The Entrepreneurial Churn

Read good things about Pittsburgh entrepreneurship and innovation in The Entrepreneurial City, Part 2, by local consultant Fourth Economy, in Pop City.  Here's Part 1, from last November. 

The takeaway:  In the 21st century economy, the name of the game is regional wealth creation, not just local job creation, and wealth creation via innovation and entrepreneurship means letting ideas and companies connect and flow.  Encouraging them to connect and flow.  Outward to other places, inward from other places.

For Pittsblog posts on similar themes, see this post (The Entrepreneurship Commons) and this one (More on the Entrepreneurship Commons).  And this one (Back to Pittsburgh's Entrepreneurial Future).

Diasporas and $$$

As Steeler Nation gears up to descend on Dallas in two weeks, The Economist (magazine) reminds us of the economic value of (such!) diaspora networks:

Brainy globetrotters are rarely rootless. Even the most cosmopolitan usually feel an affinity with others who share the same language, culture or heritage. That is why diaspora networks are so powerful, and why some of the world’s most influential people rely on them so heavily.

Some diasporas are vast and global. For example, there are an estimated 25m non-resident Indians and 60m overseas Chinese, including significant numbers in nearly all countries. They create a web of cross-border connections. Boffins are 30-50% more likely to cite a paper by someone of their own ethnicity than you would expect if such ties made no difference, according to William Kerr of Harvard Business School. Diaspora networks speed the flow of information, the lifeblood of science and commerce.

Tribes still matter: How global leaders tap into diaspora networks  (From "A Special Report on Global Leaders")

For the folks sitting at home, the Super Bowl will be a chance to bask in the reflected success of a team that they have no part of, but that has has a surprisingly successful season.  Steeler Nation claims the team's virtue as their own.  The Steelers success is our success, the city's success, and the region's success.  (From that perspective, unfortunately, there is no glory in beating Green Bay.  At least Chicago has big shoulders.)

For the folks going to the game, business elites first in many cases and fans second, the Super Bowl is largely about money.  Not money as in "what Steeler Nation will spend in North Texas," but money as in "what Steeler Nation can bring home to Pittsburgh."  The Diaspora will be out in force in Dallas, doing what Diasporas do.  The Super Bowl may well mean more to Pittsburgh in that sense than it means to any other city.

Do good and do well.  Can't wait.

Games of Life

Every so often, the news out of Pittsburgh overlaps with my professional interests in the legal system.  Today is one of those days:  Game maker declares war in federal court.

The PG story there talks about a lawsuit recently filed against a local man and a partner who are allegedly abusing the rules of play that govern a massive online game called Evony.  Evony is free to play, at least for the basic game and initial levels.  The defendants in the lawsuit are accused to developing and supplying "maps" to the online world that they sell to game players, who use them to navigate Evony's world(s) more quickly and seamlessly than they would be able to otherwise.  The PG story makes standard journo/rhetorical moves:  Is this about "theft"?  Is this about the mismatch between modern technology and outdated intellectual property laws?

The answer is really "no" in both cases, but the episode in this corner of cyberspace teaches an interesting lesson.  The problems here are not with the laws of intellectual property, but with the laws of economics.

First, as to the IP, and a quick aside about the lawsuit and the game, about which I know only a little more than Rich Lord reports in the PG.  Evony apparently is owned and run by a group in Australia that has a record of acting particularly aggressively toward anyone who would criticize the game or how it is operated.  The current lawsuit reported in the PG is, it appears, not inconsistent with that pattern, though the specific character of the claim may have been emboldened by a recent court ruling by the Ninth Circuit Court of Appeals in MDY v. Blizzard, involving botting in the World of Warcraft environment.  Blizzard, the rights holder there, won a DMCA claim but lost a copyright claim.  Here, I don't know the specifics of Evony's IP arguments, but I imagine that it's possible for the company to thread the eye of the needle of a successful copyright, or DMCA, or terms-of-service based legal claim.  I imagine that it's also possible for the defendants to block that effort, or to thread the eye of a needle themselves.

Second, as to the laws of economics, the fact that there might be a plausible legal claim doesn't mean that what the company is really complaining about is "theft."  Because nothing has been stolen.  I just looked at the Evony site, and everything seems intact.  Did the defendants in the case go in and do something that upsets the game-makers -- who make the game and game-play available for free -- and that might upset game-players who are paying money to play advanced versions of the game?  Maybe.  But the case is economics, not ethics.

Here's the better analogy -- and one that tests your ethics even if it doesn't really test the legal system.  I'm borrowing the story from my antitrust law professor, William Baxter (those with long memories will remember that he was responsible for overhauling federal antitrust policy in the first Reagan Administration).  He didn't come up with the story, but I have always associated it with him:

You go shopping for stereo speakers.  You want high quality speakers, but you don't want to pay an arm and a leg.  The discount stereo store has a pretty good selection of high end and low end speakers, but it doesn't have a listening room where you can try out different options.  So, you go over to the high end stereo store, which carries only the best stuff, at high prices, and which has a great listening room.  In fact, the reason that the high end store can afford to offer a listening room, and to pay service staff who will work with customers who want to use the listening room, is that the high end store charges premium prices for its speakers.  Those extra revenues mean extra service and extra features at the store.  But you don't care about the business model that the high end store uses.  You just care about your speakers.  So you go over to the high end store, sit in the listening room for a while and try out different speakers, then leave.  You've made your choice.  Now you go back to the discount stereo store -- and buy those same speakers there, for less.

Have you broken any laws?  No laws of the legal system.  How about "laws" of ethics?  I don't think so, but I'll bet that some people will disagree.  (I shop in stores all the time and don't buy stuff -- and then buy the same or similar stuff elsewhere, for less.  I'll bet that most people do the same, or try to.)  How about laws of economics?  Look around.  How many high end stereo stores with listening rooms do you know of today?

That doesn't mean that I do or don't  have a ton of nostalgia or sympathy for high end stereo stores, or for audiophiles who valued them, or for Evony, or for anything else that could be plugged in to that story by analogy.  Some things are more worth preserving than others.  Things change, expectations are unsettled, and people sometimes suffer disappointment, and worse, as a result.

There is no such thing as a free lunch.

The New Boston

Up in Boston, folks talk about the place as "The Hub." I've never heard a straight story as to the origins of the metaphor, or as to its meaning. Hub of what? But now I'm thinking that Pittsburgh might want to lay claim to something similar. Sure, a few years ago PIT lost its hub status for USAir(ways). But the pace of talk about Pittsburgh as a something of a model city, or an anchor city, seems to be picking up. And I mean that in a good way.

I'm prompted to say this first and foremost because of Chris Briem's recent "Cleveburgh" op-ed about regional Pittsburgh/Youngstown/Cleveland collaboration/cooperation (with Pittsburgh implicitly but clearly as the dominant or leading player -- my gloss, not Chris's point). Chris was summing up for the popular press a theme that has percolated through his own Null Space and through Jim Russell's Burgh Diaspora for several years. The difference now is that the popular conversation seems to be willing to give the idea some credit. It's more than "they like us! they really like us!"; it's "there's something there worth talking about."

But the Pittsburgh hub idea is also implicit in the Burgh Diaspora theme (Pittsburgh as the center of a huge universe of expats and would-be in-migrants), which edged up another notch in popular credibility the other day, beyond Jim's blog and beyond the occasional column in the Post-Gazette, with the launch of Carl Kurlander's Six Degrees of Pittsburgh blog at the PG.  I'm hoping that Carl keeps up blogging and that the comments start to roll in, because the PG's web audience is huge.  The Diaspora is more than Steeler Nation.  Carl is making the right case:  the Diaspora, and the idea of regional, national, and global connectedness, are keys to Pittsburgh's economic future.  He's talking about entertainment and Hollywood and Pittsburgh as a storytelling and filmmaking hub.  But those are just examples of a broader model that cuts across economic sectors.

Predictions for 2011

2011 is already underway.  I hope that it's not too late to toss out some predictions and forecasts for 2011.  This year, however, I'll borrow the Post-Gazette's list rather than try another list of my own.  These are things that the paper would like to see -- not things that it actually expects to see:

1. New WDUQ owner keeps NPR, jazz lineup
2. Reports on Jordan Miles case released
3. Sidney raises the Cup again
4. Pirates enter All-Star break at .500
5. Steelers take on Eagles in Super Bowl of Pa. rivals
6. Google picks Pittsburgh for new high-speed network
7. Merged Continental-United adds hub at Pittsburgh Intl.
8. Zoo to acquire pair of pandas
9. Unemployment rate continues plunge
10. Legislature OKs transit funding plan

That's not a bad start.  Check back in a year to see how the PG did.

The New Portland

In this Pop City piece about Pittsburgh's newfound ability to attract executive talent, I read this quote from a source:

"Twice last fall and then again last week I heard someone say that Pittsburgh is the next Portland."

I paused.  Does Pittsburgh really want to be the next Portland?  Remember that Pittsburgh's unemployment rate has been below the national average for roughly four years; Portland's has been ... higher.  The cost of living in Pittsburgh is modest.  In Portland, it's extraordinary.  Portland is beautiful.  It has bikeways, roses, high tech design and industry, craft beer, one of the world's great independent bookstores (perhaps one of the world's few remaining independent bookstores?), and a wonderful hole in the wall called Voodoo Donut (slogan:  "The magic is in the hole").  But ... 

"Perhaps Portland is actually a bit too livable. As urban scholar Joel Kotkin put it, "Portland is to today's generation what San Francisco was to mine: a hip, not too expensive place for young slackers to go."  (Source)

I have great friends in Portland, who love it there.  Some of them moved to Portland from Pittsburgh.  But Pittsburgh might be careful what it wishes for.  Mountain vistas aside, Portland doesn't look so great when it's compared to, say, Indianapolis.

The Six Percent Solution

The Post-Gazette and the Trib both picked up the recent news release from CityLab about the "Six Percent Place" "experiment":  With a seed grant from the Benedum Foundation, CityLab wants to see if the "Six Percent Solution" works.  According to the CityLab site:

Six percent is the number, the tipping point. If a neighborhood can get that many creative workers, it becomes an attraction in its own right, according to a study by CEOs for Cities.

And from the press release:

cityLAB’s experiment will directly address issues of population density in these neighborhoods through the creation of the Special Impact Zone. This Zone will draw from the scattered assets that have been built up over time and from the bold urban pioneers who currently reside there. It will market and draw people to settle in the blocks surrounding the Penn Avenue Arts Corridor so that it becomes more densely populated and a viable neighborhood. This in turn will build an economically stronger corridor providing fertile ground for expanded opportunities in the arts, retail and commercial development. At the end of this first phase, cityLAB will hand over an implementation strategy to their neighborhood partners which will consist of a toolbox of incentives. This toolbox will be a mix of physical and social incentives that when implemented will draw people to this neighborhood of great potential.

The target neighborhood is Garfield, a place that could certainly use an infusion of social and financial capital.  The impulse and energy to do something to support and revive some of Pittsburgh's struggling neighborhoods is an excellent one.

The "Six Percent Place" hypothesis raises all kinds of questions, though, and I hope that these are answered in time:

One -- Why six percent?  There's a reference to a study by CEOs for Cities, but the CEOs for Cities site doesn't have the study available, and I couldn't find it anywhere else online.  Six percent seems awfully arbitrary.  Five percent is too few?  Seven percent is a surplus?  And six (or whatever) percent of what?  This is the adequate hypothesis question.

Two -- This isn't really an experiment except in a very loose, rhetorical sense, the same sense that throwing spaghetti against a wall to see if it sticks is an "experiment" to see if the spaghetti is done.  There are no controls; there is no way to isolate cause and effect.  Suppose that six percent of some relevant population in Garfield is identified as "creative workers," and within some time frame after that, Garfield is deemed to have surpassed some measure of success (more on the measure in a moment).  For a variety of obvious reasons, the success can't be attributed to the presence of the "creative workers," and there's no way to know whether the success, like the spaghetti, will stick - or why.  This is the no-neighborhood-is-an-island question.

Three -- What's the desired outcome, and what's the intended outcome?  "Dense population," economic "viability," higher real estate values?  Some of these?  (They don't necesssarily go together.)  All of them?  I'm reminded of a light bulb joke:  How many psychiatrists does it take to change a light bulb?  Only one - but the bulb has to want to change.  What does Garfield want?  What does any neighborhood want?  An infusion of creative workers?  Or a lower crime rate and a place to buy groceries?  This is the "I'm skeptical of Rich Florida" question.

These are friendly questions; doing something is better than doing nothing, and in neighborhood development questions, Pittsburgh has too often been paralyzed by fear of change and the anchor of history.  It will be interesting to see if anything comes of Garfield and what lessons, if any, can really be borrowed for use elsewhere.

The Manifesto Revisited

Having posted "The New Pittsburgh," at last I should go back and revisit an old post titled -- terribly optimistically and breathlessly -- "Manifesto for a New Pittsburgh."  It's four years old, which means that it comes from the Pleistocene of the Pittsburgh blogosphere.

The background and purpose of the post are laid out there.  The post itself offered seven "principles" to guide what we (it was a "we") thought should be the future of the city and region:

1. Connect and reconnect with the virtual Pittsburgh.

2. Bring new resources to the region. 

3. Energize Pittsburgh’s culture and community. 

4. Listen for new voices. 

5. Change the face of Pittsburgh.

6. Build on the best of Pittsburgh’s past. 

7. Recognize the geopolitics of the neighborhood.

Each one of those was accompanied by a bit of context and explanation.  Look at the original post for all of that.

Four years later, where are we?  For all of the ponderousness and seriousness of this, I think that it's still a pretty good list of ideas.

What's changed?

Most important, a lot of people who we met and talked with while putting the list together -- people who were, at the time (late 2006, early 2007) in the early stages of launching initiatives that were consistent with the Manifesto -- have gone on to execute things, or to revive existing things, with real traction:  Lenore Blum and Project Olympus; Audrey Russo at the Pittsburgh Technology Council; Carl Kurlander at Steeltown Entertainment and the burgeoning entertainment sector in Pittsburgh.  Christina Gabriel, then at the Heinz Endowments, seeded a lot of great things locally through Heinz's Innovation Economy program.  Jim Russell, who was a leading contributor to the Manifesto, has made "diasporan economics" something of a full-time gig.

The other key difference today is that the background conversation has changed.  Back in 2006, Pittsburgh's public sphere was full of what I later called the area's "Sally Field" complex:  It was stunned, stunned! to discover that outsiders thought highly of the place.  My sense today is that this pendulum has swung to the other end of the range -- not only is Pittsburgh collectively not surprised that they like us, but there is at times a collective sense of entitlement about Pittsburgh's status.  As in, of *course* NPR would run a glowing story on the city's alleged "renaissance," because Pittsburgh has been recognized repeatedly as an amazing livable place.  A pair of Super Bowls, a Stanley Cup, a G20 summit, pancake makers at the White House, and a boy mayor on the David Letterman show will do that, I guess.

The Manifesto isn't responsible for any of this, of course.  We were trying to capture a spirit of the time.  By putting the Manifesto out there again, maybe I can capture a slightly different spirit.  Whatever success Pittsburgh may have had over the last four years, that success is fragile.  The struggle for stability is far from over.

Pittsburgh Entertainment Project Launches

The Pittsburgh Entertainment Technology Project is here.  The website has been up for a little while.  The formal launch is later in January.

The positive:  Blending Pittsburgh art and tech and leveraging that for commercial possibilities has to be a good thing.  The Entertainment Technology Center at CMU is one of the region's underappreciated gems -- though it's not as underappreciated as it once was.

The skeptical:  I'm always interested in the rhetoric, and the PETP doesn't disappoint with confusing strat-speak.  The mission:  "To create a unified entertainment technology ecosystem in the Pittsburgh region." 

Ecosystems are good, but "unified" they are not.  Ecosystems, even metaphoric ecosystems like this one, are multi-level, multi-layer collections of systems that build on and depend on each other.  Overlaps and intersections are the keys both to defining ecosystems and to understanding the good things that they do and enable.  Most important, ecosystems are open -- open to inputs, open to influence, open to change.  That openness isn't random, and openness doesn't mean sudden, unexpected changes of direction.  Openness  means dynamic and evolutionary.

"Unified" calls to mind fixed and monolithic:  a "unified" front.  Hollywood is "unified" only if you focus on the bad stuff -- monopolistic and oligopolistic behavior by major studios, for example.

Let the PETP be an ecosystem platform for growth and change.

More Cupcakes Coming?

Right after New Year's Day, I heard that pies are the new cupcakes, and cupcakes are dead.

But have rumors of the cupcake's demise been grossly exaggerated?  The New York Times reported today that Crumbs Bake Shop, a New York-based corporated cupcakerie, is going public -- and expanding.  Crumbs currently operates 34 stores across the country, from California to Illinois to New York, and it has plans to expand to 200!

If that happens, then Pittsburgh will have to look to some metric other than the Cupcake Class to measure its upwards aspirations.  Because $4 cupcakes will be everywhere -- if they aren't already.

Renaissance 3: The People

Everyone has been talking about the renewal of Pittsburgh, the city and region.  I don't buy the idea that there is a "renaissance" underway, but what interests me today -- and I have been wanting to post about this for a while -- is the absence of talk about the renewal of the people of Pittsburgh.

In short:  Whether or not the place is getting better (or bigger, or richer, or more diverse, or sexier, or financially stable, or whatever), an equally relevant question is whether the people who live in the place are getting -- what?  More?  Wealthier?  Happier?  Safer?   Better educated?  Presented with more opportunities?

Here is the always provocative Joel Kotkin, talking about cities on a larger scale than ours:

Since the beginnings of civilization, cities have been crucibles of progress both for societies and individuals. A great city, wrote Rene Descartes in the seventeenth century, represented “an inventory of the possible,” a place where people could create their own futures and lift up their families.

What characterized great cities such as Amsterdam—and, later, places such as London, New York , Chicago, and Tokyo—was the size of their property-owning middle class. This was a class whose roots, for the most part, lay in the peasantry or artisan class, and later among industrial workers. Their ascension into the ranks of the bourgeoisie, petit or haute, epitomized the opportunities for social advancement created uniquely by cities.

In the twenty-first century—the first in which the majority of people will live in cities—this unique link between urbanism and upward mobility is under threat. Urban boosters still maintain that big cities remain unique centers for social uplift, but evidence suggests this is increasingly no longer the case.

Kotkin's argument doesn't quite map onto Pittsburgh, because the bulk of the migration from the American countryside into American urban centers is long past.  Pittsburgh as a destination for large populations seeking a better future was realized eighty to one hundred years ago and more.  What matters more today, at least on a first pass, is the idea that Pittsburgh might be a better place to realize one's vision of the future -- speaking at a family or small business scale --  than some rival city, using "rival" only in the "here or there?" sense and no other.  Cleveland, say, or Atlanta, or Dallas. 

But a second pass suggests that the embers of the city as incubator of a brighter future might still be warm in Pittsburgh.  We see that claim lurking behind the Pittsburgh Promise and behind efforts to attract and keep college grads, artists, and entrepreneurs.  Citylab's Six Percent Place proposal, for example (though I will have more to say about that shortly.)  The claim isn't enough to make an urban economy go, but it's a vision that helps to keep people coming back for more.

Come to Pittsburgh, as Napoleon Dynamite never said, and all your dreams will come true.

Is Pittsburgh today a vessel for that kind of optimism?  Or is it merely one of the better alternatives in a bleak landscape?

What Ails Lawyers and Law Schools, Pittsburgh Edition

Updated (January 9, 2011):  You can read my post below, and the comments, or you can read this feature from today's Sunday New York Times, which covers much of the same ground.)  

Duquesne law professor Bruce Antkowiak took the floor this morning in the Post Gazette to describe what ails law schools today.  That discussion has been percolating through law office corridors and the halls of law schools themselves for quite some time.  It's rare, however, that it spills over into mainstream media. In the public at large, who cares about this sort of thing?

Because the PG published the piece, and because I'm a law professor and have this semi-public podium of my own, I feel somewhat compelled to speak up on the topic -- and to say that disagree with a lot of what Prof. Antkowiak has to say.

His basic argument, so far as I can make it out, is that contemporary law students make a moral claim on law schools that they will be trained adequately to do justice in the world.  Law schools are failing to honor that claim by failing to teach the art of lawyering -- "an integrated appreciation of the intellectual, practical and ethical dimensions in which law operates in real life" --  that lawyers must acquire in order to succeed.  How are law schools failing?  By hiring as faculty men and women who do not care for the dirty world of law practice, who think and write about larger questions of law and justice rather than nitty-gritty questions of running a law office and trying cases.

My concern with the argument is not (primarily) its consistency or lack thereof.  (Briefly:  The image of ivory tower academics disengaged from questions of lawyering and justice is a straw man.  Law schools across the country are falling all over themselves today, and have been for many years, to bring more "lawyering" education into the curriculum.  And I think that it stretches our concepts of morality and justice to color the problem in such stark terms.)

My concern is instead that the argument misses what truly ails legal education and the legal profession today.  What truly ails them -- where law schools *and the practicing bar* let down law students and new lawyers -- comes down to this:  Money.

There are college students and young professionals out there today who are wondering:  Should I go to law school?  There are young lawyers out there who are wondering:  Where should I drive my career?  There are senior lawyers out there looking back at their careers and wondering:  What happened?

What happened is this:

The cost of legal education has skyrocketed over the last 20 years.  Duquesne Law?  More than $30k per year in the day program -- that's tuition alone.  My school, Pitt Law, is more than $33k per year for out-of-state students, and more than $25k per year for PA residents.  A large portion of our respective student bodies borrow all or nearly all of that money, which means that after three years, many students walk away with a law degree and $75k - $90k in debt.  Add that to their debt burdens from college.  It is not uncommon for law students to enter the profession with well over $100k in student loan debt.  And Pitt and Duquesne are not exactly top of the table when it comes to cost and prestige; Yale, Harvard, Columbia, and Stanford grads are looking at annual tuition bills in the range of $50k annually.  You can do the math.

Until the last four or five years or so, lawyers' expected incomes and the number of law-related jobs more or less kept pace with the growth in tuition -- at least so long as everyone focused on the glamorous end of the business, where the larger and larger firms were willing to hire boatloads of new lawyers each year and pay them upwards of $150k in starting salary.  The last 20 years not only saw tremendous increases in tuition, it also saw an explosion in the size and revenues of private law firms around the world.  The pyramid of the legal profession kept going higher:  the base kept expanding, the folks at the top reaped the benefits, and there was plenty of money floating around to ensure that all of the bricks fell into place.  (Most law schools expanded, too.)

That era is over.  Business is down.  As a result of the recession, clients are far more cost-savvy than they have ever been, and they are likely to remain so.  It's not just that clients don't want to subsidize training of young lawyers on the job by paying high rates; clients don't want to subsidize anything.  The dominoes have fallen:  Large law firms (in Pittsburgh:  K&L Gates, Buchanan Ingersoll & Rooney, Reed Smith, Eckert Seamans) are hiring a tiny fraction of the new lawyers they hired as recently as five years ago.  New lawyers are not assured the high starting salaries that they once were.  And those small number of jobs are hugely competitive.  There's no reason for the biggest firms in Pittsburgh to focus on Pitt or Duquesne grads.  Local law students have to compete for Pittsburgh jobs with the brightest minds from New York and Cambridge.  No amount of "lawyering" training in law schools will persuade law firms to hire more new lawyers than they are hiring today.  The jobs are simply gone.  Legal education is becoming a zero-sum game:  A law firm that hires my former student is a law firm that won't hire your former student.

A footnote here:  The larger, wealthier law firms don't have to behave this way.  They don't have to furlough and fire young lawyers (and paralegals, and other staff), as they have done; they don't have to cut way, way back on hiring, as they have done.  The economy has gone in the tank, sure, but profits-per-partner among the glamour firms, the standard measure of law firm economic health, have stayed level -- or improved!  Which means that in the main, senior lawyers have preferred to maintain their standard of living and throw the future of the profession over the side -- rather than cut their own take and nurture the next generation.

But I digress.

I have focused on the gravy-train end of the legal profession.  What about the rest of the practicing bar -- which is to say, the majority of the practicing bar, the folks who make a decent living practicing law but who don't get rich?  As the curtain has gotten pulled back on the flawed economics at the top of the bar, we have learned that lawyers' incomes, particularly new lawyers' incomes, have a "bi-modal" distribution:  a relatively small number of lawyers have been making the big salaries ($150k and up); a relatively large number of lawyers have been have been making modest salaries (let's say between $35k and $60k); and relatively few lawyers have been making the money in the middle.  Sometimes you'll see published reports from law schools that talk about the "average" starting salary of a recent grad -- often somewhere in the mid $80k range.  That figure turns out to be terribly misleading.  As a new grad, either you hit the lottery and score one of the handful of big ticket, big money jobs, or you don't, and if you find a job in the profession, you make much, much less.

And don't forget:  Either way, odds are that you're carrying a six-figure student loan debt.  It's like buying a house and carrying a mortgage -- before you've started work.

OK.  That's all terribly gloomy.  What about solutions?  There are things that both law students and law schools can do, but there are no magic bullets.  (There are things that law firms can do, too, but this post is already pretty long!)

Law students:  Don't go to law school unless you are really interested in law.  Not necessarily law practice (though there's absolutely nothing wrong with law practice); there are still lots of great things that a law degree enables that don't involve law practice.  But don't go to law school because you can't think of anything better to do, or because it's a "safe" place to wait out a recession.  The odds are that you'll graduate (if you graduate) without having figured out anything better to do, and other things being equal, you'll be a lawyer that I'd prefer not to hire.  And above all:  Avoid debt!  Get your parents to pay your tuition bills.  Get your company (if you have one) to pay your tuition.  Find scholarships and grants.   Paying off a six-figure debt will still take you well over 10 years, perhaps even 20 years, even if you score a $150k law firm job right out of school -- and keep it.

Law schools:  Lawyering training, especially the kind of integrated, rich, ethically-aware experience that Bruce Antkowiak appears to be advocating, belongs in more law school classrooms, but it can't substitute fully for post-graduate training.  Legal and medical education are different, and for a lot of good reasons; law students come into school and exit school with hundreds of different career ambitions.  And law schools shouldn't get rid of the faculty he dismisses as ivory tower types.  They're not ivory tower types to begin with, plus their attention to questions of justice (the kind of questions that academics can talk about precisely because practicing lawyers have so little time for them) is essential to making the lawyering education effective.  More important than realignment of the curriculum, however, is cost.  Legal education costs a lot.  Too much.  Law schools -- and the universities that house them, and the alumni who support them -- have to find ways to make the experience less expensive to begin with.  Most law schools today are "tuition-driven," because they have thin endowments, modest financial contributions from their host universities (in fact, it is often the case that law schools send money to the central administration, rather than the reverse), and relatively modest amounts of financial support for alumni.  If tuition stays high (and law schools can be expensive to run), then big chunks of that money has to come from sources other than the students themselves.

I am well aware that among the implications of all of this is that money would be coming from institutions, firms, and people who would not reap the direct benefits of their investments.  That is why, among many other reasons, the development universe refers to "gifts."

I could go on and on about the law school side of things, but the key point is that legal education doesn't operate in isolation from the rest of the legal profession, from higher education, or from everyone's interest in justice for all.  (There's the proper place of the claim to justice, in my view:  It's not that law schools are letting down law students, though they are, but that the legal profession is letting down society at large.  Sorry to get all noble on you there, but it's part of the package!)  If you want to focus narrowly on business and the economy, legal education doesn't operate in isolation from that, either -- a point that I'll come back to in a later post.  We all get what we pay for, in a manner of speaking, but we also get what we give.  If the legal profession wants better trained lawyers, and if clients want better trained lawyers, and the public interest demands better lawyers, then everyone is going to have to stop pointing its fingers only at law schools, and figure out how to partner with law schools.

The payoff is this:

All of us who teach want our students to change the world in small and large ways.  Students who are mired in debt have a tough time doing that.  Students who graduate with little or less debt will have better career choices, because they won't feel as constrained by debt to find a job -- any job -- that will simply allow them to pay their bills.  The world doesn't have too many lawyers, but it has too many lawyers wearing fancy suits and working in business law firms.  It doesn't have enough lawyers in the criminal justice system (working either side of the street), or working on consumer interests, or helping patients navigate byzantine health care systems, or in other public interest work.  That's the justice that law schools and their graduates can -- and should -- deliver.

And now back to regular Pittsblog programming!

The New Pittsburgh

Try this on:

Pittsburgh is working.  At the micro level -- the level of the neighborhood, the community, specific and visible public and private resources (sports facilities, museums, some schools and libraries, some real estate redevelopment), the sense of individual good will, and the cost of living and the livability index -- the city and region are in pretty good shape overall.

Pittsburgh is broken.  At a macro level, its economic "model," such as it is, has exhausted itself.  To pay its collective bills, the city and region really rely on a combination of models, all of them badly outdated, that are strapped together with baling wire and duct tape.  The result is the simultaneous 21st century "Renaissance" of Pittsburgh, celebrated by the Allegheny Conference and by National Public Radio, and the disintegration of Pittsburgh's public sector, perpetuation of urban poverty, and the drumbeat of violent crime in several Pittsburgh neighborhoods.  Pittsburgh's public image of itself as a place that has turned itself around has the clarity and certainty of the Ptolemaic view of the universe:  it's perfect, except that it only works with a dizzying range of adjustments and qualifications.  And it's completely wrong.

Like many people writing about Pittsburgh, including many who write about it professionally, I've focused in the past more on the micro and on individual elements of the macro.  And individual elements of the macro get talked about and written about mostly when there's some kind of crisis at hand.  The libraries are closing!  The state will take over the pension system!  Bus routes will be eliminated!  When the individual elements get added up, however, there is a pattern here.  This post steps back and looks at it, in non-crisis mode.  Call the following a New Year's cosmology of Pittsburgh.

The sun does not revolve around Pittsburgh.  Pittsburgh revolves around the sun.  The sun is this:  There is no such thing as a free lunch.  What I mean is that in the fundamental economics of Pittsburgh -- a city that cannot afford itself -- the haves of Pittsburgh, who can pay for what they want, are slowly but surely separating themselves from the have-nots, who cannot.  People who live in the city's handful of hipster neighborhoods and in its better-known gentrified neighborhoods have the political will and economic clout to attract more residents and more local businesses; people who live in the region's more successful suburbs are gradually building better walls and moats to ensure that the rich stay rich.    The many, many neighborhoods and towns in the middle, places with retirees, public school systems, fire departments, public libraries, and need for public transit, depend on transfers of wealth to balance their metaphoric books.  Pittsburgh's tech sector, higher education sector, and medical services sector are fiddling -- sweet notes, to be sure -- while the rest of the region largely burns.

There are Copernican solutions at hand, if the region wants to remain somewhat integrated and stable.  But nothing comes without a steep price.  The price will be financial (cost of living will go up; range of public services will go down), cognitive (Pittsburgh's NPR-enabled sense of collective self-satisfaction will be disrupted), and political (established interests will resist mightily, and several options require cooperation from Harrisburg and/or Washington, DC).  The Mayor and the City Council have been playing a Ptolemaic game of Three Card Monte over the last three months, trying to solve Pittsburgh's pension crisis by flipping cards quickly on the top of a folding table set up on a grimy sidewalk and assuming that all would be well with Pittsburgh's finances once the cards were turned over.  I'm not optimistic that the current political climate will produce anything better.  But in the interest of laying out the options -- the routes to a stable future, if you will -- I've put together the following list of the real, hard options.  It seems to me that these things should be talked about in public together, rather than separately.

One:  City/county consolidation.  The City of Pittsburgh is an island of about 300,000 people in a region of nearly 2 million; Allegheny County is divided into a billion municipalities and other taxing authorities.  Consolidation is no panacea, but at least it puts in place a framework for aligning the costs of administering the region with the obligation to pay for those costs.  

Two:  Privatization.  Privatizing public services is often an article of faith for market-oriented philosophers rather than a pragmatic alternative to public provision, and privatizing things -- that is, selling them, or selling the rights to them -- just because they can be sold is usually a bad idea.  The relevant government is simply borrowing from Peter to pay Paul.  That said, there is often no good case for the government to be providing the services in the first place.  Take last Fall's flap over privatization of the City of Pittsburgh's parking assets -- parking garages and parking meters.  It is not clear to me why the City is in the parking business to begin with, except for historical reasons.  The City likes the money, of course.  The parking garages and the parking meters could be sold -- what the proceeds would be used for is a different question -- and rates regulated so that parkers don't get gouged.  Parking, of course, isn't the only public business that could be outsourced.  Public authorities could get out of the business of building, managing, and financing stadiums and arenas.

Three:  Tax reform.  This could take one or more of several forms:

 -- A commuter tax.  This has been a favorite of city residents, but it is terribly inefficient.  The idea of equalizing tax burdens is a good one; this strategy invites administrative problems -- and rewards economic development outside the City limits.  And the City is pretty small to begin with.

-- Income tax reform.  The City's Local Services Tax ($52/year) is astonishingly low.

-- Sales tax increases.  Increasing sales taxes is regressive and therefore disfavored.  But the most important sources of the regressiveness -- taxation of food and clothing -- are already off the table; those aren't taxed in PA.  Dedicated or targeted sales tax increases -- the "drink tax," for example -- are particularly problematic because they appear to be targeted at specific populations and the beneficiaries are often political favorites.  That combination means that they are likely to be unstable political bargains rather than stable structural reforms.

-- Property tax reform, including taxation of property owned by not-for-profits.  This could be a long blog post of its own.  Allegheny County is on the cusp of another round of reassessments, when the real problem is not inequitable assessments but a combination of inequitable distribution of tax liability (the enormous amount of untaxed land in the county, and the absence of a land tax) and inequitable administration of the current system (tax liens, about which I have written before).

Four:  Municipal bankruptcy.  This is the nuclear option in Pittsburgh, the He-Who-Shall-Not-Be-Named of local political debate.  An out-and-out default on the City's bonds would be one really terrible, no good, very bad thing, but worse would be the idea of ceding authority over the future of the city to a federal bankruptcy judge.   In the private sector, however, we've seen "pre-packaged" bankruptcy used strategically and mostly successfully to revive underwater companies.  Look at General Motors.  Applying that thinking to the public sector is appealing, at least conceptually.  Could we generate a New Pittsburgh and an Old Pittsburgh, a la New GM and Old GM?  The key, of course, would be to spin the City's legacy pension obligations into the "Old" Pittsburgh, where they wouldn't keep dragging down the "New" Pittsburgh.  One obvious solution would be to privatize the existing pension obligations.  If Pittsburgh wants to sell off some of its income (say, by selling its parking revenue), then Pittsburgh should match that by selling off its debt, too.  Completely isolate the economics of pensions (a legacy obligation) from the economics of the City's current operations.  Unfortunately, I believe that both federal law and state law prohibits this sort of thing, and of course the unions would flip out.  A "pre-packaged" municipal bankruptcy is not likely to be feasible.  But I put it on the table as an option because bankruptcies in the private sector are used more cynically to wipe out pension obligations altogether.  Pittsburgh's public retirees may have to think about the better of two bad options:  reduced pensions, or no pensions.

Five:  A state takeover / bailout.  Pittsburgh has its toes in this water already.  Perhaps more than its toes.  The problem here is not only that a state takeover of the City's finances is politically unpalatable, but that the state isn't exactly flush with money itself.  Harrisburg isn't looking to take on Pittsburgh's problems.  And a state takeover might stop the bleeding, emphasis on "might," but wouldn't revive the patient.

Six:  Shaving down pension obligations.  Pensions aren't the only thing dragging down the City of Pittsburgh, but they are the biggest thing.  Short of municipal bankruptcy or a state takeover, the City's public retirees and unions could voluntarily restructure their pensions in order to help save the City.  (Before you fall out of your chair laughing and crying, consider this column about similar problems in Atlanta.  Undoubtedly, there is more to the Atlanta story, but Atlanta suggests that this is not an inherently impossible conversation to have.)

Seven:  Shaving down the public sector generally:  public works, schools, libraries, police/fire.  Pittsburgh has dipped its toes in this water, and Pittsburgh doesn't like it. The political blowback from cutting the public sector in a City of 90 neighborhoods is profound.  The reality, however, is that Pittsburgh's public sector was built for a City that held vastly more people than the City holds today.  Even with new revenue (from somewhere) and reduced costs (from elsewhere), it is all but certain that public services generally will be cut back and cut back permanently.  The question is whether this is done consensually and collectively and strategically, or whether it is done involuntarily, haphazardly, and politically.

Eight:  Grow Pittsburgh's way out of the problem.  Just about everything that I've written above focuses on cutting costs or on making transfer payments.  What about raising income and therefore raising revenue?  In my native California, where the economic catastrophe of the public sector is worse than Pittsburgh's problems, history teaches that the state can grow its way out of its problems.  (History may have run its course out there, but that's a topic for a different blog.)  Some of Pittsburgh's relative success over the last decade might be attributed to economic growth, particularly the eds-and-meds businesses.  But the economic benefits of that growth have not been distributed equally across the region, and a good amount of Pittsburgh's relative success should be attributed to the region staying in place while peer regions have fallen behind.  I wrote this post last week; in Sunday's Post-Gazette there were several columns or op-eds -- Brian O'Neill, Chris Briem, and Harold Miller -- that all push on bits and pieces of a growth theme.  Putting the best face on this, however, there is no reason to think that future growth, even if it is sustained, will be broad enough and sufficiently fast-paced to cure all that ails the Pittsburgh region.  The Marcellus Shale is no panacea.

Thoughts?