Every year for the economics profession starts with the world’s largest gathering of economists at the Allied Social Science Associations (ASSA) Conference.

The ASSA includes 66 associations in related disciplines, organised by the American Economic Association. This year it was held in San Francisco, a city long celebrated by artists for its natural beauty and magnificent architecture. Today, widespread poverty, drug use, and homelessness blight the streets around the downtown conference centre in astounding contrast to its opulent design.  

This once among the best livable cities, now filled with indigence, has suffered from economic upheavals that began before the Covid-19 pandemic and have worsened since. Thousands of businesses have fled, leaving its towering skyscrapers and elegant shops empty.

Writing beneath the headline “Goodbye Eldorado: Fear and Poverty in San Francisco,” Saubhik Chakrabarti, associate executive editor at The Times of India, cited a couple of tweets by US multi-billionaire Elon Musk, US President-elect Donald Trump’s electoral campaign dynamo, on his social media platform X.

“So many stores shuttered... Feels post-apocalyptic,” Musk wrote. “You could literally film a Walking Dead episode unedited in downtown.” That was two years ago. The situation has only worsened since.

As I always do on my trips, I tried to strike up conversations with taxi and Uber drivers in San Francisco, asking them general questions about the state of a city I last visited before the pandemic in 2020. Invariably, their responses were filled with mournful reminiscences of the long-gone days of prosperity and their hopes of leaving a city where the cost of living is so high that anyone earning less than $100,000 a year is ranked as low-income.

The first driver, in his sixties, told me he had spent more than half his life in San Francisco and that although he would like to leave the city he could not afford to do so because he did not have enough savings.

A young Latino Uber driver said he planned to migrate to the Philippines, where he had found a job in a high-growth sector. An elderly Egyptian, driving an electric vehicle, said San Francisco was no longer affordable for him and his family. They had lived there for 14 years, he said. Now he plans to return to Texas, where he had graduated from university. Lower taxes in Texas have attracted many firms including the ones specialising in the high-tech field.

Our conversations touched on the scenes of wandering vagrants and drug addicts walking like zombies or sprawled on pavements outside buildings with entrances and windows barricaded, barred, or boarded up to fend off intruders.

According to official figures, at least ten per cent of San Francisco’s population suffers from poverty, with higher rates among the elderly, African Americans, and women in these groups. Among the reasons cited are the rising cost of living, the lack of a social security net, disparities in education, income inequality, increased unemployment, and low wages.

All these things have gone from bad to worse for San Francisco residents. Without the adoption of policies to promote productivity, capacity building, and skills development among the population and to strengthen the resilience of local communities and the local economy, the chances of responding effectively to the situation declines.  

San Francisco has had more than its fair share of economic disruptions. Some date the beginning of these back to the bursting of the tech bubble, the so-called dot-com crash, in the early 2000s, followed by the global financial crisis in 2008. Then, when the Covid-19 pandemic hit, the consequent economic tailspin eroded wealth and savings and weakened the resilience of all those who had no accumulated wealth or savings and no social security.

Chakrabarti aptly countered Musk’s remarks about the aspects of deterioration in San Francisco, with a quote from former US President John Kennedy. “If a free society cannot help the many who are poor, it cannot save the few who are rich,” the latter said. This sums up some of the critical roots of the problem.

Returning to the ASSA Conference, which took place in several hotels in San Francisco, the topics discussed and technical papers presented were very diverse, but there were two dominating themes in the discussions inside the sessions and in the informal gatherings: The direction of the US economy on the eve of Trump’s second term and the economic and socioeconomic impacts of artificial intelligence (AI) in terms of competitiveness, productivity, the labour market, wages, and income distribution.

When vital economic sectors decline due to decreasing competitiveness, populist leaders tend to target two areas: trade and migrant labour. As they have no quick remedies for the poor competitiveness of domestic industries, they reach for quick fixes that resonate in the short term with their supporters and direct their anger elsewhere.

These quick fixes include protectionist measures, such as increasing tariffs and customs duties, and introducing laws and regulations to curb the influx of migrant labour while expelling undocumented or inadequately documented migrants. Meanwhile, they shirk the harder tasks involved in recovering competitiveness as a driver of growth and development. These require a long time and sustained efforts to improve the quality of education, skills, research and development, and technological infrastructure.

I will be discussing the economic measures envisioned for Trump’s world when it begins on 20 January and their potential effects not just outside the US but also inside that country and in, among other place, capitals of rampant poverty and homelessness such as San Francisco.

This article also appears in Arabic in Wednesday’s edition of Asharq Al-Awsat.

* A version of this article appears in print in the 9 January, 2025 edition of Al-Ahram Weekly