Houston Strategies

WSJ-Kotkin on 400m

It seems like an appropriate follow-up to my last two posts on the 300 million population milestone in America to cover Joel Kotkin's newest op-ed in the Wall Street Journal on the future, where we're expected to reach 400 million before 2050 (alternate link, permalink on his site).

He talks about how much healthier we are in America demographically vs. declining populations in China, Japan, Russia, and Europe, where wretching economic dislocations are expected with rapidly aging populations. Then he moves on to the impact on cities:

Despite the desires of some new urbanists and "smart growth" activists to cram people into dense cities and regions, the America of 2050 -- contrary to the contention of some demographers -- also will likely be far more dispersed. A combination of new telecommunications technologies and rising land prices will accelerate the shift of population beyond the current suburban fringes and into the countryside. The demographer Wendell Cox calls this "sprawl beyond sprawl." It is driven by the simple fact, according to most recent surveys, that the vast majority of Americans -- upward of 80% -- still prefer single-family homes over apartments, while no more than 10% to 15% want to live near the central core.

Unless there is some sort of cultural revolution, most people, particularly families, are likely to continue migrating to places where they can acquire a spot of land and a little privacy. And despite the much ballyhooed "return to the city" by aging boomers, most experts suggest that most are either staying in the suburbs or moving to towns farther out in the hinterland. At least 30% of Americans, according to surveys by the National Association of Realtors and the Fannie Mae Foundation, express the desire to move to the country or a small environment, far more than live there now. The scale of this dispersion depends largely on urban governance. If cities cannot, due to economic or regulatory constraints, provide sufficient job opportunities, people and businesses naturally will flee elsewhere. Other factors, such as preserving family-friendly neighborhoods and stamping out a nascent resurgence in crime, will also be critical.

Despite these trends, there is no compelling reason for cities not to continue serving as primary centers of the nation's economic and cultural life. For one thing, 10% to 15% of 400 million is not exactly chopped liver. There will be room for some serious urban infill when you figure another additional 15 million city-dwellers will be added over the next 45 years.

The roster of great American cities will continue to evolve. There's little chance that aging industrial cities such as Detroit, Baltimore or Cleveland will regain their former prominence. By the same token, due to their dominance in particular industries, New York (finance and media) and Los Angeles (entertainment and Pacific Rim commerce) are all but certain to remain vibrant, if troubled, super-metropolises.

The shift of corporate headquarters and key industries to new cities could catapult more affordable, business-friendly cities such as Houston (energy, inter-American trade and medical care) and even Las Vegas (the global fantasy-factory) into true global centers. Fast growing cities like Phoenix, Charlotte, Dallas, Orlando and San Antonio will also likely become far more important and cosmopolitan.

He then moves on to immigration assimilation:

Several factors will accelerate this process. One is the continuing movement of minorities and immigrants into the suburbs, which tend to be less hospitable to the creation of segregated racial enclaves. If you want to find the newest and biggest Chinese supermarkets, Hindu temples, or mosques, the best place to look is not the teeming cities but the outer suburbs of Los Angeles, New York or Houston. Just travel to places where few Manhattan or Washington pundits venture, like Ft. Bend County outside Houston. The largely affordable middle-class suburb has a population that is just under half white, one-fifth African-American, one-fifth Hispanic and around 12% Asian. It's the new American melting pot, and, more or less, it's working.

Our population growth certainly indicates belief in the collective American future. But accommodating this surge clearly will require a strong response from both the public and private sectors. Perhaps the most daunting challenge will come not so much from accommodating racial diversity, but dealing with the problem -- existent in virtually all advanced economies -- of class.

Over the past two decades, education, global competition and other factors have led to a concentration of wealth. Recent surveys found nearly two-thirds of Americans fear that their children will face longer odds in trying to achieve their dreams. These troubling statistics may lead some to call for shutting down immigration, or adopting European-style redistributive politics. Although immigration and economic policies may need some adjustment, emulating the European welfare state or blockading the border would snuff out the very sources of entrepreneurial energy necessary to meet our future challenges.

Instead, we need to deal with the future by doing those things that in the past Americans have done best -- building new infrastructure and giving people the opportunity to take care of themselves and their families. Most major surges of economic growth and population have been facilitated by such investments -- canals in the early 19th century; railroads during the industrial age; roads, bridges and electrification during the Roosevelt, Truman and Eisenhower eras. Today we need to commit ourselves to building both hard and new infrastructure: more universal high-capacity broadband and better drainage systems, new electric transmission lines and renewable energy sources, better roads and innovative forms of public transit.

Governments at every level can and should play a critical role in this great project. But we also need to take advantage of the vast pool of private capital available both here and abroad for such investments. Investors can be lured, as in the past, by the opportunities created by a growing nation. Building toll roads or super-fast trains between burgeoning Texan or Californian cities offers far better prospects than doing the same in Japan or Germany, whose populations are gradually diminishing.

Leading to a strong conclusion I particularly liked:

As Tocqueville noted over 170 years ago, America has flourished not because of geniuses in Washington but due to its Constitution, fertile land mass, egalitarianism, entrepreneurship, unique spiritual vitality and attachment to local community and family. This combination of factors has always made us different from other countries, and, in this deeply cynical and secular age, now more so than ever before.

These factors do much to explain why we have reached the 300-million milestone at a time when most of our primary competitors are either stagnating or shrinking. They also provide some reasonable expectation that we will figure out how to accommodate the 400 million Americans living here in the generation ahead.

I have to say, my biggest fear these days is not North Korea or Iran or Iraq or terrorism, but that America will follow the path of Europe, where fear drove government protections that squelched dynamic opportunity and lead to a genteel decline of sluggish stagnation (see an excellent "big picture" op-ed here by the newest Nobel Prize-winning economist). Could we do the same out of fear of China, India, and the rest of the rapidly developing world? Let's hope not.

posted by Tory Gattis @ 7:05 PM