Posted on 06/27/2012 12:25:47 PM PDT by SeekAndFind
In many ways, the contemporary history of America's economy is really a story about cities.
Metro areas rise and fall with each generation, buoyed or sunk by the industries and trends that support them.
The chart below, from the McKinsey Global Institute, does a beautiful job telling that story.
On the left, we have the top 30 U.S. metro areas ranked by real GDP as of 1978.
On the right, the top 30 for 2010.
That cross-hatch of red and blue lines shows just how much churn there has been in the economy. But I think there are three main trends to take away from this.
First, there's the fall of the Rust Belt and the rise of the Sun Belt. As the country's economy eased away from manufacturing, which tends to be clustered in discrete regions, and towards services, which can be almost anywhere, people moved away from the old, frigid, and declining industrial centers towards states with cheap real estate and warm weather. Population growth ultimately means economic growth. And so you see the emergence of places like Riverside, Phoenix, Orlando, and Tampa.
Second, there's the dominance of finance. If New York had the same GDP today that did in 1978, it would still have the second largest economy of any American metro region.
(Excerpt) Read more at businessinsider.com ...
The big droppers are all heavily unionized.
How do you explain NY? We have more unions than anyone.
What is manufactured in DC??
Now this makes me interested in what constitutes "domestic product".
Answer, more or less, from the article:
If New York had the same GDP today that did in 1978, it would still have the second largest economy of any American metro region.
Unions play a huge part in the scheme of things, but population is a bigger overall predictor.
I'm in the Tampa Bay area, and we've seen enormous growth in the 30 years I've been here. It's no surprise to me that we broke into this list.
Wall Street.
Cleveland (my hometown) is an obvious one.
Taken into default by Boy Wonder Kucinich 30 yrs ago and never got out of the tailspin.
As for Wash DC / NoVa, I was there in April on vacation. It’s truly a wonder of federal spending and subsidy. Someday we’ll have to go there with pitchforks and bombs.
Laws
more and more every year.
and hundreds of thousands of very highly paid minions to write, interpret, and enforce them.
“What is manufactured in DC??”
Fertilizer, in the form of steer manure. Copious quantities of it. More than what is produced by all the cattle ranches and dairies combined. They’re drowning in it!
Hot air and steer manure
Hot air and steer manure
Misery.
But, Microsoft[Allen, Gates]decided to leave Albuquerque and head to Seattle, and be closer to their families.
Thus helping to start the tech phoenix in Seattle. Throw in Jeff Bezos founder of Amazon who was born in Albuquerque, to move to the Seattle area in 1995 and ya have a interesting twist on fate.
While the Seattle area has dramatic growth, Albuquerque has stayed the same.
The financial industry's profits (which are a creation of the Fed's money-printing) outweigh the deadweight loss of the unions. Just look upstate to Buffalo. The unions have caused it to drop off the chart.
And well it should.
Keynesians believe that spending [any kind of spending] drives the economy and Keynesians developed the GDP equation to reflect that belief. And since a lot of money is spent in Washington, ispso facto, its GDP must be high.
GDP is a measure of nothing but spending. It does not measure economic growth. That is a result of capital growth -- something the GDP and the Keynesians completely ignore. Capital growth only occurs when entrepreneurs and consumers save part of their earnings to be reinvested in production.
That concept is rejected by Keynesians and the current administration who wish desperately for a "bottom up" recovery which will never come.
I remember being stunned upon learning [many moons ago] that spending on health care was included in the GDP. Dying folk spending money to stay alive isn't what I'd call "growth".
Is it too much to ask that we start a new index of actual production and decouple that from "spending".
I will vote to not include as a product the Fed printing money.
Thanks Bflo - I nominate you for head of the New GDP Initiative.
I am humbled.
Seriously, though, the GDP and the importance attached to it by the government and the media is one of my biggest sore points. For example, consumer goods spending is now much higher than it was before the recession hit in 2008. Yet, we are certainly not growing -- unemployment is horrendous.
That's because entrepreneurs are not spending their capital on expansion -- they're maintaining production with some of it and just putting the rest in money market funds in an attempt to preserve it till the business outlook once again turns positive.
Keynesians deny the fact that consumer spending and capital investment are two entirely different processes. And the fact that consumers are spending at high levels does not necessarily mean that entrepreneurs will invest in more production capacity if they fear that future business conditions will render those investments unprofitable.
The "consumer spending" crowd is baffled, however, by the stagnant economy and assumes, therefore, that the government must spend more to get that GDP even higher.
Sigh. I'm glad you've started to see the light, though.
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