We have a great feature in our new March/April/May 2016 issue. Brian Feldman, a researcher-reporter with the New America Foundation’s Open Markets Program, has done a deep dive into the history of St. Louis’s economy and the explanations for the city’s current struggles.
It is widely known that St. Louis just lost its NFL team. It’s actually the second time this has happened. The Cardinals moved to Arizona in 1988. Now the Rams have returned to Los Angeles where they will resume play next season after a two-decade hiatus. The Ram’s owner explained his decision in a 26-page article that said “Compared to other cities, St. Louis lags, and will continue to lag, far behind in the economic drivers that are necessary for sustained success of an N.F.L. franchise.”
As Feldman explains, it didn’t used to be this way. For most of the 20th-Century, St. Louis was a leader in many fields, including advertising, public relations, food processing, engineering and aviation. Its fall from grace isn’t a simple story of deindustrialization, especially because St. Louis excelled in many of the service sectors that make up the modern economy. It also had one of best educated populations in the country, attractive cultural institutions, and a professional “creative class” that should have helped it weather the globalization storm.
The explanation for the city’s struggles may surprise you:
The relative decline of St. Louis—along with that of other similarly endowed heartland cities—is therefore not simply, or even primarily, a story of deindustrialization. The larger explanation involves how presidents and lawmakers in both parties, influenced by a handful of economists and legal scholars, quietly altered federal competition policies antitrust laws, and enforcement measures over a period of thirty years. These changes, which enabled the same kind of predatory corporate behavior that took the Rams away from St. Louis, also robbed the metro area of a vibrant economy, and of hundreds of locally based companies. This economic uprooting, still all but unaddressed by today’s politicians or presidential candidates, accounts for much of the relative stagnation of other middle American communities, and for much of the anger roiling voters this election cycle. The rise and fall of St. Louis’s advertising industry stands as a cautionary tale for what ails so many of the once vigorous and innovative cities of “flyover” America.
This article is important for a variety of reasons. It’s obviously of interest to people who live in St. Louis or its metropolitan area. It also explains how political decisions have overturned antitrust laws, and how this has hollowed out once vibrant communities in the heartland and Rust Belt. Finally, it’s an essential piece of the puzzle that helps us understand the current political climate.
As a piece of reporting, it’s a real accomplishment. Make sure to read the whole thing.
Emphases mine:
Hmmmm…
Sounds like a passage put together by Ross Perot and Ron Paul.
But that can’t be possible!!! Here on Booman Tribune!!!???
Home of the Ron Paul non-personing act?
Just sayin’…
Booman, I am going to ask you the same sort of question that has a number of “moderate” Republicans stammering and gasping for air.
If Hillary Clinton…undeniably and most certainly one of the major players in the system described by Mr. Feldman…wins the nomination, will you support her?
Hmmmmm….
AG
D’oh.
More like “dough,” Booman.
I know.
Bet on it.
I spent 15+ years in the work-caves of the NYC studio music scene. I drew the line only at armed forces and cigarette jingles.
Everything else?
Dough.
Gotta eat…
AG
Of course he will! He has done yeoman work to convince us that she is inevitable.
Yes. he has.
And I agree with him. She is inevitable. Barring major errors or accidents, HRC will be the next Dem presidential candidate. And if the lockstep governmental media system continues to lambaste Trump…deserved or not…the way that they have over the past several weeks, this particular PermaGov fix will have a happy ending. (A happy ending for the controllers, of course.)
But that is not the question that I asked of Booman.
iIasked if he is going to continue supporting her.
And his answer?
A non-answer worthy of a Trump Jr.
I will say this…if it’s Trump vs. HRC, I’ll be working for her. But I will be doing it eyes open, and I will not be approving of her role in the past 30+ years of disgrace that this country has suffered nor will I try to whitewash it. I will argue that Trump would be even worse than she would be for the country. Much worse. And if she wins I will immediately begin to try to find someone better for 2020.
But then…my livelihood does not depend on my loyalty to anything but the truth as I see it, whereas Booman is now essentially a paid media operative for the DemRat Party. I understand this. He has a young child, a house, a job…
Been there; not there anymore.
Free at last. Lord a’Mighty, I’m free at last!!!
I just want the denizens of this pond to understand in what waters they are truly swimming.
That’s all.
This fix is either going to work out in the controllers’ favor or not. I have no real say in the matter, except to tell the truth as I see it.
One person at a time.
Dassit.
Over and out.
AG
I am pro IRS. I want it bigger and stronger.
Can we talk about the change in the legal status of employee pensions and how that contributed to the raider climate?
Employer-provided pensions returned in a big way after the Second World War, thanks to pressure from unions and a desire by large companies to promote employee loyalty. By 1960, roughly half of the workforce could look forward to retirement financed by a combination of a company pension and Social Security benefits. Two decades later, more than 80 percent of employees in medium and large private establishments were covered by traditional pension plans.
Unless one worked for a small company, it was assumed that all employers, union or non-union, would provide pension benefits. In fact, the amount of money accumulating in employer pension plans — which surpassed $1 trillion in 1983 for private and public employers combined — came to represent one of the largest pools of capital in the country, much of which was invested in the securities of large corporations…
During this time, however, a counter-revolution was starting to take place in corporate headquarters around the country. Companies no longer looked at pension funds as employee nest eggs that they were charged with protecting. Now they were seen as sources of “excess assets” that could be put to very different uses — if the plans were shut down. During the 1980s, hundreds of companies took the audacious step of terminating pension plans and using the captured assets for purposes such as financing leveraged buyouts by Top managers. Corporate raiders also got into the act. For example, when Ronald Perelman took over cosmetics maker Revlon in the mid-1980s, he gained control of $100 million in pension fund assets. Overall, more than $20 billion in pension assets were captured before Congress put an end to the practice by imposing a heavy tax on pension piracy. (http://www.corp-research.org/e-letter/retirement-rip)
As someone who only entered the workforce in the 2000s the idea of pensions is just mind boggling to me.
OT: Thought of BooMan when this popped up in my news feed: new opioid prescription guidelines from the CDC.
http://www.nytimes.com/2016/03/16/health/cdc-opioid-guidelines.html
Actually, maybe not so OT.
It’s a great article. And you really could not have a better poster boy for it than Stan “Walmart Inheritance” Kroenke.
It’s mostly a great article. I’m not so sure about blaming anti-trust, though – less anti-trust favors big companies and hurts everybody else, but I don’t see any particular reason St. Louis would do particularly poorly in that shift.
This is the sum total of the argument that what happened in St Louis is not the result of globalization and de-industrialization:
You read this shit, and you are astounded at the dismissal of these factors. NY, LA and Boston are fundamentally different cities, with dramatically different strengths.
If I sound angry – I am. I know PRECISELY why this drivel is written: because if you went to grad school they told you free trade was one of the few things that was true.
And so we get excuses like this article.
So here is a chart of manufacturing jobs in St Louis. Note that steep sharp line in 1999?
https://research.stlouisfed.org/fred2/series/MANEMP
Agree that sentence is too dismissive of those factors, but all them interact with the other factors/variables that are detailed in the article. IOW once monopolies and capital gained freedom, manufacturing etc. would decline and disappear.
More analysis of how those affect St. Louis would be good, but it is basically true that St. Louis shouldn’t be particularly susceptible, especially compared to Chicago. My complaint is that he didn’t apply the same logic to anti-trust changes, which are very analogous – a bad thing, but not something you’d expect to particularly affect St. Louis. If you want to explain why St. Louis has been doing worse than most American cities for the past few decades, you should be looking at things that are specific to St. Louis.
America’s job-destroying trade policy is toxic. That’s why Obama and his bipartisan “free trade” enablers in Congress have to pass TPP, if they can, in the post-election lame duck session. The timing was designed for that. TPP is also toxic to political careers, and only lame ducks and the recently-elected can vote for it.
LOL Did you happen to notice who employs this guy to ‘splain things?…..New America Foundation’s Open Markets Program
Think they might have an agenda? Like, making the decline about anything BUT bad trade deals…
Not that all the “creative destruction” did not tee it up for the death of paternalistic capitalism and birth of the predatory sort.
Seriously good article.
One part not explored was the poor choices made by governments in the ’46-70 period in the made dash to pave everywhere and build cheaply. Took time for the public to wake up to many of the atrocities and by that time difficult to stop and correct. San Francisco stopped elevated Embarcadero freeway along the waterfront when it was half finished in 1959 and there it remained, unused/unusable, for over three decades. It took an earthquake to begin the process to tear it down.
I was wondering how much freeways messed up St. Louis.
Here’s one reason St. Louis is doing poorly: its mass transit. St. Louis has two lines which basically run the same route. Boston has eight with four basic routes. Chicago has seven running five routes.
Yes, very true. If you are not from the area, you would be surprised at the enormous kurfluffle of building the second line. And the expense today of light rail is pretty astonishing. There are busses of course.
The light rail has done one thing – pulled the campus of Wash U together. The school used to run a small bus line between the main campus and the med campus. After the second light rail line was built, the president simply kicked in a bunch of money to the light rail, and everyone had a year-round pass for transit. Save a huge amount on parking, the bus service. It was great – I was getting 1-2 parking tickets a month, and after that, none.
That being said, the streetcar approach is much cheaper than the light rail. With the streetcar, the roadbed is already laid, prepped, and ready. You only need the will to put the rails down. The expense is much lower – although I do not have any figures, this simply stands to reason.
The main problem lies in the electrical lines to power it, and the overcoming of objections to the basic notion. In most european cities of even 150,000, there are streetcar lines. We were in Cottbus, and they have buses, streetcars, and lightrail, in a town of 125,000. Amazing – you simply do not need a car.
Yes. Not the whole story — but cities that retained a functioning mass transit system through the 1970s had more to build upon later. And were better able to rehab the city center cores that had deteriorated during the decades of white flight to the suburbs.
… this very short piece is the one of the most important articles of the entire post-1968 struggle:
http://www.vox.com/2016/3/15/11236618/trump-conservatives-working-class#364735325
This may just be the year that we finally learn what the matter with Kansas is.
The dirty secret is that these people are the ones who give Republicans legislative dominance in their state and national assemblies. They provide their low population, rural rotten-boroughs.
Everytime I came here today, a box pops up that says I have requested to download “like.php”. What’s going on with this website?
I’m not getting that, but the site was down for me earlier today.
Me too
This article is very interesting, and I really enjoyed it. I lived 1997-2009 in the MetroEast, which are the Illinois suburbs of St Louis.
The focus on the advertising industry is interesting. While in St Louis, I had no idea that advertising was a big industry. But the consolidation in this industry, along with others, is key to the argument.
Here’s another industry that has consolidated: the restaurant industry. In the time since WWII, the ascendancy of the fast-crap chains is beyond belief. We have gone from a nation in which most towns had a large number of small restaurants to one in which most towns have a whole lot of the same chains. This has made the food landscape highly boring, and has another key effect – the loss of the ability of a small business owner to open his own business.
Other things like the ascendancy of Wal Mart has badly hurt small businesses. Instead of towns having small retailers, they all have a WalMart, and everything else has been absorbed.
Every town has either a Lowe’s, Home Depot, Menard’s or other big chain. These have wiped out many small hardware stores. Yet when I lived in the MetroEast, I went to the local Ace (itself a member cooperative), and got a lot of really good tips. Like specifically how to build a patio (one simple comment from the Ace guy saved me about 5000 hours).
We have gone from a nation of small shopkeepers to a nation of clerks. As a small shopkeeper, you are a member of the middle class. As a clerk, you make minimum wage.
That’s a key thing that the article does not touch on. You might consider another article about the change from “shopkeeper” to “store clerk”, from “cafe owner” to “burger flipper”, from small grocer to worker in a mega-grocery chain. It’s a huge transfer of wealth by consolidation of small businesses to large businesses.
You don’t see this in Europe. Few chains. Lots of small stores. Hopefully they are watching out for this pernicious issue.
I live in Europe, sorry it is picking up speed here too, with TTIP it will become the same soulless cultural landscape here too.
It’s global, baby! Pernicious is right…
It was the “Gateway to the West” when that meant river traffic. It was a more costly routing for rail shipments. That was when the long slow decline into regional hub started.