Until recently, however, there had been no formal analysis of the skyscraper curse. A new paper by Mr Barr, Bruce Mizrach and Kusum Mundra (all of Rutgers) investigates Mr Lawrence’s musings in detail. They look at the building of 14 world-record-breaking skyscrapers, from New York’s Pulitzer (which opened in 1890) to the Burj Khalifa, and compare them to American GDP growth (which they see as a decent proxy for the world economy).
If, as the skyscraper curse suggests, the decision to build the biggest towers happens near the peak of the business cycle, then you could use record-breaking projects to predict the future path of GDP. However, the range of months between the announcement of the towers and the business-cycle peak is large, varying from zero to 45 months. And only seven of the 14 opened during a downward phase of the business cycle (see chart). In other words, you cannot accurately forecast a recession or financial panic by looking at either the announcement or the completion of the world’s tallest building.
With such a small sample, it is tricky to draw firm conclusions. But the paper expands the sample to 311 by looking at the tallest building completed each year in four countries (America, Canada, China and Hong Kong). The authors then compare building height to GDP per person. They find that in all countries GDP per person and skyscraper height are “cointegrated”, a fancy way of saying that the two things track each other. In other words, developers tend to be profit-maximisers, responding rationally to rising incomes (and thus increased demand for office space) by making buildings bigger. While ego and hubris afflict the skyscraper market, the authors argue, its foundations appear sound.
I’ve been having some fun at Westgate Books lately. A couple of weeks ago I wandered into the store looking for Saskatoon: A History in Photographs by Jeff O’Brien, Ruth Miller and William P. Delainey. They didn’t have it but the staff that was helping me went to look in the warehouse. Instead of the book I was looking for, he came up with two books, Saskatoon, the First Half Century by Don Kerr and a Saskatoon, Hub City of the West: an Illustrated History by Gail McConnell.
I looked at them and took them both. I also put my name down on a list if Saskatoon: A History in Photographs came in. A couple of days later I got a phone call that told me that my book was in and come to pick it up. Last Friday I went back to get it and it was the wrong book. It was Saskatoon: A Century in Pictures by William Duerkop, John Sarjeant and William Delainey In hindsight I kind of wondered if there was a bit of miscommunication when I ordered Saskatoon: A Century in Pictures but I looked at this book and I realized I wanted to read it as well. I had a blast all week looking at it. So has Mark.
Since I am talking about books, it looks like Gail McConnell was doing Kickstarter long before Kickstarter was a thing. The last 20 or so pages of her book is dedicated to patrons who helped pay to publish her book. Local Saskatoon businesses sponsored the project and she does a one page profile on each company. Who knew a history book could be so cutting edge.
While I was getting that book, another staff at Westgate Books went looking for the book in case they missed it and found me another book on the history of electric transit in Saskatoon. I didn’t have the money on me to get it so they put that away for me. I’ll wander by this week and get it. Now I am curious as to what other books I will find in my brief stop at the store.
I know being in the used book business is a hard business to be in but I haven’t had as much fun shopping as I have had in Westgate Books in a very long time. I hope that still counts for something.
There has been less longing, in recent years, to be part of our own country’s version of a rust belt – the one that comprises such Southwestern Ontario cities as Windsor, London and St. Catharines, and patches of Eastern Ontario. Young people have fled in droves as the region’s employment numbers have tanked, seeing the loss of more than a quarter of manufacturing jobs in the last decade.
The plight of the region has been a driving force behind a provincial deficit that remains at over $10-billion, as well as a net loss for Ontario in the migration of people within Canada, and an alarmingly aging population.
Even with Alberta driving the national economy, the country could ill afford Ontario’s struggles; it’s hardly healthy for the largest province’s per-capita GDP to be lower than the rest of Canada’s, and it helps explain why the federal government has remained in the red.
With oil’s current slide, Canada really can’t afford for it to remain a drag – and in fact there is some expectation that Ontario will instead reclaim its old role as the leader of Canada’s economic growth. Its premier, Kathleen Wynne, recently expressed optimism that plummeting oil prices and a sinking dollar will prove a boon to manufacturing. “I don’t wish for low oil prices and a low dollar for Alberta,” she said earlier this month. “But at the same time, we want our manufacturing sector to rebound. So if that [low oil price] helps, then that’s a good thing.”
While they could indeed help in the short term, it’s difficult to imagine those volatile factors leading to the lasting revival of traditional sectors competing with consistently low-cost jurisdictions such as Mexico, China and even the American South.
For sustainable renewal, Ontario’s old industrial towns will have to work harder at reinvention – and they should be looking to some of their counterparts in the U.S. A two-week road trip through Pennsylvania, Ohio and Michigan revealed in often surprising ways how our neighbours are much further along in reinventing their most hard-hit cities, and how much we have to learn.
“The wind is at the back of these cities in a way that it wasn’t before,” says Jennifer Vey, a fellow at the Brookings Institute who studies the revitalization of old industrial centres. And although many of them will remain smaller than in their industrial heyday, the numbers bear that sentiment out. When the Manhattan Institute ranked America’s 100 biggest U.S. metropolitan areas for their economic performance in the wake of the Great Recession, mid-size Northeastern and Midwestern cities accounted for nine of the top 20.
As Mr. Piiparinen and others are quick to stress, jobs will always be the cornerstone of any regeneration. But employers themselves can be drawn to a city by affordability and infrastructure, and like to set up shop where highly skilled people want to put down roots. The renaissance of former industrial powerhouses is fuelled by attracting and keeping well-educated, entrepreneurial citizens committed to community-building and capable of creating wealth and quality of life around them.
Of course, direct comparisons between the U.S. and Canadian experience is never exact: The places I visited tended to be larger than their Canadian counterparts; and although they may have such superior amenities as major-league sports teams and world-class museums, they also suffer from some entrenched disadvantages – notably an appalling history of race relations that has left a legacy of poverty, crime and troubled public schools.
So why is it that a younger generation is finding opportunity in these Rust Belt cities (or some of them, at least; nobody sees Flint, Mich., or Gary, Ind., as models) more than in places like London or Windsor, which have some decent bones themselves? As Ontario attempts to take back Canada’s economic reins, it would do well to learn from what’s worked, and know what it’s up against.
Jerry Weiers lives less than two miles from University of Phoenix Stadium, where the New England Patriots will play the Seattle Seahawks in the Super Bowl on Sunday. Weiers also happens to be the mayor of Glendale.
Yet as politicians, chief executives and tens of thousands of well-heeled fans rub shoulders that day in the stadium in Glendale, a western suburb of Phoenix, he plans to watch the game on television in his living room, because he has not been offered a ticket.
“It was on my bucket list, but it’s not going to happen,” Weiers said. “If I had my druthers, I’d rather be in the stadium. I’ve had people say that if I was a team player, I might have gone to the game. But I’m a team player for my city.”
Weiers is not shy about making that point, so he is not surprised that he was snubbed. Critics have called Weiers ungrateful because the Pro Bowl and the Super Bowl will draw thousands of visitors to his city, and some of them will visit restaurants and hotels there. Glendale will also receive lots of free advertising during game broadcasts, though a vast majority of people visiting Arizona for the Super Bowl will visit the city only on game day.
James Cassella, the mayor of East Rutherford, N.J., was also criticized after he complained last year that his borough had been overlooked even as the Super Bowl was played at MetLife Stadium there.
But the friction in Glendale is acute because the city has a reputation for betting big on sports — and paying a price for it. In the last decade, the city spent hundreds of millions of dollars to build a hockey arena for the Coyotes and a spring training complex for the Chicago White Sox and the Los Angeles Dodgers.
The hope was that the facilities would prompt residential and commercial development. But when the recession hit in 2008, the Coyotes went bankrupt, the mall next to the arena foundered, and the city was overwhelmed by its debt payments and was forced to slash public services.
“The city of Glendale is the poster child for what can go wrong” when a city invests heavily in sports, said Kevin McCarthy, the president of the Arizona Tax Research Association. “You don’t want to be building stadiums and not be able to hire police officers.”
Glendale is by no means the first city to have sports facilities turn into albatrosses. Cincinnati and Miami, to name just two, built stadiums for wealthy owners in deals that backfired.
But the scale of spending in the city of 230,000 residents is unique. According to Moody’s Investors Service, Glendale’s debt is equal to 4.9 percent of its tax base, nearly four times the national median and twice the average rate for cities in Arizona. More than 40 percent of the city’s debt is dedicated to paying off sports complexes.
What the NFL does to Super Bowl host cities is a crime. NFL owners want to host a big party and the taxpayers pay for it. It is insane.
As for his Super Bowl ticket?
Whether that attitude gets Weiers invited is another question. Cassella, the East Rutherford mayor, said that after stories surfaced that he, too, had been unable to get a Super Bowl ticket, Jim Irsay, the owner of the Indianapolis Colts, invited him as his guest. John Mara, an owner of the Giants, sent him a parking pass.
Way to go WestJet. Incredible idea. Incredible video.