Beneath the surface, unnoticed by many, an even deeper force was at work—the rise of creativity as a fundamental economic driver, and the rise of a new social class, the Creative Class.

Ideas are the currency of the new economy.

Toronto won't topple New York or London as a financial center, nor will it dethrone Los Angeles as the international entertainment capital, but with its large and stable banks, numerous knowledge-based industries thriving in the surrounding mega-regions, and an increasingly diverse population, it will gain ground. And with employment opportunities in the largest centers eroding, it can make a big move on top global talent. It stands as a model of an older, once heavily industrial Frostbelt city that has not only turned itself around but continues to grow and thrive.

We need to find ways to transform the more than 60 million service jobs, which make up 45 percent of U.S. employment, in the same way - rewarding workers financially, encouraging and empowering creative participation, creating professional communities, and so on. We can look to any number of new companies - from Zappos, to Starbucks, to American Apparel - for examples of how this idea might play itself out. We need to do more to make service jobs into higher-paying family-supporting jobs of the future.

Human creativity is the ultimate economic resource.

We need to remake and reinvent our housing system so that it supports the flexibility and mobility of our economic system broadly. Home-ownership is rewarded by the federal tax code, which made great sense when that piece of the American Dream, and all the consumption that came with it, was essential to rebuilding the economy. These days, however, it feels like a huge penalty to people who want to travel light within the new mobile economy without a mortgage to hold them back.

There's no getting around the fact that some cities face long odds, and governments and societies are going to be confronted with some hard decisions. Most importantly, cities have to recognize that in times of crisis they have to help themselves. Governments, no matter how well intentioned, can only do so much, especially when they themselves are so strapped for cash, as the U.S. is now. Government money will probably flow to cities and regions with good prospects for the future, so as not to risk money even further by pouring it into stalled economic models.