The Magazine


Jan 26, 1998, Vol. 3, No. 19 • By FRED SIEGEL
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Stephen Goldsmith


The Twenty-First Century City

Resurrecting Urban America


Regnery, 250 pp., $ 24.95

Some things just aren't supposed to happen. The crime rate, according to the experts, will not drop until narcotics have been decriminalized. Of course, crime in America has fallen dramatically in recent years, despite the illegality of drugs, but the legalizers carry on as though nothing had changed.

Similarly, according to the urban experts who passionately believe in centralized authority, the possibility of reviving America's cities depends entirely on financial aid from the federal government. The last few years have seen some urban rebirth despite the decline of federal aid, but the fact remains invisible: the Ford Foundation consultant Karen Paget, for instance, began a recent article in the American Prospect with the assumption that such cities as Detroit and Cleveland are still sliding sharply downhill.

Paget isn't alone, for many politicians seem to share her views. About a decision by the Clinton administration to eliminate cost-of-living adjustments for Medicaid reimbursements, Westchester congresswoman Nita Lowey declared, "Once again, New York is taking it on the chin." And she is right about that particular decision hitting the cities hard. Like most conventional politicians, however, even while complaining about Washington, she can't seem to shed her shop-worn assumption that the cities have a friend in the federal government.

There has been some acknowledgement of the failures of federal policy. Henry Cisneros, President Clinton's former secretary of Housing and Urban Development, admitted to Congress in 1993 that his agency has "in many cases exacerbated the declining quality of life in urban America." Or, in the more forceful words of the Chicago Tribune, "No natural disaster on record has caused destruction on the scale of the government's housing programs."

But in fact, faith in the powers of big government remains so strong that even while analysts and politicians rattle off the long list of ways Washington has undermined urban America -- from its role in redlining inner cities and subverting stable neighborhoods, to the highway and mortgage subsidies that draw off population to suburbia -- they always somehow manage to conclude with the necessity for further federal intervention. Citing such occasional successes as the Community Reinvestment Act (which forced banks to increase profitably their inner-city investments), they always come back to drink again from that federal well they know is poisoned.

What seems to drive this irrational outlook is a dated sense of the city as a swamp of unmet "social needs." It all started in the 1960s, when everyone -- social workers, advocates for low-income housing, and race-relations leaders -- saw the city as a tangle of pathologies rather than an economic engine. Cities, in the memorable words of Milwaukee mayor John Norquist, were reduced to "the tin-cup strategy" of peddling for pity in Washington.

The great virtue of Stephen Goldsmith's new book, The Twenty-First Century City: Resurrecting Urban America (written for the Manhattan Institute) is that it explains why declining federal support for the cities may be a blessing in disguise. "The natural draw of a big city, the diversity, culture, amenities, architecture," Goldsmith explains, "is today outweighed by an enormous artificial cost that has been placed on urban economies by bad government policy."

A highly successful mayor of Indianapolis who reduced taxes while increasing infrastructure investments, Goldsmith is renowned for introducing market competition to city services. His widely praised managerial accomplishments were chronicled in such books as William Eggers's Revolution at the Roots. What makes Goldsmith's own book invaluable is his account of the perverse effects of federal policy -- regardless of whether Democrats or Republicans occupy the White House.

The book opens with an amusing account of New York's racial racketeer, the Reverend Al Sharpton, leading a rally protesting the takeover of some Indianapolis bus routes by private companies. Sharpton had federal policy on his side. The Urban Mass Transit Act not only limits competition from private providers, but entitles any transit worker "negatively impacted" by competition to six years' salary as compensation. Like the federal government, writes Goldsmith, Sharpton was fighting "to head off a nationwide epidemic of improved bus service" for inner-city residents.