Editor's Note: On December 3, Richard Bush delivered testimony before the Subcommittee on East Asian and Pacific Affairs of the Senate Committee on Foreign Relations. Read his testimony below and watch the hearing online.

There has been a wide range of views in Hong Kong about the value of democratic elections.

So far, the Chinese government has consistently chosen to engineer the Hong Kong electoral system so that no individual it mistrusts could be elected chief executive (CE) and no political coalition that it fears could win control of the Legislative Council (or LegCo). To elect the chief executive, it created an election committee composed mainly of people it trusts. For LegCo, it established functional constituencies that give special representation to establishment economic and social groups. These functional constituencies together pick half the members of LegCo. As a result, Hong Kong’s economic elite has dominated those institutions.

Major economic interests in Hong Kong have been happy with the current set-up because it provides them with privileged access to decision-making and the ability to block initiatives proposed by the democratic camp. Within this establishment, there is long-standing belief that majority rule would create irresistible demands for a welfare state, which would raise taxes on corporations and wealthy individuals and sap Hong Kong’s competitiveness.

The public, on the other hand, supports democratization. In the most representative election races (for some LegCo seats), candidates of the pro-democracy parties together get 55 to 60 percent of the vote. Those parties have tried for over twenty years to make the electoral system more representative and to eliminate the ability of Beijing and the establishment to control political outcomes.  But there are divisions within the pan-democratic camp between moderate and radical factions, based on the degree of mistrust of Beijing’s intentions.

There is a working class party and a labor confederation that supports Beijing and is supported by it. On electoral reform, it has followed China’s lead.

Of course, any electoral system requires the protection of political rights. The Joint Declaration and the Hong Kong Basic Law protected those rights on paper, and the judiciary generally has upheld them. But there are serious concerns in Hong Kong that political rights are now being whittled away.

The August 31^st decision of the PRC National People’s Congress-Standing Committee on the 2017 Chief Executive election confirmed the fears of Hong Kong’s pan-democratic camp that Beijing does not intend to create a genuinely democratic electoral system. That decision almost guaranteed there would be with some kind of public protest.

Before August 31^st, there had been some hope in Hong Kong that China’s leaders would set flexible parameters for the 2017 election of the chief executive, flexible enough to allow an election in which candidates that represented the range of local opinions could compete on a level playing field. Instead, the rules the Standing Committee of the National People’s Congress laid down were interpreted as ensuring that Beijing and the local Hong Kong establishment, by controlling the nominating committee, could screen out candidates that they saw as a threat to their interests.

I happen to believe that before August 31^st there was available a compromise on the nomination process. The approach I have in mind would have liberalized the composition of the nominating committee so that it was more representative of Hong Kong society and set a reasonable threshold for placing someone in nomination. This would have been consistent with the Basic Law (a Chinese requirement) and likely ensured that a pan-Democratic politician could have been nominated (the democrats’ minimum hope). Hong Kong voters would have had a genuine choice. There were Hong Kong proposals along these lines. Such an approach would have had a chance of gaining the support of moderate Democrats in Legislative Council, enough for reaching the two-thirds majority required for passage of the election plan.

Reaching such a compromise was difficult because of the deep-seated mistrust between the Hong Kong democratic camp and Beijing, and within the democratic camp. If there was to be movement towards a deal Beijing would have had to signal that it was serious about such a compromise, in order to engage moderate democrats. It chose not to, and an opportunity was lost.

Why Beijing spurned a compromise is unclear.

Perhaps it interpreted its “universal suffrage” pledge narrowly, to mean one-person-one-vote, and not a competitive election. Perhaps it wished to defer a truly competitive contest until it was sure that one-person-one-vote elections would not hurt its interests. Perhaps Beijing was overly frightened about the proposed civil disobedience campaign called “Occupy Central.” Perhaps it judged that radical democrats would block their moderate comrades from agreeing to a compromise. Perhaps China actually believed its own propaganda that “foreign forces” were behind the protests. Perhaps it never had any intention of allowing truly representative government and majority rule. But if Beijing believed that taking a hard line would ensure stability, it was badly mistaken.

Whatever the case, the majority in Hong Kong saw the August 31^st decision as a bait-and-switch way for Beijing to continue to control the outcome of the CE election and as a denial of the long-standing desire for genuine democracy. A coalition of student leaders, Occupy Central supporters, democratic politicians, radical activists, and middle class people resorted to the only political outlet they had: public protest. If the Chinese government had wished to empower Hong Kong radicals, it couldn’t have hit upon a better way.

Although Beijing’s August 31^st decision guaranteed a public response in Hong Kong, the form it took was unexpected. Student groups preempted the original Occupy Central plan, and the takeover of three separate downtown areas resulted, not from a plan but from the flow of events. The Hong Kong Police did overreact in some instances, but each time it sought to reestablish control, there was a surge of public support for the core protester groups, mobilized by social and other media.

The protests were fueled by more than a desire for democracy.

Also at work were factors common in other advanced societies. Hong Kong’s level of income and wealth inequality is one of the highest in the world. Young people tend to believe that they will not be able to achieve a standard of living similar to that of their parents. Real wages have been flat for more than a decade. Buying a home is out of reach for young people, in part because a small group of real estate companies control the housing supply. Smart and ambitious individuals from China compete for good jobs.

Hong Kong students have gotten the most attention in the current protests. Just as important however, are older cohorts who are pessimistic about their life chances. They believe that the Hong Kong elite, which controls both economic and political power, is to blame for these problems. They regard genuine democracy as the only remedy.

The Hong Kong government’s response has been mixed but restrained on the whole.

The Hong Kong police did commit excesses in their attempt to control the crowds. Teargas was used once early on, and pepper spray on a number of occasions since then. There was one particular incident where police officers beat a protester excessively (for which seven of the officers involved were arrested last week).

It is worth noting that the scenario for which the police prepared was not the one that occurred. What was expected was a civil disobedience action in a relatively restricted area with a moderate number of protesters who, following their leaders’ plan, would allow themselves to be arrested. What happened in late September was very different. There were three venues instead of one. Many more protesters took part, and they had no interest in quickly offering themselves for arrest. Instead, they sought to maintain control of public thoroughfares, a violation of law, until Beijing and the Hong Kong government made major concessions. Even when courts have ordered some streets cleared, those occupying have not always complied.

After the initial clashes, the Hong Kong government chose not to mount a major crackdown but instead to wait out the protesters. It accepted the occupation for a number of weeks, and now seeks to clear some streets pursuant to court order. Moreover, the government undertook to engage at least one of the students in a dialogue over how to end the crisis. In the only session of the dialogue to occur, on October 21^st, senior officials floated ideas to assuage some of the protesters’ concerns and to improve upon the electoral parameters laid down by Beijing.

The dialogue has not progressed for two reasons. First of all, the Hong Kong government is not a free agent in resolving the crisis. Beijing is the ultimate decider here, and the Hong Kong government must stay within the guidelines it sets. Second, the student federation leaders who took part in the dialogue are not free agents either. They represent only one of the student groups, and other actors are involved. With its leadership fragmented, the movement has never figured out its minimum goals and therefore what it would accept in return for ending the protest. It underestimated Beijing’s resolve and instead has insisted on the impossible, that Beijing withdraw the August 31^st decision. Now, even though the Hong Kong public and the leaders of the original Occupy Central effort believe that the protesters should retire to contend another day, the occupation continues.

For those who believe that the rule of law is a fundamental pillar of Hong Kong’s autonomy, the last two months have been worrisome. Once some members of a community decide for themselves which laws they will obey and which they won’t; once the authorities pick and choose which laws they will enforce and abide by, the rule of law begins to atrophy. The protesters’ commitment to democracy is commendable. The generally restrained and peaceable character of their protest has been widely praised. But something is lost when both the community and its government begin to abandon the idea that no-one is above the law.

Regional views and implications

Observers have believed that the implications of the Umbrella Movement are greatest for Taiwan, because Beijing has said that Taiwan will be reunified under the same formula that it used for Hong Kong (one-country, two systems). And there was momentary media attention in Taiwan when the Hong Kong protests began, but it quickly dissipated. The vast majority of Taiwan citizens have long since rejected one-country, two systems. China’s Hong Kong policies only reconfirm what Taiwan people already knew.

Hong Kong events also send a signal to all of East Asia’s democracies, not just Taiwan. Anyone who studies Hong Kong’s politics and society comes to the conclusion that it has been as ready for democracy as any place in East Asia, and that its instability in recent years is due more to the absence of democracy than because it is unready.

The long-standing premise of U.S. policy is that Hong Kong people are ready for democracy. Since the protest movement began, the U.S. government has reiterated its support for the rule of law, Hong Kong’s autonomy, respect for the political freedoms of Hong Kong people, and a universal-suffrage election that would provide the people of Hong Kong “a genuine choice of candidates that are representative of the peoples and the voters’ will.” Washington has also called for restraint on all sides.

Finally, the strategic question for East Asia is what the rise of China means for its neighbors. That question will be answered in part by China’s power relative to the United States and others. But it will also be answered by what happens between China and its neighbors in a series of specific encounters. Through those interactions, China will define what kind of great power it will become. North Korea, the East and South China Seas, and Taiwan are the most obvious of these specific encounters. But Hong Kong is as well. If the struggle there for a more democratic system ends well, it will tell us something positive about China’s future trajectory. If it ends badly, it will say something very different.

Looking forward, several options exist for resolving the crisis and only one of them is good.

One option is a harsh crackdown by China. Article 18 of the Basic Law gives Beijing the authority to declare a state of emergency in Hong Kong if “turmoil” there “endangers national unity or security and is beyond the control” of the Hong Kong government. In that case, Chinese national laws would be applied to Hong Kong and could be enforced in the same way they are in China. We would then see crowd control, Chinese style. I believe this scenario is unlikely as long as Beijing has some confidence that the protest movement will become increasingly isolated and ultimately collapse.

A second option is that the occupation ends but the unrepresentative electoral system that has been used up until now continues. That would happen because two-thirds of the Legislative Council is required to enact the one-person-one-vote proposal of the Chinese and Hong Kong governments for electing the chief executive. Getting two-thirds requires the votes of a few democratic members. If all moderate democrats oppose the package for whatever reason, then the next CE will be elected by the 1,200-person election committee, not by Hong Kong voters. Protests are liable to resume. There is a danger that in response, Beijing will move quietly to restrict press freedom, the rule of law, and the scope for civil society beyond what it has already done.

The third scenario is for a late compromise within the parameters of Beijing’s August 31^st decision. The goal here would be to create a process within the nominating committee that would make it possible for a leader of the democratic camp to be nominated for the chief executive election, creating a truly competitive election. That requires two things. First, the nominating committee must be more representative of Hong Kong society. Second, the nominating committee, before it picks the two or three election nominees, should be able to review a greater number of potential nominees. Done properly, that could yield the nomination of a democratic politician whom Beijing does not mistrust but whose platform would reflect the aspirations of democratic voters. Prominent individuals in Hong Kong have discussed this approach in print, and Hong Kong senior officials have hinted a willingness to consider it. For such a scenario to occur, Beijing would have to be willing to show more flexibility than demonstrated so far; the Hong Kong government should be forthcoming about what it has in mind; and some leaders of the democratic camp must be willing to engage both Beijing and the Hong Kong government. In the climate of mutual mistrust that has deepened since August 31^st, that is a tall order. But at this point it appears to be the best way out of a bad situation.

Boris Nemtsov’s murder may be a turning point in current Russian history. Unfortunately, it is almost surely not a turn to the better, but one to something bad or to something even worse. This point needs to be made clear from the beginning. It is an illusion to think that this event will lead to anything positive, such as a backlash in the population at large against nationalistic rhetoric or even some kind of liberal revolution, or “Russian Spring.” 

Liberalism in Russia was left near-dead once Putin prevailed over the wave of protests in late 2011 and early 2012. The geopolitical conflict with the West over Ukraine—both Russian President Vladimir Putin’s actions and the Western response of imposing sanctions—virtually guaranteed that liberal, democratic, pro-Western forces would remain irrelevant for now and, likely, for some years to come. Nemtsov’s murder only exacerbates this trend.

There are two probable scenarios going forward. Both begin with the realization that the most important conclusion from the Nemtsov murder is that it signals a lack of control by Putin over very dangerous elements in Russian society. Putin will respond by further tightening Kremlin control over Russian politics and society. The question is how forcefully and how successfully. In one scenario, Putin succeeds in stabilizing the political situation. This will result in an even more authoritarian, but somewhat stable, Russia. In the other, Putin fails to establish control and the result is a breakdown of all control and reversion to an even more extreme nationalism than now.

We do not know who murdered Boris Nemtsov. The most likely version is that it was rogue nationalist, anti-Maidan, forces. If so, this means that Putin has serious problems with his own security forces. They are either inexcusably negligent (because they allowed the murder to happen) or criminally complicit (if anyone inside the security forces in any way facilitated the crime).

Most everyone outside the Kremlin is obsessed with, as they say, the eternal Russian question of Kto vinovat—”Who is to blame?” Putin’s priorities are different. His first question is not, “Who did this?” but “Who let this happen?” So his primary concern is to solve the problem of the competence of and/or control over his security services.

Second, his main target now has to be extremist-nationalists inside Russia. They are the biggest threat to his regime, far greater than the demonstrators on Bolotnaya Square in 2011-2012. Despite the fact that it is the Kremlin itself that has been the biggest promoter of nationalism, it is aware that extreme nationalism is a danger. Last October, at the Valdai Club meeting in Sochi, Putin’s number two man, Sergey Ivanov, was asked about the threat of nationalist-extremists in Russia. He admitted there was a problem. “They do exist. They are a tiny minority. But they represent a clear risk. We need to think about that. And, especially, we need to do something about it. ... We have to make it clear to extremists that the law will be strictly enforced, and that committing illegal acts is a road that leads to nowhere.” And when we do act against those who violate the law, he said, “we will not be constrained by concerns about human rights.”

Two decades ago, Hillary Clinton delivered a speech in Beijing that inspired feminists around the world, declaring “women’s rights are human rights.” Since that declaration, a lot has changed for women globally. But what has changed for women in China?

While Chinese women today have increased freedoms, there is still a long way to go before gender equality is realized. Civil unrest concerning gender inequality recently made headlines in China and abroad when a group of five female protesters in China were arrested and jailed for publicly demonstrating against gender inequities, such as inequality in higher education and domestic violence. This incident underlined much of the commentary at a recent Brookings’s John L. Thornton China Center forum on women’s issues and gender inequality in China, during which the following key messages were conveyed:

China is in the midst of a rapid, if quiet, sexual revolution

China’s first and leading sexologist, Li Yinhe, delivered a keynote address that emphasized that when it comes to sex, China is in the midst of an “era of important changes.” Li explained that all sexual activities before marriage were illegal in China before 1997 because of a “hooliganism law,” and a woman could be arrested for having sex with more than one man. Thus, premarital sex was forbidden. In surveys in 1989, only 15% of citizens reported having premarital sex—and “most of them were having sex with their permanent partners,” Li said. That law was overturned in 1997, and recent surveys show that 71% of Chinese citizens admit to having sex before marriage. This is a dramatic change in a short period of time, and marks what Li asserts is a sexual revolution for Chinese citizens.

Chinese law still lags behind changes in social customs

While some sex laws have adapted, others are far behind. Li highlighted some “outdated” sex laws in China that are still “on the book[s],” but that are no longer strictly obeyed by the Chinese people.

Li said the indicators are clear that the force of these laws is waning. There are fewer people being punished for these offenses and the punishments are becoming increasingly less severe. Her discussion stressed four areas where public opinion has changed drastically over the last few decades, but Chinese laws haven’t adapted:  

1. Pornography: Pornography isn’t considered to be protected as it is in the U.S. In contrast, Chinese law strictly prohibits creating and selling porn. In the 1980s, porn publishers would be sentenced to death. Now the punishment is less severe—for example, a 24-year-old Beijing woman published seven “sex novels” online. Her viewership was 80,000 hits on her novels, but her punishment was only six months in criminal detention.
2. Prostitution: Prostitution is another activity affected by outdated laws in China, where any solicitation of sex is strictly illegal. In the early-1980s through late-1990s the punishment for facilitating prostitution was severe. In 1996, a bathhouse owner was sentenced to death for organizing prostitution. Now, prostitution is widely practiced and the most severe punishment for organized prostitution is that those managing sex workers are ordered to shut down their businesses.  
3. Orgies and sex parties: Chinese law used to brutally punish swingers and individuals who planned sex parties. For example, in the early-1980s “the punishment for spousal swapping was death…[and] people would be sentenced to death for organizing sex parties,” Li explained. But this is another area where the punishment for the law has now become less strict. In 2011 in Nanjing, an associate university professor organized a sex party with 72 people, and the “punishment for him was three and a half years in prison.” Also, in 2014 in Shanghai, some citizens recently organized an online sex party, and their punishment was only three months of criminal detention. According to recent private surveys, “many people are [engaging] in sex parties or orgies.” While in theory these are punishable by criminal law, “no one reports [them], so they do not get noticed,” Li said.  
4. Homosexuality and same-sex marriage: In regards to homosexuality, Li was quick to note that China’s view of homosexuality is historically very different from Western views. For example, in some U.S. states, laws “criminalized or deemed homosexual activities illegal.” But throughout China’s history, there were not severe repercussions or the death penalty for homosexuality, and it “was never illegal.” However, this is not the case for same-sex marriage. Li thinks it will be “hard to predict” when same-sex marriage might be legalized.

Chinese women will have sexual freedom, but when isn’t clear

So what does the future hold for these laws? Li explained that sex is a “hot topic” right now in Chinese public debate, and the “general consensus among legal scholars and sociologists is that these [outdated] laws need to be removed.” Those who oppose removing these laws are “in the minority.” While that may be true, she suggested it would be difficult to “form a timetable” when politicians might consider amending these laws.

As for the five young women sentenced to jail last month, Li said she usually tries to stay out of politics, but thinks people “should stand up and speak out” when their own rights are being violated. Li argued that jailing these women for expressing their opinions violated the rights of all women—and hopes that other women speak up about their arrest.

If you are interested in learning more, watch Li Yinhe’s full keynote and the entire panel event here:

Alison Burke contributed to this post.

Amid anger and protests in Baltimore following the death of 25-year-old Freddie Gray from a spinal injury sustained after being arrested by police, much of the discussion has focused on the poverty-ridden neighborhood in which Gray grew up (Sandtown-Winchester, on the city’s west side). Conversation has centered around the economic disadvantages that Gray, his peers, and so many young adults are facing in certain neighborhoods throughout Baltimore and in other U.S. metro areas.

Metropolitan Policy Program Fellow Jennifer Vey spoke yesterday with CNN’s Maggie Lake on the poverty and economic inequality prevalent in Baltimore—particularly in impoverished neighborhoods like that of Gray’s and throughout the country.

In the interview, Vey says that, “it’s important to look at the events of the last few days in Baltimore against a backdrop of poverty, of entrenched joblessness, of social disconnectedness that’s prevalent in many Baltimore neighborhoods…but that isn’t unique to Baltimore, and I think that’s a really important point here, that we really need to put these issues in a much broader national context.

“I think what this really indicates is we’ve been operating under an economic model for quite some time that clearly isn’t working for large numbers of people in this country.”

Vey also discusses how we can work to break the cycle:

“What we’re really focused on at Brookings is trying to understand how cities and metropolitan areas can really be trying to grow the types of advanced industries that create good jobs, that create more jobs, and also focusing on how then, people can connect back to that economy. What can we do to make sure that more people are participating in that economic growth as it happens?”

She goes on to say that investment in education, workforce programs, and infrastructure are all key in incorporating everyone into a prosperous economy.

To learn more about poverty in Baltimore, read this piece by Karl Alexander.

Brookings John Austin provided Great Lakes regional economic context for a forum of Ohio and Pennsylvania business and civic leaders convened by Congressmen Jason Altmire (PA), and Tim Ryan (OH) to develop strategies for growing the bi-state regional economy.

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In Pennsylvania, the next major presidential primary state, concerns about the economy loom large as global competition, economic restructuring, and an aging workforce threaten the state’s ability to prosper. Thanks to these assets, the six metro areas generate 80 percent of the state’s economic output even though they house 68 percent of its population. A true economic agenda for the state must speak to the core assets of Pennsylvania’s economy and where these assets are located: the state’s many small and large metropolitan areas. In short, this brief finds that:

• To help Pennsylvania prosper, federal leaders must leverage four key assets that matter today—innovation, human capital, infrastructure, and quality places. These assets help increase the productivity of firms and workers, boost the incomes of families and workers, and can help the state and nation grow in more fiscally and environmentally responsible ways.
• These four assets are highly concentrated in the state’s economic engines, its metropolitan areas. There are 16 metro areas in the Commonwealth, ranging from Philadelphia, the most populous, to Williamsport, the smallest. The top six metropolitan areas alone generate the bulk of the state’s innovation (80 percent of all patenting), contain the majority of the state’s educated workforce (77 percent of all adults with a bachelors degree), and serve as the state’s transport hubs.
• Despite these assets, Pennsylvania’s metro areas have yet to achieve their full economic potential. For instance, Philadelphia and Pittsburgh enjoy strengths in innovation, but they both struggle to convert their research investments into commercial products and real jobs. The Scranton metro area is emerging as a satellite of the New York City region, but it’s hampered by the absence of frequent and reliable transportation connections and inadequate broadband coverage.
• Federal leaders must advance an economic agenda that empowers states and metro areas to leverage their assets and help the nation prosper. To that end, they should establish a single federal entity that works with industry, states, and metro areas to ensure that innovation results in jobs and helps businesses small and large modernize. The federal government should strengthen access and success through the entire education pipeline. They should overhaul and create a 21st century transportation system. And they should use housing policy to support quality, mixed-income communities rather than perpetuating distressed neighborhoods with few school and job options.

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In Pennsylvania, the next major presidential primary state, concerns about the economy loom large as global competition, economic restructuring, and an aging workforce threaten the state’s ability to prosper. A true economic agenda for the state and its 16 metropolitan areas must speak to the core assets of Pennsylvania’s economy and where these assets are located: the state’s many small and large metropolitan areas. Amy Liu says an effort has to be made to build upon those assets for the future of the Keystone state and the nation as a whole.

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• Pennsylvania Metro Areas' Economic Potential

In the long run-up to the Pennsylvania primary, there's been a good deal of candidate discussion of the state's economy and how to fix it.

But missing from the prescriptions of what the federal government would do and how it would do it has been a discussion of where it will happen.

That needs to change because place matters. For all the ink spilled on the declining fortunes of the commonwealth, there are many bright spots around the state that could be catalysts to growth and prosperity.

Recent Brookings research shows strength in varied fields across the state:

Advanced health care, pharmaceuticals, and information technology in Greater Philadelphia.

Health care, architecture and engineering, and banking in Pittsburgh.

Heavy construction, machinery and food processing in Lancaster.

Industrial gases, health care and higher education in the Lehigh Valley.

The state's economy is an amalgam of its 16 metropolitan areas that generate 92 percent of its economic output.

The top six metropolitan areas alone - Philadelphia, Pittsburgh, Harrisburg-Carlisle, Allentown-Bethlehem-Easton, Scranton/Wilkes-Barre, and Lancaster - constitute 68.4 percent of the state's population and produce 80.5 percent of the state's economic output.

The research underscores that four key assets overwhelmingly located in metropolitan areas - innovation, modern infrastructure, strong human capital, and quality places - are needed today to drive productivity of firms and workers, improve the wealth and opportunities of families, and ensure sustainable growth. America's metropolitan assets - the universities, the health-care concentrations, and the skilled-labor pools - are the drivers of our national economy and the key to future American competitiveness and success.

So what does this mean for Greater Philadelphia? And what would a more thoughtful federal role look like?

Two realms with extensive current federal involvement are transportation infrastructure and innovation. Cogent efforts from Washington in both these areas could significantly leverage state and local efforts.

Rather than thinly spreading transportation-infrastructure dollars across the country, the federal government should spend strategically.

For Greater Philadelphia, supporting its competitive advantage as the linchpin of Amtrak's Northeast Corridor with federal dollars for more frequent and reliable service would strengthen the region as a rail hub, as has been championed by the Greater Philadelphia Chamber of Commerce.

Additionally, federal transportation policy should empower metropolitan areas with the discretion to spend funds flexibly, whether that's improving the aging SEPTA system, beginning the work of reinventing and burying Interstate 95 to increase access to the Delaware waterfront, or increasing transit access of city residents to suburban jobs.

Regarding innovation, unfortunately, the federal government currently has no unified national strategy to maximize high-quality jobs and spread their benefits throughout the Philadelphia region. Instead, it has a series of highly fragmented investments and programs.

Current programs put strong emphasis on research, but are insufficiently attentive to the commercialization of that research and blind to how innovation and jobs arise from the intense interaction of firms, industry associations, workers, universities and investors - a nexus ready to be capitalized on in Greater Philadelphia as documented by the Economy League of Philadelphia in a report for the CEO Council for Growth.

To this end, the federal government should reorganize its efforts and create a National Innovation Foundation, a nimble, lean organization whose sole purpose would be to work with industries, universities, business chambers, and local and state governments to spur innovation. Similar, successful national agencies are already up and running in competing nations, such as Britain, France, Sweden and Japan.

This effort should include R&D and support for technology-intensive industries such as information technology and pharmaceuticals, but it also must make small and medium-size manufacturers more competitive and train workers in manufacturing and low-tech services to work smarter.

Looking forward, our federal government must realize this is a "Metro Nation" and value and strengthen economic juggernauts such as Philadelphia.

Only by organizing our currently fragmented investments in transportation and innovation - and targeting them where they will provide the greatest return, metropolitan America - will the United States continue not only to compete, but also to lead.

This is the first in a series of reports on the demographic and political dynamics under way in 10 “battleground” states, deemed to be crucial in deciding the 2008 election. As part of the Metropolitan Policy Program’s Blueprint for American Prosperity, this series will provide an electoral component to the initiative’s analysis of and prescriptions for bolstering the health and vitality of America’s metropolitan areas, the engines of the U.S economy. This report focuses on Pennsylvania. Among its specific findings are:

• Pennsylvania is becoming a demographic “bridge” between Midwestern states like Ohio and other Northeastern states like New Jersey, as its new growth is tied to urban coastal regions. While often classed as a so-called “Rust Belt” state, its eastern and south central regions are increasingly becoming part of the nation’s Northeast Corridor, with new growth and demographic profiles that warrant attention in upcoming elections.
• Eligible voter populations indicate a state in transition, where minorities, especially Hispanics, and white college graduates are increasingly important, but where white working class voters continue to play a central role. While white working class voters continue to decline as a share of voters and are less likely to work in manufacturing and goods production, they are still a critical segment of voters, including in the fast-growing Harrisburg and Allentown regions where their absolute numbers are actually increasing.
• Recent Democratic victories in Pennsylvania have featured strong support from groups like minorities, single women, and the young but have also benefited from relatively strong support among the white working class, especially among its upwardly mobile segment that has some college education. Compared to 1988, both the latter group and white college graduates have increased their support for Democrats. And both groups have increased their share of voters over the time period.
• Political shifts in Pennsylvania since 1988 have seen the growing eastern part of the state swing toward the Democrats, producing four straight presidential victories for that party. The swing has been sharpest in the Philadelphia suburbs, but has also been strong in the Allentown region and even affected the pro-Republican Harrisburg region. Countering this swing, the declining western part of the state has been moving toward the GOP.
• Key trends and groups to watch in 2008 include the white working class, especially whites with some college, who, unlike the rest of this group, are growing; white college graduates; and Hispanics, who have been driving the growth of the minority vote.

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In last night’s Pennsylvania primary, Hillary Clinton won a sweeping if not quite overwhelming victory, receiving 55 percent of the vote and reducing Barack Obama’s overall popular vote edge by more than 200,000. Because of the Democratic party’s system of proportional representation, she netted fewer than 15 pledged delegates. These results have quieted calls for her to leave the race and will probably slow the steady flow of superdelegates to Obama. Nonetheless, her path to the nomination remains steep.

The demographics of the Pennsylvania vote followed a now-familiar pattern. Obama won among voters younger than 40, while Clinton prevailed among older voters. Obama won in big cities and some inner suburbs; Clinton carried suburbs overall while winning more than 60 percent of the small town and rural vote. Clinton did 9 points worse among men than among women, who constituted 59 percent of last night’s voters. She received 62 percent of the vote from gun-owning households and almost three-fifths of the vote from union households. Obama carried voters from families making less than $15,000 and more than $150,000; Clinton carried everyone in between. She received 64 percent of the vote from high school graduates but only 48 percent from college graduates. Obama won 55 percent of the vote among those who consider themselves “very liberal,” while Clinton got 60 percent of the vote among self-described moderates. Clinton took 56 percent among long-time Democrats, while Obama took 62 percent of new Democratic primary voters—principally Republicans and Independents who registered as Democrats to participate, but also the 4 percent of the primary electorate that previously been unregistered.

There is evidence that religion, gender and race all figured in the results. Clinton received 58 percent of the white Protestant vote and a stunning 71 percent of white Catholics. Obama got 64 percent of those who profess no religion and 56 percent of those who never attend church. Clinton did 22 points better among those who said gender was important than among those who did not. (Intriguingly, men who said it mattered were also more likely to support Clinton.) By contrast, race appears to have been a negative for Obama: whites who said it mattered gave 75 percent of their votes to Clinton, versus only 58 percent for those who said it did not. While nearly half the whites for whom race mattered refused to say that they would be willing to support Obama in the general election, their sentiments may well soften in coming months as differences between the parties come to the fore.

The long campaign mattered, and it left some bruises. 68 percent of the voters said that Clinton had attacked unfairly; 50 percent thought Obama had. Nearly a quarter of the electorate thought that Clinton was solely responsible for unfair attacks, versus only 6 percent who thought Obama was. Only 57 percent of the electorate thought that Clinton was honest and trustworthy, versus 67 percent for Obama. Only 40 percent said they would be satisfied if either candidate won; 32 percent wanted only Clinton, and 23 percent only Obama. But however negative the contest may have turned, it appears to have worked to Clinton’s advantage: she received 57 percent among voters who decided during the last week before the primary, 5 points better than she did among those who decided earlier.

The results also confirmed the surge in concern about the economy. Fifty-five percent of the voters regarded the economy as the top issue, versus only 27 percent for the war in Iraq and a modest 14 percent for health care. Obama prevailed only among voters who gave top priority to Iraq, while Clinton received 54 percent of the health care voters and 58 percent of the economy voters.

Attention now shifts to the May 6 primaries in North Carolina and Indiana. Obama is expected to prevail in North Carolina, but Indiana offers a level playing field. A split decision would be likely to prolong the race, while an Obama sweep might well induce many undecided superdelegates to declare for him and bring this protracted contest to an end. In addition, Obama’s fundraising edge is becoming increasingly important. Not long into her victory speech, Clinton made an urgent pitch for new contributions. Facing a mounting debt and dwindling cash on hand, her ability to continue on until the end of the primary and caucus season in early June may well depend on the size and speed of her supporters’ response.

Bringing together the five counties of Southeastern Pennsylvania, the nonprofit Metropolitan Caucus, a new regional consortium there, is promoting a joint regional application for ARRA’s competitive Energy Efficiency and Conservation Block Grant dollars. Its four-part proposal, which will add and refine partners and programs over time, draws on the collaboration of multiple regional institutions to establish and operate a loan fund for green building and retrofits; support clean energy technology deployment; assist local governments with energy efficiency plans; and measure the energy performance of public facilities.

The newly created Metropolitan Caucus of southeastern Pennsylvania is leading the bold new regional energy efficiency strategy targeting for the competitive Energy Efficiency and Conservation Block Grants (EECBG) in the American Recovery and Reinvestment Act (ARRA). Unprecedented for the region, the Metropolitan Caucus has brought together five area counties—Bucks, Chester, Delaware, Montgomery, and Philadelphia—to make the most of the stimulus opportunity by coordinating their plans, goals, and assets to achieve maximum regional benefit. Their proposed joint EECBG competitive application for roughly $35 million calls for financing construction and retrofits, supporting clean energy companies, measuring building energy performance, and assisting local governments in implementing various sustainability solutions. To carry out each of these activities, the caucus intends to engage in broad cross-sector collaboration to leverage the strengths and unique assets of regional educational institutions, key nonprofits, and planning agencies.

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Last week international electronics mega-manufacturer Foxconn announced plans to invest $30 million in a new robotics plant in Harrisburg, PA. Foxconn, the notorious Chinese low-wage manufacturer of Apple’s iPhone, has become the poster child of U.S. outsourcing in the face of ruinous global labor cost competition. The calculus of manufacturing supremacy is seemingly simple: Low labor costs and taxes, proximity to a large consumer base, and manageable corruption levels equal a sure strategy to attract global firms.

So what’s going on in Harrisburg? Foxconn is beginning to realize what a number of global manufacturers have come to realize: Production sites that can leverage university, government, and private R&D, a market-ready STEM workforce, and a vibrant cluster of global manufacturing supply chains trump cheap labor and tax breaks. In this regard the Harrisburg region is a big win for Pennsylvania as well as Foxconn—a company trying to move away from a legacy of poor working conditions to one of high-value, high-skilled production.   

Harrisburg and the larger Rust Belt Pittsburgh-Youngstown region to the west are hotbeds of advanced manufacturing. Youngstown is home to the National Additive Manufacturing Innovation Institute—an internationally recognized hub for so-called “3D printing” that draws together public- and private-sector resources. Pittsburgh—with the University of Pittsburgh, Carnegie Mellon University, and firms like Google—has redefined itself from a gilded-era steel town to a modern technology leader in software and robotics. Indeed, Foxconn is investing $10 million in Carnegie Mellon’s world class advanced robotics R&D. Finally, also in the Rust Belt and including Harrisburg, Akron and Cleveland, cheap natural gas has helped push manufacturing job and firm growth in a region that was hit extremely hard by the recession.

While Foxconn may be one of the highest profile foreign firm to relocate to the United States it is certainly not, as we’ve discussed, the first. Again and again, global firms interested in high-end manufacturing are putting a renewed premium on geographic clusters of intensive innovation. To be sure, countries with low labor costs still maintain solid advantages in a number manufacturing industries that will help their economies grow—this is the benefit and reality of a global economy. But when it comes to advanced manufacturing, U.S. metro areas and regions that foster synergies between research, skills, and production will likely continue to be highly sought after from firms looking to move up the global value chain.

With the GOP convention now in the electoral rearview mirror, attention is pivoting quickly from Ohio to Pennsylvania as the Democrats kick off their own nominating convention in Philadelphia.

Although it has voted Democratic in the last six presidential elections, political analysts have historically regarded the Keystone State as a swing state. FiveThirtyEight’s latest general election forecast projects a 46 percent vote share for Hillary Clinton, versus just under 44 percent for Donald Trump, making it the sixth-most competitive state. Pennsylvania also features what is shaping up to be a tight Senate race between incumbent Republican Pat Toomey and Democratic nominee Katie McGinty. Thus, it is useful to see how the state’s voters might view the condition of the economy, which could very well influence turnout levels and candidate preferences amid close contests this November.

The economic perspectives of Pennsylvanians are perhaps best understood through the prism of the state’s highly distinctive major metropolitan areas. Five large metro areas span the state—Allentown, Harrisburg, Philadelphia, Pittsburgh, and Scranton—and together account for 63 percent of Pennsylvania’s population and 75 percent of its GDP. Their economic specializations are diverse: trade, transportation, and manufacturing in Allentown and Scranton; financial, professional, and educational services in Philadelphia and Pittsburgh; and government in the state capital of Harrisburg. While much political news coverage of Pennsylvania is likely to focus on its iconic small towns, it is really these large metro areas that define the state demographically and economically.

While Pennsylvania was not one of the states hardest hit by the Great Recession, most of its major metropolitan areas bounced back relatively slowly. According to the Brookings Metro Monitor, Harrisburg, Philadelphia, and Scranton ranked among the 20 slowest-growing large metropolitan economies from 2009 to 2014. All performed somewhat better on achieving increases in the local standard of living (prosperity), but Pittsburgh stood out for its 6 percent average wage growth during that time, seventh-fastest in the nation. This wage trend also seems to have propelled Pittsburgh to a better performance than other Pennsylvania metro areas on indicators of employment, wages, and relative poverty (inclusion). Allentown, Harrisburg, and Philadelphia, on the other hand, registered declines in typical worker wages during the first five years of the recovery and little to no progress in reducing poverty.

The picture over a longer timeframe is similar, though somewhat less dire. Pittsburgh posted middling growth but very strong performance on prosperity and inclusion over the past 10 to 15 years. That provided a contrast with Allentown, where the economy grew somewhat faster but productivity and average standards of living did not, and economic inclusion suffered. The remaining metro areas—Harrisburg, Philadelphia, and Scranton—all grew weakly but managed to post middling performance on prosperity and inclusion indicators.

Pennsylvania remains a whiter state than the national average, but its major metro areas are increasingly diverse, particularly in the southeastern part of the state around Philadelphia and Allentown. Nonetheless, Pennsylvania’s economic challenges are frequently framed around the plight of the white working class, which, as my colleague Bill Frey notes, comprises 59 percent of the state’s eligible voter population. In Allentown, Harrisburg, and Philadelphia, whites have indeed suffered long-term wage stagnation. Yet in the more manufacturing-oriented Pittsburgh and Scranton areas, median wages for whites rose significantly from 2000 to 2014. By contrast, workers of color have experienced much more troublesome wage trends, losing ground to whites in every major metro area. Across the five metro areas, typical earnings differences between whites and other workers in 2014 averaged between $10,000 and $12,000.

A look at the most recent job trends, from 2014 to 2016, suggests a shifting metro growth map in Pennsylvania. Over the past two years, Philadelphia and Harrisburg have posted much stronger job gains, Allentown’s average annual job growth rate has halved, and Pittsburgh’s job level has flat-lined. The state’s two largest urban centers frame this stark change. In every major industry category, average annual job growth in Philadelphia over the past two years outpaced its rate over the previous five years. In Pittsburgh, on the other hand, job growth slowed—or turned negative—in nearly every sector. The recent energy price crash has halted a fracking boom that buoyed the western Pennsylvania economy through much of the recovery, at the same time that Philadelphia is enjoying a surge in professional services and construction employment. Fittingly, Donald Trump used Allegheny County, outside Pittsburgh, as the backdrop for one of his first post-primary campaign stops, while Philadelphia’s economic momentum will be the background of the Democrats’ argument for another four years in the White House.

The Pennsylvania economy is thus not easily characterized, and the attitudes of its voters are likely to be shaped by regionally specific short-term and long-term trends. Those trends seem sure to keep the Keystone State’s electoral votes and U.S. Senate seat highly contested over the next several months.