Thursday, November 14th, 2013
My latest column is in the November issue of Governing Magazine. It’s called “Stopping the Civic Decline Cycle.” In it I urge cities to get a real grip on their problems and restructure for new realities rather than simply managing an endless, painful decline cycle year after year. Sadly, facing fiscal challenges right in the face rather than kicking the can down the road and trying to survive another year has proven to be quite rare. I don’t want to claim this is some preferred solution. But cities are where they are and have to respond to reality.
Here’s an excerpt.
The cycle of municipal decline looks the same in a lot of places. People and businesses leave, which causes tax revenues and quality of place to degrade. That, in turn, leads to tax increases and service cuts, which makes more people and businesses leave. This repeats in an endless cycle as a city slowly dies.
Rather than an endless stream of crisis management, cities should instead take a realistic forward look at their civic trajectory—medium-term revenue forecasting, demographic and economic forecasting, capital asset replacement cycles, and so on—and restructure the services delivered and revenues raised in order to create a sustainable baseline that can be defended over at least the medium term. This would enable cities to provide some degree of predictability to current and prospective residents and businesses about what their tax bills and services received will be. That right there will improve the business climate by reducing uncertainty and the, often correct, belief that most cities just don’t have a handle on their problems.
Wednesday, November 13th, 2013
This week a trio of short films about Johannesburg, South Africa.
The first is a 1971 film by Alan Michael Levy called “Up the City.” It was uploaded by his son, who gave it a new contemporary soundtrack. I’m not sure entirely what to make of this, but it’s a peek behind the veil of apartheid South Africa (though not an overtly political one). Thanks to Urbanophile reader Stéphane Dumas for this. If the video doesn’t display for you, click here.
The second comes from a recent post by Kaid Benfield. It gives us a bit of the feel of the changes in South Africa through the lens of a building called Ponte Tower. Benfield’s article on it is also worth checking out. If the video doesn’t display for you, click here.
Lastly, another look at contemporary Johannesburg. This one is another in the series of Resident Advisor documentaries on electronic music scenes in various cities, in this case, the Johannesburg house scene. If the video doesn’t display for you, click here. (You’ll have to click over to the Vimeo site for high def).
Monday, November 11th, 2013
Ok, the great local autonomy debate is underway at Public Sector, Inc. Please check it out: Do Cities Need More Autonomy?
I’d greatly appreciate serious commentary on this topic. How do we empower cities without empowering the worst abuses? To encourage you to post your comments on the debate itself, I’m disabling them here. Definitely check it out. Rebuttals are tomorrow, as well as further questions and concluding thoughts later in the week. Again, here’s the background:
Cities have become an indirect beneficiary of the federal governments’ ever-growing reputation for dysfunction. This year, the Brookings Institution, Benjamin Barber, Thomas Friedman and David Brooks have all argued that city governments are now setting the standard for effective policymaking across the nation. Some believe that cities’ recent record justifies devolving more responsibilities to the local level, or at least reining in burdensome state and federal mandates. Already free from the incompetence and partisanship that continues to paralyze the federal government, perhaps cities deserve more autonomy to do more, and if we grant it to them, the nation as a whole would benefit.
But before asking them to do more, we should carefully assess how well cities are meeting their current obligations. The results are not, in every respect, encouraging. A recent Wall Street Journal series highlighted city governments’ fiscal woes, which still persist over four years after the recession ended, and have sometimes resulted in insolvency. Weak leadership and management are far-too common, especially among the nation’s many small and mid-sized cities. Some cities, in some areas, may be achieving great things. But it could just as easily be argued that, generally speaking, local governments’ problems and need for reform merit more attention than their achievements. And it’s far from clear that liberation is the most promising path to reform. More oversight, by state governments or federal bankruptcy judges, has certainly proved to be unavoidable in the case of Detroit and other fiscally-distressed cities.
So do cities need more autonomy?
Sunday, November 10th, 2013
I was surprised to see that last Wednesday’s post on Cincinnati’s culture of self-sabotage received such a huge response. In light of that, I want to circle back and more fully address the idea of cancelling projects.
What I do not want you to take away from that is that once started, projects should never be stopped on account of the money spent. That’s called the sunk cost fallacy. Money that’s been spent has been spent. One needs to look forward to the future expected benefits and costs. There are certainly many cases in which pulling the plug can be a good idea. For example, Indiana Gov. Mitch Daniels reversed the privatization of certain social services functions after he determined it was unlikely the contract would ever work out like originally envisioned. This an example of someone taking a risk, trying to make it work, then acknowledging it didn’t rather than continuing to double down on a mistake.
On the other hand, I do not see the majority of these rail cancellations as having anything to do with benefit/cost analysis. You may notice, it’s only transit projects that ever seem to get the ax. Since the era of the freeway revolts, it’s tough to name any governor or mayor that has ever sent back earmarks on a highway project, or ever cancelled any road project they could actually get money to build on the grounds that it’s a boondoggle. (My hypothesis continues to be that there’s no highway boondoggle big enough that even the most fiscally conservative governor is willing to kill it). Clearly, the cancellations in these cases is based on an ideological animus to transit specifically.
That is, unless it is baser motivations at play. Chris Christie’s cancellation of the ARC tunnel project enabled him to use the funds New Jersey had pledged to the project to bailout the state’s bankrupt highway fund. He’s not demonstrated any hesitancy to push even questionable and expensive transit projects when they involve Somebody Else’s Money. For example, he wants the Port Authority to spend a billion dollars on an extension of PATH service to Newark Airport, which many consider an inappropriate use of funds. Christie’s motivation appears to be bribing United Airlines to add flights to Atlantic City, whose gambling market is imploding. (Read up on the Revel Casino deal if you want to know more about this sordid story).
Meanwhile, many of these cancellations are proving to be costly in their own right. I noted before how Cincinnati had already let $95 million in contracts out the total $133 million cost of the streetcar, how it will have to repay federal grants that were going to pay for a big slug of the project, and likely end up with at best a minor financial win and potentially a loss.
It’s the same in Wisconsin. Gov. Scott Walker trumpeted that he was returning an $810 million stimulus grant for rail upgrades between Madison and Milwaukee. Apparently although the federal government was going to pay 100% of the construction costs through the stimulus bill, he didn’t want the state to have to pick up the estimated $7.5 million in annual operating costs. (How much the state actually would have had to pay incrementally is a an open point. The existing Hiawatha operating costs were being 90% paid for by federal funds. It’s by no means clear that the state would have been on the hook for the full amount anyway). The feds were actually generous enough to reimburse Wisconsin for money it had spent on the rail line it decided not to build. However, that did not prove to be the end of the matter. Train maker Talgo is planning to sue the state of Wisconsin for $66 million for breach of contract. Given that it actually built trainsets for the state, this seems like a strong case. Also, if the state does lose, it might also be forced to immediately repay an additional $70 million in loans. The state could have paid operating costs for a long time for that kind of money – and it would actually having something to show for it other than a hole in its bank account.
So from a financial perspective, it’s not even clear cancelling these projects was a good move – even if you look solely at costs and ignore benefits.
But beyond the financials, these types of things also show communities that have deep internal divides, and which as a result require businesses and residents to apply an additional uncertainty premium into investment business cases there to account for the likelihood that a) promised actions by the government may not actually occur, even if they are in flight and b) that the community may not be able to muster the staying power to make the kind of long term investments that are necessary for any community to retain marketplace relevance. Though hardly immune to infrastructure drama, New York City just put water tunnel #3 into service for Manhattan. This is a project that was started in the 1970s. That’s the type of long term thinking that has kept a place like New York on top. In short, credibility counts for something, and places like Cincinnati and Wisconsin have damaged theirs.
I want to contrast this with one of the legendary stories of Indianapolis. In the late 1980s it embarked on construction of a downtown mall. Maybe that wasn’t the best idea in the world. The city definitely didn’t have its act fully together. Two entire city blocks had been excavated and were literally holes in the ground. No anchor stores had been signed and it wasn’t clear if the project would or even could be finished. A lot of the public suggested scrapping the project. Some suggested turning the empty blocks into ice rinks. Others trying to bring in a Wal-Mart. Instead, city leaders across the board came together to commit to the project, including many of the downtown corporations investing in the project. It got built. While generally successful, the mall has certainly had its share of troubles over the years and may not even survive over the long term given the disfavor of the mall format. However, one thing that project demonstrated is that Indianapolis finishes what it starts. In short, they have credibility and an ability to execute that’s simply better than most places. I suspect that’s one of the reasons metro Indy has so outperformed Cincinnati in population, job, and reputational growth, despite having far, far fewer natural assets to start with. They aren’t constantly shooting themselves in the foot.
This is also why even though there are road projects out there I did not think were a wise use of funds – say I-69 in Indiana, to pick one I’ve criticized – once they are being built I’m all in favor of getting them done as quickly and cheaply as possible. And then letting the communities in question live with the consequences of making that choice, for good or ill. Again, that doesn’t mean no project should ever be cancelled, but you need to pick your battles. Communities are not well served when project debates turn into endless years of scorched earth politics, litigation, etc. in which neither side will ever given an inch on anything.
Friday, November 8th, 2013
Clark Williams-Derry, a blogger with the Sightline Institute, has been running a blog series called “Dude, Where Are My Cars?” which examines the increasing disconnect between traffic projections and traffic reality. The Sightline Institute is into sustainability advocacy, so would naturally have an anti-car POV, but there’s some interesting stuff in there. I was particularly struck by this graphic that’s been making the rounds:
In other words, the Washington DOT continues to use basically the same upward slope for future traffic predictions despite the fact that traffic has been on a steady downward slope since 1996. They just slide the origin point down the actual curve. Williams-Derry straightforwardly calls this “B.S.” He then proceeds to give a point by point rebuttal of the DOT’s claims regarding their projection.
He has strong words and in my experience they are somewhat justified. I try to give people the benefit of the doubt, but that’s becoming harder and harder to do in these cases. However, lest we be too harsh, keep in mind that transport is highly politicized, and staff bureaucrats, many of whom are no doubt not particularly well-paid, are under enormous pressure to toe the party line set by the political overlords. It’s not realistic to expect most of them to stick their necks out, particularly when there’s so little chance it would actually affect the outcome in any case. Like with Jay Carney, the job of a spokesman is to aggressively promote and defend the boss and his policies, not to go on some Socratic quest for the truth.
This also shows how incredibly difficult it can be refute DOT claims. Their traffic models are basically black boxes. As we all know, garbage in, garbage out. It’s very easy to tweak parameters in any model to get the results you want. Also, it’s not always obvious what the parameters in fact are. While some items like population and job growth can be fairly easily analyzed and critiqued, it’s usually hard to get a grip on much of the model. If they say the number in 2040 is X, how do you know if it’s too high or too low? Most of the time you don’t.
Thus the person who wants to try to understand if these are legitimate versus manufactured numbers has to read through reams of dry, technical material to accomplish one or both of two things (assuming there’s a problem): show inconsistency between numbers, or draw an easy to understand picture for the public of what the numbers actually imply if you believe them. One the latter point, much like some companies that disclose troubling information right in the prospectus on the assumption no one who happens to read it will notice or care, sometimes the dirt is right there for anyone who wants to read through some material. I’d put the recent Louisville bridge study into that category.
Unfortunately, few people have the time or inclination to do this. And with the state of newspapers as they are, there are very few transport reporters who are able to do a real analysis. This means that when you read the average article about transportation in the newspaper, it’s usually little more than a re-written DOT press release. Given that the papers will print whatever the DOT spokesman tells them uncritically, why not take advantage of that to the max? No surprise, that’s exactly what they do.
Thursday, November 7th, 2013
My latest post is online over at New Geography and is called “To Rebuild, the Midwest Must Face Its Real and Severe Problems.” Lou Mazzucchelli said the other week that when you have systemic problems, you need systemic solutions, not just point solutions to point problems. Clearly, incremental or point improvements can be a good thing, but unless they snowball into a comprehensive solution, they’ll be limited in what they can achieve. In the Rust Belt, most of the strategies for turnaround have been of the point solution variety. They generally attempt to rebuild on the idea of creating “success bubbles” outside the existing broken system in the hopes that they eventually expand to create a new dynamic.
Not a bad theory, and I’d even endorse these in many cases as they’ve shown some positive results, but by failing to address systemic problems, they leave cancers eating away at these communities. In this piece I review some of these core issues, ones that defy easy solutions and that people do not like to talk about in most cases. These include racism, corruption, closed societies, paralysis from two-tier societies, infrastructure, obsolete regulatory systems, and fiscal trauma in many cases. Fortunately, the region does have many strengths, and these could provide a basis for a more broad based rebuilding if the core problems are mitigated.
Here’s an excerpt (click through for the full story):
Despite the plethora of high end companies, educated workers, and top quality universities, the Midwest economy was traditionally based on moderately skilled labor in agriculture and industry. This forged a work force that places too low value on education and which can even be suspicious of people with too much of it. Today’s agricultural and manufacturing concerns, at least the ones with jobs that pay more than subsistence wages, require much higher levels of skills and education than in the past. What’s more, with the global macro-economy favorable to larger cities and talent based industries, larger metros have comparatively done well while most smaller towns have struggled. As a result, their quality of life and services have so badly degraded they are no longer attractive to “discretionary residents” (those with the means and opportunity to leave), which perpetuates a downward spiral as the educated flock to bigger cities. That’s why manufacturers complain they can’t find workers with skills, even if those skills are just passing a drug test and showing up to work everyday. This produces massive inequities, resentment, and policy confusion.
Pete Saunders followed up, suggesting that the South had to over come similar problems. His take is at “Can the Rust Belt Learn From Dixie?“
Thursday, November 7th, 2013
Perhaps the most interesting urbanist election Tuesday was in Cincinnati, where the main issue in the campaign seems to have been the under-construction streetcar project. John Cranley, a Democrat who vowed to halt construction, as well as to cancel a pending parking privatization contract, was elected by a significant margin over Roxanne Qualls. Given that an anti-streetcar city council was elected as well, it seems likely Cincinnati will halt the project.
Let me stipulate that I was never really that big a fan of the streetcar. Not evil, but certainly not at the top of what I’d see as the priority list for Cincinnati. And I’m a resolute opponent of parking meter privatizations as most of you know. Yet I can’t help but see this as a perfect example of why Cincinnati, a city that has more assets than any comparable sized place in America, has long been a national laggard.
The New Republican Strategy: Cancelling In-Flight Projects
But before that, I’d like to highlight this as part of a national trend. As with Chris Christie and the ARC tunnel project in New York, Cranley (a Democrat backed by the Tea Party) has vowed to stop the streetcar project, even though $22 million has already been spent on it and another $71.4 million has already been obligated through contracts and is underway. (To put it in perspective, this is $95 million out of the total $133 million cost, a total that while, not cheap, certainly is nowhere near say stadium or major highway projects). Streetcar supporters say that it will cost more to stop the project than finish it. The project manager disputes that but admits the cancellation cost is unknown. I suspect the cancellation costs will be pretty steep, and local government will take a bath on it since there are a huge amount of federal grants on the project that can’t be used and would even have to be paid back. This will no doubt also tarnish Cincinnati’s reputation with the US DOT, and I wouldn’t expect any discretionary grants to be becoming their way anytime soon.
Christie and Cranley aren’t the only ones. Several Republican governors also turned back grants and cancelled projects approved by their predecessors. It’s worth mentioning that none of these guys ever turns back a highway grant, no matter how big the boondoggle. This belies the notion that Republican these politicians are actually fiscal conservatives.
This seems to be the new normal, and it’s going to increasingly make doing anything difficult. A city or state can spend untold years on a project and actually spend a boatload of money, only to have one election result in everything being thrown into the trash, even if construction is half over. (In fairness, the Democrats have uncorked what I believe to be an even more toxic dynamic, namely refusing to enforce laws their politicians don’t like. I already see state level Republicans nibbling at this in response, and I think it is going to get very, very ugly).
Why Cincinnati Has Struggled
This also illustrates perfectly why Cincinnati has struggled for so long. It’s a city with deep and toxic public divides, maybe the worst I’ve ever seen in America. Until this is overcome, which seems unlikely, don’t expect Cincinnati to be reaching its potential anytime soon.
As for Cranley, he says “we want to move the city forward.” However, his entire campaign was premised on stopping the city from moving forward in a direction he didn’t like. He may have said some things I’ve missed, but in the coverage I’ve seen of this, he hasn’t put forth any alternative vision, merely typical election-cycle bromides about balancing budgets and more cops and firefighters. It’s difficult for me to believe that a guy who ran for office to stop stuff will suddenly morph into a someone with a positive agenda, but we shall see.
In that Enquirer article, a commenter named Mark Miller (which a commenter suggests may be a pseudonymous account named after a local Tea Party leader) said, “Today is a very sad day for Cincinnati. Not only are we going back four years, we are setting this city back 50 years or more. One only has to look at the Cincinnati subway to see what small thinking brings to this city. Once we were Chicago. Post subway we could only hope to be Indy or Toledo.” That’s revealing of the extraordinary regard in which it holds itself. It’s also not strictly true. But it does get at something, namely that Cincinnati has squandered advantages most places would kill to have while other cities that started without much have actually gone on to build things.
It just goes to show that the real measure of a city isn’t in the stuff it has, but in the culture of its people. I know many incredible people in Cincinnati, but the cold reality is that the culture of the city is one of smug self-regard and self-sabotage. Until that changes, don’t expect Cincinnati to achieve the greatness of which it is manifestly so capable.
Wednesday, November 6th, 2013
Chicago architecture critic, photographer and cultural commentator Lee Bey unearthed this gem of a 1961 video of Chicago called “City of Necessity” that is well worth watching. I know most people don’t watch videos online, but despite the 22 minute length, this one is a must for the serious urbanist. Among other things, it fills in part of the historical gap that exists in a lot of people (often including myself) about how our cities actually evolved to where they are today. According to Bey, this film was produced by local religious institutions in order to showcase the benefits of city living, while calling for a more fair and inclusive urban sphere. It’s shot in Chicago but is really about cities generally. Here’s the video, then a couple of my own observations after the embed. If the video doesn’t display for you, click here.
It’s clear that portions of this film would have transposed well to a timelapse film. Construction scenes, for example, frequently feature in timelapses. But what sets this apart from the contemporary timelapse, possibly because of its production by religious institutions, is the overwhelming focus on people. And not just crowds of people, but actual individuals and small groups. Last week’s time lapse is almost entirely about Chicago the built environment, with the people existing in the abstract to some extent (inhabiting it like scurrying ants) though not in the sense that we find any of the living, breathing human beings that make Chicago the city that it is. This film, by contrast, gives us a peek into the lives of a many Chicagoans, not just a look at the city in abstract.
Terry Nichols Clark once described cities as “entertainment machines.” The notion of the city as machine rather than a habitat for people permeates the time lapse genre. It also seems to be an implicit part of how a lot of people process the city, something I’ve always tried to caution against by saying that cities are about people, not buildings – you can’t say you love the neighborhood if hate the neighbors. Today more often perhaps its simple indifference to the neighbors.
Also, this film depicts a Chicago that’s much less diverse than today. It’s predominantly, though not exclusively, shown as white and black. That may be an artifact of what they chose to include, but my sense is that Chicago is much more diverse today, which perhaps shows the changes that an increase in immigration in the current era has brought.
In any event, this film is well worth watching.
Sunday, November 3rd, 2013
A couple weeks ago the Economist ran a leader and an article on the plight of smaller post-industrial cities, noting that these days the worst urban decay is found not in big cities but in small ones. They observe:
Partly, this reflects the extraordinary success of London and continuing deindustrialisation in the north of England. Areas such as Teesside have been struggling, on and off, since the first world war. But whereas over the past two decades England’s big cities have developed strong service-sector economies, its smaller industrial towns have continued their relative decline. Hartlepool is typical of Britain’s rust belt in that it has grown far more slowly than the region it is in. So too is Wolverhampton, a small city west of Birmingham, and Hull, a city in east Yorkshire.
And even with growth, the most ambitious and best-educated people will still tend to leave places like Hull. Their size, location and demographics means that they will never offer the sorts of restaurants or shops that the middle classes like.
Their editorial forthrightly embraces a policy of triage, saying “The fate of these once-confident places is sad. That so many well-intentioned people are trying so hard to save them suggests how much affection they still claim. The coalition is trying to help in its own way, by setting up ‘enterprise zones’ where taxes are low and broadband fast. But these kindly efforts are misguided. Governments should not try to rescue failing towns. Instead, they should support the people who live in them.”
This same dynamic is clearly evident in the United States as well. Bigger cities have tended to weather industrial decline far better than smaller ones. There seems to be some threshold size below which it is difficult to support the infrastructure, the amenities, and the thick labor markets that attract the people and businesses in 21st century growth industries. My “Urbanophile Conjecture” heuristic suggests that you need to be a state capital with a population greater than 500,000 to be thriving. But even larger places that aren’t capitals and conventionally viewed as failures like Detroit retain powerful metro area economies and large concentrations of educated workers, especially in the suburbs. Conversely, smaller places like Youngstown, Ohio and Flint, Michigan face much bleaker circumstances.
There are exceptions to the rule, including many delightful college towns or the occasional oddball like Columbus, Indiana, but for the most part smaller post-industrial cities have really struggled to reinvent themselves.
In part this is because a rising tide hasn’t lifted all boats, only some of them. As economist Michael Hicks noted, “Almost all our local economic policies target business investment, and masquerade as job creation efforts. We abate taxes, apply TIF’s and woo businesses all over the state, but then the employees who receive middle class wages (say $18 an hour or more) choose the nicest place to live within a 40-mile radius. So, we bring a nice factory to Muncie, and the employees all commute from Noblesville.”
In short, growth actually fuels divergence because a) the growth disproportionately accrues to the places that are doing well in the first place and b) even when struggling cities can attract jobs, people earning middle class wages frequently live elsewhere. Doug Masson likened this to Jesus’ statement that “For he that hath, to him shall be given: and he that hath not, from him shall be taken even that which he hath.” I think there’s a lot of evidence that for bigger cities a lot of activity is exhibiting a convergent or flattening effect. That’s why so many places today have decent startup scenes, quality food, agglomerations of talent, etc. But for smaller cities my observation is that it’s still a divergent world.
You see this on full display in central Illinois, where the town of Danville (population 33,000) and Champaign-Urbana (combined population 124,000) are only about half an hour’s drive apart on I-74. Danville is one of the bleakest towns I’ve ever visited in the Rust Belt. When your Main Street is a STROAD, you know you’re in trouble. Champaign-Urbana by contrast, is a fairly healthy community. It’s home to the main campus of the University of Illinois, seems to be reasonably thriving, has many high quality residential streets, a direct rail connection to Chicago, etc. As a college town, it’s one of those “exception” smaller places.
Anyone within reasonable driving distance with a choice would almost undoubtedly choose to live in Champaign over Danville, unless they had a family or personal connection to the latter. It’s an easy slam dunk decision. In effect, proximity to Champaign acts as kryptonite to Danville’s revitalization. Again, a rising tide only fuels this divergence.
This sort of divide between communities mirrors the divide in society as well. The question is, what approach should be taken to address these disparities? One approach is to focus on the people, and leave the places to rot. Jim Russell has noted that “people develop, not places” thus most place based economic strategies are destined to fail. This approach has also been advocated by economist Ed Glaeser, who in an article title, “Can Buffalo Ever Come Back?” answered his own question by saying, “probably not—and government should stop bribing people to stay there.”
This is obviously unpalatable to policy makers of either the left or the right, as no one has yet embraced it openly. How then have the left and right responded? The response of the left seems to be what Walter Russell Mead has labeled the “blue model” solution. His basic view is that the post-war economy was based around a policy consensus he labeled the blue social model (and which Urbanophile contributor Robert Munson has simply labeled the New Deal). This involved large corporations, powerful unions, extensive industrial regulation, and an expanding safety net. Those who wish to retain the model suggest allowing divergence to continue, but raising taxes on the wealthy and successful in order to redistribute them to sustain those at the bottom of the ladder (via an expanded welfare state), who are in effect seen as lost causes in the modern global knowledge economy, though few of them will openly say it. So the idea is to invest in success, and redistribute the harvest aggressively. That’s why you see lots of left advocacy in favor of tax increases on higher income earners and against food stamp and other benefit cuts, but a paucity of ideas for how to provide the left behinds with jobs and opportunity.
Mead suggests there’s no such thing as the red social model, and perhaps he’s right in that there’s never been a national policy consensus we could label as such, but there’s certainly a red model response to current conditions and it’s called the Tea Party, or what Mead has labeled a “Red Dawn” in many places like Kansas, North Carolina, and New Mexico. This is a type of single factor determinism model. In these kinds of models, a single factor like education, transportation infrastructure, climate, etc is treated as overwhelmingly determinant in driving the economic structure and outcomes. The factor posited by the Red Dawn model is government, therefore the red model response is to slash and burn government (with the potential exception of highway spending) to lower costs, taxes, and regulatory barriers that are perceived to be holding the economy back. In other words, government is the base, and the economy and everything else is the superstructure. Fix the base and the superstructure will correct itself. That’s the theory.
Broadly speaking, these are the paths that Illinois and Indiana have followed. Chicago’s size enables it and its values to political dominate the state in the modern era. With only a rump of a Republican Party, the Democrats are free to do what they like. Conversely, in Southern influenced Indiana it is the outstate areas that are numerically superior to the successful urban regions, thus the state follows their policy preference, and Republicans overwhelmingly dominate the state so there’s little real opposition to red model policies.
What have the results been? Most obviously, Illinois is nearly bankrupt while Indiana is sitting on a AAA credit rating and a $2 billion surplus in the bank. (It has a pension deficit, but it’s manageable and there’s a funding strategy in place). Clearly Indiana has a more functional political system than Illinois, which somehow manages to remain gridlocked despite a “four horseman” style legislative system and overwhelming Democratic dominance. So score two for Indiana.
Finances aside, what have the results been? Illinois has poured massive quantities of cash into building on success, with items like the O’Hare Modernization Program and Millennium Park. The successful side of the economy, epitomized by the global city portion of Chicago, has soared to incredible heights. This is a city that earned at seat at the table of the global elite. On the other hand, the overlooked areas like much of the south and west sides of Chicago and places like Danville, are in horrific shape. The goal of allowing divergence clearly worked. However, with the state’s finances in abysmal shape, the redistribution portion did not happen. Indeed, the social safety net and basic services depended on by the rest of Illinois are being shredded. Even if you believe that it’s viable to simply support a large lumpenproletariat in perpetuity on welfare – which is doubtful – financial extremis means Illinois isn’t even able to try.
Meanwhile in Indiana, pretty much the entire state policy has been reoriented towards making the left behind areas attractive to lower wage businesses. Policies that would cater to higher end businesses in successful urban areas have been less popular. That’s not to say there’s been nothing. Gov. Pence recently agreed to subsidize a non-stop flight between Indianapolis and San Francisco to help the local tech industry, for example. And he’s supported efforts to boost the life sciences sector. But I think think it’s fair to say low costs and low taxes are the watchword, with right to work, light touch environmental regulation, mass transit skepticism, etc.
However, most of Indiana’s left behind type places have not recovered. Overall the state has retained a stubbornly high unemployment rate significantly above the US average, and, even more worrying, incomes have been declining relative to the US. Metropolitan Indianapolis, Lafayette, Bloomington, and Columbus have done reasonably well. Much of the rest of the state has continued to struggle, particularly in adding jobs with middle class wages. As the recent commentary by Brian Howey, Michael Hicks, and Doug Masson shows, Indiana retains its “Noblesville-Muncie” divides mirroring Illinois’ “Champaign-Danville” ones.
In short, the blue and the red model produced some success, albeit in different modes (think San Francisco vs. Houston, Chicago vs. Indianapolis), for the “haves” side of the equation but haven’t yet proven equal to the “have nots.” The Economist makes it clear the totaly different policy configurations of the UK haven’t made a dent in it either. Post-industrial blight in much of Europe tells a similar tale. This suggests that there are powerful macro forces at work that are extremely difficult if not impossible to overcome. It’s no surprise then that the Economist suggests giving up.
Again, that’s not likely, so what should we do? I won’t pretend to have all the answers to a very difficult question. However, I’ll suggest a few possibilities:
- Seek to stop the civic death spiral. This means getting ahead of the decline curve by seeking to halt the cycle of people and businesses leaving, leading to revenue declines and degraded quality of place, leading in turn to to service cuts and tax increases and disinvestment, which leads to more people and businesses leaving. This involves getting ahead of decline and restructuring government to a place where you can hold a defensible position on services and taxes from which you can seek to rebuild.
- Integrate with metropolitan economies. Rather than Muncie trying to hold Noblesville/Metro Indy at bay, or Danville the same to Champaign, closer connectivity is the key. I’ve written on this before regarding Indiana. In the short term losing the highly paid employees to a nearby municipality is a good thing. Without those living options for the managers, etc. you’d never be in play for the plant in the first place. That connection expands your labor pool, provides trade opportunities, etc. Just the property taxes from the plant is valuable, and can be used in rebuilding. Fostering these connections would require decisions that seem counter-intuitive on the short run. For example, Ball State University in Muncie should clearly expand its downtown Indianapolis presence. That isn’t necessarily taking away from Muncie. It’s building new connections and opportunities for Muncie where they don’t exist today.
- Find a claim to fame around which to rebuild. Carl Wohlt says that every commercial district needs to be known for at least one sure thing. Similarly, what’s Danville’s sure thing? Some towns like Warsaw or Elkhart already have it and need to build on it. Others need to find one. That’s not to say one thing is the only thing you’ll ever need or that you aren’t opportunistic around potentials deals that come your way. But you have to start somewhere. Where do you put your limited available civic funds?
I’m not so naive as to think this it the complete answer. But if there’s to be a genuine attempt to rescue places, then new thinking is needed and a turnaround will take a long time. In the meantime in parallel, clearly people-centric solutions also need to be pursued, to give people the best opportunity to realize their potential and dreams in life, where ever that may take them. No city is a failure that does this for its citizens.
Friday, November 1st, 2013
Much as been written about so-called gerrymandered political districts, ones warped into various contortions in order to create a favorable or unfavorable electorate as the case may be. But a number of cities have weird shapes as well. A lot of these result from various annexations designed for a whole host of reasons such as grabbing strategic territory or trying to avoid getting landlocked by competing municipalities. So other factors can produce strange looking towns.
But in at least one case, the town itself as the appearance of having been gerrymandered. I live in West Warwick, RI which looks like this:
It’s a bit of an odd shape, though not ridiculous. From what I’ve been able to glean of the history (based mostly on what people told me), West Warwick was once part of the neighboring city of Warwick. Eastern Warwick along the coast was mostly Republican and controlled the town. Western Warwick was a big mill district along the Pawtuxet River and mostly Democratic. Chafing that their needs were not being met by the Republican faction, they went to the Democratic controlled state legislature to get split off into their own town, West Warwick, which just turned 100 and is Rhode Island’s youngest town.
I don’t know all the details, but this makes it appear as thought the town was strategically drawn to take in the mills, but not much east of there. Hence the streets it follows along the curved section, which are in part roughly parallel to the river. Today the mills have long closed and West Warwick has economically struggled. Meanwhile, formerly rural Warwick is now a much more successful city thanks to freeway access, the airport, coastal access, etc.