Archive for ‘Economic development’

01/19/2012

The Berkeley Blog: Why it’s China’s turn to worry about manufacturing

Visiting prof Vivek Wadhwa suggests that robotics and AI will bring manufacturing back to the US:

Why it’s China’s turn to worry about manufacturing:

America has been extremely worried about the loss of manufacturing to China. Seduced by subsidies, cheap labor, lax regulations, and a rigged currency, American industry has made a beeline to China.

But the tide may soon turn.

New technologies will likely cause the same hollowing out of China’s manufacturing industry over the next two decades that the U.S experienced over the past twenty years. That’s right. America is destined to once again gain its supremacy in manufacturing, and it will soon be China’s turn to worry.

China’s largest hi-tech product manufacturer Taiwan-based Foxconn Technology Group, made waves last August when it announced plans … More >

(Via The Berkeley Blog)

I’m pretty excited about our robot overlords coming soon…

01/13/2012

Who mourns for the CRA, other than the CRA?

I’ve not posted much about the decision to kill off state funding for CRAs (Community Redevelopment Authorities) in California, largely because I haven’t really known what to think. I have students who tell me that the CRAs are absolutely crucial, but I’ve never seen any evidence of it. For example, California taxpayers chucked a lot of money into LA Live via the Community Redevelopment Authority, and we didn’t even get a bus bench or a street tree out of the deal as far as I can see. And every time I say “why can’t we pursue a TOD near this or that Blue Line station” the response is that “those are outside the authority of the CRA.” So really impoverished areas are not targeted?

So in my experience–not in my research area, but in my experience in LA–the CRA in LA puts money into already viable projects in places the extra money isn’t needed and refuses to advocate (or doesn’t advocate very well) for community design factors in addition to the project’s internal amenities in return for public investment. Stated that way, CRAs seem to be in the business of giving gifts to developers and not asking for much in return. I have nothing against developers, but I also don’t know why some deserve gifts from taxpayers for building something they’d probably build any way (and if they didn’t build it, something else could go up there) and not providing street amenities.

Two recent Op-Eds echo my impressions. Like I said, I don’t study CRAs so maybe I am being grossly unfair, but others share my assessment.

Bill Fulton in the LA Times notes that the CRAs have had every reason to avoid real risks:

When the governor proposed eliminating redevelopment, I was the only mayor in California who supported him. I did it because I believe redevelopment needs serious reforming. Despite decades of incremental improvements to the law, cities still find “blight” where there is none. They have used redevelopment to do anything and everything because the law has allowed them to and they have felt they had no other options. The result has been that one of every eight property tax dollars in the state has been going to redevelopment agencies through “tax-increment financing,” a system that sends any increase in property taxes after land is redeveloped back to the agency instead of to county coffers.

Janet Denise Kelly writes in City Watch LA’s Minorities Not Mourning Death of CRA:

The 20 year anniversary of the 1992 Los Angeles Riots is nearing. This period brought great travesty to the City and South Los Angeles in particular where buildings burned and people rebelled against social and economic injustice. Since 1992, there have been promises to rebuild South Los Angeles and to target areas for business growth and job creation. Those promises have been modest at best or maybe even lip-service to appease community members.

Crenshaw Boulevard has seen growth with the new stores, the renovations of the Baldwin Crenshaw Mall, and new restaurants like Post and Beam and Buffalo Wild Wings. The USC area has had a total makeover because of its proximity to downtown. These areas because of their political influence and middle class residents have been able to wrangle in businesses and housing developments to position them for more growth in the future.

However, the most blighted communities are still struggling due to the remnants of the 1992 uprising and have been fighting for a piece of the redevelopment pie for years to rid themselves of high concentrations of liquor stores, smoke shops, or problem business that prohibit economic progress.

01/05/2012

Bread or circuses in austerity?

I had a coffee with one of my brilliant students yesterday, up in Silverlake. She told me that she co-produced a video on the displacement of businesses and families for FIFA World Cup development. It’s here, on her blog. Go watch. So interesting!

In addition, Mary Beard, of A Don’s Life, also has a column asking for an Austerity Olympics.

Although comments on the internet are usually proof enough that man descended from apes, there is a comment on the TLS blog that I find utterly priceless:

The only positive thing I have found in the whole ‘we won the Olympic bid’ saga is that it annoyed the French.

Ha! It annoyed Sarkozy at least, which, I must agree, is worth doing.

These sports programs…I don’t study this stuff. A smart economist once told me that it’s possible for cities to capitalize; they don’t always lose money. But when I look at the evidence, it seems these ‘circus’ events go forward for reasons that only make sense if you are a Marxist.

09/18/2011

Goodbye to Metropolis Books

I haven’t written about the closing of Metropolis Books in downtown Los Angeles yet, largely because I though if I just ignored it, it wouldn’t actually close.

Just like with the recall election and G.W. Bush’s second term, however ignoring it didn’t work. Here is the story from the Los Angles Times on Metropolis Books as it closes its doors.

Downtown still has another wonderful bookstore—the Last Bookstore, which I wish the LA Times writer had mentioned. It’s in a lovely space. Go visit, and spend lots of money.

09/16/2011

Another LA Stadium proposal, and another end-run around CEQA–or is it? And a Matt Kahn alternative

The LA Times ran an editorial about the California legislature’s willing to expedite AEG’s review on their Downtown LA Stadium proposal:

Legislators got the right result by the wrong process when they approved an expedited judicial review for AEG’s much-discussed downtown Los Angeles football stadium. The project is too important, and the state’s system for reviewing such projects too flawed, to allow procedure to stand in the way of progress. Nevertheless, it’s bad policy to offer special treatment to certain projects; it raises questions of favoritism and corruption to have the Legislature engage proposals one at a time rather than passing laws that apply equally to all.

They go on to make the point that CEQA, the state’s California Environmental Quality Act, is both flawed and dated, but functioning, and while CEQA can be used as anti-competition tool toward new entrants among existing businesses, these types of end-runs can also serve anti-competitive aims. If CEQA is a bad law that unnecessarily burdens businesses, then AEG is in a better position to handle lawsuits than any number of smaller developers, and yet like Majectic Reality before them, they are the ones most able to find ways to streamline the process.

It’s certainly a problem. While most argue that CEQA should be reviewed and changed, as this editorial argues, few people think we should get rid of it. It’s been an important part of slowing things down and increasing democratic participation. Part of the reason why CEQA has so few friends any more, even in the environmental community, is that it’s been used to block pedestrian and bike projects. Advocates of those argue that all we’d have to do to fix CEQA is exempt bike and pedestrian projects since they have a positive environmental impact.

But if somebody is willing to block your project, doesn’t that mean they perceive it as having a negative impact? Hey, I didn’t invent the planner world we live in, where people’s feelings are more important than the science or empirical likelihoods (nor do I like it), but if people can use CEQA to block recycling businesses because they think the industry is unsightly, I’m kind of thinking bike and pedestrian projects have to deal with democratic preferences, too, as obdurate as those are. You live and die by politics if you have given up on science as the metric for evidence, and well. There it is.

All of which reinforces, I think, the need to sunset CEQA as it is and renegotiate.

NRDC is way on board with the legislative move, for a number of reasons listed on David Petit’s blog here. NRDC sees that the state requires big, vague concessions about mitigating traffic “to the baseline” and “best in the nation mode shift”. The translation: there’s a lot of vague language in there we can use to demand more and more of the transit and urban design things we think save the world. And AEG has agreed to a public labor agreement and a community benefits agreement already. So from NRDC’s perspective, it’s not a bad deal.

Matt Kahn responded to the original LA Times editorial with his usual provocative intelligence:

But what regulator in Sacramento has the Solomon-like wisdom to balance the benefits of economic development against the costs of damage to environmental assets?

Instead, what if developers were required to post a bond to be held in escrow? The developer would lose this money if a panel of experts hired by the state determined that the project caused significant environmental damage. Projects posting this bond would be fast-tracked. Developers would gain certainty over the investment process while being put on the hook for malfeasance.

I’m thinking that as sensible as this sounds, communities would never accept the possibility that businesses had the up-front right to build. Then businesses could cause damage, pay, and walk away–even though that’s not terribly different than what we do now. (Businesses negotiate, negotiate, negotiate, get sued, withstand lawsuits, and then build, with nobody ever checking up on whether the mitigation extracted from the developers works or not). Alternatively, they could default on the bond. Can you imagine the homeowners of South Pasadena sitting still if Matt Kahn’s experts didn’t find in their favor? Me either.

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03/17/2011

Natural resource dependence

Resource and Energy Economics is has a manuscript on the economic growth associated with natural resource rich areas:

James, A. & Aadland, D., 2010, The curse of natural resources: An empirical investigation of US counties, Resource and Energy Economics.

From the abstract:

Research consistently shows that natural resource dependence tends to be associated with lower economic growth. However, the studies typically focus on differences across nations or states. We fill a gap in the literature by testing the so-called resource curse at a more disaggregated county level. Our results show clear evidence that resource-dependent counties exhibit more anemic economic growth, even after controlling for state-specific effects, socio-demographic differences, initial income, and spatial correlation. A case study analysis of Maine and Wyoming, and the counties within, highlight the growth effects of specializing in natural resource extraction.

I like the idea they have here, of testing counties, but I have some problems with the execution. They argue that looking at counties lessens the problems associated with differences in state regimes, which is true–there are over 3,000 counties.

They cover several theories on the resource curse, including “Dutch Disease”–where specialization in sectors unrelated to manufacturing minimizes that sectors’ growth potential via returns to scale and production externalities. There’s also what you might call the ‘trustafarian’ idea, where resource endowments cause people and governments to be overconfident in their economic returns, so they do not invest other sectors or human capital to the degree they should.

The authors also briefly bring up institutional differences, include a weak discussion of the role of civil strife. Here is where I have problems.
In other fields, such as sociology, the “curse of oil” or diamonds hinges on how the resources tie the economy to past colonial economic arrangements (with global corporations instead of imperial governors), concentrating wealth into privileged classes (often market-dominant ethnic majorities) who then use control over the military to enforce their economic hegemony. This cycle systematically impoverishes the remainder of the population and suppresses other possible avenues of economic growth.

It’s for me hard to tell what effect James and Adland really find here with their association between lower growth rates in resource dependent counties in the US in terms of testing these theories. We don’t really have an explanation here; it seems quite clear to me that in the presence of property regimes, different sorts of resources have different returns, and there’s no reason to believe that value or profit stays in the place it is created: ranch owners are corporate and asset wealthy; ranch workers are most assuredly neither.

I’m also not sure that we can treat agriculture as a natural resource endowment in the way diamonds and oil are.

01/12/2011

Ancient interactive public art, or tourist trap?

Mary Beard has a post up on the Colossi of Memnon, which she’s visiting. From the 14th century BC, these Egyptian statues outside of Luxor were tourist attractions for Roman visitors the region. Of particular interest to her are the inscriptions by members of Hadrian’s party. She had referred to them previously as graffiti, but then realized that the poems inscribed were hardly verses that the writer could have spun off the top of her head, and it would have taken time to do the inscription. In fact, it would have taken a trained inscriber, as the scripting is done (quite nicely) in stone.

Palimpsest writing on public art is hardly unusual, even when it’s not just tagging. Parties of Romans with young emperors in them would have been notable visitors, and their inscription may have been a means of honoring the site, and those giving tours of it may have welcomed the inscription as a nice bit of proof of who had come to see it–a “Washington slept here” kind of imprint. There’s a tendency to want to track who has come to see your work–even things as transitory as web pages track visitors. Who are you, and why are you visiting?

We discuss art industries and cultural tourism as though it is a new phenomenon, but it isn’t. There are, of course, new aspects to it, but cultural tours go back a long way–and it’s not just wealthy Romans visiting Egypt. Other forms are the cultural tourism that sprang up around the relics of saints in various churches from the Byzantine Era onward through the Middle Ages, including today.


12/08/2010

Central Cities and Suburbs: Economic Rivals or Allies?

This is the title of a very nice manuscript by Michael Hollar in the forthcoming issue of the Journal of Regional Science.

His question has been playing on my mind recently as various urbanists have crowed with delight on the decline of suburbs with the housing collapse. (That this decline actually involves human suffering is irrelevant: those homeowners are, of course, merely vacuous yuppies who should have done the morally right thing and had the sense to have money for their housing in the Upper east side and the Hamptons or Cape.)

To anybody that actually thinks about it, Hollar’s finding is pretty obvious, though the question has torn up the research in economic development in the past decades. Strong suburbs do not necessarily mean a weak downtown, nor vice versa, and regions that show evidence of either are economically less productive than places that have both strong suburbs and downtowns. The relationship he models is remarkably symmetric; one isn’t the necessary condition to the other’s growth in terms of exports or product.

The real contribution here is the research design and the model which help us nail down the considerable identification problems here: he develops export price indexes to look for shocks in either of the geographic locales and then measures responses in the paired geography.

It would be interesting to disaggregate the geography a little more than he does.


12/07/2010

USC SPPD Student Nat Gale on Economic Development in Hartfard

One of wonderful planning students has published an Op-Ed on revitalizing Hartford.Go check it out.


11/19/2010

Heike Mayer’s research on active wear industry clusters

I’m a sucker for a cool infographic, and I’ve just shown a sliver of what looks to be a very interesting analysis by Portland State alum Heike Mayer. The story appears on OregonLive.Com, and you should go take a look at the whole infographic, and go here to see the whole report.


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