May 5, 2009 City Council packet - Laserfiche WebLink

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population, the greater the innovation and wealth creation per person." Places like New York with finance and media, Los Angeles with film and music, and Silicon Valley with hightech are all examples of high -metabolism places. Metabolism and talent -clustering are important to the fortunes of U.S. city -regions in good times, but they're even more so when times get tough. It's not that "fast" cities are immune to the failure of businesses, large or small. (One of the great lessons of the 1873 crisis —and of this one so far —is that when credit freezes up and a long slump follows, companies can fail unpredictably, no matter where they are.) It's that unlike many other places, they can overcome business failures with relative ease, reabsorbing their talented workers, growing nascent businesses, founding new ones. Economic crises tend to reinforce and accelerate the underlying, long-term trends within an economy. Our economy is in the midst of a fundamental long-term transformation —similar to that of the late 19th century, when people streamed off farms and into new and rising industrial cities. In this case, the economy is shifting away from manufacturing and toward idea -driven creative industries —and that, too, favors America's talent -rich, fast -metabolizing places. THE LAST CRISIS OF THE FAcroRYTo ATNs Sadly and unjustly, the places likely to suffer most from the crash —especially in the long run —are the ones least associated with high finance. While the crisis may have begun in New York, it will likely find its fullest bloom in the interior of the country —in older, manufacturing regions whose heydays are long past and in newer, shallow -rooted Sun Belt communities whose recent booms have been fueled in part by real-estate speculation, overdevelopment, and fictitious housing wealth. These typically less affluent places are likely to become less wealthy still in the coming years, and will continue to struggle long after the mega -regional hubs and creative cities have put the crisis behind them. The Rust Belt in particular looks likely to shed vast numbers of j obs, and some of its cities and towns, from Cleveland to St. Louis to Buffalo to Detroit, will have a hard time recovering. Since 1950, the manufacturing sector has shrunk from 32 percent of nonfarm employment to just Io percent. This decline is the result of long-term trends —increasing foreign competition and; especially, the relentless replacement of people with machines —that look unlikely to abate. But the job losses themselves have proceeded not steadily, but rather in sharp bursts, as recessions have killed off older plants and resulted in mass layoffs that are never fully reversed during subsequent upswings. E