Saturday, August 07, 2010

Pressing the reset button

Will he or won’t he? Answers are he won’t and he will. United States President Barack Obama will find it a tough going at the elections to the Senate scheduled in November for 36 of the 100 seats. Obama, however, will try every trick in the book to get the economy back on track (unemployment rate in the US was 9.7 per cent in May 2010). Best-selling author Richard Florida’s latest book The Great Reset: How New Ways Of Living And Working Drive Post-Crash Prosperity might help Obama in more than one way. Books on the meltdown are being written at a pace rivalled only by Martin Scorcese characters’ penchant for mouthing expletives. Sadly, owing to the glut, most of the writers tend to choke on their own bile. Florida’s fascinating slim book is cut with different cloth: it tries to find answers for the future in the two biggest economic crises the country ever saw in 1873 and 1929.

Florida’s book is a long-form extension of a cover story titled “How The Crash Will Reshape America” that he wrote for The Atlantic magazine in March 2009. (Minor digression: What’s it with Atlantic’s cover stories turning into books, this being the second book to have released in as many months after Nicholas Carr’s The Shallows: What The Internet Is Doing To Our Brains?)

The prose of The Great Reset might lack the snap, crackle and fizz of Florida’s best-selling books like The Rise of the Creative Class and Who’s Your City?, but he makes it up with a plethora of coruscating observations. Florida says that “The First Reset” took place during the Long Depression when the US saw the transition from small cities and an agricultural society to dense industrial cities. “The Second Reset”, a consequence of the Great Depression, gave us the sprawling suburbs and great metropolitan areas that defined recent times. “The Great Reset”, whose midwife is the latest meltdown, that Florida talks about, is the shifting of the tectonic plates in the US “from an economy based on making things to one that revolves around knowledge and creativity”.

Florida terms this shifting as “spatial fix”. He argues that “positioning the economy to grow strongly in the coming decades will require not just fiscal stimulus or industrial reform, it will require a new kind of geography as well”. The argument holds water considering America’s tendency to over-consume and under-save, the main cause of the current meltdown, a consequence of the post-War spatial fix — housing and suburbanisation.

Here are a few forces that Florida expects, if worked on, will trigger the Great Reset: considerable dependence on public transport (preferably through high-speed rail); transformation of millions of service jobs into middle-class careers that value workers as a genuine source of innovation; creation of “megaregions” that will drive the development of new industries; and, of course, change in attitude towards home ownership (yes, rent it out).

The “megaregions” that Florida refers to are the concentrations of population that encompass several cities and their surrounding suburban rings. The largest in the US is “Bos-Wash”, which comprises Boston, New York, Philadelphia, Baltimore and Washington DC. According to Florida, it’s the megaregions, not nations, that really power the global economy considering the fact that the world’s 40 largest megaregions account for two-thirds of all global economic activity.

A memory of a virgin hard drive is almost a prerequisite to assimilate the book’s arguments (wonder if Obama is left with such a memory). This is apparent when the writer connects disparate dots dexterously. Sample this: According to Florida, New York will continue to be the financial hub of the world despite a double-dip recession lurking around the corner. He reasons that once a top financial centre, always a financial centre. Case in point: Amsterdam, which has been the centre of the world’s financial system in the 17th century and ever since, is one of the top-25 financial centres. The book’s otherwise turgid prose turns sparkling when the writer narrates anecdotes of his parents and grandparents, who experienced the last two crises. I could have done with more such anecdotes.

All’s not well with the book though. It is high on compelling statements but abysmally low on convincing arguments. Florida says, with the benefit of hindsight, the US could have followed the Canadian banking system and the current crisis would have never occurred. That’s almost like saying Norway is an ideal form of economy for European Union countries. What works well for a small country doesn’t necessarily mean its bigger counterparts should follow suit. Florida tries his hand at doing a Malcolm Gladwell and doesn’t achieve much success with that. By collating the employment numbers from 1970s to 2009 in a chapter titled “Good Job Machine”, all Florida could remark was that the lower-paying routine jobs in the service economy (food service workers, janitors, home health care workers and the like) will never leave the country!

Florida is prone to toot his own horn and while that is not a crime, evoking his best-selling works proves to be a speed-breaker when the reader is on the intellectual autobahn. Expanding from his original essay, the personal and economical meanings of the subject seem not to enlarge, but rather to dissipate. He has somehow contrived to say less in a book than he did in an article. Having said that, this book is highly recommended for the very fact that the writer tries to make hope possible rather than making despair convincing.


At 9:48 AM, Anonymous Arun Srinivasan said...

A very well Wrritten blog.

Will check out the book!



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