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Progressives Have Ruined California

The very idea of a recall vote seemed absurd at first in California, this bluest of US states. Yet Californians’ surprisingly strong support for the removal of Democratic governor Gavin Newsom has resulted in precisely that, with the vote scheduled for 14 September. This reflects a stunning rejection of modern progressivism in a state thought to epitomise its promise.

Some, like the University of California’s Laura Tyson and former Newsom adviser Lenny Mendonca, may see California as creating ‘the way forward’ for a more enlightened ‘market capitalism’, but that reality is hard to see on the ground. Even before the pandemic, California already had the highest poverty rate and the widest gap between middle and upper-middle income earners of any state in the US. It now suffers from the second-highest unemployment rate in the US after Nevada.

Today, class drives Californian politics, and Newsom is peculiarly ill-suited to deal with it. He is financed by what the Los Angeles Times describes as ‘a coterie of San Francisco’s wealthiest families’. Newsom’s backers have aided his business ventures and helped him live in luxury – first in his native Marin, where he just sold his estate for over $6million, and now in Sacramento.

California’s well-connected rich are predictably rallying to Newsom’s side. At least 19 billionaires, mainly from the tech sector, have contributed to his extraordinarily well-funded recall campaign, which is outspending the opposition by roughly nine to one.

There is little hiding the elitism that Newsom epitomises. In the midst of a severe lockdown, he was caught violating his own pandemic orders at the ultra-expensive, ultra-chic French Laundry restaurant in Napa.

Newsom insists California is ‘doing pretty damn well’, citing record profits in Silicon Valley from both the major tech firms and a host of IPOs. He seems to be unaware that California’s middle- and working-class incomes have been heading downwards for a decade, while only the top five per cent of taxpayers have done well. As one progressive Democratic activist put it in Salon, the recall reflects a rebellion against ‘corporate-friendly elitism and tone-deaf egotism at the top of the California Democratic Party’.

Much of this can be traced back to regulatory policies tied to climate change (along with high taxes). These policies have driven out major companies – in energy, home construction, manufacturing and civil engineering – that traditionally employed middle-skilled workers. Instead, job growth has been concentrated in generally low-pay sectors, like hospitality. Over the past decade, 80 per cent of Californian jobs, notes one academic, have paid under the median wage. Half of these paid less than $40,000.

Read the rest of this piece at Spiked.


Joel Kotkin is the author of The Coming of Neo-Feudalism: A Warning to the Global Middle Class. He is the Presidential Fellow in Urban Futures at Chapman University and Executive Director for Urban Reform Institute. Learn more at joelkotkin.com and follow him on Twitter @joelkotkin.

California Fleeing

Some longtime Californians view the continued net outmigration from their state as a worrisome sign, but most others in the Golden State’s media, academic, and political establishment dismiss this demographic decline as a “myth.” The Sacramento Bee suggests that it largely represents the “hate” felt toward the state by conservatives eager to undermine California’s progressive model. Local media and think tanks generally concede the migration losses but comfort themselves with the thought that California continues to attract top-tier talent and will remain an irrepressible superpower that boasts innovation, creativity, and massive capital accumulation.

Reality reveals a different picture. California may be a great state in many ways, but it also is clearly breaking bad. Since 2000, 2.6 million net domestic migrants, a population larger than the cities of San Francisco, San Diego, and Anaheim combined, have moved from California to other parts of the United States. (See Figure 1.) California has lost more people in each of the last two decades than any state except New York—and they’re not just those struggling to compete in the high-tech “new economy.” During the 2010s, the state’s growth in college-educated residents 25 and over did not keep up with the national rate of increase, putting California a mere 34th on this measure, behind such key competitors as Florida and Texas. California’s demographic woes are real, and they pose long-term challenges that need to be confronted.

Source: Derived from U.S. Census Bureau Estimates

Source: Derived from U.S. Census Bureau Estimates

The state has suffered net outmigration in every year of the twenty-first century, but its smallest losses occurred in the early 2000s and the years following the Great Recession, when housing affordability was closer to the national average. Home prices have risen since then—and so have departures. Between 2014 and 2020, net domestic outmigration rose from 46,000 to 242,000, according to Census Bureau estimates.

The outmigration does not seem to have reached a peak. Roughly half of state residents, according to a 2019 UC Berkeley poll, have considered leaving. In Los Angeles, according to a USC survey, 10 percent plan to move out this year. The most recent Census Bureau estimates show that California started falling behind national population growth in 2016 and went negative for the first time in modern history last year.

The comforting tale that only the old, bitter, and uneducated are moving out simply does not withstand scrutiny. An analysis of IRS data through 2019 confirms that increasing domestic migration is not dominated by the youngest or oldest households. Between 2012 and 2019, tax filers under 26 years old constituted only 4 percent of net domestic outmigrants. About 77 percent of the increase came among those in their prime earning years of 35 to 64. In 2019, 27 percent of net domestic migrants were aged 35 to 44, while 21 percent were aged 55 to 64. (See Figure 2.)

Source: IRS data

Source: IRS data

To be sure, the largest increase in net domestic migration was among those aged 65 and over. But the second-largest increase came in the 25 to 34 categories—with the state’s exorbitantly high cost of living the likely culprit.

Read the rest of this piece at City Journal.


Joel Kotkin is the author of The Coming of Neo-Feudalism: A Warning to the Global Middle Class. He is the Presidential Fellow in Urban Futures at Chapman University and Executive Director for Urban Reform Institute. Learn more at joelkotkin.com and follow him on Twitter @joelkotkin.

Wendell Cox is principal of Demographia, an international public policy firm located in the St. Louis metropolitan area. He is a founding senior fellow at the Urban Reform Institute, Houston, a Senior Fellow with the Frontier Centre for Public Policy in Winnipeg and a member of the Advisory Board of the Center for Demographics and Policy at Chapman University in Orange, California. He has served as a visiting professor at the Conservatoire National des Arts et Metiers in Paris. His principal interests are economics, poverty alleviation, demographics, urban policy and transport. He is co-author of the annual Demographia International Housing Affordability Survey and author of Demographia World Urban Areas.

Photo: Beatrice Murch, via Flickr under CC 2.0 License

Joe Biden’s Imaginary America

After two painful recessions and ever greater national discord, there is considerable support for a new beginning, even if it takes massive federal spending. The question we must ask now is what kind of spending makes sense given the character of the country, its geography, and its economic challenges. America remains a vast and diverse place, and decisions that make sense for one locale do not necessarily make any sense in others. A dispersed country needs dispersed decision-making, not edicts issued from on high by the D.C. nomenklatura.

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Yeomanry’s Global Decline

For much of the last part of the 20th Century, the world’s middle class was ascendant, expanding and, in most countries, firmly in control of national politics and culture. Yet in more recent decades, this process has been slowly reversed, in the United States as well as in Europe and, increasingly, East Asia.

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Joel Kotkin Virtual Salon, on the Topic of Neo-Feudalism

Host: Virtual Salon
On: Fieldstead and Company

Fieldstead opened its 2021 salon series with Joel Kotkin, described by the New York Times as “America’s uber-geographer.” Joel is an internationally-recognized authority on global, economic, political, and social trends. His work over the past decade has focused on inequality and class mobility as well as how regions can address these pressing issues. Joel discusses his research findings from his recent book, The Coming Neo-Feudalism: A Warning to the Global Middle Class.

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Joel Kotkin on Menzies Research Centre: Medieval Mindset

Host: Nick Cater
On: The Watercooler Podcast by Menzies Research Centre (Soundcloud)

Joel Kotkin warns that traditional middle class aspirations and values such as family, nationhood and home ownership are under threat from a new class of oligarchs.

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What Happened to Social Democracy?

In a world that seems to be divided between neoliberal orthodoxy and identitarian dogmas, it is possible to miss the waning presence of traditional social democracy. Born of the radical Left in Marx’s own time, social democrats worked, sometimes with remarkable success, to improve the living standards of working people by accommodating the virtues of capitalism. Today, that kind of social democracy—learned at home from my immigrant grandparents and from the late Michael Harrington, one time head of the American Socialist Party—is all but dead. This tradition was, in retrospect, perhaps too optimistic about the efficacy of government. Nevertheless, it sincerely sought to improve popular conditions and respected the wisdom of ordinary people.

In its place, we now find a kind of progressivism that focuses on gender, sexual preference, race, and climate change. Abandoned by traditional Left parties, some voters have drifted into nativist—and sometimes openly racist—opposition while more have simply become alienated from major institutions and pessimistic about the future.

The revolution in class relations

Social democracy was a product of the inequities of the industrial era and the consequent solidarity that flourished among working people. This often resulted in greater justice for racial minorities. The German Social Democrat Eduard Bernstein developed an “evolutionary” ideology based on gradualism, practical results, and a commitment to democratic norms. Observing late-19th century Britain, where unions were accepted even in business circles, Bernstein noticed that working conditions, contrary to Marxist dogma, were steadily improving. He believed that the proletariat was evolving from an oppressed underclass into a more upwardly mobile group, whose goal was to find “an appropriate status in industrial society.” For their efforts, Social Democrats were denounced as “social fascists” by Stalin, and Antifa’s predecessors—the German Antifaschistische Aktion—spent at least as much time fighting them as fighting the Nazis. A fatal error.

After the Second World War, however, social democrats enjoyed considerable success while the remarkable productivity of the private sector helped transform the once-forlorn proletariat into something more bourgeois in aspiration. A study covering the United Kingdom, the Netherlands, and the United States shows that all three saw a rapid decline in the concentration of wealth until the 1970s. Their program focused on physical needs such as boosting access to electricity and improving public health and education.

Never before had so much prosperity and relative economic security been so widely enjoyed. By the 1960s, the American labor movement could boast of “developing a whole new middle class,” said Walter Reuther, president of the United Auto Workers. Industrial laborers could afford to buy homes, send their kids to college, and live the kind of life only the affluent had previously enjoyed. Western Europe benefited from the same process—economic growth helped finance a welfare state that provided greater security and improved the prospects of most families; the rapid growth of export industries, in particular, was an integral part of the original Swedish social model of increasing wages without inflation.

Starting in the 1970s, such things as foreign competition, mass immigration from developing countries, automation, and the growing financialization of economic power undermined this progress. In the United States, data from the Census Bureau show that the share of national income going to the middle 60 percent of households has fallen to a record low since the 1970s. Wealth gains in recent decades have gone overwhelmingly to the top one percent of households, and especially to the top 0.5 percent. Social mobility has declined in over two-thirds of European Union countries, including Sweden. Across the 36 wealthier countries of the Organization for Economic Cooperation and Development, the richest citizens have taken an ever-greater share of national GDP while the middle class has shrunk. Much of the global middle class is heavily in debt—mainly because of high housing costs—and “looks increasingly like a boat in rocky waters,” suggests the OECD.

Parties repositioning

One might assume that this concentration of wealth would energize traditional working class parties—Labour in Britain and Australia, the Liberals in Canada, the Democrats in the US—but they shifted their focus away from blue-collar and lower-middle-class workers. Instead, leftwing parties are increasingly peopled by, and cultivated support from, the well-educated professional class—now an estimated 15 percent of the US work force—along with the corporate elites and academic clerisy. These classes have done well over the past few decades, while the traditional lower-middle and working classes have languished.

Read the rest of this piece at Quillette.


Joel Kotkin is the author of The Coming of Neo-Feudalism: A Warning to the Global Middle Class. He is the Presidential Fellow in Urban Futures at Chapman University and Executive Director for Urban Reform Institute. Learn more at joelkotkin.com and follow him on Twitter @joelkotkin.

Photo credit: Nicolas Nieves-Quiroz via Unsplash under CC0 1.0 License.

Trust the Science: The Blue State Surge is Real

For months the conventional wisdom among Democrats, amplified by their obliging claque in the media, was that lockdowns played an essential role in containing COVID-19. The great heroes, in addition to Anthony Fauci, were hardline governors like Michigan’s Gretchen Whitmer, California’s Gavin Newsom and, most of all, New York’s Andrew Cuomo.

Yet now, more than a year later, the lockdown states—starting with New York and New Jersey—are again leading the nation in coronavirus infections and deaths per capita.

By contrast, some of the states with Republican governors who were routinely castigated for unlocking things and supposedly killing their residents, most notably Florida, Georgia and Texas, did indeed suffer an increase in fatalities last summer. But since then, even after opening their economies, these states continue to suffer fatality rates per capita well below those of the locked-down Northeastern states and about equal to California, which has maintained one of the nation’s strictest lockdowns.

What emerge from these trends are some clear issues with transmission that transcend lockdowns, mask mandates and other punitive measures. However justified, such actions have not addressed the fundamental reasons why some geographies and populations have suffered so much more than others. That’s to say that while the blue state governors aren’t necessarily to blame for the surges their states are experiencing, it’s clear that the economically and personally disruptive measures did not have the expected impact.

What did make a big difference, it turns out, is not so much the severity of lockdowns but pre-existing conditions. The likely cause here can be best identified as “exposure density” brought on by crowded housing, transit, and office environments.

That helps explain why, after New York City’s suburbs were hit hard in the first wave, the current surge has hit the outer boroughs, where a much higher share of workers have had little choice but to continue taking the subway or other transit.

Nationwide, urban exposure to the pandemic also reflects their greater inequality. Higher rates of poverty and overcrowded housing accentuate the worst effects of the pandemic, which tore through impoverished parts of New York, Houston, Los Angeles County, Chicago’s poor south side, and similar areas. The Bronx, for example, has suffered an 80 percent worse death rate than denser yet wealthier Manhattan, while Brooklyn’s rate is 50 percent worse than Manhattan’s.

This can be seen also in the Los Angeles metropolitan area, whose sunshine-blessed and auto-dominated society suffered a fatality rate 60 percent below that of transit-oriented metro New York. Yet while fatality rates have been very low in affluent areas with fewer crowded households, such as west Los Angeles and Irvine, they have been much higher in areas like east and south Los Angeles. In Orange County, the fatality rate in affluent, single family dominated Irvine is 22 per 100,000 compared with 195 in neighboring Santa Ana, which is heavily Hispanic, poor and suffers crowded housing conditions.

This is an international phenomenon seen across the world’s great urban areas. During the first lockdown, almost 20 percent of the Parisian population fled to the countryside, accelerating an escapist trend that had been underway for years: the core city of Paris has lost 700,000 residents (nearly 25 percent of its population) since 1954, while millions of new inhabitants have swelled the suburban population. Meanwhile, the densely packed Department of Seine-Saint-Denis, a place synonymous there with inner ring suburban poverty, had a staggering 130 percent excess mortality rate when the virus first hit last year.

Read the rest of this piece at The Daily Beast.


Joel Kotkin is the author of The Coming of Neo-Feudalism: A Warning to the Global Middle Class. He is the Presidential Fellow in Urban Futures at Chapman University and Executive Director for Urban Reform Institute. Learn more at joelkotkin.com and follow him on Twitter @joelkotkin.

Wendell Cox is principal of Demographia, an international public policy firm located in the St. Louis metropolitan area. He is a founding senior fellow at the Urban Reform Institute, Houston, a Senior Fellow with the Frontier Centre for Public Policy in Winnipeg and a member of the Advisory Board of the Center for Demographics and Policy at Chapman University in Orange, California. He has served as a visiting professor at the Conservatoire National des Arts et Metiers in Paris. His principal interests are economics, poverty alleviation, demographics, urban policy and transport. He is co-author of the annual Demographia International Housing Affordability Survey and author of Demographia World Urban Areas.

Photo credit: Matryx via Pixabay under CC0 1.0 License.

The California Economy vs. Sacramento

Over the past few years California’s plight has taken on mythic proportions — a cautionary tale of progressive woe among conservatives, but a beacon for a future enlightened capitalism among its woke supporters. The current battle over the potential recall of the preening governor, Gavin Newsom, likely will enhance these extreme interpretations on both sides, but likely will not be sufficient to make the changes needed to restore the state’s legendary promise.

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Ownership and Opportunity: A New Report from Urban Reform Institute

In a new report from Urban Reform Institute, edited by Joel Kotkin, J.H. Cullum Clark and Anne Snyder explore what happens when opportunity stalls. Pete Saunders and Karla Lopez del Rio tell the story of how homeownership enabled upward mobility for their respective families. Wendell Cox quantifies the connection between urban containment policies and housing affordabilty.

The introduction, authored by Charles Blain, President of Urban Reform Institute is excerpted below:

The middle-class way of living is under constant threat as housing costs increase, eating away larger shares of the average American’s income.

Homeownership, which has been a critical source of advancement for middle-class, immigrant, and ethnic minority families and an asset that people can pass down from one generation to the next, is under threat. For many families, this means that instead of building wealth, they are seeing opportunity erode before their eyes.

As housing costs are the biggest driver of variation in living costs across metropolitan areas, the relentless housing cost increases of the last two decades have undermined standards of living for many Americans in the nation’s most expensive cities. If home prices continue to outpace household incomes for ordinary Americans in coming years, the American Dream will move ever further out of reach for millions of families. This is especially the case for Millennials and Gen Zers for whom high and rising housing costs are the single largest obstacle to accumulating wealth and achieving a financially sustainable life.

The COVID-19 crisis presents America with enormous challenges, but also new opportunities to move forward in rethinking policy on the future of housing and work to improve affordability and advance opportunity – particularly for our most disadvantaged communities.

A fresh policy agenda can breathe new life into the American Dream and protect middle-class standards of living. This agenda should prioritize new housing supply at all price points, particularly in growing, high-opportunity places. Cities should relax urban containment policies that have had the clear effect of making urban real estate scarce and expensive. State governments should reform tax codes that make it more cost effective to leave land stagnant than to build upon it.

If we want to protect the ability to climb the socioeconomic ladder from one generation to the next, we must face the crisis of unaffordable housing and declining homeownership. We must protect the biggest opportunity for advancement and scale back the rules and regulations that continue to snatch this opportunity away from millions of Americans.

Click here to download/read the full report.

Join the discussion on a new policy agenda for home ownership and opportunity in our post-pandemic economy.

Date: December 4, 2020
Time: 11:30AM – 1:00PM (Central Time)

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