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Trump and Economic Nostalgia: Pittsburgh Edition
In a Pittsburgh speech yesterday, Donald Trump illustrated what I call “nostalgia economics.” Trump, according to Politico, “vowed to bring back Pittsburgh’s once-thriving steel and coal industries at a rally here on Wednesday night.” Just as he has vowed to reverse decades of globalization and automation to “bring back” manufacturing jobs from Asia. But, as Politico’s Ben Shreckinger points out, Trump’s depiction of Pittsburgh might be outdated:
And his economic message may feel a bit anachronistic in a city that prides itself on its decades-long recovery from the collapse of the steel industry, which is no longer the major employer here. Pittsburgh’s dynamic mayor, William Peduto — a new-school Democrat who held a rally with Hillary Clinton here last week — has sought to make the city a laboratory for urban reinvention by luring tech companies and boosting its university-powered research sector. After years of decline, the economy has begun adding jobs again, albeit slowly, and unemployment rate is just under the national average.
Pittsburgh is now a leader in the emerging robotics industry, which Trump did not mention on Wednesday. Google opened a major research office in the city in 2006, housed in a former Nabisco factory. And Uber, the ride-sharing company, last year poached dozens of robotics engineers from Carnegie Mellon University to open a center to research self-driving cars. In February, Uber announced it is acquiring a former locomotive roundhouse along the Monongahela River — where the LTV Coke Works long ago belched out the kind of toxic smoke that once earned the city the description “hell with the lid off” — to serve as a proving ground for its new vehicles.
And the region’s largest employer is now the behemoth UPMC health system — not struggling U.S. Steel, which announced on April 6 it is cutting a quarter of its North American workforce. Trump’s Pittsburgh rally also came the day that Peabody Energy, the largest private coal company in the world, declared bankruptcy, buffeted by competition from natural gas and cratering demand for coal in Asia.
And in comparison to real-estate developer Trump’s message of nostalgia for the American and Pittsburgh economy of the 1950s and 1960s, check out this bit of advice for Pittsburgh from a recent speech by tech investor Paul Graham:
Published in EconomicsWhen I got here a couple days ago, I could feel the difference. I lived here from 1968 to 1984. I didn’t realize it at the time, but during that whole period the city was in free fall. On top of the flight to the suburbs that happened everywhere, the steel and nuclear businesses were both dying. Boy are things different now. It’s not just that downtown seems a lot more prosperous. There is an energy here that was not here when I was a kid.
When I was a kid, this was a place young people left. Now it’s a place that attracts them.
What does that have to do with startups? Because startups are made of people, and the average age of the people in a typical startup is right in that 25 to 29 bracket.
I’ve seen how powerful it is for a city to have those people. Five years ago they shifted the center of gravity of Silicon Valley from the peninsula to San Francisco. Google and Facebook are on the peninsula, but the next generation of big winners are all in SF. The reason the center of gravity shifted was the talent war, for programmers especially. Most 25 to 29 year olds want to live in the city, not down in the boring suburbs. So whether they like it or not, founders know they have to be in the city. I know multiple founders who would have preferred to live down in the Valley proper, but who made themselves move to SF because they knew otherwise they’d lose the talent war. So being a magnet for people in their twenties is a very promising thing to be. It’s hard to imagine a place becoming a startup hub without also being that. …
This is not a fast path to becoming a startup hub. But it is at least a path, which is something few other cities have. And it’s not as if you have to make painful sacrifices in the meantime. Think about what I’ve suggested you should do. Encourage local restaurants, save old buildings, take advantage of density, make CMU the best, promote tolerance. These are the things that make Pittsburgh good to live in now. All I’m saying is that you should do even more of them.
Just wanted to be first.
PITTSBURGH!!!!
GE just opened new 3D printing facility here.
Soon yinz can print yerself one of these…
Give the orange face guy a break, he still thinks we are losing economically to the Japanese. It may well be the last time he read a newspaper article not concerning himself was 1985.
GO PENS!
If our defensemen continue to poke our goalie in the eye with their stick, you may not have much trouble.
Why did Pittsburgh succeed while Detroit turned into Chernobyl? Surely the steel industry took as many body blows from Japan and Korea as the auto industry.
Yea made in Latrobe.
Which tastes better, the stuff in the can or the river?
Paul Graham most have forgotten the weather in Pittsburgh November through April.Not quite the silicon Valley . Better have a bike with a heater and tire chains.The steel industry is never change back to Pittsburgh nor would most Pittsburghers want it . That train has left the station.
Pittsburgh was better positioned to diversify into tech due to Pitt and CMU being able to generate high growth startups.
The reality is the rest of the region never recovered and is still suffering. Also, there are plenty of neighborhoods in Pittsburgh that look like mini-Detroits, within minutes of all those hipsters in the Strip District. Hence, Trump’s support in the region (and I agree it’s built on the poison of nostalgia).
The wider region’s economy was geared to supporting the behemoths of industry that powered the city and the hundreds of thousands they employed, and a great deal of wealth was built in the region between 1842 and 1946, the city started it’s decline right after World War II, although the effects couldn’t be felt until the 1960’s. The end of steele 1980-84 was a cataclysmic event for the millions that lived around the city, and they haven’t recovered.
All that wonderful stuff – the new growth, had nothing to do with Peduto whose city government has been laying the groundwork for a new economic melt-down in a generation or two by sowing the seeds of his social justice cred in things like the $15 an hour minimum wage, etc. The good redevelopment that’s been going on since Caliguiri’s day will be killed if Peduto has his way.
Too much of the city’s current economy is supporting the dying region around it, when it dies further, the city will feel the pinch.
Limited gentrification, the sign of a still sick city.
I hope I’m dead wrong.
That’s kind of true but I’m not sure that’s unique to this city. Anywhere where there is rapid change there seems to be a lost generation that gets squeezed out. Too young for the good old days and too old for the new world.
But can you print a can of the Pale Stale Ale with the Foam on the Bottom??
You know, Olde Frothingslosh is one of the phrases that is somewhere back in my brain but I never knew what it meant. Picked it up from the old man I guess. Just looked up Pale Stale Ale. Hilarious.
The issue here is one facing many cities and towns across the nation. I think the lesson is that no city or town should count on any industry or company too much. Everything changes in time.
I grew up in a small town which only exist because of the air station next to it. Havelock, NC and Cherry Point – home of the Second Marine Corps Air wing. There is no other industry for the small town of twenty thousand. Every five to ten years the Department of Defense comes out with a Base Relocation and Closure (BRAC) list. The town lives in constant fear that its existence could be wiped out.
And yet, the town leaders do nothing to attract other industries, or capitalize on their other assets. Assets which include lots of cheap labor in the form of young military spouses and off-duty Marines. They end up working the fast food joints, delivery jobs, and anything else they can find. If only some manufacturing plant would come in…which they have tried to do multiple times. Each time the town refuses to rezone, or projects uninviting tax plans, or the five families who own most of the land refuse to sell to them. The companies always go away.
Some day, it may be decades from now, the base will close. The town will go with it.
There was no one better than Rege Cordic. The decline in Pittsburgh began when he left. Even Chuck Noll couldn’t save it.
This is exactly what happened here. The lesson was learned and the plan was to diversify. It was a long slog and took lots of cooperation from Lots of entities. Pittsburgh is a tight knit family town so I’m not sure that’s possible everywhere.
Also, it’s history with Carnegie and Frick and Heinz and Mellon and now Tepper have given Pgh a pool of philanthropic resources that not a lot of cities can tap into.
On the other hand, Pittsburgh had a unique challenge trying to clean up the rivers and riverfronts which had been poisoned from years of mill funk. So a lot of the effort was directed toward stuff like that.
It’s been a tricky, fascinating business.
I think a good way to think about Pgh is this: when I was growing up Pgh was a sick old man. Like St. Sal said, that old man isn’t dead yet. But there’s a new college grad in the family and he’s full of energy and lots of potential.
That’s where we are now. Potential.
For the life of me, I couldn’t remember ‘Olde Frothingslosh!’
Isn’t that the truth. Remember the Flying Fraction (77/54)? And all of his characters he had on his show? Great stuff. Altho, ‘Bogut (sp?) in the Morning’ which followed Rege was also pretty good. (Rege went to California to try to make it big, but never did. Just a few appearances on the then popular TV shows.) Bogut used to play home movies of the mind which were very good stories. One beautiful spring morning he announced a mental health day and said that he would be supplying hot dogs, balloons – the works for a picnic to be held at Frick Park (corner of Forbes and Braddock). There’d be softball, 3-legged races, etc. I remember going. There were so many people there they kept running out of food, but miraculously more would appear. KDKA footed the bill, I believe.
Bogut didn’t follow Rege, Terry McGovern did. We went to the same high school. Terry followed Rege to LA after a few years. He had a interesting life. You can find him on line. OldFrothingslosh had the foam on the bottom.
This thread is so Pittsburgh. I love it!