What You Get for the Money

A single-family house in Clairton, Pennsylvania (outside Pittsburgh) costs considerably less than a parking space in New York City.

Values vs. Wonkishness

George Lakoff gets to the nub of the matter:

Obama understands the importance of values, connection, authenticity, trust, and identity ...The Clintonian policy wonks don't seem to understand any of this ... They confuse values with programs. They have underestimated authenticity and trust.

The rest is here.

Another Take on the Electoral College [Guest Blogger: Gary Gates]

Rich has offered several posts regarding his concerns about the electoral map and the ability for the Democratic candidate to prevail in 2008.  I am strongly convinced that a Democratic candidate can win and he or she can do it without winning big states like Florida and Ohio.

Here's the math.  Assume that all Kerry states go blue again.  Let's also say that the Democrat picks up Iowa, New Mexico, and Nevada, all states where Bush won by less than 3%.  In this a very plausible scenario (remember that Gore won Iowa and New Mexico in 2000).  The Democratic candidate now needs just one more state to prevail-any state. Depending on the candidate, I think that's entirely possible.

If it's Obama, I'd suggest that Colorado might be in play.  Colorado is trending blue and Obama is ahead of Clinton there right now in most polls.  Obama also potentially puts some southern states with relatively large African-American populations into play. Crazy as it sounds, I think Virginia (especially with Mark Warner on the ticket as a Senate candidate), Georgia, South Carolina, and Arkansas are possibilities. 

If it's Hillary, "home state" Arkansas is a very good bet.

Now that McCain looks likely to be the Republican candidate, Bill Richardson's stock as a Dem VP has gone way up.  The Southwest is the key to a Democratic victory and Richardson potentially minimizes McCain's advantage in that part of the country.

Of course, a Hillary/McCain matchup might just make the race way too tempting for Michael Bloomberg.  If he gets in and gets any traction, I'd put my money on Hillary.  Bloomberg could make a serious play for the white male independents that will be critical for McCain. He'll have much less effect on Hillary's core constituencies.

I also think that there's not been much discussion yet about the branding distinctions between McCain and either Democratic candidate. From that angle, an Obama/McCain race is gold for the Democrats-new, fresh, young guy versus old crotchety curmudgeon.  The Kennedy mystique thing is in full play.  Even if it's Clinton/McCain-the contrast is still rather stark.  McCain's age and demeanor will become an issue in the national campaign and it favors the Democrats.

While I by no means think this is easy, there are plenty of ways to get a Democrat in the White House in 2008.

*Gary Gates is senior research fellow at UCLA's Williams Institute and author of the Gay and Lesbian Atlas.

posted by Kevin Stolarick

Fun with Election Tickets

It's one of my favorite games. Some rumblings already about McCain-Guiliani (ugh).  Who would Obama choose. OK, I'll get it started: How does Obama-Hagel sound? What about Hillary? Or Romney?

Penny for your thoughts.

Tanked

The New York Times Elizabeth Bumiller reports on boom in DC "research groups" (pointer via Ryan Avent)

The economy may be slowing down, but Washington’s ideas industry is booming. The Center for Strategic and International Studies, a research institution that was effectively broke seven years ago, just bought a $33 million vacant lot downtown as the site for a new home. The Council on Foreign Relations is expanding its Washington office to a $60 million building on F Street. The United States Institute of Peace is erecting a $180 million headquarters of steel and white translucent glass on a corner of the Mall. Not least, the rapidly growing Brookings Institution — its operating budget is up nearly 50 percent in the past two years alone — just paid $18.5 million for a satellite building across the street from its headquarters on Massachusetts Avenue, in a stretch near Dupont Circle known as Think Tank Row.

That's nearly $300 million. A DC insider once told me these so-called think tanks don't so much create new intellectual capital as repackage and recycle it - or as he put it, they run it down.  Candidly, I was shockingly disappointed during my time in DC by the inability of most think tanks to tackle big questions in an open-minded, globally-oriented (that is not American-centric) way.  And while there always are individual exceptions, I was also dismayed by the quality of  much of the work.  My hunch is the increased giving is being fueled by partisan agendas - actually, I have been told many time this is the way think tanks increasingly are funded - as political actors seek to lend credibility and legitimacy to desired actions.

Question: About that $300 million - I wonder how much this works out to per unique new idea?

Social Isolation

Over at City of God, Dan asks:

The place where I worry about a loss of community isn’t in downtown Toronto, nor is it in small, farming communities. Where I worry about this phenomenon is in the vast tracts of land developed into sprawling exurbs around cities. When I drive through the Costco badlands ... I get a palpable sense of isolation - especially when I try to imagine life there without a car.

What do others think?

Who Is This Man?

UofT student and sometimes Spin correspondent, Chandler Levack writes:

In Richard Florida’s mind, Toronto at its best is a tangle of immigrants, gay men, and a free-flowing intellectual-based economy. Who is this man, and why should we trust him?

It's a nice profile with insight into my upbringing, love affair with music and the evolution of my thinking

The Year in Music

Check out the 35th annual edition of the Village Voice Pazz and Jop music rankings.  It'sa comprehensive guide to the year in sound based on votes by 577 music critics.

• 1. LCD Soundsystem Sound of Silver
• 2. Radiohead In Rainbows
• 3. M.I.A. Kala
• 4. Amy Winehouse Back To Black
• 5. Arcade Fire Neon Bible
• 6.  Kanye West Graduation 
• 7. Spoon Ga Ga Ga Ga Ga
• 8. Robert Plant and Alison Krauss Raising Sand
• 9. Bruce Springsteen Magic
• 10. The National Boxer

Like James Surowiecki, says crowds sure can be smart. Looking it over, 2007 certainly stacks up as a good year in music. But tell me Pazz and Joppers, how did you rate Taylor Swift ahead of Kevin Drew, Wooden Ships, and Daft Punk?  For my money, Feist, Rilo Kiley, Robert Plant and Allison Krause, and Iron and Wine are better than P&J, while Herbie Hancock's Joni Mitchell  tribute, Neil Young Live at Massey Hall and Jill Scott are a whole lot better. LCD System and Bruce Springsteen - fine albums mind you - seem to benefit from home-field advantage. I'm slightly less enamored of them and of the White Stripes' latest. And when it comes to hip-hop, I take the fifth - ever since Biggie.

Harford Does Colbert

Tim Harford will be on the Colbert Report Thursday night, which means his Toronto event at the Gladstone Hotel is canceled. Fortunately, Tim will still be in town on Friday.  Plus we both think the world is spiky.

I, Zune

Over at Eye Weekly where the most popular topic is this, Marc Weisblott reviews last nite's Board of Trade event, aiming his very witty key stokes at Toronto's business community, the Board of Trade, local and provincial officials and most of all, moi - I'm the "Zune" to Toronto's iPod (zing, zing).  But I have to admit I just don't think it's a bad thing when 2000 or so members of the business community are led by a female CEO and board chair, are addressed by an openly gay Deputy Premier, and a mayor who has just launched a pioneering Prosperity Agenda with business, academia and labor. Or then again, maybe I'm just too much of an old Walkman ...

State of the U.S. Economy

Jeff Madrick writes:

When wages don't rise ordinary people borrow to keep their heads above water, not because they've caught luxury fever. The foundation of this economy became private debt ...  But the genuine foundation of this economy is the people's education, their health, their transportation network, and, frankly, their sense of fairness ... When Wall Street bankers make so much by creating the conditions that lead to crisis, does America have confidence the economy is working right? They don't. Do they have a sense it's fair? No, because it's not.

Valencia and El Pais

We were in Valencia last week for an event on the New Urban Culture. The city is glorious. The mixture of historic architecture, stunning Calatrava buildings and an incredible waterfront is intoxicating.  Right now the city is in the midst of a debate over how to redevelop that waterfront.  On the one side are those that would like to make it into a Monte Carlo sort of place - with a private water-front oriented to America's Cup races and other events. On the other are those who would like to see the waterfront be developed as a public asset with a mix of housing, retail, commercial and public use development.

Here's an interview I did with El Pais, Spain's leading newspaper (in Spanish).

Disconnect

Christopher Caldwell writing in the New York Times Magazine:

Why do presidential candidates touting their concern for the economy pose with factory workers rather than with ballet troupes? After all, the U.S. now has more choreographers (16,340) than metal-casters (14,880), according to the Bureau of Labor Statistics. More people make their livings shuffling and dealing cards in  casinos (82,960) than running lathes (65,840), and there are almost three times as many security guards (1,004,130) as machinists (385,690). Whereas 30 percent of Americans worked in manufacturing in 1950, fewer than 15 percent do now. The economy as politicians present it is a folkloric thing ...

It is that the transition is over. The new economy we have been promised is in place. ...The “jobs of the future” that were promised 20 years ago are here. Choreographers, blackjack dealers and security guards have replaced factory workers as the economy’s backbone, if not yet its symbol. New economies have always required a kind of initiation fee of those who would participate fully in them.

Last Nite

I spoke at the Toronto Board of Trade 120th annual dinner last night - that's right one-hundred and twentieth. If I was a little bit tired after flying back from Valencia, the energy in the room  was infectious.  Dr. Draw played a killer electronic violin and Cirque de Soleil was even more amazing to see up-close. Most of all you can feel the city crossing an inflection point around the Prosperity Agenda for a sustainable, inclusive and creative community.

That's Toronto mayor David Miller, Rana and me. More pics here.

Happy Birthday, Lego!

Today, the Lego Brick turns 50!  Looking pretty good for something that old.  Props to Google for celebrating the event with a special logo.

As something that has triggered almost as much creativity as the crayon and the empty  cardboard box, it's something worthy of a mention on this blog.

Lego factoids:

• There are about 62 LEGO bricks for every one of the world's 6 billion inhabitants.

• Children around the world spend 5 billion hours a year playing with LEGO bricks.

• More than 400 million people around the world have played with LEGO bricks.

• LEGO bricks are available in 53 different colors.

• 19 billion LEGO elements are produced every year.

• 2.16 million LEGO elements are molded every hour, or 36,000 per minute.

• More than 400 billion LEGO bricks have been produced since 1949.

• Two eight-stud LEGO bricks of the same color can be combined in 24 different ways.

• Three eight-stud bricks can be combined in 1,060 ways

See the full set and a cool Lego timeline here.

posted by Kevin Stolarick

Can Obama Win

Newhoggers asks an important question:

Can a creative class backed candidate at the national level get beyond his/her high intensity support and create a majority coalition within the Democratic Party? Obama is the first Democrat in a competitive situation to gain a majority of votes, so I think this concern has been allayed.

Meaning his plurality in South Carolina.

Yes, I agree: He can.  Years ago, John Judis and Ruy Teixeira predicted their emerging Democratic majority based on minority plus creative-class like voters in "ideopolises."  The book resonated with me - but I could not see how the numbers would add up. What about older independents and Reagan Democrats? These voters, I believe - and still believe - would be hard to bring into such a coalition.  Bill Clinton may say draw the Jesse Jackson comparison. But Obama has shown his ability to draw from a far broader pool of people - pulling in independents and also mobilizing huge turnouts among young, black and educated or creative class voters.  I think with him, and possibly only with him, the math works. Thus less an emerging partisan majority and more an emerging Obama (alternative) majority.

But that still does not alleviate my main worry. I can see how Obama wins the Democratic nomination. But it's harder to see his road to a victory in the general election. I'm not saying he can't do it. With the Republicans seemingly and weighed down with the war issue and the electoral mood shifting to both the economy and "change" (read: throw the bums out), he stands his best possible chance this year. The hurdle I see lies in the electoral college.  He needs to swing the swing states and from what I can tell his voters are mighty concentrated geographically.  It's America's concentrated and "sorted" political geography that's the biggest obstacle to an Obama presidency.   

Is "Canadian" a Racist Term?

Click here to find out.

Books That Make You Dumb

Those are SAT scores - based on a Facebook analysis (by Virgil Griffith via Tyler Cowen)

On Inspiration

Caroline Kennedy in today's New York Times:

I have never had a president who inspired me the way people tell me that my father inspired them. But for the first time, I believe I have found the man who could be that president — not just for me, but for a new generation of Americans.

I remember her father's inspiration - I saw its effect on my own father. Caroline and I are about the same age: I've never really felt it.  Her father did this as president, what's so amazing about Obama is that he is doing this - I hear it all over the world - as a candidate.

Good Jobs

Creating good high-paying jobs is a huge issue all over the world. It's clear that the global economy is dividing employment into what UCLA economist Ed Leamer calls higher-paying "geek" jobs and lower-paying, less secure "grunt" work.  Increasingly, in the advanced economies those grunt jobs are in the service economy.  A key challenge of our time is how to make those service economy jobs better, higher-paying, more creative, and more rewarding jobs.  The Toronto Star's John Spears reports on my challenge to Toronto's Prosperity Agenda:

Appearing before the city's economic development committee to discuss its Agenda for Prosperity, released earlier this month,Florida challenged the common thinking that counter work in franchise outlets is somehow worthless ... In fact, he said, government, business, labour and academic leaders should consider holding a "service summit" to map just such a plan ...

"Why can't we do for those jobs what we did for my father's job in a factory?" he asked. "Why can't we make those service jobs good, high-paying, secure jobs?" ...

"The food cluster is one," he said. "Everyone knows we have great chefs. What about the rest of the food chain – the food support worker, the food preparation workers and the agricultural sector. What about hotel and retail? If we're going to do tourism, if we're going to do trade, if we're going to do retail, how do we strengthen that?"

Why the Giants Will Win the Super Bowl

Look Ma, no cast. Doesn't matter. The cast is not the thing, it's where the picture was taken.

Predicting sports is not my usual thing, but I'm picking the Giants to win the Super Bowl for six reasons.

1) They have the much sought after momentum. After starting off slowly, their entire team has been on a roll, improving week by week.

2) Eli Manning seems to have made a quantum jump in performance, as many people but especially elite former NFL quarterbacks have commented.

3) The Patriots have looked a little off, and are certainly not playing as well as they might be or had been. This can be a particular problem in light of point 1.

4) The Giants aren't the least bit afraid. They know they can beat the Patriots. Heck the nearly did.

5)  The Pats have to lose a game sooner or later ...

6) Tom Loves New York:  Question: Where does the Pats QB hang in his off-time? Out in Foxboro, over at Fanueil Hall. Hardly. He's a fixture in the Big Apple, walking around town,  going to chichi restaurants, clubs and haunts with Gisele. The issue isn't the "boot" on his foot, the suspected sprain, the possible ruse? Brady will be in fine physical shape.  It's the mental factor. The guy wants to be in NY so much he can taste it.  Playing in the Super Bowl against any other team, I'd bet on him being cool, calm and collected. But not against the Giants. His secret desire to be in New York is sure to pysche him out. Deep down he'll be thinking, "what if I was doing this there?"

You just watch:-) ... 

Race and Transit

It's a map of the NYC subway system which reflects the places that white New Yorkers live and travel to (h/t: Michael Bernstein, original map from Streeter Seidell).

The World's Election

In Spain as in Canada, people are pulling for Obama. Our driver, an American expat, says he now tells people he is Canadian because he can't take the Bush jokes.

The Clintons vs. Obama

Bill Greider, a thinker and writer, I have long admired and a former neighbor in Washington DC weighs in.

The recent roughing-up of Barack Obama was in the trademark style of the Clinton years in the White House. High-minded and self-important on the surface, smarmily duplicitous underneath, meanwhile jabbing hard to the groin area. They are a slippery pair and come as a package. The nation is at fair risk of getting them back in the White House for four more years. The thought makes me queasy.

Goodbye, Hegemony

That's the title of a lead article in the New York Times Magazine. In it, Parag Khanna writes:

It is 2016, and the Hillary Clinton or John McCain or Barack Obama administration is nearing the end of its second term. America has pulled out of Iraq but has about 20,000 troops in the independent state of Kurdistan, as well as warships anchored at Bahrain and an Air Force presence in Qatar. Afghanistan is stable; Iran is nuclear. China has absorbed Taiwan and is steadily increasing its naval presence around the Pacific Rim and, from the Pakistani port of Gwadar, on the Arabian Sea. The European Union has expanded to well over 30 members and has secure oil and gas flows from North Africa, Russia and the Caspian Sea, as well as substantial nuclear energy. America’s standing in the world remains in steady decline.

Why? Weren’t we supposed to reconnect with the United Nations and reaffirm to the world that America can, and should, lead it to collective security and prosperity?  ... That new global order has arrived, and there is precious little Clinton or McCain or Obama could do to resist its growth.

At best, America’s unipolar moment lasted through the 1990s, but that was also a decade adrift. The post-cold-war “peace dividend” was never converted into a global liberal order under American leadership. So now, rather than bestriding the globe, we are competing — and losing — in a geopolitical marketplace alongside the world’s other superpowers: the European Union and China. This is geopolitics in the 21st century: the new Big Three. Not Russia, an increasingly depopulated expanse run by Gazprom.gov; not an incoherent Islam embroiled in internal wars; and not India, lagging decades behind China in both development and strategic appetite. The Big Three make the rules — their own rules — without any one of them dominating. And the others are left to choose their suitors in this post-American world.

There is lots and lots I could say about this, but I have a speech coming up so I'll have to be brief.

1)  I like the title a lot.

2)  I'm sort of surprised the Times ran with it. But it means people who try to lead the thoughts must be nervous - or at least imagining that the US is no longer the center of the univivers.

3) The idea of a multi-polar world sounds reasonable.

4) Where are multinational corporations in this world?

5) Where is innovation, creativity, and innovation?

6) Do we really believe that big states will dominate in the post-empire age?   

7) My guess is that the nation-state will radically decline in influence, in ways few people adequatrely recognize.

8) The new order will feature new institutions organized by global capitalists and global companies

9) It will take shape not around nations but increasingly around mega-regions

10)  Class divides will grow increasingly salient and a key feature will be how to raise the valleys of the world economy in order to protect its peaks from attacks.

Guess Who They Think Will Be the Nominees

The New York Times endorses Clinton and McCain. Whaddya think about that?

Tragedy to Farce

People commonly think of this: "History repeats itself, first as tragedy, second as farce."  What Marx actually wrote was this: “Hegel remarks somewhere that all great, world-historical facts and personages occur, as it were, twice. He has forgotten to add: the first time as tragedy, the second as farce.” The reality is: Wolfowitz returns to U.S. government.

Secret Weapon

During the Democratic debate, Obama shot back at Hillary,  "I feel like I'm running against two Clintons."  No matter what they think of his presidency, a growing number of people on all sides of the aisle are taken aback to see a former president doing what Bill Clinton has been doing in this campaign.

So, what do you think would be the fall-out if, say, Michelle Obama showed up on Oprah or a similar venue to talk her role in the campaign and possibly the White House versus Bill Clinton's recent behavior and the tendency of the Clintons to "gang up" on people?

Immigrants and Suburbs

The New York Times discovers that the city's little Cambodia is getting littler.  Hmmmmm. Well, at those real estate prices does this really surprise anyone?

All over the country - and all over North American actually - immigrant populations have been moving out of urban enclaves and into the suburbs.  As Tyler Cowen will tell you, the best ethnic restaurants in DC aren't in the city but in the suburbs.  Brookings demographer Bill Frey reports that by 2000 more immigrants in U.S. metro areas lived in suburbs than cities; and Audrey Singer's detailed research documents this shift in greater Washington DC and elsewhere.

The old model of immigrants locating and forming ethnic communities in central city neighborhoods is no longer the dominant pattern. It's not even a matter of immigrant succession - land first in the cities and then head to the suburbs - more and more immigrants are heading directly to the suburbs.  Many city neighborhoods which used to attract immigrants are becoming too expensive, and suburbs frequently offer better schools and other "amenities" immigrants require.  In fact, our entire "urban structure" is changing fairly dramatically as a consequence of idea-driven economies and the sorting of populations by class, life-stage and other factors. 

Why Firms?

Tim Hartford directs us to this intriguing essay by Michael Munger on the theory of the firm.

So, one day the boss has this crazy thought. He asks himself a question that has never occurred to him before: Why have any employees at all? Why have a building? Why not just sit home, wearing his jammies and bunny slippers, sipping a nice cup of tea, and outsource everything? He can write contracts to buy parts, he can pay workers to assemble the parts, and he can use shipping companies to box and transport the product.

Sounds like a few people I know, actually. (You know who you are ...).

Headline of the Day

"Toxic Hollywood" (Steve Weber at Huffington Post). Money quote:

The drug is Fame. While it is never fully acknowledged as having any ill effects, the hunger for Fame has reached epidemic levels and has replaced art, education, politics, medicine and civil service as an acceptable career objective for today's youth. Because once under its spell, the pursuit of Fame can become an obsession on the order of chasing the dragon, making one all too willing to sacrifice anything in order to obtain its fleeting and instantly addictive high. More intoxicating than nicotine, cocaine, heroin and alcohol and virtually inseparable from Power (making it the ultimate aphrodisiac by any other name), Fame has been the elusive phantom nudging the vulnerable headlong from common sense into utter insensibility. Fame can warp the perception of the person swept up in the eye of the vortex, and its whirling force impacts even those loitering at its edges. It bends the air and light, a cracked prism through which reality is projected onto our screens and into our lives.

Question: Why the quest for fame now?  Might its rise be linked to dramatic shift in the nature of our economy and especially its impact on the USA and the West?

The Case for Creative Capitalism

Not me. It's what Bill Gates is advocating at Davos (via Mark Thoma). Yowser!

Ny-Lon-Kong

In Heathrow Airport waiting for my connection to Valencia, I came across the new issue of Time. It's their Davos issue.  The cover is devoted to what they consider to be one of the (igonored)  bright-spots of the global economy - the rise of the global city-states of Ny-Lon-Kong.  Here's a snippet.

Go back nearly 30 years, and few would have thought that any of the three cities were about to remake the world for the better. In September of 1982, the Hong Kong stock exchange lost a quarter of its value ... At the same time, London and New York City were bywords of urban decay ...   Yet even in the darkest times, the Nylonkong cities had the sort of hidden strengths that would be their salvation. All had a certain adaptability hardwired into their people. All were once centers of manufacturing, but all have been able to shift their economic focus to the service sector ... All are — or have been — great ports ... It has made them open to trade, with all the transformative capacity that trade has to shake up established orders and make the exotic familiar.

Their history as ports has made Nylonkong open to the world in other ways, too ... The network of international trading and personal contacts that shape New York, London and Hong Kong facilitate their key industry. If the 19th century was the age of empire and the 20th one of war, so the 21st century, to date, is an age of finance ...

Great cities, of course, are about more than money and finance. They are messy agglomerations of talent and culture. That is how they attract men and women in the financial sector who could choose to live anywhere ... That's a reason why Nylonkong needs to be careful not to kill the goose that laid its golden egg. These places are not cheap. According to the consultancy ECA International, Hong Kong's high-end apartments last year had the most expensive rents in the world, with New York third and London sixth.

The sheer expense of living in Nylonkong is but one of the challenges facing it — as the next three stories demonstrate. In the case of New York, high real estate prices may squeeze out of town the very people that make a city fun and livable. Globalization may have brought many benefits to those who live in London, New York and Hong Kong, but it has at the same time made the familiar strange, and turned the known world upside down.

More here.

Does an Empire Sh*T in the Woods

If the title of this post seems cryptic, it's probably because I'm a wee bit jet lagged at the moment. That and the fact that I used the ride to catch up on some reading - going through several issues of Business Week, The Economist, New Yorker, and the like.

But, I'm struck not just by at how much is being written about the so-called  end of American Empire and but by the matter-of-factness of the conversation. There's very little hemming and hawing, little hand-wringing.  Really no sense of frustration or despair. Little of the "what do we have to do to get it back" get-up-and-go kind of feeling.  And it is almost completely absent from the election debates, accept in a very veiled way.

As an American who has long worked on competitiveness, this strikes me as odd. Compare, for example, to the outpouring of books, articles, opeds, media coverage and what not given to America's competitiveness crisis of the 1980s - the rise of Japanese and German competition in manufacturing. Sure, there is discussion of the rise of China and India as new competitors, but precious little of the sort of fuming and getting-to-it we've seen previously.

Why might this be so? What's different now than before?  Is America - and the media - in a state of denial?  When an empire starts to decline does it go out with a bang or just a whimper?

Global Fissure

Katrin Bennhold of the International Herald Tribune reflects on the rapidly morphing zeitgeist at Davos (h/t: Alison Kemper):

Is economic history about to change course? Among the chieftains of politics and industry gathering in Davos for the World Economic Forum on Wednesday, a consensus appears to be building that the capitalist system is in for one of those rare and tempestuous mutations that give rise to a new set of economic policies ...

One such mutation in mainstream economic policy took place after the Depression of 1929, which led to a protectionist interlude and then gave rise to Keynesian demand-side policies and eventually the welfare state. Another took place following the oil price shocks in the 1970s, which refocused policy makers' attention to supply-side measures and strengthened those pushing for privatization and free markets as the best way to stimulate growth ...

A year and a half ago, researchers at Yergin's group drew up a number of scenarios for the world economy in 2030. One of them, "Asian Phoenix," saw a world in which protectionism was kept at bay and Asian economies kept underpinning swift global growth. The other, "Global Fissure," was a troubled world economy with widespread economic nationalism and a backlash against globalization. At the time, the latter scenario seemed to be the more remote. But that may be changing, Yergin said. "What seemed highly unlikely," he said, "could become rather more likely."

Navigating such a transformative period requires serious leadership. It's more than a year until the next president takes office.  Do folks believe that America's political leadership can play an effective role in the interim, or that even when a new President takes office he or she can build enough consensus in the country and in the Congress to provide it. And if not, where can such leadership come from?

Crunch Time

The dailies and the blogsphere sense a bigger financial and economic debacle is in the offing.

George Soros says its the worst market crisis of the past sixty years - the end of a long super-boom (Kontradieff rears his head).

The usually up-beat David Leonhart asks: How bad could this get?

Martin Wolf says we have come to grips the big fat elephant in the room and that the end result will be a reshuffling of global politico-economic power away from the US and the west and toward China and the emerging economies.

Curious Capitalist, Justin Fox says the explosion of US household debt is what's behind the implosion

Felix Salmon says Bernake's rate cut is a "desperate" move and that the mood opening the big Davos shindig is super-bearishly negative.

Dan Gross headlines, "Panic and Davos!"

I'm typically able to look beyond the negative, but this sounds like a chorus of Stephen Roach's and Jim Kuntsler's. And while I  believe that the economy of creativity and ideas will ultimately prevail, the short-run looks pretty, pretty rocky.

UPDATE: Tyler Cowen finds some things to cheer us up.

But Clive Crook is worried and directs us to London School of Economics, William Buiter who writes:

It is bad news when the markets panic.  It is worse news when one of the world's key monetary policy making institutions panics.  ... This extraordinary action was excessive and smells of fear.  It is the clearest example of monetary policy panic football I have witnessed in more than thirty years as a professional economist.  Because the action is so disproportionate, it is likely to further unsettle markets.

For Those About to Rock ...

The New York Times has apparently just discovered that it's becoming really expensive for bands to find practice space there (h/t: Ken McGuffin). 

Rehearsing can be tedious and time-consuming, and in New York City, musicians say it is more expensive than ever. Steadily rising real estate prices are taking a toll on all but the best-financed music groups and institutions. Small bands and ensembles feel the pinch when they book practice time in rehearsal studios ... In other cities, some groups in the hunt for affordable rehearsal space might begin as “garage bands.” But few people in New York City have their own garages, and musicians say that finding an affordable place to practice is as much of a challenge for performers who make a living in music as it is for part-timers and amateurs.

The musical energy moved to Williamsburg and Hoboken ages ago, soon (I hope) it will infest more of northern New Jersey and ultimately Philadelphia, Baltimore, and DC (which all have generated more robust scenes).  Our ongoing research suggests that the music industry is biurificating into commercial clusters like NY, LA and Nashville and creative clusters in places from Austin, Portland and Omaha;  Toronto, Vancouver and Montreal;  and others in even smaller places in  North America and around the world. For a variety of reasons, not just technology, music is being reshaped around the push and pull of the forces of dispersal and concentration.  Some older locations are losing their allure, and new ones are rising as centers of musical concentration, clustering and creativity.  It's in line with the increasing specialization and sorting or people and economic functions. But if I were Mike Bloomberg, I'd keep an eye on this, sort of as a leading indicator. Like Jane Jacobs said, "when a place gets boring even the rich people leave."   And a city without new sound can be a very boring place indeed.

Polarization of the Rich and Famous

Columbia University's Andrew Gelman has been pouring over data trying to get at the driving forces at work in American politics. He's finding evidence of increased polarization in the politics of the wealthy.

In poor states such as Mississippi, rich people are much more Republican than poor people; in rich states such as Connecticut, rich people are only slightly more Republican than the poor. .. the gap in voting between rich and poor voters has increased, but especially in the poor states: ... Thus, the familiar "red America, blue America" pattern, the "culture war" between red and blue states, is really something happening at the higher range of incomes.

This strikes me as a pretty big deal. It makes intuitive sense to me and is in line with the work of Ronald Inglehart on post-materialst politics. It suggests our politics no longer revolves around the simplistic capital-labor schism of the industrial age, but reflects the rise of the creative economy and of its new and evolving class and occupational structure. This shift also underpins the rise of independents, dissatisfaction with partisan labels among younger and more educated segments of the population, and the Obama phenomenon.

This kind of schism within the rich (dare I call them the capitalist class) - with states like California, New York and Massachusetts being more likely to identify as Democrat, and  Mississippi and other energy belt states more likely to identity as Republican - also suggests increased political competition between the royalty and rent economies.

My reading is that the underlying divides in the United States have real roots in class and economic structure, as well as their more typically discussed cultural and ideological overlays. Such economic divides have appeared before - in  the period leading up to the Civil War, during the late 19th century and certainly during the Great Depression as Tom Ferguson and others have chronicled.  In any case, findings like Gelman's suggest that the divides in America run very deep and are linked to an ongoing, internal battle between two increasingly distinct American economies fueled by a tectonic shift at the cutting-edge of global capitalism from making things to generating ideas.