Which cohort recently declared bankruptcy (Chart)? The blue cities, which otherwise seem to be on the way up: Stockton (312% pop. increase, 1950-2010), San Bernardino (233%), and Vallejo (345%). Not Cincinnati (-41%), Rochester (-37%) and South Bend (-24%). The black cities have their struggles, but are less fiscally-desperate than their Californian peers. So the sun belt no longer beats the rust belt every time, thanks to California.
Economic comparisons reveal similar topsy-turviness. California dominates the list of metro areas with a 12%+ unemployment rate (Table-note no mention of Michigan, Ohio, Indiana, Pennsylvania...).
Tom Gray and Robert Scardamalia's new report explains the apparent disparity in California between fiscal and economic weakness and population growth. California may have grown 10% over the last decade, but only because foreign immigration and natural increase offset the state's massive domestic outmigration. The latter is the critical trend, because (1) foreign immigration and natural increase rates are declining and (2) California's traditional growth model has depended heavily on positive domestic migration trends. Between 1960 and 1990, the state's boom years, California poached 4.2 million people from other American states.
Why domestic outmigration? Gray and Scardamalia blame high unemployment, density (apparently nobody's moving to CA's coastal regions-they're too crowded), the high costs of living and doing business, and fiscal distress. "[C]hronically out-of-balance budgets can be seen as tax hikes waiting to happen." High tax states like California have a small margin for error. Americans will tolerate high taxes, but only when government services are good (think wealthy suburbs with high-performing school systems).
Ultimately, the most important question here is "is America in decline?" Gray and Scardamalia's focus is on California and its woes. Others are not so measured. Urbanists often overstate the correlation between urban decline and national decline. But Cleveland's collapse did not prevent America from winning the Cold War. In more recent years, California's population loss has been Texas, Arizona and Nevada's gain.
Assuming (a) industries and corporations will always be coming and going in a capitalist system, and (b) we can't control this process, then (c) decline, to some degree, is inevitable. Again, not the decline of the nation as a whole, but of certain communities and their states. Cities can successfully reinvent themselves, but it's rare. Most urban renaissances are cosmetic.