Technoccult

Reading that Richard Florida article yesterday reminded me of Florida’s rival Joel Kotkin and the debate around urban economies years after the dot-com crash.

I came across Richard Florida’s ideas when I was a senior at the Evergreen State College and hoping to break into the public relations industry in Seattle. Florida’s thesis – that the educated “creative class” was the key to economic success and that cities should be doing their best to woo us – was seductive. Any idea that states that you are important and other people should do their best to please you is seductive.

But it didn’t take long for me to start seeing his work as a sort of “guidebook for gentrification” (in retrospect, this might not have been fair). Meanwhile, the cities he celebrated, like San Francisco, Seattle, and Portland, had yet to bounce back from the dot-com boom and I was constantly hearing about people moving back to the midwest.

On the other hand, I never bought Florda’s key rival Joel Kotkin’s ideas either. Kotkin seemed to agree that middle class professionals were important for a city’s economy, but disagreed with Florida about how to attract them. Kotkin wrote about the need for cities to attract families and thought lax building and zoning regulations and cheap housing were the answer. In other words: sprawl.

While Florida held up San Francisco as the model city, Kotkin was a booster for Phoenix. And while I’m still not convinced Florida is right – Kotkin has been soundly proven wrong. The housing market collapse in Phoenix and Las Vegas dwarfs the dot-com bust. And while San Francisco and Silicon Valley – Florida’s darlings – haven’t escaped the effect of the global economic meltdown, they’re not in as bad off as the rest of California (more on that later).

So I thought I’d check in on what Kotkin is writing lately. He doesn’t so much as admit that he was wrong but warn (or whine) that Florida was right in this Forbes article. Meanwhile, he chastises LA for not being more like Phoenix and blames environmentalists for California’s economy. The funny thing is, not too long ago he was praising LA as a model city.

The money line from his California article: “To many longtime California observers, the inability of the political, business and academic elites to adequately anticipate and address the state’s persistent problems has been a source of consternation and wonderment.” Kotkin was one of these elites, writing essays in magazines and newspapers across the country cheering on the housing bubble. It’s amazing that he’s still being taken seriously.

I was skeptical about this essay. After all it is Richard Florida and it is the Atlantic. But this is definitely worth reading:

Before the Great Depression, only a minority of Americans owned a home. But in the 1930s and ’40s, government policies brought about longer-term mortgages, which lowered payments and enabled more people to buy a house. Fannie Mae was created to purchase those mortgages and lubricate the system. And of course the tax deduction on mortgage-interest payments (which had existed since 1913, when the federal income-tax system was created) privileged house purchases over other types of spending. Between 1940 and 1960, the homeownership rate rose from 44 percent to 62 percent. […]

If anything, our government policies should encourage renting, not buying. Homeownership occupies a central place in the American Dream primarily because decades of policy have put it there. A recent study by Grace Wong, an economist at the Wharton School of Business, shows that, controlling for income and demographics, homeowners are no happier than renters, nor do they report lower levels of stress or higher levels of self-esteem.

And while homeownership has some social benefits—a higher level of civic engagement is one—it is costly to the economy. The economist Andrew Oswald has demonstrated that in both the United States and Europe, those places with higher homeownership rates also suffer from higher unemployment. Homeownership, Oswald found, is a more important predictor of unemployment than rates of unionization or the generosity of welfare benefits. Too often, it ties people to declining or blighted locations, and forces them into work—if they can find it—that is a poor match for their interests and abilities. […]

Finally, we need to be clear that ultimately, we can’t stop the decline of some places, and that we would be foolish to try. Places like Pittsburgh have shown that a city can stay vibrant as it shrinks, by redeveloping its core to attract young professionals and creative types, and by cultivating high-growth services and industries. And in limited ways, we can help faltering cities to manage their decline better, and to sustain better lives for the people who stay in them.

Full Story: the Atlantic

I remain skeptical of the idea that the key to American economic prosperity will be a continued reliance on “innovation” and “ideas.” In more concrete terms, Florida is arguing that the States will remain globally competitive by exporting designs and allowing the products and services continue to be made and supported elsewhere. But China and India are catching up to the US in the product and software design markets.

Renegade futurism is decidedly not about making predictions, but the future of the American economy I imagine is more local. It’s maker faires and farmer’s markets. It’s repairing stuff or making new clothes out of old ones. It’s neo-artisans bartering with each other. It’s co-ops, credit unions, and local currency.

Sure, there will still be imports and exports – but with increasing costs of shipping and more makers unemployed local production could make a big comeback.

(Thanks Nick)