Taking From Peterboro To Pay St. Paul

by Sandy Ikeda
Fri, 22 Feb 2008 at 4:23 PM

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"For more than a generation, presidential aspirants have mostly resisted acknowledging the importance of the cities' well being," says a recent New York Times editorial, "In search of a real urban policy" (February 19, 2008). It cites a Brookings Institution study calling for more state and federal spending in metro areas. Here is a related paper.

The editorial goes on to say that in this election year, "Voters deserve to hear a lot more from the presidential candidates — in position papers, public speeches and debates — about how they intend to help the cities," by spending on areas like schools, infrastructure, and the environment. Neither of the leading Democratic candidates "so far, are offering anything like a comprehensive vision for urban America." This is important because "the largest 100 cities and their surrounding communities are home to 65 percent of the nation's population and account for about 75 percent of the country's gross domestic product." Cities are rich, the country (as we used to call "rural areas") is poor.

Okay, it makes political (but not economic) sense for state and federal governments to redistribute wealth from cities to the country. But who would pay for the urban programs the Times wants? Certainly not the poor country, of course, but rich cities. Let cities subsidize one another! Tax Peter in New York City, then return some but not all of it to him. Use the rest to pay Paul in Detroit, presumably without paying less to Mary in the corn belt. (It's gotten so bad for NYC, currently an $11-billion loser in the redistribution game, that there's talk of secession again. See my earlier post on this topic.) But more inter-city redistribution, like all such schemes, is a bad idea whether NYC wins or loses, as political decrees made at higher levels of bureaucracy further displace market decisions. The solution is not political wealth redistribution but entrepreneurial wealth creation – locally.

And if collective planning is necessary, it's best done locally as well. The Times asserts, "There can be no substitute for national leadership." But there is. It's called local governance. Indeed, the editorial cites Mayor Bloomberg's efforts on behalf of NYC and proclaims, "Without much spending, he is changing things for the better." While I don't agree with all of the Mayor's policies, I do think it's reasonable to expect municipal governments to improve their communities without much spending.

The "comprehensive vision for urban America" we need isn't the top-down kind the Times is calling for. It's the kind that comes from the ground up. If voters viewed the entire urban landscape with common sense they would see inter-city redistribution for the shell-game that it is. Rather than expand it, they should put an end to it.

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