Creative Alibis

Richard Florida and the ruse of the “creative class”

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On October 23, 2008, in the thick of the financial crisis, retired Federal Reserve chairman Alan Greenspan was brought before a congressional oversight committee. For decades, official Washington had mythologized the jowly libertarian economist as “the oracle,” the man who pulled the levers of an American economy showering unprecedented riches on the already rich. Initially appointed by Ronald Reagan, Greenspan also found favor with market-friendly New Democrats, elected on the then-novel premise that the party of Roosevelt could be just as pro-business as the GOP. In 1996, Bill Clinton reappointed the dyed-in-the-wool Ayn Rand disciple. Greenspan paid Clinton back by duly cheering on the New Democrat president’s great deregulatory binge, which culminated in 1999 with the repeal of the Glass-Steagall Act, the landmark New Deal legislation that had walled off the worlds of commercial and investment banking.

Now, nearly a decade later, as Greenspan took his seat at the witness table in the Capitol Hill committee room, the banks the Clinton administration had turned loose into the deregulated frontiers of finance were imploding. In March, opaque derivatives brought down Bear Stearns; in September, Lehman Brothers collapsed. The global economy was in free-fall; millions of Americans had lost their homes and life savings.

The committee chair, Henry Waxman of California, led a dazed old Greenspan through a CliffsNotes version of his march of folly:

In 1994, you testified at a congressional hearing on regulation of financial derivatives. You said, “There’s nothing involved in federal regulation which makes it superior to market [self-]regulation.” In 2002, when the collapse of Enron led to renewed congressional efforts to regulate derivatives, you wrote the Senate, “We do not believe a public policy case exists to justify this government intervention.” Earlier this year, you wrote in the Financial Times, “Bank loan officers, in my experience, know far more about the risks and workings of their counterparties than do bank regulators.” My question for you is simple. Were you wrong?

“Partially,” Greenspan began. “I made a mistake,” he went on to announce to all-but-audible gasps in the world’s major financial centers. His dogmatic libertarian ideology, Greenspan admitted, had been exposed as no more valuable than a share of Lehman Brothers stock. “To exist, you need an ideology. The question is whether it is accurate or not. And what I am saying to you is, yes, I found a flaw.”

Greenspan, disgraced though he was, retained some powers to divine the future. With the oracle establishing a key precedent, other influential policy sachems stepped forward to allow that mistakes had been made in the mad rush to remove the guardrails from the American economy. From former treasury secretary Lawrence Summers to former Citigroup CEO Sandy Weill, Very Serious People confessed some very serious sins.

This chorus of public apology was also striking because nothing close to it ever took hold in the ever-bullish realm of tech-driven social forecasting. Exhibit A would be urban-economics guru Richard Florida—the nimble city-planning professor who leapt to the top of the bestseller list and into the sanctums of the Aspen Institute power elite with the publication, in 2002, of his reputation-making work, The Rise of the Creative Class. With his cheerleading for gentrification and his paeans to the tech plutocrats, there were plenty of reasons to resist his particular flavor of artisanal, farm-to-table Kool-Aid even back then. Yet it is not until now, a decade and a half later, that Florida has finally embarked on his own belated apology tour.

Gentrifiers of the World, Unite!

The Rise of the Creative Class was a straight-faced celebration of high-tech gentrification as a free-standing engine of economic development. With enough charts and graphs to satisfy the think-tank gatekeepers and a readable enough prose style to decorate a corner-office bookshelf, Florida rose from obscure academic to high-priced consultant and convention speaker. If innovation-minded leaders of the nation’s slumping metropolitan economies would just chase college-educated workers by tolerating gays and liberals and upping their indie rock scenes and food-truck menu prices, even Scranton could become the next Austin. In short order, traditionally liberal political organs like The Washington Monthly and The Atlantic—the latter still employs Florida as the editor of a well-funded, multi-partnered “vertical” devoted to urban policy—hailed the daft postcards from nerdistan collated in The Rise of the Creative Class as a blueprint for a business-friendly Democratic policy portfolio. With fellowships at ur-mainstream outlets like the Brookings Institution, Florida could convince himself and the world that he was a Very Serious Person, albeit one with an aversion to neckties—never mind that he was acending via the tried-and-true apparatchik method of flattering the donors and comforting the comfortable. No, no: Florida was a vanguardist—an honest-to-god futurist, heralding a fairer, smarter, more prosperous America, and his hip, chunky glasses proved it.

As usual, Richard Florida is late to the party. The caste-society nightmare is already upon us.

Those paying closer attention to Florida’s background and career would have had to greet his rise to edgy social-forecasting glory with bitter, disbelieving guffaws. Florida, who finished his graduate studies at Columbia University, had launched his academic career in the 1980s editing a five-hundred-page work of policy prophecy entitled—yes—Housing and the New Financial Markets. In it, Florida explained how “residential finance [had] been transformed from a relatively sheltered to a completely deregulated system [that] sell[s] adjustable-rate mortgages, like securities, on the secondary mortgage market.” The young scholar breezily noted that “mortgage-lending [had] changed from its emphasis on long-term commitments to a process in which mortgages function similarly to short-term investments.” While Florida flagged “a host of questions [that] have been raised” by deregulation, all of his queries were technical ones concerning how the new system worked. Like most New Economy boosters, he sped right by the $64-trillion question of whether the removal of Depression-era safeguards on the fabrication of speculative new financial instruments might lead to a Depression-style crash.

The figures Florida recruited for this bold new prospectus offered similar wide-eyed tributes to the glories of the deregulated financial system. “I believe that with the savings and loan industry’s receipt of new powers from Congress, it will eventually prosper,” one collaborator, Thomas P. Vartanian, a Reagan administration housing official turned corporate lawyer, suggested. Soon after publication, the massive implosion known as the S&L Crisis took hold, triggering an almost ten-year federal cleanup that cost more than $152 billion and featuring the all-too-late revelation that the industry had used congressional campaign contributions to avoid regulatory scrutiny. In another chapter, “Mortgage-Backed Securities: The Revolution in Real Estate Finance,” Charles M. Sivesind, a very serious economist at the New York Fed, assured credulous readers that “mortgage-backed securities help moderate the traditional ‘boom and bust’ cycles.” Revisiting the confident preachings of Florida and his free-market choir after the Great Recession of 2008, it’s hard to know whether to laugh or cry at (to take just one particularly egregious example) the sight of a chapter entitled, “The Adjustable Mortgage Loan: Benefits to the Consumer and to the Housing Industry.”

Let Them Drive Beemers

When The Rise of the Creative Class stormed into the center of liberal policy debate, it was largely the old deregulatory gospel repackaged in the shiny new wineskin of lifestyle liberalism. In one fell swoop, Florida repurposed his core message from the celebration of the housing market’s complete financialization to apologetics for the growing inequalities of the New Economy more generally. In post–New Deal America, Florida assured us, we could all keep up with the Gateses by pulling ourselves up by our bootstraps.

True, the repeal of the corporate social contract and the governmental safety net may mean that “there is no corporation or other large institution that will take care of us . . . we are truly on our own.” But this was no grounds for despair—at least not for the truly innovative souls who live, work, and play in the trendiest of knowledge-inebriated American cities. Simply by harnessing our own creativity, we can all stay afloat—and indeed prosper in dramatic fashion—no matter how humble our nominal social position might be. “The person who cuts my hair is a very creative stylist, much in demand, and drives a new BMW,” Florida enthused in one of his classic Panglossian proofs-by-anecdote. “The woman who cleans my house,” he continued, “is a gem: I trust her not only to clean but to rearrange and suggest ideas for redecorating; she takes on these things in an entrepreneurial manner. Her husband drives a Porsche.” With the assurance that gentrification and plutocracy were in the best interests of even the least among us, Florida leapt from bush-league libertarian training camps like the American Enterprise Institute and George Mason University to the vital center. He now teaches at the University of Toronto and NYU as a professor at both institutions.

But as Greenspan and company ultimately learned, when you have a flawed ideology, eventually the facts catch up with you. No matter how many Beemer-driving barbers may cross your path, the hard numbers of the past few decades utterly contradicted Florida’s forecasts in nearly every particular. In our winner-take-all society, just about everyone, by definition, ends up a loser. Post-crash, especially, the results of the upward redistribution of wealth were evident everywhere. The return to Roaring Twenties levels of wealth inequality was thoroughly documented in academic journal articles, in seven-hundred-page books by Thomas Piketty, and even in charts and graphs published by right-leaning outlets like The Economist. But it was most acutely felt on the streets of America’s leading cities, Richard Florida’s area of feverishly professed expertise.

After he’d spent his early career touting the creative prowess of global megacities like New York and Los Angeles and his cherished roster of smaller tech hubs, where the working-class row houses of yesteryear now go for a million dollars a pop, even Richard Florida realized something had gone awry. Middle-income neighborhoods were disappearing; cities and regions were resegregating along lines of race and class; and social goods such as higher education, once broadly accessible, were becoming de facto totems of hereditary privilege. Belatedly facing up to the savage inequalities that had overtaken the nation in the long wake of the Reagan Revolution, Florida went into what he calls “a period of rethinking and introspection, of personal and intellectual transformation.” His latest book, The New Urban Crisis, is the result.

Mea Sorta Culpa

So it is a chastened Florida who now steps forward to acknowledge that “the middle class has been eviscerated . . . the poor and disadvantaged truly are falling further and further behind . . . [and] even the affluent . . . don’t feel as prosperous as they did in the past, because they live in expensive cities where securing their own, and their children’s, futures is growing more costly and increasingly difficult.” (One presumes that this means the BMWs and Porsches of the lavishly compensated service class of the early aughts have long since been repossessed.)

Moreover, Florida glumly admits that only a small handful of cities, “maybe a couple of dozen [are] really making it in the knowledge economy; many more [are] failing to keep pace or falling further behind.” Scranton is not becoming Austin—and Austin is not keeping itself weird. Life in America has become a game with few winners beyond the D.C. revolving-door spinners, the derivative hustlers on Wall Street, and the lucky bearers of timely vesting stock options in Silicon Valley. For Americans stuck in more typical cities, opportunities are scarce. And even for those in the places that are “making it”—de facto gated communities that now typically require well-heeled parents to co-sign inflated leases for their newly graduated progeny—life is more precarious. When a 2013 poll asked New Yorkers if the city had become “too expensive for people like you to live in,” fully 85 percent said yes.

Yet the curious thing about this unrelieved portrait of urban despair and displacement is that this new reality all seems to have unfolded without any of Richard Florida’s help. Even faint suggestions to the contrary promptly get the big thinker’s dander up. To those “mainly on the left [who] blamed . . . me personally for everything from rising rents and gentrification to the growing gap between the rich and the poor” he concedes only that “this criticism provoked my thinking in ways I could never have anticipated, causing me to reframe my ideas.” It appears Florida genuinely sees himself as a fly-on-the-wall social scientist, not a debate-altering propagandist. And he seems genuinely puzzled that anyone would take him to task for failing to notice economic problems that began in the Reagan era and unspooled over the course of three-plus decades.

The man who rose to prominence as a libertarian foot soldier making the world safe for plutocracy now endorses a guaranteed basic income.

In The New Urban Crisis, Florida finds himself gobsmacked to read in a 2016 Pew study that “from 1970 to 2012, the share of American families living in middle-class neighborhoods declined from 65 to 40 percent, while the share living in either poor or affluent neighborhoods grew substantially.” Yet more than a decade ago, a nearly identical study from the Brookings Institution (where Florida was, at that time, a senior fellow) found that the proportion of metro area neighborhoods that were middle-class had declined from 58 percent in 1970 to 41 percent in 2000. Similarly, Florida now reports with alarm that levels of economic inequality in major American metropolitan areas match those of developing-world countries. The New York metro area, he informs us, is on par with Swaziland; Greater Miami matches Zimbabwe; San Francisco is El Salvador; Chicago is Bolivia; and Boston is Rwanda. But this trend, too, predates his mea culpa by decades. The 2000 Census, for example, showed Manhattan suffering the same level of economic inequality as Namibia, the most unequal country in the world. This fact was reported by such obscure publications as the New York Times, which introduced its coverage with this observation: “Trump Tower on Fifth Avenue is only about 60 blocks from the Wagner Houses in East Harlem, but they might as well be light years apart.” As that prescient sentence makes clear, you don’t need a Census taker to know which way the demographic wind blows.

To sense that American cities were becoming more unequal only took a pair of walking shoes and eyes unshielded by rose-tinted hipster glasses. You’d think Richard Florida, who grew up in an economically integrated New Jersey suburb in the 1960s, would have been able to see this happening in real time and maybe even sound the alarm. By the time The Rise of the Creative Class came out, the idea of a town where his father, a factory worker with a seventh-grade education, and his uncle, a Colgate-Palmolive executive with a master’s degree, could be neighbors already sounded like something out of a sci-fi novel or (more fantastically still) a Scandinavian welfare state.

As for the Cassandras who had been inveighing against the follies of deregulation and financialization for decades, even now, Florida refuses to credit them. It is as if these problems didn’t exist until the moment Florida discovered them. But the lineage of unheeded oracles goes all the way back to Jane Jacobs—perversely enough, the figure Richard Florida has long claimed as his mentor. A public intellectual who deserved her plaudits, Jane Jacobs foresaw the dangers of gentrification in their earliest stirrings. As the seminal sidewalk critic warned in The Death and Life of Great American Cities in 1961[!]:

So many people want to live in [a] locality that it becomes profitable to build, in excessive and devastating quantity, for those who can pay the most. These are usually childless people. . . . Accommodations for this narrow, profitable segment of the population multiply, at the expense of other[s]. Families are crowded out, variety of scene is crowded out, enterprises unable to support their share of the new construction costs are crowded out. This process is now occurring, very rapidly, in much of Greenwich Village.

For all of Florida’s resistance to relitigating his own checkered past, his proposals going forward do bespeak a stunning transformation. The man who rose to prominence as a libertarian foot soldier making the world safe for plutocracy now endorses a minimum wage pegged to 50 percent of the median wage and backs a guaranteed basic income to be distributed through a negative income tax. He even praises Scandinavian socialism, hailing it in glowing terms as “the high-road path of the Nordic countries, where income inequality is low.” But the elite he long flattered will have little use for these egalitarian solutions. One can imagine the reaction all of this would get should Richard Florida pitch it to the crowd at the next Aspen Ideas Festival, let alone the Trump White House.

Never Miss an Opportunity to Miss an Opportunity

A funny thing happened on the way to reviewing The New Urban Crisis. A few months after receiving a review copy from the publisher, I was emailed a new version of the same book. In the old New Urban Crisis, Donald Trump was just “a deeply flawed candidate [who] mobilized ranks of anxious voters . . . who have lost their jobs, their income, and their status and are lashing out against groups they believe are getting ahead or threatening them.” In the new New Urban Crisis, Donald Trump was the president of the United States. Yet again, Richard Florida only realized the danger after it was too late.

Of course, Florida has plenty of company in the ranks of shame-faced pundits who underestimated Trump. But for Florida, the oversight is less excusable. After all, he had just completed a book on the very geographic inequalities and economic frustrations that powered Trump’s campaign. And, as a professor in New York City and Toronto, he’d long had a front-row seat to the rise of the new populism, both left and right. Even his original text had devoted copious ink to how rising inequality had spawned the Jekyll-and-Hyde populist mayors, Bill de Blasio and Rob Ford. From the left, de Blasio had dispatched billionaire mayor Mike Bloomberg’s handpicked successor—the openly gay, neoliberal City Council speaker Christine Quinn—by arguing that life in New York had become a “tale of two cities” and vowing to represent those left out of Manhattan’s plutocratic prosperity. De Blasio’s victory was, in Florida’s words, “a shock [to] pundits and political prognosticators in the city and just about everywhere else.”

To sense that American cities were becoming more unequal only took a pair of walking shoes and eyes unshielded by rose-tinted hipster glasses.

In a more farcical version of populist upheaval north of the border, the tough-talking, crack-smoking Rob Ford took city hall by railing against Toronto’s downtown elites on behalf of his conservative working-class constituents in the outlying neighborhoods. Florida was similarly dumbfounded: “somehow, this progressive, diverse city . . . chose Rob Ford.” The original version of The New Urban Crisis even flagged the surprise outcome of the Brexit vote, a hinterland revolt against London’s cosmopolitans and oligarchs, as part of the same phenomenon. But despite observing all of these premonitory tremors along our deepening socioeconomic fault lines, Florida was blindsided by Trump. Holding the two versions of The New Urban Crisis side by side provides a rare and instructive real-time vision of a pundit pulling his head out of the sand just moments past the point when his disinterment could be of any plausible use.

With Trump now ensconced in the White House, Florida’s revised blueprint for post-meltdown urban revival is a study in futility. Florida notes with predictably startled tardiness that America’s Gini coefficient—the economic profession’s metric for inequality—is worse than Russia’s and Nicaragua’s. But the real question is not why America now has Russian-style monopolist oligarchs and a Latin American–style rally-addicted caudillo as our supreme leader, but why it took so long.

For the next four years, the 2016 election has made a pipe dream of Florida’s Scandinavian-inspired prescriptions for tackling inequality—and he knows it. “Nothing remotely like what I envisioned and hoped for is likely to happen now with Trump in office and the Republicans in control of both houses of Congress,” Florida confesses in the new version. The idea of Florida getting a meeting with Dr. Ben Carson, the conspiracy-minded brain surgeon now charged with ordering America’s urban affairs, let alone pitching him on, say, a guaranteed basic income is unthinkable. “I can’t tell you how depressing it’s been for me to contemplate a future . . . where the causes of concentrated poverty remain unaddressed, and where our socioeconomic classes harden into castes,” Florida writes.

But, as usual, Florida is late to the party. The caste-society nightmare is already upon us. In explaining his maps of growing racial and economic inequality in America’s major metropolitan areas, Florida credits Robert Ezra Park, the early twentieth-century sociologist who pioneered this form of data visualization. Florida prefaces his brief biography of the thinker by noting, “Park’s odyssey is so remarkable that it seems the stuff of fiction.” As Florida recounts, Park was born in a coal-mining town in Pennsylvania. He worked on the railroads before attending public universities in Minnesota and Michigan, where his professors discovered that he was unusually bright. Park got into Harvard for graduate school and studied abroad in Germany, at the University of Heidelberg. He went on to teach at Booker T. Washington’s Tuskegee Institute and eventually landed at the University of Chicago. No doubt, Park was a spectacularly talented and influential social scientist—how many academics write papers that are still routinely assigned to students a hundred years after they were first published?—but his rise from the working class to the ivory tower was not, in his day, all that shocking. Back then, they had a name for it. They called it the American Dream. By the 1960s and ’70s, it was being democratized to include Americans who did not share Park’s privileged race or gender. But to our ears, his quintessential American tale now sounds like fiction—in part because Park’s meritocratic rise so manifestly relied on the egalitarian public institutions that Richard Florida so blithely dismissed until just last week.

We tend, in retrospect, to stereotype the heyday of American social mobility as an era of gray-flannel-suit conformity. But it was a time when a creative kid like Robert Ezra Park could rise from obscurity to prominence on the strength of his own talent. Maybe someone should write a book about that era and its demise. They could call it, oh, I don’t know, The Fall of the Creative Class.

Daniel Brook’s latest book is A History of Future Cities.

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