Sunday, January 17, 2021

The Case for American Optimism

By Joel Kotkin

Thursday, January 7, 2021

 

When there is a general change in conditions, it is as if the entire creation had changed, and the whole world altered.

— Ibn Khaldun, 14th-century Arab historian

 

Now that Trump has been edged out of office, Joe Biden may emerge as the harbinger of a brighter, better blue future or as a version of Konstantin Chernenko, the aged timeserver who ran the Soviet Union in its dying days. To succeed, he will have to confront massive pessimism about America’s direction, with some 80 percent thinking the country is out of control. The Atlantic last year compared the U.S. to a “failed state,” while The Week predicts “dark days ahead.”

 

Conservative opinion, particularly after the election, is also increasingly mordant. The American Conservative’s Rod Dreher thinks we are heading towards a state of “no families, no children, no future” as the cultural Left and its gender-fluid ideology take hold of the culture. Marco Rubio has already suggested that the new president’s administration will prove “polite & orderly caretakers of America’s decline.”

 

Yet despite all the wailing, the United States is not so much declining as reinventing itself — and, as usual, doing so from the ground up. Globalist, post-national notions may be popular in Silicon Valley and on Wall Street, but many people on both sides of the political divide realize that with the rise of China’s state capitalism, we cannot simply sing “Kumbaya” but need to forge a strong national response focused on the needs of Americans.

 

America as a whole is not a “failed state” but a place where people move from areas of limited opportunity to those with more. The pandemic has accelerated this process. The Congressional Budget Office has suggested that the economy could take a decade to recover, but some metropolitan areas, such as Indianapolis, Salt Lake City, Austin, Dallas–Fort Worth, and San Antonio, as well as others across the South, have recovered far more decisively from the pandemic than Los Angeles, New York, Boston, or San Francisco. Similarly, according to the Bureau of Labor Statistics, California and New York suffered the highest unemployment rates outside of tourist-dominated Nevada, Louisiana, and Hawaii.

 

The pandemic has accelerated a shift away from expensive coastal cities that was already well under way before it hit. Urbanistas blame this migration on the pandemic, which was most deadly in dense urban areas, but it has been going on for years, for many reasons. Workers in New York City are the least likely to return to offices, according to Kastle Systems, because of virus concerns about public transportation and skyscrapers as well as the city’s population density.

 

The home office is replacing at banks and leading technology firms, the office for many and, to many manager’s surprise, with surprising productivity gains. A University of Chicago study suggests that this could grow to as much as one-third of the workforce, and in Silicon Valley, the number could reach nearly 50 percent.

 

Many companies predict much of the workforce will remain online, some part-time and some all the time. The impact on our geography could be profound: An estimated 14 to 23 million remote workers may relocate as a consequence of the pandemic, according to a recent Upwork survey, with half of them saying they are seeking more affordable places to live.

 

These trends likely will moderate, but much of the repositioning of work may continue even after the introduction of a vaccine. To be sure, lower rents could provide a great opportunity to reinvent and revitalize our cities, by luring a new generation of immigrants and young entrepreneurs. But the political wave now sweeping our cities threatens to undermine even a modest rebound.

 

In recent months, many of our once most attractive cities — Minneapolis, Seattle, San Francisco, Los Angeles, and Portland — have become largely dysfunctional, particularly in their downtown areas. Movements to limit the police and cut their funding have become de rigueur in our most progressive cities, and violent crime in places such as Chicago, Minneapolis, New York, and Los Angeles is picking up. Given the failures of urban educational systems, the return of fear to the cities will continue to force out many middle-class families.

 

***

 

The pandemic has widened the gap between the vast majority and the relatively small upper-middle and upper classes. It could widen further under an administration that appears determined to fill itself with people who have close ties to Wall Street, technology firms, and the China lobby. That tendency can be seen in Biden’s proposed choice for secretary of state (Antony Blinken) as well as his naming as head of his economic council Brian Deese, a high-ranking official at BlackRock — a firm that, like many woke corporations, has pushed “stakeholder capitalism.” In this formulation, large companies are expected to serve not only their shareholders but a specific agenda of set progressive values on such things as climate change, gender roles, and “systemic” racism.

 

This trend is most evident in the willingness, even enthusiasm, on Wall Street and among high-ranking executives for such things as rapid decarbonization and the subsidization of renewable-energy projects. These policies offer subsidy catnip to wealthy investors but will put American workers in jeopardy by letting China, which emits more greenhouse gases than the U.S. and EU combined, keep building coal-fired and other dirty facilities, including in their growing archipelago of vassal states, until 2030, by which time the western countries will have become so deindustrialized that they will have little option but to kowtow to Beijing’s wishes.

 

Fortunately, the goofy one-world globalism of the American establishment is not so popular among the populace, because while free trade benefited some selected companies and the already affluent, it did so at the expense of most other people. The trade deficit with China, as the left-wing Economic Policy Institute points out, has cost as many as 3.7 million jobs since 2000. The view from BlackRock and Apple is not like the view from Main Street or the Rust Belt.

 

What America needs is not richer technology oligarchs but a policy agenda to increase jobs and bring production back to our communities. Despite the much-ballyhooed consumer benefits of low-cost imports, the vast majority of Americans seem willing to pay higher prices that could come from moving production out of China. Some American companies and foreign corporations have recognized the strategic advantages of locating here in the U.S. and the downsides of shifting operations to China and other competitors. The tariffs may not have made a big impact, as Trump promised, but the annual rate of jobs coming from offshore, according to the Reshoring Initiative, increased from 6,000 in 2010 to 180,000 in 2017. Cumulative jobs brought back represent about 5 percent of total U.S. industrial employment.

 

One signature shift has been the announcement by Taiwan Semiconductor to build a new $12 billion plant in Arizona, greatly increasing our high-tech security. These investments have the key characteristic of tightening supply chains on critical goods. President-elect Biden would do best to take advantage of a resurgent U.S. industrial sector that has survived the pandemic, performing better than its rivals in Europe.

 

The pandemic has helped make opposing dependence on China a bipartisan issue, particularly in terms of medical equipment, There have been longer-standing problems with our dependence on high-tech gear. Democrats, as former Indiana senator Evan Bayh has suggested, cannot hide behind globalist notions if they wish to win a sustainable majority.

 

***

 

For most of us, this author included, the pandemic and the rioting have been disruptive and stressful. But the shift of focus from the office and the long commute also presages the emergence of a home-based society that represents a possible return to a more balanced, more family-friendly, and even more spiritually connected society.

 

Americans are deeply divided on ideology and the role of government, but the vast majority, according to Pew, believe that the way toward a better tomorrow lies in greater neighborliness and less tribalism. Despite a bumbling governmental response, personal charity has been much in evidence throughout the pandemic. There remains a natural proclivity to engage the virus as close to home as possible, providing precisely the kind of local solutions that are critical to meeting the challenges posed by the pandemic. (There are enormous variations in how different geographies are impacted by the virus, in terms of household density, transit use, poverty, underlying health conditions, and basic compliance with even mild health orders.)

 

The good news: In the wake of Trump, the vast majority of Americans wear masks, and most continue to socially distance. Religious institutions, which have had a poor decade with declining adherence, may soon enjoy a resurgence. Religion has often thrived in the wake of pandemics and other disasters, and it was the plagues of the early Christian era that did much to promote its ascendancy.

 

What will now have to take place is a different kind of “spiritual reawakening,” more a matter of personalized digital choice than regular attendance. In contrast to in-person attendance, the virtual variety is booming. The need is there; according to Pew, a quarter of Americans say the pandemic has bolstered their faith.

 

Being stuck in lockdown for months has reminded us what really matters, like faith, family, and community. We may be annoying each other more, but we also are more dependent on those closest to us. To be quarantined amidst a pandemic is particularly difficult for single people.

 

***

 

In recent months, Americans have been told that their country is hopelessly racist, yet somehow, despite President Trump’s anti-immigrant rhetoric, the United States continues its massive demographic evolution. Over 840,000 green-card holders last year became citizens, the most in a decade. More than 10 percent of the American electorate was born elsewhere, the highest share in at least half a century.

 

Some on the right see this increasing diversity as the harbinger of ceaseless racial conflict. In reality, though, most Americans of all ethnicities want both order and justice. The vast majority, according to a 2018 survey, reject Manichean “anti-racism” and political correctness even as they are widely adopted by the billionaire class as well as corporate HR departments. Americans want more security, not less; the vast majority of them — including Millennials and minorities — do not favor defunding the police.

 

America’s cultural evolution cannot happen successfully if we follow the script presented by Black Lives Matter and its boosters in academe and media. Instead, the future is being created through unscripted mingling. The number of interracial couples, for example, is up by 40 percent since 2003, according to census data, and interracial marriage has gone from 3 percent in 1967 to 17 percent now. Today one in ten babies born in the U.S. have one white and one nonwhite parent; 12 percent of all African Americans are now immigrants from Africa, the Caribbean, and elsewhere.

 

The monoliths are breaking down, even as progressives continue to obsess like it’s 1950. Minorities and immigrants, instead of being “the other,” are increasingly everyone’s neighbors, and increasingly the best hope for what may soon be a major labor shortage. The suburbs, not the cities, now dominate the nonwhite experience in America. The pattern of 1950s and 1960s “white flight” no longer holds. In the 50 largest U.S. metropolitan areas, 44 percent of residents live in racially and ethnically diverse suburbs, ranging from 20 percent to 60 percent nonwhite. Nationwide, in the 53 metropolitan areas with more than a million residents, more than three-quarters of blacks and Hispanics now live in suburban or exurban areas.

 

***

 

The economic crisis we now face presents a unique opportunity. As occurred in Europe’s medieval pandemics, great disruptions scramble the economic order (as historian Barbara Tuchman observed). The massive wave of mortgage defaults in our biggest cities is likely to reduce costs for those who seek new space. The shift to online work is already changing the business environment, with a surprising surge of new-company formations.

 

This is what America needs now, not an endless expansion of the power of the tech oligarchs and their close-knit web of funders. It should be made more difficult, through antitrust or other regulation, for them to suppress or swallow competitors (as occurred recently with Salesforce’s purchase of Slack). Today few companies grow to the point where they can compete with the ultra-rich giants, so over time, the oligopolies simply grow stronger.

 

Some conservatives — including those funded by tech oligarchs — oppose such interventions in the “free market.” But as the Edmund Burke Society’s David Brog points out, Burke, Smith, and other conservative icons from Benjamin Disraeli to Abraham Lincoln saw the goal of economic policy as the prosperity of the nation and those who live in it. “Economic nationalism” (a policy agenda that seeks primarily to help the broad citizenry), Brog suggests, “does not represent a departure from conservative tradition; it is an overdue return to it.”

 

The globalist perspective also violates much of the liberal tradition. After all, it was the original progressives who introduced antitrust and, like Lincoln, supported tariffs and spending on infrastructure and new land development that would spread the blessings of capitalism more widely, and, from a political perspective, create long-term support among the aspirational working and middle classes. The current Democrats’ merger with Big Tech and Wall Street, however woke they may be on green and cultural issues, undermines the building of an agenda that would help America’s middle and working classes.

 

Fortunately, many on the left and the right now agree that tech monopolies are stifling innovation as well as entrepreneurship. The pandemic has made the crisis for small firms worse, with experts warning that one-third of small businesses could ultimately shut down for good, as hundreds of thousands have already done, including an estimated 100,000 restaurants. These firms make up the majority of U.S. companies and employ nearly half of our citizens.

 

If we wish to remain a capitalist country, we must do it at the grass roots. “Capitalism,” Lenin understood, “begins in the village marketplace.” Nearly three-quarters of Americans approve of small business, notes Gallup, while big business barely garners 20 percent. Voters demonstrated in the 2020 election that they are not eager to convert from a largely market perspective to a socialist one, and they rejected big tax increases even in blue Illinois and California. Their improved prospects under the first three years of Trump may also explain how Trump won a significantly larger Latino vote than in previous elections, as well as making surprising gains among African Americans, Muslims, Jews, and Asians.

 

To be sure, Americans, including minorities, are not wedded to laissez-faire. Despite its rejection of socialism outside the core cities, Florida’s endorsement in the recent election of a $15-an-hour minimum wage, even as it was voting for Trump, suggests that a policy that rewards work remains widely popular. This seems preferable to the idea of expanding the welfare state, a notion popular with the Left and endorsed by many oligarchs, including those that the New York Times described as “silver-spoon socialists,” who live on inherited wealth from their often capitalistic parents. This approach is not deeply supported even by its own beneficiaries, as evidenced by the defeat of its leading political advocate, Stockton, Calif., mayor Michael Tubbs, by, of all things, a GOP-leaning African-American preacher.

 

Americans of all colors want both justice and prosperity. Most still seek the (somewhat nebulously defined) American dream of home-ownership and upward mobility, according to a recent AEI study. What they lack is the conviction that they can achieve it. A country where this aspiration is accepted and supported, as leaders from Lincoln to Franklin Roosevelt to Ronald Reagan understood, can be humbled and even suffer, but ultimately cannot be defeated or denied.

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