Tag Archive for: economy

Elites are Using Climate Hysteria to Immiserate the Working Class

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Few things in life are as predictable as the rhetoric of climate change summits like this coming week’s in Glasgow. Over the next week, you will hear again and again that the planet is dying and that climate change will cause mass dislocations and starvation. The end is nigh, the UN has told us, and only green house gas reducing penance can save us.

We have been hearing this now for decades, with each global confab upping the ante, insisting that with the inevitable denouement, “not enough” is being done and what we need is to get more militant. And this despite whatever progress has been made.

The climate industrial complex, as economist Bjorn Lonborg has aptly called the climate doomsday crowd, has persuaded the media to indulge consistent exaggeration and predictions that link virtually any weather event— droughts, floods, hurricanes or heavy rains—directly to human caused climate change. As President Obama’s undersecretary of energy for science, physicist Steve Koonin, pointed out, the most widely reported projections reflect only highly improbable worse case scenarios based on such things as ever growing coal usage and no significant technological improvement.

Increasingly, even climate scientists are noting that the constant, and often poorly supported doomsaying threaten the credibility of the movement itself. And there have been quiet reversals; the more extreme predictions have been abandoned or walked back, even by the UN itself. And yet, in the U.S., the vast majority of young Americans continue to believe that we face imminent environmental catastrophe. And Canadian psychologists have found elevated levels of anxiety among young people, some of whom see climate as justifying the decision to not have offspring—not surprising given that they are constantly told that their world will be coming to a catastrophic end.

Of course, some climate change is real and deserving of our attention; it needs to be addressed. But what we need to combat it is not despair, but rather, a willingness to face future climate changes of any kind, including those that may be induced by human activities, with positive effort. The environmental movement needs to give up “utopian fantasies,” writes Ted Nordhaus, a longtime California environmentalist, and “make its peace with modernity and technology.”

A mix of diverse options from nuclear power and hydroelectric generation to replacing coal with abundant, cleaner natural gas and geothermal, as well as entirely new innovations could reduce emissions over time without catastrophic economic and social consequences. This is particularly true in the developing world that remains critically short of reliable, affordable energy.

Read the rest of this piece at Newsweek.

Joel Kotkin is the author of The Coming of Neo-Feudalism: A Warning to the Global Middle Class. He is the Roger Hobbs 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: UK Government via Wikimedia under OGL v.3.

To Make Homeownership Affordable in California, Rethink the Suburbs

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California’s future as a place of aspiration is fading for all but the wealthiest residents — with that promise nearly out of reach for young people and new immigrants.

This state has become a place marked both by spectacular successes and by not-so-welcome superlatives. The rise of the tech giants, engines of wealth creation, coexists with the nation’s highest cost-adjusted poverty rate, the second-lowest rate of homeownership among the states and the greatest concentration of overcrowded housing in the nation.

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America the Indispensable

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God has a special providence for fools, drunkards, and the United States of America.
~Otto von Bismarck

Post-millennium America does not look good at a glance. The country has struggled with the pandemic and with deepening divisions over race, class, inequality, and culture. It is in the humiliating process of losing another war, this time in Afghanistan. Since 2016, the world’s largest economy has been presided over first by the buffoonish and occasionally deranged Donald Trump, and then by an aging Joe Biden who bears scant resemblance to Franklin Roosevelt.

Yet, despite its manifest failings—the assault on the Capitol by Trump’s supporters was not a good image builder—the US remains the indispensable country, the last major counterforce to the rising authoritarian challenge of China, and its growing list of allies, including perhaps the new Islamist regime in Kabul. It remains, without question, the only nation with the natural resources, population, military, and technical skill to rally the West and salvage its threatened legacy.

The US routinely rises to the challenge late, a pattern evident in both World Wars, the initial period of the Cold War, the response to China’s late 20th century industrial juggernaut, and the terrorist threat. But in the end, it remains a huge and blessed land with enormous sokojikara, or “reserve power,” as Japanese political scientist Fuji Kamiya described it decades ago, that allows it to overcome competitors.

The case for America

Pessimism about America’s direction has resurged, following a brief improvement when Biden became president. According to an ABC/Ipsos poll, Americans’ optimism about the country’s direction has dropped 20 points since May. Concern is growing that the country is in a  precipitous decline, something that won’t improve with the bleak images from the Afghani debacle. Most Europeans believe that China will soon replace America as the world’s economic powerhouse. The Chinese, unsurprisingly, seem to feel the same. In a since-deleted tweet, Ministry official Zhao Lijian described Western efforts to slow China’s dominion as being “as stupid as Don Quixote versus the windmills … China’s win is unstoppable.”

So will our children—now living in unhappy and increasingly divided societies—grow up kowtowing to the Mandarins? Without America, that’s the future for the West and everyone else. Europe, politically divided, demographically stagnant, and anti-American, lacks the capacity and willingness to resist. Germany appears unwilling to stand up to either its largest trading partner, China, or to its now-favored supplier of energy, Russia. Weaker European states, such as Italy, the Czech Republic, Greece, Macedonia, Montenegro, Poland, Portugal, Serbia, and even rightwing favorite Hungary have signed up to be cogs in China’s “Belt and Road initiative.” Asia’s democracies can’t hack it without America. Japan is a rich but aging country that lacks much forward momentum, something that can also be said of South Korea. India is still too poor and chaotic to match China’s regimented power.

Nevertheless, as Bismarck suggested, it’s not usually a good idea to bet against the United States. Trump’s disruptive interlude, notes Walter Russell Mead, may have concentrated the minds of others, creating “new leverage” for the US now that its support, particularly on the military side, can never again be taken for granted, particularly if they don’t seem willing to fight for themselves. Some countries, like the Philippines, have already reconsidered their China links and moved closer to Washington. Even some Europeans, notably France’s Emmanuel Macron, are ready to consider China as a strategic “rival.”

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.

Homepage photo: Osman Rana, via Unsplash.

California Fleeing

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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

Fully Oligarchic Luxury Socialism

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What happens in California matters well beyond its borders. The Golden State’s cultural and technological influence on America, and the world, now could provide the nation’s next political template.

What California is creating can be best described as oligarchic socialism, a form of collectivism that combines hierarchy with “equity,” regulation with oligopoly, and progressive intentions with feudal results. Read more

The American Renaissance Has Begun

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By: David Brooks
Appearing in: The New York Times

Americans are searching for ways to make more money while living more connected lives. Joel Kotkin, a professor of urban studies at Chapman University, points out that as the U.S. population disperses, economic and cultural gaps between coastal cities and inland communities will most likely shrink. And, he says, as more and more immigrants settle in rural areas and small towns, their presence might reduce nativism and increase economic competitiveness.

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Winners and Losers: The Global Economy After COVID

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The COVID-19 pandemic has transformed the world economy in ways that will be debated by pundits and future historians for decades to come. Yet, as hard as it is to predict a disrupted future accurately, the pandemic (not to mention its probable successors) looks likely to produce clear economic winners and losers. The top digital companies—Amazon, Apple, Tencent, Microsoft, Google, Facebook, Ant, Netflix, and Hulu—have thrived during quarantines and the ongoing dispersion of work. These are the most obvious winners in what leftist author Naomi Klein has called a “Screen New Deal” that seeks to create a “permanent and profitable no-touch future.” Since 2019, Facebook, Apple, Amazon, Microsoft, and Google have added over two-and-a-half trillion dollars to their combined valuation, and all enjoyed record breaking profits in 2020.

But it’s not just the tech oligarchs who have benefited from the pandemic disruption. Companies that keep the basic economy functioning—firms dealing in logistics, for example, or critical metals or food processing—have become, if anything, even more important. With the shipping supply chain disrupted due to the pandemic, logistics giant Maersk is set to increase its inland-based operation with the acquisition of the Swiss-based broker KGH Customs Services. The company reported its best quarter ever in the first quarter of 2021, launching a $5 billion share buyback scheme. And although the developing world has been hit hard by declines in tourism and investment, mining giants such as Glencore are investing billions to challenge China’s market dominance in rare earth minerals. The global market for cobalt is expected to double by 2025 and has launched a new “scramble for Africa,” which is also raising moral questions about whether or not the green oligarch’s love of the planet outweighs human rights abuses such as the practice of child labor in the Democratic Republic of Congo.

Even some high street businesses which have taken major hits are finding new niches. Many small businesses may never return to pre-COVID levels, as people have become used to the convenience of online purchases. Nevertheless, some are finding new uses for redundant malls, and have discovered new ways to reach more customers using social media and technology. Lower property prices are also opening up potential opportunities for entrepreneurs in pricey places such as Manhattan, San Francisco, or London. Pestilence re-shapes economies.

In his 2017 book The Fate of Rome: Climate, Disease, and the End of an Empire, historian Kyle Harper argues that plague, as well as climate change, undermined the Roman empire, creating conditions that boosted the barbarian warlords who would later become the Medieval aristocracy. The lethal plagues of the Middle Ages likewise disrupted the great Mongol empire, at the time the largest in history, and in conjunction with cooling temperatures, undermined the stability of the great Silk Road and ended the Pax Mongolica. This opened the door to the Age of Exploration and Europe’s maritime conquest of the world. Within Medieval Europe, the Black Death killed as much as 40 percent of the population, but also precipitated the rise of the Third Estate, and in some places raised wages for scarce labor. “People were fewer,” noted historian Barbara Tuchman, “but they ate better. The pandemic also led to greater emphasis on long-distance navigation.”

During the current crisis, disintermediation has been the primary driver of the post-pandemic economy. The novel coronavirus forced businesses to adapt quickly to new circumstances, and as with all economic crises, created winners and losers. The lockdowns accelerated the use of digital technology for work, retail, and entertainment. This has not only helped the big firms but also produced a whole crop of new startups, many of which address the shift to online work. The tech oligarchies now face competition from decentralized networks based on blockchain technology which is less vulnerable to domination by giant firms with algorithms that are designed to eliminate the incentive structures that lead to central node control and promote monopolistic behavior. Domains such as Lokinet, Ethereum, Odysee, and Urbit seek to give users ownership of their own data. Even Google’s near-monopoly of web browser supremacy is set to be challenged by data-privacy-conscious alternatives such as DuckDuckGo, which has seen a 62 percent growth in search results in 2020. Users are clearly becoming more conscious of privacy and data ownership.

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.

Hügo Krüger is a Structural Engineer with working experience in the Nuclear, Concrete and Oil and Gas Industry. He was born in Pretoria South Africa and moved to France in 2015. He holds a Bachelors Degree in Civil Engineering from the University of Pretoria and a Masters degree in Nuclear Structures from the École spéciale des travaux publics, du bâtiment et de l’industrie (ESTP Paris). He frequently contributes to the South African English blog Rational Standard and the Afrikaans Newspaper Rapport. He fluently speaks French, Germany, English and Afrikaans. His interests include politics, economics, public policy, history, languages, Krav Maga and Structural Engineering.

Homepage photo: Steve Jurvetson, via Flickr under CC 2.0 License.

The Green New Deal will Impoverish America

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‘The interesting thing about the Green New Deal is it wasn’t originally a climate thing at all… Do you guys think of it as a climate thing? Because we really think of it as a how-do-you-change-the-entire-economy thing.’ So said Saikat Chakrabarti, former chief of staff for Alexandria Ocasio-Cortez, and generally acknowledged author of the Green New Deal.

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Who Will Control the 21st Century? Whoever Controls Space

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It’s impossible to predict the future. But one thing you can be sure of: few things will be more important to the lives of our children than who wins the emerging, epoch-defining struggle for control of space.

This is a battle just beginning over who will control the communication satellites so central to our economy, as well as the vast resources of other planets. But ultimately, the new space battle represents a war over opportunities for colonization, for an increasingly resource-stretched and crowded earth.

This may sound like apocalyptic sci-fi. But space is already becoming big business, and it’s certain to get much bigger. Boosted by a huge surge of investment, space-industry global revenues are up more than twofold since the early 2000s, from $175 billion in 2005 to almost $424 billion in 2019. By 2040, Morgan Stanley projects annual global space-industry revenues to reach $1.2 trillion.

Today the big money—$271 billion of it—is in communications satellites and launch services. Soon enough, there may be a market for things like space tourism, manufacturing in space and even, eventually, the old dream of colonization.

But in the long run, the key struggle will be over military applications, and, perhaps even more critical, control of valuable resources. The monetary potential in mining key resources like lithium, cobalt and gold has been estimated to be as high as 27 quintillion dollars.

But the space war is not just about money. It’s also about power. And America faces a challenge on the galactic front from China, Russia, the European Union, Japan, and even Israel. And as Brandon Weichert notes in his book Winning Space: How America Remains a Superpower, America’s claim to being the world’s superpower rests to a large degree on winning the space front.

Right now, military advantage clearly remains a prime motivator. Control of satellites is crucial to any future conflict, as militaries depend on satellite communications for both surveillance and battlefield operations. The winner of future “star wars” will be those who can control access to space.

Unfortunately for the U.S., China is very aware of this. Ye Penjiang, the head of its moon program, views space from an imperial perspective, comparing it to the islands China is occupying or creating in the South Seas. Penjiang has gone so far as to suggest that China’s “descendants” would never forgive them for giving up this new realm.

So it’s not surprising that Chinese young people now dream of being astronauts, like Americans in the 1960s, while most of our young people seem more interested in becoming social media influencers, more like Justin Bieber than Buzz Aldrin as Weichert archly put it.

Read the rest of this piece at Newsweek.

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.

Homepage photo credit: SpaceX, via Flickr used under CC 2.0 License.

The California Economy vs. Sacramento

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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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