Archive for the ‘New Economy’ Category

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ECONOMIC RECOVERY PART THREE

June 4, 2013

Although I made note of these encouraging signs, it took the arrival of the Summer Issue of “thirty two”  for me to understand that a transformation was indeed happening.  A featured article, “The Next New Economy” by Jessica Conrad began with this:

If there has ever been such a thing as a silver lining to the economic crisis, it may be this:  As we dig ourselves out of the recession, we are also building the stepping stones for a new economic paradigm, where trust is the new currency and sharing is more attractive than ownership.  Jessica Conrad explores the rise of a global phenomenon in the Twin Cities.

To set the stage, Conrad described two new sharable phenomenons  in Minneapolis-both of which I am familiar with, use and support:  Nice Ride bikes and HOURCAR.  Conrad thinks the fact that Avis  purchased  a similar service, ZIPCAR,  shows that the rental car industry recognizes the viability of car sharing.   People want the sharing option.  In fact, a national consumer study commissioned by Campbell Mithun found that 60% of respondents find the concept of sharing appealing; and 71% who already use “sharable” goods expect to continue.

And with that, my interest peaked, I read on to learn more:

The sharing economy leverages the power of on line social networks and smartphones to provide a new way for old business models to thrive…people all over are sharing, lending, trading, bartering, and swapping goods  via peer-to-peer exchanges instead of owning them.  And in doing so, we have created a cultural shift that builds trust among strangers….”And it’s an economic revolution where access has become more important, and more fashionable, than ownership” 

You are not convinced yet?  Think Time-shares and Netflex!.  As I continued to read, I was reminded of more examples….SOFIA,  an online platform for social education….The Mayo Clinic  as a pioneer in social education and I also  learned  about a whole new list of national and international examples that have been experimenting with this concept. 

I added Rachel Botsman’s TED Talk on “The Rise of Collaborative Consumption” to my to-do list, and learned of a new service in Minneapolis: “Heroic” -an online platform for free recommendations. I enjoyed the author’s take on CoCo being driven by not only a tough economy, but also a more ecologically minded population and a desire for stronger community.  A creative city-making concept I learned when I participated in Plan It Hennepin was mentioned as part of the Starling Project on University/Central Corridor Light Rail; I was happy to read that appealing to owners of vacant properties  to consider short-term leases  for artists and others  is working not only on Hennepin Avenue and in Whittier Neighborhood, but has now been applied to spaces on the Central Corridor.

Familiar with some of the examples given, it was easy for me to see this as a growing trend; however, I took note when Conrad tied the trend to both community creation and the creation of staggering wealth.  “Forbes actually estimates that people will earn more than $3.5 billion this year through the sharing economy, with growth exceeding 25 percent.” 

That is a significant contribution!  Add to that, a declining supply of natural resources and an exploding population, and I concur with Conrad that it is more important than ever “to find new solutions for curbing the waste inherent in modern consumerism.”

There is much more “food for thought” put forth in the article as it continued.  Check it out-more details at www.thirty-two.com.  Perhaps, like me, you will concur with the author’s closing remarks:  “It’s encouraging to see entrepreneurs embrace the new model and drive innovation because they…believe that we can’t afford not to try.”

 

 

 

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THE DECIDING DEBATE…or just more blather?

October 22, 2012

For weeks we have heard the debates don’t matter. Opps…poll numbers started shifting during the first three, and now this final debate is the MOST IMPORTANT thing of the campaign. Who knows what the truth is? All I really know is that we should expect posturing and not truthful thought-out responses.
Yesterday I started a blog that outlined what I would like to hear discussed in the last debate tonight. No, Benghazi was not on the list…contrary to neo-con manipulation of Romney’s impression, Benghazi’s greatest importance was the unexpected loss of American lives-especially one who may have emerged as a knowledgeable and informed leader in 21st century foreign policy-someone who understands the Middle East; someone that could have helped the United States make needed transitions from “War is the Answer” to peaceful co-existence. And, its second most important role was as a demonstration for the American people of just how complex-even murky-an incident like this is. Such an incident calls for patience and level heads, no finger pointing until everyone has the facts, and no posturing for political advantage…especially from a neophyte whose total foreign policy is wrapped up in a father born in Mexico for religious reasons, and time spent as a missionary in France – a country that was then just emerging from post-WWII recovery! While I applaud Romney for his time and compassion, I do not think he emerged a qualified 21st century diplomat based on that experience! And frankly, I shudder to think his neo-con advisors are the very same men and women that manipulated Bush and tricked the world into the wrongful war in Iraq!
But I digress. What I was in the midst of outlining yesterday was my own questions/issues I hope to hear discussed tonight.
• Japan is about to take China’s place as the US largest creditor. What do you see as positive/negative impacts, if  any, on the United States?
• With China’s low profit margins on production of goods, combined with extremely low worker wages, what do you see as impact in the US, of as the Chinese “Boom” recedes? Will there be economic consequences from the many US companies with facilities there? Are the US corporate investments in China significant enough that a collapse there would impact us domestically?
NOTE: This morning STRIB had article in Business Insider Page 1 raising similar question of what will happen as US Corporations ramp up there, expecting China to replace slow markets in the US and Europe.
• What impact to US do you see as the Chinese population growth controls (one child; preferably male) starts impacting the Chinese economy?
I’ve read that traditionally, this male head of family takes on responsibility of support for parents AND parents of spouse. That support of three families on low wages seems challenging; as does the question of whom do these favored sons marry with so few Chinese women in their generation?
The Strib OPINION PAGE added significant “food for thought” this morning by pointing out that the most serious security challenges confronting the US –which come from the Mideast and South Asia- are “so complex and fluid” it is hard to provide clear answers…so at best we can expect posturing by Romney and over-simplification by Obama.
Uggh.
Before the debate, take the time to check out the article “What to hope for tonight at the debate”. The questions raised about the Arab Spring, Syria, Iran, will make your head spin, but every one of them is valid and raises significant issues…just reviewing the questions makes one realize how daunting the situation is.
The author’s last paragraph says it all.
Whatever the weaknesses of Obama on these issues, I’ve heard no clear alternatives from Romney and no recognition of the global changes of the last decade. I hope Schieffer will press both candidates for real, not canned answers. But my expectations aren’t high.
Amen to that….by now, most of you know, my biggest issue with Romney is that he is NOT prepared or even cognizant that we do not live today in a world in which his experience and success in a past century will make any difference. If he does not understand the implications and relationships in the world today, he will not be effective; nor will he be able to lead us successfully into the future. I say again, tomorrow is NOT more of the same. The world has changed.

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OBAMA and the ELDERLY

September 17, 2012

Voters over 65 represent the age group least supportive of Obama in the upcoming presidential election, rather than following the 20th century Democratic model of the traditional Medicare advantage.  The Press continues to paint this a “paradox”…sometimes with an implied,” what do they know that we don’t know” undertone that speaks loudly of “Father (read: Elders) Knows Best.”

And once again, I say, older voters represented by traditionalists and the first boomers to retire are far too engrained in twentieth century thinking to be the “trusted” resource on this issue.  That is what they learned; that is what they know; that is how they excelled; that is what they expect the world to be going forward.  And therein lays the dilemma.

Changes in the world that began in the 1990s and rapidly accelerated exponentially as we transitioned into the new millennium are challenging all those familiar axioms of our comfortable past.  And change is the least comfortable (and more threatening) the longer one has been vested in something.

So it should be no surprise to press or knowledgeable politicians that this is the case.  It is a natural phenomenon and reaction to change that often destroys the comfort of foresight based on experience.  Experience, although important, will not be what steers us forward safely into the future.  

The Obama administration originally campaigned on hope and change…..I saw that change not as the insignificant- by- comparison personal change but the all-encompassing world changes from the growth in the digital world to collaboration and sharing not brute power, to the rise of radical Islamists, to a new world that replaces the Industrial Century with new challenges, just as the industrial world replaced the agrarian culture of the century before.  In the age of globalization, we needed to change as a country in order to build the second American century – not by brute force, but by emerging new values and skills and ways of leading the transition with thought and understanding, not guns. 

I still believe that this is, indeed, the change needed for the United States to move triumphantly into the future.  But today, I recognize that I was naive to expect that the first explorer of this new world that lies before us, Barack Obama, could facilitate this change painlessly and all by himself.  Columbus may have changed the world of the Americas when he “discovered” us, but it took many more courageous explorers before we amassed the knowledge we have of the earth today!

And, yes, the Obama promises included plans to better the situations in Iraq and Afghanistan and a host of other things…some accomplished, and some not so much.  And so, like many explorers that have gone before him, Obama has been questioned incessantly.  We often ignore he  had a BIG SURPRISE waiting for him that had not been revealed when he developed and delivered that campaign strategy….a dirty little secret from the first decade of the 21st century was about to explode….economic practices run amuck were about to wreck havoc on America and the world, and create the greatest financial crash since 1929! 

So while I understand the hesitancy of that elderly group, my only question is why do I – a member of that demographic – see things differently?!!  Maybe I just wasn’t as vested in our unsustainable future, but more realistically, realized it could not last; maybe I was just too against a war we did not need to be fighting in Iraq; maybe my research in experiences, engagement, the impact of technology on my own little world of meetings and events gave me the “cushion” I needed to anticipate world changes as well; or maybe through that research, I was beginning to see the cracks in what had come before, and simply recognize, from living through it, that there had to be a better way. But deep down, I think I got it because I was open to the thinking of the generations coming after me, found them inspirational, and had already experienced I could learn from them as Obama emerged on the scene….so maybe not being so invested in ME, I was open to the change that he envisioned.

And maybe, understanding the changed playing field he inherited, and the fight to save our country he had not planned he had to take on, I gave him a little slack.  That and the knowledge, that even with 20/20 hindsight, I have yet to see anyone always have all the right answers.  Whatever, I still stand with the man – even if that means I stand against my own generation.

 

 

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OPPORTUNITIES FOR THE FUTURE

August 9, 2012

Daily, we find ourselves embroiled in who “knows best” in visualizing the correct path for economic recovery from the Bubble and its collapse during the first eight years of the 21st century.  The Press weigh in; the politicians weigh in; the economists weigh in, and every average American weighs in with finger pointing and theories of their choice; but as I listen I feel like we are missing an important key thought.

Through the posturing and finger-pointing, there is not much discussion about why theories of supply and demand seem suspended in time.   Every day, I see new numbers reflecting growing number of existing but unfilled jobs in corporate America.  Every day, we hear complaints that the supply of available unemployed workers is not diminishing fast enough.

But no one seems to put these two seemingly “opposites” together and asks “why aren’t they attracting one another and moving us forward?”

I believe one reason is the unemployed themselves.

First, the Great Recession has given many people the push to do what Americans do best:  Invent our own future.  Many are resetting their lives; changing their career paths, going back to school or launching a small business based on something they are passionate about.  In the uncertainty of a startup and erratic income common to business in its infancy, these new entrepreneurs hold tightly to the lifeline of Unemployment.  They report income when they have it; get no assistance that period, but the unpaid amount extends the lifeline by a like amount.  And of course, that means they continue to show up as part of the “unemployed” we are talking about.    It buys time for them as they create the NEW NORMAL that is needed from all of us if we expect to recover and grow.

Second, I see the grumbling that yes, there are jobs, but for less than I made before, so I am going to hold out as long as I can.  Despite intellectually knowing that inflated income and spending will not continue, they keep drawing unemployment rather than settle; and thus delay their transition to the NEW NORMAL.  I understand the emotional difficulty of giving in, but the result is that our unemployment rates remain high.

Third, they do not meet the needs of companies that, if they have openings, are moving forward into the future.  Those are the companies that can’t readily FIND workers with skills that meet the needs they have, as these companies also  are reinventing themselves for a NEW NORMAL.  And the reason the unemployed aren’t eligible for hires in that environment lies in another major issue of today- our educational system itself, but I will leave that for another day.

As I ponder that, I keep coming back to the review of Friedman’s  “The World Is Flat “that I watched in this past week.  He talked back in 2006 about the OLD middle class jobs going away, to be replaced by the NEW middle class jobs that fell into eight categories.  Jobs will be available for: great collaborators; great leveragers of technology; great synthesizers; great localizers; passionate personalizers; anyone “green”; great explainers; and great adapters.

Friedman warned it will not be about what you know but about what you can learn so you can adapt.

That’s a big helping of food for thought! And I think we can all agree, as we chant,” It’s the Economy, stupid”, whichever side we are on, we are the ones not showing much sense.  Neither candidate for President should be held accountable, nor knows how he can fix this problem.  We have all been led astray by the media , I think, who early on decided this should be THE TOPIC of election campaigns-and candidates and public alike, followed blindly along.

So I suppose we all will be “disappointed” in the results when whomever emerges as the victor in this battle cannot wave the magic wand and make it happen.

But those we should be disappointed in are ourselves.   We all know better, if we really think about it. We are missing a great opportunity for the future.

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EMBRACE THE FUTURE

August 7, 2012

Just last week I was reminiscing with a few old CMG friends about the mid ‘80s and the time I spent traveling to Cupertino to meet with those Apple people I thought were a “cult”.  After all, they thought they could change the world and conquer IBM…and they were trying to do it through a K-12 program in schools … influencing our kids when they were young and most vulnerable! 

And even more out there for a time when we all were “suits with a Hartman Briefcase”, their world was one of casual dress, glass-walled conference rooms, backpacks, and keggers every Friday afternoon as a way to say thanks to their dedicated employees for a good week of work.

Of course, I was a non-believer-after all, none of our Fortune 500 clients were acting this way….in fact, I not long before, I had been part of a long gruesome design study with IBM to develop a single travel application that cut across all of Carlson’s needs- from CMG Travel to Carlson Travel across the country and across the world– agencies and tours, and all the ancillary travel products.  To do what we envisioned, we needed $millions and a major mainframe upgrade….how could Apple even THINK their strange little “box” was the wave of the future? 

Today I look around at the Millennials – those innocent kids in school that Apple was targeting to build their “cult” – and I am envious, as well as inspired by the way they think…let alone, how quickly they adapt to each NEW Apple product!

Last night, having overdosed on too much NBC blather that accompanies the thrill of watching the athletes perform, I took a break from the Olympics and watched “Globalization” with Thomas Friedman – an address taped in 2006, I believe, that predicted not only the world we live in, but also the “jobs” problem we are struggling with today.  So RIGHT ON, and yet, I was reminded of what I thought when I read “The World is Flat”…mostly it was, not so fast, Friedman…normally I track with you, but this time…you might be over the edge.  Ya, sure…just 6 years later, and I can relate to his message.

This morning, a headline in the business section triggered another 1980s memory…the friendly neighborhood ATM.  Flash back again to early 1980s…this time I am in midst of building a cutting edge  “CMG sales tracking system “ to help us better project almost a billion dollars of sales; and we are using a WANG word processing system to host it.  Ugghh!

 Meanwhile, my friend Sharon Wikstrom was leading a marketing team whose client, Security Pacific, was trying to launch a relatively unknown innovation in the banking world– the Automatic Teller Machine.   And once again, if asked, we all thought – whatever – this is not a smart idea…who in the world is going to trust a machine and a “charge card” to give them money.  None of us could imagine giving up the interaction with our friendly bank-teller for the coldness of a machine.   Enough said on that one.

As I sit here drinking my coffee, all kinds of thoughts are racing through my head….typically, new changes coming have me worried….Windows 8 for my laptop and for my phone?  Outlook.com?  But I’ve accepted there is still a bit of fear of change in my attitude, so I can deal with that, get over it, and slowly more forward-accepting,  in most cases,  I will not be the disciple spreading the good news-but I will try to keep an open mind.

But more important on a larger scale, in aggregate, why do we resist new ideas and take on that “Show Me” attitude when at the same time, we are a country of people that have grown, thrived, and led the world in innovation and change?   I get it that it is a result of lack of understanding and a need to be comfortable, but why do we “doubt” instead of embrace, celebrate, and learn?  And why, when half of us are pushing forward, does the other half cling so desperately to the familiarity of what we know and are comfortable with? 

 

 

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BUSINESS INSIDER , Monday, July 16, 2012

July 16, 2012

If the current version of   “It’s the Economy, Stupid” is starting to get you down, go to STARTRIBUNE.COM/BUSINESS and read the whole thing.  Today’s issue will put a positive spin on your day!

Here’s just a few uplifting comments from this morning’s articles:

Neal St. Anthony: “Do tax breaks for rich really ‘create jobs’?”

And the chief executives at many of the United States’ largest public companies are heading for their third year of record profits and paydays.

Pay particular attention to Dave Cleveland’s comments within the article as he offers evidence for why he thinks the wealthy do not come close to being the entrepreneurs that drive job creation.  I loved the quote “the best entrepreneurs don’t have toys, but they have passion and they want to build something and grow.”

Mark Haveman, of Minnesota Taxpayers Association, feels both political parties are over-stating their case and agrees with Cleveland that dynamic job creators tend to be disaffected former employees  and other innovators who start their own business with  help  from  family, an angel or their own equity, and with “sweat”.   

Both Cleveland and Mark Sellner, professor of taxation at St. Thomas agree that the biggest inhibitor to business confidence for expansion is the no-compromise tactics between political parties in Washington. 

As you read, don’t skip over “Amp ramps up approach” for the Non-Profit sector; “Vets seek job retraining in record numbers” -they get it and are taking advantage of federal funds to help impact that high vet unemployment rate;  MacKay’s “Critical thinking still is critical to your success”; Dr. Crimmins in the Movers and Shakers column reminds us that Minnesota already is on board with much of the Affordable Health Care Act and just needs to focus on improving so no need to fear what’s coming;  and then take some time to think about “ ‘ New normal’ haunts job recovery”.

William Blazer, oversees GROW MINNESOTA at the Minnesota Chamber of Commerce.  He shares that the optimistic  picture of growing domestic economy-1 in 4 companies surveyed plan to expand in next two years,  with  business reinvestments through product innovation, new jobs, and expansion , has a downside…a continuing shortage of qualified workers for the available jobs.   

And of course, this supports my continuing thoughts on the need to assess our education system and make some necessary changes.  It was encouraging to hear a qualified workforce is the foundation of strengthening the business environment and improving the lives of all Minnesostans .  That thought is being backed up by dialogs with the companies to determine workforce needs and skills, along with input from students and a thoughtful three step process to move us forward to future growth.   

 When I finished the section, I sat back, and thought once more time, how glad I am to be living in Minnesota!  Hope you have the same reaction. 

 

 

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The Jobs Debate We Ought To Have

July 16, 2012

FINALLY, a reprint in the STRIB of editorial from Bloomberg News that makes some sense!

This entire argument about off-shoring and out-sourcing, may have been appropriate in the 1950s, but come on, people, we LIVE in a world of globalization!  And more important, as a country, we benefit from it and will continue to benefit from it when we act like collaborative partners with those countries that are increasingly playing important and contributive roles in the global economy.  And let’s not forget where the innovation came from that allowed for the rapid growth of globalization.  If we don’t like it, and would prefer to lock to the doors to the country – no immigrants in; no jobs outsourced – we have no one to blame but ourselves!

However, like it or not, the world around us has awakened and moved forward.  We have good examples of what has happened to countries like China and Russia in the past, when afraid, or unable to keep up, chose to lock the doors and wither inside.  

 Think about this argument in the article:

For U.S. corporations , globalization isn’t just about cheaper wages.  Companies create jobs outside the country to pursue sales opportunities in new markets, get closer to suppliers in fast-growing regions and employ people who understand local tastes.  Even if labor costs were equal, companies would still hire abroad because that’s where the talent pool is.  Companies that don’t do any of this for patriotic reasons will be at a disadvantage to European and Asian competitors, probably resulting in lost market share and more U.S. layoffs.

Are there downsides to globalization?  Of course.  Can we minimize the impact if we address the right issues?  Probably.

But the two little boys fighting in the national presidential sandbox today are not going to solve the problem with their approach. 

Those that follow my blog will recognize the thinking expressed in the last two paragraphs of the editorial:

An honest discussion would require both sides to face…unpleasant facts.  Many jobs have been lost to automation, not necessarily just to off-shoring.  That [ is} why employment in the middle-wage occupations is declining rapidly.

If the presidential candidates want to be constructive, they will tell voters the hard truth:  Well-paying midlevel jobs may have to wait for new industries to be born, and the wait could be a long one.

And as long as we continue to use the industrial model and practices of early 20th century to guide our educational systems, we only create more people that can’t get jobs that do not exist.    Since high-skill/high wage jobs are plentiful and U.S. corporations insist they have openings today that can’t be filled, it appears that is a lasting need, that our educational systems need to address. 

Likewise, low-skill/low wage jobs are also available.  Perhaps it is time to RETHINK those service jobs.  Early in the 20th century we had to make a shift….industries at the time were sweatshops and small cottage industries where laborers could barely make a living.  It took a change in thinking  led by the labor unions to create those mid-level well-paying jobs that have now been eliminated- 100 years later -by technology and automation. 

Yes, a change in thinking is what is needed today. Perhaps it is time to look at the value of those providing services to us every day, and determine whether we are paying for the value we receive.  Perhaps it is time to ADJUST those incomes to a point where service laborers can support a family without holding two jobs. 

Perhaps it is time to stop ignoring the practice of using the new immigrants we are trying to stop from coming into the US to groom our lawns, paint our houses,  clean our homes and do our laundry  all for $5 an hour!  

Perhaps as our country evolves into an inter-racial country with “minorities” out-pacing the whites-combined with longer lifes that could be economically productive lives, we RETHINK social security without all the emotion: raise the retirement age to 70.  With average lifespans of 75-80, it is ridiculous to think that it is our RIGHT to work only 25-30 years of a lifetime and play the other 60%!

And definitely it is time to acknowledge that an educational system that was geared to the industrial age creates  people to fill  jobs  that have now disappeared, it might be time to teach them what they need to learn to fill the job markets we will have available – not only now, but for the next 50 years!

 

 

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THE ECONOMY, THE ELECTION, and the PRESS

July 13, 2012

Again today, there is a report in the STRIB that a broad range of expert economists and forecasters  expect the economy to improve slightly in the coming months…with expectations that it will pick up through the summer and into the fall.  Although there are still barriers to the RAPID recovery we all WISH FOR, the “signs” all continue to point to a slow gradual recovery over a long period of time.

Yes, this is exactly what was initially projected when we experienced the WORST DOWNTURN in 70 years (read: the Great Depression) .  Yes, for a short time, we had a country, a press, and the pols all agreeing that this was a RESET – A NEW NORMAL – that the experience of recent years was UNSUSTAINABLE.  We almost accepted that a long recovery was a reality, and in fact, allowed that the reset needed to be accomplished by the PEOPLE not the POLITICIANS.  We talked about not only national but personal debt; we talked about the cost of the continual advancement to the exurbs, homes that were growing bigger and bigger, but more importantly, infringing on farmland – land that was needed to FEED the ever-growing populations of the world. And equally important, those in outer ring suburbs and the exurbs were showing a flicker of understanding that they could not possibly pay enough taxes to support the infrastructure they demand to support those outposts – and perhaps they should consider how the government could be expected to pay it, if they were not willing or able  to pay the taxes to make it happen.

And then, Obama won the election and all reasonable discussion flew out the window.    We spent almost two years strategizing how to make Obama a one term president, JUST BECAUSE…not because of the economy.  We were still too close to the reality of the cause of the mess (read:  some pretty bad policies on the part of the Bush Admin and the neo-cons that moved an economic readjustment to a need for a RESET) to blame it on Obama. And Obama missed an opportunity to be honest, to rally the country, and call for a commitment on everyone’s part, to work together through the DECADE ahead to get the country back on a safe track forward.

And soon, the Republicans started to run for President – just think how many were in the mix in the beginning!- and “It’s the Economy Stupid” became the battle cry.

Only it isn’t-at least in the way we are talking about it and judging success…and I refuse to believe that even the Republicans – supposedly the business experts, the economic experts and the war experts- do not know full well, that this economy does not have a short term fix.   And if they truly DO believe this, then there is the reason not to vote for them…because if they do not recognize what has happened to this country, then surely, we should not put the recovery in their hands.

Meanwhile, I also do not understand the Democrats.  In the end, laying it out, sharing the truth and showing the country there is no easy fix has not been attempted.

No, I have come to believe that all this angst and name-calling to the extreme, and refusal to work together has it roots in the live media coverage. Both Republicans and Democrats want favorable press – and for some reason, the press who depend on RATINGS not an actual fix for our problems have more influence than those we elect to serve us.   And so, we as a country have been sentenced to this continual babble that makes no sense about the economy….and  there will be no winners – at least until we are honest with ourselves and realize our politicians do not walk on water.  Neither side has a quick fix.  Only the people of the United States can fix this…and make the politicians and press follow… for as long as it takes.

Unfortunately, in a few months we have to vote for someone…and I’d rather have someone in charge that is moving slowly forward than someone who is taking advice from the same folks that gave advice to Bush.  About the only thing another 8 years of the neo-cons pulling the strings on an empty suit puppet guarantees is more wars paid for on a credit card.

 

 

 

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THE GREAT RESET – A NEW WAY OF LIFE

June 30, 2012

Except for some exceptional boom periods, housing has never been a good financial investment.”  Richard Florida; The Great Reset

                                                                                                                                                                                                       

It used to be the business of America was business.  Now the business of America is homeownership.  To recover and grow again, America needs to get over its ‘house passion’. “  Edmund Phelps, Economist

                                                                                                                                                                                                                

Among people of similar financial status, those who chose to rent in 2004 had more wealth in 2009 than those who bought their homes.”  Wendell Cox, Suburbs and Cities:  The Unexpected Truth

                                                                                                                                                          

                                                                                                                                                                      

 

The Strib’s “Big US Cities Boom as Young Adults Shun ‘Burbs’ “ headline caught my attention this morning. The accompanying  AT A GLANCE Box reported:

  • Primary cities in large metro areas over time grew more than surrounding suburbs.
  • City growth in 2011 surpassed or equaled suburbs in 33 of the nation’s top 51 metro areas, compared to only 5 in 2000-2010.
  • 52 of 73 cities over 250,000 showed faster annual growth in 2011 than their average growth in the last decade.

 I assumed, hopefully, that the article was reporting evidence that the Reset that has to come from grass roots had begun and now had been noticed by the press.   I should have known better.  The press are, of course, still back in the 20th century with the politicians.

The story reported that young adults were “spurning homeownership in the suburbs for shorter-term no-strings-attached apartment living, public transit, and proximity to potential jobs in larger cities “– not as a part of the Reset, or the New Normal, but because nothing has been done about the weak job market, high unemployment, delayed careers, a college debt burden and availability of only lower-wage positions.

The authors assured the audience however, that economists believed this city boom was only temporary,  because, after all, the last time people moved to the cities was prior to 1920.  Ah yes, that was the spatial fix caused by the Long Depression of 1873, wasn’t it?  Then we got out of control again; crashed in 1929, headed into the Great Depression of the 30s; experienced a second reset and spatial fix as people moved to the suburbs that lasted well into the 60s.

And here we are again.  Another crash in 2008 and we are now looking for the spatial fix to slowly end the Great Recession. 

I hope I am right and the Strib is wrong.  I hope this spatial fix does not peter out; we need it to become a grassroots happening so we can move forward.    If the stats are correct, I could be right and we could be moving in the right direction.  If we are, do you think the Press and Pols will come along with us, or will they prefer to stay in the safe world of the 20th century?

 

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SPATIAL FIXES for Ecomonic Recovery

June 24, 2012

According to Richard Florida, one of the key things that has to happen to recover from a generational GREAT RESET comes not from top-down policies and programs  (see Blog of June 18) but does come gradually as millions and millions of people respond  to challenging economic  times  by changing the very way they live.   

This is called a spatial fix.  It happened in the Long Depression when movement was from farms to cities; it happened in the Great Depression when people moved from dense cities to inner ring suburbs.

And then as the economic bloat began, we moved to poorly-built McMansions in outer ring cities, and then we created the exurbs and demanded infastructure to follow.  Florida postulates that when the people determine this is not sustainable and begin on their own to migrate once again to smaller spaces, to consolidate along transit lines and turn their backs on exurbs and unsustainable and expensive super highways, we will have begun the real start of the economic recovery to move us out of the Great Recession of the 21st century.

So the STRIB’s headlines” Housing’s comeback spurs new building”/”House construction sees modest, focused comeback”caught my attention and infused a little hope into my day.

It seems builders are putting new emphasis on areas close to jobs and existing highways.  And even more important:

,,,the developments have a different flavor than those that boomed before the Great Recession:  Smaller and concentrated in places where jobs, transit and major highways are already nearby…in contrast to the rural cornfields that became subdivisions in the mid-2000s.

And the flip side, says the Strib, is stagnation in the exurbs.

YES!  That’s a good sign…and maybe there is even hope that the Minnesota snowbirds – who mostly are upside-down in their winter palaces- will not have ready cash to negatively influence this natural adjustment of the people.  Although what some will do without elevators in their garages, I just don’t know.

So, I am not holding my breath, but I will be keeping an eye out for additional signs that support the spatial fix.  I can only hope that it will “trickle-down” and things like buying a soup bone for $1.59 a pound that yielded less than 2 ounces of meat (read: equivalent of $23 per pound) will also slowly be adjusted.  Until then, I guess I will buy a small sirloin when I make  my soup – it is cheaper!