Sunday, September 9th, 2012

Fixing Chicago: Rahm’s Work in Progress

This article is part of The State of Chicago.

As I continue with my Chicago series, I’ll turn now to the matter of how to fix what’s wrong with Chicago, hopefully without damaging the things that are already right and going well.

This first piece is to highlight what Mayor Rahm Emanuel has already been doing. The timing’s risky, as at midnight tonight the teachers’ union might go on strike. But I’ll take my chances.

I voted for Rahm for mayor, for three major reasons:

1. I see him as like his mentor Bill Clinton, namely someone to whom getting elected and staying popular is more important than pushing any ideological agenda. In short, I see him as a pragmatist, not someone with a policy ax to grind.

2. Rahm has spent a lot of time outside of Chicago. He’s got a global perspective and a global network that’s critical in this era. He’s also got the gravitas to interact at the highest levels of power in America, which is something few mayors can say.

3. Rahm has no natural constituency in Chicago. So if he wants to be re-elected, he needs to perform. He clearly has future political ambitions, and flaming out as mayor wouldn’t be helpful in pursuing them.

Having been in a office a bit over a year, Chicago’s problems are far from fixed, but I have seen a number of good thing’s he’s accomplished or started, so let’s take a look.

Fresh Blood and Re-Energizing the Civic Elite

Unlike some, I am not a Richard M. Daley hater. Of course he made some bad decisions, did things I didn’t like, etc. But one thing you could never take away from Daley was his fierce passion for the city. Here’s a guy that you get the feeling woke up every morning and asked, “What can we do to make Chicago a greater city today?” That’s a quality of leadership seldom seen in America. While Chicago had the wind at its back in the 1990s, you have to give at least partial credit for Chicago’s turnaround from Rust Belt malaise to the man at the helm.

Yet by the end it was clear that Daley had been in office too long and was running low on ideas – good ones at any rate. The high water mark of the Daley administration was the opening of Millennium Park, one of his great legacies in office. But I think we can assign a very specific date to when it became very clear all was not well: March 21, 2003, the day Daley demolished Meigs Field airport in the middle of the night.

Rahm came onto the scene like a breath of fresh air. The city needed new blood, new ideas, new energy, and Rahm delivered. He really put a focus on hitting the ground running and delivering some “first 100 days” type results. This made it appear he was rapidly going to deliver on his promises.

One impact of this was to re-energize the civic elite, which had been feeling dispirited. You can definitely tell they’ve gotten a bit of confidence and swagger back about the city, and there’s a more optimism in the air. One key example of this is the series of reports from World Business Chicago and the OECD with a number of negative findings about Chicago. In the later Daley, maintaining a facade of all-is-well was paramount. Today, Chicago’s elite has enough confidence in their city that they can openly admit the things they believe aren’t quite right yet.

This shift in the overall civic sentiment is very important. Both optimism and pessimism are infectious. Changing the mindset of a place can be very hard. Re-establishing a bit of the can-do spirit may not be something that can be quantified in stats, but is very important nevertheless.

Economic Development

Another area we’ve seen Rahm hit hard is economic development. Initially this has consisted of transactional econdev. I call it economic development via “Rahm’s Rolodex.” Since Rahm has a powerful rolodex and isn’t afraid to use it, this is the logical place to start. He basically started dialing every CEO he could to pitch them on bringing jobs to Chicago. And it has been working. He’s managed to announce something like 20,000 new jobs since taking office. Now a good chunk of these are suburban relocations, and some are merely promises for the future. But hey, it’s the same everywhere. No matter how you slice it, there have been and will be real jobs created. And the drumbeat of announcements reinforces the positive civic dynamic in the city.

Rahm also, as I noted, put out an economic development strategy in conjunction with World Business Chicago that frankly acknowledged the problems the city has been facing. Rahm also led the restructuring of the agency and has brought in a couple of corporate heavy hitters to lead up the economic team in his own office. He also took some first steps around red tape reductions for small business.

Unfortunately, the recommendations of the WBC plan seemed a bit weak. It’s hard to imagine this initiative really driving transformational change. I’ve yet to see the mayor outline a real vision of the city’s future economy that isn’t more or less based on more of the same that’s already in the Loop. And as I’ve demonstrated, the Loop economy just isn’t big enough to carry the load. Even growing it at a rapid clip, that will still be the case.

But while I think there’s a grade of Incomplete on this to be sure, Rahm has made a lot of progress so far, particularly on the transactional side.

Keeping Up With the Joneses

As I said, one advantage of having Rahm in office is his global perspective. The average Chicagoan who doesn’t know much about what’s been happening in New York, London, San Francisco, Portland, or DC may be impressed with what Chicago was doing, but in critical areas like transportation design, Chicago had fallen very behind.

As somebody who got around, Rahm knew this, and set about shoring up some of the city’s weak spots. For example, he brought in John Tolva from IBM as Chief Technology Officer to spearhead getting Chicago up to speed on things like open data. He also made a big push behind technology generally, trying to put Chicago over the top as a technology hub.

Most notably in my view was bringing in Gabe Klein to run the Department of Transportation. Klein was running transport in Washington, DC, but lost his job in a change of administrations right about the time Rahm was elected. Klein quickly set about switching to things like protected bike lines, making a push on bike share, and other matters. Pretty much Klein has followed what I would have recommended as a starting strategy for Chicago transport, starting with low hanging fruit and lower cost items.

Transport is a good example of the next phase of the challenge. Rahm’s been pushing hard to catch up with the market in areas where Chicago had fallen behind. So far, so good. That’s step one. The harder thing to do is start innovating and driving the agenda to get ahead of other cities.

So I’d put the challenge out to Gabe Klein and Rahm Emanuel to do that on transport. Don’t just be a fast follower and deployer of best practices. Do that, but also look to innovate.

Fiscal Restructuring

Without a doubt, Rahm inherited a huge financial mess in the city. He’s taken some steps to tackle it. Spending was cut 5.4% last year. And the projected deficit for next year is about half of his first year in office. Daley had used gimmicks like privatization transactions to paper over deficits. Rahm has avoided that so far.

Rahm also took steps to start addressing old infrastructure. He raised water rates, which were ridiculously low, to fund badly needed upgrades of the system. He’s pushed forward on the O’Hare modernization plan, though at this point there are real questions about how fast the city should move. And he’s managed to make a number of announcements around the transit system, particularly investments in the Red Line, by far the most important in the system. (To be fair, I believe the state capital bill really funded most of this). I do not support a casino in downtown Chicago, but Rahm is pushing it hard as another source of tax dollars for infrastructure. His signature initiative in the space is new Chicago Infrastructure Trust, a type of off balance sheet financing entity, though the specifics of what that will actually end up doing are unclear.

While Rahm has made progress, there’s a very tough road ahead. There are no easy choices. Chicago’s citizens, already among the most harassed and nickel-and-dimed out there, will be facing a blizzard of speeding cameras soon, this on top of the red light cameras and the locust plague of parking ticket enforcement agents. On the expense side, the police force is down in strength while the murder rate gains national attention. Other city services like libraries are also being affected. Either way, raising taxes/fees/fines or cutting services, reduces quality of life for Chicago’s residents. When you see more Department of Revenue workers than you do cops, firemen, or other public employees, you know something’s gone badly wrong.

There are opportunities to save money through restructurings that wouldn’t affect service delivery. The city is rolling out the “grid” garbage collection system, for example. The fire department also needs rationalization. And some agencies might be merged with Cook County. But these are politically daunting. Chicago also faces a major pension crisis that could send property taxes soaring.

Rahm should be applauded for the progress he has made tackling a very major problem. But clearly fiscal issues are going to remain front and center for some time to come.

In fact, I believe the financial stress is so high that Rahm will change in mind on some things. My prediction is that the temptation to privatize Midway Airport will prove to strong to resist, for example.

In Conclusion

In short, I think Rahm’s done a pretty good job in a very tough situation in a number of areas. I think ultimately he’ll figure out a way to mostly get a handle on the types of areas I highlighted.

Unfortunately, two items I didn’t list could end up undermining his entire administration: the spike in crime, especially murder, and problems at CPS. Rahm is defending his public safety record, which is understandable, but trying to spin the statistics when it’s clear there’s a very serious problem with shootings makes it seem he’s out of touch with reality. Also, even if the strike situation is resolved, there are big problems at Chicago Public Schools, financial and otherwise. A long time employee I greatly trust tells me he’s never seen the central office in worse shape.

I suspect Rahm knew the schools would be challenge. But he was probably surprised by the murder problem. Both of these are the types of challenges mayors have to deal with. If he successfully sees the city through them, it will cement his reputation for leadership and strengthen his hand for implementing further difficult actions. But failure would undermine much of the good work he’s already been doing. Which is a shame. I hope for the city’s sake Rahm is able to pull it off.

12 Comments
Topics: Economic Development, Public Policy, Transportation
Cities: Chicago
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12 Responses to “Fixing Chicago: Rahm’s Work in Progress”

  1. the urban politician says:

    The school situation, to be honest, is emblematic of what I view to be Chicago’s and Illinois’ greatest weakness.

    Entrenched public sector unions.

    The fact that to this day there does not yet remain enough political will to overturn their vice-like grip over the powers that be just boggles the mind.

  2. mike says:

    I absolutely agree with you 100% urban politician. As an out of state transplant living in Chicago, It’s stunning to see how far behind the educational system is in Chicago and throughout Illinois. Unfortunately, this carries over into the daily lives and behaviors of indigenous Chicagoans. The educational system MUST be completely overhauled. I also agree that Rahm recognizes the educational deficiency because he has spent much of his time outside of the State. Chicago is a mess!

    Regarding crime, I happen to live in one of the more dangerous neighborhoods and while open-air gang violence has decreased noticeably under Emanuel’s watch, other areas of crime has gotten worse. For example, the cops are primarily focusing on preventing murders from happening, all the while, a host of annoying and less violent crimes are taking place and being completely ignored.

    I understand the Mayor is sticking to his guns in trying to keep expenses down by not hiring more police officers but this may be at the expense of losing population and more importantly talent. At the present time, there is no relatively safe neighborhood within the city of Chicago.

    Crime is out of control.

  3. Racaille says:

    Mr. Renn says:

    “The average Chicagoan who doesn’t know much about what’s been happening in New York, London, San Francisco, Portland, or DC may be impressed with what Chicago was doing, but in critical areas like transportation design, Chicago had fallen very behind.”

    I do hope that Chicago does not look towards San Francisco as a model of transportation because it’s a disaster. Furthermore, people who think that London is a model for much of anything clearly have not spent much time there.

  4. Racaille says:

    Mike says:

    “At the present time, there is no relatively safe neighborhood within the city of Chicago.”

    This is simply not true.

  5. SGaldi says:

    I can’t agree with you re. Rahm. I think he’s done a pretty poor job. Saying that he’s done well, except for crime and education, just doesn’t do it for me.

    Crime and education are probably the two biggest issues in the city (and the two where the mayor can have the biggest influence), and he’s been awful on both. The schools are shut down, the teachers are on strike, and Chicago leads the nation in murders in 2012 (it isn’t even close).

  6. Racaille says:

    “Chicago leads the nation in murders in 2012 (it isn’t even close).”

    Percentage wise….it’s not even close.

    http://chicago.cbslocal.com/2012/06/15/chicago-not-ranked-among-ten-most-dangerous-cities/

  7. Ziggy says:

    I disagree that Rahm doesn’t have a policy ax to grind. Like Clinton, he’s been a loyal foot soldier in the application of neoliberal and predatory economic policies advocated by Robert Rubin and others, which have been a disaster for all in every country they’ve touch saved for the extremely wealthy.

    Anyone who says that public sector unions are the root of all evil without acknowledging their targeted destruction by the payed minions of both political parties is simply repeating the company line espoused by the establishment propaganda machine. The reality if more complex. I doubt seriously the private sector could do much better than the public sector when it comes to education, and that certainly seems to be the case with the performance of chartered schools in Chicago to date. The issue is how should an entity with monopoly power over a critical public service be held accountable. The private sector has less desire to be accountable than the public sector, and the pay and benefits are far worse for employees. Busting unions will only perpetuate the race to bottom for Main Street America that is now well underway.

  8. costanza says:

    How long has Rahm been Mayor?

  9. costanza says:

    “The average Chicagoan who doesn’t know much about what’s been happening in New York, London, San Francisco, Portland, or DC may be impressed with what Chicago was doing, but in critical areas like transportation design, Chicago had fallen very behind.”

    Does the average New Yorker, Londoner, Portlander, etc know what’s going on in other cities?

  10. Rob says:

    “Crime is out of control.”

    Until bodies hang off bridges on nooses and headless corpses are dumped dozens at a time along Michigan Avenue, I’ll never buy this line of oversimplification.

    Since I’m a suburbanite, I haven’t done a deep read of the CPS situation.

    My general read is this: my salary, and everyone else’s, depends on how well our employers do. Pension payments are soaring, but the union wants to squeeze money out of rocks to provide cost of living raises. Wages in the real world have been stagnant or falling.

    The union opposes choosing and rewarding better performing teachers. They oppose experiments in better education, in the form of charter schools, while some CPS schools sit 50-60% empty.

    I’m not so naive as to think that charter schools can’t be co-opted by various forces, and that some of those that ought to be closed, won’t be. What I do know is that right now, all of those charter schools are teaching children, and no matter how many parents gush over their local teacher, I think they care about the education of their children more.

  11. uffy says:

    Last I heard 47% of people support the teachers vs 39% opposed. This is a much higher number than I would have expected. It also looks like people think that Rahm is doing a mediocre to poor job of handling the situation by a huge margin.

    From my perspective this strike is the absolute worst thing that could happen to Chicago. Awful.

  12. SPQR says:

    You say you voted for Rahm, but what was the alternative? Carol Mosely Braun? The choice was among a slate of Democrats. So much for an election: Rahm won with a total of about 300,000 votes out of a population in the millions. People get the leaders they deserve.

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