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Hey, Guys, the Action's Down There

By Joel Kotkin
Sunday, September 12, 2004; Page B01

First came the newspaper ads. "Retro vs. Metro" they read, featuring a head shot of Newt Gingrich (retro) facing one of Hillary Rodham Clinton (metro). Or Mel Gibson (retro) contrasted with Michael Moore (metro). The mystery of their message had people talking for a while. Turns out it was all about a book, one that purports to have the secret to a "winning strategy" for the Democrats in November.

"The Great Divide" is the self-published -- and vigorously self-promoted -- brainchild of an eccentric 83-year-old Arizona billionaire businessman named John Sperling, founder of the for-profit University of Phoenix. It suggests that Sen. John Kerry can ace the election this fall by taking advantage of a growing conflict between what the book describes as a highly sophisticated, productive "metro" economy based largely in the Northeast and on the West Coast, and a troglodyte, parasitic "retro" economy located in the South and parts of the West and Southwest.

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In the book's analysis, the famous Republican "red states" of 2000 are socially and culturally regressive and economically backward. Meanwhile, the Democratic blue states are the "economic engines" of America, the incubators of new industries and bastions of financial brilliance and global savvy. Kerry's challenge, Sperling and his three co-authors declare, is to convince voters in swing states such as Arizona, Colorado and the industrial Midwest that they should get hip by becoming more "metro" and less "retro."

Memo to Kerry: If only it were that easy.

There are lots of reasons why this analysis is wrongheaded. It's based on a significant misreading of many key economic indicators. And it doesn't recognize where Americans who aspire to upward mobility make their homes. But it's easy to see why it plays with the pro-Kerry crowd: In recent years, the Democratic Party has shifted away from its working- and middle-class roots to identify more and more with the rising elites of the information age. Yet this shift could cost it an election where economic issues may still prove decisive.

Look at Kerry's chief supporters and you see a new kind of elite, a veritable "hip-ocracy" of high-tech tycoons, Hollywood moguls and celebrities, and a bevy of Wall Street financiers. This group is bolstered by Americans with graduate degrees and a growing number of college and university faculty members.

These core Kerry constituencies, the technical and professional intelligentsia, increasingly show signs of seeing themselves as a new social elite, what urban guru Richard Florida has anointed as the nation' s "creative class." Most make their homes in the peculiarly elitist economies of post-industrial metropolises such as greater Boston, Manhattan, San Francisco and the west side of Los Angeles, where the definition of middle class often comes with a million-dollar-plus mortgage, a PhD and, often enough, more than a few pence handed down from the parents. Kerry, a Yale graduate identified by Burke's Peerage as having more royal blood than any presidential candidate in U.S. history, educated in Swiss boarding schools and married to his second heiress, is an almost-too-perfect representative of this new class.

Bush, of course, isn't exactly from the wrong side of the tracks, and he has more than his share of corporate backers. But they're mostly from the more established business community. The Democratic elites see themselves as in many ways smarter and much "hipper" than these good-old-boy business elites of Dallas, Houston or Atlanta. Their collective self-image fits right into the retro/metro analysis.

But the assertion that the "retro" states represent the economic past is a vast, and dangerous, exaggeration. Wyoming and Mississippi may still be backward, but it's absurd to write off North Carolina, Georgia and Texas as technological laggards.

The days when the economies of these places depended on oil depletion allowances and farm subsidies is long past. Texas today is the nation's second most important high-tech state after California, having long ago blown past the likes of Massachusetts. More importantly, since the dot-com crash of 2000, the "retros" appear to be gaining ground, with both high-tech and business service jobs heading to the South, the Great Plains and cities like Phoenix. Meanwhile, many of the bluest places on the map -- the San Francisco Bay area, Portland, Ore., and New York City -- have suffered the biggest job losses.

Most revealing is a huge and longstanding shift among educated workers, particularly young families. Many are moving out of the blue states in pursuit of the better economic conditions in the scarlet ones. Between 1995 and 2000, according to Brookings Institution demographer Bill Frey, among the largest net receivers of college-educated migrants have been such nominally "retro" places as Florida, Georgia and Texas.

Nowhere have these trends been more pronounced, and less reported, than in Kerry's home state. Back in 1988, Michael Dukakis used his state's "Massachusetts miracle" -- its rise from industrial also-ran to high-tech bastion -- to help him win the Democratic nomination. Today, Kerry and many others still cite the Bay State as a case study in success.

Yet Massachusetts is very different now from what it was in Dukakis's day. Since 2000, the Boston economy has been among the worst in the nation in terms of job losses, many of them in higher-end business service and technology fields. Since 2002, nearly 40,000 Boston area residents have left the labor force. The city itself, after enjoying a small population gain in the 1990s, has been losing residents since 2000.

Overall, notes Michael Goodman, an economist at the University of Massachusetts's Donahue Institute, the state is hemorrhaging young middle-class families -- largely to "retro" states such as Florida, Georgia, Texas and North Carolina, as well as neighboring low-tax New Hampshire.


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