Monday, March 09, 2009

Maybe these two things I'm about to present have no connection, nothing in common. Or maybe, taken together, they're suggesting something about our future that we'd better figure out. I'm honestly not sure myself.

Item One is Richard Florida's much-discussed cover story in the current Atlantic, "How the Crash Will Reshape America." Florida brings his usual thesis to this analysis: cities with vibrant intellectual ecosystems populated by knowledge workers will thrive, or in this case suffer relatively less. New York in particular is cited as a "winner" in the post-recession economy (though how much consolation this will provide the upwardly revised estimated 270,000 New Yorkers who will lose their jobs is unknown). The southwest and the suburbs in general are losers in his scenario, bringing Florida somewhat in line with James Howard Kunstler's "Long Emergency" theory, and for somewhat the same reason: shrinking oil supplies and tighter credit markets will render headlong development unsustainable. Additionally, Florida sees the crash auguring the final disappearance of the old manufacturing communities scattered throughout the Rust Belt as well as in the non-unionized south. And though he's considerably less dire and dramatic about it, Florida again echoes Kunstler in suggesting that the crash will bring to a close the developmental patterns of the last sixty-plus years:

[W]e 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.

But different eras favor different places, along with the industries and lifestyles those places embody. Band-Aids and bailouts cannot change that. Neither auto-company rescue packages nor policies designed to artificially prop up housing prices will position the country for renewed growth, at least not of the sustainable variety. We need to let demand for the key products and lifestyles of the old order fall, and begin building a new economy, based on a new geography.

What will this geography look like? It will likely be sparser in the Midwest and also, ultimately, in those parts of the Southeast that are dependent on manufacturing. Its suburbs will be thinner and its houses, perhaps, smaller. Some of its southwestern cities will grow less quickly. Its great mega-regions will rise farther upward and extend farther outward. It will feature a lower rate of homeownership, and a more mobile population of renters. In short, it will be a more concentrated geography, one that allows more people to mix more freely and interact more efficiently in a discrete number of dense, innovative mega-regions and creative cities. Serendipitously, it will be a landscape suited to a world in which petroleum is no longer cheap by any measure. But most of all, it will be a landscape that can accommodate and accelerate invention, innovation, and creation—the activities in which the U.S. still holds a big competitive advantage.

The imagination can run away from one pretty quickly in this scenario: I start thinking about abandoned suburbs turning into ghost towns or even tourist attractions like the frontier communities of the Old West, or vast swaths of "the heartland" reverting to nature. (Though I guess as long as the land remains arable, we'll grow food on it--just that no other jobs will be there, and hence no people.)

But the changing economic landscape brings me to Item Two: an analysis piece from last Friday's Times. In the wake of news that the U.S. economy shed another 651,000 jobs in February, there's a growing realization among analysts that a lot of the jobs we've lost are gone for good:

“These jobs aren’t coming back,” said John E. Silvia, chief economist at Wachovia in Charlotte, N.C. “A lot of production either isn’t going to happen at all, or it’s going to happen somewhere other than the United States. There are going to be fewer stores, fewer factories, fewer financial services operations. Firms are making strategic decisions that they don’t want to be in their businesses.”

This dynamic has proved true in past recessions as well, with fading industries pushed to the brink during downturns before others emerged to create jobs when economic growth inevitably resumed. But with job losses so enormous over such a short period of time, some economists argue that the latest crisis challenges the traditional American response to hard times.

For decades, the government has reacted to downturns by handing out temporary unemployment insurance checks, relying upon the resumption of economic growth to restore the jobs lost. This time, the government needs to place a greater emphasis on retraining workers for other careers, these economists say.
The stimulus spending bill signed last month includes $4.5 billion for job training. That only begins to address an area long neglected, said Andrew Stettner, deputy director of the National Employment Law Project in New York. In current dollars, the nation devoted the equivalent of $20 billion a year to job training in 1979, compared with only $6 billion last year, Mr. Stettner said.

“We have to seriously look at fundamentally rebuilding the economy,” he said. “You’ve got to use this moment to retrain for jobs.”

Naturally, I agree with Andy (whom I know a bit and have done some work with). If anything, I think he understates the extent of federal disinvestment in job training over the last three decades: as I recall, as a nation we spent closer to the equivalent of $30 billion in the mid-1970s, compared to less than $4 billion a few years ago. Given that the economy in the meantime has become only more reliant upon educational attainment and skills mastery, to say we've been going in the wrong direction is an enormous understatement.

But at the risk of basically repeating my last post, the problem is that "job training" isn't really what we need right now, at least not as it's come to be understood: short-term preparation, through soft skills or specific instruction, for a relatively menial job, at which point the individual receiving help pretty much is wished the best of luck. What's required is a massive investment in post-secondary education, something more like the GI Bill than any New Deal legislation. Eliot Spitzer, of all people, articulated a good idea about how to do this in a recent Slate column. (It's really too bad that Spitzer rendered himself a joke for the rest of his life; this guy was a quality public servant, even if personality-wise he was pretty much William Rawls with a lot more power.) It's hard to imagine much public sympathy for such an undertaking right now, though--despite the fact that without it, we won't be able to fully populate Florida's "landscape that can accommodate and accelerate invention, innovation, and creation."

Whether we're talking about new spatial arrangements or new economic patterns that require a fundamental reorientation of the workforce and an unprecedentedly large bet on human capital, it seems clear that big changes will be needed; things aren't going back to the way they were. I'm starting to believe that until we as a country internalize this truth, there's no chance we'll pull out of the tailspin.

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