Joel Kotkin

How the Democrats can Rebuild

Joel Kotkin — Thu, 09 Mar 2017 20:17:23 +0000

Appearing in:

Orange County Register

Numerous commentaries from both the political left and right have expounded the parlous state of the Democratic Party. And, to be sure, the Democrats have been working on extinguishing themselves in vast parts of the country, and have even managed to make themselves less popular than the Republicans in recent polls.

Yet, in the longer term, the demographic prospects of a Democratic resurgence remain excellent. Virtually all of the growing parts of the electorate — millennials, Latinos, Asians, single women — are tilting to the left. It is likely just a matter of time, particularly as more conservative whites from the silent and boomer generations begin to die off.

But, in politics, like life, time can make a decisive difference. It’s been almost a decade since the Atlantic proclaimed the end of “white America,” but Anglos will continue to dominate the electorate for at least the next few electoral cycles, and they have been trending to the right. In 1992, white voters split evenly between the parties, but last year went 54 percent to 39 percent for the GOP.

Identity politics vs. social democracy

To win consistently in the near term, and compete in red states, Democrats need to adjust the cultural and racial agenda dominating the “resistance” to one that addresses directly the challenges faced by working- and middle-class families of all races. This notion of identity politics, as opposed to those of social class, is embraced by the progressives’ allies in the media, academia, urban speculators, Hollywood and Silicon Valley, since environmentalism, gender and race issues do not directly threaten their wealth or privileged status.

The rise of identity politics, born in the 1960s, has weakened the party’s appeal to the broader population, as Columbia University humanities professor Mark Lilla argued in a November New York Times column. But most progressives, like pundit Matthew Yglesias, suggest that “there is no other way to do politics.” To even suggest abandoning identity politics, one progressive academic suggested, is an expression of “white supremacy,” and she compared the impeccably progressive Lilla with KKK leader David Duke.

This hurts the Democrats as they seek to counter President Donald Trump. Americans may not be enthusiastic about mass deportations, but the Democratic embrace of open borders and sanctuary cities also is not popular — not even in California. And while most Americans might embrace choice as a basic principle, many, even millennials, are queasy about late-term abortions.

Democrats also need to distance themselves from the anti-police rhetoric of Black Lives Matter. Among millennials, law enforcement and the military are the most trusted of all public institutions. Rabid racial politics among Democrats, notes Lee Trepanier, political science professor at Saginaw Valley State University in Michigan and editor of the VoegelinView website, is steadily turning white voters into something of a conscious racial “tribe.”

Finally, Democrats have now embraced a form of climate change orthodoxy that, if implemented, all but guarantees that America will not have a strong, broad-based economic expansion. The economic pillars of today’s Democratic Party may thrive in a globalist, open-border society, but not many in the more decidedly blue-collar industrial, agricultural or homebuilding industries.

This piece first appeared in The Orange County Register.

Joel Kotkin is executive editor of NewGeography.com. He is the Roger Hobbs Distinguished Fellow in Urban Studies at Chapman University and executive director of the Houston-based Center for Opportunity Urbanism. His newest book, The Human City: Urbanism for the rest of us, was published in April by Agate. He is also author of The New Class Conflict, The City: A Global History, and The Next Hundred Million: America in 2050. He lives in Orange County, CA.

Photo: Gage Skidmore

Is L.A. Back? Don't Buy the Hype.

Joel Kotkin — Tue, 28 Feb 2017 20:44:01 +0000

Appearing in:

Forbes

With two football teams moving to Los Angeles, a host of towers rising in a resurgent downtown and an upcoming IPO for L.A.'s signature start-up, Snapchat parent Snap Inc., one can make a credible case that the city that defined growth for a half century is back. According to Mayor Eric Garcetti, the Rams, Chargers and the new mega-stadium that will house them in neighboring Inglewood, show that “that this is a town that nobody can afford to pass up.”

And to be sure, Los Angeles has become a more compelling place for advocates of dense urbanism. Media accounts praise the city’s vibrant art scene, its increasingly definitive food scene and urbanist sub-culture. Some analysts credit millennials for boosting the population of the region and reviving the city’s appeal. Long disdained by eastern sophisticates, there’s an invasion from places like New York. GQ magazine called downtown L.A. “America’s next great city” last year.

Downtown has transformed itself into something of an entertainment district, with museums, art galleries, restaurants, and sports and concert venues. Yet it has not become, like San Francisco or New York, a business center of note. In fact, jobs in the region have continued to move out to the periphery; downtown accounts for less than 5% of the region’s employment, one-third to half the share common in older large cities.

Downtown’s residential growth needs to be placed in perspective. Since 2000 the population of the central core has increased by only 9,500; add the entire inner ring and the population is up a mere 23,000. Meanwhile over the same span, the L.A. suburbs have added 600,000 residents. Jobs? Between 2000 and 2014, the core and inner ring, as well as older suburbs, lost jobs, U.S. Census data show, while newer suburbs and exurbs added jobs.

In our most recent ranking of the metro areas creating the most jobs, Los Angeles ranked a mediocre 42nd out of the 70 largest metro areas; San Francisco ranked first. That’s well behind places like Dallas, Seattle, Denver, Orlando, and even New York and Boston, cities that we once assumed would be left in the dust by L.A.

A New Tech Hub?

The emergence of Snap has led some enthusiasts to predict L.A.’s emergence as a hotbed of the new economy. And to be sure, there is a growing tech corridor in the Santa Monica-Marina area that may gradually gain critical mass. Talk of a growing confluence between tech and entertainment content -- the signature L.A. product -- and the proliferation of new entertainment venues, could position the area for future growth. At the same time, the presence of Elon Musk’s Space X in suburban Hawthorne, near LAX, has excited local boosters.

Yet despite these bright spots, Los Angeles’ current tech scene is almost piteously small. One consistent problem is venture capital. Despite the massive size of its economy, and huge population, Los Angeles garners barely 5% of the nation’s venture capital, compared to 40% for the Bay Area, 10% for New York and Boston. Companies that were born in L.A. often end up moving elsewhere, like virtual reality pioneer Oculus, which was frog marched to the Bay Area after being acquired by Facebook.

Indeed, despite bright spots like Snap, since 2001 STEM employment in the L.A. metro area has been flat, in sharp contrast to high rates of job growth in the San Francisco Bay Area, Austin, Houston and Dallas, and the 10% national increase. Tech employment per capita in the L.A. area hovers slightly below the national average, according to a recent study I conducted at Chapman University. Los Angeles County, once the prodigious center of American high-tech, is also now slightly below the national average of engineers per capita.

The Poverty Economy

The regional economy, notes a recent Los Angeles Development Corporation report, continues to produce largely numbers of low-wage jobs, mostly in fields like health, hospitality and services. Sixty percent of all new jobs in the area over the next five years will require a high school education or less, the report projects.

At the same time in the year ending last September, employment dropped in three key high-wage blue collar sectors: manufacturing, construction and wholesale trade notes the EDC The largest gains were in lower-wage industries like health care and social assistance, hospitality and food service. Since 2007 Los Angeles County has 89,000 fewer manufacturing jobs, which pay an average of $54,000, but 89,000 more in food service that pay about $20,000. No surprise more than one out every three L.A. households have an income under $45,000 a year.

All this works well for the people who are increasingly coming to enjoy L.A.’s great restaurants, hipster enclaves and art venues. The football teams will add to this mixture, offering employment selling peanuts, popcorn and hot dogs to generally affluent fans in the stands.

Yet low wages could prove catastrophic in a region that lags only the Bay Area in housing costs. Some 45,000 are homeless throughout the metro area, concentrated downtown but spreading throughout the region all the way to Santa Ana, in the south. Housing prices have risen to five times median household income, highest in the nation and more than twice the multiple in New York, Chicago, Houston or Dallas-Ft. Worth. L.A. leads the nation’s big metro areas in a host of other negative indicators, including the percentage of income spent on housing, overcrowding and homelessness. A city which once epitomized middle class upward mobility is increasingly bifurcated between a wealthy elite, mostly Anglo and Asian, and a largely poor Latino and African-American community.

A recent United Way study, for example, found that 37% of L.A. families can barely make ends meet, well above the 31% average for the state; the core city’s south and east sides have among the largest concentrations of extreme poverty in the state. Once a beacon for migrants from all over America, L.A. now has a similarly high rate of mass out-migration as New York. But unlike New York, where immigrants continue to pour in, newcomers to the U.S. are increasingly avoiding Los Angeles – it had the lowest growth in its immigrant population of any major metropolitan area over the past decade. Perhaps even more revealing, the Los Angeles area has endured among the largest drops in the number of children since 2000,notes demographer Wendell Cox, more than New York, Chicago and San Francisco.

Altered DNA

The writer Scott Timberg notes that L.A.’s middle class, was once “the envy of the world.” L.A. used to be a place where firemen, cops and machinists could own houses in the midst of a great city. Dynamic, large aerospace firms, big banks and giant oil companies sustained the middle class.

But the city has lost numerous major employers over the years, most recently longtime powerhouse Occidental Petroleum, and the U.S. headquarters of both Toyota and Nestle. The regional aerospace industry, which provided nearly 300,000 generally high-wage jobs in 1990, is now barely a third that size. High housing cost have devastated millennials, whose home ownership rate has dropped 30% since 1990, twice the national average.

Many urbanists hail the emergence of a transit-oriented, dense city. Since 1990, Los Angeles County has added seven new urban rail lines and two exclusive busways at the cost of some $16 billion. Yet ridership on the Metropolitan Transportation Authority rail and bus services is now less than its predecessor Southern California Rapid Transit District bus services in 1985, before any rail services were opened. The share of work trips on transit in the entire five-county Los Angeles metropolitan region, has also dropped, from 5.1% in 1980 and 4.5% in 1990 to 4.2% in 2015. Meanwhile the city endures the nation’s worst traffic.

Some longtime Angelenos are mounting a fierce ballot challenge -- known as Measure S -- to slow down ever more rapid densification. The ballot measure would bar new high-density construction projects for the next two years. “The Coalition to Preserve L.A.,” which is funding the measure, claims to be leading in the polls for the March 7 vote, but faces well-financed opposition from politically connected large developers, Mayor Garcetti, both political parties, virtually the entire city council, and much of the academic establishment. The L.A. Times denounced Proposition S as a “childish middle finger to City Hall” and its architecture critic Christopher Hawthorne, has urged the citizenry “to move past the building blocks of post-war Los Angeles, including the private car, the freeway, the single-family house and the lawn.”

Proposition S proponents include many neighborhood and environmental groups, as well progressives and conservatives, including former Mayor Richard Riordan. The people controlling Los Angeles may dream of being the “next” New York but many residents, notes longtime activist Joel Fox, “are tired of the congestion and development and feel that more building will only add to congestion.”

Renewing La La Land

Of course, slowing or banning development by popular proposition is probably not the ideal way to get control over the deteriorating situation. Yet it is clear that the current trajectory towards more dense housing is not addressing the city’s basic problems. Los Angeles, as the movie “La La Land” so poetically portrays, remains a “city of dreams” but that mythology is clearly being eroded by a delusional desire to be something else.

In my old middle-class neighborhood in the San Fernando Valley, heavily populated by people from the creative industry, the worsening congestion, the upsurge of ever taller buildings and ever more present homeless did not reflect the giddiness of “La La Land.”

Yet despite all these problems, Los Angeles has the potential to make a great comeback. It has a dispersed urban form that allows for innovation and diversity, and an unparalleled physical location on the Pacific Rim. Its ethnic diversity can be an asset, if somehow it can generate higher wage employment to stop the race to the bottom. The basics are all there for a real resurgence, if the city fathers ever could recognize that the City of Angels needs less a new genome but should build on its own inimitable DNA.

Photo: AdamPrzezdziek

The True Legacy of Gov. Jerry Brown

Joel Kotkin — Tue, 28 Feb 2017 20:42:04 +0000

Appearing in:

Orange County Register

The cracks in the 50-year-old Oroville Dam, and the massive spillage and massive evacuations that followed, shed light on the true legacy of Jerry Brown. The governor, most recently in Newsweek, has cast himself as both the Subcomandante Zero of the anti-Trump resistance and savior of the planet. But when Brown finally departs Sacramento next year, he will be leaving behind a state that is in danger of falling apart both physically and socially.

Jerry Brown’s California suffers the nation’s highest housing prices, largest percentage of people in or near poverty of any state and an exodus of middle-income, middle-aged people. Job growth is increasingly concentrated in low-wage sectors. By contrast, Brown’s father, Pat, notes his biographer, Ethan Rarick, helped make the 20th century “The California Century,” with our state providing “the template of American life.” There was then an “American Dream” across the nation, but here we called it the “California Dream.” His son is driving a stake through the heart of that very California Dream.

California crumbling

Nothing so illustrates the gap between the two Browns than infrastructure spending. Oroville Dam’s delayed maintenance, coupled with a lack of major new water storage facilities to serve a growing population, reflects a pattern of neglect. Just this year alone, the massive water losses at Oroville Dam and other storage overflows have almost certainly offset a significant portion of the hard-won drought water savings achieved by our state’s cities. A sensible state policy would have stored more water from before the drought, and would now be maximizing the current bounty.

Once a national and global leader in infrastructure, according to a report last year by the Center for Budget and Policy Priorities, California now spends the least percentage of its state budget on infrastructure of any state. In the critical Sacramento-San Francisco Delta, an ancient levee and dike system is decaying, and ever more stringent environmental regulations limit key state and federal water facility operations. To be sure, Brown has supported a “water fix” — a dual tunnel through the Delta — to address some of these problems, but his efforts have only produced a mountain of paper, rather than real-world improvements. In terms of preparing for the future, California’s current penchant for endless studies and environmental hand-wringing is fostering pre-Katrina Louisiana conditions, rather than the forward-looking capital investments previously the state’s hallmark.

This piece first appeared in The Orange County Register.

Photo: Troy Holden

Neo-Stalinists Versus the Sons of Anarchy

Joel Kotkin — Wed, 22 Feb 2017 17:52:37 +0000

Appearing in:

Orange County Register

In one of the great scenes from the movie “Dr. Zhivago,” based on the novel by Soviet author Boris Pasternak, a young Bolshevik commander explains to the idealistic physician that “the private life is done in Russia. History has killed it.”

In America today, it also seems increasingly impossible to separate personal life from the political. In awards shows, sports broadcasts and fashion runways — which once provided escapes from politics — we find endless passionate anti-Trump protests and denunciations. Even corporations, like Under Armour, have faced opprobrium — and even boycotts — for daring to support Trump. Nordstrom faced a possible boycott for carrying a now-canceled fashion line of his daughter, Ivanka.

In contrast, the GOP, once a smooth-running machine, has become something akin to the motorcycle gang from the TV series “Sons of Anarchy.” Led by a screwball president, its partisans often at odds with each other, they have so far demonstrated some stupefying incompetence, not to mention a lack of policy coherence. If enforced and overwrought unanimity is the disease of today’s Democrats, chaos threatens to be the new GOP curse.

The new cadre party

Joseph Stalin, the dominant figure of the Soviet era, understood keenly the role of culture in politics. He once called writers “the engineers of the soul.” He would find some kindred spirits in today’s progressive cultural warriors who dominate the arts. Most of the media, outside of the Murdoch empire, have been, in the words of the Baltimore Sun’s David Zurawik, “flipping out,” losing any tie to the tradition of impartiality. Attempts to silence pro-Trump, or simply too obstreperously right-wing, supporters are also gaining currency on the progressive-controlled social media.

Conservatives are regularly harassed and prevented from speaking on college campuses. Celebrities and law professors have even praised the idea of a coup, although it’s pretty clear who would have the guns on their side. But what they lack in firepower they have made up for with impressive organization. There has been little “spontaneous” about some of the various demonstrations that, as the Daily Beast recently reported, are produced by well-organized, and well-funded, cadres.

The dominant groupthink of our cultural and intellectual classes increasingly runs through the bloodstream of the Democratic Party. Once a broad coalition of regional, economic and ethnic interests, the Democrats, as Will Rogers once quipped, were not an “organized party,” but rather a motley assemblage of interests.

Enforced by the notion of “intersectionality,” activists are compelled to embrace every permutation of the politically correct ideology. Increasingly, no self-respecting Democrat can dissent on issues ranging from climate change policy to “Black Lives Matter,” an “open borders” immigration policy, transgender rights or income redistribution. The threat to the last remaining moderate Democrats, such as West Virginia Sen. Joe Manchin, seems to be of little concern; orthodoxy, if you will, trumps efficacy.

Read the entire piece at The Orange County Register.

Photo: James Willamor, Creative Commons

The Screwed Generation Turns Socialist

Joel Kotkin — Mon, 20 Feb 2017 15:33:32 +0000

Appearing in:

The Daily Beast

Increasingly American politics are driven by generational change. The election of Donald Trump was not just a triumph of whiter, heartland America. It also confirmed the still considerable voting power of the older generation. Yet over time, as those of us who have lived long enough well know, generations decline, and die off, and new ones ascend.

In this past election, those over 45 strongly favored Trump, while those younger than that cast their ballots for Clinton. Trump’s improbable victory, and the more significant GOP sweep across the country, demonstrated that the much-ballyhooed millennials simply are not yet sufficiently numerous or united enough to overcome the votes of the older generations.

Yet over time, the millennials—arguably the most progressive generation since the ’30s—could drive our politics not only leftward, but towards an increasingly socialist reality, overturning many of the very things that long have defined American life. This could presage a war of generations over everything from social mores to economics and could well define our politics for the next decade.

To best understand the battle lines, you must know the generations and their differences, and where they will leave this increasingly fractured republic.

The Greatest Generation

The last “civic generation” before the advent of the millennials—a term coined by generational theorists Neil Howe and William Strauss—was forged in the Depression, fought the Second World War, and managed the ensuing cold conflict with the old USSR. Born between 1901 and 1927, members of the much admired ++“greatest generation” were civic minded, embracing the idea that government provided an ideal mechanism to address the nation’s problems.

Like the millennials, who also follow this civic impulse, this generation was decisively Democratic. They are also, sadly, dying out, with the last remnants now in their 80s and 90s. According to generational analysts Morley Winograd and Michael Hais, this group was the only generation, besides the then small cadre of voting age millennials, to support John Kerry in 2004.

Under two million in 2010, per the Census, their numbers have dwindled to 750,000. Yet even so, as recently as 2014 , the remnants of the “greatest generation,” according to Pew, still favored the Democrats by 7 percentage points. Even fewer will be around in 2020 but those who remain may well remain liberal. It’s no sample, but my 93-year-old mother holds to pattern. Brought up poor in the Brownsville section of Brooklyn, she voted for the oldest and most left leaning major candidate—Bernie Sanders—in the primary and then cast her ballot for Hillary.

The Silent Generation Slow to fade

The “silent generation,” born between 1925 and 1942, mostly came of age in the conservative ’50s. These products of the Eisenhower era have been the prime beneficiaries of the sustained boom that took root between the end of the Second World War and the ’70s. As a result, they continue to hold a big share of America’s wealth—roughly 33 percent –even as they enter their seventies and eighties.

Given their embrace of the normative social values of their era, and their wealth, it’s not surprising that the silents have tended to the right. These older voters went for Trump by a significant margin, and overall, note Winograd and Hais, 53 percent lean to the Republicans, compared to just 40 percent who lean Democratic.

It would be a mistake to dismiss the silents before their time, as Democratic theorists sometimes seem to do. They still number upward of 29 million, and more than forty members of Congress hail from this generation, including, ironically, much of the Democratic leadership. Given their extended longevity, particularly among those in the upper middle class, they may remain influential well into the next decade.

Boomers: For Now, the Power Generation

The largest generation in American history before the millennials, the Baby Boomers were born between 1943 and 1960 and they remain the power generation. After all, both presidential candidates last year were clearly Boomers, with sufficient evidence of the narcissism that defines this generation. They also predominate in Congress, with 270 members, roughly half the total, in 2016. Hais estimates that they number between 75 and 82 million strong.

Ever since the turbulence of the ’60s, the Boomers have been sharply divided. Peace protests, psychedelics, and Woodstock defined only a part of that generation. Indeed, rather than tending to the left, the Boomers over time have slowly moved to the right. In 1992, note Winograd and Hais, they leaned 49 to 42 percent Democratic; last year, they leaned 49 to 45 Republican. Overall, Boomers supported Donald Trump by a narrow margin.

In the future, economics more than culture may define Boomer politics. Somewhat more socially liberal than the silent generation before them, they control a dominant share of the nation’s wealth—some 50 percent—and according to a recent Deloitte study will still control about 45 percent well into their seventies and eighties. This may make them naturally suspicious of the redistributionist agenda of the left Democrats, since this would naturally come from their wealth. They will also have to resist attempts by GOP reformers like Paul Ryan to meddle with Medicare, social security, and, for some, pensions. One reason Trump won over these voters—both in the primary and the general election—was by promising not to touch these holy of holies.

Xers: Long-time outsiders but soon the next power generation

Smaller than the boomers, and generally less privileged, the X generation—born between 1965 and 1981—gets short shrift among advertisers as well in the media, but seem poised to take power by the end of the decade. Numbering more than 65 million, they are a smaller generation than the boomers but they are slowly gaining control of politics, with 117 members in Congress compared to just five for millennials. They already dominate the leadership of the GOP. Paul Ryan is their poster boy.

Today, the Xers, many already in their fifties, have only 14 percent of the nation’s wealth, a relative pittance compared to the boomers. But by 2030, as the boomers finally start to fade from the picture, Xers should account for 31 percent of the nation’s wealth, twice the percentage for the millennials. Critically, the heads of most companies backed by venture capital come from this generation, according to the Harvard Business Review. Raised largely during the neo-conservative heyday of Reagan, George H.W. Bush, and Bill Clinton, Xers also dominate the ranks of managers at major companies.

Yet at the same time, they have faced a rockier economic ride than the boomers, suffering particularly in the 2007 housing crash. The percentage of Xers who own their own homes dropped far more precipitously compared to the more entrenched Boomers The impact was particularly tough on younger Xers, who often got into the market around the housing bust.

Millennials: The Red Generation?

The long-term hopes of the American left lie with the millennial generation. The roughly 90 million Americans born between 1984 and 2004 seem susceptible to the quasi socialist ideology of the post-Obama Democratic Party. They are also far more liberal on key social issues—gender and gay rights, immigration, marijuana legalization—than any previous generation. They comprise the most diverse adult generation in American history: some 40 percent of millennials come from minority groups, compared to some 30 percent for boomers and less than 20 percent for the silent and the greatest generations.

Millennials’ defining political trait is their embrace of activist government. Some 54 percent of millennials, notes Pew, favor a larger government, compared to only 39 percent of older generations. One reason: Millennials face the worst economic circumstances of any generation since the Depression, including daunting challenges to home ownership. More than other generations, they have less reason to be enamored with capitalism.

These economic realities, along with the progressive social views, has affected their voting behavior. Millennials have voted decisively Democratic since they started going to the polls, with 60 percent leaning that direction in 2012 and 55 percent last year. They helped push President Obama over the top, and Hillary Clinton got the bulk of their votes last year. But their clear favorite last year was self-described socialist Bernie Sanders, who drew more far millennial votes in the primaries than Clinton and Trump combined.

The West is red, too? Maybe, maybe not.

Roughly half of Millennials have positive feelings about socialism, twice the rate of the previous generation. Indeed, despite talk about a dictatorial Trump and his deplorables, the Democratic-leaning Millennials are more likely to embrace limits on free speech and are far less committed to constitutional democracy than their elders. Some 40 percent, notes Pew, favor limiting speech deemed offensive to minorities, well above the 27 percent among the Xers, 24 among the boomers, and only 12 percent among silents. They are also far more likely to be dismissive about basic constitutional civil rights, and are even more accepting of a military coup than previous generations.

Millennials clearly have not been well-schooled by the founders’ vision. This could augur a grim prospect, a kind of voluntary 1984 with cellphones and social media. Potential economic conflicts between millennials and boomers and Xers for scarce resources could accelerate support for a federally mandated agenda of redistribution. After all, if they have little money, own even less and have modest prospects for achieving what their parents did, why not socialism, constitutional norms be damned?

Yet this future is not guaranteed. Already white Millennials, still 60 percent of the total youth electorate (less than the 73 Anglo share among older voters but still a large bloc), show signs of moving to the right, particularly outside the coasts. Overall, they backed Trump by 48 to 43 percent and, notes one recent Tufts University survey, they were more enthusiastic about their candidate than were the Clinton backers.

Other factors could slow the lurch to the left. There is a growing interest in third party politics, not so much Green but libertarian; 8 percent of Millennials voted for Third Party candidates, twice the overall rate. Overall, Tufts finds that moderates slightly outpace liberals, although conservatives remain well behind. Millennials, note Winograd and Hais, also dislike “top down” solutions and may favor radical action primarily at the local level and more akin to Scandinavia than Stalinism.

As Millennials grow up, start families, look to buy houses, and, worst of all, start paying taxes, they may shift to the center, much as the Boomers did before them. Redistribution, notes a recent Reason survey, becomes less attractive as incomes grow to $60,000 annually and beyond. This process could push them somewhat right-ward, particularly as they move from the leftist hothouses of the urban core to the more contestable suburbs.

Yet even given these factors, Republicans have their work cut out for them as the generational wheel turns. Certainly, to be remotely competitive, they must abandon socially conservative ideas that offend most Millennials. The GOP’s best chance lies with making capitalism work for this group, sustaining upward mobility and expanding property ownership. If we see the creation of a vast generation of property serfs with little opportunity for advancement, America’s future is almost certain to be redder, a lot less market-oriented, and perhaps a lot more authoritarian than previous generations have ever contemplated.

This piece first appeared in The Daily Beast.

Joel Kotkin is executive editor of NewGeography.com. He is the Roger Hobbs Distinguished Fellow in Urban Studies at Chapman University and executive director of the Houston-based Center for Opportunity Urbanism. His newest book The Human City: Urbanism for the rest of us, was published in April by Agate. He is also author of The New Class Conflict, The City: A Global History, and The Next Hundred Million: America in 2050. He lives in Orange County, CA.

Unemployed photo by BigStockPhoto.com.

Decentralize Government to Resolve Country's Divisions

Joel Kotkin — Tue, 14 Feb 2017 17:35:49 +0000

Appearing in:

The Orange County Register

America is increasingly a nation haunted by fears of looming dictatorship. Whether under President Barack Obama’s “pen and phone” rule by decree, or its counterpoint, the madcap Twitter rule of our current chief executive, one part of the country, and society, always feels mortally threatened by whoever occupies the Oval Office.

Given this worsening divide, perhaps the only reasonable solution is to move away from elected kings and toward early concepts of the republic, granting far more leeway to states, local areas and families to rule themselves. Democrats, as liberal thinker Ross Baker suggests, may “own” the D.C. “swamp,” but they are beginning to change their tune in the age of Trump. Even dutiful cheerleaders for Barack Obama’s imperial presidency, such as the New Yorker, are now embracing states’ rights.

The founders’ solution

When the founders crafted the Constitution, they confronted a country with deep divisions — rural and urban, slave and free, immigrant and nativist, manufacturing and commodity producing. The solution they came up with had its shortcomings, notably the tolerance of the truly deplorable institution of slavery, but without these built-in restraints the republic likely would not have survived its first decades.

Even after the Civil War settled control of the central government, the country largely followed the founders’ vision of separating and restraining power. Education, zoning, laws and the governing of morality were handled largely at the local level. The federal government focused on things that were its natural purview — interstate transportation, immigration, foreign and defense policy.

Federal intervention remained necessary at times, for example, to assure voting rights. But, overall, maintaining power at the local level has remained broadly popular, with the support of over 70 percent of the adult population. Even in one-party California, most would prefer to see local officials, not those at the national or state level, in control.

Division and the road to alternating dictatorships

As in the antebellum period, American politics sadly reflects two increasingly antagonistic nations. One can be described as a primarily urban, elite-driven, ethnically diverse country that embraces a sense of inevitable triumphalism. The other America, rooted more in the past, thrives in the smaller towns and cities, as well as large swaths of suburbia. Sometimes whiter, the suburbs are both more egalitarian and less reflexively socially liberal.

This division worsened in the Obama era, whose city-centric approach all but ignored the interests of the resource-producing regions of the country, as well as the South. In contrast, under Presidents Bill Clinton and Jimmy Carter, Democrats were joyously competitive in these areas, assuring that the party was truly diverse, rather than simply the lap dog of the littoral constituencies.

With the GOP now in control of Washington, the coastal areas are becoming, to paraphrase President Obama, the new clingers, whether on the environment, racial redress or gender-related issues. Now they fear, with good reason, that the very administrative state they so eagerly embraced could come back to undermine their agenda even at the local level.

Republicans, for their part, are stoking these fears by using statehouse control to slap down efforts by communities in the states they control to embrace progressive policies on minimum wages, transgender bathrooms and fracking bans. By doing this, the GOP could be accused of engaging in its own form of payback, which simply assures that when the Democrats get back in power, they will do the same to them.

Read the entire piece at The Orange County Register.

Joel Kotkin is executive editor of NewGeography.com. He is the Roger Hobbs Distinguished Fellow in Urban Studies at Chapman University and executive director of the Houston-based Center for Opportunity Urbanism. His newest book The Human City: Urbanism for the rest of us, was published in April by Agate. He is also author of The New Class Conflict, The City: A Global History, and The Next Hundred Million: America in 2050. He lives in Orange County, CA.

Photo: Matt H. Wade, [CC BY-SA 3.0], via Wikimedia Commons

The High Cost of a Home Is Turning American Millennials Into the New Serfs

Joel Kotkin — Mon, 06 Feb 2017 19:20:02 +0000

Appearing in:

The Daily Beast

American greatness was long premised on the common assumption that each generation would do better than the previous one. That is being undermined for the emerging millennial generation.

The problems facing millennials include an economy where job growth has been largely in service and part-time employment, producing lower incomes; the Census bureau estimates they earn, even with a full-time job, $2,000 less in real dollars than the same age group made in 1980. More millennials, notes a recent White House report, face far longer periods of unemployment and suffer low rates of labor participation. More than 20 percent of people 18 to 34 live in poverty, up from 14 percent in 1980.

They are also saddled with ever more college debt, with around half of students borrowing for their education during the 2013-14 school year, up from around 30 percent in the mid-1990s. All this at a time when the returns on education seem to be dropping: A millennial with both a college degree and college debt, according to a recent analysis of Federal Reserve data, earns about the same as a boomer without a degree did at the same age.

Downward mobility, for now at least, is increasingly rife. Stanford economist Raj Chatty finds that someone born in 1940 had a 92 percent chance of earning more than their parents; a boomer born in 1950 had a 79 percent chance of earning more than their parents. Those born in 1980, in contrast, have just a 46 percent chance.

Since 2004, homeownership rates for people under 35 have dropped by 21 percent, easily outpacing the 15 percent fall among those 35 to 44; the boomers’ rate remained largely unchanged.

In some markets, high rents and weak millennial incomes make it all but impossible to raise a down payment (PDF). According to Zillow, for workers between 22 and 34, rent costs now claim upward of 45 percent of income in Los Angeles, San Francisco, New York, and Miami, compared to less than 30 percent of income in metropolitan areas like Dallas-Fort Worth and Houston. The costs of purchasing a house are even more lopsided: In Los Angeles and the Bay Area, a monthly mortgage takes, on average, close to 40 percent of income, compared to 15 percent nationally.

Like medieval serfs in pre-industrial Europe, America’s new generation, particularly in its alpha cities, seems increasingly destined to spend their lives paying off their overlords, and having little to show for it.

Rather than strike out on their own, many millennials are simply failing to launch, with record numbers hunkering down in their parents’ homes. Since 2000, the numbers of people aged 18 to 34 living at home has shot up by over 5 million.

One common meme, particularly in the mainstream media, has been that millennials don’t want to buy homes. The new generation, as Fast Company breathlessly reported, is part of “an evolution of consciousness.” Other suggest the young have embraced “the sharing economy,” so that owning a home is simply not to their taste. The well-named site Elite Daily asserts that the vast majority of millennials are headed to “frenetic metropolis” rather than becalmed suburbs.

And it’s not just ideologues claiming millennials have evolved out of home ownership. Wall Street speculators like Blackstone are betting that the young are committed to some new “rentership society,” with that firm investing $10 billion to scoop up existing small homes to rent, and even building tracks of homes exclusively for rent.

It’s not a lifestyle choice, but economics—high prices and low incomes—that are keeping millennials from buying homes. In survey after survey the clear majority of millennials—roughly 80 percent, including the vast majority of renters—express interest in acquiring a home of their own. Nor are they allergic, as many suggest, to the idea of raising a family, albeit often at a later age, long a major motivation for home ownership. Roughly 80 percent of millennials say they plan to get married, and most of them are planning to have children.

Overall, more than 80 percent of millennials already live in suburbs and exurbs, and they are, if anything, moving away from the dense, expensive cities. Since 2010 millennial population trends rank New York, Chicago, Washington, and Portland in the bottom half of major metropolitan areas while the young head out to less expensive, highly suburbanized areas such as Orlando, Austin, and San Antonio.

Age will accelerate this process. Economist Jed Kolko notes as people enter their thirties they tend to head out of core cities to suburban locations; roughly one in four people in their mid to late twenties lives in an urban location but by the time those people are in their early thirties, that number drops precipitously and continues dropping into their eighties. In fact, younger millennials, notes the website FiveThirtyEight, are moving to the ’burbs at at a faster clip than previous generations. What’s slowing that trend is economics. Many can’t afford to move or transition to a traditional adulthood.

The millennial housing crisis is reshaping the geography of opportunity. Although millennial rates of homeownership have dropped nationwide, the most precipitous declines have been in such metropolitan areas as New York, Miami, San Francisco, Portland, Seattle, and Los Angeles. In all these areas, public policy has regulatory barriers in the way of suburban and exurban affordability. It is in these markets where such things as “tiny houses” and “micro-apartments”—not exactly a boon to people looking to start families—are being touted as solutions to housing shortages.

Nowhere is this dynamic more evident than in California, where the state government has all but declared war on single-family homes by banning new peripheral development, driving up house prices throughout metropolitan areas. Regulatory fees typically add upward of $50,000, two-and-a-half times the national average; new demands for “zero emissions” homes promise to boost this by an additional $25,000.

Due largely to such regulatory restraints, overall California housing construction over the past 10 years has been less than half of that it averaged from 195 to 1989, forcing prices up, particularly on single-family houses. The state ranks second to the last in middle-income housing affordability, trailing only Hawaii. It also accounts for 14 of the nation’s 25 least affordable metropolitan areas.

Home ownership rates in California are among the nation’s lowest, with Los Angeles-Orange having the lowest rate of the nation’s 75 large metropolitan areas. For every two homebuyers who come to the state, five families leave, notes the research firm Core Logic.

The irony is that the state’s progressive policies are contributing to a less mobile society and a potential demographic crisis. For one thing, fewer young people can form families—Los Angeles-Orange had one of the biggest drops in the child population of any of the 53 largest metros from 2010 to 2015.

This also has a racial component, as homeownership rates African American and Latino households—which often lack access to family wealth—have dropped far more precipitously than those of non-Hispanic Whites or Asians. Hispanics, accounting for 42 percent of all California millennials, endure homeownership roughly half that seen in other parts of the country.

This is not the planners’ happy future of density dwelling, transit-riding millennials but a present of overcrowding, the nation’s highest level of poverty and, inevitably, a continued drop in fertility in comparison to less regulated, and less costly, states such as Utah, Texas, and Tennessee that have been among those with the biggest surges in millennial migration.

Once identified with youth, California’s urban areas are now experiencing a significant decline in both their millennial and Xer populations. By the 2030s, large swaths of the state—particularly along the coast—could become geriatric belts, with an affluent older boomer population served by a largely minority servant class. How feudal!

Ownership of land has always been a critical component of middle-class wealth and power. Those celebrating the retreat from homeownership among millennials are embracing the long-term decline of that middle class, two thirds of whose wealth is in their homes.

The potential decline in ownership also represents a direct assault on future American prosperity. Jason Furman, who served as chairman of President Obama’s Council of Economic Advisors, calculated that a single-family home contributes 2.5 times as much to the national GDP as an apartment unit. Investment in residential properties has dropped to its lowest share of overall spending since World War II; by some estimates reviving that would be enough to return America to 4 percent growth.

With so many millenials unable to afford homes, or even to see a path to future ownership, household formation has been far slower than in the recent past. Rather than a surge of middle-class buyers, we are seeing the rise of a largely property-less generation whose members will remain economically marginal into their thirties or forties. Indeed by 2030, according to a recent Deloitte study, millennials will account for barely 16 percent of the nation’s wealth while home-owning boomers, then entering their eighties and nineties, will still control a remarkable 45 percent of the nation’s wealth.

If this continues, we may have to all but abandon the notion of the United States as a middle-class nation. Instead of having a new generation that strikes out on their own, we may be incubating a culture that focuses on such things as the latest iPhone, binge watching on Netflix, something they do far more than even their Xer counterparts.

Progressives who embrace these developments are abandoning one of the central tenets of mainstream liberalism. In the past, many traditional liberals embraced the old American ideal of dispersed land ownership. “A nation of homeowners,” President Franklin D. Roosevelt believed, “of people who own a real share in their land, is unconquerable.” Homeownership is not only critical to the economy but provides a critical element of our already fraying civic society; homeowners not only tend to vote more than renters, but they also volunteer more and, as Habitat for Humanity suggests, provide a better environment for raising children.

On the flip side, high housing prices tend to suppress birthrates. Many of the places with the highest house costs—from Hong Kong to New York, Los Angeles, Boston, and San Francisco—also have very low birthrates. The four U.S. areas ranked among the bottom 10 in birthrates among the 53 major metropolitan areas in 2015. Over time these can have a dampening impact on economic growth, as is clearly seen today in places like Japan and much of Europe, and increasingly here in the U.S.

It’s time for millennials to demand politicians abandon the policies that have enriched the wealthy and stolen their future. That means removing barriers to lots of new housing in cities and, crucially, embracing Frank Lloyd Wright’s notion of Broadacre Cities, with expansive development along the periphery.

These new suburbs, like the Levittowns of the past, could improve people’s lives, while using new technology and home-based work to make them more environmentally sustainable. They could, as some suggest, develop the kind of urban amenities, notably town centers, that may be more important to millennials than earlier generations. One thing that hasn’t changed is the demand for affordable single-family homes and townhomes. But the supply is diminishing—those under $200,000 make up barely one out of five new homes.

There are some reasons for hope. The soon-to-develop tsunami of redundant retail space will open up millions of square feet for new homes. A move to prefabricated homes, already common in Europe and Japan, could help reduce costs. Certainly there’s potential demand at the right price—ones that young people can reasonably aspire to and then build lives in.

The alternative is to travel back to serfdom and a society sharply divided between a small owner class and many more permanent rent payers. By then, the American dream will be reduced to a nostalgic throwback in an increasingly feudalized country.

This piece first appeared in The Daily Beast.

Death Spiral Demographics: The Countries Shrinking The Fastest

Joel Kotkin — Thu, 02 Feb 2017 21:29:40 +0000

Appearing in:

Forbes

For most of recent history, the world has worried about the curse of overpopulation. But in many countries, the problem may soon be too few people, and of those, too many old ones. In 1995 only one country, Italy, had more people over 65 than under 15; today there are 30 and by 2020 that number will hit 35. Demographers estimate that global population growth will end this century.

Rapid aging is already reshaping the politics and economies of many of the most important high-income countries. The demands of older voters are shifting the political paradigm in many places, including the United States, at least temporarily to the right. More importantly, aging populations, with fewer young workers and families, threaten weaker economic growth, as both labor and consumption begin to decline.

We took a look at the 56 countries with populations over 20 million people, nine of which are already in demographic decline. The impact of population decline will worsen over time, particularly as the present generation now in their 50s and 60s retires, begins drawing pensions and other government support.

Europe: Homeland of Demographic Decline

Heading up our list of slowly dissipating large countries is the Ukraine, a country chewed at its edges by its aggressive Russian neighbor. According to U.N. projections, Ukraine’s population will fall 22% by 2050. Eastern and Southern Europe are home to several important downsizing countries including Poland (off 14% by 2050), the Russian Federation (-10.4%), Italy (-5.5%) and Spain (-2.8%). The population of the EU is expected to peak by 2050 and then gradually decline, suggesting a dim future for that body even if it holds together.

The most important EU country, Germany, has endured demographic decline for over a generation. Germany’s population is forecast to drop 7.7% by 2050, though this projection has not been adjusted to account for the recent immigration surge. The main problem is the very low fertility rate of the EU’s superpower, which according to United Nations data was 1.4 between 2010 and 2015. It takes a fertility rate of 2.1% to replace your own population so we can expect Germany to shrink as well as get very old.

Nor can Europe expect much help from its smaller countries. Although too small to reach our 20 million person threshold, many of Europe’s tinier “frontier” countries have abysmal fertility rates. Among the 10 smaller countries with the greatest population declines, all are in Europe, and outside Western Europe, with Bulgaria’s population expected to shrink 27% by 2050 and Romania’s 22%. Each of these have below replacement rate fertility. Things are not that much better in Western Europe, where fertility rates are also below replacement rates, but not quite so low. Long-term, the only option for Europe may be to allow more immigration, particularly from Africa and the Middle East, although this may be impossible due to growing political resistance to immigration.

Demographic Decline: The Asian Edition

If this were just a European disease, it would not prove such a challenge to the economic future. Europe is gradually diminishing in global importance. The big story in demographic trends is in Asia, which has driven global economic growth for the past generation. The decline of Japan’s population is perhaps best known; the great island nation, still the world’s third largest economy, is expected to see its population fall 15% by 2050, the second steepest decline after Ukraine, and get much older. By 2030, according to the United Nations, Japan will have more people over 80 than under 15.

But the biggest hit on the world economy from the new demographics will come from China, the planet’s second largest economy, and the most dynamic.

Until a generation ago, overpopulation threatened China’s future, as it still does some developing countries. Today the estimates of the country’s fertility rate run from 1.2 to 1.6, both well below the 2.1 replacement rate. By 2050 China’s population will shrink 2.5%, a loss of 28 million people. By then China’s population will have a demographic look similar to ultra-old Japan’s today — but without the affluence of its Asian neighbor.

Other Asian countries have similar problems. Thailand ranks as the fifth most demographically challenged, with a projected population loss of 8%. The population of Sri Lanka, just across Adam’s Bridge from still fast-growing India, is projected to increase only 0.6%.

Also going into a demographic stall is South Korea, another country which a generation ago worried about its expanding population. With its fertility rate well below replacement (1.3), the country will essentially stagnate over the next 35 years, and will becoming one of the most elderly nations on earth.

Full List: The Countries Shrinking The Fastest

Smaller Singapore is an anomaly. The city-state has a rock-bottom fertility rate of 1.2, but projects a population increase of 20% by 2050 due to its liberal and vigorously debated immigration policies.

Economic Consequences

Most world leaders are fixated on the unpredictable new administration in Washington in the short term, but they might do better to look at the more certain long-term impacts of diminishing populations on the world’s most important economies. Economists, including John Maynard Keynes, have connected low birth rates to economic declines. On the “devil” of overpopulation, Keynes wrote, “I only wish to warn you that the chaining up of the one devil may, if we are careless, only serve to loose another still fiercer and more intractable.”

It is already fairly clear that lower birthrates and increased percentages of aged people have begun to slow economic growth in much of the high-income world, and can be expected to do the same in long ascendant countries such as China and South Korea. Economists estimate that China’s elderly population will increase 60% by 2020, even as the working-age population decreases by nearly 35%. This demographic decline, stems from the one-child policy as well as the higher costs and smaller homes that accompany urbanization, notes the American Enterprise Institute’s Nicholas Eberstadt. China’s annual projected GDP growth rate will likely decline from an official 7.2% in 2013 to a maximum of 6% by 2020.

There are several reasons these demographic shifts portend economic decline. First, a lack of young labor tends to drive up wages, sparking the movement of jobs to other places. This first happened in northern Europe and Japan will increasingly occur now in Korea, Taiwan, and even China. It also lowers the rate of innovation, notes economist Gary Becker, since change tends to come from younger workers and entrepreneurs. Japan’s long economic slowdown reflects, in part, the fact that its labor force has been declining since the 1990s and will be fully a third smaller by 2035.

The second problem has to do with the percentage of retirees compared to active working people. In the past growing societies had many more people in the workforce than retirees. But now in societies such as Japan and Germany that ratio has declined. In 1990, there were 4.7 working age Germans per over 65 person. By 2050, this number is projected to decline to 1.7. In Japan the ratios are worse, dropping more than one-half, from 5.8 in 1990 to 2.3 today and 1.4 in 2050. China, Korea and other East Asian countries, many without well-developed retirement systems, face similar challenges.

Finally, there is the issue of consumer markets. Aging populations tend to buy less than younger ones, particularly families. One reason countries like Japan and Germany can’t reignite economic growth is their slowing consumption of goods. This challenge will become all the more greater as China, the emerging economic superpower, also slows its consumption. The future of demand, critical to developing countries, could be deeply constrained.

What about the USA?

To a remarkable extent, the United States has avoided these pressing demographic issues. The U.N. has the U.S. tied with Canada for the fastest projected population growth rate of any developed country: a 21% expansion by 2050. Yet this forecast could prove inaccurate.

One threat stems from millennials who, even with an improved economy, have not started families and had children at anything close to historical rates. Today the U.S. fertility rate has dropped to 1.9 from 2.0 before the Great Recession; population growth is now lower than at any time since the Depression. This places us below replacement level for the next generation. Projections for the next decade show a stagnant, and then falling number of high school graduates, something that should concern both employers and colleges. The United States’ high projected population growth rate, like that of Singapore, is entirely dependent upon maintaining high rates of immigration.

But even before the election of Donald Trump, who is hell-bent on cracking down on at least undocumented immigration, total immigration to the United States has been slowing. At the same time the fertility rates of some immigrant groups, notably Latinos, have been dropping rapidly and approaching those of other Americans. This is despite the fact that as many as 40% of women would like to have more children; they simply lack the adequate housing, economic wherewithal and spousal support to make it happen.

In the coming decades, the countries that can maintain an at least somewhat reasonable population growth rate, and enough younger people, will likely do best. To a large extent, it’s too late for that in much of Europe and East Asia. For countries like the United States, Canada and Australia, with among the most liberal immigration policies and large landmasses, the prospects may be far better. However, we also need native-born youngsters to launch, get married and start creating the next generation of Americans.
This piece originally appeared at Forbes.

Photo: Ahmet Demirel [Public domain], via Wikimedia Commons

The Immigration Dilemma

Joel Kotkin — Tue, 31 Jan 2017 23:02:11 +0000

Appearing in:

The Orange County Register

In often needlessly harsh ways, President Donald Trump is forcing Americans to face issues that have been festering for decades, but effectively swept under the rug by the ruling party duopoly. Nowhere is this more evident than with immigration, an issue that helped to spark Trump’s quixotic, but ultimately successful, campaign.

Many Americans are clearly upset about an estimated 11 million undocumented immigrants, and many also fear the arrival of more refugees from Islamic countries. Perhaps no issue identified by Trump has been more divisive.

Not surprisingly, Trump’s rhetoric has stirred bitter anger among the country’s polite establishment, right and left, as well as the progressive grievance industry. His call for a massive border wall has not only offended our neighbor, Mexico, but also created legitimate concern in Latino communities of massive raids. According to a 2012 study for the National Institutes for Health, the undocumented account for roughly one in five Mexicans and up to half of those from Central American countries.

The weakness of the open borders position

Anti-immigrant sentiment has a long, if somewhat nasty, history in America. It usually follows periods of great immigration, and ethnic change, as occurred in the mid-19th century and early 20th century, when immigration policies were dramatically tightened.

Today, economics dictates some change of direction. In a country where wages for the poorest have been dropping for decades, the notion of allowing large numbers of similarly situated people into the country seems to be more a burden than a balm. In California, among noncitizens, three in five are barely able to make ends meet, according to a recent United Way study.

In California, Gov. Jerry Brown has famously laid out a “Welcome” sign to both Mexican illegal and legal immigrants coming to the state. Many progressives consider concerns with nationality and cultural integration as vile attempts to have them “Anglo-Saxonized.” The open borders ideology has reached its apotheosis in “sanctuary” cities which extend legal protection from deportation even to criminal aliens who have committed felonies.

Trump’s over-the-top response

Politically, the open borders rhetoric helps Trump. Even in California, three-quarters of the population, according to a recent UC Berkeley survey, oppose sanctuary cities. Overall, more Americans favor less immigration than more. Most, according to a recent Pew Research Center study, also want tougher border controls and increased deportations. They also want newcomers to come legally and adopt the prevailing cultural norms, including English.

But in his rants on immigration, Trump may be going too far. Only a minority favor Trump’s famous wall, and the vast majority, including Republicans, oppose massive deportations of undocumented individuals with no criminal record. Limiting Muslim immigration does better, but appeals to only roughly half of Americans.

Trump’s restrictionist choice for attorney general, Sen. Jeff Sessions, is also on record opposing more legal immigration. This could prove ruinous to the country’s long-term future. Like most high-income countries, the United States’ fertility rate is below that needed to replace the current generation. If the U.S. cuts off its flow of immigrants too dramatically, we will soon face the labor shortages, collapse of consumer demand and drops in innovation already seen in the European Union and much of East Asia.

An overly broad cutback in immigration would also deprive the country of the labor of millions of hard-working people, many of whom do difficult jobs few native-born Americans would do. The foreign-born, notes the Kaufmann Foundation, are also twice as likely to start a business as the native-born.

Read the entire piece at The Orange County Register.

Photo: JamesReyes [Public domain], via Wikimedia Commons

Kevin Starr, Chronicler of the California Dream

Joel Kotkin — Fri, 27 Jan 2017 18:15:47 +0000

Appearing in:

The Orange County Register

“From the Beginning, California promised much. While yet barely a name on the map, it entered American awareness as a symbol of renewal. It was a final frontier: of geography and of expectation.”

— Kevin Starr, “Americans and the California Dream, 1850-1915” (1973)

In a way, now rare and almost archaic, Kevin Starr, who died last week at age 76, believed in the possibilities of California, not just as an economy or a center for innovation, but also as precursor of a new way of life. His life’s work focused on the broadest view of our state — not just the literary lions and industrial moguls but also the farmworkers, the plain “folks” from the Midwest, the grasping suburbanites who did so much to shape and define the state.

His California was not just movie stars, tech moguls, radical academics, talentless celebrities and equally woeful party hacks who dominate the upper echelons. A native San Franciscan, who grew up in a contentious working-class Irish family and never forgot his roots, Kevin’s California was centered on providing, as he said in a recent interview with Boom California magazine, “a better life for ordinary people.” The diverging fortunes of our people — with many in semi-permanent poverty while others enjoy unprecedented bounty — disturbed him profoundly, and, in his last years, darkened his perspective on the state.

Over recent years, Kevin was increasingly distraught by what he saw as “the growing divide between the very wealthy and the very poor, as well as the waning of the middle class” that now so characterizes the state. He saw San Francisco changing from the diverse city of his youth, made up of largely ethnic neighborhoods, to a hipster monoculture. With typical humor, he labeled his hometown as essentially “a Disneyland for restaurants,” a playground with little place for raising middle-class families. California has, indeed, changed over the decades, but not always in a good way.

Kevin Starr’s California

Kevin Starr represented another, more congenial California, one where people could still disagree on issues, but work for common goods. He was, as his wife Sheila told the New York Times, largely a man of the 1950s, a creature of consensus seekers. He served as state librarian under governors Pete Wilson, Gray Davis and Arnold Schwarzenegger. A conservative-leaning centrist Democrat, he did not fit comfortably in a state that has drifted from a vibrant two-party culture to a dominant progressive monoculture with little more than a Republican rump.

In today’s hyperpartisan environment, the Golden State must either be a dystopia (the conservative view) or an emerging paradise on earth (the common progressive mantra). Starr, as a fair-minded historian, saw both realities — not only today but through time. In his multipart “California Dream” series, Starr both confronted reaction against ethnic change and celebrated the process of integration, whether for Latinos, Asians or Anglo Okies, whose unique presence, outside of their descendants, is all but lost in contemporary California.

But what most separated Kevin’s view of California from many others were his humanity and empathy with the aspirations of the state’s middle- and working-class families. Many intellectuals denounce suburbs as racist and exclusionary, as well as environmentally and culturally damaging. Starr saw in them something else — what author D.J. Waldie has described as “Holy Land” — in places like Lakewood, the Bay Area suburbs and Orange County. To him, these were not only places of opportunity, but also landscapes of a reborn “more intimate America,” home to an expanding middle class.

Read the entire piece at The Orange County Register.

Photo: Institute of Museum and Libraries Service (IMLS website) [Public domain], via Wikimedia Commons

Loyal Opposition Versus Resistance to Trump

Joel Kotkin — Thu, 19 Jan 2017 22:46:21 +0000

Appearing in:

The Orange County Register

Perhaps nothing has made modern progressivism look sillier than the often hysterical reaction to the election of Donald Trump. This has spanned everything from street protests, claims of Russian electoral manipulation and even reports of sudden weight gain and loss of sexual interest. Rather than become more introspective in the face of defeat, the bulk of left-leaning media and their intellectual allies have embraced the notion — even before the new president proposes anything — of following what UC Berkeley public policy professor and former U.S. labor secretary Robert Reich calls “the resistance agenda.”

The notion of modern progressives donning berets and fighting the modern-day version of Nazis is absurd. Donald Trump may be wrongheaded, and personally venal, but he is not Adolph Hitler, or even Benito Mussolini. Critically, he is not particularly popular, as were those demagogues. Trump’s election certainly was not a mandate, as many liberals correctly point out.

The election showed a still deeply divided nation. Hillary Clinton won the popular vote, but the GOP triumphed everywhere else, notably at the congressional level, where they won by 3.5 million votes, and it did even better at the state and local levels. Certainly, the progressives can get back into the game, but first they need to toss out the berets, stop talking civil disobedience and instead embrace the role of loyal opposition, using counter-arguments rather than histrionics.

Progressives still have wind at their backs

Democrats, time is still largely on your side. All the constituencies that backed Hillary Clinton — minorities, millennials, college-educated professionals — are demographically ascendant. Those that backed Trump, such as boomers, seniors and members of the white working class, are destined to fade.

To return to power in the short run, however, the Democrats need to appeal to parts of the largely white, older Trump base, many of them former Democrats. The meme, as seen in Slate’s assertion that the election proved “how racist, sexist and unjust America is,” does not seem the best way to win over these wavering voters. There are opportunities galore to do this.

Read the entire piece at The Orange County Register.

Trump protest photo by i threw a guitar at him. (https://www.flickr.com/photos/becc/26879649373/) [CC BY 2.0], via Wikimedia Commons

The Irony That Could Trip Up Trump's Quest To Make The U.S. Economy 'Great Again'

Joel Kotkin — Mon, 16 Jan 2017 22:52:18 +0000

Appearing in:

Forbes

Perhaps no president in recent history has more pressure on him to perform economic miracles than Donald Trump. As someone who ran on the promise that he could fix the economy -- and largely won because of it -- Trump faces two severe challenges, one that is largely perceptual and another more critical one that is very real.

To start, Trump must cope with the widespread idea, accepted by much of the media, that we are experiencing something of an “Obama boom.”

He is widely portrayed as inheriting a very strong economy, notes MSNBC, in which the U.S. is “the envy of the world.” Fortune sees Trump inheriting “the best economy in a generation.”

Yet this is more a matter of perception than reality, a kind of “fake news.” To be sure, President Barack Obama inherited a disastrous economy from George W. Bush and can claim, with some justification, that on his watch millions of jobs were restored and the economy achieved steady, if unspectacular, growth. Under Obama average GDP growth has been almost twice as high as under his predecessor, but roughly half that of either President Reagan or Clinton.

Less appreciated, however, are the fundamental long-term weaknesses in the U.S. economy that Obama and Bush have left for Trump. A recent report from the U.S. Council on Competitiveness details a litany of profound, lingering flaws -- historically slow growth, rising inequality, stagnant incomes, slumping productivity and declining lifespans. As the report concludes: “The Great Recession may be over, but America is dangerously running on empty.”

These make for challenging conditions for Trump to make good on his promise to “make America great again.”

Since 2005 the vast majority of new jobs created have been part-time, and most have been in low-end service professions. Full-time middle-class employment, particularly in fields like manufacturing, construction and energy, has recovered some, but not enough to rekindle a broad sense of economic opportunity. Both the numbers of the rich, and those of the poor, grew markedly under our now departing President. There are now 16 million more people on food stamps than in 2008, and homeownership is down to the lowest level in nearly 50 years.

Trump may have lost the popular vote but given his awful approval numbers, it’s a testament to how deep the distress is for millions amid this economic malaise that he managed to come even close. Perhaps more importantly House Republicans, also running against the economy, outpolled their rivals by 3.5 million votes. Their constituents differ from that of the blue states won by Hillary Clinton. These states, whose economies depend more on financial engineers, real estate speculation, media and technology development, did well – or at least those who worked in these industries did.

Trump’s Biggest Challenge

Trump won because of Middle America -- largely white, suburban and small town, mainly in the vast region between the Appalachians and the Rockies. To consolidate his grip on power, and that of his unruly party, he needs to extend the weak, but long-lasting Obama recovery into something that drives up higher wage employment in manufacturing, energy and services.

This is where Trump’s emerging nationalist policies could come into play. Conservatives and liberals alike sneer at his needling of big corporations, foreign and domestic, over jobs, but what is the job of a President? Shouldn’t he be on the side of average citizen in Podunk, USA? If Trump can bring good jobs back to Middle America, notes analyst Aaron Renn , a native of southern Indiana, they’ll appreciate it. Trump, he notes, is “sending a powerful message to workers that they matter and he will fight for their interests. “

His jawboning of Carrier, Ford, GM and Sprint, and even the mighty Apple, could all be dissected as dependent on subsidies, incentives and intimidation. But people in Indianapolis, southeast Michigan and Kansas City are not theoretical beings waiting for the welfare leavings of the coastal super-rich. Their desires matter as much as those of sensitive souls in San Francisco or Brooklyn.

There are certainly ways -- tax policies, regulatory reform, infrastructure investment -- that might spark growth and get companies to create more jobs here.

Is Trump Up To The Job?

There is nothing better for an economy than mass prosperity, which is something now sorely missing. That means people buying houses, getting married, having babies, the essentials of a strong middle class economy. Anyone who delivers those goods -- last accomplished by Bill Clinton and Ronald Reagan -- seems certain of re-election. This is particularly critical for the roughly seven in 10 Americans who have less than $1,000 in savings.

Of course, Trump seeks to achieve this goal is using a very different approach than either Clinton or Reagan. He has chosen to follow an economic nationalist course that, in some ways, seek to reverse the approach embraced by both of these successful Presidents and much of the nation’s establishment. In contrast to virtually everyone who has held the White House since the 1940s, Trump did not run for leader of the world; he ran, very purposely, as the candidate of Americans. Clinton, like the European Union have offered more complexity, notes the Guardian; Trump, like many effective leaders, boiled everything down to simple memes.

Whether this populist course will work is not clear. Critics in the Democratic Party have pointed out, correctly, that Trump’s cabinet hardly fits a populist mold. It’s full of Wall Street financiers and high level corporate executives. He also will face opposition within his own party, which remains largely chained to big business interests and includes many advocates for ever expanding globalization. Similarly many “routine” jobs that paid well have fallen not simply to foreigners, but to automation and technology.

Yet ultimately Trump has proven himself something of savvy politician -- far more than anyone suspected -- and seems, at least for now, to be keeping his eye on the ball. The specter of tax, regulatory reform and more infrastructure spending is already ramping up projections of long lagging investment from businesses. And the general population, however deeply divided, seems more optimistic than in previous years, which could further stimulate the economy.

This could reinforce the notion that Trump’s hectoring of executives, and pushing economic nationalism, could prove effective in creating broad based economic growth for the emerging post-globalization era. Now it’s a matter of whether he can pull this off without sparking a trade war, an international meltdown or another recession that could turn him not into the new Reagan, but the latest version of Herbert Hoover.

This piece originally appeared in Forbes.

Photo by Gage Skidmore from Peoria, AZ, United States of America (Donald Trump) [CC BY-SA 2.0], via Wikimedia Commons

California as Alt-America

Joel Kotkin — Mon, 16 Jan 2017 22:51:32 +0000

Appearing in:

Real Clear Politics

In 1949 the historian Carey McWilliams defined California as the “the Great Exception” -- a place so different from the rest of America as to seem almost a separate country. In the ensuing half-century, the Golden State became not so much exceptional but predictive of the rest of the nation: California’s approaches to public education, the environment, politics, community-building and lifestyle often became national standards, and even normative.

Today California is returning to its outlier roots, defying many of the political trends that define most of the country. Rather than adjust to changing conditions, the state seems determined to go it alone as a bastion of progressivism. Some Californians, going farther out on a limb, have proposed separating from the rest of the country entirely; a ballot measure on that proposition has been proposed for 2018.

This shift to outpost of modern-day progressivism has been developing for years but was markedly evident in November. As the rest of America trended to the right, electing Republicans at the congressional and local levels in impressive numbers, California has moved farther left, accounting for virtually all of the net popular vote margin for Hillary Clinton. Today the GOP is all but non-existent in the most populated parts of the state, and the legislature has a supermajority of Democrats in both houses. In many cases, including last year’s Senate race, no Republicans even got on the November ballot.

Homage to Ecotopia

The election of Donald Trump has expanded the widening gap. The two biggest points of contention going forward are likely to be climate change, which has come to dominate California’s policy agenda, and immigration, a critical issue to the rising Latino political class, Silicon Valley and the state’s entrenched progressive activists.

Most of the big cities -- Los Angeles, San Jose, San Francisco, Oakland and Sacramento -- have proclaimed themselves “sanctuary cities,” and the state legislative leadership is now preparing a measure that would create “a wall of justice” against Trump’s agenda. If federal agents begin swooping down on any of the state’s estimated 2 million undocumented immigrants, incoming Attorney General (and former congressman) Xavier Becerra has made it among his first priorities to “resist” any deportation orders, including paying legal fees.

Equally contentious will be a concerted attempt to block Trump’s overturning of President Obama’s climate change agenda. In recent years Gov. Jerry Brown has gone full “Moonbeam,” imposing ever more stringent environmental policies on state businesses and residents. The most recent legislation signed by Brown would boost California’s carbon reductions far beyond those agreed to by the U.S. in the Paris accord (which Trump has said he will withdraw from). All of this is being done along with a virtual banning of nuclear power, which, as the Breakthrough Institute’s Michael Shellenberger notes, remains the largest and most proven source of clean energy.

California’s draconian climate policies have been oft-cited by Obama and environmentalists as a role model for not only America but the world. However, they will not be widely emulated in the rest of the country during the next four years. Instead, California may be opting for a kind of virtual secession, following the narrative portrayed in Ernest Callenbach’s 1975 novel, “Ecotopia,” where Northern California secedes from the union to create a more ecologically perfect state.

Ironically, the state’s policies, which place strong controls on development, road construction, and energy production and usage, are somewhat symbolic; by dint largely of its mild climate, the state is already far more energy efficient than the rest of the country. But to achieve its ambitious new goals, most serious observers suggest, the state would lose at least 100,000 jobs and further boost energy prices -- which disproportionately affect the poorer residents who predominate in the state’s beleaguered, and less temperate, interior.

The impact of these policies would be far-reaching. They have already reduced outside investment in manufacturing to minuscule levels and could cost California households an average of $3,000 annually. Such economic realities no longer influence many California policymakers but they could prove a boon to other states, notably Texas, Arizona and Nevada, which make a sport of hunting down California employers.

A ‘Light Unto the Nations’?

Even with these problems, no other part of the country comes close to being as deeply progressive as California. Illinois, President Obama’s home state, is a model for nothing so much as larceny and corruption. New York, the traditional bailiwick of the progressive over-class, is similarly too corrupt and also too tied to, and dependent upon, Wall Street. In addition, both of these states are losing population, while California, although slowing down and experiencing out-migration by residents to other states, continues to grow, the product of children born to those who arrived over the past three decades.

California’s recent economic success seemingly makes it a compelling “alt-America.” After a severe decline in the Great Recession, the economy has roared back, and since 2010 has outpaced the national average. But if you go back to 2000, metro areas such as Austin, Dallas, Houston, Orlando, Salt Lake City and Phoenix -- all in lower-tax, regulation-light states -- have expanded their employment by twice or more than that in Los Angeles.

Indeed, a closer examination shows that the California “boom” is really about one region, the tech-rich San Francisco Bay Area, with roughly half the state’s job growth recorded there since 2007 even though the region accounts for barely a fifth of the state’s population. Outside the Bay Area, the vast majority of employment gains have been in low-paying retail, hospitality and medical fields. And even in Silicon Valley itself, a large portion of the population, notably Latinos, are downwardly mobile given the loss of manufacturing jobs.

According to the most recent Social Science Research Council report, the state overall suffers the greatest levels of income inequality in the nation; the Public Policy Institute places the gap well over 10 percent higher than the national average. And though California may be home to some of the wealthiest communities in the nation, accounting for 15 of the 20 wealthiest, its poverty rate, adjusted for cost, is also the highest in the nation. Indeed, a recent United Way study found that half of all California Latinos, and some 40 percent of African-Americans, have incomes below the cost of necessities (the “Real Cost Measure”). Among non-citizens, 60 percent of households have incomes below the Real Cost Measure, a figure that stretches to 80 percent below among Latinos.

In sharp contrast to the 1960s California governed by Jerry Brown’s great father, Pat, upward mobility is not particularly promising for the state’s majority Latino next generation. Not only are housing prices out of reach for all but a few, but the state’s public education system ranks 40th in the nation, behind New York, Texas and South Carolina. If California remains the technological leader, it is also becoming the harbinger of something else -- a kind of feudal society divided by a rich elite and a larger poverty class, while the middle class either struggles or leaves town.

Will America Turn to the California Model?

The new California model depends largely on one thing: the profits of the very rich. Nearly 70 percent of the state budget comes from income tax, half of which is paid by the 1 percent wealthiest residents (the top 10 percent of earners accounted for nearly 80 percent). This makes the state a model of fiscal instability. As long as the Silicon Valley oligarchs and the real estate speculators do well, California can tap their wealth to pay its massive pension debt, and expand the welfare state inexorably for its increasingly redundant working-class population.

It’s highly dubious this model would work for the rest of the country. Due largely to its concentration of venture capital, roughly half the nation’s total, Silicon Valley may be able to continue to dominate whatever is the “next big thing,” at least in the early stages. Even parts of the tech community, such as Uber, Lyft and Apple, have announced major expansions outside of the state, in some cases directly due to regulatory restraints in California. Layoffs, meanwhile, are rising in the Valley as companies merge or move to other places. Google, Facebook and others, of course, will remain, keeping the big money in California, but the jobs could be drifting away.

Under any circumstances, the rest of the country -- with the exception of a few markets such as Manhattan and downtown Chicago -- could not absorb the costs for housing or the taxes California imposes on its residents and businesses. Part of the reason stems from the fact that California is indeed different; its climate, topography, cultural life cannot be easily duplicated in Kansas City, Dallas or anywhere else. People will pay for the privilege of living in California, particularly along the coast. Would they do so to live in Minneapolis or Charlotte?

Nor, unlike during much of the postwar era, can it be said that California represents the demographic future. The state -- even the Bay Area -- generally loses people to other states, particularly those in middle age, according to an analysis of IRS numbers. Brown apologists suggest it’s only the poor and uneducated who are leaving, but it also turns out that California is losing affluent people just as rapidly, with the largest net loss occurring among those making between $100,000 and 200,000.

Perhaps more revealing, the number of children is declining, particularly in the Los Angeles and San Francisco areas. Children made up a third of California’s population in 1970, but USC demographer Dowell Myers projects that by 2030 they will compose just a fifth.

Nor is help on the way. Although boomtown San Francisco has maintained its share of millennials, most large California cities have not. And the number of people in their mid-thirties -- prime child-bearing years -- appears to be declining rapidly, notably in the Bay Area. Coastal California is becoming the golden land for affluent baby boomers rather than young hipsters. Surfing dudes will increasingly be those with gray ponytails.

Instead of a role model for the future, the Golden State seems likely to become a cross between Hawaii and Tijuana, a land for the aging rich and their servants. It still remains a perfect social model for a progressive political regime, but perhaps not one the rest of the country would likely wish to, or afford, to adopt.

This piece originally appeared in Real Clear Politics.

Photo by Thomas Pintaric (Own work) [GFDL or CC-BY-SA-3.0], via Wikimedia Commons

California’s Racial Politics Harming Minorities

Joel Kotkin and Wendell Cox — Thu, 05 Jan 2017 22:44:40 +0000

Appearing in:

Orange County Register

Across the country, white voters placed Donald Trump in office by a margin of 21 points over Clinton. Their backing helped the GOP gain control of a vast swath of local offices nationwide. But in California, racial politics are pushing our general politics the other direction, way to the left.

Some of this reflects California’s fast track toward a “minority-majority” state. Along with a few other states — Hawaii, Texas and New Mexico — California is there now, with minorities accounting for 62 percent of the population, compared to 43 percent in 1990. The shift in the electorate has been slower but still powerful. In 1994, registered Democrats held a 12 percentage-point margin over Republicans. By 2016, the margin had widened to 19 points.

The racial shift does much to explain why Trump lost some largely affluent suburban areas like Orange County, where 53 percent the population is Latino or Asian, up from 45 percent in 2000. Perhaps most emblematic of potential GOP problems was Trump’s — and the GOP’s — loss in Irvine, a prosperous Orange County municipality that is roughly 40 percent Asian.

California’s unique racial politics

Ideology plays a critical role in California’s emerging politics of race. Hispanic and Asian voters outside California — for example, in Texas — have tended to vote less heavily for Democrats. In 2014, Republican Gov. Greg Abbott won 44 percent of Texas Latinos. Florida’s Gov. Rick Scott garnered 38 percent of the Latino vote in his successful re-election campaign. In contrast, that same year, Neel Kashkari, Jerry Brown’s Republican opponent, won only 27 percent of the Latino vote in California. Only 17 percent of California Asians voted for Trump, nearly 40 percent lower than the national rate (27 percent).

These differences, ironically, have become more evident as California has become relatively less attractive to immigrants. Since the 1980s and 1990s, as California’s economy has become increasingly deindustrialized, the immigration “flood” has slowed, particularly among Hispanics. By the 2010s, other cities — notably Dallas-Fort Worth and Houston — were emerging as bigger magnets for newcomers.

Read the entire piece at The Orange County Register.

Wendell Cox is principal of Demographia, an international public policy and demographics firm. He is a Senior Fellow of the Center for Opportunity Urbanism (US), Senior Fellow for Housing Affordability and Municipal Policy for the Frontier Centre for Public Policy (Canada), and a member of the Board of Advisors of the Center for Demographics and Policy at Chapman University (California). He is co-author of the "Demographia International Housing Affordability Survey" and author of "Demographia World Urban Areas" and "War on the Dream: How Anti-Sprawl Policy Threatens the Quality of Life." He was appointed to three terms on the Los Angeles County Transportation Commission, where he served with the leading city and county leadership as the only non-elected member. He served as a visiting professor at the Conservatoire National des Arts et Metiers, a national university in Paris.

Obama's Not so Glorious Legacy

Joel Kotkin — Wed, 04 Jan 2017 21:54:08 +0000

Appearing in:

Orange County Regiser

Like a child star who reached his peak at age 15, Barack Obama could never fulfill the inflated expectations that accompanied his election. After all not only was he heralded as the “smartest” president in history within months of assuming the White House, but he also secured the Nobel Peace Prize during his first year in office. Usually, it takes actually settling a conflict or two — like Richard Nixon or Jimmy Carter — to win such plaudits.

The greatest accomplishment of the Obama presidency turned out to be his election as the first African American president. This should always be seen as a great step forward. Yet, the Obama presidency failed to accomplish the great things promised by his election: racial healing, a stronger economy, greater global influence and, perhaps most critically, the fundamental progressive “transformation” of American politics.

Racial healing

Rather than stress his biracial background, Obama, once elected, chose to place his whiteness in the closet and identified almost entirely with a particular notion of the American black experience.

Whenever race-related issues came up — notably in the area of law enforcement — Obama and his Justice Department have tended to embrace the narrative that America remains hopelessly racist. As a result, he seemed to embrace groups like Black Lives Matter and, wherever possible, blame law enforcement, even as crime was soaring in many cities, particularly those with beleaguered African American communities.

Eight years after his election, more Americans now consider race relations to be getting worse, and we are more ethnically divided than in any time in recent history. As has been the case for several decades, African Americans’ economic equality has continued to slip, and is lower now than it was when Obama came into office in 2009, according to a 2016 Urban League study.

The economic equation

On the economy, Obama partisans can claim some successes. He clearly inherited a massive mess from the George W. Bush administration, and the fact that the economy eventually turned around, albeit modestly, has to be counted in his favor.

Yet, if there was indeed a recovery, it was a modest one, marked by falling productivity and low levels of labor participation. We continue to see the decline of the middle class, and declining life expectancy, while the vast majority of gains have gone to the most affluent, largely due to the rising stock market and the recovery of property prices, particularly in elite markets.

At the same time, Obama leaves his successor a massive debt run-up, doubling during his watch, and the prospect of steadily rising interest rates. Faith in the current economic system has plummeted in recent years, particularly among the young, a majority of whom, according to a May 2016 Gallup Poll, now have a favorable view of socialism. Economic anxiety helped spark not only the emergence of Bernie Sanders, but later the election of Donald Trump.

Read the entire piece at the Orange County Register.

Photo: The Official White House Photostream (originally posted to Flickr as P012109PS-0059) [CC BY 2.0 or Public domain], via Wikimedia Commons