I was skeptical about this essay. After all it is Richard Florida and it is the Atlantic. But this is definitely worth reading:
Before the Great Depression, only a minority of Americans owned a home. But in the 1930s and ’40s, government policies brought about longer-term mortgages, which lowered payments and enabled more people to buy a house. Fannie Mae was created to purchase those mortgages and lubricate the system. And of course the tax deduction on mortgage-interest payments (which had existed since 1913, when the federal income-tax system was created) privileged house purchases over other types of spending. Between 1940 and 1960, the homeownership rate rose from 44 percent to 62 percent. [...]
If anything, our government policies should encourage renting, not buying. Homeownership occupies a central place in the American Dream primarily because decades of policy have put it there. A recent study by Grace Wong, an economist at the Wharton School of Business, shows that, controlling for income and demographics, homeowners are no happier than renters, nor do they report lower levels of stress or higher levels of self-esteem.
And while homeownership has some social benefits—a higher level of civic engagement is one—it is costly to the economy. The economist Andrew Oswald has demonstrated that in both the United States and Europe, those places with higher homeownership rates also suffer from higher unemployment. Homeownership, Oswald found, is a more important predictor of unemployment than rates of unionization or the generosity of welfare benefits. Too often, it ties people to declining or blighted locations, and forces them into work—if they can find it—that is a poor match for their interests and abilities. [...]
Finally, we need to be clear that ultimately, we can’t stop the decline of some places, and that we would be foolish to try. Places like Pittsburgh have shown that a city can stay vibrant as it shrinks, by redeveloping its core to attract young professionals and creative types, and by cultivating high-growth services and industries. And in limited ways, we can help faltering cities to manage their decline better, and to sustain better lives for the people who stay in them.
I remain skeptical of the idea that the key to American economic prosperity will be a continued reliance on “innovation” and “ideas.” In more concrete terms, Florida is arguing that the States will remain globally competitive by exporting designs and allowing the products and services continue to be made and supported elsewhere. But China and India are catching up to the US in the product and software design markets.
Renegade futurism is decidedly not about making predictions, but the future of the American economy I imagine is more local. It’s maker faires and farmer’s markets. It’s repairing stuff or making new clothes out of old ones. It’s neo-artisans bartering with each other. It’s co-ops, credit unions, and local currency.
Sure, there will still be imports and exports – but with increasing costs of shipping and more makers unemployed local production could make a big comeback.