning, a ballot initiative to ban gay marriage headed for a narrow victory. It’s a public repudiation of a landmark state court ruling in May that found same-sex couples have a right to marry. Voters in Florida and Arizona also approved constitutional bans on gay marriage on Tuesday. Just two years earlier, Arizona was the first state to defeat a gay marriage ban at the ballot box.

A gay friend in Florida writes, “A really bad night for gays in Florida and California, very upsetting, despite Obama’s victory.”

Gay rights is the civil rights issue of our time. Those who oppose them are simply on the wrong side of history. (For some perspective on what being on the wrong side of history means, check out what the daughter of George Wallace has to say.).

While stabilizing the economy and dealing with what Paul Kennedy dubbed America’s imperial overstretch have to be the new President’s first priorities, if Obama is to fulfill his historic role and transformative promise, he cannot back away – in fact he must lead – on this fundamental issue.

Barack Obama rode to his resounding victory on the enthusiasm of two constituencies, the young and African Americans, whose support has driven his candidacy since the spring. Yet arguably the biggest winners of the Nov. 4 vote are located at the highest levels of the nation’s ascendant post-industrial business community.

Obama’s triumph reflects a decisive shift in the economic center of gravity away from military contractors, manufacturers, agribusiness, pharmaceuticals, suburban real estate developers, energy companies, old-line remnants on Wall Street and other traditional backers of the GOP. In their place, we can see the rise of a different set of players, predominately drawn from the so-called “creative class” of Silicon Valley, Hollywood and the younger, go-go set in the financial world.

These latter business interests provided much of the consistent and massive financial advantage that the Illinois senator has accrued since early spring. The term “creative class” was popularized by former George Mason professor Richard Florida, who used it to describe those with both brainy business acumen and a very liberal cultural agenda borrowed from the bohemians of the ’60s.

I’m dumb-struck. The rest here.

Obama’s victory last night is a great victory for humanity – global humanity. Desmond Tutu compared it to that of Nelson Mandela in South Africa. For my money, after eight years of deteriorating conditions in America, in the Middle East, and around the world, it is nothing less that an American glasnost.

I watched both speeches and both men closely last night. It was the best speech I have ever seen McCain give. He was eloquent, forward looking, and optimistic.

Obama was, in a word, amazing. He sounded all the right notes about moving beyond America’s divides and engaging the entire country and the world. Like so many of you, I was deeply moved by the scenes of the crowds in Chicago and elsewhere around the U.S. and the world. And Obama’s effort to reach out immediately and instinctively not just to his opponent but to all those who voted against them and to assure them that he is their president and will work ever harder for them is a poignant move toward healing the deep divisions that plague America.

Obama’s gifts are plentiful. In my entire life, I cannot remember an incoming president with so many natural and developed talents. I found myself thinking about Carolyn Kennedy’s comment about how she had at long last come upon a political leader who inspired her the way so many people say her father inspired them. I find Obama to be more inspiring, more serious, and more in touch with his nation and the entire world’s moods and needs. There will be plenty of challenges ahead, but he has the gifts and the ability to make his mark and lead the U.S. and the world. I have never, ever felt so very proud to be American.

Still, I was miffed by so much of the coverage which focused on a single dimension of the contest – race. As someone who was born in Newark in 1957 and whose very being was shaped by the civil rights struggles of the 1960s, I found myself riveted in ways I cannot even begin to explain by the sight of African-Americans rejoicing – and I was deeply touched by the sight of Jesse Jackson with tears welling in his eyes and rolling down his cheeks.

Obama is much more than an African-American figure. When Tom Friedman reduces the election to: “And so it came to pass that on Nov. 4, 2008, shortly after 11 p.m. Eastern time, the American Civil War ended, as a black man — Barack Hussein Obama — won enough electoral votes to become president of the United States,” he reflects a parochial, American-centrist, out-moded, boomerist sentiment.

Obama is bi-racial – the son of a Kenyan father and a white American mother. He is both global and multi-cultural – his early years spent in Jakarta Indonesia, not only a developing economy but one of the most diverse and multi-racial societies in the world, before being raised by his white grandparents in Hawaii, another multi-racial and multi-cultural society.

The rise of Obama promises much, much more than the end of “the American Civil War.” His victory signals the rise of a truly global, post-racial world – the possibility that we can transcend racial categories.  This is what young Americans see. And it is why billions of others of all ages and races across the world rejoice today.