Posts

America Isn’t Falling Apart. It’s Still the Land of Opportunity

More than 840,000 green card holders became citizens last year, the most in a decade. Over 10 percent of the American electorate was born elsewhere, the highest share in a half-century. All of Donald Trump’s huffing and puffing could not stop this demographic evolution; nor could an endless stream of stories about what an unequal, unfair, and no good place America has supposedly become.

The ground-level integration of America—what my friend Sergio Munoz calls “the multiculturalism of the streets”—continues with ever greater mingling, epitomized by the rise and acceptance of interracial dating, up 40 percent since 2003, and marriage.

What Trump and his most dedicated opponents have both had trouble appreciating is that, rather than a chaotic future defined by racial conflict, most Americans want both order and justice. Most Americans initially supported the George Floyd protests but soon overwhelmingly rejected the violence and looting that accompanied them. Racial minorities, like other Americans, are increasingly heterodox in their political views.

This was evident in Trump—an unpleasant and unprincipled man frequently labeled as a “racist” in the mainstream media, a term also applied to his voters— improving in 2020 on his 2016 results with most minorities, including a significant gain in the Latino vote, particularly in Florida and Texas, and among Black men. In California, Asian voters also didn’t flock to Trump, but they helped reject an affirmative action measure bankrolled by the tech oligarchs. In heavily Asian Orange County, Biden won comfortably but the affirmative action measure lost 2-to-1, and two Korean American women replaced Democratic congresspeople. The measure was also crushed in heavily Latino interior counties.

Another issue where elite support and popular opinion diverge is defunding the police, a position that the vast majority of Americans—including millennials and minorities—do not favor. As my colleague Charles Blain points out, when the Houston city council was swamped with testimony from residents pushing for the dismantling of the city’s Police Department, Black council members and Mayor Sylvester Turner pushed back, saying that these people clearly didn’t spend time in the communities that they claimed to support. A similar dynamic played out in New York, where Black City Council members held the line against a push to slash the NYPD budget by $1 billion.

Economics account for some of Trump’s gains among minority voters. Before the pandemic, most minority workers had done better in terms of income under his administration than they had under previous administrations from both parties. Like working-class people in general, most African Americans did worse economically under Barack Obama despite the enormous boost in political power and influence for portions of the African American upper class on his watch.

Latinos, suggests former California state Senate Majority Leader Gloria Romero. have been devastated by the state’s more extreme lockdowns, and angered to see their putative advocates, like Gavin Newsom or Nancy Pelosi, flaunt their privilege in luxury and even violate their own rules as “ordinary people have literally been arrested and even thrown in jail for opening their businesses to just survive and feed their families.”

Read the rest of this piece at Daily Beast.

Joel Kotkin is the author of the recently released book 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 — formerly the Center for Opportunity Urbanism. Learn more at joelkotkin.com and follow him on Twitter @joelkotkin

Homepage photo credit: Angelsharum via Wikimedia under CC 3.0 License.

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)

Register for Webinar

Joel Kotkin talks with Dan Proft About The Green End Game

By: Dan Proft
On: The Dan Proft Show at Omny radio

Joel Kotkin joins the Dan Proft show to discuss how the green end game runs through Biden. Outside of those dismissed as far right, there is virtually no serious debate about how to address climate change in the U.S. or Western Europe outside the parameters suggested by mainstream green groups.

 

 

Related:

The End Game

Governor Preen: Newsom’s Woke Posturing Masks California’s Dismal Economic Record

If Hollywood were to cast a governor and future president, and if a straight white male were still politically acceptable, he would look like California’s Gavin Newsom. The 53-year-old governor, a former mayor of San Francisco, Newsom handsomely epitomizes the preening politics of the California elite class that has nurtured and financed his career from the beginning. Read more

The Grand New Party

Given the likely defeat of President Donald Trump, a functionally headless Republican Party is destined for a period of reflection. Trump himself, for all his rudeness and often unnecessary, divisive rhetoric, has transformed the Republican Party from being a bastion of the establishment to a voice for America’s working and middle class.

Read more

Elite Democrats Could Destroy the Middle Class if Biden Wins in 2020

It’s been a long time since the Democrats were considered “the party of the people” and the GOP the party of the fat cats. This year Joe Biden and even more so his running mate, Kamala Harris, are raising record sums from the corporate elite, notably the tech giants and their Wall Street allies. These wealthy donors dominate the party, own much of the media, and can manipulate the social-media platforms where a growing proportion of Americans get their news.

Meanwhile, the Republicans find themselves largely castigated in the press and overwhelmed by a torrent of oligarchic wealth at the Senate and local levels. This wealthy oligarchy is not just liberal; many members also support a thorough remaking of our country. Some, like former Twitter CEO Dick Costolo, are so committed to progressivism that, as he said recently, those who don’t get with the program should “face a firing squad.” Currently led by CEO Jack Dorsey, Twitter has gone so far as to block The New York Post’s account after it reported on the unsavory foreign business dealings of Biden’s son Hunter.

If these Democrats win both houses of Congress as well as the White House, things could get far worse for the already beleaguered middle class, which has been rocked by the pandemic, with an estimated 100,000 small firms going out of business. Particularly hard-hit by the recent urban unrest are inner city and minority businesses.

The other big winners have been the professional managerial class, including top levels of the federal bureaucracy, academia, and the mainstream media. These are, for the most part, people who can work from home, or, in some cases, the safety of their country houses. Meanwhile, they have achieved power at a level never before exercised outside of wartime and are as likely to surrender this control as the oligarchs are to give up their money.

If the Democrats win on Election Day, the future for the middle class could be bleak. As a lifelong Democrat, this is not easy to write, but most of the party’s initiatives — such as the Green New Deal — are directly harmful to those in the middle and working classes, who’d be forced to face increased housing and energy prices and fewer upwardly mobile jobs in industries like manufacturing.

A Democratic landslide could prove particularly devastating to owners of small businesses, particularly those in the energy, agriculture and manufacturing sectors, who were all critical to electing Donald Trump and seem likely to follow him again this year, despite the recession caused by the pandemic.

Read the rest of this piece at NYPost.


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.

Homepage photo credit: ptufts via Flickr under CC 2.0 License.

Democrats’ Energy Dilemma

The biggest challenge facing a putative first-term Joe Biden administration and the Democratic Party may lie with energy policy, where gentry and green wishful thinking confront the daily realities of millions of middle- and working-class Americans.

Democrats could choose a climate policy that allows for gradual change – for example, transitioning from coal to natural gas – and consider the feasibility of smaller and safer nuclear plants, while keeping the productive economy afloat. But Biden, despite some wriggling about fracking on private land, just last week committed himself to the gradual eradication of the fossil fuel industry. His running mate, Senator Kamala Harris, is beloved by California’s extremist greens.

Already, in anticipation of a Democratic sweep, utilities are putting some natural gas projects on hold – threatening a powerful growth engine in places like Pennsylvania and Ohio. If Biden continues to embrace the basic thrust of the Green New Deal, if not its full-bore socialist program, the impact could be devastating for manufacturing areas that compete with China, which depend largely on natural gas, coal, and nuclear power to keep costs down. These state economies cannot fantasize, as some do in California, that the resulting social costs will be paid for by the wealthy digerati; lacking sufficient numbers of the rich and famous, these states will be hit hard, and fast.

If, as seems likely, victorious Democrats enact legislation broadly derived from the Green New Deal, major blowback – and economic disruption – seems inevitable. Biden and Harris have been almost comically inconsistent in their statements about fracking, but they’re certainly hostile to it: if they win the White House and pursue a ban, it would likely drive higher prices for energy, reduce national energy self-sufficiency, and cause massive job loss among a large number of Americans, particularly in key states like Ohio and Pennsylvania.

Read the rest of this piece at Real Clear Energy.

Joel Kotkin is the author of the just-released book 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 — formerly the Center for Opportunity Urbanism. Learn more at joelkotkin.com and follow him on Twitter @joelkotkin

The Roots of California’s Tattered Economy Were Planted Long Before the Coronavirus Arrived

California is in far worse shape economically than the great majority of other states also struggling through the pandemic. COVID-19 may be the primary cause of our current distress, but the evolving structure of our economy has exacerbated this calamity. The worst part is our state leaders should have known this all along.

In September, California’s unemployment rate was 11%, well above the national average of 7.9%, and better only than two other states in the nation. Since the March lockdown, California, with 12% of the nation’s population, accounts for 16.4% of all U.S. unemployment.

A similar pattern can be seen in our metropolitan areas. Among the 55 largest metro areas in the country, the worst job losses from February to August — outside of Las Vegas and Boston — have occurred in the Bay Area and Los Angeles-Long Beach. By contrast, other metro areas, such as Salt Lake City; Austin, Texas; Dallas-Fort Worth; and San Antonio are doing much better.

Over the past decade, the California economy has been divided, Janus-like, between a rising innovation economy, based largely in the Bay Area, and the rest of the state where 86% of all new jobs have paid below the median income of $66,000, and 48% are under $40,000 a year. Once a beacon of opportunity, the state suffers the highest cost-adjusted poverty rate in the country.

The slow growth in high-wage jobs, particularly outside the Bay Area, contrasts with that of other states — such as Texas, Utah, Colorado, Washington — that have continued to expand middle-income jobs more rapidly in manufacturing and in professional, scientific and technical services, a large industry classification used by the federal Labor Department to include everything from legal work to software developers to accountants.

The consequences of this distorted economy have made the state susceptible to losses in fields like hospitality and other low-end services, which suffered half the initial job losses from the coronavirus shutdowns.

The situation is particularly grim in the Los Angeles region. Over the past two decades, according to an analysis of job growth by UC Irvine professor Ken Murphy, Los Angeles County has suffered almost twice the level of industrial job losses as the nation. During that period, professional and technical service jobs — which are better suited to remote work and have survived the pandemic in reasonably good condition — grew in the region by only 14%, compared with a national increase of 36% in such jobs.

Indeed, from 2000 to the beginning of 2020, L.A. County has led the state in growth of low-paying service jobs, adding 867,000 of them. That represents a 48% increase over the number of those jobs in 2000. Similar growth has been seen in Orange and San Diego counties. Yet between 2008 and 2018, the L.A. area lost 41,000 high-wage jobs.

With the pandemic, this dependency on low-end-job growth has placed the Southland at great risk. The health crisis has wiped out 374,000 of those jobs, a reduction of 23.3%. Overall, Los Angeles has lost 11% of its jobs, Murphy notes, significantly higher than the 8% drop nationally.

In previous recessions, notably after the 2008 financial crisis, Silicon Valley’s job growth, and revenues from initial public offerings and stock price increases, helped bail out the state’s finances, which are once again under stress. With several potential IPOs coming and the rising value of existing tech firms, we could see some help for the state government’s revenue picture.

But that will not help the state recover the lower-wage-job losses or reduce the entrenched inequality making the economy susceptible to rolling catastrophes. Even at full bore, these Silicon Valley firms create few jobs for non-tech workers, with the notable exception of the Tesla factory in Fremont, which employs roughly 10,000 workers.

Even more troubling is evidence that the industry’s willingness to keep high-wage jobs in California appears to be dissipating. Palantir, the data-mining software company, recently announced it was relocating to Denver from Palo Alto. Other tech companies — such as Uber, Tesla, Apple — have committed huge investments in Texas while others have shifted to northern Virginia, Nashville and Phoenix.

Ironically, the biggest threat to California-based jobs may come from the changing nature of technology itself. Employees at the largest tech companies, including Google, Twitter, Pinterest, Facebook and Salesforce, will very likely continue to work remotely even after the pandemic. In a recent survey, three-quarters of high-tech venture funders and founders predicted the same for their workforces. And some 40% of Bay Area tech workers say they would like to move to a less expensive region, which suggests locations outside of California.

For the past three decades, California’s leaders have assumed that the state’s great advantages — superb universities, a large, diverse labor force, international connections — would help us weather economic storms. The pandemic has shown how wrong that is and how much needs to be done to meet this steadily growing economic crisis.

This will require a dramatic shift in state policy, starting with environmental and other regulatory restraints. We should continue our efforts to embrace cleaner climate standards and move forward with lower-emission fossil fuels, such as renewable natural gas, and, when the technology is more economically feasible, gradually shifting completely to non-fossil energy.

Unless trends are reversed, California’s unstable economy will continue to erode. In 2016, an estimated 1,800 companies left, largely for Texas. Between 2009 and 2016, 13,000 companies left the state. Those include traditional middle-class employers such as McKesson, which now has the contract for distributing the COVID-19 vaccine, Toyota, Nissan and Mitsubishi, which have all been moving marketing and production jobs out to other states.

This does not mean we should stop focusing on “innovation sector” jobs. We need to take advantage of the rich vein of intellectual capital California has cultivated over the past four decades. But the state can diversify its economy and keep higher-wage jobs by beefing up its economic development strategies to expedite new facilities and provide incentives for companies willing to locate where working-class people live, providing education for working-class vocations, and creating a formal apprenticeship system in all trades to provide younger people with a path to a solid middle-class income.

These strategies depend on such things as retooling the education system to provide students with the specific skills required for jobs in manufacturing and other non-university-track areas. Almost three out of five California high schoolers are not prepared for either college or a career. The greatest disadvantages are suffered by Latino, African American and poor students, who have long been trapped in the worst, most under-resourced school systems.

The coronavirus pandemic has brought about great suffering for Californians in nearly every aspect of life. It’s time state government leaders focused on developing more economically diverse approaches — not only for recovery, but also to restore real opportunity to most of its residents.

This piece first appeared on Los Angeles Times.


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.

Marshall Toplansky is a clinical assistant professor of management science at the Argyros School of Business and Economics at Chapman University. He is a research fellow at the university’s Hoag Center for Real Estate and Finance and at the Center for Demographics and Policy.

Photo credit: Dave Reichert via Flickr under CC 2.0 License.

Democratic Civil War

The three heads of the Democrat Hydra will soon start biting at each other.

Donald Trump may still sit in the White House, but America seems increasingly submissive to the rule of the Democrats. The Party now enjoys predominant influence over mainstream media, rising influence among wealthy elites, a stranglehold over education and entertainment industries, and the domination of the burgeoning non-profit world. Remarkably the self-styled “party of the people” now accommodates the big Wall Street firms and tech oligarchies alongside the progressive, neo-socialist, activist base and an ever-diminishing remnant of traditional working-class voters.

This powerful coalition is also a fundamentally unstable one—a three-headed hydra whose heads, particularly after Trump leaves, will soon be biting each other furiously. One faction, the corporatist elite, genuflects and even profits from the progressive mantra on climate, gender, and race. Some, like former Twitter CEO Dick Costolo, are so committed to gentry progressivism that he recently suggested those who don’t get with the program could “face a firing squad.” Others, like the Marxists and rioters of BLM, seek a total social revolution and increasingly speak of ending “racial capitalism.”

Many on the Right, having learned nothing since Reagan, simple-mindedly identify each of these two dominant groups as “liberal.” A more accurate assessment would be “corporatist” and “socialist.” Largely left:  the constituency that once drove the Democratic Party—middle-of-the-road voters, many of them in unions, who constitute roughly half of party members. Only 15% of Democrats consider themselves “very liberal.” Along with older African-American voters, these suburban voters, also mostly older, were critical to nominating the lackluster former vice president. They could very well get him into the White House itself.

The Corporatists

The tech oligarchs and their Wall Street allies were clear winners of the Democratic primaries. The so-called “party of the people,” Biden and other Democrats now can count the wealthiest individuals on the planet among its ranks, including former Microsoft CEO Steve Ballmer, Facebook co-founder Dustin Moskowitz, Zynga’s Mark Pincus, Steve Jobs’s widow Lauren, as well as media moguls Michael Bloomberg and Barry Diller.

This pattern, already notable in 2016, can also be seen in 41 of the 50 wealthiest Congressional districts that Democrats now represent. It is now wealthy donors who dominate the party, not the grassroots youth movement agitated by Sanders. This point bears repeating over and over again. This is particularly true in the key battle for the Senate, where most Republicans find themselves overwhelmed by a torrent of oligarchic wealth.

Some oligarchs, such as Jeff Bezos with his mouthpiece the Washington Post, are following along not out of enthusiasm, but at least partially out of naked fear of socialists like Bernie Sanders and Elizabeth Warren. But it’s doubtful even an unhinged San Francisco billionaire like Costolo has much interest in having his wealth and market power disrupted by radicals, who feel, justifiably in my mind, the largely unrestrained oligarchs, and their Wall Street allies, devour far too much of the nation’s wealth and should have much of their property confiscated by the state. After all, both Sanders and his acolyte Alexandria Ocasio-Cortez believe that billionaires “should not exist.”

Read the rest of this piece at American Mind.


Joel Kotkin is the author of the just-released book 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 — formerly the Center for Opportunity Urbanism. Learn more at joelkotkin.com and follow him on Twitter @joelkotkin

Image credit: SilviaP_Design via Wikimedia, in Public Domain.

Americans Won’t Live in the Pod

“No Bourgeois, No Democracy”
Barrington Moore

Protecting and fighting for the middle class regularly dominates rhetoric on the Right and Left. Yet activists on both sides now often seek to undermine single-family home ownership, the linchpin of middle-class aspiration.

The current drive to outlaw single-family zoning—the one protection homeowners possess against unwanted development—has notched bans in the City of Minneapolis and the state of Oregon, with California not far behind. Advocates have tapped an odd alliance of progressives and libertarians. Essentially, it marries two inflexible ideologies, in principle diametrically opposed, but neither of which see housing as a critical element of family and community. In its stead, the Left seeks to place the state in charge, while libertarians bow instinctively to any de-regulatory step they see as increasing “freedom and choice.”

Although couched in noble sentiments, both approaches are fundamentally hostile to both middle- and working-class aspirations. Without a home, the new generation—including minorities—will face a “formidable challenge” in boosting their worth. Property remains key to financial security: Homes today account for roughly two-thirds of the wealth of middle-income Americans while home owners have a median net worth more than 40 times that of renters, according to the Census Bureau. Equally important, a shift from home ownership would also weaken the basis of democracy. Since ancient times, republican institutions have rested on the firmament of dispersed property ownership.

An Odd Time for More Density

The push for ever-greater density and against suburban home ownership could not come at a less propitious time. Even before the pandemic, big cities like New York, Los Angeles, and Chicago were losing population. Since 2010, despite all the talk of a massive “return to the city,” suburbs and exurbs account for about 90% of all metropolitan-area growth. Millennials, often seen as an urban generation, have fueled population growth in the suburbs since 2010.

Millennials have had a hard time buying homes—among post-college millennials (25-34), ownership has dropped from 45.4% in 2000 to 37.0% in 2016, a drop of 18% according to Census Bureau data—but three-quarters want single-family detached houses, according a 2019 report on home buyer preferences by the National Association of Homebuilders. A 2018 Apartment List survey found that 80% of millennials dream of home ownership. Among those under 35 who do buy homes, four-fifths choose single-family detached houses.

This shift has been greatly accelerated by the pandemic, and could gain even more momentum from the rising crime and disorder in many of our core cities. Pew reports roughly one in four Americans either moved on account of COVID-19 or knew someone who did so, with the largest percentages for young people under 30. Since 2018, according to Gallup, the percentage of Americans saying they want to live in cities dropped 55%, down to barely 13%. Rather than the much-ballyhooed “back to the city” movement, we are entering what Zillow describes as “a great reshuffling” to suburbs, smaller cities, and less expensive states. Even non-metro areas, for the first time in over a decade, are beginning to gain population.

The rise of online work is likely to accelerate the trend. Stanford economist Nicholas Bloom projects we will see telecommuting increase from 5% of the workforce before the pandemic to something closer to 20%. More important still, most people now working from home express a preference—some 60% according to Gallup—to do so for the foreseeable future. Even when offices opened early this summer in New York, real estate brokers report, most workers refused to return. And now developers, like KB Homes, are adding home offices to their newest offerings.

These trends will be reinforced by shifts in job markets. A new survey by the Site Selectors guild suggests that only 10% of companies are looking to expand in large cities, one sixth as many as choose suburbs, and a third of those who favor rural areas. Meanwhile major office and residential complexes are being downsized, cancelled, or hit with major price reductions in cities from Chicago and New York to Los Angeles and San Francisco.

Read the rest of this essay on the American Mind.


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: Taxiarchos228 via Wikimedia under CC 3.0 License.