The U.S. is Inherently Prosperous

Obama’s $800 billion stimulus bill has both policy makers and the public wondering what the bill will actually manage to stimulate. Yet, somewhat surprisingly, a recent study shows that left to fend for itself, the United States is inherently prosperous.

The Legatum Prosperity Index recently released a study of the most prosperous nations, measuring economic growth and quality of life. The study found that the U.S. – despite its current economic situation – ranks fourth out of 104 nations.

The amount of wealth and sense of well-being enjoyed by U.S. citizens is higher than any among large countries, with no other country with more than 100 million inhabitants ranking above the top 10.

The Index measures nations overall by “how well they foster the practices, institutions, and habits that create competitive economies, stable and free political institutions, and social capital.”

When looking at prosperity in this fashion, America and its ability to foster both economic and non-economic progress is what puts it so high on the scale. The US still rewards innovation and entrepreneurship to an extent seen in few other countries. This opportunistic culture provides the basis for successful growth of commerce even in an otherwise weak environment.

The U.S. bests the other top 10 countries on personal income by 40 percent. It scores 38 percent higher than the rest of the world in its ability to “commercialize innovation through patents.”

On the flip side, the US ranks just 7th in economic competitiveness and below average on promoting international trade and investment. The stimulus bill could offer some jolt to the weak economy, but given access to capital, Americans might prove adept in finding their own path to prosperity.

NGVideo: East St. Louis (Part I)

The first in a series of videos about the economic, political, and cultural history and future of East St. Louis, Illinois.

Part II gives views of downtown today, shows how its history can be seen in the city, and explains why the city could still be a good place for new development.

Michael R. Allen is the Assistant Director at Landmarks Association of St. Louis. He edits the blog Ecology of Absence, "a voice for historic preservation and a chronicle of architectural change in St. Louis, Missouri and its region".

Alex Lotz is an undergraduate film student in his final year at Chapman University.

Wall Street Brain Drain May Not Be All Bad

President Obama’s recent executive compensation plan comes on the heels of the revelation that Wall Street firms awarded over $18 billion in bonuses last year. The plan will create a $500,000 pay cap for executives at companies receiving substantial taxpayer bailout money.

While the Wall Street salary cap – certainly well intentioned – mirrors public sentiment nationwide, the Masters of the Universe and their friends are not so pleased. Some feel it is a “killer for New York.” Kathryn Wilde of the Partnership for New York argues the lower salaries on Wall Street will lead to a “critical brain drain” in the industry and “lower tax revenues for the city and state.”

But in the longer run, is this all bad? The so-called “brain drain” of high priced talent – the same folks who got us in trouble in the first place – could be fortuitous if more creative and innovative professionals now arrive on Wall Street. A new breed of Wall Streeter might have the potential to create a sustainable industry rather than the current casino culture. What may be a superficial wound on NYC in the short term may benefit the country as a whole – and even New York – in long run.

More than Two-thirds of the Nation Still Lives in Their Home State

In which states do folks tend to stay home? Here's a look at Americans still living in their birth states. New York and Louisiana top the list. Upwards of 82% of the US-born residents living in New York and Louisiana were born there. Looking at the map, you can see that the highest numbers reside in the rust belt and northeast. The most transplants tend to live in natural amenity rich western states, except for California.

More than 72% of US born Californians were born in the state. That number is over 74% in LA county, but only about 60% in San Diego. Other high transplant areas include New Hampshire and Vermont in the northeast, and not surprisingly the Washington DC area, Florida, and Nevada.

Only 41.7% of US born Alaskans were born there. I suppose if you are living in Alaska, you've come there for good reason.

Take a look at an extension of this analysis: Does a low number of home staters mean everyone has left?

Percent of Native Population Born in their Current State of Residence
Geographic area Percent Margin of Error
New York 82.1 +/-0.1
Louisiana 82 +/-0.2
Michigan 80.6 +/-0.1
Pennsylvania 79.6 +/-0.1
Ohio 77.8 +/-0.1
Illinois 77.4 +/-0.1
Iowa 75.4 +/-0.3
Wisconsin 75.3 +/-0.2
Massachusetts 74.7 +/-0.2
Minnesota 73.8 +/-0.2
Kentucky 73.6 +/-0.2
Mississippi 73.4 +/-0.3
Alabama 73.2 +/-0.3
West Virginia 72.9 +/-0.3
Texas 72.3 +/-0.1
North Dakota 72.1 +/-0.4
California 71.8 +/-0.1
Indiana 71.4 +/-0.2
Nebraska 69.7 +/-0.3
Missouri 68.9 +/-0.2
Utah 68.5 +/-0.3
Rhode Island 67.9 +/-0.6
South Dakota 67.5 +/-0.5
United States 67.3 +/-0.1
Maine 66.5 +/-0.5
Hawaii 65.6 +/-0.5
New Jersey 65.4 +/-0.2
Tennessee 65 +/-0.2
Oklahoma 64.8 +/-0.2
North Carolina 64.1 +/-0.2
Connecticut 64 +/-0.3
Arkansas 63.8 +/-0.3
South Carolina 63.4 +/-0.3
Kansas 62.7 +/-0.3
Georgia 61.5 +/-0.2
New Mexico 57 +/-0.4
Virginia 56.3 +/-0.2
Montana 55.3 +/-0.5
Maryland 54.6 +/-0.3
Vermont 54.5 +/-0.5
Washington 53.7 +/-0.2
Oregon 50.2 +/-0.3
Delaware 50 +/-0.6
Idaho 48.7 +/-0.4
Colorado 46.9 +/-0.3
District of Columbia 45.5 +/-0.7
New Hampshire 44.4 +/-0.4
Wyoming 43.3 +/-0.8
Alaska 41.7 +/-0.6
Arizona 41.7 +/-0.3
Florida 41.4 +/-0.1
Nevada 27.8 +/-0.4

Source: U.S. Census Bureau, 2005-2007 American Community Survey

A (New) Place to Call Home

A recent survey by Pew Research finds that nearly half of Americans (46%) "would rather live in a different type of community from the one they're living in now," with those living in cities expressing the highest desire to live elsewhere.

Even though many Americans say they are interested in giving somewhere new a try, most of us seem to think that our current communities aren't so bad. According to Pew, over 80% of respondents rated their current community as excellent, very good, or good. The survey also reports that "ideal community type" was not dominated by any one class of place, with 30% preferring small towns, 25% suburbs, 23% cities, and 21% rural areas.

Pew also asked those surveyed about their interest in living in specific big cities. Denver came out on top, with 43% of respondents stating that they would be interested in living in its metro area. Other western cities also fared quite well, with seven of the top ten "popular" cities being located in the west. The remainder of the top ten was made up of southern cities. Cities in the north and east lagged behind in popularity, with the rustbelt cities of Detroit and Cleveland registering the lowest popularity. (8% and 10%)


MC Bailout

Thanks to Steve Bartin for pointing out this hilarious bailout video, which then led me to The Daily Bail, a new site looking at the lighter side of the financial crisis. Stockbroker thuglife? Good stuff.


Even the Super Bowl Can't Defend Pittsburgh From a Recession

Somebody call the New York Times. The national economic meltdown has finally come to Pittsburgh, a city-region where you’ll want to be on the day the world ends because you’ll still have several years to live.

Sunday’s Super Bowl game between the mighty Steelers and the upstart Arizona Cardinals – teams representing regions going in exactly opposite socioeconomic directions since 1950 – has eclipsed all non-sports news coming from Pittsburgh.

Pro football, which Pittsburgh continues to excel at despite 60 years of economic decline, brutal population loss and criminally inept public sector mismanagement, is a seasonal religion every fall no matter how well the Steelers do. But when the Steelers make it to the Super Bowl, as they did this year for an NFL record seventh time, the region and its 2.3 million people are paralyzed by a religious fervor that can be culturally embarrassing.

“Go Stillers” signs appear everywhere. Secretaries, retail clerks and TV news anchors wear black-and-gold Steelers garb on game Fridays and during the playoffs. If Ben Roethlisberger game jerseys had collars, an embarrassing number of professional men would wear them under their suits. The Pittsburgh public schools have instituted a two-hour delay Monday morning in an effort to thwart what should be a severe epidemic of the usual morning-after-Steeler-Sunday-night game flu among teachers. Eat n’ Park, a venerable and highly profitable family restaurant chain that ordinarily wouldn’t close if a meteor struck downtown Pittsburgh, has won enormous goodwill because it’s decided to close at 3 p.m. on Sunday so its several thousand employees can not only watch the Super Bowl but have several hours to prepare the sacred sandwiches and dips and dress up for it. If the Steelers lose, the whole town will be on a suicide watch till March.

Even the Steelers’ success on and off the field could not defend Pittsburgh from the recession forever, however. For the last two months national publications that should have known better (like the Times) came to Pittsburgh, looked around at its service sector-university-government economy, and declared that it was some sort of model for other city-regions because it was apparently recession proof.

Of course, reality turned out to be not so kind. Pittsburgh’s unemployment rate and stable housing prices were relatively better than the national figures only because its deindustrialized economy was already so stagnant that it never experienced fast job growth or a recent real estate boom and therefore couldn’t go bust.

The latest regional numbers, as reported by, a useful web site devoted to documenting the economic reality of the Pittsburgh region as well as boosting it, showed job losses accelerating in December for the second straight month.

Compared to December of 2007, Pittsburgh had 7,500 fewer jobs in December 2008. November’s revised numbers, according to PittsburghToday’s Harold Miller, showed a net loss of 1,600. These numbers, while negative, are minuscule in a region with over 1.1 million jobs. In December jobs were up slightly year-over-year in health care, higher education, professional and business services, mining and construction, Miller reported, but about 10,000 lost jobs in leisure and hospitality, retail and manufacturing offset those gains.

Miller, per usual for a professional civic booster, looked for and found a few relative silver linings in Pittsburgh’s permanently gray clouds: The job loss – 0.6 percent in December – was small compared to Detroit, which has lost 5 percent of its jobs in the last year. And compared to Cleveland – Pittsburgh’s rival in all things, including pro football, population loss and the rate of post-industrial economic decline – the former Steel City did better.

The capital of Steeler Nation lost only 1 manufacturing job in 2008 for every 5 lost by the Cleveland, a city whose hapless Browns finished 4-12. But even if the Steelers – who are narrow favorites – whip the Cardinals Sunday and win their sixth Super Bowl in seven tries, it won’t do much to protect Pittsburgh from eventually being hurt harder by the national recession/depression.

LAPD Getting it Right

Though California state government may be truly dysfunctional, one much-maligned institution has managed to reinvent itself and flourish this decade: the LAPD.

The town that once conjured up images of Bloods and Crips shooting it out as an indifferent and racist police force sat by has seen homicides drop 41%, rapes by 37% and aggravated assaults by a whopping 63% over the last six years. In 2008, Los Angeles had the fewest property crimes since 1959 and the lowest level of violent crime since 1969 - amazing given the plight of the economy. And the benefits are being felt in the city's toughest neighborhoods: Compton, with 65 gangs crammed into 10 square miles, saw its lowest number of homicides in 25 years last year. All this has happened despite a much lower number of cops per capita - and a much larger area to patrol - than New York.

Police Chief Bill Bratton deserves a huge amount of the credit for this amazing transformation, but the department has also remade itself in the image of the diverse city it serves. Over a decade ago, the LAPD was 80% white. Today that number is 38%, with 41% of the force composed of Latino officers, 12% black, 7% Asian. Almost 20% of officers are women.

The LAPD has put a lot of effort into fixing its poor image in the communities where it was most detested - admitting to its checkered past in minority communities. And its strategies are working.

Housing Price Shifts Vary by US Region

Here's a look at the monthly Office of Federal Housing Enterprise Oversight monthly housing price index by US Census Region. The OFHEO index gives us a little different geographic cut than the popular S&P Case-Shiller Housing Index. We can see the extreme fluctuations in the western US, especially in the Pacific states. These are seasonally adjusted numbers current as of October 2008. The black line, depicting the national composite, finishes at 204 - indicating a doubling of housing prices since 1991, but a fall of 8.8% since its peak in April 2007.

The 8.8% national decline is interesting considering the larger declines depicted by the metropolitan focused Case-shiller index.

Judging by these numbers, the housing prices in the 8 states of the West South Central and East South Central Regions appear to be most stable. The Great Plains states fare remarkably well, and the east coast states are falling in line with the national average. Interestingly, end-to-end growth in the Pacific region ends up about the same as the stable south, yet it took a much more turbulent path to reach that point.

According to OFHEO, the data "is obtained by reviewing repeat mortgage transactions on single-family properties whose mortgages have been purchased or securitized by Fannie Mae or Freddie Mac since January 1975." Here's more on the OFHEO housing price index methodology.


Laughing During 'Gran Torino'

Recently, I saw Clint Eastwood’s extraordinary new film, 'Gran Torino' in Hollywood. Set in a declining Detroit neighborhood, the movie chronicles the unlikely relationship retired auto worker Walt Kowalski (Eastwood) forges with his new Hmong neighbors.

Walt is cranky, surly, and bigoted while still possessing a certain rough-edged charm. His dialogue is laced with racist terms and stereotypes that would mandate a lengthy “sensitivity training” seminar if he came of age in a different era.

And yet, the audience laughed and laughed loud. Here, in one of the nation’s most multi-ethnic cities with a history of racial tension, blacks, whites, Asians and Latinos were chuckling as Walt bemoaned “gook food” and cringed at his neighbor’s ways. Twenty years ago, Walt’s language would have appeared less ironic, perhaps being interpreted as a sign of how a sizeable percentage of white Americans viewed minorities. To laugh at Walt then would appear to be laughing with him rather than at him.

But in 2009 America, on the cusp of a black president arriving in the White House, a character like Walt feels safely anachronistic – his views seem fringe like. What seemed funny to the audience is that people like Walt still exist. What is so satisfying about 'Gran Torino' is how it eschews political correctness and decides to speak to an audience that it figures will laugh at Walt rather than with him. It assumes that Americans watching the film are smart and tolerant enough to get the joke. And they do.

I’d be curious to know how audiences reacted to the movie across the country.