The Schwarzenegger-Brown Climate Alliance

schwarzMonday’s L.A. Times gushed over the “bipartisan” gubernatorial legitimacy Governors Arnold Schwarzenegger and Jerry Brown have given efforts to fight climate change in Paris this weekend. The two former governors “sat for a joint interview to put a bipartisan spin on fighting climate change,” showing the world that green-minded Democrats and Republicans can avoid petty bickering and find a middle ground in combating this great issue of our times.

Here are the juiciest quotes the Times recounts:

“It’s important for people to know that Republicans can work with Democrats and vice versa,” Brown said.

Schwarzenegger added, “That is a very important message for the international community, that they should not look at [climate change] in a political way.”

Bipartisanship for broader goals is all well and good. Of course, the Times doesn’t recount the fact that Schwarzenegger is not, to put it mildly, a typical Republican, and that his participation in “bipartisanship” doesn’t mean much. In fact, on the climate change issue in particular, he arguably toes the liberal line with crossed t’s and dotted i’s. It’s perhaps a little bit ironic that a self-described Rockefeller Republican like myself should accuse a fellow Republican of being a “Republican In Name Only,” but on climate change, because of his joining hands with the green-and-blue liberal policy elite on cap-and-trade, renewables, and other fashionable green boondoggles, it’s hard to categorize Schwarzenegger as anything other than a post-partisan Donkey in Elephants’ clothing.

In an excellent article for the excellent journal National Affairs (read the whole thing) Troy Senik nicely outlines the self-imposed fate of the once-maverick Governor:

“[H]e began marshaling his political capital in the service of nationally fashionable issues like greenhouse-gas reductions. … [I]t began to feel suspiciously like Schwarzenegger was concerned more with buttering up the national media and the Beverly Hills cocktail circuit than actually forging an agenda to pull California back from the abyss.”

So the notion that the Schwarzenegger-Brown stand is anything like meaningful bipartisanship is, by all significant measures, bunk. Most Republicans, moderate or conservative, will rightfully oppose the anti-growth measures that modern environmentalism requires in the crusade against climate change.

Rather than joining hands with fashionable elites in pursuing self-defeating policies that aren’t likely to put much of a dent in carbon emissions, Republicans should live up to their tradition of conservation and environmental stewardship by living up to another one of their great traditions — innovation. Instead of fighting climate change by arbitrarily restricting carbon emissions and pumping money into zero-emissions, zero-results “renewable” sources, Republicans should pursue a climate strategy with what has worked empirically- high-energy, low-emission fuels like natural gas as substitutes for high-emission fuels like crude oil and coal. Peter Wehner and Jim Manzi argued for such a strategy in another article at National Affairs, and their middle ground makes for much more practical policy than either ultra-conservative denials of climate science or mainline liberal worship of cap-and-trade and solar energy.

As Joel Kotkin argues, the Paris climate talks aren’t likely to result in much more than self-righteous gabbing by the elite classes of developed nations, to the detriment of the lower classes of said nations. Developing countries like China and India, by far the largest carbon emitters, are unlikely to shackle their growth to the whims of Western experts and activists. So in the end, Schwarzenegger and Brown’s united stand against climate change will do much for their consciences and little for the climate or the struggling. It remains for another generation of pragmatic politicos to tend to this truly pressing problem. Let’s hope the glittering promise of accolades for “bipartisanship” doesn’t take precedence over reality for them.

esearch associate for the Center for Opportunity Urbanism and Senior Correspondent at Glimpse From the Globe.

Originally published by Fox and Hounds Daily

Political Battle of the Ages: Boomers vs. Millennials

Photo courtesy of www.ondeck.com

Photo courtesy of www.ondeck.com

NEW GEOGRAPHY–The old issues of class, race and geography may still dominate coverage of our changing political landscape, but perhaps a more compelling divide relates to generations. American politics are being shaped by two gigantic generations – the baby boomers and their offspring, the millennials – as well as smaller cohorts of Generation X, who preceded the millennials, and what has been known as the Silent Generation, who preceded the boomers.

Both the boomers and the Silents gradually have moved to the right as they have aged. Other factors underpin this trend, such as the fact that boomers are overwhelmingly white – well over 70 percent compared with roughly 58 percent for millennials. People in their 50s and 60s have seen their incomes and net worth rise while millennials have done far worse, at this stage of their lives, than previous generations.

Although millennials are more numerous than boomers, the elderly are a growing portion of the population, and they tend to vote in bigger numbers. Voters over age 65 turn out at a rate above 70 percent, while barely 40 percent of those under 25 cast ballots. That may be one factor in why this presidential campaign is dominated not by youth, but by aging figures like Donald Trump (69), Hillary Clinton (67) and Bernie Sanders (74).

The Silent Generation

Leading generational analysts – Neil Howe, Morley Winograd, Mike Hais – have suggested that the experiences people have growing up shape political beliefs throughout their lives. This does not mean that people do not change as they age, but where they started remains a key factor in determining how far these changes spread within a generation.

The now-passing Greatest Generation – the group that survived the Depression and the Second World War – were largely shaped by the experiences of the New Deal and the boom of the postwar era. This has made them consistently less conservative than successor generations, and they have retained their Democratic affiliations.

In contrast, the Silents – many of whom grew up under President Dwight Eisenhower and during the Cold War – have gradually moved toward the Republican column. After generally supporting the Democrats in 2006, they have backed GOP candidates but remain surprisingly balanced in their affiliations; Pew estimates Silents who at least lean Republican constitute 47 percent, versus 44 percent Democratic.

Surprisingly, Silent Generation Democrats are not much more socially conservative on issues – such as gay marriage, abortion and climate change – than the younger generation. But Silent Generation Republicans are far more socially conservative than their younger counterparts, particularly on immigration. This may be one factor that keeps the Donald Trump energizer bunny animated.

Boomers Move Right

Although now outnumbered by millennials, 83 million to 75 million, boomers, those born from 1946-64, remain the largest voting bloc, accounting for some 35 percent of the electorate. Despite being closely identified with the 1960s hippie movement and the counterculture, this group has been heading right for at least 30 years. This may be traced to their experience with the inept and depressing Jimmy Carter presidency and their support for the more self-assured optimism of Ronald Reagan.

Since the second term of the first boomer president, Bill Clinton, that generation has favored the GOP in virtually every election. And they are getting more conservative over time. Since the 1970s, the percentage identifying themselves as liberal has dropped consistently while those holding conservative views have steadily climbed. In 2011, 42 percent of boomers identified as conservative, more the twice the number who considered themselves liberal.

Focus on Generation X

Generation X, smaller than the boomer and millennial demographic behemoths, with roughly 65 million, occupies a particularly critical, if unappreciated, niche in our evolving political structure. Born from the mid-1960s to early ’80s, this generation will produce our next generation of leaders.

The politics of the X’ers are complex. On social issues, they are notably more liberal than boomers but considerably more conservative than millennials. Younger X’ers, many of whom grew up under the generally successful era of Bill Clinton, are notably more liberal than their older counterparts, but a strong majority do not approve of President Obama.

Overall, the X’ers represent something of a swing vote and could be a source of some moderation on social and environmental issues. As a group, they are widely seen as more pragmatic than boomers, who tend to embrace ideological politics. Although likely to support the GOP nominee in 2016, the margin may not be great and, if the Republicans remain committed to embracing clownish candidates, the X’ers could even end up in the Democratic column.

Millennials: Game changers?

With the exception of the Greatest Generation, the millennials are the only age cohort that can be said to be solidly Democratic. Given their huge numbers and relative youth, they will ultimately dominate our political system. By 2030, there will be 78 million millennials and 56 million boomers. But, as in other generations, their political affiliations could shift, at least somewhat, depending on how the parties shape their message over the next decade or two.

Millennials’ social views strongly benefit Democrats. The Republicans have turned off a large portion of a generation that embraces gay marriage by a huge margin and is heavily pro-immigration. The shift to the Democrats could be supercharged if Trump, disliked by four-fifths of Latinos in some surveys, gets the GOP nomination.

Millennials also could push the Democrats even further to the left. They have become a major base of support for socialist candidate Bernie Sanders. The Vermont septuagenarian has played well to this generation’s latent anti-capitalism (about as many of them favor socialism as the free market system; his call for free college no doubt appeals to those worried about college debts). More than three times as many millennials like Sanders’ Facebook page as Hillary Clinton’s, and he is polling about even among them with the former secretary of state, well ahead of his national rankings.

Although smaller in numbers, Republican millennials have gained some ground in recent elections, with most white millennials now in favor of a GOP takeover of the White House in 2016. Their expanding presence could have a potentially moderating impact on a party that appears committed to engaging in ideological and demographic suicide. Young Republicans tend to be more socially liberal – 64 percent, for example, embrace broad acceptance for homosexuality, compared with 45 percent of GOP boomers – and more often define their conservatism in economic terms, a potentially strong issue after seven years of generally anemic, and highly concentrated, income and job growth.

Who wins?

Generational politics pose both risks and rewards for each party. A Trump candidacy may excite older voters and many younger white voters, but the cost among a pro-immigrant, heavily minority millennial voting bloc could prove damaging over the longer run.

Democrats, too, face risks, particularly if they continue on the path of radical wealth redistribution and draconian climate change regulation. Although still strong, support for Obama has been steadily weakening since 2008. Millennials are the only age group to still approve of President Obama’s record, but by only 49 percent, not exactly a ringing endorsement.

The future may be determined by the extent that millennials feel that Democratic policies inhibit their ability to move up economically. Younger millennials, having grown up during a weak economy under a progressive president, are notably more conservative than older ones, notes a recent Harvard study.

They increasingly share some attitudes with conservatives, having become notably more deeply distrustful of many of the nation’s political institutions. Nearly half describe themselves as independents, far more than any other age group.

To be sure, mllennials will likely stay more liberal than boomers (about as many are conservative as liberal), but they could shift further to the right once they enter their 30s and start earning a living. Once they are accumulating such things as a house and starting families, they may not easily embrace policies that would see much of their income taken away – radical redistribution is more appealing when you have little and know even less.

To take advantage of these trends, Republicans first need to adjust their views on social issues, notably on immigration and gay rights, and come up with policies to address rampant income inequality. If they fail to do so, generation dynamics will likely allow the Democrats to dominate electorally for the next decade or more.

(Joel Kotkin is executive editor of NewGeography.com, the Roger Hobbs Distinguished Fellow in Urban Studies at Chapman University, and a member of the editorial board of the Orange County Register. His most recent book is “The New Class Conflict” –Telos Publishing: 2014. Joel Kotkin lives in Orange County. This piece first appeared at The Daily Beast.) 

SoCal’s Housing Crisis: Middle Class, Minorities May Not Survive

urban-housing-sprawl-366c0What kind of urban future is in the offing for Southern California? Well, if you look at both what planners want and current market trends, here’s the best forecast: congested, with higher prices and an ever more degraded quality of life. As the acerbic author of the “Dr. Housing Bubble” blog puts it, we are looking at becoming “los sardines” with a future marked by both relentless cramming and out-of-sight prices.

This can be seen in the recent surge of housing prices, particularly in the areas of the region dominated by single-family homes. You can get a house in San Francisco – a shack, really – for what it costs to buy a mansion outside Houston, or even a nice home in Irvine or Villa Park. Choice single-family locations like Irvine, Manhattan Beach and Santa Monica have also experienced soaring prices.

Market forces – overseas investment, a strong buyer preference for single-family homes and a limited number of well-performing school districts – are part of, but hardly all, the story. More important may be the increasingly heavy hand of California’s planning regime, which favors ever-denser development at the expense of single-family housing in the state’s interior.

In both the Bay Area and Southern California, plans are now being set to force the building of massive new towers in a few selected “transit-oriented” zones. In a bow to political realities, the planners say they won’t bring superdensity to the single-family neighborhoods beloved by Californians; the wealthy – including those who bought early and those with access to inherited money – will still be able to enjoy backyard play sets, barbecues and swimming pools. 

Home prices skyrocket

The rest of you had better get used to cramming. House prices over the past two years in Orange and Los Angeles counties have risen at a rate more than 10 times the relatively paltry increases in weekly paychecks, among the nation’s worst ratios of home prices to income. Now, you can’t buy a house in much of Orange County or West L.A. without a triple-digit income; in Manhattan Beach, buying a median-price house requires an income of more than $300,000 a year.

With development on the periphery basically shut down for lack of sufficient transit usage, the bright folks at SCAG, MTC, ABAG, SANDAG (the regional planning agencies in Los Angeles, the San Francisco Bay Area and San Diego, respectively) foresee a future of ever-increasing density, with apartment towers interspersed throughout the cities.

To be sure, city life and density might seem great, and could even work to some extent in smaller, scenic areas like Laguna Beach or Santa Monica, with their accessible walking districts. But such locales are only a small part of Southern California.

To live in a high-rise in Ontario or Garden Grove might please planners, but density without much amenity – and nothing that will ever be close to a New York-style transit system or even a system as good as that serving downtown Los Angeles – seems more a ticket to a neo-tenement purgatory than paradise.

For areas that lack ocean breezes or scenic views, we are looking at something more like the congested chaos of Mexico City or Tehran than the tourist’s Paris on the Pacific (more than 80 percent of Paris, France, is outside the compact core).

The biggest losers, as usual, will be those people – working and middle-class families as well as minorities – who have looked to the periphery for housing opportunities and a chance for a better life. Los Angeles County is already a majority-renting community, and attempts to force densification in other counties could bring this reality to Orange, San Bernardino, Riverside and Ventura counties as well. 

Where minorities can thrive

Until recently, the periphery has offered housing salvation for younger middle-income homeowners, particularly families. Homeownership rates are more than 25 percent higher in the Riverside-San Bernardino area than in the Los Angeles-Orange County area. Minorities also do much better. The homeownership rate inland is a quarter higher among African American and Asian households. The rate for Hispanics is nealy half again higher than in Los Angeles-Orange.

But as housing prices have soared, and opportunities to move outward have shrunk, Southern California has developed some of the worst crowding in the nation. Three of the most crowded areas – based on people per room – are in Los Angeles County: South Los Angeles, the Pico Union area near downtown LA and Huntington Park. Southern California trails only Miami, Fla., for the highest percentage of residents who spend 40 percent or more of their incomes on rent or a mortgage.

The impact of high prices extends well beyond the poor and minorities. As a recent report from the state’s Legislative Analyst’s Office suggests, the lack of affordable housing is one reason why California companies have trouble attracting employees, particularly those with families. To keep the digital hearths going in places like Silicon Valley, companies rely on either young people (often with family money) or, increasingly, low-wage workers, called “technocoolies” by some, imported from Asia.

The LAO is spot on about the disadvantages of California housing, which now costs two and half times the national average, and rents that are 50 percent higher than in the country as a whole. Homeownership rates now stand at 48th among the states. Unfortunately, the proposed solutions follow the same script adopted by our planning elites that seeks to further densify large swaths of central Los Angeles and the San Francisco Bay Area, which, since 2000, have accounted for roughly 10 percent of all growth in the state. 

Affluent exempt

This planning fiat is sure to spark fierce resistance. Don’t expect to see high-rises sprout amid the expanses of single-family housing in Malibu or Beverly Hills, due to the organized power of their overwhelmingly “progressive” residents. Higher-density development likely will be jammed, instead, into already denser, less-affluent and less politically powerful areas, such as the east San Fernando Valley, North Orange County and some inland communities.

There’s nothing wrong with appealing to a market for apartments, but limiting the expansion of single-family construction will only exacerbate our looming demographic dilemmas. Southern California’s family population is decreasing more than any of the nation’s other large metro areas. Homes are increasingly owned by an aging population lucky enough to have bought before the new planning regime helped drive prices into the stratosphere. Young workers may be amused by dense, high-cost rental space, at least until they desire to start families and own homes. But the crucial middle-class households headed by thirty- and fortysomethings may find themselves forced out of the region if they are unwilling to accept a lower quality of life.

Some of the logic behind densification was based on the perception that the suburban dream is dead. Yet, despite persistent claims by planners and pundits, this turned out to be less a matter of altered market preferences than of temporary effects of the Great Recession. Roughly 80 percent of Americans still prefer single-family homes. So do Californians: In the past decade, single-family units represented the vast majority of all new homes built in the state.

Now that the economy is coming back to life, suburban communities, particularly the much-disdained exurbs, appear to be on the demographic rise again around the nation. By rejecting this option for the next generation, we are essentially putting the California Dream on ice, all but pushing upwardly mobile, but not rich, families to pursue their futures in notably lower-cost, less-regulated places, like Texas.

All this is for a dubious philosophy that has long derided suburban communities and their single-family homes as an environmentally wasteful, anti-social extravagance. Yet, today, many new suburban developments are eco-friendly, including such features as high-efficiency construction and renewable solar power, and employment patterns increasingly allow for work from home or in nearby firms. Business growth near homes in Irvine, often pilloried as the epitome of sprawl, notes former California State University, Los Angeles demographer Ali Modarres, has resulted in some of the nation’s shortest commutes and highest rates of people working at home.

Add to the equation more fuel-efficient cars and the environmental justification for forced sardinization becomes even less compelling. Densification might well increase over time as some people prefer more urban lifestyles. But the opportunity to own a single-family home should not be limited to the very rich, or to aging baby boomers, by Sacramento bureaucrats and unelected regional planning agencies. Yet, precisely this is the inevitable result of the massive attempt at social engineering now advancing throughout the region and state.

This piece is cross-posted at Citywatchla.com

Joel Kotkin is executive editor of NewGeography.com… where this piece was most recently posted …  and Roger Hobbs Distinguished Fellow in Urban Studies at Chapman University, and a member of the editorial board of the Orange County Register. He is also executive director of the Houston-based Center for Opportunity Urbanism is now available at Amazon and Telos Press. He lives in Los Angeles, CA

Drought: Californians must demand better for the state

agriculture“Science,” wrote the University of California’s first President Daniel Coit Gilman, “is the mother of California.” In making this assertion, Gilman was referring mostly to finding ways to overcoming the state’s “peculiar geographical position” so that the state could develop its “undeveloped resources.”

Nowhere was this more true than in the case of water. Except for the far north and the Sierra, California – and that includes San Francisco as well as greater Los Angeles – is essentially a semiarid desert. The soil and the climate might be ideal, but without water, California is just a lot of sunny potential, but not much economic value.

Yet, previous generations of Californians, following Gilman’s instructions, used technology to build new waterworks, from the Hetch Hetchy Dam to the L.A. Aqueduct and, finally, the California State Water Project and its federal counterpart, the Central Valley Project. These turned California into the richest farming area on the planet and generated opportunities for the tens of millions who came to live in the state’s cities and suburbs.

Today, California operates on very different assumptions. If growth was valued under the regimes that existed in the 100 years after Gilman, it began to lose its allure in the 1960s and 1970s. Part of this was understandable; much of the state had developed haphazardly, and, particularly in the urban areas, not enough open space was left behind. The greens thrived most here because so many had witnessed the dramatic transformation of so much of the state.

The central figures in this transformation are the Browns. The father Pat was a builder by proclivity, and he made sure Californians not only had lots of water, but excellent roads and a great education system from grade schools and community colleges to the University of California. Brown epitomized California’s opportunity era, with its many excesses but also remarkable social mobility, less poverty and more equality than what we see today.

Jerry Brown, his son, was much the opposite. As his adviser Tom Quinn explained to me 30 years ago, Brown’s politics were informed by an abhorrence of what he called his father’s “build, build, build thing.” Brown Jr., he added, was not just rejecting his father, but a long line of Democrats – from Harry Truman to Lyndon Johnson and Hubert Humphrey – who saw the party’s mission as creating wealth and opportunity for their middle- and working-class constituents.

Brown’s approach, in contrast, has been to embrace the notion of “an era of limits,” sometimes for good cause: On nonproductive, runaway government spending, for example. But the lack of investment in infrastructure – as opposed to social services, pensions and salaries – caused disastrous results, of which the current severity of the drought is just one example.

Part of this is world-view. Although generally scientists reject the claim that the drought stems from climate change, Brown and his amen crew, such as at the New York Times, swear that it’s a big part of the story.

This narrative helps explain why the state, under increasingly strong environmentalist influence, has chosen to refrain from taking steps to mitigate the drought. If it’s part of a general revolt of “gaia,” after all, why bother? Better to don a hair shirt and shrink the consuming base than prepare to meet future demands.

Brown’s distaste for adding storage space – a sentiment shared by his core green backers – goes back to his first two terms. Recently, he seems to have wised up on the need to deal with water infrastructure, but he has been careful not to offend his green allies. He has not called for an end to the unconscionable mass diversion of water to San Francisco Bay to restore ancient salmon runs and to save the Delta smelt. This inaction has helped make the current drought – which recalls at least two others I have experienced over the past 40 years – far worse than it need be.

But Brown’s water policies are only part of broader systemic problem in the political economy. The state’s politics are now dominated by a coalition of environmentalists, wealthy coastal residents and public employees who have little interest in broad-based growth, particularly in the state’s interior. This is reflected not just in water polices, but in such areas as basic transportation infrastructure. During the recession, for example, California cut transportation spending far more than states like Texas. A recent study from the American Association of State Highway and Transportation Officials and a nonprofit group found that California was home to eight of the 20 urban areas with the worst roads in the nation.

Brown’s disdain for infrastructure spending has survived the bad times and continues with the current budget. Similar trends are seen across the state, including even in opposition to building capacity at the ports – leading to a gradual erosion of our dominant market share to competitors, particularly in the Southeast. Some cities invest in expensive rail development but fail to keep up with the more cost-efficient bus service.

Similarly, a commitment to Draconian “renewable energy” goals has helped line the pockets of Silicon Valley investors and utilities at the expense of manufacturers, Main Street businesses and households. And when it comes to new housing, the green regime has created conditions that make the purchase or rental of housing outrageously expensive.

In the process, California has gone from the 25th-worst state in terms of inequality in 1970 to fourth-worst in 2013. Sure, Silicon Valley companies, flush with investment cash desperate for returns, do well, as does high-end real estate. But the historic constituents of the Democrats – minorities, the poor, the working class – have gotten only crumbs, effectively sold out by their own clueless, and often corrupt, political class.

So in the Oedipal conflict between the Browns, it’s not hard to see whose legacy we should seek to emulate. Pat Brown left behind roads, schools and, most critically, a water system, all of which we still depend on. Jerry Brown has promoted his reputation as a climate crusader and architect of the collapse of the Republican Party. His legacy is tied to his high-speed choo-choo, even though many not profiting from the gravy train don’t think it’s a good idea. Indeed, many progressives, such as Mother Jones’ Kevin Drumm, consider the whole thing “ridiculous,” a massive boondoggle.

But unlike some of my conservative friends, I don’t think all the blame belongs to Brown and his Democratic allies. California business did not push hard for new state investment when GOP governors ran the state. In some cases, Republicans also turned against their own traditional support of infrastructure building, embracing an infantile notion that low taxes alone would solve all problems.

California’s mess has many progenitors outside the green machine. Big agriculture, which consumes upward of 80 percent of our water, has not exactly covered itself with glory, resisting ground water controls as they unconscionably pump critically depleted state aquifers to historically low levels. And some growers insist on planting crops like rice, alfalfa and cotton that are more suited to the wet southeast than arid California. Some cities did not meter their own water uses, encouraging waste even as the drought mounted.

So what do we do now? How about not using state law to say “no” to everything and start saying “yes” to the things most Californians need. The Right needs to get beyond its 1978 Howard Jarvis moment. The greens should clamber down from their mountaintop and start embracing a combination of solutions that includes not only conservation but more reservoirs and more desalination. Business has to accept fewer subsidies and a more intelligent selection of crops to adjust to the new reality. The public needs to accept that our houses need to have landscaping that looks more like Tucson than England.

But it’s more than just water. We also need to start saying yes to those things – natural gas electrical generation, new housing, better roads and buses – that actually would improve the lives of Californians. Caught between the clueless Republicans and the ecotopian fantasies of the Left, Californians need to reject both, and demand something better for this state.

Cross-posted at New Geography and Fox and Hounds Daily

Editor of NewGeography.com and Presidential fellow in urban futures at Chapman University

Economic Contrast: Texas vs. CA

In the last decade, Texas emerged as America’s new land of opportunity — if you will, America’s America. Since the start of the recession, the Lone Star State has been responsible for the majority of employment growth in the country. Between November  2007 and November 2014, the United States gained  a net 2.1 million jobs, with 1.2 million alone in Texas.

Yet with the recent steep drop in oil prices, the Texas economy faces extreme headwinds that could even spark something of a downturn. A repeat of the 1980s oil bust isn’t likely, says Comerica Bank economist Robert Dye, but he expects much slower growth, particularly for formerly red-hot Houston, an easing of home prices and, likely, a slowdown of in-migration.

Some blue state commentators might view Texas’ prospective decline as good news. Some, like Paul Krugman, have spent years arguing that the state’s success has little to do with its much-touted business-friendly climate of light regulation and low taxes, but rather, simply mass in-migration by people seeking cheaper housingSchadenfreude is palpable in the writings of progressive journalists like the Los Angeles Times’ Michael Hiltzik, who recently crowed that falling energy prices may finally “snuff out” the detested “Texas miracle.”

Such attitudes are short-sighted. It is unlikely that the American economy can sustain a healthy rate of growth without the kind of production-based strength that has powered Texas, as well as Ohio, North Dakota and Louisiana. De-industrializing states like California or New York may enjoy asset bubbles that benefit the wealthy and generate “knowledge workers” jobs for the well-educated (nationwide, professional and business services employment rose by 196,000 from October 2007 through October 2014), but they cannot do much to provide opportunities for the majority of the population.

By their nature, industries like manufacturing, energy, and housing have been primary creators of opportunities for the middle and working classes. Up until now, energy  has been a consistent job-gainer since the recession, adding  199,000 positions from October 2007 through October 2014, says Dan Hamilton, an economist at California Lutheran University. Manufacturing has not recovered all the jobs lost in the recession, but last year it added 170,000 new positions through October. Construction, another sector that was hard-hit in the recession, grew by 213,000 jobs last year through October. The recovery of these industries has been critical to reducing unemployment and bringing the first glimmer of hope to many, particularly in the long suffering Great Lakes.

Reducing the price of gas will not change the structure of the long-stagnant economies of the coastal states; job growth rates in these places have been meager for decades. Lower oil prices may help many families pay their bills in the short run. But there’s also pain in low prices for a country that was rapidly becoming an energy superpower, largely due to the efforts of Texans.

Already the decline in the energy economy, which supports almost 1.3 million manufacturing jobs, is hurting manufacturers of steel, construction materials and drilling equipment, such as Caterpillar. Separately, the strengthening of the dollar promises harder times ahead for exporters  in the industrial sector, and greater price competition from abroad, amid weakening overseas demand. Factory activity is slowing, though key indicators like the ISM PMI are still signaling that output is expanding.

Right now in Texas, of course, the pain is mounting in the energy sector. Growth seems certain to slow in places such as Houston, which Comerica’s Dye says is “ground zero in the down-draft.” Also vulnerable will be San Antonio, the major beneficiary of the nearby Eagle Ford shale. The impacts may be worst in West Texas oil patch towns like Midland, where energy is essentially the economy.

Yet there remain reasons for optimism. Cheaper energy prices will be a boon for the petrochemical and refining industries, which are thick on the ground around Houston and other parts of the Gulf Coast. The Houston area is not seeing anything like the madcap office and housing construction that occurred during the oil boom of the 1980s. Between 1982 and 1986 the metro area added 71 million square feet of office space; including what is now being built, the area has added just 28 million square feet since 2010. Compared to the 1980s, the residential market is also relatively tight, with relatively little speculative building.

The local and state economies have also become far more diversified. Houston is now the nation’s largest export hub. The city also is home to the Texas Medical Center, often described as the world’s largest. Dallas has become a major corporate hub and Austin is developing into a serious rival to Northern California’s tech sector.

Texas needs to increase this diversification given that oil prices could remain low for quite a while, and even drop further after their recent recovery.

This is not to deny that the state is facing hard times. Energy accounts for 411,372 jobs in Texas, about 3.2% of the statewide total, according to figures from Austin economist Brian Kelsey quoted in the Austin American-Statesman. If oil and gas industry earnings in Texas fall 20%, Kelsey estimates the state could lose half of those jobs and $13.5 billion in total earnings.

Low prices also could also devastate the state budget, which is heavily reliant on energy industry revenues. A reduction in state spending could have damaging consequences in a place that has tended to prefer low taxes to investing in critical infrastructure, and is already struggling to accommodate break-neck growth. The only good news here is that slower population growth might mitigate some of the turndown in spending, if it indeed occurs.

But in my mind, the biggest asset of Texas is Texans. Having spent a great deal a time there, the contrasts with my adopted home state of California are remarkable. No businessperson I spoke to in Houston or Dallas is even remotely contemplating a move elsewhere; Houstonians often brag about how they survived the ‘80s bust, wearing those hard times as a badge of honor.

To be sure, Texans can be obnoxiously arrogant about their state, and have a peculiar talent for a kind of braggadocio that drives other Americans a bit crazy. But they are also our greatest regional asset, the one big state where America remains America, if only more so.

This piece first appeared at Forbes.

Cross-posted at New Geography and Fox and Hounds Daily

Economic Growth: Why SoCal is Slow and Go

ECONOMICS POLITICS-In this information age, brains are supposed to be the most valued economic currency. For California, where the regulatory environment is more difficult for companies and people who make things, this is even more the case. Generally speaking, those areas that have the heaviest concentration of educated people generally do better than those who don’t.

Nothing more illustrates this trend than the supremacy of the Bay Area over Southern California in the past five years. Since the 2007-09 recession, the Bay Area has recovered all of its jobs, as has San Diego, but Los Angeles-Orange and the Inland Empire, although improving, lag behind.

Overall, the San Jose and San Francisco areas boast shares of college graduates at around 45 percent, compared with a 34 percent average for the 52 largest U.S. metropolitan areas. The San Diego area clocks in at 34.6. In comparison, the Los Angeles-Orange County area has roughly 31 percent college graduates while the San Bernardino-Riverside area has the lowest share of four-year degrees – 20 percent – of any large region in the country – this is worse even than backwaters like Memphis, Tenn., and Birmingham, Ala.

Dividing this region by counties shows Orange County well in the lead, with 37.6 percent college-educated, well above Los Angeles County’s 30 percent. 

Recent Trends – To see where these metrics are headed, Mark Schill, an analyst with the Praxis Strategy Group was asked to identify the share growth of bachelor’s degrees in the country’s largest metropolitan areas during 2000-13. The share of the adult population with college educations rose by 6.8 percent in San Jose and 6.4 points in the San Francisco-Oakland region. Some regions did better, including Boston, Pittsburgh, Grand Rapids, Mich., Baltimore, New York and St. Louis. All these were considerably above the national average increase of 5.2 percent.

In contrast, most areas of Southern California have shown more meager growth in their educated workforces. Los Angeles, overall, enjoyed a very average increase of 5.2 percent. San Diego, despite its high-tech reputation, notched a 5 point jump while the Inland Empire increased by 3.8 points, one of the lowest performances in the country. The biggest gainer in the Southland was Orange County, where the share of educated workers grew by a healthy 6.3 percent. 

Whither young, educated workers? – The picture, particularly for the Inland Empire, is not totally bleak. In a recent survey conducted by Cleveland State University, there have been some promising developments in the growth of younger educated workers. This key cohort, notes researcher Richey Piiparinen, appears to follow a very different path than do older educated workers, with many seeking out careers in less-expensive locales.

Indeed, looking at educated growth among 25-34-year-olds from 2010-13 finds that the most rapid expansion is taking place in unlikely places, such as the areas around Nashville, Tenn., Orlando, Fla., and Cleveland, all which experienced increases of roughly 20 percent or more. This is better than twice the growth rate in such noted “brain centers” as San Jose and San Francisco, which were around 10 percent, and New York at 9 percent. The Los Angeles-Orange County area saw a similar increase.

The reasons for these surprising, and somewhat encouraging results, particularly for the Inland Empire, may vary. One thing, of course, is the low base from which the area starts. After all, until the past decade, the employment profile of the Inland Empire favored manufacturing, logistics and construction, all fields not dependent on large contingents of highly educated workers.

Another critical factor may well be price, as we saw in our surprising findings on millennials. Simply put, many of the areas attractive in the past to educated workers have become extraordinarily expensive – as demonstrated by San Francisco-based writer Johnny Sanphillippo – while some more affordable locales have become “sweet spots” for younger educated people, particularly as millennials enter their family formation years. 

County, city breakdowns – The Southland, of course, is a vast region, and even every county contains hosts of cities that are very different from each other. In terms of counties, the biggest gains – albeit from a smaller base – took place in the Inland Empire, notably Riverside, which saw a 93 percent jump in its educated population since 2000. Orange County saw a 37.6 percent gain, ahead of Los Angeles’ roughly 36 percent gain.

More intriguing, and revealing, is the distribution of college degrees by city areas. Here, the supremacy of a few areas is very clear. In three Southland communities, more than 60 percent of the adult populations have college degrees: Santa Monica, Newport Beach and Irvine. Yorba Linda, Pasadena and Redondo Beach all boast rates close to, or above, 50 percent.

Obviously, these towns are something of outliers in the region. Los Angeles, by far the region’s largest city, has roughly 31 percent of its adults with college degrees. Many communities do far worse, most of all, Compton, where less than 6 percent have four-year degrees. Hesperia, Southgate, Lynwood and Victorville have educated percentages under 10 percent.

Adjacent communities sometimes have radically different rates of education. Santa Ana, for example, abuts Irvine, but has an educated population of barely 12 percent. And while some areas have shown meager growth in their share of educated residents, several areas have seen double-digit percentage increases, including Burbank, Yorba Linda, Rancho Cucamonga and Santa Monica. 

Implications – As the Southland economy evolves, it makes sense to look at those areas most likely to have more of the educated workers that high-end industries need. These increasingly are clustered in a few places, such as Irvine, Newport Beach, Rancho Cucamonga and Costa Mesa, that are both suburban in form but tend to have better schools than much of the region. These areas also tend to have lower-than-average unemployment rates. Educated people tend to migrate, for the most part, to areas where others of their ilk are concentrated, and often where their children have the best chance at a decent education.

These statistics and trends suggest that our leaders, in education and politics, need to focus on reality. It is dubious that many communities throughout the Southland will develop large shares of educated people in the immediate future. Indeed, given the quality of public education throughout most of the region, it seems almost inevitable that much of the region will lag in terms of skills well into the next decade.

This means that local leaders cannot expect to duplicate in the near future the success of places like Boston, the Bay Area, or even Pittsburgh. Instead, there needs to be a two-pronged attempt to address this issue. One is to boost preparatory and higher education throughout the region, which will allow for Southern California to better compete at the highest-end of employment.

But the other strategy, not to be discounted, is a full-scale commitment to skills training for those unlikely to earn bachelor’s degrees. This also means taking measures allowing the industries that would employ such workers – largely manufacturing, logistics, medical and business services – to flourish, so this training will have rewards. The Southland’s already large educated population is one key to its future, but finding a decent work environment for those without a four-year degree merits equal, if not greater, emphasis.

This article was originally published on CityWatchLA

(Joel Kotkin is executive editor of NewGeography.com and Distinguished Presidential Fellow in Urban Futures at Chapman University, and a member of the editorial board of the Orange County Register. He is author of The City: A Global History and The Next Hundred Million: America in 2050. His most recent study,The Rise of Postfamilialism, has been widely discussed and distributed internationally. He lives in Los Angeles, CA. This piece was posted most recently at newgeography.com.)