Gulf Coast on the rise--California set to decline more 

Excellent Forbes piece by Joel Kotkin on the rise of the Gulf Coast, and especially the port of Houston. Kotkin notes that historically great ports and transportation centers have arisen not necessarily in places most blessed by nature but where local entrepreneurs and politicians create the conditions for growth.

As he writes, “In the 19th century New York through a combination of ruthless ambition and greater vision overcame aristocratic Boston and more established Philadelphia. Icy Chicago performed a similar coup over its then far more established and temperate rival, St. Louis, in the mid- and late 1800s. In the last century, unfashionable Los Angeles, without a great natural port, overcame the grand Pacific dowager San Francisco, blessed by one of the world’s great natural harbors, as the economic center of the West Coast. Los Angeles built a vast new modern and largely artificial port to make up for what nature failed to provide, and also nurtured a host of   industries from aerospace, oil and entertainment to garments.”

Now the Gulf Coast is primed to take over. The widening of the Panama Canal, scheduled to be completed by 2014, will probably result in a decline of the business-unfriendly port of Los Angeles/Long Beach in favor of the equally man-made but business-friendly port of Houston. And if you look at the map, Houston and Atlantic ports like Jacksonville and Charleston are located far closer to the bulk of America’s population than Los Angeles/Long Beach. In the 2000-10 decade, the population of the three West Coast states, the one area where cargo landed at the port of Los Angeles/Long Beach has a land-freight cost advantage over cargo landed at Houston, increased just 11% to 47.8 million. In contrast, the population of Texas increased 21% to 25.1 million, that of the South Atlantic states from Virginia to Florida 17% to 50.7 million and that of the Southern states in between by 7% to 31.5 million.

 

The port of Los Angeles/Long Beach has been one of California’s great economic assests. Kotkin is warning that it may be an asset of declining value.

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Michael Barone

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