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Archive for June 13th, 2005

Primate Cities

From the Times today, an article on the housing bubble and globalization:

“The Fed and other central banks encouraged this boom so that the wealth lost in the stock market was replaced by housing,” said John Llewellyn, the global chief economist at Lehman Brothers in London. “And the housing boom has stimulated demand around the world.”

The biggest globalization lift in house prices has been in what urban economists call “primate cities.” These are the places where the world’s well-off want to live or visit regularly for business or culture like London, Paris, New York, Boston, Shanghai, San Francisco, Miami, Sydney and Vancouver.

They are the most cosmopolitan of locales, often coastal cities and tourist hubs. They experienced the largest spikes in housing prices and pull up the national averages, while inland cities lag – the tourist coast of Spain outpaces Madrid, San Francisco outdoes Milwaukee.

Such a breathtaking transition, from when I was a kid (not all that long ago) till today. When, if Manhattan had an elite, it was composed of the aging scions of dwindling fortunes… Holdovers, quite literally, from another era.

Such a breathtaking transition, from when I was a kid (not all that long ago…) to today. Back then, America’s elite (technocracy definitely wasn’t the word – they were simply “management,” right?) preferred the suburbs. The preference for suburbs – for New Jersey (where I grew up) or worse, actually their indifference about the place that they lived, itself an index of the state and nature of production at the time.

If you managed those who made cars, you lived in Michigan. If you managed those who managed the machines that rolled tobacco into cigarettes, you lived in a suburb of Richmond, Virginia or Winston-Salem, North Carolina.

The list of places that we very nearly moved when I was a kid: Wichita, Kansas; Minneapolis, Minnesota; Columbus, Ohio…

But now, something different – due to a confluence of processes, one of which this Times article addresses: the globalization of finance markets, the availability of cheap money… Still doesn’t quite explain why “primate cities” are the primary site of this bubble,, the taste issue…

Real estate aesthetic / transformation in the dominant genre of production / increase in the supply of cheap money.

The important thing is the hinge between each part of the three. Where the aesthetic touches the financial, where the productive feeds back into the other two…

To live today outside of the “primate cities” is to appear at turns comic and hideous, a left behind, the missing link of the history of production – what ought to have been incinerated by creative destruction – a blacksmith, a phrenologist, someone who eats with their fingers or keeps animals in the garage or puts out embroidered delicacies for sale on ebay…

Or is the “primate city” effect simply a massive spending-down of the fruits of the last great period in western economic history, before the shit hits the fan, children spending their partents hard earned? Or both? I vote both…

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June 13, 2005 at 1:11 am

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