NewGeography.com blogs

Even before the Wall Street meltdown, the New York area was going through its own de-clustering. No it hasn't - and probably never will - become a multi polar area in the style of Los Angeles, Houston or Phoenix, but the trend to deconcentrate jobs has been inexorable over the last thirty years, according to a new report by our friends at the Center for an Urban Future.

The report states:

"In 1975, New York City accounted for 53.1 percent of all private sector jobs in the 17-county metro region. But by 2005, the five boroughs’ share was just 47.2. Most of the ci ty’s losses occurred in Manhattan, which had 33.9 percent of the region’s private sector jobs in 1975 but only 28.8 percent in 2005."

None of this is particularly worrisome in that the shrinkage of the city's jobs slowed considerably in the past decade up to 2005. The whole region showed some growth. But what happens now with an estimated 150,000 or more jobs expected to be wiped out due to the financial crisis? This may prove the biggest crisis faced by the city since the "Ford to City: Drop Dead" days of the 1970s.

Both the Giuliani and the Bloomberg legacies surely will now be tested.

Lost amidst headlines of bank nationalization, credit market woes, and a worldwide equities rout, was news that the Baltic Dry Index, an index seen as a measure of world trade flows and future economic activity, has been in freefall this week. A drop of 8% on Tuesday was bookended by drops of around 11% on both Monday and Wednesday.

According to the Guardian, the index is

"seen as a good leading indicator of future economic production levels because it charts the cost of freight movements in 26 of the world's biggest shipping lanes of "dry" materials, such as coal, iron ore and grain which feed into the production of finished goods some weeks or months ahead."

Since reaching a peak in July, the BDI has plummeted over 80%, leading to fears that demand for commodities, particularly in China, may be on the wane. This could, reports the Guardian, mean that the "great Asian miracle economy might now be coming apart at the seams, in spite of the official figures suggesting everything is still fine."

Agricultural areas throughout the United States, buoyed by recent high prices for commodities, have thus far shown economic strength in the face of increasingly difficult conditions nationwide. The good times may be, if not coming towards an end, facing some sort of moderation.

Effects of the credit crunch have already begun to show some impact on international commodities trade. Last week, Canada's Financial Post reported that grain shipments had begun to pile up in ports as international buyers found themselves unable to obtain letters of credit. In the words of one marketing expert, the situation is a "nightmare." According to experts interviewed by Bloomberg, "letters of credit and the credit lines for trade currently are frozen," and as a result, "nothing is moving". Such credit issues, in connection with weakened demand for commodities in a potential worldwide recession and a downturn in international trade, may mean that communities around the nation will soon face a more difficult economic picture.

There's yet another study, this one from Hewitt Associates, that confirms our notion that telecommuting will be an ever bigger part of our future. A Washington Post piece picked up by blogger Steve Bartin also quotes consultant James Ware about the environmental and economic forces pushing firms and individuals towards full or part-time telecommuting, "The combination of gas prices and climate-change issues is going to push a lot of people in that direction."

You don't have to be an Al Gore apostle or a new urbanist to see that telecommuting could be part of the solution for reducing commutes and energy use while also creating the basis for viable communities. What continues to mystify: only a few environmentalists and neo-traditionalist developers embrace this trend. Perhaps it has something to do with individual choice, and the fact that it does allow people to live in the kind of dispersed and low-density environments that so many of these kind of people tend to despise.

Yet there is nothing anti-urban in embracing telecommuting. Many cities, such as San Francisco and Santa Monica, are hotbeds for entrepreneurs working from home. In fact, as the economy continues to decluster, this may be one way traditional cities can reinvent themselves: through the work of a new generation of high-tech artisans. It also offers opportunities for suburbs to reinvent themselves as something other than bedroom communities filled with miserable commuters. For rural towns, it provides a chance to plug into the broader global economy. All geographies benefit when people can choose the kind of community they both desire and can afford.

Recent soundings from Washington suggest that neither party has a solid idea of what to do about the deepening economic crisis. It makes me cringe to hear Barney Frank, Chairman of House Financial Services Committee, talking about a big stimulus to “prop up consumption”.

Under the Democratic-controlled Congress, this would likely include the usual tax relief to middle and working class Americans, as well as big new payments to hard-pressed cities and states. To be sure, the interests of wage-earning Americans should be paramount, but this is reminiscent of the “stimulus” plan earlier this year that did little more than “prop up” spending on consumer goods for a couple months.

Since many of these products are made in China or somewhere overseas, who are we helping most here? In addition, of course, the bail out of local governments benefits a prime Democratic constituency --- public employee union. If we are going to cough up more to pay their salaries, why not ask them first to accept less largesse? Maybe they can agree not to retire until they are in their sixties, like the rest of us chumps, I mean, taxpayers. Then we can talk bailout.

However, let’s not pick on Democrats alone. The Republicans seem to like consumer “stimulus” but only when spiked with more tax cuts for their dwindling, but still significant cadre of wealthy Americans. Maybe this will help consumption a bit more at Bloomingdales than Wal-mart, but in the end, who cares?

My thought is that we should focus instead on the core issues of stimulating the “real economy” through incentives for high value manufacturing, domestic energy producers of all kinds (including nuclear power) and investment in basic infrastructure, including new transmission lines, research in clean and alternative fuels. All of these things would reduce our increasingly debilitating dependence on other countries to fund our deficits and consumption habits.

To lift spirits of Americans the most we need a program that aims to make the country less dependent on both Middle East energy producers and Chinese manufacturers. As we did starting in the 1930s, let us create a climate for real upward mobility based on expanding the productive economy. It’s time to stop relying on quick sugar highs to spur more consumption of items we do not produce or can’t afford and time to start getting back to basics.

A recent article in the Las Vegas Review-Journal lamented the economic decline in the state according to a report by the Rockefeller Institute of Government in NY. The Rockefeller report cited a growth index released by the Philadelphia Fed, but reset the index to a baseline of January 2007, singling out Nevada as the worst performing state in the nation over that period.

Interested in the bigger picture, I looked up the original index from the Philadelphia Fed and charted it back to its original baseline of July 1992. The results show a much more interesting picture for the state of Nevada.

We see a meteoric rise in economic activity in Nevada, far surpassing any state since 1992. Then as late as November 2007, the bottom began to fall out. The recent decline in Nevada is certainly serious, but we can always benefit by putting as much data into the picture as possible. What if the Rockefeller report had chosen January 2005 as a baseline? It would have shown Nevada as about flat, but obscured the detail of its true growth trajectory.