Sunday, July 27, 2014

Hiatus

Think I will give you all a break.  Its been about 250 essays since Mugs and I have been on the road.  See you in a month.Mugs Riding Shotgun Cross Country February 2011

Unsticking Poverty

Preceded by textiles during WWII, tobacco manufacturing in Durham, North Carolina peaked in 1958, twenty years before manufacturing jobs peaked nationwide.

By the time I arrived here in 1989, all but one factory was gone and that closed a decade later.

The poverty rate nationwide back when Durham’s manufacturing peaked was close to 23%.  But it was 40% in North Carolina at the time and 33% in Durham.

Research shows that communities lose 1.6 other jobs when they lose a manufacturing job.

Poverty in Durham officially took root in the mid 1930s with the closing of the Durham Hosiery Mill nestled within the Edgemont neighborhood.

Soon surrounding businesses also collapsed and unemployed workers were evicted or indebted by speculators who took over the mill housing.

Only two decades before, that hosiery mill had been the largest in the world.  Sociologists here at Duke University, led by activist Dr. Howard Jensen, not only rushed to study the emerging poverty there but initiated a number of solutions still in use today.

Among many of the initiatives, Jensen initiated the precursor to United Way, spearheaded a community center and did much more.

Thanks to strategic foresight nearly four decades earlier,  Durham had already begun adapting its overall economy to research, higher education, healthcare and hi-tech, but these were very different kinds of jobs.

Following the Civil War, people could easily transfer skills from agriculture to working in Durham’s factories with little or no change in education.

In 1860, on the eve of the Civil War, the area surrounding Durham was 30% African-American, a mix of free and enslaved.

That proportion grew to what is today, 4-in-10, when after emancipation and war’s end, African-Americans relocated to Durham to work in its booming tobacco and textile factories, giving it 50% more diversity than the state as a whole.

Today, that proportion is double what it is statewide, one of the reasons Durham is known for being “accepting,” and why it is still a beacon for new talent and the corporations relocating in pursuit.

Many African-Americans drawn to Durham also started service businesses by the 1880s that accompanied each increase in manufacturing, eventually spawning Black Wall Street and a thriving African-American middle class here.

While manufacturing had drawn African-Americans to Durham for jobs after the Civil War, the poor created by that benchmark mill closing in the mid-1930s were predominantly white.

Dr. John Rodman Larkin is remarkable for many reasons.

One is the valuable study he conducted in his native North Carolina based on data collected just four years after that mill closing in Durham entitled, “The Negro Population of North Carolina: Social and Economic.”

Larkin was African-American himself, and in the study he concludes something researchers at Harvard and UC-Berkley recent also concluded in another study published this summer entitled, “Where Is the Land of Opportunity? – The Geography of Intergenerational Mobility in the United States.”

Poverty, especially among African-Americans, settled into specific pockets in communities because unlike other groups they were less likely to relocate or have the means to do so.

Larkin’s observation in North Carolina was that in the wake of that first mill closing here.

These new researchers agree and also find a link to income equality and segregation of the poor.

Anecdotally, Joe Queenan, a conservative commentator and critic who is Caucasian and grew up very poor in Philadelphia projects, agrees.

In a Rotary Magazine article entitled, “The Inconvenient Truths About Poverty,” he cautions the “industriously empathetic” and “professionally compassionate” people such as myself and many others in Durham.

He writes that poverty in pockets where it is especially stubborn can become rooted in an “interlocking series of self-fulfilling prophecies,” where from generation to generation and neighbor to neighbor “the poor become architects of their own destruction.”

He would point, I’m sure, to the fact that more than half of the poor residents of Durham come from families where no one worked and all but 2% of those who did, only worked part-time.

Forever waiting for a “call back” to mill work can filter down for generations.

But Queenan also cautions, that this should never be interpreted that poverty is a “lifestyle choice” and gives a hint as to why poor people walked out of a session where a Durham task force was delving into poverty.

“People who have grown up poor always feel a proprietary attitude toward poor people in general, even when they themselves have migrated to a more congenial economic class.” (paragraph break mine)

“They don’t like to hear well-born outsiders presume to discuss the unexplored charms of slumming. It’s like listening to people who have never left Nebraska rhapsodize about the thrill of sailing the high seas.”

Since its high of 30% in 1960, Durham’s poverty rate dropped by nearly two-thirds to barely above the state average (actually below when weighted for ethnicity,) only to bounce back up during the Great Recession again to around 19%.

Weighted for differences in ethnic diversity, it really isn’t any higher than other urban areas in the state, including those nearby, but it is still vexing to Durham, long identified as an extremely “caring” community.

Several times in the 26 years I’ve lived here some of the very smartest people I’ve ever known have wrestled with the problem, including many globally recognized experts at Duke who have followed in Dr. Jensen’s footsteps.

Even after opponents in high office perpetually tried to starve it of funding, the War On Poverty worked wonders through the ‘60s and ‘70s and intermittently during the ‘80s and ‘90s after being gutted.

But it was never enough, nor was it meant to be a panacea.  Education is a piece because mobility is higher and unemployment lower among college and high school graduates than it is for dropouts.

This is why in his new book entitled The New Geography of Jobs, economic researcher Dr. Enrico Moretti suggests a “relocation voucher” as a means to reduce unemployment.”

The idea was also included a year ago last spring in economist Dr. Michael Strain’s report entitled, “A New Jobs Agenda” in his report for the American Enterprise Institute, a conservative think tank. I think it was one of his better ideas.

The voucher is now part of the bi-partisan American Worker Mobility Act.

Dating from the late ‘60s, researchers suggested the value of mixing the unfortunate in with better off neighborhoods, but Moretti and other believe this is now more a matter of relocation to communities better matched for skill levels.

He suggests the “relocation voucher” as part of the unemployment insurance safety net that was devised back in the 1930s around the time Durham’s poverty took root.

It could be coupled with the federal government’s shift of job training and re-training from just the classroom to apprenticeships and on-the-job training.

It isn’t clear to me if the vouchers will motivate people who are poor to move.  Nearly 40% of Americans overall have never left their hometowns.  But even if some won’t, the fact that others do, experts think will open up more jobs for those who stay.

Durham would be hard to leave.  More than 70% of native-born North Carolinians still live here, making it the second most “sticky” city in the nation according to Gallup.

However, those working hard to reduce Durham poverty might do well to consider these options rather than hoping to somehow restore the magic of days gone by.  Poverty is complex and there is no “silver bullet.”

While we’re at it, we need to look at what the impact will be of Durham’s next economic adaptation and begin preparing residents well before its arrival.

Friday, July 25, 2014

Durham Could Become Detroit If It Doesn’t Adapt

There is much for Durham, North Carolina, where I live, to celebrate in The New Geography of Jobs.

While the author often jumps from metro areas to multi-metro consolidated statistical areas in search of data without distinguishing, it is clear Berkley economics researcher Dr. Enrico Moretti finds Durham one of a handful of centers of innovation.

But the book is more than that.  It is an excellent primer to remind policy makers what is and isn’t economic development and why.  It also pinpoints how some cities avoid decline while others don’t.

They continually and strategically economically adapt.

Detroit was once like Durham is today, a center for research, technology and innovation but it became complacent and peaked in 1950.  Instead of patting themselves on the back, Durham leaders should be running scared.

The community is where it is today because it has economically adapted at least four different times during its history, five or six if you count transitions by Native Americans here.  That this is an almost temporal part of its personality is no guarantee.

Most communities. such as nearby Raleigh, another emerging innovation center, have been lucky to do it once.

When one examines Durham’s economic transitions, they were both gradual and farsighted but each took root long before its then-current economy peaked.

Durham’s status as a center of innovation today is rooted in a time more than a hundred years ago when it was a bustling center for tobacco and textile manufacturing, fifty years before they would dissipate and nearly ninety years before they would disappear.

Architects for new developments around the historic American Tobacco Complex elected to ignore truly historic elements dating back more than a century and emulate instead a building erected in the 1950s.

Those erected by the City ignored even that, defying its own design guidelines.

American Tobacco’s founders, though, began re-thinking Durham’s economic future a little more than 20 years after the final addition to the Old Bull Building was completed in the 1880s (now a National Landmark, it dates to 1874.)

This strategic foresight began to evolve just before the far more distinctive Neo-Romanesque portion was erected in 1900, also reflected in several other thriving historic districts such as Brightleaf.

These historic buildings and more than a million square feet of others of that vintage or earlier are filled with innovation workers today.  But the foundations of that transition were laid in 1892 when Durham’s tobacco and textile generation facilitated the relocation of Trinity College here.

The school was transitioning to the German university model with an emphasis on research over recitation.  This was less than two decades after Durham’s adaptation from agriculture to manufacturing.  Within a decade, seeds for the next adaptation were already being sown.

In 1907, Republican President Theodore Roosevelt moved to break up the massive Duke trust, one of two forged by Durham natives, one tobacco and the other fertilizer created from tobacco byproducts.

Its fall from grace began because of its complete monopoly of licorice, a flavoring used in tobacco.

Two years earlier his father, Washington Duke, had died just as J.B. Duke was founding The Southern Power Company, an entrepreneurial endeavor to help North Carolina adapt economically.  It’s now known as Duke Energy.

He would fight the breakup of his tobacco trust all the way to the Supreme Court four years later, but I think he had already seen the “writing on the wall” based on breakups of similar trusts.

In spite of their differences with Roosevelt, both father and son were also ardent Republicans, subscribing during its last few years to a wing committed to the downtrodden.

After breaking up his trust on behalf of the government, J.B. Duke walked away from tobacco for good just as the Republican and Democratic parties traded places on the issue of social justice during the election of 1912.

Roosevelt didn’t break up the Republican Party.  In fact he won every presidential primary but one that year.

But the party’s Wall Street wing used backroom tactics to block his nomination anyway, leaving the social justice wing no choice but to follow Teddy to a third party and to finally convert to Democrats.

The Party of Lincoln had become one that would have shunned its first President, just as today’s version would probably shun President Reagan.

J.B. Duke spent his last decade setting up another kind of trust, this one to create and endow Duke University from its Trinity foundations with one of the foremost goals of establishing a research-driven nationally recognized medical school.

By the end of WWII, Durham and Duke leaders were at the forefront of pushing a proposal by a UNC-Chapel Hill professor to forge a university park out of southeast Durham pinelands.

It would be solely dedicated to research and development. It’s known today as Research Triangle Park, “triangle” emblematic of the first three of now four universities involved, half of them also based in Durham.

The Park’s tenants are corporations, but employees have always spun off to launch another economic transformation, this time smaller innovation concerns.

By 1987 when time American Tobacco abandoned its plant in Durham for good two years before I would arrive to jumpstart the community’s first destination marketing agency, innovators were already beginning to gravitate to downtown to live and work alongside artists in converted lofts.

Even the city center district of Downtown Durham was receiving positive reviews for sense of place and authenticity long before it began trying to earn them.

Moretti cites research in his book for why innovators like to congregate in Durham besides the fact they like authenticity in their surroundings.  “Geography matters for the spread of knowledge, and knowledge quickly dies with distance.”

He cites research that the transference and synergy important for innovative ideas falls off dramatically between zero and 25 miles.  In fact Harvard researchers have correlated it to being less than a kilometer away or just over a half mile.

RTP is four miles from downtown Durham and Duke ranges from being adjacent to two miles from downtown.

Similarly, he notes that it is equally important to venture capitalists to be in very close proximity to their investments.

Clearly Raleigh developers and realtors who beginning in 1960 hoodwinked so many newcomers into commuting to Durham by disguising the location of RTP, undermined more than the housing market and philanthropy here.

In his book, Dr. Moretti also explains another reason innovation centers are very geographically compact.  Innovation concerns not only locate in clusters for the exchange of ideas, but like Facebook has recently admitted, they also buy other concerns and close them down.

This isn’t to eliminate competition but because the true objective of the transactions was to secure more talent.

Durham leaders, especially those responsible for economic development would do well if they haven’t really read and re-read The New Geography of Jobs, not to reinforce self-perceptions of exceptionalism but to see and understand broader influences.

For example, it may take decades before we know whether downtown revitalized because of shifts in macro-psychographics nationwide including whether it would have happened even without massive subsidies.

But far more important is that Durham learn from its adaptive past and also the past of great cities now in decline.

Other than accredited community destination marketing organizations, economic developers are not known for strategic thinking, especially on the supply-side.  Often this is because governing boards and stakeholders limit them to just “shoveling more coal on the fire.”

But for continuing and never-ending economic adaptation to perpetuate, strategic thinking is imperative, especially among elected officials.

It isn’t enough to celebrate today’s accolades, really a credit to preceding generations of Durham leaders.  But we can learn from their example and be inspired by their witness.

Judging by how far ahead past economic transformations took root in Durham, today’s leaders need to be focus on 2050 and beyond or risk Durham becoming another Detroit one day.

Thursday, July 24, 2014

Leaving Something of Ourselves Behind

A friend of mine who teaches strategic thinking and consults for organizations from time to time estimates that 2% to 3% seem to come by this skill naturally.

It was probably embedded beginning at age 3 in the way their parents and grandparents schooled them in pre-school foundational skills.

The professor estimates the percentage rises to 10% at college graduation and then levels off.  He finds it curious that so many  that pick it up naturally studied history in college, not business.

I’m not surprised, really.

Interest in history is piqued during those very early years, and when studied,becomes a way to make connections and see patterns in the world.  It’s about looking back to see forward, all foundations of strategic insight.

Maybe a required course in historical analysis should be required in business schools.

Driving  home from giving a lecture in the mountains earlier this week,  a passage penned by Dr. Peter Bieri for a “philosophical thriller (smile)” and published under the name name Pascal Mercier kept running through my mind:

We leave something of ourselves behind when we leave a place, we stay there, even though we go away.

And there are things in us that we can find again only by going back there (Night Train to Lisbon.)”

When my paternal great-grandparents and grandparents homesteaded the ancestral ranch the shadow of the Tetons, where I was born and lived until the age of accountability, only one had Idaho roots dating to when it became a territory during the Civil War.

At the time, only 20% of Americans lived outside of the state in which they were born.  Today, it is 33%, half of college graduates by the time they are thirty but only 17% of high school dropouts according to the research in the book The New Geography of Jobs by UC-Berkley economist Dr. Enrico Moretti.

The book is an excellent primer on economic development.

When my paternal great-grandparents and grandparents homesteaded ancestral ranch more than a hundred years ago in the shadow of the Tetons where I was born and lived through the age of accountability, it was so the younger generation could afford land of their own

Only one had Idaho roots dating to when Idaho became a territory during the Civil War but all of them had been born in the Rocky Mountains.

Idaho, at the time, had fewer than 2 persons per square mile, “the census classification for frontier.”  At the time, only 20% of Americans lived outside the state where they were born.

Today, it is only 33% including half of college graduates by the time they are thirty but only 17% of high school dropouts according to the research in the book The New Geography of Jobs by UC-Berkley economist Dr. Enrico Moretti.

Homesteading land made available by the federal government back then worked much as a “relocation credit” Moretti proposes for today.

Homesteaders in the first two decades of Idaho statehood anticipated the routes of soon-to-be-laid railroads which those companies, such as the Oregon Short Line, actively promoted through intensive marketing.

Founded by Union Pacific, “short line” stood for the shortest route between Wyoming and Oregon but by 1889 that railroad was laying tracks north to Ashton four miles from our ranch, then by 1908 up 57 miles over the Rea’s Pass across the Continental Divide to the western gateway to Yellowstone Park.

By 1912, a spur had also been laid from Ashton southeast to Victor where connections were made over the Tetons and up the Jackson Hole to the southern entrance to Yellowstone and the much anticipated creation of Grand Teton National Park.

In 1954, my entire elementary school took a field trip along that spur behind a steam engine a few years before the demise of the Yellowstone Special and the Yellowstone Express passenger trains, one from Chicago and one from Los Angeles.

It was the end of an era but the old rail lines are now being leveraged into another kind of economic development.

Abandoned rail lines are now trails throughout Idaho including the two routes out of Ashton, a thirty mile rail-to-trail along the length of the Tetons and the 34 mile Yellowstone Branch Line Trail through the canyons of the Henry’s Fork from Warm River to the Divide.

In 1896, when Butch Cassidy and his Hole in the Wall Gang robbed a bank in Montpelier, Idaho near where my maternal grandparents would live during my early years, my paternal ancestors were still living just across the Bear River Range.

Soon they headed north to homestead against the Tetons when Idaho barely had 160,000 residents, after the National Forests were first established but before Targhee National Forest was created up behind the ranch in 1908.

But in 1906, Congress responded to powerful special interests by gutting some of the national forests and reopening some of the less forested land to homesteading through the Forest Homesteading Act.

Public use back then did not include recreation and although only 1.8 million acres were eventually patented for homesteads, the act effectively pried 12 million acres away for developers.

In all, by WWII, only 19% of public land had actually been leveraged into  homestead ranches and farms.

When the first of six transcontinental railroads began to tunnel through the Bitterroot Mountains of Northern Idaho, there were less than a thousand non-native people living there.  By 1900, there were more than 10,000 living in each of the two counties through which I’ll soon pass.

Many had moved there because of inexpensive public land given to the railroads and then sold to settlers before construction crews even began grading.  By 1900, these land sales reached 105,000 acrese a year.

That’s the year the lumbering industry arrived after depleting stands in the upper Midwest.  Before 1891, the land from near Spokane, across to Montana and north to Lake Pend Oreille belonged to the Coeur d’Alene Indians, about 500,000 acres left of their ancestral lands by treaty.

Responding to special interests, all but 70,000 acres was pried away.  Even given the Forest Homesteading Act, settlers were soon overrun by lumber “robber barons,” some through legal means, but much of it through fraud.

As I drive down from Lookout Pass and across northern Idaho again, three things will be on my mind.

First is that one day, we need to build in time to detour down the St. Joe River Scenic Byway along a series of Forest Service roads, hopefully astride my Harley Cross Bones.  For now, having Mugs along and my grandson’s eagerness to get to the lake take precedent.

Second is how ironic it is that the route of the Milwaukee Road’s old Hiawatha passenger train is now a 15-mile trail in Idaho alone from Lookout Ski Areas to Pearson for trail bikes and hikers, alternative forms of National Forest economic development.

Another rails-to-trails adaptation is rated one of the 25 best in the nation, a 72 mile asphalt Trail of the Coeur d'Alenes greeneway from the Tribe’s reservation at Plummer, along its namesake lake and up to the early 1850s Cataldo Mission before ending in Mullan.

One of the most spectacular views during my hiking days was heading up the St. Jo River north of St. Maries to its headwaters, a must for fans of the book The Big Burn.

One or the Forest Service heroes of the firestorm, 25-year-old Joe Halm, took his crew to safety there.  Little did I know as we hiked that stretch, that a few years earlier, a group of University of Montana students had climbed up the other side.

Well into a second century of controversy over Northern Idaho logging on public lands, they have been advocating for over 40 years for the roadless area to be set aside as a 275,000 acre wilderness area straddling each side of the Bitterroots.

Third, is what will soon be two Tribal Casinos on the plains above Spokane, near the original Longhorn (southern pit-style) Barbeque restaurant, one a leisure and convention resort opened by Idaho’s Kalispel Tribe and nearly through the approval process by the Spokane Tribe, just desserts I suppose.

To paraphrase Pascal Mercier,There are things in us that we can find again only by going back to the places were we have left parts of ourselves behind.”

Thanks for keeping me company.

Wednesday, July 23, 2014

"Is This ‘The End Boom, Boom, Boom’? - Part 2 of 2

I wrote yesterday about lessons learned and a situation I faced running the destination marketing organization for Anchorage, Alaska.  This, as Paul Harvey would say, is “the rest of the story.”

They went to the press with a story, just not the real story.

Unfortunately, those attempting the coup chose a straw issue that was very easy to refute, but it was clear the conspirators all had one thing in common, reliance on and allegiance to tourism originating out of Seattle and heavily invested in Southeast Alaska.

This calculation relied on gridlocking a generations-long web of economic and personal relationships.  It also played to a deep insecurity, particularly in small towns in Southeast Alaska that Anchorage, with half the state’s population, wanted it all.

The board to which I answered unanimously held fast.  The complainants followed through and publicly dropped their membership, but they miscalculated the reaction.

News editorials saw through it as did our Anchorage membership along with nearly every elected official including those in high office.

While from opposing political parties and ideologies, both the mayor and the long-time former mayor who was an officer on our board at the time especially understood.

Even several CEOs of Seattle interests saw through the vendetta and backed away. Meanwhile, many of us worked tirelessly behind the scenes to help those involved save face, but to no avail.

Within a few months or so, those involved in the coup were being transferred or had faded behind the scenes. However, Alaska tourism relationships, stretched thin, would never quite be the same again.345882026_03d978c5ba_b

Nor would Alaska tourism.

I pressed on for another year after that, going on my ninth there and one of our most productive given the distraction.

But I also knew from experience that once again I had been unavoidably “splattered with blood.”

Completing startups is incredibly stressful, especially those that shift paradigms.  Not yet 40, I had already spent two-thirds of my adult life forging intense change.

I felt exhausted, teetering on burn out, but more than that I suddenly felt a flood of repressed anger.  Even after venting to friends, anger “colonizes the emotional life” and clouds one’s judgment.

As Dr. Robert Karen would pen a dozen years later in a small but powerful book entitled, The Forgiving Self, unresolved anger:

“…is like a cancer, sapping our vitality, aggravating our feelings of shame, weighing us down with depression, and secreting a steady stream of bitterness throughout our being.”

I needed a pause for reflection and rejuvenation.  I realize now I also needed to find a way to forgive and hope to be forgiven, especially forgiving myself.

The DMO board and Anchorage community were extremely disappointed when I told them I was moving on - first to help the mayor jumpstart the foundation of and a governing board for a traditional supply-side economic development corporation, then - to take a hiatus from DMO work.

At a farewell dinner thrown by several hundred community leaders, I encouraged them to think only of what we had achieved together by being strategic and data-driven.

I thanked them for forgiving me my mistakes and asked them to forgive others, but it would be another 16 months before I would truly forgive, especially myself.

For two decades after I left, Alaskans would write or call to check in.  A long-time newspaper editor there would regularly post updates on my whereabouts. It’s that kind of place.

A little over a year after I left Alaska and was fully rejuvenated, I landed in Durham, North Carolina to participate in my fifth DMO or economic development start up if you count the one I did in college at BYU.

This time, the challenge included reclaiming Durham’s story, assets and identity from Raleigh, a separate but then over-reaching metro on the other side of the co-owned airport.

Having by then just turned age 40, I knew full well what the drill would be.

That certainly didn’t make it any less intense.  Within a few years, Raleigh interests were repeatedly calling for me to be fired and openly lobbying for Durham’s DMO to be disbanded, often strapping a sycophant to the front bumper.

It only fueled resilience and hardened support, but I had also learned to look past such threats to try and see opposing points of view while still coming to admire those who couldn’t yet do that in return.

And, as so often happens in life, this story circles back around. Eventually one of the participants in the Alaska coup attempt relocated to North Carolina.

Friendship and mutual respect renewed once he let slip details as to who was behind it.

I wasn’t surprised to learn the ring leader was Seattle-based with long ties to Southeast Alaska but it didn’t matter.  I had long ago forgiven - as well as come to grips with the fact - that there was so much I could have done differently, too.

Soon another friend who had lived in Southeast Alaska during that time took charge of a DMO across the state, but we never spoke about what happened other than in coded references and jokes about the job hazards that came with our chosen profession.

Over my more than two decades on the job in Durham before concluding my four-decade career five years ago, I probably made just as many mistakes as I had elsewhere, some the same, just maybe not as stupid.

Whenever I clashed with interests not Durham’s it merely seemed to raise my stock.  It’s just that kind of place.

I had not only learned from Spokane and Anchorage, but found Durham even more gritty in my defense. Someone defending me once told someone complaining about me, “he may be an a**hole but he is our a**hole.”

I suspected a few for whom I had long been an irritant might have gloated when I retired but they didn’t.

That didn’t stop a Durham sycophant or two from taking a cheap shot but the only rumor I ever heard involved the ever worsening “essential tremor” in my hands, there from childhood.

Instead several people, thinking it was a degenerative cousin such as Parkinson’s, whispered to friends of mine, “Is this it?,” meaning The End and thus the title of this essay, a hit song by the The Doors when I was in college made even more memorable as the intro during my time in Anchorage for a movie classic.

It wasn’t, but it was time to move on toward an entirely new stage of life.

Looking back I have no regrets.  But I can more easily spot what I could have done differently or better.  This is human.

Due to the power of forgiveness as well my brain’s innate ability within a short time to shed rather than obsessing over bad experiences I can relay them to help someone learn from my mistakes.

As I hope any of my former antagonists are,  I am entirely at peace.

No longer a “hired gun,” but each day still pursuing change.