Top of the News: The Wall Street Journal story was headlined, “Youth magnet cities hit midlife crisis.” The gist: cities such as Seattle, Portland and Austin continue to attract hip young college graduates although job prospects have dried up.
Although the story focused on Portland, it struck me as another swipe against the supposed latte-quaffing, creative-class places that are getting what they deserve. Unfortunately, the troubles in the labor market during this Great Disruption are falling almost everywhere. Nobody’s writing about how — to continue the stereotype — sprawl construction workers keep flocking to Phoenix, but there’s no work.
In reality, cities such as Seattle have not only drawn a disproportionate share of young talent, but have been able to benefit from it — starting new companies and regenerating such established firms as Microsoft. It’s not so much the “hipsters,” as the Journal terms them, as the “techsters” — along with the rich cultural players that make the city appealing to them.
Because these cities offer the amenities that this talent cohort seeks, they’re more liable to stick around through tough times than, say, lower-wage service workers in the interchangable cities of most of America. Whether Seattle can continue to attract them is one of the key issues of the next few years.
Each of these cities is very different, too. Seattle has had more midlife crises than an insecure 50-year-old who already has a Porsche, a comely blonde and a passion for extreme sports his body can’t handle. Yet every time, it has reinvented itself. This isn’t a re-invitation to smugness. It’s just that the problem is not that we’re continuing to attract the best and brightest.
The original story is here for Journal subscribers.
The Back Story: In the Not So Fast Department, a committee of GM bondholders is looking more favorably on a revised offer. It would allow them to increase their stake in a reorganized company through warrants, making their payoff potentially more palatable. Bondholders had rejected the earlier GM plan.
Writing on Naked Capitalism blog, Edward Harrison puts the GM crisis into a broader perspective, including political: “Under no circumstances is the Obama Administration going to allow General Motors to do to the economy in 2009 what Lehman Brothers did to it in 2008. They are going to fix GM no matter what it takes. And if this includes heavy-handed tactics, so be it.”
Today’s Econ Haiku:
Nordy’s rating cut
Becky should have bought those shoes
So says Credit Suisse