Left behind: San Jose and the broken promises of the neoliberal era

By and large, the winners have been corporate interests, chief among them real estate developers, large commercial landowners, and tech corporations. Indeed, to the extent that there has been regional coordination in the Valley, it has been spearheaded by and molded to the benefit of the business class.

The entrepreneurial approach to local governance, of which Silicon Valley was an early adopter, is now the national norm. Increasingly, cities, regions, and states compete for mobile capital in a desperate game of tax incentive and subsidy one-upmanship that turns local and state governments into supplicants and runs the risk of leaving them starved.

This fear that those with capital can just up and run — the sense of panic at the thought that money and jobs and growth will go somewhere else — guides the thinking of local policymakers to an exceptional degree. It certainly does in San Jose and elsewhere in the Valley. Specifically, it short-circuits any policy approaches premised on asking more of the people who control the majority of the capital — those who can best exploit its mobility and regularly threaten to do so. Even though many of the technologies that allowed for capital mobility originated in Silicon Valley, the problems that such mobility causes extend far beyond the region, as do the most full-fledged solutions.

Meanwhile, metro areas around the country have dedicated themselves to trying to emulate the Valley’s success. Places like Austin and Raleigh and even New York are seduced by Silicon Valley as economic metaphor, a sure-fire machine for the production of wealth. But Silicon Valley the place, that patch of land south of the San Francisco Bay between the Santa Cruz Mountains and the Diablo Range, is an object lesson in the downside of entrepreneurial government. The winnings have been uneven and the costs have been great. And within the Valley, San Jose has come to bear many of these costs: a prolonged fiscal crisis, a rapidly eroding middle class, and a disproportionate and concentrated share of the growing underclass that characterizes today’s economy.

In Part 1 of this series, we examine the impact of San Jose’s budget crisis on its residents, the current efforts at pension reform, and the corresponding lack of attention to solutions on the revenue side.

Part 2 looks at the history of economic and residential development in San Jose since the middle of the 20th Century, describing how unrestrained suburbanization, followed by a sharp turn toward neoliberalism, put the city where it is today.

Part 3 takes a closer look at the disparities and imbalances created by this history and by the neoliberal model, both within San Jose and in the region of Silicon Valley.

Finally, in Part 4, we explore different approaches to resolving the problems of the city and the region and report on why they have not been more seriously pursued.

Read Part 1 (“Deep-rooted dysfunction”)

Read Part 2 (“The delusions of an American Technopolis”)

Read Part 3 (“This valley is their valley”)

Read Part 4 (“Forging a different path”)