Rebuilding Place in the Urban Space

"A community’s physical form, rather than its land uses, is its most intrinsic and enduring characteristic." [Katz, EPA] This blog focuses on place and placemaking and all that makes it work--historic preservation, urban design, transportation, asset-based community development, arts & cultural development, commercial district revitalization, tourism & destination development, and quality of life advocacy--along with doses of civic engagement and good governance watchdogging.

Tuesday, November 06, 2012

The global economy, societal restructuring and the U.S. Presidential Election

Image from the article "In tiny Romney, Texas, someone paints 'Obama' on the town sign," in the Dallas Morning News.

So, today is the U.S. Presidential Election and therefore a terrifying moment in the context of "We the People" and the future of the United States in terms of competitiveness and positioning in the global economy.

1.  With an increasingly interconnected, global economy (e.g., Friedman's The World Is Flat) the U.S. can no longer command extranormal wages, profits, and resources vis-a-vis other nations.

This is an ongoing process of the restructuring of American Political Economy that started in earnest with the Gasoline Crisis of 1973, when OPEC increased the price of gasoline, and the U.S. economy cratered in response.

2.  The interconnected global labor market means that wages are pushed down in the U.S. as more and more sectors of the economy are subject to outsourcing, even mortgage servicing ("U.S. jobs or more outsourcing? Future is unclear for one mortgage servicing firm" from the Washington Post).

Why industry can't figure out that American consumer economic demand decreases as more jobs are outsourced (and more wealth is increasingly captured by the top 1% and 5% of the U.S. population) is beyond me.

3.  And various sectors of the American economy are forced to restructure in response, including the US-based auto industry, parts of the finance industry definitely and local government ("Bankruptcy filings may rein in pensions" from the Lompoc Record, "Inquirer Poll: N.J. majority backs consolidating government" from the Philadelphia Inquirer, and ""Baltimore Co. AFSCME members rally against Kamenetz" from the Baltimore Sun), state government ("Gov. Christie signs N.J. higher education merger bill" from the Newark Star-Ledger and various press coverage of budget deficits in states including California and Arizona, the elimination of collective bargaining rights for municipal unions by Wisconsin Governor Scott Walker-- AP photo of the protests in Wisconsin, above--etc.) and the federal government, as indicated by various budget debacles in Congress, budget cutbacks, the threat of sequestration, etc.

A 1965 Pontiac GTO unveiled at an automobile showLeft: a Pontiac GTO at an Automobile Show in 1965.

4.  This is very painful, and not so much about "socialism" but about state capitalism and what "political economists" call the Neoliberal agenda (e.g., "Neo-liberalism and the Market State: What is the Ideal Shell" by Richard Robison ) in favor of "the free market" and the reduction of involvement of the national government in regulation.

From "Neoliberalism's 'trade not aid' approach to development ignored past lessons: Neoliberal development policy was radical and abstract, but its uncompromising approach proved dangerous in the real world" in the Guardian:

Neoliberalism is often used today as shorthand for any idea that is pro-market and anti-government intervention, but it is actually more specific than this. Above all, it is the harnessing of such policies to support the interests of big business, transnational corporations and finance. It seeks not so much a free market, therefore, as a market free for powerful interests.

The problem with the faith in the free market is that on a global scale corporations are much larger, less connected to the fortunes of any one country, much harder to regulate and oversee, and individuals (labor, etc.) lack countervailing size and protections.  And failures are potentially much more catastrophic with the potential for interconnected cascading negative effects.

The economic crash in the Fall of 2008 is a perfect example of cascading catastrophic failures throughout the international economic system.  Combine that with increasing worldwide demand for natural resources, particularly by China, and the economic drag of US wars in the Middle East and in the US, you have real problems.

5.  So while someone like me would see the US government's response of providing capital to the auto industry and the financial sector as an example of how government is controlled by capital, somehow the "Tea Party" response is that this is an example of Socialism, and how Government is taking over society.  

I understand the anger about the lack of sanctions against the people who almost brought down the US economy, but why wasn't the anger directed at them, instead of President Obama?

6.  Relatedly, while I think it was mishandled in many significant ways, I think the issue of what is now derided as "Obamacare," various changes in the provision of health care in the US, but still not national health care in the way it is provided in Canada or many European countries--is a necessary element of economic and political restructuring in the face of global political economic changes, and how the drag on the economy and society from how health care is provided mostly (c.f. "Kaiser Permanente CEO on saving lives, money" from USA Today) is unsustainable, especially if we have to reduce spending in wasteful ways as an attempt to maintain the "American standard of living."

7.  Mostly, we are not looking at the Federal Government (and the election) in these terms.  And even though tonight we'll know, pretty much, what's up with the election (see the Bloomberg story "Clues to Obama-Romney Outcome Lie in Three Eastern States"), we can't say the same for the future of American Political Economy.

Housewife in Kitchen, 1940Left: image by Victor Keppler, 1940.  A housewife in her kitchen.

8.  If we want to be successful as a society and as an economy, we do have to restructure in significant ways.

That doesn't mean socialism, but it does mean reorganizing how we deliver the "American Way of Life" and whether or not the predominate method for doing so  is affordable, sustainable, equitable and produces value and wealth rather than destroys it.

In an article in Financial Times Deutschland ("Urban boom: America's return to the cities") I was quoted on this, saying how the "back to the cities" movement combined with the adoption of sustainable transportation modes is the best way for American households to change their spending and living patterns in a manner where decline in quality of life is minimized, even if they are making and spending less money.

9.  The three biggest areas where we ought to restructure how U.S. society as a whole organizes "exchange" include health care, transportation, and land use and the spatial organization of metropolitan areas.

I already mentioned health care.  How can we spend more money per capita than any other nation on health care?, yet 40 million people don't have health insurance, our society is increasingly unhealthy (the rates of obesity and other lifestyle-choice related diseases continue to escalate), hospitals are closing, and most of the money spent on health care for the average person is spent during the last month of their life?

Left: Shortly before the gas ran out, customers wait in line at a Hess station where the line of cars snaked 10 blocks, and at least 60 people waited to fill red gas cans for their generators, in the Gowanus section of Brooklyn, New York, Oct 2, 2012. David Caruso/AP Photo.

We can't afford economic dependence on a gasoline-based economy for transportation.

Look at the impact of reduced supplies in the Northeast (New Jersey has imposed rationing) post Superstorm Sandy.

Plus, how many households, in an economy where wage growth is stagnant at best for all but the 1%, can continue to afford to spend 20% (or more as gasoline prices continue to increase in the face of world demand, even with increasing supplies in the US) on transportation?  (See Newman and Kenworthy's research on how metropolitan economies with a greater use of transit have higher incomes, such as "The Ten Myths of Automobile Dependence.")

William Levitt on Time Magazine CoverSprawl is probably the cause of more destruction of wealth and slack resources in the US economy than anything else.

The painful reorganization of suburban economies and governments will be underway for a long time.

And except in the most successful metropolitan areas, property values of residential subdivisions located far from the core of a region will continue to languish.

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At 12:44 PM, Anonymous charlie said...

globalization: very true, national political choice can make a difference here. See Jeep building factory in China to get over tariff, or Foxconn building factory in Brazil to do the same

healthcare; RommneyCare/Obamacare has not been succesful in Massachusetts on cost containment. In terms of outcomes, I also don't think it is making a major difference. Something like 3% of the population is resonsible for 95% of heathcare costs.

Urbanism: I'd agree Obama is probably better than Romney, but again Obama has not been strong. With hybrid/electric/increased CAFE in the near future, we may be reaching peak-transit and a return to the personal vehicle.

At 1:17 PM, Blogger Richard Layman said...

good thing I don't have children, even if the next door neighbor children are almost like nieces...


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