Last year I visited UC Berkeley as a researcher and studied the city of Vallejo. The city is known by the youth of the San Francisco Bay Area for its hip hop music. There are some famous rappers from there. I rarely put videos in this blog, but a friend sent it to me, and it was nice to see the city again. What is interesting about this video is that even if Vallejo is known for being officially in bankruptcy (because of mismanagement) or other things that make the citizens struggle, the people there are so proud of their city. With good reason, is a very interesting place, with a fascinating economic evolution.

Here it is a post talking a little about my findings of this city. Vallejo has recently got coverage from New York Times, Financial Times, Wall Street Journal and other media. Watching the video I wish I would have got some souvenirs from there. By the way 707 is the telephone code of the area.

Here it is another video with images from the town.

Just a little note for the demographers, the city is equally divided in white, black, brown and yellow. See chart below. Also the neighborhoods are quite unsegregated. The interesting thing… they all can rap.

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This is a couple of paragraphs which won’t fit in the paper I’m finishing but I think is cool to put it online, and won’t fit in twitter :)


In the last decades, consultants have been taken a more relevant place. In the 1959, there were consultants who designed the mammoth downtown renewal project. Outsourcing to “professionals” is something widely used in the nation, but Vallejo massively uses them. As the ViceMayor said after loosing a close vote against the renovation of the firefighters contracts, “I’m going to say something many here won’t like: The elephant in the room is that the City is run by consultants” (Gomes, 2010)

(…)

In acquiring external knowledge many cities, especially in the US, rely on consultants. The city management of Vallejo, as many others, openly confirmed that they prefer to hire contractors instead of offering city jobs because it is cheaper for the municipality budget. While it is important for cities to obtain knowledge from outside, the case study of Vallejo has shown, that they should be careful not to trust any sole architect, economist, lawyer, arbitrator, planner or academic. Local officials should also contrast information from different groups, which does not necessarily have to be highly paid, or even paid as they can be volunteers concerned about their city or city region.

Yesterday there was an article about Vallejo in the Financial Times. It says:

For an image of the future that is guaranteed to chill US civic leaders and bondholders alike, there is no better place to look than among the potholed streets and boarded-up houses that litter the Californian city of Vallejo.

It made me feel good that last year I went to the city to make a case study about it. I stated at Univ. of California, Berkeley during the whole Spring semester 2010. A few days ago I finished writing a paper called “VALLEJO, CALIFORNIA. FROM THE FRINGES OF THE CITY, A CASE FOR THE ‘CITY REGION SYSTEM OF SURVIVAL’. I wrote it to present it at the DIME-DRUID ACADEMY Winter Conference 2011, this week.

This paper is very heterodox, and is a paper on progress. The main purpose of it was to make a summary of theories I learned about Local Economic Development at the Berkeley libraries. I then tried to connect the case of this city (or district) of the San Francisco Bay Area, and its significance to entrepreneurship and innovation policy. Innovation from a broad sense, for the ones that now what I’m talking about.

I got much help from the locals of Vallejo, and one of them, the editor of the popular Vallejo Independent Bulletin, asked me to send him a copy of the article when I would finished it. Keeping my word I sent it to him, and he has published it online.

My article at the Vallejo Independent Bulletin

I am grateful he did it, because I got a few comments from the citizens. This made me realize that my ideas are still quite confusing. So I wrote a comment. It seems it has an anti-spam feature, I told the editor. For now I’ll put it here.

Since I read the comments of Ab and SomeoneElse on my paper about Vallejo and the Bay Area, I have been thinking a lot.

I am grateful for the comments. In particular, because I have realized that I have not made a good job to express my ideas. This is hard, as English is not my native language. But also because of the internal fight I have had. I am a PhD student specializing in local economic development, but it is the case of Vallejo that has made me changed many of my preconceptions. Now I would like to comment on the comments.

Ab says: -“the last line is spont on”- and then quotes me: -“Vallejo … end up like many cities in third world countries, where a few (police and firefighters?) live in affluence while the vast majority of citizens live and die in misery”- [police and firefighters added by Ab].

There are two things. First it should be understood that even though Vallejo has been a city, since the 19th century, I refer in the paper as a “district” of the city-region of the Bay Area. I know this may sound weird for any local (of the Bay Area), but coming from abroad I can clearly see that the Bay Area is a large metropolitan area, highly connected in its economic geography.

The second thing is that I don’t necessarily say that police and firefighters are the few, or the elite of Vallejo, nor of course the elite of the city-region. True, they are an interest group, and as I referenced in the paper they have a well known “symbiotic relationship” with the political power of the city. But going back to my first point, one has to look beyond the city limits of Vallejo. Making $150,000 as a safety employee it’s certainly high, but what about the bankers and real estate leaders who make 10 times or more, in the different districts of the Bay Area?. This is probably a stupid comparison, but what about the profits of a company of the city region, like Apple making 100,000 times more. But still, what is their responsibility towards their neighbors?

“Someone Else” points out we need to think outside the box. I’ll try to do it. There is so much anger against the public safety employees, and probably with a reason. But this is not going to solve the problem of Vallejo. Thinking outside the box… What about a Bay Area police? After all, the criminals operate in all the Bay Area, not only in one particular city. I am NOT an expert in safety, but I see that the New York City Police Department, covers 8 million people, more than the 7 million of the Bay Area. The Bay Area has already the BART police, that would fall inside the Bay Area Police. The 9 counties police departments (sheriffs), a heritage from a bygone era could also be reduced. I repeat, I have no idea about this field. But as an economist I would think that cities (and their tax payers) would avoid the “competition” among them. And that is the idea: work more towards collaboration, than competition.

Of course, safety should not be the only thing. In fact should be the least. The most important things would be towards, education. I had the chance to be in UC Berkeley, one of the most amazing universities in the world. Also visited friends in Stanford. Great places. I know all these ideas have been said many times before, even from the former Governor (I still can’t believe people voted for an European actor). But there should be more mechanisms to get more funding for the rest of more ordinary higher education. However, what I think is of really concern, is the high inequality in the school districts across the Bay Area. In Europe we have many problems, don’t get me wrong! but with the exception of a few countries (like UK), every child has the same amount of money allocated for education, regardless in which neighborhood was born. There is an urgent need for a more cohesive education across the Bay Area.

More cohesiveness should be as well for access to justice, healthcare, transportation, innovation and entrepreneurship policy, etc in the Bay Area. That’s what I am trying to say in the paper. Because the different parts of the city region are so interdependent.

The same goes to having X or Y Mayor. Sure, many question if Davis should be the Mayor. But I think it does not matter if X or Y, or Z would be Mayors. Neither if Vallejo hires the best consultants, or the best City Manager. My hypothesis is that it does not matter who is in the leadership of Vallejo. The city will not survive.

Unless, they realize that: 1) Vallejo is dependent of the city-region. (This does not mean surrender). 2) There is need of active coordination, at local (Vallejo) and city-region level. That is stop fighting at local and inter-local level, and start collaborating.

If not, and now I clarify, the city region of San Francisco, will become more and more as third world country, “where a few live in affluence while the vast majority of citizens live and die in misery.”. Many in the elite, as the mentioned Andy Grove in the paper, have noticed it.

“Effective economic development strategies must be customed-designed to meet the unique strengths and opportunities of local and state economies”.

Luke, Ventriss, Reed & Reed argue on page 175, as the editors of the book Managing Economic Development – A guide to State and Local Leadership Strategies (1988). My first impression when I read this, is the striking resemblance of what I must have written a few years ago for a paper conference or project. That is, one should be careful with the ‘one size fits all’ approach than many economists have. I completely agreed with that. That is… agreed. Because now I’m kind of skeptical of this local oriented approach that treats all communities if they were in the same line of the race track.  I keep reasoning in my head:

For example, in the case of Vallejo, they can make the best possible study looking at their financing, regulation, infrastructure, public services, human capital, etc… to tackle their Local Economic Development (as the mentioned book does in chapter 9).  However, no  matter what these cities do, their options will be very limited because theyir economy is quite dependent on the city-region (the San Francisco Bay Area), State of California, etc.

I think to my self that reviewing this book is not going to be very helpful. I keep reading;

“ (…) As a result of the growing economic interdependence, there has been a significant decline in state and local governments’ capacities to unilaterally develop an implement economic development policies and programs. No one government department or individual public manager can effectively act single handedly. This situation forces the invention of new collaborative mechanisms and collective development strategies.
Successful economic development strategies not only precipitate from an intergovernmental contest of cities, counties, COG’s (Council of Governnments), and state and federal agencies, but also emerge from intersectoral collaboration between the public, private, and non profit sectors. Each sector depends on the vitality of the other (…)”

This book is better that I though!, this are so much in line with one of my working papers!. Let’s continue.

“In such an interconnected policy context, a new type of public leadership is required – catalytic leadership. Chapter Eleven examines this trend and shows how, unlike charismatic leadership, which rallies people around the leader’s vision, catalytic leadership facilitates cooperation among a group of leaders and stimulates the pursuit of a goal that is created collectively by the group”.

A pretty nice book, with good complementary articles.

Again, I remembered that one should never judge something for the first paragraphs one reads. Specially from old fellows…

Obama believes States and Cities need urgent help

I’m currently studying the city of Vallejo, California, because it is so far the biggest city of California (and I think in the USA) to have filed for bankrutcy so far. For my PhD I learn about the “do’s”, but I also have to learn about the “don’ts”, so the case of Vallejo it seems it’s a good one to look at some “don’ts”. But, it’s not only California, all across the USA, Europe and Japan, cities now are seriously struggling. Many has been said about the countries, but as Jane Jacobs and Robert Lucas clearly pointed out, the economic development and innovation does not come from the coutries, but more precisely, from the cities. So, in my opinion, we should pay more attention to the cities, even if the neo-classical economists and the different national media across the countries only look at the national level.
Unfortunately, we have had not to wait too long to start paying attention to the economy of the cities. They have been getting into trouble, and this last Friday, President Obama talking about the American cities expressed the urgency to focus on them: 

I am concerned … that the lingering economic damage left by the financial crisis we inherited has left a mounting employment crisis at the state and local level that could set back the pace of our economic recovery. Because this recession has been deeper and more painful than any in 70 years, our state and local governments face a vicious cycle. The lost jobs and foreclosed homes caused by this financial crisis have led to a dramatic decline in revenues that has provoked major cutbacks in critical services at the very time our Nation’s families need them most. Already this year, we have lost 84,000 jobs in state and local governments, a loss that was cushioned by the substantial assistance provided in the Recovery Act. And while state and local governments have already taken difficult steps to balance their budgets, if additional action is not taken hundreds of thousands of additional jobs could be lost. (….) Because the urgency is high—many school districts, cities and states are already being forced to make these layoffs,”

(Barack Obama, 12 June 2010)

Then according to the media he’s asking for $50 Billion in this emergency fund. Something that of course many policy makers can hardly support, not so much because of the 13 trillion debt the USA already has, but because it’s an election year and this looks a risky move. Obama in order to get the monies he continues, a) “I have called for a three year freeze in non-security discretionary spending”, b) put a “a fee on the largest Wall Street firms”, and c) put “agency incentives to identify ways to save money”.

For the first, I think that’s fantastic, although the main chunk of the discretionary budget is the military, so if this is not even discussed to be frozen then it does not go too far. In fact I think the US should not have a freeze but to reduce the whole thing. The question is, Does the American people prefer to keep having a huge military force or teachers in their towns and cities? The fact is that the majority of the people believe that education should be the priority, but the choice it’s not that easy, even if the US military budget sums more than the next 16 countries altogether. For the second measure, it seems that the majority of the people won’t have any problem on taxing the big ones in Wall Street. I mean, it’s like one of the wildest dreams of the middle and poor class. The third sounds like empty words, that I can not even say it is a good try.

Anyways, I don’t want to get into US politics. The main point here it’s not if they’re going to be able to do this, but to say that it seems that the US Government is realizing about the importance of the state and local level. From my view, this is very positive, even if it might be too late. They should have let bankrupt some companies, but cities can not and should not go bankrupt.

p.s. Having said that, I of course have to acknowledge that leading-Republican American guys really think Obama wants sincerely to destroy the nation, as well as the leading-Democrats though Bush wanted the same.

I’m currently in Berkeley, California. Besides the good research environment I have experienced here, I came because of the city of Vallejo. Why Vallejo?

In March 2009 I went to visit our old friends the Tanners, here is Jason’s website. They picked us up in San Francisco and we were driving to his home in Folsom. While driving on I-80, he told me that this city we were driving by (Vallejo), recently declared bankruptcy. He told me it was because of the unions (the police and firefighters), they were getting super high salaries, and the city couldn’t pay them. I was like “come on, you always blame the unions. no matter if it is the car industry or the education system”. We discuss the situation for a while, and then I kept it in mind.

The Doctoral School at my university, Aalborg (Denmark), encourages PhD candidates to study abroad for one semester or so. Something I wanted, was to be able to improve my qualitative research on Local Economic Development. I also wanted to go to a place where I could communicate with any problems (sometimes in Denmark is hard for me), a Spanish speaking country or English place would be fine.  So I looked at a few possibilities in my home country, Spain, England and the U.S. But I was looking for a place somewhat similar to Frederikshavn (see Differences and Similarities between Frederikshavn and Vallejo), with an industrial history, and in the struggle of transform themselves. Besides I had to go to a fine environment research, which is what the Doctoral School wants too. That is to a good university or research center.

Fortunately I knew about Richard Walker at UC Berkeley, from some of his literature, I think his publication with Storper is the number 4 most quoted reference in the discipline of Economic Geography. But specially I knew him from listening to one of his classes on line, [that anyone can follow] or the Berkeley podcast on Economic Geography. It’s an introductory class he teaches to undergrads. Because I also have to do the same, I liked to listen to this classes while I cleaned or cooked at home. I used some of his stuff in my classes. By the way he received the Distinguished Teaching Award this semester too. At the AAG 2009 meeting, I went to thank him for putting his classes online, and the inspiration I got from him. He said I made his day :)  I think he remembered me, so when I asked him if I could visit his Dept. of Geography, he agreed to sponsored me. He’s not an expert on Local Economic Development, but his approach to it is really enriching. I’m really grateful to him, and the whole UC system here. He also has given very good insights for my PhD project and research.

So here I came in late February, and I will leave by the end of July. I like Berkeley, which by the way it’s the institution who gives more PhD degrees in the world. I’ve heard around 800 a year, so here they know how to make PhD’s. have been enjoying visiting a few classes, and I’ve learned a lot from seminars and colloquiums they always have around. The case of Vallejo is amazing, and my family is quite happy to be here visiting Berkeley.

Stay tuned, today Vallejo is the canary in the coal mine.

I believe today I have practically finished my qualitative work in the city of Vallejo. Although I might visit it again with my wife and daughter just for fun. I have interviewed a lot of people from different important sectors. I think this relates in certain way to my interest in the theory of Systems of Innovation, even though it’s not used too much for local level. For this theory it’s crucial to understand the Actors, the Institutions and Networks. So that’s why I interviewed people from different sectors.

These are the people I have talked to:

Representatives from:

  • City Management
  • Chamber of Commerce
  • Solano Community College (Center in Vallejo)
  • Schoold District
  • Historic Museum
  • Visitors Bureau (Tourist Office)
  • Great Vallejo Recreation District
  • Firefighters
  • Local Media
  • Citizens Groups
  • Vallejo Economic Development Commission (former members)
  • Vallejo Business Incubator (now extinct)

Individuals:

  • Around 30 individuals in the waterfront, streets and businesses.
  • Several business owners (accountants, lawyers, restaurant, retail, etc.)
  • UC Berkeley students who were originally from Vallejo
  • Around 15 people from the Bay Area, and Northern California in general.
  • City librarians
  • Bank workers
  • Construction workers

Academic support:

  • My advisor: Prof. Richard Walker
  • Several PhD students from different departments, but specially my colleagues from Geography.
  • Presented a seminar about my PhD project, in the Dept. of Geography last week, and I got feedback from UC Berkeley faculty and students

I always took notes, and in some occasions emails have been exchanged.  A couple of times it was done by telephone, but I always preferred face by face meetings.

There are two groups of people I have not been able to formally interview: The Policy and City Council. Regarding, the Police, two friends, who were family of police officers of Vallejo, gave me their emails and I asked them for interviews. I have not an answer since March. But I have informally talked about the issues to other cops. Concerning the City Council I have sent a few emails to the official addresses. I have not received an answer, but I understand it, as they might be full of spam or/and these elected politicians might be very busy.

Secondary sources, have come from a dozen of books citing Vallejo, most of them found in UC Berkeley (Public Policy and Bancroft Libraries) and the Library of the Naval and Historic Museum of Vallejo. Of special interest has been the outstanding XIX century newspaper publications of the city, Images of America by Jim Kern, and the official documents of the mid XX century with planning and local economic development plans. For most recent material, I have also gathered information from city publications and 11 newspapers with online edition (having read over 60 articles about Vallejo) and TV segments in youtube.

I have attended an key City Council, in which they Firefighters contract was renewed. To complement the qualitative research I have visited and observed the city several times for the last 3 months. As I can drive to Vallejo in less than 30 minutes from Berkeley.

Most of the sources have been used to understand the current situation, but I have also inquired about the historical development of the city.