The Flinchum File
Thoughtful Economic Analysis and Existential Opinions

Divided Loyalties ?

05/16/2019

Recently, I attended a lecture by Raghuram Rajan, formerly chief economist of the IMF and the central banker of India and currently at the University of Chicago.  He spoke about his new book The Third Pillar, which argues a strong, long-lasting nation needs three pillars.  The first is efficient, effective government, along with a growing, prosperous business pillar, the second pillar.  The third pillar is mixed communities.

But America no longer has mixed communities.  We have self-segregated, by race and by income.  I confess some embarrassment that I didn’t know any black people, until a couple moved into our neighborhood last year.  That is not healthy.  That is NOT the worst self-segregation.  The most accurate predictor of success in this country is zip code.  High income communities offer better schools, better perspectives, and better connections for success.  He calls it “succession of the successful.”  We can pour more money into poor schools, but we cannot improve their perspectives nor connections.

He discussed one case in particular where a mixed community existed and fought to stay that way.  Queens, New York, is a well known mixed community that turned down the new Amazon headquarters, with 50 thousand jobs paying $125 thousand annually.  Their argument was that real estate prices would increase, along with real estate taxes, and bring in lots of jobs that local residents were not qualified to get.  They successfully fought off giant Amazon.  They saved their mixed community.  Rajan’s thought is that mixed communities are good and worth fighting for.  They are the most American of American communities.

So, does my loyalty belong to my country, my political party, my religion, my business, or my zip code?  In what order of priority?

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