The Redemption of Richard Florida

Image via the American Conservative

My in-depth review of Richard Florida’s new book The New Urban Crisis is online in the July/August issue of The American Conservative magazine. Even if you’ve read other reviews of this book aleady, I have some unique takes on it. Here’s an excerpt:

With his rock-star looks and positions as senior editor of The Atlantic, head of the University of Toronto’s Martin Prosperity Institute, and visiting professor at New York University, Richard Florida is the highest-profile urbanist in the country—and has been for over a decade. In all my travels, he and his creative-class theory are nigh universally cited. To the extent that civic leaders across America understand the criticality of human capital and talent in the 21st-century economy, it’s because of him.

In his 2002 bestseller, The Rise of the Creative Class, Florida described how the world economy was being transformed by high-performing workers who specialize in innovation. Though he originally distinguished this creative class from white-collar knowledge workers generally, today the two terms are largely synonymous in the public mind and Florida’s analyses. In effect, he developed a sexy way to talk about the increasing criticality of talent to economic success—and it catapulted him to superstardom.

The problem for Florida is that the economic transformation he once celebrated has a dark side that he failed to predict. His newest book, The New Urban Crisis, is Florida’s attempt to grapple with the downsides of the trends he popularized. Among the negative aspects of these changes are an economy that disproportionately rewards “superstar” cities like New York and San Francisco (something he calls “winner-take-all urbanism”), rising income inequality, persistent racial segregation, increasing suburban poverty, and the decline of urban middle-class neighborhoods, resulting in a barbell-shaped economy of rich and poor.

Click through to read the whole thing.


from Aaron M. Renn

Trouble In Trump County, USA

Image via City Journal

Small town Austin, Indiana in Scott County made national headlines last year when it had 203 newly contracted cases of HIV in only about a year and half. This was caused by needle sharing from addicts injecting the prescription drug Opana. Scott County became one of the symbols of working class malaise during the election.

I have a major feature article on Scott County in a special issue of City Journal. It explores Scott County’s history and problems, and more importantly, what they’ve been doing about it with some success.

Dr. Jerome Adams, whom I interviewed for the piece and is quoted several times, was recently nominated by President Trump to be Surgeon General. I was very impressed with Dr. Adams when I met him.

Here’s a sample from the article:

Taken together, the employment crisis and the social dysfunction produce a sense of malaise in some places. People almost always wave, smile, and say hello in small-town Indiana; but in Austin, for instance, only one person I saw even acknowledged my presence while I drove around. The rest just shambled about with blank stares. One local assured me that had my wife not been with me in the car, prostitutes would surely have approached me, soliciting for money to buy drugs. Scottsburg looks much better, with a healthy business district centered on its interstate interchange, but it, too, has troubles, such as significant retail-storefront vacancy on its courthouse square.

The difficulties of communities like Scott are all the more striking, considering the region’s economic strengths. Scott is part of the federally defined Louisville metro area. The inclusion of rural areas within metro regions is not unusual. America’s metro areas are defined by commuting patterns, and they include large rural zones. To say that America is a metropolitan nation—86 percent of the country lives in metro areas—doesn’t mean that it all looks like Chicago or New York. Most of the metropolitan population is in suburban and even rural areas, and many rural areas, like Scott, are within easy commuting distance of a city. In Scott’s case, that city is the center of a bustling regional economy that is home to major corporations like Brown-Forman, Humana, and Yum! Foods (parent company of Kentucky Fried Chicken, Pizza Hut, and Taco Bell). In the last five years, the Louisville metro area added 75,300 jobs—a growth rate of 12.9 percent. Manufacturing grew 31.6 percent, adding 19,600 jobs. Ford maintains a major auto-assembly plant there, and General Electric still manufactures appliances in the city. Louisville is also the site of UPS’s primary global air hub. The shipping firm employs more than 20,000 people and supports a major distribution infrastructure.

Beyond fighting back against drugs and HIV, Scott County has also made a good start on retraining workers to help them find jobs and offering inducements to attract employers. The main effort on both counts is Scottsburg’s new $10 million Mid-America Science Park, financed half from stimulus funds and half from reserves in the local Tax Increment Financing district. Despite its own serious troubles, the county generously delayed the science park’s planned 2012 opening so that it could be used as a temporary high school after a tornado destroyed nearby (Clark County) Henryville’s building. Today the science park hosts training facilities for workers and high school students. IvyTech, Indiana’s community-college system, has opened a campus there.

Some training is employer-specific. For example, Jeffboat in nearby Jeffersonville, America’s largest inland shipbuilder, donated a special welding training machine to help people learn how to perform the extra-thick welds needed on the barges that it constructs. The science park’s goal is to become, in effect, an outsourced training department for employers—albeit one they don’t have to pay for. Mayor Graham tells local companies: “My goal is that if you need any training done, I’ll do it. You won’t have to do it.” This wouldn’t just be for new hires. “It’s also for our incumbent workers,” Graham says. “If they need to get their skills upgraded—and they do—they can come here and take some training.”

Click through to read the whole thing. Even if you’ve read about Scott County before, this piece has a lot you haven’t already read elsewhere. It’s an important read for anyone working in or with similar struggling communities.

from Aaron M. Renn

The Superstar Effect, Tennis Edition

Photo Credit: Tatiana from Moscow, CC BY-SA 2.0

It is obvious that the information age, by homogenizing our tastes, is causing the unfairness to be even more acute—those who win capture almost all the customers – Nassim Taleb, Fooled by Randomness

The Financial Times highlighted an example of the superstar effect in its editorial calling for professional tennis to pay its losers more.

Even more than team sports such as football, where top players earn a fortune while those lower down get squeezed, tennis is a winner-takes-all activity. Roger Federer, who is enjoying a renaissance at the age of 35, is the world’s fourth wealthiest athlete, gaining $6m in prizes and $58m in sponsorship in the past year and accumulating $104m prize money in his career.

It is another story for the less talented on the circuit, having to pay for equipment, hotels and food while competing to remain in each tournament long enough to get paid. A study by the International Tennis Federation found that the average male tennis player in 2013 earned $32,640 and had expenses of $38,800. For many, the game is an unprofitable racket.

There are people who are professional tennis players – at the very top of the skill level of the sport by almost any measure – who are losing money while the top stars rake in gigantic sums. This is the move towards a more “winner takes all” model that we see being prevalent in a number of areas today.

As I point out, the gap is not just between the upper middle class and the working class as is written about in the media constantly, but also withing the ranks of successful people and cities. The “second tier successful” often have a much more precarious position than people realize.

from Aaron M. Renn

Diners and the Decline of Shared Social Institutions

Photo Credit: Coyote-mania, CC BY-SA 3.0

Grub Street posted another installment in the decline of the New York diner genre.

I’ve made the point before that many of these old line institutions are going out of business because their product simply isn’t very good. I’m a fan of diner food, but I’ve never had a good meal in a Manhattan diner.

But there are many other forces at work, including changes in the structure of our society. One thing the disappearance of diners illustrates is the loss of shared social infrastructure spanning across social classes.

Something I’ve always liked about diners is that they are the kinds of places that you could find people from all walk of life. There were cops and blue collar workers, college students, professionals grabbing breakfast, etc. It was the kind of institution that was broadly patronized across social groups.

These kinds of institutions are in decline. There has a been fragmentation of the shared American common culture that existed as recently as 1990 into a multiplicity of niche markets.

There’s also been a gulf that has opened between the consumption and cultural practices of the upper middle class (the top 20% by education and income) and everyone else. They shop in different stores, eat in different restaurants, drink different beers, etc.

There are fewer of the spaces were classes intersect as they did in diner. There are still NYC restaurants where multi-class patronage does occur – pizza by the slice places and delis come to mind. Those are both great. But in my experience, in diners it’s more likely that people will actually strike up a conversation with others, and thus have real cross-class conversation, even if just idle banter.

So the decline of the diner is not just about the loss of a restaurant format – those come and go – but also the decline of shared social space and the increasing alienation between social classes and groups.

You might also like: The fact that you get to interact in a positive way with people of so many different backgrounds is why I love jury duty.

from Aaron M. Renn

Rahm Emanuel and the Art of the Troll

In the last couple of years, both Boston and Washington experienced epic high profile transit meltdowns. Now it’s New York’s turn to suffer.

What city have we not heard about lately when it comes to transit fiascoes? Chicago.

Chicago Mayor Rahm Emanuel, seeing an opportunity, penned an op-ed in the New York Times given the provocative title “In Chicago, the Trains Actually Run on Time“:

The L, Chicago’s system, turned 125 this year. The elevated railway began as four wooden cars powered by coal and steam. Last year, more than 238 million rides were taken on the system, which, unlike the ones in New York and Washington, has not been troubled by systemic failures, breakdowns and delays. Even during a 28-day stretch of arctic temperatures in 2014, the L was never interrupted.

How have we done it? First, we put reliability ahead of expansion. We focused relentlessly on modernizing tracks, signals, switches, stations and cars before extending lines to new destinations. Unlike New York, which has spent billions to reach Hudson Yards, or Washington, which has concentrated on trying to reach Dulles Airport (both laudable projects), Chicago has improved the existing system.

This triggered quite a bit of national and New York media coverage and blow back, such as the Daily News cover above. This includes articles in the Post, Gothamist, the Hill, and Fortune.

I would have to rate this op-ed as a big success. Rahm Emanuel successfully used trolling to gain a lot of attention for himself and his city on a subject where he had a good story to tell.

The fact that much of the coverage was negative doesn’t detract from that at all.  All the tabloids are doing is focusing attention a) on Chicago and b) on a subject where Chicago is actually doing well. Read the Daily News piece and despite the cover, it delivers plenty of good marketing for Chicago’s transit system.

Yes, this came with the downside of brining crime into view. But Chicago is already nationally well-known for crime. So nothing new there. It was not yet known for better transit. Now it is.

In fact, there are lessons to be learned from Chicago’s transit approach. For example, Chicago shut down the Dan Ryan L for several months to expedite repairs. New York is dipping its toe into the water on that with M and L train shutdowns. More of this will likely be necessary.

Regardless, this shows the power of troll style marketing tactics in a social media age. Score one for Rahm on this one.


from Aaron M. Renn

How Connecticut Ended Up as the Odd Man Out

Stamford, Connecticut. Photo Credit: Lee Cannon, CC BY-SA 2.0

The Atlantic’s Derek Thompson has a nice piece out called “What on Earth Is Wrong With Connecticut?” that summarizes the problems with the Nutmeg State.

Despite being the richest state in the country, by per-capita income, Connecticut’s budget is a mess. Its pensions are woefully under-funded. Its deficit is projected to surpass $2 billion, or 12 percent of its total annual tax revenue. Hartford is approaching bankruptcy. Conservatives look at Connecticut and see a liberal dystopia, where high taxes have ruined the economy. Liberals, on the other hand, see a capitalist horror show, where the rich dwell in gilded mansions, ensconced in sylvan culs-de-sac, while nearby towns face rising poverty and bankruptcy. Why is America’s richest state floundering?

The first answer is: Corporations are leaving. Aetna, the insurance giant, is leaving Hartford, where it was founded 150 years ago. In early 2016, General Electric announced that it would move its global headquarters from Fairfield, Connecticut, to Boston. Caterpillar, Motorola, and Kraft Heinz have all moved offices or employees out of the state, as well.

The second answer is: People are leaving. It’s rare for any state to actually shrink, but Connecticut’s population has been falling for three straight years. Meanwhile, only Michigan, Ohio, and Mississippi had slower job growth than Connecticut did over the last two decades, according to Jed Kolko, the chief economist at Indeed, a job site.

Thompson references my analysis that one problem with Connecticut is that it is getting squeezed at both ends. At the high end, cities are back in fashion for top level executive jobs. You see this in the rise of the executive headquarters. At the low end, cities like Dallas and Charlotte are hoovering up white collar jobs in the back office.

The suburban office park might not be dead, but it’s an endangered species in high cost states like Connecticut.

A couple of other points about Connecticut.

First, the state didn’t even have an income tax until 1991. Connecticut was originally not just a suburban refuge from urban dysfunction, it was also a tax haven. Now it’s one of America’s highest tax states overall.

Secondly, a nugget about the Aetna executive headquarters relocation should cause locals to dig in more deeply. The Wall Street Journal noted that, “Many of the 250 employees that will be working at the new New York office will be new positions, according to an Aetna spokesman.”

It could be that this is referring to support staff, and Aetna is trying to soften the blow to Hartford. But remember, this is an executive HQ populated by top executives. Consider some other explanations for this that are more troubling for Connecticut, such as that Aetna couldn’t fill the positions in Hartford. Or worse, Aetna is looking to make personnel changes, suggesting challenges in the Connecticut talent base. This is something for the state to get to the bottom of.

In other news featuring Yours Truly recently, the Economist cited my research in a piece on the promise and perils of privatization. And the New York Times also cited me about privatization.

Also, I’ll remind you again that you can sign up for my free monthly email newsletter with exclusive content from me, including updates on what I’m up to and a roundup of the top news in urbanism and related topics. Sign up and you’ll also get a free PDF copy of my e-book The Urban State of Mind. Sign up on the right sidebar of my site.

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from Aaron M. Renn

On the Grid

Photo Credit: Wendy Harman, CC BY 2.0

I was down in Washington a couple weeks ago and was reminded of the difference between global and non-global cities in terms of how they operate.

I was talking with someone there and he mentioned that he’d discovered that the real opposition to food trucks these days was not coming from bricks and mortar restaurants (which are often cash poor and not especially politically powerful), but from commercial real state interests (who are both wealthy and have massive political clout at the local level).

This was a perspective on the food truck business I hadn’t heard before. And it wasn’t based on a DC local perspective, but a derived from a national one.

A lot has been made about the coastal “bubble” such as the one along the Acela corridor. But as I’ve noted before, people in these cities actually know a lot about what’s going on in the country and the world.

The intellectual classes in NYC are a lot more knowledgable about the interior of the country than most people living in the interior are. People in interior cities might know a ton about the place they personal live, but often know next to nothing about the city just 100 miles down the interstate.

The bubble effect in coastal cities comes not from a lack of information, but a lack of imagination. There are some things they just don’t want to be true, so they refuse to believe them.

Though hardly perfect in their analyses, these global cities are key hubs in national and international information flows. When I found out what was going on in food truck regulation around the country, I didn’t travel around myself, I went to Washington and found it out there.

New York, Washington – and others cities like Boston and San Francisco – are what I like to call “on the grid.” When you are there you are plugged into global information flows. When you want to find out what’s going on – head to the global city.

Other cities don’t give off that vibe. I love Nashville and it’s booming, but when I visit there I don’t get the sense that I’m plugged into the grid. I’m sure for some specific things – music, health care – the city functions that way, but on the whole that feeling of being connected to global information flows is not something I have felt or heard people talk about with regards to that city.

I pick Nashville because it’s a prosperous city. I want to be clear that being on the grid isn’t necessary to be very successful. It just seems to me that there is a qualitative difference in functioning and feel between these global cities and others.

from Aaron M. Renn