Policy

Industry And The Urge To Cluster

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What drives industry to locate in one region and not in the next?

Economic geography – the distribution of economic activity over physical space – has always been central to economic development. Policy-makers trying to encourage economic activity to locate in under-developed regions want answers: Is it infrastructure? Fiscal incentives? Good business environment? Or could it be agglomeration – the compounding effect of industry clustering in a particular location?  read more »

Fool Me Once, Geithner, Shame on You, Fool Me Twice...

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Treasury Secretary Timothy Geithner revealed the new “Financial Stability Plan” on February 10, 2009. It’s thick with “why we need it” and thin on “exactly what it is.” He told Congress that he would open a website to disclose where all the bailout money was going. When asked if he would reveal where the first $350 billion went, he was a little vague on the details.  read more »

Housing Price Bubble: Learning from California

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In a letter to The Wall Street Journal (February 6) defending California’s greenhouse gas (GHG) emissions policies, Governor Arnold Shwarzenegger’s Senior Economic Advisor David Crane noted that California’s high unemployment is the result of “a bust of the housing bubble fueled by easy money.” He is, at best, half right.

The “bust of the housing bubble” occurred not only because of “easy money,” but also because of the very policies California has implemented for decades and is extending in its battle against GHG emissions.  read more »

Stimulus Plan Caters to the Privileged Public Sector

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Call it the Paulson Principle, Part Deux.

Under the now thankfully-departed Treasury secretary, we got the first bailout for the undeserving – essentially, members of his own Wall Street class.

Now comes the Democratic codicil to the P. Principle. It's a massive bailout and expansion of the public-sector workforce as well as quasi-government workers in fields like health and education.  read more »

Wisconsin Checks Out The Finland Club

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Our Central Wisconsin delegation journeyed to Finland in October, 2008. We definitely learned a few lessons that we’ll apply here at home, with the hope of moving our ability to compete globally to a much higher level.

“Finland is not a country, it is a club” stated one of the many presenters we heard during our study tour. This perspective of how Finns see themselves says something valuable about what they believe it will take for them to compete in the changing global economy: a whole lot of cooperation, strong relationships and inter-connectedness!  read more »

Reviving the City of Aspiration: A Study of the Challenges Facing New York City's Middle Class

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For much of its history, New York City has thrived as a place that both sustained a large middle class and elevated countless people from poorer backgrounds into the ranks of the middle class. The city was never cheap and parts of Manhattan always remained out of reach, but working people of modest means—from forklift operators and bus drivers to paralegals and museum guides—could enjoy realistic hopes of home ownership and a measure of economic security as they raised their families across the other four boroughs.  read more »

Obama: Only Implement Green Policies that Make Sense in a Time of Crisis

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With the exception of African-Americans, the group perhaps most energized by the Barack Obama presidency has been the environmentalists. Yet if most Americans can celebrate along with their black fellow citizens the tremendous achievement of Obama’s accession, the rise of green power may have consequences less widely appreciated.

The new power of the green lobby — including a growing number of investment and venture capital firms — introduces something new to national politics, although already familiar in places such as California and Oregon. Even if you welcome the departure of the Bush team, with its slavish fealty to Big Oil and the Saudis, the new power waged by environmental ideologues could impede the president’s primary goal of restarting our battered economy.  read more »

New York Should End Its Obsession With Manhattan

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Over the past two years, I have had many opportunities to visit my ancestral home, New York, as part of a study out later this week by the Center for an Urban Future about the city's middle class. Often enough, when my co-author, Jonathan Bowles, and I asked about this dwindling species, the first response was "What middle class?"

Well, here is the good news. Despite Mayor Bloomberg's celebration of "the luxury city," there's still a middle class in New York, although not in the zip codes close to hizzoner's townhouse. These middle-class enclaves are as diverse as the city. Some are heavily ethnic, others packed with arty types, many of them more like suburbia than traditionally urban.  read more »

Cleveland, Part II: Re-Constructing the Comeback

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Yesterday, in Part I, I talked about how, despite the Cleveland region’s significant assets, the Greater Cleveland Partnership’s strategy is failing to transform its economy. Today I’ll focus on the strategy’s five weaknesses, and how to fix them.

First: The Wrong Approach To Achieving Scale  read more »

Cleveland: How The Comeback Collapsed

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The Cleveland comeback has stalled. Once hailed as a shining example of rebirth in our industrial heartland, Cleveland now sits rudderless and drifting backward. Between 2000 and 2007, Cleveland suffered one of the largest proportional population losses in the country: the city shrank by 8%. Per capita income growth in Cleveland also lags behind cities like Cincinnati, Milwaukee, and Pittsburgh. Since the early 1990s, the gap between Cleveland and these other cities has widened. As a regional economy deteriorates, the pressure for social services goes up.  read more »