Feedback Loops

Earlier today I was reading the Atlantic Cities article on whether or not Millennials will stay in the cities they now call home, and through the comments, when I noticed:

What will happen when the baby boomers who are living in suburban mansions they've built over their lifetimes find that their home, which is their biggest if not only financial asset, doesn't have any appeal or demand to younger buyers who prefer city life? If they can't cash in on the value of their home because demand is down it means they can't access what they thought would have been their retirements savings... 

An unasked question? Perhaps, but in the answer we find the driver of a feedback loop: If (a) you can't access your retirement savings, (b) you can't retire, meaning (c) you have to stay in the workforce. Since the workforce isn't growing (in fact, it's shrinking) that means (e) you're taking a job away from a Millennial, which (f) deprives them of the opportunity to buy your home, thereby (g) preventing you from accessing your retirement savings (forcing you to keep working and so on)...

Feedback loops are compounding cyclical phenomena, and what I have just described is a compounding cyclical phenomenon--a feedback loop. Note that this feedback loop assumes the New Geography* status quo, that of continuing unhindered suburbanization (despite the considerable evidences to the contrary).

In the New Geography worldview, living choice is a function of affluence, and suburbanization a function of increasing wealth. But the ideal of increasing wealth assumes unlimited growth--a common tenet of economics, but one that is decreasingly justifiable. Even assuming economic stability (note: not stagnation, although there is no doubt we live in an economically stagnated era), we note that by the rather poor choice of storing your "savings" in your home** you have inadvertently triggered a feedback cycle whose ultimate effects are (a) a devaluing of your home and (b) a mismatch between your home's market and buyers' markets--because, in search of jobs, those who would ordinarily replace you have moved on: in this case, to the cities, because that's where the strongest economic engines are.

Multiply this thousands upon thousands of times and you go from a few people making bad choices to a macroeconomic trigger.

How stunningly naïve New Geography's worldview is! Their entire analytical framework is built on a single aberration in American history, a hopelessly linearized misunderstanding of the rise of American (autocentric) suburbia. To look deeper, which we must, we have to recall that from 1950 to 1990, American cities were locked in a negative feedback loop, one triggered long before their population peaks.

We must understand the Chicago School is a reasonably accurate understanding of prewar urban dynamics, and in all Chicago School models, immigration was the population dynamo. Can you imagine the effect of the Immigration Act of 1924, crowning glory of the nativists? Suddenly, cities stopped having a ready replacement supply for those leaving, as the immigration quota was (and continues to be) far too low for replacement. Worse, the quota failed to solve the problems it claimed to, and produced new ones--illegal immigration and visa fraud wouldn't exist if we didn't have a quota-based immigration system.

Of course, like all feedback loops, the effects wouldn't become apparent for decades. The Great Migration was initially able to hide the dynamo collapse, but it is no coincidence city populations plateaued 1920-1950; worse still, the Great Migration happened at the same time as the nadir of American race relations. Like all poorly-thought-out "solutions", this, unsurprisingly, increased the problems of the city.

The second major trigger of suburbanization was the automobile. Here was this absolutely amazing invention that could whisk you from skyscraper canyons to the Grand Canyon. And, once the opposition movement was quelled (thanks in no small part to astroturfing on a grand scale) it suddenly became--not only ubiquitous, but essential. Every new development after ca. 1930 had garage space--in the beginning, rear-loaded. But cars are the enemy of cities. Everywhere, they push things apart to their own scale, and their scale is gigantic, inhuman. At first, developers applied the living traditions to humanize their streets, their blocks--but to no avail. A pushing-apart is evident beginning in 1930s developments, culminating in exurbia. (There's a reason postwar suburbs are called autocentric.)

What happened is simple. After their fathers were defeated in the great car wars of the first third of this century, the Greatest Generation youth came to adulthood in a society re-forming around the car. And this wondrous new(ish) invention could do great things--but at a price. Worse, those people were all over the place in the places they grew up. What was a fellow of the Greatest Generation to do?

The Baby Boomers were not the first suburban generation--merely the first to grow up there. The Greatest Generation chose suburbia. They were the first "suburban" generation. And in that choice, they set in motion a feedback loop that would eviscerate cities.

In their wake, it wasn't just the middle class shriveling. The collapse of the immigration dynamo three decades previous reared its ugly head: there was no new middle class forming. Tax bases began to hollow out, while at the same time, as a greater percentage of residents remained in poverty, the need for services multiplied. The collapse of cities wasn't just a result of the formation of suburbia--it was as much a result of turning off the immigration spigot. It was the result of rampant social mores that wouldn't begin to change for two more decades. It was the result of an entire finance built around these mores...

And once those gears had begun to move, no matter how many well-intentioned people tried to stop them, they would not stop. The collapse of American cities that has been the defining urban reality for Boomers' lifetimes would further compound on itself by driving Boomers away, ever further away, and would drive their attitudes about the city, the way they viewed the thing.

The nadir of the American city occurred around 1990, and several factors led to the feedback loop stalling--most importantly, bringing the crime rate under control. The maturity of Gen Xers, who did not have the memories the Boomers did, also helped: it was under their purview that urban middle-class populations, particularly around downtowns, finally stabilized and, over time, began growing again. And this was both catalyzed by and further catalyzed the growing idea of downtown as destination: a place for nightlife, fine dining, and culturally important activities***. This middle-class stability, in turn, fuels the only long-term sustainable solution for dealing with what has today become the most pressing urban issue: schools.

It will be on the strength of how well Millennials deal with schools, how much they have the initiative to deal with them, and how much factors-at-large force them to deal with them, that the American city will be said to have stabilized--or will grow again, and explosively.

Schools are at the crux of the Millennial urban feedback loop.
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* No, I will not link to that wretched hive stricto sensu.
** Or, more accurately, your land; the improvements are a constantly depreciating asset--like your car--while the proximity value of the land it's on increases slightly year-over-year; part of the inflation of the housing bubble was an overvaluing of suburban land (combined with a persistent undervaluing of city land).
*** It is also important to note that attempting to isolate elements within a feedback loop has the effect of short-circuiting the whole thing. Arts and entertainment districts fail because of this; "natural" arts and entertainment areas blossom and then are subsumed within the greater system. When they arise, they can be marketed, but they cannot be created out of whole cloth.

Building A Political Coalition

Everything is politics. To do anything, a strong enough coalition must be assembled to counteract the opposition. These kinds of coalitions can take long times to assemble, or coalesce quickly, depending on the scale of the problem.

Let us take, as an example, the road coalition. It took a half a century from the invention of the automobile before a strong road coalition came into existence--a half a century during which the car had to go through an image shift from rolling death machine to tool for freedom--and the development of movements and companies providing improved auto infrastructure (e.g. tire companies, gas companies, Better Roads, etc.) It took fundamentally proscriptive and ultimately myopic urban movements (Garden Cities, public housing) as well as a tapping into Americans' escapist tendencies. And it had to do it all fighting the rail lobby, then one of the most powerful in the country. It ultimately gained the upper hand not due to itself, but rather because the ICC insisted on draconian rail policy, undermining shippers' profitability, while states saw them as rolling banks and incurred high taxation on them, all the while absolutely subsidizing their competition.

Ultimately the rail lobby failed, the roads movement succeeded beyond its wildest expectations, and American railroading began its long half-century collapse from the cream of American pride and culture to a peripheral transportation solution focused on moving bulk goods. Alongside our railroads' collapse has been our manufacturing sector's, to a state where it, too, is now economically peripheral.

The road-based system then established itself as culturally central. Interstates replaced the great rail networks as our country's crown jewels. But it's a system that is internally unsustainable, starting to grind toward its own collapse; a generational shift has begun to reject it; and it's time to build a coalition toward a major transportation shift.

In his Sunday Train blog, Bruce McF began feeling the way toward such a coalition. But a coalition that would ultimately be successful would have to unite a majority of Americans, a majority of American politicians, and (ironically enough) couple into the dominant economic hegemony of the era*. So the question isn't just what vested interests would be interested in his Steel Interstate proposal--it's also what compromises are needed to win over otherwise unaligned interests.

Right now our politics are dominated by a neoliberal/neoconservative ascendency which has been in power, regardless of party alignment, since 1980; these politics are linked to Austrian School neoclassical economics, which favor "free-market" solutions and dogmatically believe in the idea that markets can and always will self-correct--but this hegemony is opposed by those both on the right and the left, by populist movements both progressive and regressive (Occupy v. the Tea Party), by ideologies by both right and left.

The two largest ideologies opposed to the current status quo are the progressives and the libertarians**.

In order for the Steel Interstates to be politically viable in any form, it must be as a coalition between these two ideologies. To do that, a compromise must be reached.

This is not a difficult compromise. Steel Interstates mark a realization that our current transportation paradigm is unbalanced, structured to support ecologically self-destructive means, and that only massive investment or economic/ecologic ruin can rectify this imbalance--just as Better Roads did in its day. Libertarians, too, recognize this imbalance, and (what is today) the radical proposal*** to privatize the Interstates would likewise begin to rectify it.

Granted, the Steel Interstates, as a populist proposal, grew out of a plan opposing a road privatization. We must remember here that that so-called "privatization" was really just a government handout, a boondoggle where the government had all the capex risk, but the private entity all the reward. In a true privatization, the private entity must assume both risk and reward. Leasing the Interstates as-is would do so.

The compromise I offer is that we convert the embodied capital in the Interstates into a financial asset, which we then use to improve our railroads to a like condition (i.e. subsidize the railroads to develop their core mainlines to Steel Interstate standards). In this manner, both major forms of higher-level ground transportation are handled by equivalent enterprise, that is, private enterprise. The alternative is nationalization of the railroads--politically untenable in our day and age.

At this point, the coalition can court interested vested interests, such as what Mr. McF mentioned.

Bring the progressives and the libertarians to the same playing table, and real opposition to the status quo begins to cook--and I would not be surprised if there are many more grounds for progressive-libertarian compromise. If a coalition can assemble a powerful enough policy package, one (this is dominated by Millennial policy concerns) concerned with improving mass and non-motorized transportation, the changeover from fossil fuels to sustainable energy sources, and social policies like some form of universalized^ healthcare, a separation of church and state in the field of marriage, empowering (rather than disempowering) labor policy, and so on.

It is clear that, even in its infancy, Millennial political policy is radically distinctive from the post-Progressive status quo. The work involved in bringing Millennial policy to reality will be fascinating to watch and work for.
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* One could say the current road-based transportation paradigm has been running on its own inertia since 1980, when the economic hegemony that built it (Progressivism 1.0) failed and was replaced by "neo"
-ism and its economic policy, Austrian School neoclassicism. Railroads 1.0 where the product of an era of laissez-faire libertarianism. Our road coalition arose alongside the Progressive ascendency.
** I'm not talking about the status quo that masquerades as libertarianism, I'm talking about that particular branch Republican Party elite enjoy ostracizing.
*** Just like the Steel Interstates are a radical proposal...
^ Note term.