Tag Archives: economic geography

Zoning restrictions on housing supply catch the White House’s eye

In case you were wondering, the White House grounds are technically unzoned - as is a lot of federal property in DC. Screenshot from the DC online zoning map.

In case you were wondering, the White House grounds are technically unzoned – as is a lot of federal property in DC. Screenshot from the DC online zoning map.

Zoning has been on the national stage in the past few weeks, starting with this paper (just hovering on a link to whitehouse.gov is good to see) based on remarks delivered to the Urban Institute on Nov 20 from Jason Furman, chair of the White House Council of Economic Advisors:

In today’s remarks, I will focus on how excessive or unnecessary land use or zoning regulations have consequences that go beyond the housing market to impede mobility and thus contribute to rising inequality and declining productivity growth.

For more in-depth commentary, I’d recommend the following:

  • Joe Cortright at City Observatory: “these observations show the pervasive and powerful effects of what we’ve called the nation’s shortage of cities.”
  • Matt Yglesias at Vox: “for younger people, for renters, and for the overall cause of social and geographical mobility it’s a disaster.”
  • Gillian White at the Atlantic: Rent seeking “often means that changing zoning laws or other supply-constricting regulations is in the hands of those who stand to collect on those economic rents in the first place, which can make change slow and difficult, if it happens at all.”
  • Paul Krugman at the New York Times: “Rising demand for urban living by the elite could be met largely by increasing supply. There’s still room to build, even in New York, especially upward.”

I had two immediate reactions to the paper: first, it’s great to see the White House recognize the importance of issues like this. Getting an issue like this on the national stage, linking it to a salient national political issue such as inequality is important. Getting someone like Paul Krugman to devote his NYT column to the subject is great to see (note that Paul Krugman is no stranger to urban economics: he won the Nobel Prize for his work on economic geography and agglomeration economies).

Second, given the scale and importance of the issue, the list of administration actions is underwhelming. Affirmatively working towards fair housing, offering incentives to localities to loosen zoning, and HUD’s program to lessen lending risk for multifamily housing development are all good ideas, but seem small in comparison to the scale of the issue.

It’s hard to say if there’s more that could be done administratively at the Federal level. In the absence of additional legislation, it’s hard to make the case for federal interference in an ostensibly local issue like zoning (no matter the national interest). Perhaps there are additional tools available that build on new rulemaking enabled by existing fair housing laws (perhaps involving litigation in the courts as well) in the same vein as New Jersey’s Mount Laurel doctrine.

Even with the national scope of housing supply constraints and their clear impact on the national economy, Pete Saunders at Corner Side Yard is quick to point out that housing demand is far more varied across the US. This presents yet another issue in raising housing supply as a national issue – it’s not a uniformly national issue. Relaxing the restrictions on housing supply only matter in the face of demand pressure – and many markets in the US don’t have the kind of demand to drive up housing costs in the first place.

Dispatch from the battle lines over Globalization: US Airlines take on the Middle East Carriers

Dubai International Airport. CC image from Raihan S.R. Bakhsh

Dubai International Airport. CC image from Raihan S.R. Bakhsh

There’s a fight brewing amongst big international airlines. The old guys are complaining that the new kids aren’t playing by the same rules; the new kids argue that the old guys need to step up their game. The dispute represents a fascinating window into a very public battle over globalization. What are the rules, and who gets to make them?

A coalition of the three major American airlines (American/US Airways, United, and Delta) combined with many of the unions that represent their employees are putting on a full-court press (complete with ads in DC’s Metro), arguing that the Big Three carriers in the Middle East (Emirates, Qatar, and Etihad – often abbreviated as the ME3) are undermining the principles of free and fair competition with subsidies that distort the market. The Gulf air carriers are pushing back against the accusations, arguing they provide a superior product at a lower cost. Vox has a brief article that summarizes the arguments for both sides.

The US carriers outline billions in subsidies to these carriers. They include everything from subsidized development of the region’s massive airports to interest-free loans and infusions of capital from the ruling families – who also own the airlines themselves.  The alleged subsidies support Qatar and Etihad to a greater degree than Emirates (the paper alleges that Qatar and Etihad would not be viable commercial businesses without their subsidies; not so for Emirates). You can find the white paper and presentation here.

ME3subsidies

Summary of the subsidies alleged by the US carriers. Image from the Americans for Fair Skies presentation.

Central to the debate are the United States’ Open Skies treaties with Qatar and the United Arab Emirates. Open Skies treaties deregulate the routes and destinations for international air travel between the two signatories. The US State Department prioritized signing Open Skies agreements since signing the first such agreement between the US and the Netherlands in 1992 (see the full list of agreements here, as well as the text of a sample agreement).

There is an inherent asymmetry in any Open Skies agreement between the United States and Qatar or the UAE; due to the small size of those countries, the agreements only add two or three destinations worth serving for US airlines (indeed, there are only two scheduled flights to Qatar or the UAE from US-based carriers – Delta flies ATL-DXB and United flies IAD-DXB). Gulf airlines, however, earn rights to fly to a wide array of American cities.

Part of the success of the Gulf carriers is due to the geographic advantage of the Middle East hubs. Dubai has long served as a stopover point for refueling along the Kangaroo Route. Now, carriers like Emirates use Dubai as centrally located hub to efficiently connect air traffic between Europe, Africa, India, and Southeast Asia.

However, there’s more to the rise of the Gulf carriers than advantageous geography. For these Gulf states (often, effectively, city-states), focusing on aviation is a deliberate economic development strategy. When you’re talking about state-owned businesses, how do you differentiate between the viability of the various airlines as businesses from the state’s explicit policy of aviation-focused economic development? In their white paper, the US carriers make the case that Open Skies agreements assumed that an open market would provide a superior business model to state-owned airlines (and there is a long history around the world of poorly run state-owned airlines) and that competition would bring this truth to light. However, with the rise of State Capitalism, the US carriers argue, it’s not clear that assumption can be trusted.

It’s the next step in the idea of developing around the aerotropolis. Instead of building your economy around an airport, why not build it around an airline? Dubai’s success in developing their middle-eastern metropolis around a global aviation hub inspired Qatar and Abu Dhabi to do the same – a strategy that not only required the airport, but the airline to feed it.

The Gulf carriers aren’t just looking to their Middle East hub airports, either. Emirates took advantage of struggling Alitalia to earn a fifth-freedom route from Milan to JFK. Emirates makes no secret of their ambitions to offer service around the globe via some key fifth-freedom routes:

President Tim Clark has revealed the first details of what looks like the next step in Emirates’ march to become a truly global powerhouse. On the sidelines of last week’s International Air Transport Association (IATA) annual general meeting in Cape Town, the airline outlined plans to set up a major transpacific operation. Its aircraft would be flying through intermediate points in Asia to destinations in North America. What is making the threat even more serious for Asian and U.S. airlines is that Emirates has another 67 Airbus A380s on firm order, which—like its large incoming fleet of Boeing 777-300ERs—has the range capability to fly from many points in Asia to cities far beyond the U.S. West Coast.

Emirates can choose from several geographic points that offer the necessary aeropolitical framework. The United Arab Emirates (UAE) has an open skies agreement with the U.S. “It allows us to take passengers on a fifth-freedom basis from the West Coast and central points in the U.S. to points in Asia,” Clark says. In Asia, there are open skies agreements with Thailand and Singapore. Emirates also has similar rights for some destinations in Japan.

Bold added. This is the root of the entire debate: a battle over the details of a global aeropolitical framework. A battle over the rules.

When it comes to Emirates, their Dubai hub isn’t the concern from the US carriers. The real concern is these aspirations to cover the globe with fifth-freedom traffic. Delta claims that the ME3’s cheap connections in Dubai make it difficult to serve India directly from the US (and presents strong competition for the European joint venture partners if connecting to India in Europe). Flying to US cities from Europe or Asia directly (e.g. the current New York-Milan service, if expanded to other airports) threatens to undermine direct service to Europe; additional fifth-freedom routes across the Pacific could do the same. Brett Snyder notes the concern about hurting the overall network:

If the Middle East carriers skim the international markets with the most traffic, then the US carriers will have to cut back service. When international flights get cut, the whole network becomes vulnerable. The end result is probably less service for smaller and mid-tier cities. It’s just the way the network effect works.

While the American carriers are asking the US Government to revisit these agreements, the Feds must balance other US interests in the region beyond air travel. Qatar and the UAE host a number of US military facilities. The US has a large trade surplus with both nations, partly due to companies like Boeing selling lots of widebody airliners to the Gulf Carriers. American cargo airlines like FedEx take advantage of Open Skies in a similar fashion to the Gulf carriers, facilitating global cargo movement. In other words, it’s not clear the US carriers have a sympathetic ear from the Federal government.

The PR campaign from the US carriers is an attempt to change policy by influencing public opinion, but it will be an uphill climb with the general public. Counter-arguments from the Gulf carriers ask why the American carriers are afraid of competition. US airlines aren’t exactly earning lots of sympathy from the public.

The PR battle is also getting nasty: Qatar Airways’ CEO accuses Delta of flying “crap” planes without a hint of irony: it’s not hard to buy nice, new aircraft when you can fall back on massive capital infusions (as alleged in the white paper) to buy those expensive aircraft. Lufthansa’s CEO, facing a strike from his unionized pilots, joked that he should hire Qatar’s CEO as his union advisor (unions being illegal in Qatar and the UAE). And while customers might like the product and the price point offered by the Gulf carriers, it’s not clear than anyone in the US would be willing to accept the trade-offs that make that product possible.

The white paper notes that the subsidies documented meet the World Trade Organization definition. However, even though both Qatar and the UAE are part of the WTO, aviation isn’t a core part of the WTO’s agreements.

If aviation were a part of the WTO, there would be a specific process to raise and resolve disputes. In other trade areas, the WTO can authorize the use of ‘counterveiling measures’ against subsidies and dumping, such as tariffs or restrictions on trade volume. But here, there aren’t any specific rules governing aviation – hence the PR campaign.

In essence, this is a battle over the rules. If the story of the aerotropolis is the story of globalization, is this a tide that lifts all boats? Or is it a race to the bottom? Competition is good, but what if the basis for that competition is based on the rules governing labor markets in Qatar or the UAE? Will the fight over the rules of the game lead to improvements in working conditions for migrant labor in the middle east? While the US airlines are certainly acting in their own self-interest, is this battle similar to the public scrutiny over Qatar’s labor practices in advance of hosting the 2022 World Cup? Could this battle over the rules not only find room for fair competition, but also leverage an improved quality of life elsewhere in the world?

Or is all of that wishful thinking?

Updating the Reading List, August 2014: The New Geography of Jobs; Edge City; The Box; The Power Broker

CC image from carnagenyc.

CC image from carnagenyc.

The confluence of events in my life (new apartments, travel, wedding planning, etc) haven’t left time for much blogging recently. However, there’s always time to read. With that in mind, a few additions to the reading list (and correcting one egregious omission):

The New Geography of Jobs: Enrico Moretti (2012)

Berkeley economist Enrico Moretti delivers a concise and readable summary of the economic geography of innovative industries – the kinds of jobs that produce what Jane Jacobs referred to as “New Work” (Moretti cites Jacobs’ books on urban economics repeatedly). This transition to the ‘innovation sector’ means a profound shift in the economic geography of the US, just as past shifts from agriculture to manufacturing had large impacts on where and how we live. Moretti also explains how these innovative jobs tend to cluster together and the paradox of location and local interactions becoming more and more important in a world of globalization and ever-improving communication technologies.

Also, credit to Moretti for writing such an accessible book. In the acknowledgements, he notes that “serious economists are not supposed to write books – they are supposed to write technical papers.” Yet, such papers don’t easily spread outside of the academia bubble and into the hands of planners and policy-makers.

Edge City: Life on the New Frontier: Joel Garreau (1991)

First, a confession: despite Edge City‘s place in the urban planning canon, I had never read the entire thing (just a chapter here and there as a part of grad school assignments). With the opening of the Metro’s Silver Line through the quintessential Edge City, Tysons Corner, I wanted to correct my own reading list gap. It was also an opportunity to look at Garreau’s work nearly 25+ years after he wrote about these places.

Edge City describes the rise of the suburban office/retail node, usually located at a key transportation intersection, obtaining a critical mass of jobs and retail and pulling the business focus away from the traditional downtowns and business districts. Garreau’s description of the thought process behind development deals is insightful (as well as the impacts of unintended consequences, development following the path of least resistance, etc), but hardly limited to the suburban context of edge city.

Some statements from 1990 seem laughable now (“there is no petrochemical analyst around who thinks there is any supply-and-demand reason… that the price of oil should go higher than $30 a barrel in constant dollars in this generation.”), but others seem prescient: speaking of Tysons Corner, Garreau notes that parking lots alone represent a massive land bank, just waiting for a “higher and smarter and more economic use.”

The error, however, seems to be in thinking of places like Tysons as fundamentally decentralized, rather than strengthening centers in a polycentric metropolis. The future of an edge city like Tysons has more in common with urbanism than with the model Garreau describes. Nevertheless, his description of these places is an important element of the grand American suburban experiment.

The Box: How the Shipping Container Made the World Smaller and the World Economy Bigger: Marc Levinson (2006)

Levinson’s history of the shipping container is a fascinating look behind the scenes of how we move goods around. Consequences for cities involve containers making old break bulk piers in Manhattan, San Francisco, and other ports obsolete; lower shipping costs enabling greater trade; intermodal shipping opportunities eventually enabling all sorts of new models for trade and distribution.

Levinson documents the challenges of overcoming proprietary interests to develop a series of standards that ensure interoperability, as well as the economic and institutional challenges (from port operators to unions to shipping companies to regulators) in embracing the new model. Levinson provides an insightful account of the difficulties in implementing new systems.

The Power Broker: Robert Moses and the Fall of New York: Robert Caro (1974)

I’m not sure how I missed including this in the reading list. It’s not a recent read for me, but reading Cap’n Transit’s post on the book and the reminder of Caro’s focus on the use of power rather than a personal, David v. Goliath struggle between the Moses and Jane Jacobs, I realized that I didn’t have it on the list. Here’s to correcting that omission.

More than just a documentation of Moses’s life and his use of the institutions to wield power, Caro’s book provides an excellent history of New York City and the background for so many of the institutions that shaped and continue to shape the city to this day. Caro’s focus on the institutional levers of power (a theme he carried through to his biographies of LBJ) gives the book applicability to any major city.

Are evolving suburbs really suburban anymore?

Silicon Valley google map

Leigh Gallagher is in the news with a provocatively titled book, The End of the Suburbs. Gallagher writes about the shifting geography of the American Dream from suburbia to growing cities and walkable places. In a summary for Time, Gallagher writes:

A major change is underway in where and how we are choosing to live. In 2011, for the first time in nearly a hundred years, the rate of urban population growth outpaced suburban growth, reversing a trend that held steady for every decade since the invention of the automobile. In several metropolitan areas, building activity that was once concentrated in the suburban fringe has now shifted to what planners call the “urban core,” while demand for large single-family homes that characterize our modern suburbs is dwindling. This isn’t just a result of the recession. Rather, the housing crisis of recent years has concealed something deeper and more profound happening to what we have come to know as American suburbia. Simply speaking, more and more Americans don’t want to live there anymore.

The American suburb used to evoke a certain way of life, one of tranquil, tree-lined streets, soccer leagues and center hall colonials. Today’s suburb is more likely to evoke endless sprawl, a punishing commute, and McMansions.

A few comments pop into mind:

This isn’t a new idea: Just googling some articles in recent years that I remember off the top of my head:

And I’m sure there are countless others, along with corroborating evidence from declining VMT, growing urban populations, and so on.

‘Suburb’ isn’t a descriptive term: Is Cambridge, MA suburban? Is all within the city limits of Houston, TX urban? The term could refer to the type of built environment, or to the nature of the political jurisdiction in relation to others in the region.

Suburbs are already evolving: Dan Reed highlights urbanizing suburban jurisdictions; Richard Layman describes potential paths for evolution; Josh Dzieza wonders if urbanizing suburbs might take some of the sting out of the culture wars and rhetorical battles between city-dwellers and suburbanites.

Suburban evolution isn’t a new thing: Alexis Madrigal offers a story about searching for the landmarks of Silicon Valley, finding that the center of a new industrial revolution is now a self-storage complex. Part of the myth of Silicon Valley is about a new industry emerging from agricultural landscapes; clean, new industry. But as Madrigal explains, the industry wasn’t that clean, and the pattern isn’t that new:

In our Internet-happy present, it’s easy to forget that up until the mid-1980s, Silicon Valley was an industrial landscape. Hundreds of manufacturers lined the streets of Sunnyvale, Palo Alto, Cupertino, Mountain View, and San Jose. This is the Silicon Valley when AMD, Apple, Applied Materials, Atari, Fairchild, Hewlett-Packard, Intel, National Semiconductor, Varian Associates, Xerox, and hundreds of other companies made their products right here in the Bay.

Now, with most of the production shifted overseas, the land uses have changed accordingly. Nonetheless, production of semiconductors and microchips is not without pollution, and leaking chemicals have littered the Valley with Superfund sites:

In contemporary descriptions of Silicon Valley as it was being built, every writer seems to note the absence of smoke stacks. A miracle! A clean industry! A better industrial capitalism!

The aesthetic was intentional. These factories of the future were designed to look like buildings on a college campus, which is to say, Stanford. The Stanford Industrial Park (later, the Stanford Research Park) set the visual standard from its founding in 1951 onward. There were rules governing which parts of the industrial apparatus could be visible, so as not to detract from the idea that these were locations for scholars, not laborers.

“Companies had to follow strict building codes, which included ‘complete concealment’ of things like smokestacks, generators, transformers, ducts, storage tanks, and air conditioning equipment,” environmental historian Aaron Sachs wrote in 1999.

Other municipalities wanted to encourage similar developments, and as Sachs concludes, “Stanford Industrial Park essentially replicated itself several times over–each time spurring the construction of new expressways and strip malls in neighboring areas.” What began as Stanford dean and Silicon Valley godfather Fred Terman’s dream to build “a community of technical scholars” in pleasant industrial parks became the architectural standard for the entire high-tech manufacturing world.

But the manicured look and feel had consequences. Storage tanks were placed underground, out of sight and out of mind. Until suddenly, in 1981, people in south San Jose living near Fairchild Semiconductor and IBM realized they were drinking water contaminated by the two firms’ manufacturing plants.

Several patterns of note: the influence of codes, unintended consequences, agglomeration economies, and the impacts of growth. And, hidden within the stereotypical suburbia is a more complex, evolved place:

What we see here is not simple suburbia. This is a landscape that industrialists, government regulators, and city planners sacrificed to create the computer industry that we know today. It has as much in common with a coal mine or the Port of Oakland as it does with Levittown or Google’s campus. All of which should lead us to a simple conclusion: the Silicon Valley of today is a post-industrial landscape, like the lofts near downtowns across the country, like Lansing, Michigan, like Williamsburg, like Portland’s Pearl District.

What we see now is a surreal imitation of the suburban industrial parks and commercial spaces of yesteryear. They’re built atop the past’s mistakes, erasing them from our maps and eyes.

The evolution of suburbia isn’t new. And Madrigal’s article is well worth the read.

Cities as complex systems – with scientific research to show it

False-color satellite image of China's Pearl River Delta. Top image is from 1973, bottom image from 2003. CC images from NASA.

False-color satellite image of China’s Pearl River Delta. Top image is from 1973, bottom image from 2003. CC images from NASA.

Building off of previous research working towards a universal theory of cities, Luis Bettencourt is back in the news with a new paper (working paper version here) that argues cities are a new kind of network not easily captured by analogies to natural systems. Rather, cities are “part social reactor, part network.”

Based on this theory, Bettencourt identifies the basic patterns of how cities grow. From that observation, Bettencourt builds his theory, allowing for the determination if cities are under or over-performing.

From the Santa Fe Institute’s article on the paper, this theory of cities is described as follows:

o what is a city? Bettencourt thinks the only metaphor that comes close to capturing a city’s function is from stellar physics: “A city is first and foremost a social reactor,” Bettencourt explains. “It works like a star, attracting people and accelerating social interaction and social outputs in a way that is analogous to how stars compress matter and burn brighter and faster the bigger they are.”

This, too, is an analogy though, because the math of cities is very different from that of stars, he says.

Cities are also massive social networks, made not so much of people but more precisely of their contacts and interactions. These social interactions happen, in turn, inside other networks – social, spatial, and infrastructural – which together allow people, things, and information to meet across urban space.

Ultimately, cities achieve something very special as they grow. They balance the creation of larger and denser social webs that encourage people to learn, specialize, and depend on each other in new and deeper ways, with an increase in the extent and quality of infrastructure. Remarkably they do this in such a way that the level of effort each person must make to interact within these growing networks does not need to grow.

The argument that cities can be partially explained with natural analogies sounds similar to the use of the constructal law to explain cities, but Bettencourt is arguing that there is a similar, but different relationship here.

Emily Badger summarizes and explains Bettencourt’s research at Atlantic Cities:

But Bettencourt is basically describing interconnected relationships between the population growth of a city; the incremental expansion of the infrastructure networks that more people require; the socioeconomic outputs that come from our social interaction; and the density that necessarily develops over time so that we can still benefit from ever-more social connections without spending ever-more energy to reach each other.

As cities grow, Bettencourt says, the city comes to you. This is a high-minded way of talking about infill development. If cities continued to grow but only grew outward, you would never get any benefits out of knowing or working with new people, since you’d have to sit in traffic for two hours to reach them. Density, however, allows us to reap the benefits of more social connections without adding too many costs in congestion and energy (like gas). All of this enables the amazing growth and benefits of cities to be open-ended.

Per Square Mile offers a summary as well:

Bettencourt believes there are four sparks that cause cities to form—the mixing of populations, the incremental growth of networks, the bounds of human effort, and the relationship between socioeconomic output and personal interaction. According to these assumptions, cities are founded and grow primarily so that people can interact frequently and on a personal level. As demand for face time swells, cities expand, incrementally adding to the existing network. Eventually, those networks reach a limit, bounded by the amount of effort we are willing to expend to expand and maintain them. The greater the benefit of living in a city, the more effort we’re willing to expend to sustain it. Bettencourt’s final assumption may be his most astute—that cities aren’t just agglomerations of people, but also concentrations of social interactions.

The formulas Bettencourt derived could prove powerful. His most muscular equation, that which models city growth, identifies cities that punch above and below their weights. Others show how substandard transportation can hold a city back, or how transportation networks tend to grow incrementally (perhaps that’s why automobile sprawl seems so intractable). But his formulas also highlight some perils, like how energy loss in transportation increases superlinearly—the more you move, the more energy it takes to move something. In sum, they appear to build a solid theoretical framework by which further questions can be asked and hopefully answered.

Questions immediately come to mind about matching our policies to this theory; what the trade-offs between growth and the benefit of living in cities look like in the real world beyond the theoretical framework. Conversely, how might such a theory influence policy? Could an understanding like this help with proposed policy frameworks such as the zoning budget? What about the qualitative elements of a place and the influence they have on these dense, social networks?

The Acela and economic geography

Acela - CC image from wiki

Last month, the New York Times Magazine featured a story on the “Empire of the in-between,” the places along the tracks traveled by Amtrak’s Acela Express.  Decaying post-industrial landscapes, battered and half-abandoned residential neighborhoods, and so on. The train serves as a metaphor for the changing nature of the American economy:

But for most of the 180 or so years of the train line’s existence, the endpoints of this journey — New York and D.C. — were subordinate to the roaring engines of productivity in between. The real value in America was created in Newark’s machine shops and tanneries, Trenton’s rubber and metal plants, Chester’s shipyard, Baltimore’s steel mills. That’s where raw material was turned into valued products by hard-working people who made decent wages even if they didn’t have a lot of education. Generation after generation, and wave after wave of immigrants, found opportunity along the corridor. Washington collected the taxes and made the rules. Wall Street got a small commission for turning the nation’s savings into industrial investment. But nobody would have ever confused either as America’s driving force.

This model was flipped inside out as Wall Street and D.C. became central drivers, not secondary supports, of the nation’s economy.

While the general trajectory is correct, the idea that the emergence of Washington and New York as dominant centers isn’t quite correct.  As the Economist points out, the real story is less about a nefarious capture of sectors of our economy, but the shifting nature of how our economies are structured:

Yet to pin the broad changes in the geography of the northeastern corridor (and similar shifts across the nation and rich world as a whole) on an explosion in rent-seeking is a mistake. The real story is more interesting: the economic role of the city itself has changed.

The Economist continues:

The difficulty this creates for the northeastern corridor is that this kind of clustering creates a demand for a different set of workers (and often a different infrastructure) than was necessary a century ago. Adjustment to this shift in labour demand has been taxing for major cities, but more importantly it has placed a great deal of stress on middle-income workers, whose talents are no longer needed. Cities continue to serve as engines of wealth-creation, but they are less effective as engines of broad economic mobility than they once were.

The article uses New York’s ports as an example.  The state of the art for transportation has shifted away from breakbulk cargo and towards containers.  New York remains one of the top ports in the United States, but the location of the bulk of the port activity shifted with the changing technology away from Manhattan’s waterfront and instead to container terminals.  The same pattern could be said for the industrial assets along the Northeast Corridor tracks, where freight trains are now rare and high(ish) speed passenger rail is the prime cargo.

Still, even if not the best analysis of the economic geography of the corridor, the Times Magazine piece serves as a metaphor for the shifting nature of our economy.  At the same time, however, you don’t want to overdo it, and conclude too much.  Aaron Renn does just that when asking “is the Acela killing America?” by directly linking the finance industry’s influence over DC’s regulatory apparatus to the rise of the Acela.

Never mind the logical challenges of such a claim (the old Metroliners ran faster between DC and New York on the same tracks; the two cities have been linked by frequent air service for years as well), other industries have been able to curry favor with DC.  Oil is one example; perhaps focusing on decisions like Exxon-Mobil’s location of substantial workforce presence in suburban DC (workers soon to be consolidated in Texas – such is the power of industrial agglomeration).  However, I don’t see anyone claiming Big Oil’s favorable treatment from the federal government is solely attributable to flights between Houston and Dulles.