Friday, February 20, 2009

Economy Crashes...but Chicago Wins

We recently came across the feature article in the March issue of The Atlantic titled, "How the Crash Will Reshape America". Although it's not a quick read, we highly recommend it as it takes a step back and looks at the long term effects of the current economic crash. The gist of the article is the emergence of what they call 'mega-regions':
Worldwide, people are crowding into a discrete number of mega-regions, systems of multiple cities and their surrounding suburban rings like the Boston–New York–Washington Corridor. In North America, these mega-regions include SunBelt centers like the Char-Lanta Corridor, Northern and Southern California, the Texas Triangle of Houston–San Antonio–Dallas, and Southern Florida’s Tampa-Orlando-Miami area; the Pacific Northwest’s Cascadia, stretching from Portland through Seattle to Vancouver; and both Greater Chicago and Tor-Buff-Chester in the old Rust Belt.

Internationally, these mega-regions include Greater London, Greater Tokyo, Europe’s Am-Brus-Twerp, China’s Shanghai-Beijing Corridor, and India’s Bangalore-Mumbai area.

Economic output is ever-more concentrated in these places as well. The world’s 40 largest mega-regions, which are home to some 18 percent of the world’s population, produce two-thirds of global economic output and nearly 9 in 10 new patented innovations.
As you would imagine (and probably already know), Chicago is the largest and most important metropolitan area in the Midwest region. While other Midwest manufacturing cities suffer (ie Detroit, Cleveland, St. Louis, Buffalo) due to their inability to evolve with the changing times, Chicago has blossomed into a dynamic, global city with a variety of industries and professions. Although Chicago isn't immune to the current recession, the article argues that it is (among other 'mega-regions') better prepared for the future.

The article also has an interesting take on the limits of suburban life and growth:

Suburbanization—and the sprawling growth it propelled—made sense for a time. The cities of the early and mid-20th century were dirty, sooty, smelly, and crowded, and commuting from the first, close-in suburbs was fast and easy. And as manufacturing became more technologically stable and product lines matured during the postwar boom, suburban growth dovetailed nicely with the pattern of industrial growth.

But that was then; the economy is different now. It no longer revolves around simply making and moving things. Instead, it depends on generating and transporting ideas. The places that thrive today are those with the highest velocity of ideas, the highest density of talented and creative people, the highest rate of metabolism. Velocity and density are not words that many people use when describing the suburbs. The economy is driven by key urban areas; a different geography is required.

For those of us who like maps, they have a great interactive map that looks at patent activity, income and population growth throughout the country starting from 1860:
So we share this with you not because it specifically cites anything in regards to the Sloop, but provides an interesting take on macro trends potentially coming out of the current crash.

It's going to be a cold and snowy weekend...turn up the heat and enjoy some good and interesting reading!

1 comment:

Brady said...

A theory about an unintended side effect of the recession:
By now everyone is aware that the current recession has hit non-urban areas and manufacturing centers much harder than mega cities whose economies are service driven. This has resulted in a proportionally higher decline in purchasing power in non-urban areas than in cities. Due to this, people in non-urban areas have less disposable income to spend on things such as food and education. The result is that they are eating fast food more frequently and the obesity epidemic is worsening. Over time these people will be forced by their economic circumstances to only eat unhealthy food and eventually their obesity will prohibit them from maintaining steady work and acquiring new skills. This problem will inevitably perpetuate itself, and as people get fatter and stupider they will only be able to order from restaurants with picture menus (McDonalds, BK, Taco Bell, etc).
Eventually this will eliminate the middle class as we know it and leave only two classes of people. One being regular educated people who live in cities and provide skilled labor and a new separate class will emerge that is enslaved by its own obesity and stupidity. This trend has already started to emerge(1), and unless something is done the economic gap between city dwellers and country folk will continue to widen. So what can you do to help curb this epidemic? It’s actually quite simple, you can start by reaching out to “at risk” people you know and inform them of the slippery slope on which they tread. It’s possible they will not respond to reason, in that case inform them that Big Macs are 2 for 1 in metropolitan areas. If this doesn’t work, it means they are too far gone and a best practice is to cut ties immediately to make sure you don’t get infected. This lust for dollar menus and disdain for skills is highly contagious and spreads through groups of people like the plague(2).

1.Observations made at Chippewa Bowl in South Bend, IN on 2/18/09
2.Case study performed at Wal-mart in Niles, MI (Jan 09-Feb 09)