Political Decisions Matter in State Economic Performance


California has pending legislation, AB 2529, to require an economic impact analysis of proposed new regulation. Its opponents correctly point out that AB 2529 will delay and increase the cost of new regulation. There will be lawsuits and arguments over the proper methodology and over assumptions. It is not easy to complete a thorough and unbiased economic impact analysis.

Should California incur the costs and delays of economic impact studies?  read more »

Iowa's Agro-Metro Future


When Brent Richardson, a field rep for Cadillac, was told he'd been transferred to Des Moines, he assumed he'd be spending the next year in a small town environment. Des Moines turned out to have much more bustle than he expected. The city had a robust insurance sector among its diverse industries. And the lifestyle was very similar to what he was able to live in big city suburbs like Naperville, Illinois or Bellingham, Massachusetts. Steeped in a decade of Farm Aid concerts, he also expected the surrounding rural areas to be populated with hardscrabble homesteaders struggling to hang on. Instead, he discovered that farming was big business – and, these days in particular, reasonably profitable. And some of those Iowa farmers turned out to be Cadillac buyers.  read more »

Urban Plight: Vanishing Upward Mobility


Since the beginnings of civilization, cities have been crucibles of progress both for societies and individuals. A great city, wrote Rene Descartes in the seventeenth century, represented “an inventory of the possible,” a place where people could create their own futures and lift up their families.

What characterized great cities such as Amsterdam—and, later, places such as London, New York , Chicago, and Tokyo—was the size of their property-owning middle class. This was a class whose roots, for the most part, lay in the peasantry or artisan class, and later among industrial workers. Their ascension into the ranks of the bourgeoisie, petit or haute, epitomized the opportunities for social advancement created uniquely by cities.  read more »

Cities: Size Does Not Matter Much Anymore


The heart and brain are certainly not the largest organs in the human body, but they are arguably the most important. Why? The heart, through a miles-long network of capillaries, keeps every part of the body supplied with nutrients, and the brain, through an equally extensive network of nerves, provides instructions to every part of the body about what to do with those nutrients. They are important not because they are big, but because they are connected to everything else.  read more »

Where’s Next: November May Determine Regional Winners


As the recovery begins, albeit fitfully, where can we expect growth in jobs, incomes and, most importantly, middle class opportunities? In the US there are two emerging “new” economies, one largely promoted by the Administration and the other more grounded in longer-term market and demographic forces.  read more »

America's 21st-Century Business Model


Current attitudes aren't too kind to the old American way of doing business. In our globalized economy, the most enthusiastically touted approaches are those adopted by centralized, state-dominated economies such as China, Brazil and Russia as well as--somewhat less oppressively--those of the major E.U. states.

Yet the U.S. may well be constructing the best sustainable business model for the 21st Century. It is an approach built on the country's greatest enduring strength--an innovative business culture driven increasingly by a diverse pool of immigrants.  read more »

Australia 2010: Unstable Politics in a Prosperous Country


2010 has been something of an annus mirabilis in Australian politics. On 24 June a prime minister was dumped before facing the voters a second time. This was the first time ever for such an early exit. Then the election on 22 August produced a “hung parliament”, an outcome not seen since the 1940s. Having fallen short of enough seats to form government, the major parties are scrambling for the support of four independents and one Green in the House of Representatives.  read more »

Has America Caught the British Disease?


As the economy stalls, analysts are worrying that the United States might repeat the experience of Japan’s “lost decade” (actually, two lost decades). Is America turning Japanese? We should be more worried about the prospect that America is turning British.

The United Kingdom went from creating the first industrial economy and establishing a global empire to lagging Italy by the 1970s. The neoliberal reforms of Thatcher and Blair, intended to modernize the economy, merely replaced a rotting manufacturing economy with an unstable rentier economy centered in the City of London. With a zombie economy characterized by industrial wastelands, off-limits aristocratic landholdings, tourist kitsch and a financial sector that choked on its own excesses, Tony Blair’s “Cool Britannia” looks more like “Ghoul Britannia.”  read more »

The Housing Bubble: The Economists Should Have Known


Paul Krugman got it right. But it should not have taken a Nobel Laureate to note that the emperor's nakedness with respect to the connection between the housing bubble and more restrictive land use regulation.  read more »

The China Syndrome


China's ascension to the world's second-largest economy, surpassing Japan, has led to predictions that it will inevitably snatch the No. 1 spot from the United States. Nomura Securities envisions China surpassing the U.S.' total GDP in little more than a decade. And economist Robert Fogel predicts that by 2050 China's economy will account for 40% of the world's GDP, with the U.S.' share shrinking to a measly 14%.

Americans indeed should worry about the prospect of slipping status, but the idée fixe about China's inevitable hegemony--like Japan's two decades ago--could prove greatly exaggerated. Countries generally do not experience hyper-growth--the starting point for many predictions--for long. Eventually costs rise, internal pressures grow and natural limitations brake and can even throw the economy into reverse.  read more »