G.L.Piggy [at] gmail.com
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I didn’t watch Julian Castro’s speech last night so I’m not sure if he commented on the general state of the U.S. economy. But this passage from a piece by The Atlantic’s Derek Thompson is interesting:
In our interview, Castro acknowledged that the bedrock of San Antonio’s economy was not in bright shiny venture capital industries (in fact, the city’s information sector is shrinking), but rather in safe and conservative industries that were largely non-cyclical, and therefore recession-proof. He further conceded that the city was blessed by the most uncontrollable factor of all: geography. “We’ve got lots of affordable land,” he told me, which helps keep housing prices low. The proximity to the border creates a “constant supply of labor [that] feeds the hospitality industry” and keeps wage levels down.
Here I thought the Democrats and Obama were complaining that greedy corporations were responsible for depressing real wages. But now we have a bright, rising Democratic star admitting that cheap illegal labor has something to do with it. And celebrating it, no less. That can’t really thrill northern labor unions.
Elsewhere in the piece, Thompson sought to make the case that San Antonio’s relative economic success (really just a lack of failure) was due to its reliance on government services. That, Thompson indicates, allows Castro push back against the GOP’s criticism of Obama’s “you didn’t build that” message:
In 2010 I went to San Antonio to find out what made it the “most recession-proof city in America.” What became clear very quickly, from studying metro statistics and speaking with business leaders and Castro himself, was that, for much of the last decade, San Antonio was a tortoise in a country full of hares. While much of the Sun Belt saw massive population growth and booming economies on the back of rising housing prices, San Antonio grew steadily, without a big home-price boost.
The city is powered by three major industries, all directly or indirectly supported by government, which I’ll call: eds, meds, and enlisteds. Education, medicine/biosciences, and military and local government spending employed a third of the city’s workers in 2010. Its 31 colleges and universities (mostly public) enrolled another 100,000 students, boosting the cities population by 8 percent in school time. Hundreds of thousands more jobs are in low-paying services that would not have existed without government-supported hospitals and military spending.
As Thompson points out, the heavy reliance on government spending limits growth. San Antonio is characterized as a tortoise in a sea of hares. Of course, none of this is replicable on a massive scale given our huge national debt.