James Fallows

James Fallows is a national correspondent for The Atlantic and has written for the magazine since the late 1970s. He has reported extensively from outside the United States and once worked as President Carter's chief speechwriter. His latest book is China Airborne. More

James Fallows is based in Washington as a national correspondent for The Atlantic. He has worked for the magazine for nearly 30 years and in that time has also lived in Seattle, Berkeley, Austin, Tokyo, Kuala Lumpur, Shanghai, and Beijing. He was raised in Redlands, California, received his undergraduate degree in American history and literature from Harvard, and received a graduate degree in economics from Oxford as a Rhodes scholar. In addition to working for The Atlantic, he has spent two years as chief White House speechwriter for Jimmy Carter, two years as the editor of US News & World Report, and six months as a program designer at Microsoft. He is an instrument-rated private pilot. He is also now the chair in U.S. media at the U.S. Studies Centre at the University of Sydney, in Australia.

Fallows has been a finalist for the National Magazine Award five times and has won once; he has also won the American Book Award for nonfiction and a N.Y. Emmy award for the documentary series Doing Business in China. He was the founding chairman of the New America Foundation. His recent books Blind Into Baghdad (2006) and Postcards From Tomorrow Square (2009) are based on his writings for The Atlantic. His latest book is China Airborne. He is married to Deborah Fallows, author of the recent book Dreaming in Chinese. They have two married sons.

Fallows welcomes and frequently quotes from reader mail sent via the "Email" button below. Unless you specify otherwise, we consider any incoming mail available for possible quotation -- but not with the sender's real name unless you explicitly state that it may be used. If you are wondering why Fallows does not use a "Comments" field below his posts, please see previous explanations here and here.

James Fallows: Economics

  • The Eagles Come to Allentown, and So Does 'American Futures'

    Tomorrow is the first day in an old city's new life—or so the city leaders hope and believe.

    PPL Center arena in the heart of downtown Allentown, as it looked two weeks ago. On Friday night at 8 pm, it kicks off Allentown's new era with a concert by The Eagles. (All photos: Deborah and James Fallows)

    In a few hours, our partners at Marketplace will carry their latest “American Futures” report, this one on an unusual, high-speed, and high-stakes effort to revive the tattered downtown district of Allentown, Pa. Starting next Monday, here at the Atlantic’s site, Deb Fallows, John Tierney, and I will kick off a new season of American Futures reports with a series of posts on Allentown's ambitions, challenges, and personalities.

    In between those two dates—to be precise, tomorrow night, Friday, at 8 p.m.—the new era in the town's long history will begin, when a brand-new 10,000-seat arena will have its debut event with a concert by The Eagles.  If you're interested in getting tickets, good luck! Some people told us that the concert was entirely sold out three hours after tickets first went on sale; others, that it had taken 24 hours. Either way, it's a significant moment for the town.

    What you see at the top of this post is the way the arena and its surroundings looked less than two weeks ago, when the most common downtown sights were cement trucks, construction cranes, paving crews, and other signs of people working hard against a deadline. What  you see below this paragraph is one of many sketches of how a revived Allentown central district is hoped to look.

    "Will this possibly be ready in time?" we asked ourselves—and our hosts. "Yes!" said mayor Ed Pawlowski, who has overseen the revitalization effort from the city-government's perspective. "Yes!" said J.B. Reilly, the developer most prominently involved in the downtown effort. "Yes!" said Lee Butz, whose construction firm is building the arena. We'll all know for sure tomorrow.

    The story we plan to tell about Allentown and the surrounding Lehigh Valley region is different from what we expected before going there (which is, of course, the reason to make these trips), and I suspect different from the image that the city's name may call up in many people's minds. Billy Joel's anthem of industrial decline "Allentown" is misleading in a micro way. It's about the ripple effects of shutting down a huge steel works—but that was in fact the story of nearby Bethlehem and its enormous Bethlehem Steel plant, whose ruins have now become an eerily compelling modern-Stonehenge style arts center, concert venue, and casino. (The music-video is also an astonishing specimen of early-Reagan-era camp, but we'll save that for a later installment — plus the reasons why Billy Joel called the song "Allentown" rather than "Bethlehem" in the first place.)

    A band warming up on a Saturday afternoon at SteelStacks, once the enormous Bethlehem Steel works

    Allentown has suffered its large industrial layoffs, notably with what had once been the world manufacturing center for Mack trucks. Now that is a center of advanced-tech and light-manufacturing startups—including a great brewery, and a "meadery"—working on what had been the Mack shop floors.

    Once the site of Mack Trucks, now an incubator for a
    "walkable manufacturing" economy

    We'll describe the goal of "walkable manufacturing" that the people running this center envision for their community.

    But the overall economy of the Lehigh Valley region is stronger, for surprising reasons, than many outsiders would assume. What many people in Allentown describe as the city's real problem, and the challenge their new programs are designed to address, is specifically the decay of their historic downtown as a place where people were willing to shop, dine, spend time and money, work, live, and generally consider an attraction rather than a menace.

    Thus when people in Allentown talk about a turning point downwards in their city's modern history, they're less likely to mention the Bethlehem Steel shutdown than the shuttering in the 1990s of the main Hess department store, which had been one of the highest-grossing retailers in the country. If you go to these archives of the Morning Call, you can find some astonishing Times-Square-on-New-Year's-Eve pictures of the throngs that once teemed in front of, and down the aisles inside, the main Hess store. (I will include some if I can get permission from the relevant people at the Morning Call. Meanwhile, here is one from Department Store Museum.) The Hess store and many other downtown retailers were the victims of, naturally, the spread of suburban sprawl-malls. By the way, the more we travel, the more we come to regard these malls as Public Enemy No. One in the mis-shaping of late 20th century America.

    Getting an idea of what downtown Allentown had once been helped me understand a comment we heard from State Senator Pat Browne, a Republican who represents Allentown and who is credited with coming up with the tax plan, known as Neighborhood Improvement Zone or NIZ, that plays a crucial part in the investment boom now underway. "Ten thousand people coming right here, downtown!" he said two weeks ago, looking forward to what should happen tomorrow night. "What that will mean to everyone here ..."

    If you look even a block or two in the wrong direction from the hub of all the construction, you can see all the signs of a still very troubled downtown area. Pawnshops, boarded up buildings, check-cashing operations. We'll report on how the city thinks it can spread prosperity from an intensely built-up center; what this will mean for the city's sizable Latino minority, many of whom are Puerto Ricans or Dominicans who have come from New York and New Jersey in search of a more affordable, safer life; why some of the area's companies have decided to shift their investments from suburban sprawl back downtown; how the area's school systems affect revival prospects; and more.

    With the Marketplace crew, talking with City Council President Julio Guridy a few blocks from the new city center and arena.

    There's a lot riding on tomorrow's opening performance by The Eagles. I am happy to report that as of 2:30pm EDT Thursday, 30 hours before the opening, my friends in Allentown are saying that things seem all set and ready to go.

    Mayor Ed Pawlowski, inside a downtown building just before it reopened as the headquarters of Trifecta Technologies, a locally owned software firm.

    There's more to come, but that's enough for now. Over to Marketplace, and then to The Eagles, and see you here next week for more of the Allentown saga.

  • California High-Speed Rail No. 11: Thinking in Time

    Everybody talks about the future, but nobody does anything about it.

    This model of locomotive is slightly before my time, but otherwise it's a childhood scene I recall. ( Calisphere )

    If you're joining us late, this is No. 11 in the roman fleuve known as the California High-Speed Rail series. HSR is of course a major part of Gov. Jerry Brown's legacy and platform as he runs for an unprecedented fourth term. We'll wrap things up by the time we get to No. 15. For previous installments see No. 1, No. 2, No. 3, No. 4, No. 5, No. 6, No. 7, No. 8, and No. 9, and No. 10.

    Today's theme is "thinking in time," after the title of a wonderful book by my one-time professors and longer-term mentors Ernest May and Richard Neustadt. In our previous installment, a former Federal official wrote about the difficulty of thinking about effects, good and bad, will be felt only decades in the future. Now readers address the question of considering the future.

    1) "If we refuse to embrace the unknown, we will remain inert."  From a reader in the South:

    In Richmond, VA, I'm involved in historic re-enactments. (One of my many lives involves acting).  I'm currently studying for a re-enactment of the Virginia debates over the ratification of the Constitution in 1788, involving Patrick Henry, Peyton Randolph, James Madison and George Wythe.  And one of the themes in the debate is whether the existence of defects in the Constitution as proposed should result in its defeat, or whether they could rely upon the goodwill and intentions of those involved to remedy defects as they occur; especially whether to ratify on the assumption that the Bill of Rights would be enacted, or to forestall the entire enterprise to achieve some unattainable level of perfection.

    On one side Patrick Henry assumes that the scoundrels will usurp the individual liberties for which they had recently fought bloody battles.  

    The argument on the other side excoriates the opponents for supposing that the general legislature will do everything mischievous they possibly can, and that they will omit to do everything good which they are authorized to do.  In essence it is a plea to recognize that the people will rest their authority in the hands of representatives of goodwill: It is more reasonable to assume that they will as readily do their duty as deviate from it.

    It's important to make sure that we have people of goodwill and good talent. There will be things unforeseen; there will be things foreseen which won't materialize.  The human mind is incapable of embracing the totality of circumstances.  And the failures fade, as the inherent goodness of the works remain. 

    I really wonder whether the people of Boston drive through the Big Dig wishing it had never been built.  Do the people complaining of the Oakland Bay Bridge desire that it not be replaced? Do we assume that the project was handed over to a bunch of incredible dolts? Or is it a massively complex piece of engineering, undoubtedly with issues which were not foreseen?

    Yes, there are the failures, and they happen as frequently in private enterprise as they do in government.  But if we refuse to embrace the unknown, and refuse to forgive that which was not attained, then we will remain inert.  

    And in that vein, I give you our contemporary Congress where there are too many people who are not of goodwill who have lost sight of the purposes of the Union.  A republic depends upon people of goodwill doing the work of the people... Shining a light on one such important work is extremely valuable to that end.

    This is not about railroads, but it continues the orange-crate art theme, plus thinking-in-time. (Calisphere)

    2) "It's our familiar combination of anarchy and oligarchy." From a reader in northern California

    I'm not sure how to deal with this, but it's actually not uncommon. Several studies and stories of past Big Projects (levee systems, aqueducts, even the transcontinental railroads) show that Americans in general can't see beyond the tips of their noses in terms of planning and financing Big Things.

    That's something we have to live with in this country: we are not Europe or Japan, where even under "democratic" systems with parliaments and the like the overall government and economic structure remains aristocratic with a strong sense of national identity and vision.

    Comparisons to Europe don't work here, because we have a combination of anarchy and oligarchy, neither of which cares about the long term. Trying to show that it'll be better for the kids or grandkids doesn't fly well; it's what you're doing for me today or next week, or perhaps (for a corporation) over the next quarter to at most a year.

    This is not a large-scale infrastructure project. Miniature railroad, early 1920s. (Calisphere)

    3) "A century is nothing!" Last time around I said that infrastructure decisions were so crucial because "people will be living with their consequences a century from now." A reader in Massachusetts says that's a gross under-statement:

    a) The Erie Canal opened in 1825. By 1842, its entire route had a railroad.  Nevertheless, I understand it’s the big reason that the Northern tier of New York is lined with cities, while the central and Southern corridors are lined with cute little villages.

    b) Property values in Manhattan are, to a considerable extent, dominated by the placement of subway lines. Many of those lines, coincidentally, were laid out in part by real-estate speculators. Chicago’s Loop is all about rails, literally.

    c) The street grids of most cities bear scars from odd or arbitrary choices made long ago, but which continue to influence the way the city moves and works.  San Francisco’s street grid collision at Market Street is one obvious example. The inability of 19thC engineering to get rid of Boston’s Muddy River means that Back Bay, that very tony residential neighborhood, ends abruptly in The Fens, Fenway Park, and the commercial clatter of downscale Kenmore Square. Just to the South, the memory of a short-lived railroad bridge, filled in and vanished for a century and a half, firmly divides downtown from the south end.  In Chicago, Clark and Broadway divide at Diversey because that’s where two trails diverged back before 1830.

    Even big parties cast a long shadow. Paris 1889, Chicago 1983,  San Diego 1915 — what would Paris be without the Eiffel Tower, Chicago without Grant Park (and the Art Institute) and Jefferson Park (and the Museum of Science And Industry, the Columbian Exposition’s palace of fine art), or San Diego without Balboa Park?

    d) And why is Boston a city at all?  Boston existed for its harbor, just as Salem (once far more important) did.  Salem’s Harbor silted up, and then people discovered that while Boston Harbor freezes only once a generation, New York Harbor never freezes. Once that was clear, the ships all moved to New York, yet Boston remained.

    e) The Oregon Trail and the Santa Fe Trail were shaped for technologies that vanished long, long ago — and actually were useful for only a brief time. Their routes continue to shape the West. Some of this is geography, but only some.

    Electric railroad on the Peninsula south of San Francisco, ca 1900 (Calisphere)

    4) "The number is just too big." The same California reader as in the second point, above, on the distinct challenge of understanding large multi-year costs:

    People think of a $68 billion (or whatever something *10E09) as a lot of money. That's because the vast majority of people in this country get along one way less than $100K a year (more like <$50K) [JF note: median US household income is a little above $50,000] and just can't conceive of anything that can or should cost that much.

    They also see that as money spent right now, not over 20+ years. Doesn't matter whether it's current dollars or inflated - the number is just too big.

    I understand, because I worked for 40 years in various forms of land use and environmental and transportation planning, that the $68 B inflated number over 20 years is real but phony at the same time: real because you can explain how you got it using standard financial analysis, and because Federal financial planning requirements now insist that such a number be provided; but phony because it is based on a ton of assumptions that will have to change as time goes on.

    We have the same problem with regional traffic and emission projections over 20 years. The number could go up or down (though most of the time it goes up), so you have a regular update process to adjust things. Also, the general public, if they think about it at all, see the $68 B as what they will have to pay in taxes for this thing - with some justification considering how transportation in general has played out over the years, though they don't see it that way for things like roads that they use every day.

    By rail to Muir Woods, 99 years ago (Calisphere). As will be obvious, I consider the University of California digital archive known as Calisphere to be a treasure trove and a major public asset.

     

  • California High-Speed Rail No. 3: Let's Hear From the Chairman

    It's time for broader national attention to the most expensive and ambitious infrastructure proposal in America today.

    Plan for the California high-speed rail system when completed ( UC Davis and Esri )

    First, a word about the roadmap for the series I have in mind here. Last week, in installment No. 1, I tried to put California’s proposed north-south high-speed rail (HSR) system in perspective, and preview why I’ve become a supporter. Then, in No. 2, I summarized and quoted some of the critics and opposition, including an article pointing out in loving detail my (alleged) naiveté.

    Why give so much space to the topic in the first place, in those installments and some through this coming week?

    • Because California is our most populous, most productive, and (depending on the measure) both our most environmentally progressive and our most polluted state. Whatever it does on the transportation front matters.
    • Because this initiative is the most expensive and ambitious, and as best I can tell the most important, infrastructure project under consideration in the country as a whole. If it were happening on the East Coast, I promise you it would be in the NYT and the national TV news all the time. If someone has a nominee for a more ambitious/important U.S. infrastructure project, please let me know about it.
    • Because HSR is the signature and now politically embattled project of Jerry Brown, who is in the middle of his bid for an unmatchable fourth term as governor of California. (Last year he passed Earl Warren to become the longest-serving governor in California history. No successor will have a chance to beat his record, because they will be subject to a two-term limit enacted in 1990, after Brown had served his first two terms.) And ...
    • Because, in my view, the decision-process about this project will show a lot about the way our prosperous-but-unequal, environmentally-concerned-but-skeptical-of-spending American society can undertake big public endeavors.

    ***

    Dan Richard, with California Secretary of Food
    and Agriculture Karen Ross, in Shanghai last
    year as part of Jerry Brown's delegation. One of
    the stops was a Chinese high-speed rail station.

    More from me later on. Today, as installment No. 3, I give you Dan Richard, who as chairman of the California High-Speed Rail Authority is Jerry Brown’s designate to oversee the project. He has a long background in finance, utilities, and public works. He started at NASA, served in the first Jerry Brown administration, was an official at PG&E, co-founded an energy consulting firm called MRW & Associates, and was twice the president of the board overseeing BART, the SF-area transit system. For the record, I had not known him until we met in Merced this spring so I could interview him about HSR. Also for the record, he turns out to be a fellow active Cirrus pilot, and flew himself to Merced in his four-seat SR22.

    We’ll hear again from Richard in at least one more upcoming installment. For the moment, if you’d like to get a sense of how he sounds, and why he’s spending his time on the project, you could listen to a podcast of his recent address at the Commonwealth Club about what the project can mean to the state. The Commonwealth Club, for those who don't know, is (along with the newer and fast-growing Zócalo) California’s functional equivalent to C-SPAN plus the D.C. think tanks.

    For the rest of this installment, here is Richard's response, via email, to the critical letter I posted from a reader who liked the idea of high-speed rail but had soured on the specifics of this project. Passages from the reader’s message are in itals, followed by Richard’s response. In this installment I'm giving Richard his uninterrupted say, as I did with the opponents previously.

    Aspirational version of the HSR station of the future, from the High-Speed Rail Authority

    [Reader]: First off, I am very supportive of a high speed rail network in theory; very few people I have talked to are not....

    However, the actual execution of the high-speed rail plan is what has gone and lost my support.  While a high speed land connection between Los Angeles and San Francisco would certainly make money, the high initial investment is obvious.  Shorter segments between San Francisco and Sacramento, Los Angeles and Las Vegas, or even Los Angeles and San Diego would make money almost immediately.  However, none of those things is what they are building.  Instead, they are building the line between Bakersfield and Merced, with the further extensions only in later phases at undetermined dates.

    [Dan Richard of HSR] I can understand this frustration. To a certain extent, we're playing cards we were dealt. The bond act established a first phase of the project between LA/Anaheim and San Francisco. It put San Diego and Sacramento into a Phase II, which we cannot fund until we complete Phase 1. If someone asked whether it would have been better to build the first leg between LA and San Diego, I'd be hard pressed to dispute that.

    However, having said that, I do believe that as difficult as it is, there are ample reasons to begin in the Central Valley. Here are several:

    • We can lay the most track-miles per dollar there, which means we can get a good jump on the project.
    • It's one of the only places where we can test the trains at their maximum speeds of up to 250 mph. You can't do that between SF and San Jose or between LA and Anaheim.
    • There is no existing corridor there. Securing transportation corridors should be one of the earliest things done.
    • The Central Valley is growing at the fastest rate in the state. Already, we may have to buy and tear down a four year old apartment complex in Bakersfield that wasn't there when project planning started.
    • The economic stimulus effect in the Valley would be very great, given poverty and unemployment. The Valley is left behind economically and needs to be connected to the great urban areas.

    Politically, I've seen over the last two years, that urban lawmakers—of either party—simply don't want to spend money in the Valley. There will always be an insatiable need for local transportation projects and without forcing the construction of the project spine, I fear it would be a long time before anyone wanted to actually try to connect the whole state.

     

    The line between these two cities [Bakersfield and Merced] would be, basically, useless; to attempt a simile to another part of the country, this would be as if the Acela didn't go between DC and Boston, just between Trenton and Newark...

    Even though our first construction segment will not be full high speed rail, it will not be useless. The bond act says we must build useable segments and this segment will be.

    Right now, the Amtrak route down the Central Valley is the fifth busiest in the nation. California has three of the top five Amtrak routes. Sacramento is the 7th busiest Amtrak station in the U.S.! The ridership on that line tops 1 million trips per year and is growing at double-digit rates. The trip takes five hours to Bakersfield from Sacramento or Oakland, over a lousy rail bed much of the way, etc. The track is shared with freight, which means that it is subject to speed restrictions of passenger trains, constraining them to 79 mph.

    We will be building 130 miles of brand new, passenger-only track. While we will not begin high speed service on that immediately, the current Amtrak trains, rolling onto our track at Madera, will be able to open their throttles and go 110-120 mph with existing equipment, shaving 75-90 minutes off the trip. Moreover, we will be tying in the very popular ACE train service that currently goes from Stockton to San Jose. The point is that we will be building up a network of improved rail service as we "vertically" improve to full HSR levels. I wish we had the money to build everything at once but without a national commitment, what we are doing is building a foundation, using the structure for immediate good purposes and preparing for full HSR.

     

    Building this section first, without connecting any major population center to any other, therefore seems like an investment with no hope of a return.  In the  meantime, the people already opposed to the system (which are particularly numerous in the Central Valley) will be joined by those opposed to government waste in general, who will point to a train that has already cost billions of dollars and still connects nowhere to nowhere, and say, "enough, pull the plug, this has been a waste of money."  Once that happens, the political realist in me has to acknowledge that there is no way promises of "but if we extended it further, it would actually work" would get any traction, and the idea would be dead. 

    As I have remarked with my friends, only half-jokingly, if they wanted to kill the idea of high speed rail in California forever, they couldn't have gone about it much better than this.

    The federal GAO looked at our project at the behest of Congressional Republicans. They concluded that our biggest risk is the lack of full funding—a widely quoted statement in their report. I have been prone to quote their next sentence which was that we have developed a reasonable risk mitigation plan by building the project in segments, with each segment having immediate value. Would it be better to build everything at once? Yes. You have to start somewhere. This is a beachhead.

     

    To this pessimistic political outlook, I could also add the accusations of mismanagement of the funds already spent, and the compromises that are watering down the project as it moves along (portions of the line are now not even going to be high-speed), but those are already documented by actual journalists.  My main feeling, though, is that if they wanted this to work, they should have gone about it any other way than what they have.

    I have to simply reject these statements. Most importantly, we have not made compromises to water down the project. It's an unfortunate myth.   We are maintaining fidelity to the bond act requirements of a 200+ mph electric train designed to get from Los Angeles to downtown San Francisco in less than 2 hours 40 minutes. Ninety percent of the track will be new, dedicated high speed rail track. For the other ten percent, in the urban areas where trains don't operate at line speeds anyway, we will share the track. The passengers won't see any significant difference.

    Ultimately, someone may upgrade those last sections, but in the meantime we save billions of dollars, provide early investments to upgrade popular commuter systems on those lines and still meet our performance standards and ridership projections.

    Maybe the program was mismanaged, but it is not now. Maybe it was a clown show for a number of years. Not now. Not at all. In fact, the the GAO report found that our cost estimates and ridership estimates largely complied with best practice.

    When Jerry Brown came in, the HSR program was rife with problems. The organization was at half-strength, the board was dysfunctional, there was a high level of criticism from independent groups evaluating ridership and plans.

    All of that has turned around. The board is highly cohesive and professional. The staff is now at full strength with a highly capable day-to-day CEO, top flight engineering, risk management and program leadership. We have the most sophisticated risk management program likely to be found in any public infrastructure program. Our cost data and risk assessments are now presented publicly on a regular basis at our board meetings and are in accessible form on our website. Our CEO put in excellent local project leaders and former critics have lauded the openness and responsiveness of that team.

    Here's a quote from the Independent Peer Review Group, established by the California Legislature. The PRG was highly critical of past plans. No more:

    "We believe that the Authority has made manifest progress in all areas of planning and management since the Revised 2012 Business Plan. This assessment applies to risk management, demand forecasting, operating and maintenance (O&M) cost modeling and the analysis of the impact ofHSR on California's greenhouse gas emissions.

    "We particularly compliment the inclusion in all of the upcoming financial and economic analyses of probabilistic assessments based on Monte Carlo simulation techniques so that future reports will more accurately report the range and likelihood of potential outcomes. The Authority also expects to incorporate their cost experience in real time at every stage so that future plans will more and more be based on results rather than expectations. As noted by the U.S. GAO, the Authority'S steps to take uncertainty into account are appropriate for this stage in the project. With this said, we also emphasize that essentially all of the Authority's plans and budgets so far necessarily remain based on estimates rather than experience, causing all of the plans to have a wider range of uncertainty than might be the case 5 to 10 years from now. "

    It's a big decision, that matters. Watch this space for more.

  • Now That Mississippi Is in the News

    Can the media avoid a freak-show tone?

    The Air Force's training base in Columbus has stayed open through waves of base-closing, thanks to the influence of Mississippi politicians.

    Nearly a year ago, when my wife Deb and I were kicking off our American Futures project, we said that one of the ambitions was to apply a "normal" reporting lens to parts of the country that don't usually get it.

    The range of experience in New York or San Francisco—or in D.C. or Boston or L.A. or Chicago or sometimes Seattle or Miami or a few other places—is a staple part of American news and pop-culture coverage. But when somewhere in South Dakota, or Alabama, or Inland-Empire California, or Kentucky is in the news, it's usually because of:

    •  a disaster, natural or man-made: tornado, shooting, explosion, flood, drought, hate crime, sinkhole;
    • a sporting event (NASCAR, Little League World Series) occasionally or a political event regularly: any place in Iowa or New Hampshire every four years in primary season, then Ohio and Florida in the general election campaigns;
    • a "concept" piece—"meth in the heartland," "the new economy of prisons" "climate change hits the farm"—that involves picking out some Middle American location and using it as the narrative setting for your thesis.
    Inside Marriage Special Report bug
    Reinvention and resilience across the nation
    Read more

    You've seen something like that going on in Mississippi these past few days, with more to come in the two weeks ahead. The Senate primary is the latest front in the struggle for the future of the GOP. Thus we have reports from Tupelo and Hattiesburg, op-ed pieces on the paradox/ hypocrisy of America's most "conservative" states being the ones most reliant on federal subsidies, and so on. And, given Mississippi's past, plus eloquent reminders of the omnipresence of that past from the state's most celebrated writer, there's an all-but-irresistible freak-show undertone to a lot of reports from Mississippi. These Southerners! Can you believe them?

    I mention this as set-up to the very interesting note below, from a lawyer in the Jackson, Mississippi, area. [See update below for his identity.] Here's a policy exception I'm making for this note: When quoting reader mail, I always cut out any specifically complimentary part. If someone says, "Great article, but I wonder about your point that ..." I will quote it as beginning, "I wonder about your point that ..." No doubt it's the WASP in me, but I figure that quoting compliments can't come across well. I'm leaving in the complimentary parts of the note that follows, both because they're integral to the reader's point and because, frankly, it's so heartening for my wife Deb and me to hear that what we've been trying to do has come across in the way we intended, at least in this case. 

    Now, to our reader in Mississippi:

    Yesterday, a stray tweet from a friend announced you had been doing some writing about my home state so I hurried over to check things out.  I haven’t had time to read everything, but I want to thank you and your lovely “research assistant” for engaging with some of what is good in our state.

    You may be aware the chef Anthony Bourdain, of whom I’m a fan, recorded an episode of his CNN show on the “Mississippi Delta” with stops in Jackson and Oxford too. I was appalled by it.

    He was escorted around by the food writer John T. Edge (a Georgia native) and spent an inordinate amount of time in Oxford (where I was previously a resident for eleven years) with the expat writer community and fellow chef John Currence (a New Orleanian). 

    The most unbearable moment came when Geno Lee, the proprietor of the Big Apple Inn, a historic black-owned business in Jackson famous for their pig-ear sandwiches, announced to the camera, “I didn’t know I had such a cool place until he (John T. Edge) told me so.” 

    I cringed at the N.Y. Times-published taste maker “blessing” the heretofore clueless owner of a historic business. Edge spoke for Lee, the writers spoke for Oxford, Chef Currence spoke for himself and any truth about Mississippi was lost in the process. What was absent from Bourdain’s show, and what is not absent from your series of dispatches, are the voices of Mississippians speaking for themselves.

    I find a lot of reporting, storytelling, and documenting of the South in general and Mississippi in particular to be diagnostic and mostly hostile or contemptuous. (There’s no victim complex here, I assure you, you would be hard pressed to find anyone who give you a more honest accounting of our historical cultural and political depravity which has given way to the current cultural and political malaise and decay.) The hostility is born of our state’s vicious history and pretty understandable; however, I think the tendency to diagnose comes from a certain impenetrability  of our society or culture. 

    There is a complexity of feeling and attitude that history has imprinted on most Mississippians through the generations. This is a place that the American dream went and continues to go unlived by most, not only because of our racial history, but because of isolation, poverty and backwardness that transcends any questions of black and white and effect huge numbers of endemically poor of both races. The collective emotional damage of that history remains unresolved just as the social and economic damage does in way that is more pronounced than Alabama, Louisiana, Arkansas, or South Carolina. 

    What I appreciate about your series is that, and maybe you are simply performing that now rare function called journalism, in the face of that impenetrability you broadcast the voices of Mississippians working on the ground in hopes of turning the tide of history in their communities or for themselves. You may find this odd, but Higgins’s quote [in this post] about Eurocopter “changing the psyche” nearly brought me to tears. Despite the small upward or downward spikes in wealth and affluence for the small elite and middle classes (of which I am, thankfully, one), it is that image of sharecropper, white or black, Higgins invokes about which we all shudder.  The shame of poverty, lack of education, civic and political failure is shame for those who experience it directly as well as the elites who have allowed it to persist uninterrupted since Reconstruction.  

    You hear the echoes of Higgins’ “barefoot and pregnant … snuff in their lip” in Kimberly Sanford’s essay when she describes her sister, mother and mother’s third husband—the miscarriage, the dirty table, the work boots and worn jeans. [For about Ms. Sanford, see below.] For Kimberly, it appears the discovery of feminist criticism is changing her psyche in a way similar to that in which Eurocopter helped Higgins dream big for the GT.

    These stories of discovery are the ones that get lost among the usual yarns told to tourists in Mississippi whether it be the terror of the Civil Rights Movement, the fantasy of Antebellum culture and the old Lost Cause, the friendly debauchery of the Delta planters or the very real charms for Oxford.  But like everywhere else, it’s self-discovery and self-actualization that are in short supply, not images of cotton, bluesmen, bourbon, much less hooded klansman and hoop skirts.

    I hope comparing your work to Bourdain’s doesn’t offend you. I only do so because both are recent depictions of life here, even if yours is journalism and his is entertainment. 

    I love my home state as much as an American can love the political subdivision in which he was born and raised. I do not, however, think Mississippi is a “great place.” It is not. In the present day it is a strange, tribalistic, confused and impoverished. However, I do believe Mississippi has great potential  to be a better place. Thank you for sharing with your readers what many of us believe are the green shoots of some kind of economic transformation here. But more so, thank you for letting Joe Max Higgins and Kimberly Sanford speak about discovering ways forward from this dark, green, lonely place. 

    Sincere thanks back to the reader for this powerful and thoughtful note. Deb and I do feel as if over the past year we have learned as much about the variety of our country as we learned about China in any of our years of traveling and living there.

    Update: At his request, I'll identify the author of this message. His name is Zachary Bonner, of Ridgeland, Mississippi. He says that he would be happy to hear from like-minded people in the region or beyond. You will easily find his contact info online. 

    Fifth and Main, downtown Columbus.

    Before I send you to the rest of the reader's thoughts, let me mention Deb's latest report from Mississippi, which is about some of the science projects developed by students at MSMS, the Mississippi School for Mathematics and Science, in Columbus. Again its point is to let students and teachers there describe in their own words—literally, in short videos—what they are trying to do. And if you read the powerful collection of MSMS student essays that Deb previously presented here, you might be interested in this update on what is becoming of the five students she mentioned, starting with one the lawyer-reader mentioned:

    • Kimberly Sanford, "As I grasp the battered storm door of my unleveled mobile home ..." is going to Harvard.

    • Rachel Jones, "The wind of my parents’ perennial unemployment has blown away my umbrella ..." is going to Vassar.

    • Brendan Ryan, "my favorite things about living at a residential high school four hours from my hometown is the car rides home ..." is going to Wenzao Ursuline University in Taiwan.

    • Sabrina Moore, "MSMS is often referred to as the most diverse square mile in the state of Mississippi ..." is going to Mississippi State.

    • Joseph Messer, "I think that home is also wherever I make it ..." is going to Deep Springs College in California.

                                                                 ***

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  • The Endless Civil War Goes On

    Northerners and Southerners, blacks and whites, grapple once more with the question of "what's the worst we will put up with?"

    C.S.A. monument, West Point, Mississippi, May 2014.

    None of us planned it this way, but my wife Deb and I happened to be reporting from Mississippi at just the time when when Ta-Nehisi Coates's "Case for Reparations" article, which starts with scenes from Mississippi, was coming to such deserved attention.

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    What Deb and I have been discussing is loosely parallel to, rather than directly engaged with, the issues of legally enforced racial injustice that are central to Ta-Nehisi's story and its follow-ups. We have been looking at the ways a part of the country with this heritage—on average quite poor, historically under-industrialized, with about three times as great an African-American population share as the country as a whole (about 38 percent in Mississippi, vs. about 13 percent for the United States) and with a history of racially based mistreatment of its black population—moves ahead now, as every part of the country aspires to do. We've had Ta-Nehisi's articles in mind as we've been writing, and I think the accounts of Mississippi then and Mississippi now can usefully be read together.

    As a reminder, here's a "swipe map" by John Tierney, matching proportions of black population across the country with median household income. (Click "Hide Intro" to see more of the map. You can zoom in and out and pan to different parts of the country. Also you can follow a link to a more fully featured, but non-embeddable, version of the map.) 

    For background, reports mainly from Deb on extraordinary efforts in innovative Mississippi schools are here: one,  twothree, and four. And mine on the surge of heavy industry in the "Golden Triangle" of east-central Mississippi are here: onetwothree, four, and five. 

                                                               ***

    In the latest installment, I quoted a reader from the North arguing that on balance it would have been better for America if Mississippi stayed poor. The reasoning was that industries coming into lower-wage, emphatically non-labor-union Southern states were part of a "race to the bottom" that has immiserated the middle- and working-class everywhere. That reader and others faulted me for not laying out my own views on the race-to-the-bottom question as regards Mississippi, whether or not I'd done so in previous books or in reports from China (which is of course as the center of "race to the bottom" patterns worldwide).

    I'll do that, but as part three of today's three-part plan. Part 1 is factual clarification from Joe Max Higgins of Columbus, Mississippi, who has been at the center of some recent reports. Part 2 is a selection of messages from readers on the "race to the bottom" / "let those Southerners stay poor" theme. And part 3, after the jump, is my summary view.

                                                                  ***

    Part 1: Joe Max Higgins and the new industrial wage. Earlier I mentioned that Joe Max Higgins, of the business-promoting "Golden Triangle LINK" organization in Columbus, Mississippi, had one big guideline for the industries he hoped to attract. Namely, that they pay a lot more than people in the area already earned.

    As a benchmark: the median household income in the United States is just over $50,000 per year. In many parts of Mississippi, it's barely half as much. Then when the enormous, high-tech Severstal steel mill opened up outside Columbus, employing hundreds of people at an average pay (before benefits) of $80,000, Higgins said that he regarded this as a huge win for his area. A reminder of what it's like inside the mill, from a company video that exactly resembles what I saw:

    Many people wrote back to say: Eighty thousand dollars, on average? No way. You've been conned! So I went back to Higgins. He showed me evidence of a formal agreement between the mill and the State of Mississippi that the average pre-benefit pay must be at least $70,000. And at the latest audit, it was just under $80,000.

    I'm not getting into the possible differences between median and average earnings there, or what the workers give up or gain by being in a non-union plant. I'm saying that there's a reason the mill had so many thousands of applicants when it opened up, which is that its jobs are such a step up for local workers. (And, before you ask, there is still an installment coming on how local people are being trained for these jobs.)

                                                                   ***

    Part 2: Let's hear from the readers. There has been a very large volume of mail, from which I am trying to take representative samples. Here goes.

    • Think of the TVA as reparations. A previous reader objected to the TVA even trying to speed development in Mississippi: "To be honest my chief reaction was to wish that TVA funding was quickly and permanently yanked. I do not support federal funds in order to develop this political cesspool into an influential center of the American economy." Another reader, originally from Wisconsin, responds:

    I moved to the mid South about 12 years ago, and very few days go by when I don't find it alienating still.  However, your piece on the Black Belt in Mississippi caught me up.

    To reference TNC's recent Atlantic article, a TVA designation of "Megasite" plus Federal/State/Local tax incentives could be argued as the sort of economic policies that target the development of poor communities, and if focused on areas historically affected by racist intent/policies (e.g., chattel slavery in the Black Belt of the South followed by sharecropping, lynching, disenfranchisement, Jim Crow, etc., etc., etc.), a sort of reparation.  (Did that sentence contain enough hedges?!)

    Although I too decry the political shift I feel in the nation as a whole which I think is in large part driven by the weird Republican values emanating from the South, I believe policies of infrastructural development such as the TVA "Megasite" are essential for moving forward.  My electricity comes from TVA and in general I do not herald their track record (e.g., Kingston Fossil Plant in Harriman TN).  However, I was heartened to read about the "Megasite" policy.  TVA is not perfect but as a hybrid Federal/State/Private entity, maybe it can be steered toward more progressive ends (could not for the life of me find a better word than progressive there...)

    An aside:  a pox on those in my home state [Wisconsin] who have lost the true "conservative" Republican values of my father's family who fought for the Union. 

    Also about the TVA. A reader, who discloses that his firm does business with the TVA, adds this note:

    A minor nitpick with your reader who dislikes the TVA megasites due to it being federal funds helping a region of the country she dislikes politically. 

    The TVA does not receive federal funding, it is a self funded agency, funded through ratepayers and bonds.

     • "They may be charming, but their policies are killing us." In support of the original "let Mississippi stay poor" message:

    Add me in as another regular reader who has a hard time much caring about economic gains in white Mississippi. [JF note: the regions I've been writing about have been majority black, and the factory work forces are integrated.]

    As a young person, I was too much of a snob to work at learning this history of my own country -- much snazzier to concentrate on Europe and Africa -- so I'm doing some catching up as a semi-retired adult. One of the insights I've gotten through working my way through the Oxford History of the United States is that the shape of modern US society was set by the absence of representatives of the Confederate States from Congress in 1860-65. I don't just mean emancipation, though that's the root. I mean the Homestead Act, the Land-Grant colleges, "internal improvements", a modern-ish federal government and direct taxation system. With the Southern obstructionists around, we could not have had any of that. 

    And the southern states, insofar as they are controlled by whites (almost entirely) don't seem to have changed much: they exist to impede all forms of necessary national public policy: access to health care for all, education, reasonable gun control, etc.  In this era, climate crisis is the moral equivalent of the emancipation struggle and these states, along with some western types who imagine themselves solitary cowboys, would rather all our descendants suffer than sacrifice their phony extractive culture. 

    The only reason I can imagine attending to the economic struggles of the South is that the majority of this country's Black citizens live there. It would be an additional white crime to abandon them to the unhindered depredations of their white neighbors. 

    What to do I don't know, but you lose me when you are celebrating industrial development using non-union labor that props up a state whose representatives throw themselves against everything that makes this country and the world work. I'm sure they are charming, but their politics are killing us.

    • "Do these people think we can't read?" A note on anti-Southern attitudes:

    These comments show explicitly an attitude that has been pretty common from the beginning of the civil rights era- hatred and contempt by progressives for those they consider not sufficiently with the program, most obviously southerners but also non-elite, non-progressives whites outside of the south.

    Do these people think we can't read? Or are too stupid to understand what their real feelings, intents and motivations are?

    • "The real question is, what's the worst we will put up with?" Mike Levsen, the mayor of Aberdeen, South Dakota (whose city we have coincidentally planned to visit), writes:

    We will always try to steal other cities’ assets when the opportunity is offered (and have done it); it is expected of us as city officials. So, I don’t question the Mississippi people, even if it correspondingly causes distress elsewhere.  Interestingly, nobody ever suggests we are destroying the work ethic of those companies by giving financial help, the way it is assumed by many that social welfare breeds laziness.

    To me, a more essential question demanding answer is “What will we put up with”, not where. 

    There will always be people occupying the bottom one-fifth or one-tenth.

    We spend much time discussing who, what, where, why…but I don’t care about those questions.

    Whether by race, geography, legacy, age, or any other demographic indicator.

    Whether or not they are responsible for their own situation or undeserving in any way.

    Whether they are able to exit from that status or not

    They are among us.

    Those exiting will be replaced by others who will be a part of our life, our country, our future, and occupy that bottom cohort.

    The question is, what is the worst state of life for that bottom rung that we will put up with.  How bad does the housing, nutrition, healthcare, educational opportunities, family services, environmental protection legal system access, and all the other things that are degraded by a lack of money have to be before we say it can’t continue.  …what’s the worst the rest of the country will put up with... 

    It’s not important where they are, what’s necessary to acknowledge is that they exist in that situation, and everyone else is also the worse for it.

    • "Strategically brilliant but morally bankrupt." From a reader in a big East Coast city: 

    As a Citizen of this great country, someone who has more than a passing acquaintance with American history in regard to industrialization and things north/south and also someone who builds all over the United States and Canada, I continue to wish that we could somehow meet in the middle on the work issue, because there truly are two legitimate sides to this story. 

    The actions of various Southern state governments and their business partners actions have been strategically brilliant but morally bankrupt.  To wit, South Carolina.  They receive $1.92 in Federal funding for every dollar paid, gleefully using the differential as a subsidy for their low wages, low property taxes and poor services, all while issuing a steady stream of anti-Federal, pro-State rhetoric. 

    States like South Carolina are all about the business owner and only about the worker in the most basic sense that they see them as units of production, nothing more.   From a development perspective the best monetary example of how South Carolina would act if they were allowed is by building the Burj Khalifa, which cost $1.5B for 5M sf, or $300 psf.

    On the other side, we have the legacy airline and automobile manufacturing unions, who have continued to make their own collective beds through continuing to demand luxurious pensions, European-style working hours, confiscatory base wage, overtime and double time rules, and refusal to modernize their approach towards work and a continued erosion of quality of work that used to separate them from non-union workers.  The best development example of how this still works in the US is the Freedom Tower, which cost $3.8B for 3.8M sf, or $1,000 psf, or 3.3 times the cost of the Burj Khalifa.

    I’m equally frustrated with both sides.  People in work for Boeing in South Carolina need to make more.  People who work for Boeing in Washington need to make less.  Benefits need to generally equalize on both side.

    • And what if Lincoln had lived? To wind up this part for now:

    As a native of the upper south (Kentucky) and a student of history generally, I consider myself “southern” in a general kind of way. I have two graduate level degrees, and am currently living in the Mid-West. My speech, however, is peppered with the southern and country idioms, and while in informal company, I am still apt to drop the g’s of words ending in “-ing.”

    My political beliefs are left and Democratic, despite the conservative nature of the Kentucky Democratic Party: I can point to real things in my family’s more humble beginnings that are the products of the hard work of my forebears, certainly, but which were made available TO my forebears during hard times by Democratic administrations. THAT is the Democratic Party in which I believe and for which I still vote unflinchingly... 

    Your post yesterday regarding the affirmative answer given by an urban resident of a Rust Belt city to your hypothetical question, “Should Mississippi remain poor?” prompted a reaction in me, as I’m sure it did (and will) with many others, perhaps none more so than residents of Mississippi. My own reaction, however, is more of an “Amen!” of sorts rather than a typical “circle the wagons” response from a fellow southerner.

    I have taken enough history courses to know understand how the anti-union and union-busting policies of the South in general have led to a “national race to the bottom” as your correspondent pointed out, with Northern industries decamping to states where unionization is at best discouraged, but where the State actively pursues policies favorable to “business growth” – low taxes, right-to-work laws, lax environmental regulations, and so on. The move of the textile industries from New England to the lowlands of the Carolinas and Georgia after the Civil War is just such an example. 

    I am also aware that as much as the South has been guilty of economic depredations against its Northern kin, it has also been a victim. After the Civil War, the untapped natural resources of the South were snapped up at bargain prices by Northern interests, whether it be West Virginia’s and Kentucky’s coal, Georgia’s timber, Alabama’s iron, etc. These new industries were, of course, abetted by the aforementioned state policies that gave them, more or less, a free hand to do as they pleased, whether to the resources they controlled and processed, the workers they employed, or the land they despoiled.

    As an American citizen (not one of Kentucky or ‘the South’ alone) with progressive political beliefs, I can understand your correspondent’s dark suggestion that perhaps, yes, Mississippi should be left poor. If increasing economic clout means “the Mississippi model” works, and therefore, her policies should be emulated elsewhere, then I might tend to agree with her. I’ve watched President Obama try to solve some of the nation’s toughest problems with both hands tied around his back by an intransigent opposition that has sometimes appeared willing to destroy the nation in its zeal to “save it” from Obama’s policies. Examples of this, and other, clearly race-based policies, such as those that have rolled back voting protections in the South, etc., have just left me disgusted.

    I don’t know how you feel about “alternate history,” but I’ll go one better than the Rust Belt correspondent. I very often wonder how different (and presumably BETTER) the nation as a whole would have been had Lincoln lived, and, instead of his passive “prodigal son” reconciliation with the South, he had been inflamed with a real sense of remaking (with a "Radical" Republican Congress) the South for all times:

    - the entire political and military leadership of each seceding state being seized and forcibly removed, either to the North or West, or otherwise given the opportunity to be banished abroad, but removed from the South at the least;
    - the political and economic vacuum in the South filled with the growing ranks of the Northern urban poor and immigrants from abroad;
    - massive agricultural and land reform;
    - investments in infrastructure projects and education; and
    - perhaps even a redrawing of jurisdictional boundaries, such as redrawing state boundaries, creating new states with new names, etc....  

    Such a thing as this “remaking of the South” is unimaginable in American society or history, and thankfully (for the South, perhaps, at least) we had a man with Lincoln’s temperament instead of, say, Stalin’s at that time and in that office. From the nation’s fraught history with race, and with that region’s desire to seemingly stymie nearly every effort to advance public policy that brings light to the darkness and knowledge to the unlearned, it would seem, sometimes, to be a price worth paying. 

    After the jump, just a little more. 

    More »

  • The Endless Civil War, Continued

    "Should the people in Mississippi stay poor? I would suggest taking a serious look at the answer 'yes'." So says a reader who lives elsewhere.

    Sharecroppers in Georgia, just before World War II. Are their grandchildren better off, because industries have arrived? Hint: my answer is Yes. ( Farm Security Administration, 1941 )

    Over the past few weeks, my wife Deb and I have been reporting on Mississippi's efforts to move itself up from the bottom in rankings of educational achievement, and similarly to move itself up from being overall the poorest state in the nation.

    Question for the day, from readers: whether any success it achieves will necessarily come at the expense of other places, especially in the North. Of course movement in rankings is by definition zero-sum. The real question is whether greater prosperity for Mississippi has to mean less somewhere else.

    For background, here are some installments about the Mississippi educational efforts: one,  two, three, and four. (No matter what region you're from, be sure to read at least the first couple of essays by students in that final, fourth item.) And these on industrialization: one, two, three, and four

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    Now, a note representative of several I've received. It concerns how to think or talk about economic activities in the non-union, low-wage, politically conservative, ever-shadowed-by-racial-injustice (cf. Ta-Nehisi Coates) areas of the Deep South. Here goes, quoted in full for context: 

    I have an odd relationship with your blog. I read it avidly and yet I find myself alienated. You prick my despair about the country, in fact. In your most recent entry in the 'Lo and Behold, Industry in Mississippi' series, you asked for feedback and so here is a little exploration of my vexed relation to your work and perspectives.

    First off, I'm a native of a Rust Belt city and much of my family originally migrated here from the South. In fact they were slaveowners who left the South to industrialize the North - and they were very successful at it, probably even a factor in the victory of the North over the South in the Civil War.

    But I grew up in a different time - the time of decline of industry. I grew up with the decades of desolation and loss. I understand the impact of abandonment, wholesale and profound, that has infected the Rust Belt in the post war era. I know the economic decline of Rust Belt cities to be deeply imprinted with American racism as well as the relentless and devastatingly effective rightwing campaign against unionization. The deindustrialization of the North cannot be separated from the success of Southern style politics and ideologies over the last 40 years. The American people have suffered serious economic harm as a result.

    So forgive me if Joe Max Higgins does not seem charming. To be honest my chief reaction to reading this piece was to wish that TVA funding was quickly and permanently yanked. I do not support federal funds in order to develop this political cesspool into an influential center of the American economy. I think the South should be quarantined, politically and economically. They suck on the federal tit whilst fanning resentment of the poor, among many (many!) other political sins.  (The best thing about the Dixiecrats is that there were less effective nationally when stranded within the Democratic Party than they are today, when they control Republican ideology and the Supreme Court. )

    I wasn't satisfied by your reply to this comment [from another reader, a man in New York]:

    "The theme that I find missing in your series is any recognition that the Southern states have been in a continuing economic war with the Northern manufacturing base for at least since the Civil Rights Act. Undermining and destroying unions has been a signature part of that strategy and it has been very successful. The great cities of the North have been hollowed out just as they were beginning to provide a haven for lower class families, not to mention the overall starvation of the middle class."

    You didn't address the above point. The South has had a baleful influence. Perhaps what is in process is the lasting destruction of American broad based prosperity, thanks in no small part to rise of Southern political values. There are no signs of a turnaround for most in this economy - it is only getting worse. Yet continuing on this path would be tragic. It would fundamentally undermine the whole American experiment. I would like your series a lot more if you addressed this.

    I keep telling myself I won't do this any more, but I wrote right back to the woman who sent the message:

    I have a reaction of "And therefore, what....?" to your views.

    Suppose one, like me, is in favor of unions, is in favor of more progressive taxation and a fairer economy, is against what many Southern politicians now stand for, has written endlessly about the "new nullification" menace, and so on. Should I say: "Well, I hope these people in Mississippi stay poor?"

    I'd be interested to know what, specifically, you'd like to do to, or with, Mississippior St Marys, Georgia, or Greenville, SCas the action part of your view. 

    To which she replied: 

    As to your question - should the people in Mississippi stay poor? I would suggest taking a serious look at the answer 'yes'. If industrial jobs in Mississippi are in fact a part of a national race to the bottom and if that race is destructive to the larger good then the race itself should be stopped. And one consequence of that could be a slow down in the industrializing of Mississippi. 

    I don't enjoy making careless arguments and there are a number of 'ifs' in the above paragraph. The point is that there is a larger picture. What conventions, regulations, and laws enable corporations to make states compete against each other for their investment? Some of that should simply be outlawed. Some of that sort of thing is actually disallowed under trade pacts - why should it be allowed for states?

    It's taken decades to build an economy of downward mobility. Financial deregulation, corporate trade deals, and union busting has required not only policies but ideology and economic theory. It has been a bipartisan effort and academics and the media have contributed. Virtually all of the conventional thinking in my view is tainted by this history. But the issues we are discussing impact the real economy of jobs and wages. We must not avoid painful disputes even though bringing up these difficult issues is a downer in the context of a feel good story of a poor corner of the country doing better. 

    If you've gotten this far, I hope you'll indulge a further word about the ongoing juggling act for a writer like me. Over the past three-plus decades, in at least four of my books and at least a dozen long Atlantic articles, I've tried my best to apply reporting, reading, thinking, and observation to questions of exactly this sort. The movements of industries among nations; the movements from region to region within a nation; the forces that make whole economies seem to progress or stagnate; the forces that are uniquely necessary if America is to seem "fair"; the burdens of history, race, public policy, and private institutions in shaping American mobility, and so on.

    I know that I've written all this stuff. Most readers, probably including this one, don't. But if I say, "go read 'How the World Works' or More Like Us or 'How America Can Rise Again,'" I sound insufferable. And if I don't, I'm left with people who "are not satisfied" because I haven't dealt with a topic at a time when they happened to be noticing or in a post they're seeing on its own. As the world's problems go, it's small. But it is one I have to think about it.

    Enough about me! Let's turn now to a reader in Florida. He writes: 

     I agree with you —I wouldn't lead every Mississippi piece I wrote with a racial disclaimer either. After all, TNC's writing has focused as much on Chicago as Mississippi—which makes sense because parts of Chicago are historically, literally Mississippi north. 
     
    That said, two things about two of these posts really struck me and both relate to the historical relationship of Missisippi and Chicago. Key quote from your post:
     
    "Part of the 'Northern narrative' on what we're doing here is that we're just buying industries," [Joe Max Higgins] told me.
     
    In 1914, with the onset of World War I, European immigration halted overnight. By 1915, booming, shorthanded northern industry was "buying" southern black farm labor and creating the Great Migration—and changing America, north and south, forever.
     
    Southern government and industry (mostly agriculture) fought with every legal and extra legal tool it had to halt the migration. "The southern narrative was you will cripple our society by stealing our niggers." It was routine for southern local governments to ban labor recruiting; to ban migration itself through brutally enforced vagrancy laws. My hometown in Florida passed an ordinance in 1916 requiring a $1,000 license for any recruiter seeking black labor. Not getting the license was a crime.
     
    You ask, don't people know these things
     
    No, they don't. They know about water fountains and epithets. They know nothing about the migration that made both redlining and the successful civil right movement possible by breaking up the status quo.
     
    In my opinion, WWI and the Great Migration are the two most important forces of 20th century. One caused the other. They are, I think, without question the most important racial forces of the 20th century. And we as a country know nothing about them. We know so little about them that an economic developer in Mississippi doesn't see the exquisite historical irony in the South "buying" the industry that the north used to buy its labor and grow the industrial power of the US. 

                                                                  ***

    This is plenty to chew on for now. I was tempted to add a "This I Believe!" summary of my economic views, but I am going to save that for tomorrow. I have actually written it already, so I will actually post it after I let it cool.

    I will though close with one transition point, tied to the first reader's note. I respect her clarity in following her logic to its conclusion. Still, I completely  disagree that the rest of the country might have stayed richer and fairer if our poorest state stayed dirt poor. While I'm at it: I also don't think America would be richer, fairer, or happier if China were still dirt poor. That's a topic-sentence assertion for now. Supporting sentences soon.

  • Smaller-Town Startups: 'Stopping the Brain Drain' in South Carolina

    'People say, this is my ticket Out.' Then, they want to stay.

    "Code academy" room for The Iron Yard, inside the Next tech-accelerator building Greenville SC.

    Yesterday PCH International -- the company from Shenzhen, in southern China, that is run by my friend Liam Casey and whose exploits the Atlantic has chronicled from 2007 to 2012 -- announced yet another acquisition. It's of the e-commerce site ShopLocket, and the logic of the deal was an extension of what I've heard from Casey all along. The main function of his company (and others) has been to shorten the distance -- in time, money, effort -- between the idea for a new product, and the reality of that product in a customer's hands.

    You can read all about it in the announcement, but here's the connection to our American Futures journey. ShopLocket is a service for the "maker revolution" -- the small startups, all around the U.S. and elsewhere, that are producing new things, and that are using the advantages of today's distributed commerce to help small, new companies do what only big companies could do before. That is, they can more quickly and easily: get startup capital; refine prototypes for their products; find suppliers and subcontractors; line up distributors and test markets; respond to shifts in demand; and all the rest. This is what Liam Casey was describing to me a little over a year ago, and it's what you can read about on the ShopLocket site here.

    Which brings us back to the Greenville-Greer-Spartanburg area of "upstate" South Carolina. A big question we have been asking is why high-value companies end up where they do, and how and where new companies get their start. In Burlington, Vermont, this involved asking what Dealer.com was doing there. In Redlands, California, why the big geographic-software company Esri (our partner in the project) had started and --  more interesting -- stayed in a place far from existing software centers.

    In Greenville, we spent a very interesting afternoon at the locally well-known firm The Iron Yard, which was housed in a new tech-incubator building that said "NEXT" out front.

    Next Innovation Center at night, photo by Brad Feld.

    As my wife mentioned before, and as we're sure to mention many times again, just about everything in the Greenville area reflects the fruits of the "public-private partnerships" that have rebuilt the downtown, attracted international manufacturing firms, created surprising new schools, and in other ways tried to reposition the town as a modern technology/culture/good-life center.

    [Before you ask, I've received a lot of mail about Greenville's troubled past in race relations and other barometers of inclusiveness. Greenville County, for instance, was the very last one in South Carolina to observe Martin Luther King's birthday as a holiday.  We talked the past, present, and future of the area's "openness" with lots of people there and will say more about it in upcoming dispatches.]

    The Next project is run by the Greenville Chamber of Commerce, with "public-private" guidance from local officials, businesses, developers, and so on. But it is located separately from the main Chamber of Commerce building and is designed to look and feel like a Boston/SF/Shenzhen-style startup center rather than some normal civic building. When we visited there last week, John Moore, a Chamber executive who runs the Next project, told us that it tried to run lean startup-style too. "We had the advantage of starting with a blank sheet of paper," he said.

    The Iron Yard, discussed below, part of the Next complex.

    "Because there were no existing entities to protect their turf, we were able to leapfrog," Moore said -- much as some developing countries jump entirely past the wired-telephone stage to create nationwide wireless networks. "We went from the idea for the center, to finishing the building and opening it, to having it full, all within three years. If we'd had to start with a university or an existing city facility and tried to change its model, it would have been a lot harder and slower."

    The purpose of Next is to make it easier for new companies to start in the Greenville area. Moore pointed out that this "upstate" region of South Carolina had become famously effective in recruiting big, established firms to set up operations there: GE, BMW, Michelin, and on down a long list. "We've been so good an attracting other companies that we may not have done enough to develop our own," he said. Thus Next and related enterprises -- which connect startups with angel investors, provide physical space to get started, offer advice from mentors and startup veterans, and generally supply the sort of surrounding entrepreneurial information and advantage that can come automatically from being in startup centers from Boston to SF.

    Some of the startups with offices in Greenville's Next building.

    Has it made any difference? Can it make any difference, I asked Moore, given the scale and distance handicaps of a smallish place like Greenville?

    "If you'd asked me five years ago, during the toughest times economically, I would have said, I hope so," Moore told us. "We had eight software companies in our program in 2006. They hadn't known each other. Now we have 134 companies, all new, in all kinds of industries, from manufacturing to genomics to game software." He said that he expected 200 local startups to be involved with Next soon. The main building has space only for 20 to 24; the rest are part of a network for advice, financing, and other services. Moore said the companies Next is looking for are ones "that can compete on a global scale but are based here."

    "They're now coming without recruiting. It's become a kind of flywheel. The momentum, the acceleration -- it all shows the potential. But of course I'm from the Chamber of Commerce, so you'd expect me to say that!"

    Indeed, but then he put it in more tangible terms, gesturing to an office across the hall: "A few years ago, people like Eric Dodds would never have stayed here."


    The Iron Yard's Eric Dodds, via Global Accelerator Networks.

    Eric Dodds, whom we met at the Next building, is a co-founder and the chief marketing officer of The Iron Yard, a multi-purpose software startup based in Greenville and with operations in Spartanburg, nearby Asheville, NC, and other southeastern locations. You can read more about its operations here.

    Dodds grew up in Greenville, and always dreamed of getting away. "Boulder, Portland -- that's where My People would be." Then, after going to Clemson and working for national branding companies, he came back and noticed that the place where he started out had changed. The Iron Yard's co-founder and CEO, Peter Barth, grew up in Florida and had worked in New York and the Midwest and was planning to work in Charlotte. He stopped for lunch in Greenville, walked through its famously renovated downtown, and decided this is where he wanted to stay.

    The Iron Yard's CEO, via Vimeo.

    Some other time I'll go into The Iron Yard's whole business model, which is a combination of "code academy," business incubators, kids' classes, and other features. The code academy charges $10,000 for a three-month session, and offers a full refund if graduates can't get an appropriate job. "We can guarantee an entry-level job, but entry level in this field might be $65,000 or $75,000," Barth told us. So far they have not had to give any refunds. (More here and here.)

    The point for today is an effect we heard about time and again. This was a change in this area's ability to attract and retain people like Barth or Dodds -- whom you might normally expect to find in Boulder, Portland, Boston, and who might have expected to find themselves there.

    "Greenville is great once you get here, but it can be hard to get people to come and take a look," Peter Barth said.  Eric Dodds added, "It's been really interesting rubbing shoulders with people in our classes who say: 'I’ve gotten here, I’m going into your program, and this is my ticket Out.' Then after a while they say, 'I’ve seen this culture, I think I’m going to stay around here.' It’s been very interesting in stopping the brain drain."

    More on this theme, the dispersion of opportunity, in coming installments. And before this coming week's State of the Union address, a reminder that the resilient capacity of America is more evident and encouraging city-by-city than it seems in national discussions.

    As a closing bonus, in case you were wondering what the Blue Ridge Parkway looks like from above during the Polar Vortex era, here is your answer.

     

  • Thursday Late-Night Reader: Eight Ways of Thinking About China

    Can China hope to become ... the next Mexico?

    Updates from Greenville and "the upstate" of South Carolina coming soon. In the meantime, selected China readings:

    Amb. Jorge Guajardo (right), via WSJ.

    1) "Is China the Next Mexico?" Atlantic readers know Jorge Guajardo and his wife Paola Sada as former Guest Bloggers in this space. In China they have been known in recent years as the face of Mexico, since from 2007 through 2013 Jorge was the Mexican ambassador there. (That's him at the right, in a news picture during a tense Mexican-Chinese moment five years ago.) Now they are living in the United States, where Jorge has delivered a puckishly provocative speech.

    Its premise is not the tired one of whether Mexico might become the "next China" but rather the reverse: whether China has the hope of going through the political reforms that have transformed Mexico since the end of one-party rule. Very much worth reading, for its "who should be learning from whom?" approach. I hope they are studying this in Beijing.   

    Disclosures: Jorge and Paola Guajardo are close friends of our family. Also, the venue for the speech was the School of International Relations and Pacific Studies (IR/PS) at the UC San Diego, where I have visited many times and feel part of its diaspora.

    2) "A Field Guide to Hazardous China Cliches," by Benjamin Carlson in Global Post. Anyone writing or talking about China gets used to a certain rodomontade. China has not simply been around for a long time. It has a "5,000-year history," which must be referred to in exactly those terms. (I burst out into admiring laughter when, with my friend Michele Travierso, I walked into Turkey's pavilion at the Shanghai World Expo in 2010. The introductory plaque said something like, "For 6,000 years, civilization on the Anatolian plain..." ) China was not simply buffeted by the decline of the Qing dynasty at just the time of European colonial expansion. It suffered the "century of humiliation," which explains and excuses any touchiness now. 

    Ben Carlson, a former Atlantic staffer now based in Hong Kong (and a relative of mine), has a very nice brief checklist of these and other phrases to be aware of and avoid—or at least to surround in protectively ironic air-quotes if you have to utter them. As with one of the phrases he saves for later discussion: "Hurting the feelings of the Chinese people." Again very much worth reading. 

    3) "In China, Watching My Words." From Helen Gao—a Beijing native, Yale college alumna, and recent Atlantic staffer—a very eloquent NYT essay on how she has adjusted what she allows herself to say since moving back to China. This piece has gotten a lot of attention, and deserves it.

    4) "China's International Trade and Air Pollution in the United States." Here is the full-text version of a scientific study mentioned in an Atlantic Cities item recently. Most press coverage emphasized a kind of ironic backflip whammy: U.S. factories had outsourced much of their production to China. And—ahah!—the pollution was blowing right back across the Pacific to get them. (I discussed the ramifications of this coverage in an On the Media segment with Bob Garfield today.) 

    To me the real impact of the study was in charts like the ones below. Here is what they show, for the pollutants sulfur dioxide and nitrous oxides. (There are similar ones for CO2 and other pollutants.) In the left-hand column, that China is putting out a lot more than America is; and in the right-hand column, that the U.S. puts out more per capita, though by a declining margin. The middle column is the important one, showing that per unit of output, Chinese factories are still grossly more polluting than those in America (or Europe or Japan). Thus the economic logic of outsourcing, which is powerful, has also made the world's output more environmentally damaging than it was before. 

    This is a big gnarly issue, which I've tried to deal with here and here and here. But the importance of this study, in my view, is underscoring how important it is to the entire world to clean up those Chinese factories.

    5) Pollution take 5.5 years off every person's life. The study above got headlines for concluding that Chinese pollution (some driven by serving export markets) added one extra day, per year, to Southern California's smog burden.

    A study a few months ago by a Chinese-American team calculated that for the 500 million residents of Northern China, pollution was already taking five and a half years off the average person's expected life span. This is a genuine public-health and political emergency.

    6) The missing 1 trillion (or 4 trillion) dollars. Not to dwell on the negative, but reports here, here, and here detail some of the ways in which the people running China have tried to insulate themselves and their children from the environmental and other effects of actually living there. These reports are not positive indicators—any more than if the Obama family was moving all of its assets out of the U.S., to protect the daughters' future prospects.

    7)  Let's be realistic about China's ambitions, and problems. My line all along has been: Take China seriously, but don't be afraid of it. Take it seriously, because what happens there affects the entire world. Don't be afraid of it, because it has problems that already-rich and stable countries can barely imagine. More on this theme from the China Daily. And an interesting twist from Global Times. (Both papers are state-controlled; GT is often more fire-breathingly nationalist.)

    8) To end on a positive note, a Chinese lower-pollution car.

    That is all. Another Reader coming shortly, on Iran and related topics. Then: the story of Greenville, Greer, and environs.

  • All-American Detroit

    'Not only can I not help but love Detroit - I can't help but believe in that city too.'

    A reader who grew up on the East Coast, went to college at U Michigan, and now lives on the West Coast writes about the Detroit bankruptcy news:

    My only connection to Detroit was as a student in Ann Arbor - 40 miles west of the city, and attending school with a lot of kids who had grown up in its suburbs, and some who had grown up in the city itself. And because of that, I grew to love the city. I was aware of the urban blight, but it wasn't as in my face as for those who'd grown up with it. Instead my experiences were were heading downtown for a festival, a ballgame or a show. I saw the autoshow. I partied in Greektown. I saw Belle Isle during the day. Once we did a service trip to the Gratiot corridor to teach some kids about STEM and make it "cool" for them. And that's about it.
     
    So I'm not a Detroiter. But I can't help but love Detroit. Part of that is that I've always loved cars, and Detroit will always be the Motor City. But also, it does feel like an exaggeration of America - from its beginnings as a frontier outpost, to its rise as a very provincial, western city in the Gilded Age, to its explosion as the Motor City and the birthplace of the industrial middle class in the early 20th century, to its long, sad, slow racially-charged decline during the Cold War that saw its suburbs prosper, and its inability to change with the new world order over the last decade that saw its urban renewal feel like - well the perfect caricature of our new Gilded Age.
     
    And yet, there is hope. Detroit has begun to reinvent itself, both in the city and in the metro area as a whole. SE Michigan does have a ton of engineers and a high level of R&D dollars being spent. While the bankruptcy is sad, just as GM's bankruptcy on 1 Jun 2009 was, it'll be far sadder if Detroit can't continue to reinvent itself as it has from the darkest days of 2008-9. The bankruptcy is payment for the sins of the past - but this purgatory should lead Detroit on a path to success. There's no reason that Detroit can't mirror what North Carolina's Research Triangle did in the '90s and '00s. And considering how much Detroit has made America look at herself over its history - I think we should all be rooting for the Motor City to rocket forward from here.
     
    Not only can I not help but love Detroit - I can't help but believe in that city too.

    The "always darkest before the dawn" / "what doesn't kill me makes me stronger" creed of plucky bounceback can be overdone. Sometimes what doesn't kill you still cripples you or leaves you doomed and weak. But our national saga has often enough included stories of setback, grit, and recovery that this is a plausible response to the news -- and certainly is a more useful response than despair. "Detroit" the metonym,* which was all but counted out four years ago, now is in much better shape. It is useful to assume that Detroit the physical city could recover too.

    __

    * Ie, as reference for the U.S. auto industry. For explanation of this little inside joke, see the first few paragraphs of my article on Jerry Brown.

  • Detroit's Distress, and the 'Curious Unevenness' of American Blessings'

    Indelibly American.

    With the city bankruptcy news, a reminder of the best Super Bowl commercial ever -- yes, including '1984.' From two years ago, with Eminem.


    I hardly know anything first-hand about Detroit, but this ad succeeded in making it seem indelibly American. In the automotive spirit, and while noting that Detroit's municipal bankruptcy filing came on the same day that the Dow Jones average hit an all-time high, I am also reminded of this passage from John Kenneth Galbraith's The Affluent Society:
    "The family which takes its mauve and cerise, air-conditioned, power-steered and power-braked automobile out for a tour passes through cities that are badly paved, made hideous by litter, lighted buildings, billboards and posts for wires that should long since have been put underground.... 

    They picnic on exquisitely packaged food from a portable icebox by a polluted stream and go on to spend the night at a park which is a menace to public health and morals. Just before dozing off on an air mattress, beneath a nylon tent, amid the stench of decaying refuse, they may reflect vaguely on the curious unevenness of their blessings. Is this, indeed, the American genius?"

    Indeed. And that was 55 years ago.

    Update: Want to know who the fabulous narrator of the "Imported From Detroit" ad is? It's this guy, Kevin Yon. Congratulations and thanks.

  • An Interesting Year-End 'Charitable' Possibility

    A private solution to public failures? A new group offers an innovative approach.

    I am living proof of the way tax codes change behavior. Unavoidably on December 31, I start thinking of all the worthy causes I "should" have been supporting during the year, and rush to mail out checks or send online contributions while they still "count" as deductions for the tax year that's about to end.

    Here is a last-minute possibility with interesting implications: a site called "Give It Back for Jobs" that lets you calculate how much you, personally, will save on taxes because of the recent extension of the Bush-era tax cuts, and then suggests that as a prod for contributions to organizations that will "promote fairness, economic growth, and a vibrant middle class."

    I won't get into the details of how the site's creators estimate each family's tax savings or how they choose worthy recipients. The interesting aspects are (1) the authors' awareness that this kind of guilt-trip/ noblesse oblige approach, which they call "political philanthropy," isn't really the ideal answer to a society that's becoming more economically polarized, but (2) their determination nonetheless to make what they can of its possibilities. As they say on the site:

    >>Americans who have the means should collectively give back our Bush tax cuts...  Such joint action by wealthy visitors to this site will begin to replicate good government policy, outside the government and free from the grip of obstructionists within it. Because contributions to all of the selected charities are tax deductible, donations made through this site draft the government as a partner in funding the projects that they support.<<

    In an op-ed yesterday in the LA Times, two of the sponsors -- Jacob Hacker and Daniel Markovits, both professors at Yale -- say more about the limits of this approach ("nothing can take the place of a just tax policy") but also its aspiration and rationale:

    >>When political institutions use taxes paid by all to bail out institutions that are perceived to benefit only the wealthy few, our sense of shared fate is threatened....

    To their credit, many of the most fortunate Americans believe they should contribute more. The Giving Pledge campaign, started by two of the nation's wealthiest citizens, Warren Buffett and Bill Gates, encourages the super-rich to donate half or more of their fortunes to charity.

    But that does not mean the rest of us have to sit by... Americans who can afford it should contribute the windfall that they receive because of the Republicans' obstructionist demands to charities that promote the programs -- job creation, housing, education and the like -- that they believe a just government should pursue.<<

    The big story of American society through my lifetime has been the thinning of the "middle" in all (non-anatomical) senses of the term. As America overall has become vastly richer, the median family income has stagnated or declined; as the possibilities for knowledge have expanded immeasurably, the middle-ground of agreed-on facts and values threatens to disappear. Those are topics for another time -- and about which Hacker has written extensively. (And, yes, of course, there have been other big stories during the Baby Boom era, including the changed possibilities for women and racial minorities -- but the retreat from Middle Class America is the one I think about most.) Take a look at the site, mainly because of the problem it's attempting to solve. And I'll try to remind myself to support causes I care about more often than on the last day of the year.

  • Asian Development Bank Meets the Smiley Curve

    Where does that iPhone come from? The answer is harder to tell, and more important, than you might think.

    [See update at the bottom]
    Smiley2.jpgThree years ago in "China Makes, the World Takes," I discussed the Irish-born China-based entrepreneur Liam Casey and his concept of the "smiley curve." This was the graph that traced the evolution of a modern product -- from corporate brand and product concept at one end of the "smile," through components and assembly at the bottom of the curve, and on to shipment, retail, and services on the other end. The big profits, he said, were on the two ends of the curve, which were the fields American, European, Japanese, and other rich-country companies dominated. The Apple brand, the Intel chips, Japanese and Korean components or display screens, plus the final retailers. The skimpiest rewards were at the bottom part of the curve -- simply assembling the product, which was done in China. That is why, he concluded, American customers might pay $1000 for a "made in China" laptop computer, but less than $100 of that would end up in any Chinese person's hands.

    Yesterday the Wall Street Journal had a story, by Andrew Batson, about a new study from the Asian Development Bank Institute that dramatized this issue. In normal US-China trade statistics, Yuqing Xing and Neal Detert of the ADBI said, the entire cost of the "made in China" product is counted as a Chinese "export" to America. This grossly distorts our picture of the trade relationships, they say -- making China's surplus look bigger than it "really" is, and disguising exports from Japan, Korea, and elsewhere, plus what is really "US" content.

    The Journal illustrated the pattern this way, through costing out the components of an iPhone. Using current counting techniques, in which the phone's entire value is assumed to be "Chinese," on its own it accounts for nearly $2 billion of the Chinese surplus with the U.S. But if it is allocated to its real sources, most of the surplus is from Japan (famous for its "failed" economy), and second-most from Germany. The US-China direct exchange is actually a small surplus for the US.
    :
    WSJSmileyCurve.jpg

    The ADB study is here, and while it's not very long and doesn't pretend to be comprehensive, it suggests the increasing complications of international production chains. In a "nation-vs-nation" sense, these new figures make America (and, especially, Japan) look "stronger" and China "weaker" than we normally think. But the flow of money to Apple, Intel, Amazon, etc, with the shift of assembly jobs to China, may intensify rather than reduce the steady polarization of American economic life.

    And on that point, a few other references: a powerful Reuters special report that starts with yet another deindustrialized Michigan town and goes on to ask, "Is America the Sick Man of the Globe"?; a column from Michael Sekora, who worked on a "re-industrialization" effort called the Socrates Project under the first President Bush; and a very powerful op-ed by Alan Blinder, in the Wall Street Journal, on the emergence of a Dickensian economy -- in the grim, brutal sense. Eg:

    >>Wages. When it comes to wages, the basic story of recent decades is redolent of Scrooge. Real average hourly earnings (excluding fringe benefits) now stand roughly at 1974 levels. Yes, that's right, no real increase in over 35 years. That is an astounding, dismaying and profoundly ahistorical development. The American story for two centuries was one of real wages advancing more or less in line with productivity. But not lately. Since 1978, productivity in the nonfarm business sector is up 86%, but real compensation per hour (which includes fringe benefits) is up just 37%. Does that seem fair?<<

    It is hard to me to read any of this data and, at the same time, consider the latest changes in the estate tax or other benefits at the top end. Some time some leader will succeed in making most Americans see that a more polarized, more Gilded Age social-economy is worse all around. I think most people sense that, but the sense has been given no effective political voice. Here's Bill Moyers, making an attempt in a speech about the new plutocracy.

    UPDATE: My Atlantic colleague Derek Thompson reads this report in a different way. Here's where our interpretations diverge: We both see the ADB report as saying that high-tech wonders like the iPhone don't necessarily improve the US overall trade situation, since so many of the components and value come from overseas. But when it comes to the bilateral US-Chinese trade imbalance, the role of "made in China" products is grossly exaggerated -- again, since so much of what is counted as a "Chinese" export (including by Derek in his item) is actually from Japan, Germany, etc. Indeed, if we're thinking only of the US-China balance, the study shows that the iPhone creates a surplus for America.
     
    So, we agree in seeing the report as talking about a chronic trade problem for the United States -- but with the world as a whole, not specifically with China. This is all part of the Atlantic's big-tent philosophy.  

  • Peter Orszag: The Shoe That Didn't Drop

    If a scandal happens in Washington and no one notices, is it really a scandal? And other political koans.

    I made a mistake several days ago when lamenting Peter Orszag's decision to take a senior job with Citibank, reportedly for several million dollars per year, so soon after leaving a senior Obama Administration post. Over the past two-plus years, Obama (and GW Bush) policies played a crucial role in saving Citi -- and in not holding its executives (or other senior financial-world figures) accountable for polices that brought on the world financial crisis or reining in top-end pay as profitability has returned. Now a senior member of the Obama team -- Orszag was budget director -- was going straight to one of those top-end jobs, even as his former colleagues in the administration have their hands full fighting the social, economic, and political effects of the crisis on "ordinary" Americans who can't find jobs or are losing their homes.

    My mistake was not in pointing out this problem, nor in identifying it as the kind of thing that is notable precisely because no one even stops to remark on it any more. It was in the sentence that said, "Objectively this is both damaging and shocking." That's the difference between one-draft web postings and many-times-edited print articles. What I meant was, "Politically this is damaging and should be shocking." Because the real point is that official Washington should notice this instance of structural corruption -- but won't.

    If you're wondering just how taken for granted such arrangements are in today's Washington/ Versailles, here's a data point. The Washington Post, still aspiring to be official journal of politics, has not published a single story about Orszag's new job. Here is what its search function shows just now:
    WaPo3.png

    "Please try another search" indeed. How about "things that are depressing"? To their credit, the Post's Ezra Klein and Ed O'Keefe each had one-line links on their sites, pointing to (respectively) the NYT "Dealbook" and Reuters stories on Orszag. (And those links come up if you search the Post's site for "Orszag Citigroup." Otherwise there appears to have been no "news" coverage by the Post. Klein also had this follow-up link to an item called "Our Peter Orszag Problem" on the Economist's site.) The gap between the things the Post considers "scandals," and a development like this, so taken for granted as not to merit mention, says too much about our politics.

    Or, consider a Google News chart of coverage of the story. There's a little flurry when the deal was announced (a "real" story would generate vastly more coverage), then... it goes away. Pathetically, the "C" on that chart is my own original item on the story -- with nothing in the mainstream press since then. The chart doesn't show mainstream press results after Dec 11, because there don't seem to be any.

    GoogleNewsOrszag.png

    Here's a reader reaction:

    >>I think the situation is even worse than you suggest. Many of us who supported the idea of a bailout for the reason you suggest -- the likely negative consequences of not bailing them out were terrifying -- urged that the bailout be conditioned on major changes in the size and operations of the financial sector behemoths who'd become too big to fail. The Volcker rule was one example. Serious changes in compensation practices. Breaking up of these banks was possible and desirable. Strict regulation of derivatives. And so on.

    The final outcome, however, has been pathetically inadequate, if the goal was to prevent another crisis like 2008. And Orszag signing up with Citi for several million $ per year puts that policy failure in even worse light. What chance is there that the government will get tough on the big banks when key economic policy makers move back and forth between government and those banks?

    Two more reader reactions after the jump. Eventually I'll publish a few defenses of Orszag that have come in. Really, I don't have anything against him personally, though I think this was a big misjudgment. What I can't get away from is the two twinned aspects of taking this move for granted. From the "elite" level -- the editors who decide not to put it in the paper -- taking it for granted means: Sure, that's reasonable, what else would you expect? And from everyone else's level, taking it for granted means: Sure, that's how the world works. Them that has, gets. What else would you expect?

    More »

  • America Underestimates - and Misunderstands - Its Economic Strengths

    How can we respond to the rise of China, India and Brazil? Just look in the mirror.

    The brief column below appears in the December 11 issue of a National Journal supplement on The Next Economy, which includes a variety of articles on the longer-term challenges to U.S. economic strength. This summarizes themes I've gone into over the years, notably here and here and in various reports from China. But the lesson of modern life is that if a point is worth making once, it's worth making more than once. And I do think these points are worth making as often as anyone will listen, so that Americans appreciate the strengths they have and don't lightly or thoughtlessly dissipate them.

    ___

    I have spent much of the past quarter-century among people in other countries who want America's best jobs.

    In the 1980s, I met the designers and industrial engineers in Japan who dreamed that someday Toyota would overtake General Motors as the world's No. 1 carmaker--as it now has done. In the 1990s, I interviewed computer and mobile-phone makers in Singapore, South Korea, and Taiwan who aspired to move from their role as subcontractors to develop their own premium brands--which the likes of Samsung and LG have achieved. Over the past four years, I have visited companies in China that make everything from electric cars to electric airplanes and hope to create the high-paying, high-skill job opportunities that come with future technologies and industries. And then there's India ...

    How can Americans respond?

    More »

  • On John Kerry and Framing the Tax Argument

    A powerful presentation ... which perhaps the White House should have listened to

    On Sunday I mentioned that John Kerry had given other Democrats a lesson in how to stand up against the Republicans' insistence on bonus tax cuts for people in the top 2 percent of the income distribution. For another Democrat who figured out how to make the case, see this earlier item, about White House economist Austin Goolsbee, with his visual-mnemonic device. (That's a static screen shot; playable video of Goolsbee is here.)

    Thumbnail image for Goulsbee.png

    Now it appears that Kerry's (and Goolsbee's) eloquent hardline was for naught. I can't pretend to assess fully the impending deal on tax cuts at the moment. But here are several reader messages about the general question of framing the discussion.

    First, from a reader who thought I was putting Kerry down when I said that the effective presentation had come from "John Kerry, no less." I'm not sure what I meant by that, but here's the reader's point:

    >>Kerry's reputation as an uninspiring speaker is undeserved. From the time he first gained national prominence, I have been enormously impressed by his ability to frame issues and forcefully advocate sensible liberal positions (not an oxymoron!). He's also an entertaining speaker with a wry sense of humor. Even his famous remark about voting for the $87 billion before he voted against it, which probably cost him the presidency, represented only 5 seconds of a 2-minute remark that actually made an excellent point when played in full.

    That said, I too am guilty of piling on, at least indirectly: whenever I am trying to explain to someone why I can't stand Joe Buck and Tim McCarver, I say that their pompous style reminds me of what a broadcast would be like if John Kerry were calling play-by-play. But of course I'm only talking about the caricature, not the real John Kerry. <<

    For the record, I have written at length about Kerry's rhetorical skills, in this 2004 cover story. After the jump, two other suggestions about how the Democrats could/should have framed the discussion. I guess worth reading as prep notes for 2012.

    More »

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