Against exceptionalism: here’s what a housing start really looks like (one for the Minnesotans).

My long-time readers are aware, I think (perhaps too aware) that I spend an inordinate amount of time contemplating (and sometimes writing about) the life and fate of my home state, Minnesota (population, 5.3 million). And that mental phenomenon, in part (there were other reasons), explains why, yesterday morning, I was atop a hotel in Foshan (population, 3.3 million) a rapidly developing Chinese city (what Chinese city isn’t rapidly developing) that most Minnesotans have never heard of, looking at data on Minnesota housing starts. For those who don’t follow this sort of thing, a housing start is simply a housing unit on which construction has begun in a given period. So, according to the US government data that I was looking at, there were exactly 709 housing starts in Minnesota in September.

Then I turned around, looked out the window, and saw many more than 709 starts happening 33-floors below. As well as a shopping mall to dwarf any but the Mall of America, a new “financial park,” lots of commercial real estate … and this is just one neighborhood on the outskirts of town. Far more intensive construction was going on closer to the city core. And, in the course of the 16 days that I’ve spent up, down, and sideways in Guangdong this month, I’ve seen dozens of projects just like these, often much bigger (photos taken of the right and left-handed views of the same project).

None of this comes as a surprise to anyone who spends any time in China – even fleetingly. It is the stuff of daily life. But back in the US, and back home, in Minnesota, especially, I can’t help but get the sense that there’s an almost purposeful denial that what’s happened, and is happening in China is fleeting; that, in some shape or form, everything will go back to normal and sooner or later Minnesota will have more housing starts than China (or, at least, Foshan), again. We just need to cut taxes. Or spend more on K-12 education. Pick your favorite solution to the current economic malaise, whatever that may be, and it’ll set things back to 1985, again.

At a minimum, over the course of several trips to the US this year, I’ve gotten the unerring sense that otherwise intelligent people are too ready to blame the current economic downturn on partisan factors having to do with Minnesota/North America, without pausing to consider that, just perhaps, there’s something (many somethings) happening in cities they’ve never heard of, changing the living standards of Minnesotans, permanently; that much of what’s happening to Minnesota’s economy has nothing to do with Minnesota.  This sort of economic and political narcissism (“our problems are only our own creation”) isn’t going to lead to a very nice place. At some point, you’re going to have to admit that there is, in fact, something to that competition beyond their lower salaries.

Anyway, dear Minnesotans, that’s what 2.5 weeks in Guangdong (and 9 years in China), and a bunch of Census Bureau stats, led me to ponder.


  1. The manufacturing and assembly sector of the American economy has been gutted by off-shoring to Asia and those jobs are not coming back. What this means is that high school graduates and the drop-outs have few options and their dreams of living a middle-class lifestyle made possible through high union wages and benefits in manufacturing is gone for good.

    This has happened for many reasons. Free trade, deregulation of communications and transportation, low-cost trucking, high labour costs, environmental protection laws, labour unions and the high overhead costs involved with employing workers made outsourcing extremely attractive.

    The American consumer fell in love with the new low prices that Asian labour made possible. When buying stuff, low prices trumps “Buy American” every time.

    The bottom half (my estimate) of the American population is now adjusting to a lower standard of living and not just to get through this recession. If millions of Asians are going to become wealthier, then many Americans are going to become poorer.

    It is a slow but steady process. To see the beginnings of this, watch the 1989 documentary “Roger and Me.”

  2. Not having been to Minnesota (but having been a fan of Hubert Humphrey – Civil Rights Act of 1964 – Yeah!), I don’t have much insight on when or how housing start figures will improve there. I suppose most of them are in the Twin Cities area (also never visited but very familiar to me from watching the Mary Tyler Moore show; like most Americans I got most of my knowledge about the world from tv sitcoms – no joke).

    I have been to Foshan and Guangdong, and one needs to remember that Guangdong has a population of 106 million – about a third of the USA – living in an area roughly 4/5ths the size of Minnesota. Geographically speaking, all of Guangdong could fit into Minnesota and there would be room for moose to spare. So given that Guangdong has over 20 times the population of Minnesota, many living in substandard housing, you can bet they are working hard to acquire their first newly-built apartment, plus lots of shopping to fill those new homes. The two places are simply not comparable.

    But I don’t think your post was really about comparing them; it was about how seemingly out of touch the political, economic and social conversation back home is with regards to what is happening in the world of globalization that you witness firsthand in China; how our American political culture seems to be caught up in self-absorbed hand-wringing and fist-waving (and circle-jerking) while the rest of the world moves on. Most Americans can only gripe and complain but no one seems to know how to make it better, and you can’t say all of our politicians are crooks, but the most successful ones seem to be.

    There are many to blame but the problem now is that our political system is no longer structured to serve the commonweal. In case you have not read these:

    How the GOP Became the Party of the Rich

    (Summary: tax cuts for the rich has become the sole defining feature of the GOP, and the leader of the movement Grover Norquist has pursued a highly successful single-minded strategy of pushing for lower taxes on the wealthy through changes in tax code, news media, academic think tanks.)

    Nobody represents the American people

    (American politics structurally only serves the elites, as “mass organizations” like unions and civic organizations have ceased to be relevant as money trumps people in our political structure.) Author Michael Lind notes:

    “We should not idealize the mass membership movements of the past. The old party machines were notoriously corrupt. Unions were often racist and in league with organized crime. And local civic organizations were often snobbish and clique-ridden. The point is that the existence of these mass membership organizations, along with dues-paying charitable organizations, served as transmission belts bringing demands and values up from ordinary people in local communities to politicians and policymakers at the state and local level. These institutions complemented elections and made electoral democracy work.”)

    Your pictures of Foshan inspires a variation on the old Roosevelt New Deal quote, “If you want to live like a Republican, vote Democrat” — “If you want to live like a capitalist, stick to the socialists.”

    Now brickbats will be thrown at me by writing the next paragraph, but I would posit that the reason why China is working is because the CCP functions as a mass membership organization the way the unions did in the pre-Ronald Reagan days. The old unions in the US were corrupt, badly run, nasty if crossed and undemocratic – but they looked out for the workers, and did good by them for the most part. The unions helped to “spread the wealth” (as Obama suggested he would do during his campaign, but has done very little to effectuate once in office). For all their faults, the unions were great equalizers and the lives of the average American were much better when labor unions were strong than today.

    For all that everyone complains about the Chinese government, the number one priority on the mind of every government official in China is job creation (when they are not busy with their mistresses) and they have been doing their damndest to make sure everyone in their district has a job, or they don’t get promoted.

    By contrast, the top priorities for American politicians are (a) raising money to get elected (b) getting elected and (c) having sex with pages, interns, assistants, call girls, escorts, lobbyists, patrons in airports toilets etc. Getting elected in America has little to do with creating jobs, but more with creating the right image, and the voting system is manipulatable.

    Governmental politics is ugly in both places, but right now it seems like the Chinese system is doing better at bringing home the bacon.

    The US system has become good at bringing home filet mignon for a few, and beans for everyone else.

    Isn’t it odd – no matter how much the US media and politicians complain about China, life in the US isn’t improving?

    Perhaps one day the Chinese people will, like Americans, become enamoured of the siren song of neo-liberal, tax-cutting, small government ideologies and personal NIMBY-style freedoms (meaning freedom from egalitarian allocation of society’s resources), and the CCP will abandon is mass organization status, and instead focus on serving the elites alone. You are already seeing some of that as some SOEs free themselves from state control and increasingly seek profit (and higher compensation for their managers). And as the private, non-SOE sector of the economy grows, these entrepreneurs will push for less government controls and lower taxes, and you will see less focus on poverty reduction and the traditional CCP preoccupation with egalitarianism. Meanwhile there are still hundreds of millions living in abject poverty.

    More freedom of expression and reduction of media controls (as we have seen in the US) will have the perverse effect of permitting those with have the deepest pockets to dominate political discussions; rich industrialists and financiers can fund think tanks and news media, and publish academic papers and pay for talking heads and sock puppets to propagate views that cutting taxes on the rich will make life better for everyone, and that government itself is bad. Guys like these will appear:

    Think tanks funded by exceedingly wealthy individuals like the Koch brothers will employ intellectuals, academics and business writers to spread tax reduction mantras like “reduce tax rates” (降低税率), “simplify the tax system” (简化税制) and “equalize the tax burden” (公平税负), so as to move away from the progressive taxation that was the hallmark of a good life for Americans. This will make life better for the rich, but worse for the middle class and poor.

    These guys have been funding think tanks for decades and the “freedom” propaganda has been very successful in getting people to think that less government means more freedom for everyone, and that everyone benefits from lower taxes. Look where that has gotten us.

    709 single-family housing starts in all of Minnesota.


  3. Have to chuckle a bit at your assessment. That cold humor comes from how as much as there is a ‘to do’ about cites in P.R. China growing fast, there is a steady exodus of jobs from P.R. China to places like Vietnam, Pakistan, and other ‘less developed’ nations. Hell, if you really want to draw parallels – take the cycle of boom and bust in the U.S. cities as a spectre of things to come, ten to hundred fold, in P.R. China. It was a lesson the folks in Mexico didn’t learn fast enough.

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