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07 Jul 09

Finally, A CEO Speaks Up on How to Renew America - HBR Editors' Blog - Harvard Business Review

Timely.
QUOTE
Immelt exhorted Americans to give up the notion that the U.S. can make it as a services-led, consumption-based economy, where "a mortgage broker is pulling down $5 million a year while a Ph.D. chemist is earning $100,000."

The country must refocus on manufacturing and R&D and must strive to be a leading exporter, he said. He announced that GE was opening an advanced manufacturing and software technology center outside of Detroit near the headquarters of Visteon, the auto parts maker that recently sought bankruptcy protection.

Coincidentally, "Restoring American Competitiveness," an article in the July-August special issue of the Harvard Business Review makes the same case about the importance of manufacturing. It warns that the erosion of the U.S. manufacturing base is seriously undermining the country's ability to innovate. (So much for the idea that we can succeed by letting other countries manufacture the products we invent!)

In his speech, Immelt offered a vision for how the business and government together can revive the economy and solve grand challenges such as clean energy and affordable health care. "We should welcome the government as a catalyst for leadership and change," he said, calling for a "real public-private partnership." (This from a self-described "Republican and free market guy.")
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This article fits nicely with Konrad Yakabuski Globe & Mail article, "Canada's Innovation Gap." http://www.theglobeandmail.com/report-on-business/commentary/canadas-innovation-gap/article1203108/

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harvard_business steve_prokesch america economy renewal innovation manufacturing video

26 Feb 09

Toward a New Housing System - Creative Class » Blog Archive »

QUOTE:
The only way toward long-run and sustainable recovery is a dramatic change in where and how we live. What ultimately got us out of the Long Depression of the late 19th century and the Great Depression of the 1930s wasn’t just new technology, or creative destruction, or government spending, it was a phase-shift in the way we live - in our economic geography. The recovery after the Long Depression took shape around the rise of the industrial city and its streetcar suburbs. The recovery after the Great Depression was powered by suburbanization. We need a massive shift not just in our infrastructure but in our housing system.
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housing mortgage_crisis richard_florida economy spatial_fix

The only way toward long-run and sustainable recovery is a dramatic change in where and how we live. What ultimately got us out of the Long Depression of the late 19th century and the Great Depression of the 1930s wasn’t just new technology, or creative destruction, or government spending, it was a phase-shift in the way we live - in our economic geography. The recovery after the Long Depression took shape around the rise of the industrial city and its streetcar suburbs. The recovery after the Great Depression was powered by suburbanization. We need a massive shift not just in our infrastructure but in our housing system.

24 Feb 09

The Atlantic Online | March 2009 | How the Crash Will Reshape America | Richard Florida

Richard Florida on how the financial crash will affect specific geographical locales and cities in the US / in North America. On NYC, he notes that its diversified economy - even though it's home to Wall Street, which may well be moribund if not dead already - will see the city through the worst of it.

www.theatlantic.com/...meltdown-geography - Preview

richard_florida economy economics cities

The great urbanist Jane Jacobs was among the first to identify cities’ diverse economic and social structures as the true engines of growth. Although the specialization identified by Adam Smith creates powerful efficiency gains, Jacobs argued that the jostling of many different professions and different types of people, all in a dense environment, is an essential spur to innovation—to the creation of things that are truly new. And innovation, in the long run, is what keeps cities vital and relevant.
In 2005, I asked a top-ranking official at a major investment bank whether the city’s rising real-estate prices were affecting his company’s ability to attract global talent. He responded simply: “We are the cause, not the effect, of the real-estate bubble.” (As it turns out, he was only half right.) Stratospheric real-estate prices have made New York less diverse over time, and arguably less stimulating.
25 more annotations...
- In his 2005 book, The World Is Flat, Thomas Friedman argues, essentially, that the global economic playing field has been leveled, and that anyone, anywhere, can now innovate, produce, and compete on a par with, say, workers in Seattle or entrepreneurs in Silicon Valley. But this argument isn’t quite right, and doesn’t accurately describe the evolution of the global economy in recent years.
  
  In fact, as I described in an earlier article for this magazine (“The World Is Spiky,” October 2005 [link opens PDF]), place still matters in the modern economy—and the competitive advantage of the world’s most successful city-regions seems to be growing, not shrinking. To understand how the current crisis is likely to affect different places in the United States, it’s important to understand the forces that have been slowly remaking our economic landscape for a generation or more.
- Pacific Northwest’s Cascadia, stretching from Portland through Seattle to Vancouver
- The ability of different cities and regions to attract highly educated people—or human capital—has diverged, according to research by the Harvard economists Edward Glaeser and Christopher Berry, among others. Thirty years ago, educational attainment was spread relatively uniformly throughout the country, but that’s no longer the case. Cities like Seattle, San Francisco, Austin, Raleigh, and Boston now have two or three times the concentration of college graduates of Akron or Buffalo. Among people with postgraduate degrees, the disparities are wider still. The geographic sorting of people by ability and educational attainment, on this scale, is unprecedented.
- University of Chicago economist and Nobel laureate Robert Lucas declared that the spillovers in knowledge that result from talent-clustering are the main cause of economic growth
- Well-educated professionals and creative workers who live together in dense ecosystems, interacting directly, generate ideas and turn them into products and services faster than talented people in other places can. There is no evidence that globalization or the Internet has changed that. Indeed, as globalization has increased the financial return on innovation by widening the consumer market, the pull of innovative places, already dense with highly talented workers, has only grown stronger, creating a snowball effect. Talent-rich ecosystems are not easy to replicate, and to realize their full economic value, talented and ambitious people increasingly need to live within them.
- Big, talent-attracting places benefit from accelerated rates of “urban metabolism,” according to a pioneering theory of urban evolution developed by a multidisciplinary team of researchers affiliated with the SantaFe Institute. The rate at which living things convert food into energy—their metabolic rate—tends to slow as organisms increase in size. But when the Santa Fe team examined trends in innovation, patent activity, wages, and GDP, they found that successful cities, unlike biological organisms, actually get faster as they grow. In order to grow bigger and overcome diseconomies of scale like congestion and rising housing and business costs, cities must become more efficient, innovative, and productive. The researchers dubbed the extraordinarily rapid metabolic rate that successful cities are able to achieve “super-linear” scaling. “By almost any measure,” they wrote, “the larger a city’s population, the greater the innovation and wealth creation per person.” Places like New York with finance and media, Los Angeles with film and music, and Silicon Valley with hightech are all examples of high-metabolism places.
- While the crisis may have begun in New York, it will likely find its fullest bloom in the interior of the country—in older, manufacturing regions whose heydays are long past and in newer, shallow-rooted Sun Belt communities whose recent booms have been fueled in part by real-estate speculation, overdevelopment, and fictitious housing wealth.
- In November, nationwide unemployment in manufacturing and production occupations was already 9.4 percent. Compare that with the professional occupations, where it was just a little over 3 percent. According to an analysis done by Michael Mandel, the chief economist at BusinessWeek, jobs in the “tangible” sector—that is, production, construction, extraction, and transport—declined by nearly 1.8 million between December 2007 and November 2008, while those in the intangible sector—what I call the “creative class” of scientists, engineers, managers, and professionals—increased by more than 500,000. Both sorts of jobs are regionally concentrated. Paul Krugman has noted that the worst of the crisis, so far at least, can be seen in a “Slump Belt,” heavy with manufacturing centers, running from the industrial Midwest down into the Carolinas. Large swaths of the Northeast, with its professional and creative centers, have been better insulated.
- Still, as its population density dips further, the city’s struggle to provide services and prevent blight across an ever-emptier landscape will only intensify.
  
  That’s the challenge that many Rust Belt cities share: managing population decline without becoming blighted. The task is doubly difficult because as the manufacturing industry has shrunk, the local high-end services—finance, law, consulting—that it once supported have diminished as well, absorbed by bigger regional hubs and globally connected cities. In Chicago, for instance, the country’s 50 biggest law firms grew by 2,130 lawyers from 1984 to 2006, according to William Henderson and Arthur Alderson of Indiana University. Throughout the rest of the Midwest, these firms added a total of just 169 attorneys. Jones Day, founded in 1893 and today one of the country’s largest law firms, no longer considers its Cleveland office “headquarters”—that’s in Washington, D.C.—but rather its “founding office.”
  
  Many second-tier midwestern cities have tried to reinvent themselves in different ways, with varying degrees of success. Pittsburgh, for instance, has sought to reimagine itself as a high-tech center, and has met with more success than just about anywhere else. Still, its population has declined from a high of almost 700,000 in the mid-20th century to roughly 300,000 today. There will be fewer manufacturing jobs on the other side of the crisis, and the U.S. economic landscape will be more uneven—“spikier”—as a result. Many of the old industrial centers will be further diminished, perhaps permanently so.
- But in the heady days of the housing bubble, some Sun Belt cities—Phoenix and Las Vegas are the best examples—developed economies centered largely on real estate and construction. With sunny weather and plenty of flat, empty land, they got caught in a classic boom cycle. Although these places drew tourists, retirees, and some industry—firms seeking bigger footprints at lower costs—much of the cities’ development came from, well, development itself. At a minimum, these places will take a long, long time to regain the ground they’ve recently lost in local wealth and housing values. It’s not unthinkable that some of them could be in for an extended period of further decline.
- To an uncommon degree, the economic boom in these cities was propelled by housing appreciation: as prices rose, more people moved in, seeking inexpensive lifestyles and the opportunity to get in on the real-estate market where it was rising, but still affordable. Local homeowners pumped more and more capital out of their houses as well, taking out home-equity loans and injecting money into the local economy in the form of home improvements and demand for retail goods and low-level services. Cities grew, tax coffers filled, spending continued, more people arrived. Yet the boom itself neither followed nor resulted in the development of sustainable, scalable, highly productive industries or services. It was fueled and funded by housing, and housing was its primary product. Whole cities and metro regions became giant Ponzi schemes.
- From October 2007 through October 2008, the Phoenix area registered the largest decline in housing values in the country: 32.7 percent. (Las Vegas was just a whisker behind, at 31.7 percent. Housing in the New York region, by contrast, fell by just 7.5 percent over the same period.) Overstretched and overbuilt, the region is now experiencing a fiscal double whammy, as its many retirees—some 21 percent of its residents are older than 55—have seen their retirement savings decimated. Mortgages Limited, the state’s largest private commercial lender, filed for bankruptcy last summer. The city is running a $200 million budget deficit, which is only expected to grow. Last fall, the city government petitioned for federal funds to help it deal with the financial crisis. “We had a big bubble here, and it burst,” Anthony Sanders, a professor of economics and finance at ASU, told USA Today in December. “We’ve taken Kevin Costner’s Field of Dreams and now it’s Field of Screams. If you build it, nobody comes.”
- Will people wash out of these places as fast as they washed in, leaving empty sprawl and all the ills that accompany it? Will these cities gradually attract more businesses and industries, allowing them to build more-diverse and more-resilient economies? Or will they subsist on tourism—which may be meager for quite some time—and on the Social Security checks of their retirees? No matter what, their character and atmosphere are likely to change radically.
- Every phase or epoch of capitalism has its own distinct geography, or what economic geographers call the “spatial fix” for the era. The physical character of the economy—the way land is used, the location of homes and businesses, the physical infrastructure that ties everything together—shapes consumption, production, and innovation. As the economy grows and evolves, so too must the landscape.
- Positioning the economy to grow strongly in the coming decades will require not just fiscal stimulus or industrial reform; it will require a new kind of geography as well, a new spatial fix for the next chapter of American economic history.
- Suburbanization was the spatial fix for the industrial age—the geographic expression of mass production and the early credit economy.
- Demand for houses was symbiotic with demand for cars, and both were helped along by federal highway construction, among other infrastructure projects that subsidized a new suburban lifestyle and in turn fueled demand for all manner of household goods. More recently, innovations in finance like adjustable-rate mortgages and securitized subprime loans expanded homeownership further and kept demand high. By 2004, a record 69.2 percent of American families owned their home.
- The places that thrive today are those with the highest velocity of ideas, the highest density of talented and creative people, the highest rate of metabolism. Velocity and density are not words that many people use when describing the suburbs. The economy is driven by key urban areas; a different geography is required.
- The bubble encouraged massive, unsustainable growth in places where land was cheap and the real-estate economy dominant. It encouraged low-density sprawl, which is ill-fitted to a creative, postindustrial economy.
- The solution begins with the removal of homeownership from its long-privileged place at the center of the U.S. economy. Substantial incentives for homeownership (from tax breaks to artificially low mortgage-interest rates) distort demand, encouraging people to buy bigger houses than they otherwise would. That means less spending on medical technology, or software, or alternative energy—the sectors and products that could drive U.S. growth and exports in the coming years. Artificial demand for bigger houses also skews residential patterns, leading to excessive low-density suburban growth. The measures that prop up this demand should be eliminated.
- in both the United States and Europe, those places with higher homeownership rates also suffer from higher unemployment. Homeownership, Oswald found, is a more important predictor of unemployment than rates of unionization or the generosity of welfare benefits. Too often, it ties people to declining or blighted locations, and forces them into work—if they can find it—that is a poor match for their interests and abilities.
- we need to encourage growth in the regions and cities that are best positioned to compete in the coming decades: the great mega-regions that already power the economy, and the smaller, talent-attracting innovation centers inside them—places like Silicon Valley, Boulder, Austin, and the North Carolina Research Triangle.
- we need to make elite cities and key mega-regions more attractive and affordable for all of America’s classes, not just the upper crust. High housing costs in these cities and in the more convenient suburbs around them, along with congested sprawl farther afield, have conspired to drive lower-income Americans away from these places over the past 30 years. This is profoundly unhealthy for our society.
- If there is one constant in the history of capitalist development, it is the ever-more-intensive use of space. Today, we need to begin making smarter use of both our urban spaces and the suburban rings that surround them—packing in more people, more affordably, while at the same time improving their quality of life. That means liberal zoning and building codes within cities to allow more residential development, more mixed-use development in suburbs and cities alike, the in-filling of suburban cores near rail links, new investment in rail, and congestion pricing for travel on our roads. Not everyone wants to live in city centers, and the suburbs are not about to disappear. But we can do a much better job of connecting suburbs to cities and to each other, and allowing regions to grow bigger and denser without losing their velocity.
- Places like Pittsburgh have shown that a city can stay vibrant as it shrinks, by redeveloping its core to attract young professionals and creative types, and by cultivating high-growth services and industries. And in limited ways, we can help faltering cities to manage their decline better, and to sustain better lives for the people who stay in them.

18 Dec 08

"Financial 9-1-1: Implications of the Economic Crisis - The UVic President's Panel on the Economy"

Podcast of the panel/symposium hosted by University of Victoria on 11/18/08 re. "Financial 9-1-1: Implications of the Economic Crisis - The UVic President's Panel on the Economy"
QUOTE
How might the current economic crisis affect your house, your job, your future? Gain insight and a fresh perspective on the global financial crisis from this panel discussion featuring business, economic, and financial experts from UVic and the community.

Speakers: Graham Voss, UVic, Associate Professor, Department of Economics
Basma Majerbi, UVic, Assistant Professor, Faculty of Business
Tom Siemens, RBC, Vice President Commercial Banking
Robert Jawl, Jawl Properties, Principal
Tony Gage, Head, JEA Pension System Solutions
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Local perspective.

dailysplice.com/play - Preview

uvic economy financial_crisis podcast daily_splice victoria

17 Dec 08

CIBC World Markets - Economics & Strategy - Metropolitan Economic Activity

QUOTE
The CIBCWM Metropolitan Economic Activity Index

Using 9 key macroeconomic variables, we have developed a metropolitan index of economic activity, which is structured in a way that approximates the change in each city's level of economic activity. With data going back for almost 10 years, our index enables us not only to monitor the current performance of a given city but also to track its cyclical behavior against the national economy and other census metropolitan areas (CMAs). The focus is on the 25 largest CMAs in Canada.

The macro variables used to develop the index are: (1) Population growth, (2) Employment growth, (3) Unemployment rate, (4) Full-time share in total employment, (5) Personal bankruptcy rate, (6) Business bankruptcy rate, (7) Housing starts, (8) MLS Housing resales, and (9) Non-Residential building permits. We combined all the above information into one index per city: "The CIBCWM Metropolitan Economic Activity Index"1.
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The link to the synopsis (Metro Monitor - Canadian Cities: An Economic Snapshot 12/17/08) is on this page (PDF) :
http://research.cibcwm.com/economic_public/download/metro_monitor.pdf (6 pages)

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cibc canada metros census_metropolitan_areas economy world_markets markets

16 Dec 08

"Why home values may take decades to recover," by Dennis Cauchon (USAToday.com)

Quite a horrifying article about the depth (and breadth) housing's role in the financial crisis, and why the market is in the doldrums in a bad bad way.
QUOTE:
Home values have fallen before — during the Great Depression and in Texas after a 1980s oil boom, for example — but those drops were a response to other economic forces. This time, the housing price collapse is the cause of the nation's broad economic troubles, not just an effect.
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usatoday housing subprime_mortgage_crisis bailout financial_crisis economy

More room to fall?
As painful as the decline has been, history suggests home values still may have a long way to drop and may take decades to return to the heights of 2½ years ago.
"We will never see these prices again in our lifetime, when you adjust for inflation," says Peter Schiff, president of investment firm Euro Pacific Capital of Darien, Conn. "These were lifetime peaks."
The boom in home prices — fueled by heavily leveraged loans built on low or even no down payments — made it easy to forget that housing values had been remarkably stable for a half-century after World War II, rising at roughly the same pace as income and inflation. Prices soared in most of the country — especially in Arizona, California, Florida and Nevada and metro areas of Washington, D.C., and New York — during a brief period of easy lending, especially from 2002 to 2006. That era's over.
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- "Homes are different than other goods and services," she says. "The fragility of our banking system is tied to the value of homes."
- Other economists see a brighter picture in the long term. Wachovia economist Adam York expects home values to keep falling until 2010 but is optimistic they will recover.
  "The one saving grace is the population is growing by 3 million people a year," he says. "They need to live somewhere. That means more roofs."
- When the housing bubble began to deflate in 2006, history had a sobering lesson to teach. Home values had closely tracked three common-sense measures for many years:
  •Income — Home values floated at about three times average household income from 1950 to 2000. In 2006, the average household income was $66,500. Under the traditional model, home prices should have been about $200,000. Instead, the typical home sold for $301,000.
  •Rent — Homes traditionally have sold for about 20 times what it would cost to rent them for a year. In 2006, houses were selling for 32 times annual rent.
  •Appreciation — Existing homes grew in value by less than 0.5% per year, after adjusting for inflation, from 1950 to 2000. From 2000 to 2006, home prices rose at an average annualized rate of 8.2% above inflation and peaked with a 12.3% jump in 2005. Housing prices began to fall in the second quarter of 2006.
- Low down payments and ARMs gave homeowners enormous financial leverage to pay high home prices. Leverage boosts buying power through debt, the same way a 100-pound woman uses a lever to jack up a 3,000-pound car.
  Consider a couple with $20,000 cash. In 2006, they easily could get a 5% down mortgage to buy a $400,000 house. Today, a 10% down payment would limit the couple to a $200,000 house.
- The Great Depression of the 1930s was preceded by a real estate bubble, also fueled by loose lending standards and shrinking down payment requirements. Those real estate problems — and solutions — echo today's.
  Florida real estate was the epicenter of speculation in the mid-1920s. Developers ran up prices by selling to borrowers who put as little as 10% down. Those were shockingly risky loans at a time when the standard mortgage lasted five years and required a 50% down payment.
  The risky loans went bad first, but it was the spread of credit problems to the supposedly safe loans — five years and 50% down — that caused the housing market to collapse.
  The five-year loans required no payments to reduce principal. Homeowners expected to refinance mortgages when the loans expired, usually with the same lender. The stock market crash led to a "liquidity crisis" — no money to borrow — that dried up mortgage refinancing.
  Millions of families lost their homes to foreclosure. Falling prices on nearly everything — homes, farm crops, wages — made consumers reluctant to buy and banks afraid to lend.
  As part of the New Deal, the government took control of millions of loans and restructured them into something new: the modern mortgage, with 20% down and principal that is repaid over the life of the loan. The government extended the mortgages to 15 years, then 25 and finally 30.
  When World War II ended in 1945 and the Baby Boom began the following year, the 30-year, fixed-rate mortgage became a cornerstone of society and led to unprecedented levels of homeownership.
- The danger of rapidly falling home prices is that — similar to the Depression — potential buyers and lenders will stay away, fueling even sharper price declines.
  During the housing boom, buyers expected prices to rise, so they were quick to buy, borrow and pay a premium. As prices drop, home buyers wait for better deals. says economist Dean Baker of the liberal Center for Economic Policy Research in Washington, D.C.
  Lenders want bigger down payments to protect against the falling value of collateral. Homeowners lose equity, so they can't buy other houses. "Price declines can be a self-reinforcing mechanism," Wachter says.
- An out-of-control price collapse would have dire consequences, Baker says. Even the most conservative banks would find themselves carrying portfolios of toxic mortgage loans.
  If housing prices don't stabilize at traditional levels, financial troubles could spread everywhere — to credit cards, car loans and commercial mortgages, Baker says. "The waves of bad debt will just keep coming," he says.

21 Nov 08

The Gospel of Green | CBC News: the fifth estate

CBC portal page for a program on Germany's shift to a green(er) infrastructure/ economy, w/ focus on Hermann Scheer, parliamentarian who helped make it happen.
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Hermann Scheer is a German parliamentarian who has turned ideas into practical solutions. Because of the laws that bear his name, Germany is now a solar-paneled, windmill-building, job-producing green powerhouse of the industrialized world. Fifteen per cent of Germany's electricity now comes from renewable energy systems. Scheer predicts that, if his country continues on this course, that number could be 100 per cent by 2030.
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cbc hermann_scheer environment economy green_strategies germany

19 Oct 08

Creative Class » Blog Archive » The Nature of This Crisis Matters - Creative Class

A sobering assessment of current bail-out strategies and why they could well fail, by Martin Kenney.

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creative_class richard_florida financial_crisis economy martin_kenney

when the Treasury/Fed say they will bail out banks, they only mean a few key banks and leave the rest to their own devices (there is evidence for this suspicion as the large regional banks such as Sun Trust and Zion did not participate in the huge rally on Monday). So, which banks will be bailed out? My guess is Goldman Sachs (Paulson and Robert Rubin’s ex-employer), Citi, JPMorgan Chase, Bank of America, and a few others (did Wells Fargo buy Wachovia so that it could enter this charmed circle?). P.S. - We now have confirmation of which firms are being bailed out: JPMorgan, Goldman, Citi, BoA, Wells Fargo, Merrill Lynch, Morgan Stanley, State Street Bank [thank you Barney Frank], Bank of NY Mellon [thank you Hillary and Schumer].
The forces of globalization are still underway and, as many of have been saying, they are putting downward pressure on incomes in the developed nations, which, of course, are the consumers of the products of the developing nations. A small telltale of this, IBM announced dramatically increased profits on only slightly higher sales. My guess is that these profits were made by substituting low-cost developing world service providers for their high-cost developing nation employees. This dynamic will continue putting pressure on wages in the developed nations and contributing to a deflationary dynamic.
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- Income inequality has increased globally and, as a result, the vast majority find themselves less and less capable to consume.
- The technological revolution of digitization has changed the central source of value creation from the assembly line to the designer/engineer.

06 Oct 08

"I Purchase, Therefore I Am," by Richard Florida - Creative Class blog

Great entry by Richard Florida, which underscores the connection between suburbanization, reliance on cheap gasoline, consumption, and using housing/ real estate as a "piggy bank" that one could always raid to get money to buy more stuff. See entry, and annotations/ highlights.

I added a comment, in response to an existing comment by Wendy Waters, and then a second one in response to Kwende Kefentse.

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creative_class economy financial_crisis mortgage_crisis richard_florida suburbs

Most experts agree this is the worst financial meltdown since the Great Depression. The stock market is down almost 25 percent so far this year. Housing prices in the United States are off more than 20 per cent since their peak in 2006. Manufacturing output is falling and consumer confidence has slipped.
Martin Feldstein, former head of the National Bureau of Economic Research, past chairman of the Council of Economic Advisers and a Harvard economics professor - usually a voice of calming reassurance - wrote in The Wall Street Journal: “Sliding into recession, monetary policy already at maximum easing, and fiscal transfers impotent … an unenviable situation, to say the least, for any incoming president.”
Where did this financial mess come from? And what does it mean?
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- The easy answer is to blame the housing market.
- Banks and financial institutions, so the story goes, are clogged with this bad debt, now dubbed toxic waste. This is the kind of thinking behind the U.S. financial bailout: Remove the toxicity and all will magically be well again.
- The real reason is that the roots of the current crisis are tied to the fundamental nature of the postwar model of economic development called “Fordism.” That model drew a tight connection between assembly-line mass production and mass consumption - ultimately fueled by massive suburbanization.
- Fordism emerged as a full-blown economic and social model during the 1930s, marked by president Franklin D. Roosevelt’s New Deal programs, and flourished after the Second World War, when government policies brought about the rise of longer-term mortgages and a new system organized under the now infamous Fannie Mae to purchase those mortgages and thus lubricate the system.
  Add to that massive tax breaks for homeownership and gargantuan subsidies for highway construction and infrastructure, and a whole new model of suburban-fueled mass consumption was born - family after family purchased new homes, filling them with TVs, appliances and all manner of furnishings, while also purchasing record numbers of cars to get to and from work.
  - I also blogged this, here: http://tinyurl.com/52hr33 - on 2008-10-06
  - To underscore the validity of what Florida is saying here, watch the video of SoCal news, "What the meltdown looks like" (on trash-outs): http://tinyurl.com/3jryu9 - on 2008-10-06
  Add Sticky Note
- While Fordism looks stable on the surface, it suffers from a fatal flaw: It’s impossible for consumption to keep up with the ever-growing pace and efficiency of production. This is particularly true of recent times, when a great deal of production has been sent to China, India and other places where labour is cheaper. It’s hard for the working and middle classes to consume more when their wages are essentially stagnant. Low-wage workers in emerging economies do not have the income to fill the gap. And while the ranks of the rich have grown, the wealthy are a relatively small group that can buy only so many luxury cars, designer products, homes and yachts.
  That’s where credit comes in. Those new fancy mortgage instruments were meant to turn homes into veritable “piggy banks” that could be used to finance bigger and better cars and homes and toys.
- Almost a century ago, Austrian economist Rudolf Hilferding identified this basic contradiction of modern capitalism in his monumental work Finance Capital. Capitalist economic development stands on a shaky foundation, he argued - workers always produce more than they can consume, more even than society as a whole can consume.
  - - we always produce more than we can consume: so, can we get around to producing the "right" things, or is that impossible? - on 2008-10-06
  Add Sticky Note
- As one leading blogger, Yves Smith at Naked Capitalism, recently put it: “Since consumption has come to depend on growth in indebtedness, a reversal, however painful, is necessary. Our excesses have been so great that there is no way out of this that does not lead to a general fall in living standards.”
  There you have it. The financial crisis is in reality a much deeper crisis of our underlying economic model and our way of life. It’s a crisis of the way we have come to define ourselves.
- Regardless of how or when the financial markets are restored, credit will be much harder to get - the age of the house as piggy bank is long gone.

13 May 08

Do tourists miss 'Toronto the Good'? - Posted Toronto

While some people say that "gritty" = "edgy" (and therefore "cool"), there's an undeniable line that gets crossed at some point, and then gritty isn't edgy anymore, it's just shabby & run-down & dirty. It seems that far too many North American cities are on their way to that. I'm reminded of my oldest sister's visit to Victoria a couple of years ago. She lives in the heart of Tokyo, and her observations of Victoria were that it's dirty. Not the air (compared to Tokyo), but in terms of the litter on the streets, the obvious signs of infrastructural decay, and the obvious signs of social decay (panhandlers, drug users). Maybe things have gone downhill in Tokyo since her remarks, but they have also certainly gone further downhill here.

This article in the National Post (by Barry Hertz) should be read in conjunction with some of the other commentaries appearing on infrastructure, whether on Richard Florida's blog, or on the CEOs for Cities blog, or even on Doc Searls's blog (see Handbasket weaving, http://blogs.law.harvard.edu/doc/2008/05/13/handbasket-weaving/). The basic message is that this is not a question of "style" or edginess or cool or whatever, but a question of underfunded infrastructure, which is crumbling around our ears. And this has long term deleterious economic impacts.

network.nationalpost.com/...sts-miss-toronto-the-good.aspx - Preview

toronto infrastructure infrastructure_funding economy competitiveness

the Royal Ontario Museum’s chief executive officer said yesterday that all the litter, dead trees, graffiti, cracked pavement and posters plastered across the cityscape detract from major attractions and leave visitors with an impression that Toronto is a metropolis in decline.
“The devil is in the details,” William Thorsell said. “Public spaces in Toronto are inferior to those in other comparable cities in the world. Just go to New York City or Chicago and walk around downtown. You would see much higher standards for public space than you do in Toronto. I’m just back from Seoul, Korea, which makes Toronto look extremely shabby.”
3 more annotations...
- suggests Toronto needs to polish its tired image if it wants to maintain its status as a top-tier tourist destination, starting with such basic steps as better signs, cleaner streets, fewer panhandlers and an increase in overall friendliness.
  - Yeah, but it's not just a question of "polishing." It's a question of INVESTING: funding, supporting, repairing, improving. If my house's windows are cracked, single-pane, and leaking heat -- as well as dirty -- then polishing them won't do the trick. I need to caulk them, I need to replace cracked panes, and I need to invest in storm windows. - on 2008-05-13
  Add Sticky Note
- “It’s going to take an approach where we look at sprucing up, for example, things like our washrooms in this city,” Mr. Thompson said. “That’s one of the things I got from a lot of people, that ‘Ya, your washrooms really need to be cleaned up.’ ”
- One complaint among downtown and entertainment district business owners especially, has been the number of aggressive panhandlers accosting tourists. Tim Finlayson, who operates ShopDineTour Toronto, said he has gotten negative feedback from tourists about the number of homeless and seen his clients avoid streets with a high number of panhandlers.

26 Feb 08

Logic+Emotion: Thinking Through The "3 U's"...

The 3 Us -- damn that apostrophe, it's all wrong as used in the article's title. But if you leave it out, it reads as "the 3 us," as in *us* or *them*... Regardless, an interesting summing up of what might make applications interesting for users. See notes.

darmano.typepad.com/...thinking-throug.html - Preview

apps economy marketing socialnetworks web2.0

Usefulness
5 more annotations...
- Any experience is useful when it's meaningful
  and serves a purpose. Currently much of marketing still breaks down
  into self-serving gimmicks and interruptions that offer little value.
  - ..."interruptions"... key point. Think of the "attention economy": can you really afford to interrupt people? - on 2008-02-26
  Add Sticky Note
- Utility
- Utility = interaction that delights us in some
  way.
- Ubiquity
- We are living in a fragmented world with what seems like infinite touch points available to us. Brands and businesses who can distribute value across these endless touch points in effective ways will tap into new markets and solidify existing ones. Even though some of us are interacting through multiple social channels—we
  can now find people just like ourselves who we trust and see what they like/dislike. This influences our decisions from the stuff we buy to
  the things we recommend to each other. The best marketing in the world tries to
  simulate this, but usually ends up coming off as contrived. Meaningful interactions through multiple networks and channels leads to authentic word of mouth references and ultimately affinity.

22 Dec 07

An Update to TD Economics' 2002 Report on the GTA Economy (application/pdf Object)

- 33-pg PDF update by Toronto Dominion Bank on GTA (Greater Toronto Area)

www.td.com/...db0707_gta.pdf - Preview

canada cities economic_development economy td_bank toronto

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