Sunday, March 16, 2014

Does the Consumer City Cause Productivity Growth?

Read this article about why startups locate in Santa Monica on the beach.  The great quality of life in this Los Angeles city attracts these young people and also acts as a co-ordinating device.   Young hipsters with ideas know that others like them are gathering in this location.  Add in the glamour of Hollywood and Los Angeles has a nascent new economic brewing.  Note that government is only needed here to provide street safety and good infrastructure. No tax breaks are needed.  Will the middle class gain from this movement?  Yes, in terms of a local multiplier effect for rising demand for service jobs. As the economy evolves, people have to be ready to adapt. If they can't, who has the problem?