Michael Evans and Andrew Hendrix write,
The Bay Area is not alone. Along with Boston, New York, and Washington, D.C., these four metro areas lost nearly 3 million people on net between 2000 and 2009 — even as cities became increasingly fashionable places to live. Meanwhile, the ten largest destinations for internal migration in the U.S. absorbed more than 3 million new residents. In these cities, the average newcomer found his wages to be 25% lower than at the job he left behind.
The cost of starting a business in coastal cities is high.
regulations won’t stop the next Facebook, but they may halt an immigrant hoping to set up a corner shop or an aspiring chef’s food truck. These mundane forms of entrepreneurship are the lifeblood of America’s cities, and they are slowly being choked by endless red tape. When an entrepreneur needs a miniature army of lobbyists to simply establish his business or develop a property, something is wrong.
It is unfortunate the there is so little political competition in these poorly-governed cities.
This is probably one of the largest ways in which “progressives” exacerbate racial inequality. In the Bay Area people will read Ta-Nehisi Coates with justified outrage at the history of denying African-Americans economic and housing opportunity, e.g. through redlining, and then turn around and support policies that continue that denial in the name of protecting a few existing residents and businesses from “displacement”.
I’m inclined to agree with their recommendations but a really dissatisfying read with so many assertions and no links or footnotes. Where are they getting net loss for those metros between 2000 and 2009? Compare with https://en.wikipedia.org/w/index.php?title=List_of_Metropolitan_Statistical_Areas&oldid=482810503 the only >2m metros with net loss are Detroit, Cleveland, and Pittsburgh.
I realized they must be referring to net domestic population, as they refer to internal migration regarding metros with a net gain. Sloppy writing and/or editing, but makes sense now.
City governments tend to tax as much, and govern as poorly, as they can get away with, without killing the goose that lays their golden eggs and finally chasing out their cash cows in their search of brighter prospects elsewhere.
Therefore, when one observes cities with much poorer governance and much more challenging cost of living that other, relatively nearby areas, and yet sees no major exodus or collapse in real estate prices, then one can conclude that these cities have some other key, attractive asset that compensates for the increased expense and frustration, and even enables the follies and excesses of local governance.
Of course, sometimes the local goose does get killed (i.e. non-suburban Detroit) when the sector becomes uncompetitive and the real goose is federal government subsidies.
That asset seems to be serving as a dominant hub for the region or some major national / global economic sector, (LA = Hollywood, NYC = finance, DC = government, SF =Bus/Tech, Boston = Sci/Tech/Academia, Houston = Oil), from which there is a ‘network-effects’ benefit to close proximity to the center for face-to-face coordination and interaction. It’s not too different from the Thiel-ish ‘special monopoly’ assets from which Google, Facebook, and Microsoft benefit. (Probably also the top-reputation universities)
Apparently, the resident populations with lucrative employment in those cities are quasi-captive audiences. I’d put myself in that category. I reluctantly reside the in the DC metro area because almost all of my best opportunities to capitalize on my particular comparative advantages are here, even net all the taxes, higher cost of living, and bag governance. When they’ve got you by the short hairs, they’ll pull until you squeal – that is – right up to the point where you decide to leave.
In the infamous words of current resident of the governor’s wing of the federal prison in Illinois, Rod Blagojevich:
So long as these cities still have this thing, it’s like a trust fund that a prodigal son can always rely upon to bail out his reckless misconduct.
The utopian dream is ‘Malthusian / Social Darwinian Surplus’ – that is – that people, institutions, governments, will behave better – and thus experience better outcomes – then they are absolutely compelled to do by threat of imminent implosion of their main asset or subsidy. That patterns and traditions of prudence and responsibility will persist past the point of where they are an absolute necessity of survival (and deviations punished with merciless severity) and into higher levels of wealth, where the ‘luxury’ of recklessness becomes affordable.
My guess is that this is a losing battle to entropy and temptation. The surplus will survive the longest in those societies with the greatest inertia of (or reverences for) traditional social patterns of existence, or some sustainable public virtue that the preservation of the old ways is a sacred and priceless good in and of itself that should not be subject to question lest the surplus it offers be inevitably whittled away to nothing.
San Francisco has plenty of political competition, but building a lot more housing there is a political loser, and I don’t see how this will ever change. The main beneficiaries would be people who do not currently live there.
But building housing is no longer up to the local politics. A Republican administration or just an embarrassed Democratic one could use the new HUD affordable housing rules to make the city of San Francisco build housing, for the poor and minorities right in the swankiest neighborhoods.
But they won’t.
You are probably correct, but places getting dumped on might have standing to sue to force the issue now that it is strict policy.
If a swanky neighborhood keeps getting federal funds even with them having much worse demographics, then that is discrimination.
Reflect on how these conditions should fit in with your (Arnold Kling’s) ruminations on NWW’s “Violence and Social Orders,” particularly the concepts of Limited Access and Open Access Social Orders.
Do we not observe here constraints on Open Access?
If you go back to the Glaeser & Sunstein piece (National Affairs No. 20) you will find the desire to study and remedy *impacts* rather than find and mitigate root causes of such constraints on Open Access. That is; how (and why) do provisions of (possibly necessary) police powers for health and safety develop into political powers for distribution or control of economic benefits.
Experience appears to indicate that municipalitizations of societies produces degrees of reversions to Limited Access Orders (not necessarily related to control of violence?). The evolution of ex-urbs may have been partially in response to that phenomenon; Texas “urban chaos” another.
It does seem that the great migrations just don’t happen anymore, although eventually, CA cities will run our of even federal funds, or have them conditions as in my comment above on affordable housing.
I’ve just been re-reading a speech ‘Socialism’ given by Frederic J. Stimson (1903). In addition to what I’d say is a good explication on the economics of Socialism, he discusses Australia and New Zealand, which were apparently socialist to the point of collapse in the 1890s and several municipal socialism experiments during that time, the most thorough being West Ham in East London.
“The great borough of West Ham, part of East London, a city of nearly 300,000 people, tried municipal socialism about ten years ago, with the result its taxes rose eightfold, umtil the small householder had to pay more than half the annual value of his house in taxes, the great industries threatened to leave and finally, only last year, the population — and mind you, it is all a laboring population, there are no capitalists, no ” hourgeois ” in West Ham — rose in revolt and voted the socialists out of office. ”
— “Socialism; a speech delivered in Faneuil hall, February 7th, 1903, by Frederic J. Stimson
He also offers this observation regarding New Zealand and their early adoption of the minimum wage:
“And in volume 2, page 33, speaking of New Zealand, ” wages in the colony fell generally between 1879 and 1895. In 1889 the minimum amount of wages to be paid in industries was fixed by law. As a result the old and slow workers in the clothing and underclothing trades were all discharged and starved or became paupers,” (vol. 2, page 64). ”
The references in the preceeding to: “ State Experiments in Australia and New Zealand,” written by William P. Reeves, a member of government, and pledged to give the best account of it that he can.”
the average newcomer found his wages to be 25% lower than at the job he left behind.
A reminder that labor, thanks to immigration, has no bargaining power. The womb has done its job nicely.
… an immigrant hoping to set up a corner shop or an aspiring chef’s food truck.
Examples from retail sectors that are competitive and saturated. If that is the best they can do, we seem to be looking at a Dickensian future.
Where is this guy getting these population figures? According to the census, the dc metro are went from 4.8M in 2000 to 5.5M in 2009, which id consider a net increase. I haven’t check the other metro areas he cites, but I’m skeptical.
Same here.