How The Economic Crisis Will Reshape America

Richard Florida who wrote The Rise of the Creative Class has a lengthy new piece in the Atlantic Monthly that looks at the current economic crisis and speculates as to which areas in the USA will best weather the economic storm and/or arise stronger in its aftermath. Likewise, he looks at which regions are likely to rebound the least or even stay depressed and increasingly outside of the economic mainstream. In the course of the article, Florida looks at various areas of the country and changes in technology and innovation. The prospects while not assured seem to greatly favor areas of high innovation and diversity in thought and higher education. In short, many of the "blue" states appear better postured than "red" states that are not welcoming to change and diversity. Here are few of his concluding highlights:

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[W]e need to encourage growth in the regions and cities that are best positioned to compete in the coming decades: the great mega-regions that already power the economy, and the smaller, talent-attracting innovation centers inside them—places like Silicon Valley, Boulder, Austin, and the North Carolina Research Triangle.

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Whatever our government policies, the coming decades will likely see a further clustering of output, jobs, and innovation in a smaller number of bigger cities and city-regions. But properly shaping that growth will be one of the government’s biggest challenges. In part, we need to ensure that key cities and regions continue to circulate people, goods, and ideas quickly and efficiently. This in itself will be no small task; increasing congestion threatens to slowly sap some of these city-regions of their vitality.

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Just as important, though, we need to make elite cities and key mega-regions more attractive and affordable for all of America’s classes, not just the upper crust. High housing costs in these cities and in the more convenient suburbs around them, along with congested sprawl farther afield, have conspired to drive lower-income Americans away from these places over the past 30 years. This is profoundly unhealthy for our society.

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What will this geography look like? It will likely be sparser in the Midwest and also, ultimately, in those parts of the Southeast that are dependent on manufacturing. Its suburbs will be thinner and its houses, perhaps, smaller. Some of its southwestern cities will grow less quickly. Its great mega-regions will rise farther upward and extend farther outward. It will feature a lower rate of homeownership, and a more mobile population of renters. In short, it will be a more concentrated geography, one that allows more people to mix more freely and interact more efficiently in a discrete number of dense, innovative mega-regions and creative cities. . . . . . But most of all, it will be a landscape that can accommodate and accelerate invention, innovation, and creation—the activities in which the U.S. still holds a big competitive advantage.

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One cannot help but wonder what these economic trends, if correct, will portend for areas like Alabama, Mississippi, portions of the Mid-West and even large parts of Virginia where xenophobia and religious based hostility to diversity and intellectual openness are prevalent. Closed mindedness and hostility towards those who are different may well carry a high price indeed.

Time to Reboot America

I book marked Tom Friedman's latest column in the New York Times a fee days ago because it looks at what I believe should be among the highest priorities of the Obama administration - in addition to health care insurance reforms - because it will help on both the employment front and, I believe, in bolstering confidence again in the country/economy. What is it? A public works effort to rebuild are aging and dilapidated national infrastructure. Compared to other nations, much of our public works infrastructure is old, out dated and falling apart. Moreover, as in the Great Depression a well thought out and disciplined public works campaign would provide jobs and much needed improvements. Here are some highlights from Friedman's column:

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I had a bad day last Friday, but it was an all-too-typical day for America. It actually started well, on Kau Sai Chau, an island off Hong Kong, where I stood on a rocky hilltop overlooking the South China Sea and talked to my wife back in Maryland, static-free, using a friend’s Chinese cellphone. A few hours later, I took off from Hong Kong’s ultramodern airport after riding out there from downtown on a sleek high-speed train — with wireless connectivity that was so good I was able to surf the Web the whole way on my laptop. Landing at Kennedy Airport from Hong Kong was, as I’ve argued before, like going from the Jetsons to the Flintstones.

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The next day I went to Penn Station, where the escalators down to the tracks are so narrow that they seem to have been designed before suitcases were invented. The disgusting track-side platforms apparently have not been cleaned since World War II. I took the Acela, America’s sorry excuse for a bullet train, from New York to Washington. Along the way, I tried to use my cellphone to conduct an interview and my conversation was interrupted by three dropped calls within one 15-minute span. All I could think to myself was: If we’re so smart, why are other people living so much better than us? What has become of our infrastructure, which is so crucial to productivity?

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My fellow Americans, we can’t continue in this mode of “Dumb as we wanna be.” We’ve indulged ourselves for too long with tax cuts that we can’t afford, bailouts of auto companies that have become giant wealth-destruction machines, energy prices that do not encourage investment in 21st-century renewable power systems or efficient cars, public schools with no national standards to prevent illiterates from graduating and immigration policies that have our colleges educating the world’s best scientists and engineers and then, when these foreigners graduate, instead of stapling green cards to their diplomas, we order them to go home and start companies to compete against ours.

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{o]ur present crisis is not just a financial meltdown crying out for a cash injection. We are in much deeper trouble. In fact, we as a country have become General Motors — as a result of our national drift. Look in the mirror: G.M. is us. That’s why we don’t just need a bailout. We need a reboot. We need a build out. We need a buildup. We need a national makeover.

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[W]e must make certain that every bailout dollar, which we’re borrowing from our kids’ future, is spent wisely. It has to go into training teachers, educating scientists and engineers, paying for research and building the most productivity-enhancing infrastructure — without building white elephants.

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America still has the right stuff to thrive. We still have the most creative, diverse, innovative culture and open society — in a world where the ability to imagine and generate new ideas with speed and to implement them through global collaboration is the most important competitive advantage. John Kennedy led us on a journey to discover the moon. Obama needs to lead us on a journey to rediscover, rebuild and reinvent our own backyard.